I am living in the middle of the emergency over coronavirus in Finland. Due this reason the update cycle to make posting to this blog could be slowed down.
The Finnish government announced on Monday nationwide school closures in order to help prevent the spread of coronavirus. Read more on the following aricles:
Finland closes schools, declares state of emergency over coronavirus
https://yle.fi/uutiset/osasto/news/finland_closes_schools_declares_state_of_emergency_over_coronavirus/11260062
Daycare centres are to stay open but parents were asked to keep their kids home if possible. The government also published a 19-point list of emergency legislation that takes effect on 18 March.
Coronavirus latest: 359 cases confirmed in Finland, S-Group shuts its Helsinki eateries, bankruptcy fears mount
https://yle.fi/uutiset/osasto/news/coronavirus_latest_359_cases_confirmed_in_finland_s-group_shuts_its_helsinki_eateries_bankruptcy_fears_mount/11249610
Here is a link to an earlier post related to Coronavirus:
https://www.epanorama.net/blog/2020/02/12/mobile-trends-2020-mwc-canceled/
1,657 Comments
Tomi Engdahl says:
Hoidossa keskitytään elintoimintojen ylläpitämiseen, koska täsmälääkettä ei ole, toteaa Jorvin tehohoidon ylilääkäri Tero Varpula. Osalla potilaista tehohoito voi kestää viikkoja.
Lääkäri Ylelle: “Mikään aiemmin tunnettu virustauti ei ole ollut samanlainen” – nuorimmat koronatehohoidossa 30-vuotiaita
https://www.helsinginuutiset.fi/paikalliset/1639785
Tomi Engdahl says:
Leo Kelion / BBC:
UK’s NHS says it’s making a contact tracing app that uses a centralized approach, giving it more insight into COVID-19′s spread than Apple and Google’s approach — The UK’s coronavirus contact-tracing app is set to use a different model to the one proposed by Apple and Google, despite concerns raised about privacy and performance.
NHS rejects Apple-Google coronavirus app plan
https://www.bbc.com/news/technology-52441428
Bloomberg:
Australia launches a contact-tracing app that records digital handshakes between smartphones via Bluetooth, seeing 1.1M signups within a few hours
https://www.bloomberg.com/news/articles/2020-04-27/australia-launches-contact-tracing-app-as-states-ease-lockdown
Tomi Engdahl says:
Douglas Busvine / Reuters:
Germany says it will adopt a decentralized approach to digital contact tracing backed by Apple and Google, abandoning its home-grown alternative
Germany flips to Apple-Google approach on smartphone contact tracing
https://www.reuters.com/article/us-health-coronavirus-europe-tech/germany-flips-on-smartphone-contact-tracing-backs-apple-and-google-idUSKCN22807J
Germany changed course on Sunday over which type of smartphone technology it wanted to use to trace coronavirus infections, backing an approach supported by Apple and Google along with a growing number of other European countries.
Tomi Engdahl says:
Tulenko immuuniksi, jos saan koronan? 10 kysymystä ja vastausta viruksesta https://www.is.fi/kotimaa/art-2000006489138.html
Tomi Engdahl says:
Hyödyllinen ennakointikartta COVID-19 -kriisin jälkeiseen maailmaan.
https://bigdataexcellence.com/news/how-will-the-world-change-after-covid-19-2/
Tomi Engdahl says:
Town’s plans to use drone to monitor coronavirus scrapped because of privacy concerns
https://www.wftv.com/news/trending/towns-plans-use-drone-monitor-coronavirus-scrapped-because-privacy-concerns/WYBBK67D7ZD65ICJZV55URAO3E/?fbclid=IwAR2LDq-cHPH899LV2HoczFTW30lNvxx45qy9C3cH92TqyIZdTxvFMLK9HO0
A Connecticut town’s plan to use drones to monitor the health of its residents in group situations has been grounded.
Westport was going to be part of the “Flatten the Curve Pilot Program” that is being kicked off by the drone company Draganfly.
The company said the drone would be “equipped with a specialized sensor and computer vision systems that can display fever temperature, heart and respiratory rates, as well as detect people sneezing and coughing in crowds, and wherever groups of people may work or congregate,”
Originally the drone was expected to be deployed to beaches, train stations, parks, recreation centers and shopping centers, the Courant reported.
