Soldiers are enforcing curfews in Hubei province, the epicenter of the coronavirus outbreak, as millions are confined to their homes. Hospitals there are overwhelmed as the number of suspected cases grew by thousands overnight.
Chinese authorities are resorting to increasingly extreme measures in Wuhan to try to halt the spread of the deadly coronavirus, ordering house-to-house searches, rounding up the sick and warehousing them in enormous quarantine centres.
The urgent, seemingly improvised steps come amid a worsening humanitarian crisis in Wuhan, one exacerbated by tactics that have left this city of 11 million with a death rate from the coronavirus of 4.1 per cent as of Thursday — staggeringly higher than the rest of the country’s rate of 0.17 per cent.
With the sick being herded into makeshift quarantine camps, with minimal medical care, a growing sense of abandonment and fear has taken hold in Wuhan
Chinese authorities are resorting to increasingly extreme measures in Wuhan to try to halt the spread of the deadly coronavirus, ordering house-to-house searches, rounding up the sick and warehousing them in enormous quarantine centres. The urgent, seemingly improvised steps come amid a worsening humanitarian crisis in Wuhan, one exacerbated by tactics that have left this city of 11 million with a death rate from the coronavirus of 4.1 per cent as of Thursday — staggeringly higher than the rest of the country’s rate of 0.17 per cent.
With the sick being herded into makeshift quarantine camps, with minimal medical care, a growing sense of abandonment and fear has taken hold in Wuhan, fuelling the sense that the city and surrounding province of Hubei are being sacrificed for the greater good of China.
The harsh new moves in Wuhan, the centre of the outbreak, clearly signalled the ruling Communist Party’s alarm that it had failed to gain control of the coronavirus epidemic, which has overwhelmed the country’s health care system and threatened to paralyse China, the world’s most populous country and second-largest economy. Nick Note: Please please pay attention here. If the Pandemic comes to America they will do far far worse to you. I promise you if they take you to a quarantine center it will be your final resting place. We are not their yet and we may not get their. But i got a idea… why not take the steps now to insure your safety
China reported Sunday a drop in new virus cases for the third straight day, as it became apparent that the country’s leadership was aware of the potential gravity of the situation well before the alarm was sounded.
BEIJING (AP) — A recent speech by Chinese President Xi Jinping that has been published by state media indicates for the first time that he was leading the response to a new virus outbreak from early on in the crisis. The publication of the Feb. 3 speech was an apparent attempt to demonstrate that the Communist Party leadership had acted decisively from the beginning, but also opens Xi up to criticism over why the public was not alerted sooner. In the speech, Xi said he gave instructions on fighting the virus on Jan. 7 and ordered the shutdown that began on Jan. 23 of cities at the epicenter of the outbreak. His remarks were published by state media late Saturday. “On Jan. 22, in light of the epidemic’s rapid spread and the challenges of prevention and control, I made a clear request that Hubei province implement comprehensive and stringent controls over the outflow of people,” Xi told a meeting of the party’s standing committee, its top body.
The number of new cases in mainland China fell for a third straight day, China’s National Health Commission reported Sunday. The 2,009 new cases in the previous 24-hour period brought the total to 68,500.
Commission spokesman Mi Feng said the percentage of severe cases has dropped to 7.2% of the total from a peak of 15.9% on Jan. 27. The proportion is higher in Wuhan, the Hubei city where the outbreak started, but has fallen to 21.6% from a peak of 32.4% on Jan. 28. “The national efforts against the epidemic have shown results,” Mi said at the commission’s daily media briefing. China reported 142 more deaths, almost all in Hubei, raising the mainland China death toll to 1,665. Another 9,419 people have recovered from COVID-19, a disease caused by a new coronavirus, and have been discharged from hospitals. Japanese Prime Minister Shinzo Abe convened an experts meeting to discuss measures to contain the virus in his country, where one person has died and more than a dozen cases emerged in the past few days without any obvious link to China.
“The situation surrounding this virus is changing by the minute,” Abe said.
