Links 22 May 2020

Global Macro / Markets / Investing:





Leith van Onselen



    Jobless claims: Another 2.438 million Americans file for unemployment benefits … Yahoo Finance

    Even as an increasing number of states began reopening their economies across the country, the COVID-19 pandemic continued to wreak havoc on employment in the U.S. last week.

    An additional 2.438 million Americans filed for unemployment benefits in the week ending May 16. Economists were expecting 2.4 million initial jobless claims during the week. The prior week’s figure was revised lower to 2.69 million from the previously reported 2.98 million. Over the past nine weeks, more than 38 million Americans have filed unemployment insurance claims. … view and read more via hyperlink above …
    US seeing the cost of late unemployment benefits … (US) ABC News

    Nearly one in five Americans has been left unemployed amid the pandemic. … view and read more via hyperlink above …


      More huge US job losses; economies contracting; Beijing clamps down on Hong Kong; China stimulus plans awaited; China tackles Australia; UST 10yr yield at 0.68%; oil unchanged and gold down; NZ$1 = 61.1 USc; TWI-5 = 66.9 … Interest Co NZ

      … But first, the latest update records 2.4 mln more people claiming unemployment benefits in the US, taking the total since early March to more than 38 mln. We may be getting used to such large numbers and this latest week is lower than last week, but this still represents a building social disaster, the scale of which vastly exceeds the Great Depression. In 1932, twelve million Americans were unemployed and one out of every four families no longer had an income. In 2020 the social safety net is helping with the income stress in the short term, but the level of real jobless level is also now approaching 25%. US jobless benefits typically last only 26 weeks. …

  2. Will be a good test of true demand if international students have to self fund their quarantine period.

    International student arrivals would recommence from countries deemed safe and be subject to self-funded quarantine requirements under a plan put to federal and state governments by the elite Group of Eight universities.

    The “secure corridor” framework could allow for students to return en masse subject to strict health checks and with the co-operation of government agencies and the aviation industry, according to the proposal being considered by federal and state leaders and obtained by The Sydney Morning Herald and The Age.

    Students would be subject to pre-travel isolation and health checks in their home countries and then be flown to Australia with a “trusted Australian carrier”. The strategy calls for co-operation with airlines to facilitate flights and deal with pricing.

    Students would then go into designated quarantine accommodation, which they would pay for themselves. Universities would take charge of airport pick-ups and escort students to the accommodation. Quarantine would be closely monitored to ensure compliance.

      • People who work at universities are immensely clever. I know this because they have told me.

        Nothing will go wrong with this plan. All our foreign students come from countries with strong ethical and legal systems like India and China and Tibet, and none of them would ever game this system, or ignore it, or bribe their way out of it or circumvent it in any way.

    • happy valleyMEMBER

      “… subject to strict health checks …”

      Yeah, just like the ones for Ruby Princess? And with money-grabbing unis monitoring the quarantine? What could possibly go wrong?

      • Hey, unis do the needful regarding english language checks so why doubt their desire to oversee appropriate health checks as well. Also, remember that China has reported that the virus re-activates in between 5% and 15% of cases. In other words people can have the virus, recover from the virus, return a number of negative results for the virus, and then weeks or months later become affected and contagious again.

    • I think we are overdoing these border measures … almost like we think we can eradicate the virus LOL
      most of countries in Europe (even those that had very few cases like Greece or Croatia) opened or will open in June borders so tourists can flock to the Mediterranean for summer holidays … and nothing will happen … it’s summer so local transmission is going to be very hard as we learned from our example in March

      so as long as students come here in Jan/Feb it’s fine. They should pay for quarantine but that quarantine should not be university organised student accommodation but rather same hotel kind as for others … just to stimulate local tourism

        • all fake reporting
          Sweden has much lower covid19 mortality than Belgium, UK, Italy, Spain and France – countries with one of the hardest lockdowns in the world …

          also at no point of time Sweden got close to health care capacity and none died because epidemic was out of control, as opposed to all these hard lockdown countries like Italy, Spain, France, some parts of USA where extra people died because epidemic was out of control
          Z score in Sweden reached 15 as opposed to many other countries in Europe that had much higher execs deaths (Z score over 30)

          • Think Doctors seem to misunderstand the sociology at play. Regardless of Governments peoples behavior is dictated by friends, family, socials, the news. Funnily enough the Swede’s locked themselves down when all their neighbours did. Fear. Look at the economics of the time period. The excess deaths they experienced are virtually identical to the UKs. They just let the virus sweep through their care homes, niether country hit healthcare capacity primarily because citizens in those countries did the right thing regardless of their bat$hit leaders.

      • We have eradicated the virus (several weeks without community transmission) in most Australian states and territories apart from Queensland, New South Wales, and Victoria, and Queensland is getting close. New South Wales has only had a few cases of community transmission recently. It is still a problem in Victoria.

