COVID19 killed 389 Italians Saturday, accounting in one day for 25% of Italy’s death toll to date. Italy’s medical structure has been exposed as systemically inadequate, especially in a crisis, and is reduced to triage protocols.
According to the WHO, as of last Friday, excluding Italy, the rest of Europe accounted for 7% of the world wide COVID19 infected population, whereas the worst affected countries of China, Italy, Iran and South Korea represented 75%. Given the late response to COVID19 by the US we only represented .9%; likely a misleading statistic at this point given inadequate testing.
One positive note was the precipitous decline in the infection rate in South Korea, a relatively small country that amazingly reacted almost spontaneously with widespread testing and development of successful treatment protocols (not cures!) of those infected. We should send a medical task force there like yesterday to learn from South Korea. How there is anyone in the US who doubts the severity of this pathogen is amazing; has our illiteracy rate risen lately?
Now all the talk about COVID19 as the perpetrator of a likely recession is also a sign of illiteracy – it is more like the match that lit the fuse! The Fed has caused a deep lack of confidence in the market with such panic moves as interest rate cuts, postured as a concern for liquidity; it’s like concern for a man dying of thirst while drowning in a lake. It was such manipulations for more and more liquidity that brought on one recession after another over the years and this movie is no different – likely worse.
The match was serious as COVID 19 will burn businesses big and small, but the strain on what we were told was a strong economy was the short fuse as that was just bad economic reporting based on even worse statistical posturing; and the powder keg was a credit bubble and it went BANG!
It is true that this is not the 2008 Financial Crisis, but that is misleading; the truth is this is the result of all the bad things the FED and the UST did to “recover”, like QE. If QE was such a success, did you ever ask yourselves why we had QE2 and QE3? Why the Fed’s balance sheet is still so hopelessly bloated? Why we needed rate cuts during a strong economy? If you kick the can down the road long enough, you better hope you don’t run out of road.
So since early March the DJIA went from an all-time high of over 29,000 to today’s close near 21,000. I think a 30% fall sounds more like a collapse than a correction, so let’s get real, this is not the 2008 Financial Crisis; this is something much worse.