Japanese Health Minister Katsunobu Kato said the country is “entering into a phase that is different from before,” requiring new steps to stop the virus from spreading further. About 400 Americans on a quarantined cruise ship in Japan were awaiting charter flights home, as Japan announced another 70 infections had been confirmed on the Diamond Princess. Canada, Hong Kong and Italy said they were planning similar flights. Japan now has 412 confirmed cases, including 355 from the cruise ship, and one death from the virus. Xi’s role was muted in the early days of the epidemic, which has grown into one of the biggest political challenges of his seven-year tenure. The disclosure of his speech indicates top leaders knew about the outbreak’s potential severity weeks before such dangers were made known to the public. It was not until late January that officials said the virus can spread between humans and public alarm began to rise.Zhang Lifan, a commentator in Beijing, said it’s not clear why the speech was published now. One message could be that local authorities should take responsibility for failing to take effective measures after Xi gave instructions in early January. Alternatively, it may mean that Xi, as the top leader, is willing to take responsibility because he was aware of the situation, Zhang said.
Trust in the government’s approach to outbreaks remains fractured after the SARS epidemic of 2002 and 2003, which was covered up for months.
Authorities in Hubei and Wuhan faced public fury over their initial handling of the epidemic. Wuhan on Jan. 23 became the first city to impose an unprecedented halt on outbound transportation, a measure since expanded to other cities with a combined population of more than 60 million.
The anger reached a peak earlier this month following the death of Li Wenliang, a young doctor who was reprimanded by local police for trying to spread a warning about the virus. He ended up dying of the disease himself.In apparent response, the Communist Party’s top officials in Hubei and Wuhan were dismissed and replaced last week.
Even as authorities have pledged transparency through the current outbreak, citizen journalists who challenged the official narrative with video reports from Wuhan have disappeared and are believed to be detained.
The fall in new cases follows a spike of more than 15,000 on Thursday, when Hubei began to include cases that had been diagnosed by a doctor but not yet confirmed by laboratory tests. Overwhelmed by the number of suspected cases, the province has not been able to test every person exhibiting symptoms. The clinical diagnosis is based on doctors’ analyses and lung imaging and is intended to allow probable cases to be treated as confirmed ones without the need to wait for a lab result. Nick Note: I see a great big cover up. Explain to me about the 50 million people quarantined…… Something is very very very wrong
SINGAPORE (Bloomberg) – A sudden oil buying spree by China’s independent refiners has taken Asian traders by surprise. After weeks of production cuts, cargo deferrals and cancellations because of the deepening impact of coronavirus on Chinese crude demand, companies including Shandong Shouguang Luqing Petrochemical Co., Shandong Huifeng Petroleum Chemical Co. and Sinochem Hongrun Petrochemical Co. have returned to the market in a big way. They’re all non-state-owned refiners, known as teapots, from the eastern province of Shandong. Until recently, this corner of the industry appeared to be doing everything to avoid buying crude including cutting processing rates. But then Luqing snapped up as many as seven cargoes from Russia, Angola and Gabon for March and April, while Sinochem Hongrun bought a shipment from Gabon and Huifeng was also looking for spot cargoes, according to traders with knowledge of the market. The spree is probably a sign that the refiners known as teapots are getting ready for an eventual rebound in demand, taking advantage of the slump in crude prices to buy cheaply, according to the people. The timing of a recovery in China’s oil demand, which by some estimates has been reduced by 20% because of the virus, is the subject of great speculation in the market because getting it right could be very profitable. Luqing bought ESPO, Gindungo and Oguendjo grades in the spot market this week, said the traders who asked not to be identified as the information isn’t public. Hongrun purchased Mandji at about a $1-a-barrel discount to Brent on a delivered basis, while prompt supplies of other crudes such as Lula and Johan Sverdrup were also being offered and may have traded. International trading companies were among the sellers. Nobody answered telephone calls or responded to emails sent to Luqing and Huifeng, while Hongrun declined to comment when contacted by phone. Spot premiums for crude delivered to Shandong plunged by more than 50% against the global benchmark Brent since the market began taking notice of the outbreak in mid-January, according to industry consultant IHS Markit Ltd. The traders were cautious on whether the teapot purchases signaled a recovery in Chinese crude demand as many of the nation’s refineries are still running at reduced operating rates, and travel curbs keep consumption of transport fuels low. Some teapots are also laden with debt, weighing on their credit-worthiness and hindering operations. Nick Note: I know a bargain when i see one and so do refiners…. ENJOY!