        The Northern Territory, which has never had community transmission, has essentially opened up, apart from large public gatherings.

        “Our hard borders are the reason we’ve been able to get back to business, back to work, and back to enjoying our incredible Territory way of life.” NT’s Chief Minister, Michael Gunner

        Why do you take this defeatist attitude? Does your income depend on international travel?

        • you just said that we never really had much of local transmission, even in the days when borders were open and thousands of infected people were disembarking from infested cruise ships … so who is in denial?
          every imported case infected less 0.3 other people, including family members

          That doesn’t mean we’ll see the same situation now in winter, but the border will not prevent spread if virus becomes as virulent as it was in Europe or USA. dozens of local cases can easily explode into thousands if that happens

          BTW. we “eradicated” the virus in all states but those where almost all Australians live – Northern Territory was virus free even when borders were open and no measures beside border controls have been justified at all. NT is “successfully” reopening but there was not a single reason to close in the first place. They could have had as successfully reopen 1 day after the closure

    • China PlateMEMBER

      geez what’s the extra cost of a couple of weeks living with oneself on top of their total fees anyway.
      Sure they’ll whine and look to palm off the cost to you and me but it’ll just be another cost of their edumacation when all said and done

    • desmodromicMEMBER

      So a smaller domestic herd with immunity, supplemented by foreign genetics. The only question is how small is smaller?


      Just have the ‘students’ pre-pay their entire tuition in advance now and then give them a credit voucher that can be used when (if) it’s safe to return.
      No need to rush them back- and everybody’s happy as money changed hands!

      And if they pre-pay the tuition, they will get a VIP real estate access portal so they can buy from where they are currently- again, no need to arrive here yet.

  3. I’m getting sick of this political self-pride claiming hard and timely measures saved Australia from an Italian scenario.
    That’s a total BS not supported by any evidence whatsoever,,,

    Lets see some numbers (we’ll ignore unconfirmed cases to avoid any speculation):

    source of infection
    Overseas acquired – 4406 (of which around 1000 on cruise ships that arrived after border closure)
    Locally acquired – 1664 (of which 200 in age-care services)

    New cases on some important dates
    13/03 – 52
    14/03 -51
    23/03 – 313
    24/03 – 427
    28/03 – 469
    30/03 – 279
    31/03 – 312
    01/04 – 303
    5/04 – 139
    6/04 – 108
    12/04 – 21

    Total number of cases by a date
    15/03 – 307
    19/03 – 691
    23/03 – 1702
    31/03 – 4500

    Government measures:

    15/03 – gatherings over 500 banned (on 14/03 we had sport games going on)
    16/03 – all incoming travellers must self-isolate for 14 days, cruise ships banned for 30 days
    20/03 – closed borders for non-citizens
    22/03 – social distancing (4sqm rule)
    23/03 – closed clubs, hotels and bars, entertainment venues, cinemas, casinos, nightclubs and places of worship
    state lockdowns introduced on 31/3 in NSW and VIC, 2/04 in QLD …

    of all deaths almost 2/3 was in aged care and 1/3 on cruise ships – all easily preventable with very little measures.

    some states did also some minor measures like moving school holidays 3 days forward in Vic

    So what we can tell from this data?

    First of all, effective reproduction number (Reff) in Australia was less than 0.24 every infected person in Australia infected on average only 0.24 people in Australia. by the time self-isolation has been introduced we had at least 307 confirmed cases walking around (we also let 1000 infected people from cruise ships to freely go home from the ports), and by the time any social distancing measures have been introduced we had 1500 confirmed cases. Our contact tracing at that stage was so poor, we were discovering cruise ship cases as late as in April two weeks after the disembarking. Also during that initial period we almost had no locally acquired cases beside very high risk events a wedding in NSW where 40 guests got infected (people kissing each other) and few backpackers/student crowding cases in Bondi. Even among overseas people who went home and later got tested positive very few reported family members getting infected (imagine living with someone and not getting infected but not being able to go for a walk on the beach on your own). So, if the virus ever had R0 in Australia anywhere close to 2.5 we would be seeing locally transmitted numbers exploding in mid to late March already – before almost any measures have been taken. Instead, in last week of March we almost exclusively had imported cases and very little or no local transmission despite thousands of infected people already detected.

    by the time, we introduced first measures aimed to prevent local transmission we already had 1500 confirmed cases, and by the time lockdowns were introduced we had 4500 cases (60% of all cases), by the time lockdowns had any chance to show results (two weeks later on 15/4) epidemic almost ended, number of new cases was down by 90% and we already had 6500 cases (93% of all cases). Even 6 days after lockdowns were introduces (a shortest theoretical date lockdowns were able to start working) number of new cases was already down by 80%.
    Even measures like closing clubs, hotels and bars, entertainment venues, cinemas, casinos, nightclubs and places of worship introduced on 23/03 had very little or no impact because after the time results would start to be visible in the data (6/04), number of new cases was down by almost 80%.