Tomi Engdahl says:
Brookings:
A look at how governments can help people stay at home by subsidizing remote work, online education, and streaming entertainment services
Can public policy incentivize staying at home during COVID-19?
https://www.brookings.edu/blog/future-development/2020/04/23/can-public-policy-incentivize-staying-at-home-during-covid-19/
More than a quarter of the world’s people are in quarantine or lockdown in response to the coronavirus (COVID-19). Tens of millions are required to stay at home, with many of them laid off or on unpaid leave. Given the highly contagious nature of the virus and the absence of a vaccination or cure, the mandatory nature of lockdowns and quarantines—to maintain physical distance—is understandable. Without government intervention, most private individuals, especially asymptomatic ones, would not self-isolate. Moreover, even with the intervention, there will be some “leakage.”
What is missing in such mandatory “stick” approaches is the more active use of “carrot” incentives that could both encourage self-isolation and help prepare a workforce to bounce back in the recovery phase. Noncompliance during a quarantine has large social costs, not least a faster spread of the pandemic and higher death rates. But governments could subsidize activities that help to better align private incentives with social objectives, and, in so doing, provide new forms of social protection that also make social distancing more bearable. What are some activities that could be performed by many citizens without leaving their homes?
We classify our ideas under three broad categories: jobs, human capital, and fun. The list could be expanded and we invite interested readers to submit their ideas.
Jobs. Here, we propose that governments subsidize a set of activities that could be done from home. This would further induce self-isolation, reduce the need for quarantine enforcement, and encourage some to learn new skills that could be useful after the pandemic is over. It could also provide effective, self-targeted social assistance to young people who have lost their jobs due to quarantines and lockdowns. Several categories of activities satisfy these criteria: data labeling, document digitization, and virtual services.
Human capital. Extended bouts of self-isolation could lead to wasted human capital. Digital jobs are one way to alleviate this concern. Another could be for governments to subsidize the dissemination and provision of Massive Open Online Courses (MOOCs) to make them freely and readily available.
Fun. Government could subsidize greater access to web-streamed entertainment services, because—in the current COVID-19 context—there is actually a public-good component in these privately provided services. Despite significant audience growth in recent years, many households still lack access to streaming services. And subsidizing household access to faster and more reliable Wi-Fi would also be fair game.
Tomi Engdahl says:
Tata Consultancy Services tells staff to go to their rooms and stay there, even after the pandemic passes
COO says plague-time productivity has improved so clients don’t see see WfH as a WtF
https://www.theregister.co.uk/2020/04/28/tata_consultancy_services_to_persist_with_remote_work/
Indian technology services giant Tata Consultancy Services will increase its use of remote working in the wake of the COVID-19 pandemic.
In an interview with pay TV channel India Live, Tata (TCS) Chief Operating officer N Ganapathy Subramaniam said “Customers are happy and employees are happy” as all service levels have been met.
“We observe better throughput and productivity,” he said, adding that “People have become a lot more collaborative.”
“Working from home in secure workspaces is going to be an integral part of our operating model,” he added.
The COO said TCS moved 415,000 staff to work from home after consulting over 1,000 clients about its plans and security arrangements.
Tomi Engdahl says:
Sweden Shatters Lock-down Model As Curves Stay Flat, Population Found Exposed But Not Sick; German MD Calls Corona Lock-down Measures “Collective Suicide Based On A Spook”
https://uncoverdc.com/2020/04/23/sweden-shatters-lock-down-model-as-curves-stay-flat/
The “controversial” health minister of Sweden, Anders Tegnell, and colleagues revealed the latest results of the Sweden Covid model which—as we all know— did not lockdown, did not quarantine.
What made it “riveting” was this: There is no crisis, no death spikes, no national emergency, no shortage of hospital beds. Listening to the press conference, (twice) and transcribing every word was like watching paint dry. And with each passing moment, the story became clearer and clearer to me:
Sweden can save the world right now.
It’s not easy to get the real story out of Sweden.
Tomi Engdahl says:
Yritykset koronakriisissä: Keskon tulos paljastaa mitä suomalaiset tekevät keittiöissään korona-aikana – ruuan verkkokauppa kasvoi jopa 800 prosenttia
Verkkokauppa tuottaa kuitenkin yhä tappiota.
https://yle.fi/uutiset/3-11326044
Keskon pääjohtaja Mikko Helanderin mukaan ruoan verkkokaupan myynti on parhaimpina viikkoina kasvanut yli 800 prosenttia edellisvuodesta.