(CNN)Ning Zhu, a nurse in Wuhan, the central Chinese city at the heart of a deadly coronavirus outbreak, is restless. Instead of helping on the frontlines, she has been under self-quarantine at home for weeks, after a chest scan on January 26 revealed that she had a suspected case of the novel Coronavirus. Zhu was told to wait for a nucleic acid test that would provide the final verdict, but it never came. “Right now, it’s really a problem. Our hospital already has more than 100 people who are quarantined at home,” she told CNN over the phone. An additional 30 medical workers have been confirmed to have the virus, she said. “If the tests are fine, we can go back to work. I actually don’t have any symptoms, there’s just a slight problem with my CT scan, it seems there’s a bit of infection,” she said. Zhu estimates that of the 500 medical staff at the hospital, more than 130 may have been stricken by the virus, which has so far infected more than 60,000 globally. She declined to publicize the name of her hospital and asked to use a pseudonym as she was not authorized to speak to the media. The situation at her hospital is not unique. A nurse from the Wuhan Central Hospital said on Weibo, China’s Twitter-like platform, that around 150 colleagues at her hospital have been confirmed or suspected to be infected — including herself. The nurse, who had been under self-quarantine at home since being infected last month, was finally admitted into the hospital she works at for treatment on Tuesday. “The (in-patient) floor I live on is basically filled with colleagues from my hospital,” she wrote in a post on Wednesday. “These are mostly double or triple rooms, with my colleagues’ names and bed numbers clearly written in black and white on the doors.”
Every time fellow medics came to check on her, she said, she would hold her breath. “I’m afraid the virus inside my body will come out and infect these colleagues who are still standing fast on the frontline,” she wrote. On Friday, it was revealed that 1,716 healthcare workers nationwide had been infected by the virus, six of whom had died, according to China’s National Health Commission (NHC). Nearly 90% (87.5%) of those medics came from Hubei province, of which Wuhan is the capital.
Chinese President Xi Jinping talks to medical staff on duty via a video link at Beijing Ditan Hospital in Beijing on Febuary 10.
More than a thousand infected in Wuhan
Health care workers have long faced a high risk of infection during major outbreaks, including the severe acute respiratory syndrome (SARS) epidemic that swept China from late 2002 to 2003. In Wuhan, the epicenter of the noval corronavirus outbreak, however, that risk is now exacerbated by a dire shortage of medical resources to cope with the influx of patients, as well as the government’s belated warning of the high-infection rate.
In Wuhan alone, 1,102 medical workers have been infected, accounting for 73% of infections in the province and 64% nationwide. The city of 11 million people has 398 hospitals and nearly 6,000 community clinics. However, the Wuhan Municipal Health Commission has designated nine hospitals to treat coronavirus cases, as well as an additional 61 hospitals whose outpatient clinics will receive patients with fever — believed to be a common symptom of the pneumonia-like illness. In some of these designated hospitals, medical staff have made up a significant percentage of infected patients. For example, at Zhongnan Hospital, one of the 61 hospitals dealing with cases, 40 health care workers had been infected, accounting for nearly 30% of the 138 coronavirus patients admitted by the hospital from January 1 to 28, according to a research paper published in the Journal of the American Medical Association last week.
Peng Zhiyong, director of acute medicine at the Zhongnan Hospital who co-authored the paper, told Chinese investigative news magazine Caixin that “the ratio is already very small compared with other hospitals.” At the Wuhan No.7 Hospital, another of the 61 facilities, two thirds of the ICU staff were infected due to shortage of medical resources, Peng said, citing his deputy director who was sent to assist that hospital, according to the report. The Wuhan government has acknowledged the shortage of medical supplies, such as specialist N95 respiratory masks, goggles and protective suits. Hospitals across Wuhan have pleaded for help repeatedly on social media, calling for more donations of the protective gear, which are vital in protecting frontline staff from catching the virus from patients. The government’s initial delay in releasing information about the outbreak meant medical staff were unaware of the potential dangers during its early stages. Wuhan Mayor Zhou Xianwang admitted on CCTV late last month that his government did not disclose information on the coronavirus “in a timely fashion.” Chinese authorities repeatedly stressed in the early days of the outbreak that no health care workers were infected — an important sign for possible person-to-person transmission used to suggest that the virus was not that contagious. Nick Nick: I promise you your medical professional does not have a hazmat suit. Never mine knowing how to take it on and off without infect themselves and everyone around them. I doubt he has a positive flow filtered breathing devise. IF it ever comes into America the JOKE over stressed, overworked, deep i debt health care facilities from your HMO, to your hospital and your local emergency room are sitting ducks. Only a had full of isolation ward beds…… AND AND the solution will be to quarantine the healthy with the (with no isolation) sick. You go into the military run Trump ordered Quarantine center in a green army tuck and come out in a black body bag.