    Basically the only measures that worked were border closure and ban of mass gatherings. Everything else was mostly meaningless and contributed very little to the final numbers. And not only that there is no evidence supporting effectiveness of lockdowns but in contrary all th evidence shows the opposite.

    and this is not much different than what we observed around the world, some countries or even parts of countries with early and hard measures saw worst results than other with late and weaker measures. why it’s anyone’s guess?

    Reasons for this could be various, like climate, humidity, pollution, lifestyle/culture (e.g. infrequent close social interaction like kissing), outdoor culture, … we don’t know this when it comes to flu neither – during our summer many flu infected people arrive from the north and yet we never get local spread.

    if we had timely and light measures like closing borders on time (remember foreign student and F1 debacle) or even if we just implemented all measures (cruise ship debacles, aged care debacle) we would have seen nothing – number of cases would have been in hundreds and deaths in handfuls and there would be no need to hurt economy beside tourism and unis.

    • Interested PartyMEMBER

      You are failing to ask the logical question. Everyone is.
      ‘Why’ are they doing it!

      “US data on influenza deaths are false and misleading. The Centers for Disease Control and Prevention (CDC) acknowledges a difference between flu death and flu associated death yet uses the terms interchangeably. Additionally, there are significant statistical incompatibilities between official estimates and national vital statistics data. Compounding these problems is a
      marketing of fear—a CDC communications strategy in which medical experts “predict dire outcomes” during flu seasons.”

      Bernays wrote about this behaviour, and promoted the use of emotion and base instinct ( fear, sex) to control the masses.
      I will go out on a limb here and say that we….as a global collective……are being used as emotional weapons to remove Trump this november. That is not to say that the virus isn’t real, or harmful. It is very real, and dangerous. In fact, it is so dangerous that in the UK, approximately 40,000 healthcare workers are taking HCQ proactively.

      So, the new question is this.
      Why do we not take HCQ proactively ourselves, and just open up the country and get back to life?

      • there is another interesting fact
        if you carefully look through the ABS causes of deaths reports you’ll find that of almost 7k (non-chronic) respiratory system deaths, only 3k are usually associated with flu with less than 200 confirmed. Huge majority of other 4k acute respiratory system deaths are not tested, not confirmed, not classified, other … basically none even bothered to check

        Also from multiple causes table one can see that only 15% of all respiratory diseases didn’t have other comorbidities, 20% had 4 or more other comorbidities

    • You need to account for the 10 days to 2 weeks (at least) that the public were ahead of the government.
      The trains were less than half full in Sydney well before Scotty pulled the pin. Less than half the kids were at school and many, if not most, were working from home.

      • account for what?
        is what you are saying is proof that government measures were needed or that they helped in any way? quite the opposite, it would confirm that measures were even more meaningless.
        You think in Sweden buses and restaurants are as full as before covid?

        BTW. while some level of behavioral change was noticeable in second half of March it was still shy of any ability to prevent the spread. On 14th of March we had rugby matches playing on in mid March with 100k people attending (at that time all mass gatherings were already banned in NYC).
        Also Sydney buses and trains even when half full are still packed with people at much less than 1m apart. Should I mention beaches being packed days after social distancing measures were introduced? So if the virus was as virulent as it was in NYC we would have been seeing thousands of dead … but for some reason virus was not spreading in Australia nearly as fast and easy as it was in some other parts of the world

  4. From the ABC link:
    They also described allegations of harassment and bullying, including some based on a Facebook post where it is alleged Mr Pavlou said, “I hate stupid BAFE [UQ Bachelor of Advanced Finance and Economics] c**** who went to a GPS school so are basically shocked by the prospect that politics could exist outside narrow band of thought that is What Dad Plus his Other Rich Mates Think About The Economy…”

  5. Interested PartyMEMBER

    From the links above regarding 78% of americans willing to pay more if not chinese……..
    To any and every politician who reads this board…
    The door is open here in Australia for a return to manufacturing with a likely similar percentage willing to play a part. Step up and be popular for a generation or two. Go on….you can do it. Cut the foreign strings that control are attached to you, and we will support you.

  6. Arthur Schopenhauer

    And Target is quickly fading away. Currently 287 stores. 100 or so to remain. Some converted to small format Kmarts, The rest shutdown.
    The Geelong store support office to be downsized. (Offshored?)

  7. migtronixMEMBER

    If house prices fall 32% and I dollar average all the way down, I’ll be a property mogul billionaire right?

    • migtronixMEMBER

      Hahaha anyone remember when Shrub had torture legalised? Or who – read no-one important – got held accountable for Abu Grabh and assorted black sites? Last I looked Gina Haspel was promoted….

      • Reminds me of when Tillerson was told that the government only cares when countries that they don’t like violate human rights.