Hän uskoo, että koronaepidemia nopeuttaa verkkokaupan kasvua ja tulee aiheuttamaan pysyvän muutokset suomalaisten kulutustottumuksissa.
– Tällä hetkellä ruoan verkkokaupan osuus on noin viiden prosentin tasolla meidän vähittäismyynnistämme.
Vielä muutama vuosi sitten verkkomyynnin osuus oli Helanderin mukaan vain muutama prosentin kymmenys.
ruoan verkkokauppa on tappiollista toimintaa.
– Kun tuotteet kerätään kaupoissa, pakataan, kuljetetaan kotiovelle – ja monesti vielä kannetaan jääkaapin viereen – se on työtä ja työ maksaa. Tällä hetkellä tilanne on se, että se ei kata kustannuksia joita työstä ja palvelusta syntyy, Keskon Helander kertoo.
Hänen mukaansa tilanne on sama verkon ruokakauppiailla ympäri maailman.
– Niin meillä kuin muillakin on työtä tehtävänä, että verkkokauppa saadaan kannattavuudeltaan samalle tasolle kuin kivijalkakauppa.
Päivittäistavarakaupassa ruokakaupan myynti kasvoi, mutta varsinkin Kespro-tukun myynti putosi ravintoloiden koronarajoituksista johtuen.
Tomi Engdahl says:
Akava: Lomautettujen määrä kohosi ennätykseen – jopa 90-luvun laman luvut jäivät kakkoseksi
Korkeakoulututkinnon suorittaneista erityisen paljon maaliskuussa oli lomautettuna tradenomeja.
https://yle.fi/uutiset/3-11325851
Tomi Engdahl says:
Teknologiateollisuus: Suomen vienti romahti huhtikuussa – Helle: ”Työpaikoilla on hätä”
https://www.iltalehti.fi/talous/a/45e6743d-3d6a-4697-91a7-b01fbca17c63
Teknologiateollisuuden tuoreen kyselyn mukaan tarjouspyyntöjen määrä romahti huhtikuussa, ja heikko kysyntä vaikeuttaa yhä useamman yrityksen toimintaa merkittävästi.
– Vaikeudet lisääntyvät lähikuukausina, liikevaihto laskee, ja pohjakosketus tulee näillä näkymin vuoden loppupuolella, Teknologiateollisuuden tiedotteessa todetaan.
– Tämänhetkisen arvion mukaan lähes kolmannes alan henkilöstöstä on jossakin vaiheessa lomautettuna.
Tomi Engdahl says:
Aww, poor things. “I don’t need to spend so much money on luxury items. I can reuse my clothes”
Coronavirus: Influencers’ glossy lifestyles lose their shine
https://www.bbc.com/news/business-52362462?at_campaign=64&at_medium=custom7&at_custom2=facebook_page&at_custom4=A779462C-863B-11EA-8AF2-12293A982C1E&at_custom1=%5Bpost+type%5D&at_custom3=BBC+News&fbclid=IwAR0xd2V6019vLdQSBFyur3j0MH86Qq1LAwHvJw74mNDsPMLVnVLFZ-WpFb8
The economic consequences of the coronavirus pandemic are far-reaching, and advertising and marketing budgets are among the first things businesses are cutting back on as they try to survive.
That spells trouble for the media industry at large, all the way from the biggest of the newspaper brands down to the one-person-band social media creators.
And in the case of those so-called “influencers” not only is sponsorship evaporating, but also their ability to generate content as brands stop providing products to try out and ditch plans for press trips.
“Ad and marketing spend has been either cut drastically or thrown out of the window,” Khyara Ranaweera, digital director of the agency, says.
“A lot of businesses’ first response was panic mode: they shut their doors, social accounts and stopped spending.”
Tomi Engdahl says:
Teknologiateollisuus: Vientiyrityksillä tarve 3–5 miljardin euron suorille tuille
https://www.is.fi/taloussanomat/art-2000006489698.html
Kyselyssä alan yrityksistä kolmannes kertoi jo lomauttaneensa ja toinen kolmannes tekevänsä samoin lähikuukausina.