Health officials have contacted hundreds of conference attendees in London, after it emerged one of them was later diagnosed with coronavirus. The person, who has not been identified, was at the UK Bus Summit at the QEII Conference Centre last week.Two Labour MPs who were also at the conference said they were well but cancelling public engagements until 20 February as a precaution. So far, nine people in the UK have tested positive for the virus. MP Lilian Greenwood – a former chair of the transport select committee – spoke at the 6 February conference in Westminster, which was attended by about 250 people from the bus and transport industry. She said on Twitter she was “feeling completely well” but to be “extra-cautious” she was cancelling her public engagements for two weeks from the date of the conference, in line with advice from Public Health England (PHE). Her colleague Alex Sobel, MP for Leeds North West, told BBC News he only found out through a journalist about the positive test and was “concerned” other attendees may still be unaware.Mr Sobel, who said he was not exhibiting any symptoms, called the NHS non-emergency 111 phone line to be “formally assessed” and has been “established as low risk”. He said he spent Friday afternoon in a room in his office away from staff but, after receiving the advice from 111, will not remain in isolation – although he has cancelled public engagements as a precaution. The government’s buses minister Baroness Vere – who was a keynote speaker at the conference – is “following Public Health England advice”, the Department for Transport said. Transport Times, the organiser of the conference, sent an email on Thursday afternoon to attendees informing them that a person confirmed to have coronavirus – which causes an illness now named Covid-19 – had been at the event. The email included advice from PHE urging delegates that no action was needed if they felt well, but if they developed symptoms such as a fever or cough they should stay indoors, avoid contact with others and call NHS 111. The letter told people to follow the advice until 20 February, “even if your symptoms are minor”. Nick Note: I would say this is a warning.Health professional at at conference on the Coronavirus get sick from the very virus they are suppose to be the experts fighting it . Who says GOD does not have a sense of humor…. I do not think GODS like me hates pompous pricks
NICK NOTE: even the praise the Lord socce rmoms are starting to figure it out. And she is a certified blond with blue eyes!!
The US Northern Command has started preparing for a potential pandemic, as the COVID-19 novel coronavirus, which originated in China’s Hubei Province in December, continues to spread. The US Navy, Army and Marine Corps have also released service-wide messages on steps to contain and prevent the spread of the virus.
According to Military Times, an executive order issued by the Joint Chiefs of Staff and approved by US Defense Secretary Mark Esper earlier this month advised Northern Command leaders to prepare for outbreaks of the virus.
The US Navy, Marine Corps and Army also issued service-wide messages on Tuesday and Wednesday referring to the executive order directing the US Northern Command to follow the guidelines outlined in a document titled, “Defense Global Campaign Plan for Pandemic Influenza and Infectious Diseases 3551-13.”
The document outlines directions to prepare for the widespread outbreaks of diseases. The US Northern Command also announced Wednesday that the Joint Chiefs of Staff directed them on February 1 to begin “prudent planning” for the disease. According to the Military Times, any service members who have been to China since February 2 will be confined to their residences. Any service members who live in an open barracks or share a bathroom with other members will be quarantined in a temporary lodging facility for two weeks. Any quarantined service members will also be assessed daily by medical personnel.
However, despite the fact that the US Northern Command has started planning for a pandemic, Navy Lieutenant Commander Mike Hatfield said in a statement to Military Times that the planning does not indicate a greater likelihood of an event developing.
“As military professionals, planning for a range of contingencies is something we owe the American people. We coordinate with other combatant commands to assess potential impacts in the event of a pandemic, and we ensure the US military is poised to respond as required. The military profession fosters a culture of planning, and the fact that we are coordinating planning efforts across the geographical combatant commands is consistent with how we prepare to respond, if directed,” Hatfield explained.
