Self Isolation Day 10
March 12th 2020
I'm sure I'm not the only one getting fed up with this Coronavirus, especially the amount of rubbish being trumpeted around in the media. So whilst I still can, I am having the day off tomorrow. I am going out with a friend, I'm going to play some computer games and lounge around on the sofa watching Outlander.
Measures are being stepped up by governments around both Europe and North America. Iceland have lowered their interest rates. The Republic of Ireland, following its first death yesterday, has announced the closure of schools, colleges and other public facilities like art galleries and museums. Indoor gatherings of more than 100 and outdoor gatherings of more than 500, like football matches, are banned. Ironically, these measures were announced by the Taoiseach from Washington DC where he is on a St Patrick's Day tour.
Meanwhile, Trump announced that the US was banning all Non-US travellers from Europe, but inexplicably excluded the UK and Ireland. Apparently because the UK is not in the borderless free travel area in Europe. However, in his border fetish Trump may not be aware that the UK has had plenty of people return from skiing trips in Italy to provide an adequate source of infection. Other countries, such as the Czech Republic, India, Israel and Lebanon, have banned travellers from the UK. I don't see what at present would prevent someone catching the Eurostar to London and then an onward flight to the States from Heathrow?
The markets are now officially in bear market territory. Basically, the markets and the financial system is the equivalent of the old person with an underlying health condition who is most vulnerable to the Coronavirus. So yes, the WHO declaring a pandemic pushed it down, yes Trump's travel ban pushed it down, yes the non-materialisation of a rate cut by the ECB pushed it down. These factors are simply squeezing the life out of this over bloated market quicker. Sure we will see some dead cat bounces, but the overall trajectory is clear.
The FTSE is having a bad day. A 10% drop puts it on track for its worst day since 1987. Some of the UK stocks hit hardest include, unsurprisingly, International Consolidated Airlines Group S.A (IAG), Easyjet PLC (EZJ), Intercontinental Hotels Group PLC (IHG),Rolls-Royce Holdings (RR/) and Whitbread (WTB). Some hit even harder are John Menzies PLC (MNZS) an old established British firm from the nineteenth century which has suffered a decline today of over 20% and has decided to suspend its dividend payment for the year. Another casualty with over a 20% decline is WH Smith PLC (SMWH) who largely sell books in large train stations and airports, especially in Asia. Today they've taken the step of issuing a profit warning. If only Flybe could have hung on a bit longer it too could have blamed its woes on the Coronavirus.
An article in today's Guardian lends scientific weight to what doctors in China have been reporting, namely that the majority of Coronavirus infections are spread asymptomatically. As the article states it is a dismaying, but I think Chris Martenson can say those words today - I told you so. European researchers have drawn on the data to calculate the "generation interval". Roughly between 4 and 5 days. It should be noted that this research is still under review though.
In UK news four big insurers have withdrawn travel cover, as well as withdrawing cover for future Coronavirus claims. The former regional health director for North West England has derided the government's response as "pathetic" and accused Ministers of behaving like "19th century colonialists". Pretty much sums up the UK in general.
UK cases at 590 with 10 dead. (Still need to note that these are yesterdays figures due to "delay"). Now the UK Health Secretary is ill. Following yesterday's budget the Office for Budget Responsibility slashed its 2020 growth forecast to a generous 1.1% amidst the prospect that UK debt is about to crash the £2 trillion barrier.