In addition, commanders are expected to “review, update and validate existing disease containment plans and policies in order to implement procedures for response, isolation, quarantine, restriction of movement, and community-based intervention.”
“The US Marine Corps will prepare for potential outbreaks of 2019-nCoV. If an outbreak occurs, the Marine Corps mitigates, responds and recovers from the effects in order to maintain force readiness,” the report adds.
Meanwhile, the Navy also issued a service-wide message this month that gives commanders discretion to decide whether they should confine service members. The directive also states that service members who have visited mainland China, Hong Kong or Macau since February 2 may be subject to quarantine.
Currently, six US bases are holding evacuees from China: March Air Reserve Base, Travis Air Force Base and Marine Corps Air Station Miramar, all in California; Fort Carson in Colorado; Lackland Air Force Base in Texas; and Camp Ashland in Nebraska.
The US Defense Department announced last week that 11 more bases may be made available to the Department of Health and Human Services (HHS) to quarantine more evacuees from China. The quarantine measures were announced on January 3.
Alex Azar, the US secretary of HHS, declared that any foreign nationals, other than immediate family of US citizens and permanent residents, who had traveled to China within the previous 14 days could be denied entry into the US. As for US citizens who have been in Hubei Province, they “will be subject to up to 14 days of mandatory quarantine to ensure they’re provided proper medical care and health screening.”
Doctors in China have adopted a new way of diagnosing the novel coronavirus, leading to a huge jump in both the official number of deaths blamed on the disease and the tally of confirmed cases in the country at the heart of the outbreak. Officials in Hubei province, the Chinese region where the virus is believed to have jumped into the human population from wild animals, reported 254 new deaths and 15,152 new cases of the flu-like virus. The increase brought the worldwide death toll to at least 1,369 and the number of confirmed cases to more than 60,000. Only about 400 of those patients, and just two of the confirmed fatalities, have been outside of mainland China.The sharp increase came after two days of reported declines in the number of confirmed new cases in China. It was the result of Chinese doctors in Hubei province starting to use lung imaging to diagnose the disease, in addition to the standard nucleic acid tests they had been using. The largest cluster of coronavirus cases outside of China, on a cruise ship that has been quarantined for almost two weeks in Japan, continued to grow Thursday. With 218 cases confirmed from the Diamond Princess, Japan’s government said it would allow some elderly passengers from the vessel to move into government-provided housing on land, where they would be monitored for symptoms apart from the general population.
British grime music star Stormzy announced Thursday that he would reschedule the Asia leg of his current world tour due to the deadly coronavirus epidemic. The rapper, real name Michael Omari, told his social media followers he had “regrettably” decided to postpone his shows on the continent starting next month due to the outbreak.
The 26-year-old had been set to perform in Malaysia, Singapore, Japan, China, South Korea and Indonesia in March and April, as part of his “Heavy is the Head” tour. “I was seriously looking forward to bringing the #HITH world tour to Asia and playing some epic sold out shows,” Stormzy wrote on Instagram. “But due to the ongoing health and travel concerns surrounding the Coronavirus, I’m regrettably having to reschedule this leg. “Information regarding the rescheduled dates will follow in due course… I promise I’ll be back,” he added.
Chinese e-commerce giant Alibaba Group’s CEO Daniel Zhang characterized the widening coronavirus crisis as a “black swan event” on Thursday, warning that the outbreak has potentially global implications. During a call with analysts discussing the company’s fiscal third-quarter results that beat expectations, Zhang said that the coronavirus presents “near term” challenges to Alibaba’s businesses that will have “significant impact” on China and beyond. As the numbers of those affected continue to rise, economists and businesses have made sobering remarks about the outlook for worldwide growth. On Thursday, Alibaba reported its revenue rose 38% year-over-year during a strong quarter. In the release, Zhang touted the “robust growth” across the lines of business, pointing to a record Single’s Day, increased user engagement, and rapid growth in the cloud computing services. However, the coronavirus remained at the forefront of the company’s remarks to investors. The crisis has roiled markets with the estimated death toll reaching 1,350 and the number of confirmed cases topping 60,000 — most of them in mainland China. “In response to the coronavirus, we mobilized Alibaba ecosystem’s powerful forces of commerce and technology to fully support the fight against the outbreak, ensure supply of daily necessities for our communities and introduced practical relief measures for our merchants,” Zhang said. With a growing number of multinationals curtailing or shuttering Chinese operations and evacuating employees, Zhang said the company “took every effort to protect the health and safety of employees through flexible work policy and remote office collaboration.”
He added: “No matter past, present or future, we remain true to our mission and we will support our merchants to overcome this challenging time together,” he added.
Shortly after the outbreak, Alibaba began procuring medical supplies from around the world. To date, over 40 million units have been donated to Wuhan and other affected cities, Zhang said.
Zhang emphasized that they are “monitoring the challenge and identifying opportunity as the situation evolves.”
He observed that there’s been a delay in employees returning to work after the Chinese New Year, which is preventing merchants and logistics companies from assuming operations. According to Zhang, this is having a “negative impact” on commerce as merchants’ operations haven’t returned to normal. What’s more, a “significant number of packages are not able to be delivered on time.”
Strong growth amidst a pandemic
Both Alibaba and JD.com have seen a surge in online ordering since the virus forced China to mandate quarantines, keeping many citizens homebound.
The company’s Freshippo supermarket is seeing online order increase “significantly” as a “result of consumer migration to online purchasing” of fresh goods, groceries, and daily necessities, according to Alibaba. However, Zhang added that there are limitations in the delivery capacity that is preventing order volume from fully recovering.
While categories like grocery have increased, restaurant visits and delivery orders have declined because many restaurants haven’t resumed normal operations, Zhang added.
Travel booking also saw “material” numbers of cancellations because of the virus, he said.
Alibaba’s leadership emphasized that they’re committed to supporting their merchants by providing interest-free or low-interest loans through Ant Financial to help normalize merchants’ operations.
CFO Maggie Wu said it’s “too early to quantify the impact” coronavirus will have on the business.
She added that it’s impacting the overall economy in China, especially the retail and services sectors. While the demand for goods and services is there, the “means of production has been tempered” by the delay in openings after the Lunar New Year holiday.
Wu added that Alibaba is “not immune to this imbalance of supply and demand,” but the company sees “an opportunity to provide value and support.” According to Wu, this will help “translate into sustainable, long-term growth,” which is similar to what they saw after the 2003 SARS outbreak.
She said they “remain optimistic about consumption growth” and “remain confident about the long-term.” Wu emphasized that this is a “one-off occurrence” and by “helping customers through difficult times” that will “help drive” sustainable long-term growth.
The GSMA, the organization behind MWC, the world’s largest mobile trade show, has announced that it is officially canceling the show. MWC usually attracts over 100,000 attendees from 200 countries to Barcelona. This year’s show was supposed to take place on February 24-27. Several publications received a statement about the cancellation. “The GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event,” GSMA CEO John Hoffman told Bloomberg and the Financial Times. El Diario, El País and La Vanguardia also report that the show has been canceled. The GSMA has now published a statement confirming its decision to cancel — writing:
Since the first edition of Mobile World Congress in Barcelona in 2006, the GSMA has convened the industry, governments, ministers, policymakers, operators and industry leaders across the broader ecosystem.
With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event.
The Host City Parties respect and understand this decision.
The GSMA and the Host City Parties will continue to be working in unison and supporting each other for MWC Barcelona 2021 and future editions.
Our sympathies at this time are with those affected in China, and all around the world.
Further updates from the GSMA, are on our website and can be found on www.mwcbarcelona.com.
Dozens of companies pulled out of the trade show. In other words, some of the top consumer electronics and telecom companies got scared. And those who thought that GSMA had things under control started to cancel their attendance as well — it wasn’t worth going to Barcelona if many important partners had already canceled. Some of the companies that announced they wouldn’t be attending include Amazon, Deutsche Telekom, Ericsson, Facebook, HMD, Intel, LG, Nokia, NTT Docomo, Sony and Sprint. GSMA’s lawyers wanted to make sure that the association wouldn’t be held accountable if there was a single case of coronavirus at the show. But they started another virus — companies pulling out one by one. Nick Note: Despite all the joy jell they are spreading the big guys are not going to risk their executives or family… Wiping out the worker bees is the order of the universe. The shhep to the slaughter thought they were gettng a badley needed shower… You are suppose to be smarter then that.
Federal Reserve Chairman Jerome Powell came close to acknowledging that the central bank may not have the firepower to fight the next recession and called on Congress to get ready to help. The current low level of interest rates “means that it would be important for fiscal policy to support the economy if it weakens,” he told the House Financial Services Committee on Tuesday. The remark, which came in opening testimony that Powell is due to repeat to a Senate panel on Wednesday, was an unusual appeal by the head of a politically independent institution that is used to combating economic contractions on its own. But it highlights the difficulties that the Fed and other major central banks face in a world of historically low interest rates and why tax cuts and government spending increases may also be needed to fight future downturns.
“There is very little central banks can do” when both short- and longer-term rates are near zero, said Mark Spindel, a co-author of a book about the Fed’s relations with Congress. “We are much closer to a fiscal-monetary collaboration. They are out of optimal monetary policy tools.” Speaking in Strasbourg on Tuesday, European Central Bank President Christine Lagarde was more explicit than Powell about the limits to central bank power. “Monetary policy cannot, and should not, be the only game in town,” she told European lawmakers. Admitting he was “straying a bit” from his remit, Bank of England Governorr Mark Carney also backed the U.K. government’s new spending program. The Fed is engaged in an in-depth review of its policies and practices that is aimed at finding ways to enhance its recession-fighting abilities. Powell’s comment on Tuesday though suggests he recognizes that there’s just so much the central bank can do in that regard. After three reductions last year, the Fed’s target for short-term interest rates now stands at 1.5% to 1.75%, less than half the 500 basis points in cuts it has made to fight past downturns. Powell said that the Fed would resort to tools it used in the last recession if it’s again forced to lower short-term interest rates to zero. They are quantitative easing — in which the Fed buys Treasury bonds to drive down long-term interest rates — and forward guidance on the future direction of short rates. The Fed chief though made clear that the central bank would not follow the lead of its counterparts in the euro zone and Japan and push rates below zero. “In the U.S. context, that’s not a tool we’re looking at,” he said. He also dismissed a suggestion that the central bank consider directly funding the government so it can cut taxes and boost spending in a recession. “That’s really an untested and not widely supported perspective,” he said. Some economists though think the Fed might have to go that far if the economy turns bad enough. In a paper last year, former Fed Vice Chairman Stanley Fischer and ex-Swiss National Bank chief Philipp Hildebrand said “unprecedented policy coordination” may be needed to deal with the next downturn, including central banks explicitly financing bigger government budget deficits. To make room for future fiscal actions to aid the economy,
Powell urged lawmakers on Tuesday to rein in budget deficits now. “Putting the federal budget on a sustainable path when the economy is strong would help ensure that policy makers have the space to use fiscal policy to assist in stabilizing the economy during a downturn,” he said.
His comment came in the wake of the release on Monday of President Donald Trump’s latest budget plans, which would push the gross federal debt above $30 trillion over the next decade. Some economists argue fiscal policy isn’t a decent substitute for monetary policy when trying to boost economies in the short-term. Harvard University Professor Kenneth Rogoff wrote recently that government stimulus “inevitably involves messy, hard-fought compromises” that limit its effectiveness. There are dangers for the Fed in collaborating too closely with elected officials because it could undermine its political independence. Breaking with recent presidential tradition, Trump has repeatedly attacked the central bank for keeping interest rates too high, including posting a tweet on Tuesday that delivered a dig at Powell for his performance on Capitol Hill. But the president is not alone in seeking favors from the Fed. At Tuesday’s hearing, Democratic Representative Rashida Tlaib from Michigan repeatedly pressed Powell to explain why the central bank hadn’t helped Detroit avoid bankruptcy as it did during the crisis for major U.S. banks. In the end, economists said there may be no alternative for the Fed in the next contraction but to accept some form of disciplined fiscal-monetary cooperation. “They are running low on ammunition,” given that they are unlikely to use negative interest rates, said David Beckworth, a senior research fellow at the Mercator Center at George Mason University. “It does seem like they are going to be in a bind in a next recession.” Nick Note: The Fed is in a box. At first before the recession interest rates will climb by at least 200 to 300 bases points. And then the fun begins. As interest rates go negative deeper and deeper. its the only way they can keep the system going.