Teknologiateollisuus ry arvioi, että valtion on valmistauduttava tukemaan vientiyrityksiä miljardiluokan tuilla. Yhdistyksen toimitusjohtajan Jaakko Hirvolan mukaan elinkelpoisten yritysten suoran tuen tarve voi olla 3–5 miljardia euroa tai jopa enemmän.
Hirvola korostaa, että koronakriisistä taloudelle aiheutuva tilanne on epävarma ja arvioidun summan on tarkoitus toimia signaalina tuen tarpeesta. Olennaista tarvittavan tuen laajuudessa on koronaviruksen vuoksi säädettyjen rajoitustoimien purkaminen niin Suomessa kuin maailmalla.
– Kun Suomi on niin vientivetoinen talous, paljon riippuu siitä, miten erityisesti Euroopassa rajoituksia päästään purkamaan ja siellä kysyntä kasvamaan, Hirvola sanoo STT:lle.
Tomi Engdahl says:
Nyt sen tunnustavat viranomaisetkin: Koronaepidemia on hidastunut Suomessa voimakkaasti, mutta se ei välttämättä ole pelkästään hyvä asia
https://www.aamulehti.fi/a/adb7f481-075e-4d69-b899-3c92e375e36d?c=1522737894164
Tomi Engdahl says:
Maskien avulla takaisin arkeen? Professori esittelee ESTE-strategiansa tienä ulos koronarajoituksista
https://www.iltalehti.fi/terveysuutiset/a/146f2873-9370-41b9-90fb-9603d0aefdd3
Tomi Engdahl says:
COVID-19 vs. Our Privacy: The Dilemma of Contact Tracing
New contact tracing technologies are being deployed to fight the spread of COVID-19. But when does a technology cross the line between being helpful or invasive?
https://www.designnews.com/electronics-test/covid-19-vs-our-privacy-dilemma-contact-tracing/208608238662907?ADTRK=InformaMarkets&elq_mid=13003&elq_cid=876648
Tomi Engdahl says:
UK’s coronavirus contacts tracing app could ask users to share location data
https://techcrunch.com/2020/04/28/uks-coronavirus-contacts-tracing-app-could-ask-users-to-share-location-data/
More details have emerged about a coronavirus contacts tracing app being developed by UK authorities. NHSX CEO, Matthew Gould, said today that future versions of the app could ask users to share location data to help authorities learn more about how the virus propagates.
At the same time, ongoing questions about the precise role of the UK’s domestic spy agency in key decisions about the NHSX’s choice of a centralized app architecture means privacy concerns are unlikely to go away — with Gould dodging the committee’s about GCHQ’s role.
A basic version of the NHSX’s coronavirus contacts tracing app is set to be tested in a small geographical region in the next 1-2 weeks, per Gould — who said “technically” it would be ready for a wider rollout in 2-3 weeks’ time.
For now, the basic version of the contacts tracing app the NHSX is devising is not being designed to track location. Instead, it will use Bluetooth as a proxy for infection risk, with phones that come into proximity swapping pseudonymized identifiers that may later be uploaded to a central server to calculate infection risk related to a person’s contacts.
Bluetooth proximity tracking is now being baked into national contacts tracing apps across Europe and elsewhere, although app architectures can vary considerably.
The UK is notable for being one of now relatively few European countries that have opted for a centralized model for coronavirus contacts tracing, after Germany switched its choice earlier this week.
France is also currently planning to use a centralized protocol. But countries including Estonia, Switzerland and Spain have said they will deploy decentralized apps — meaning infection risk calculations will be performed locally, on device, and social graph data will not be uploaded to a central authority.
Centralized approaches to coronavirus contact tracing have raised substantial privacy concerns as social graph data stored on a central server could be accessed and re-identified by the central authority controlling the server.
Apple and Google’s joint effort on a cross-platform API for national coronavirus contacts tracing apps is also being designed to work with decentralized approaches
Tomi Engdahl says:
Farmers Face Their Worst Case Scenario: ‘Depopulating’ Chickens, Euthanizing Pigs And Dumping Milk
https://www.forbes.com/sites/jennysplitter/2020/04/28/farmers-face-their-worst-case-scenarios-depopulating-chickens-euthanizing-pigs-and-dumping-milk/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Valerie/#76616c657269
Farmers and ranchers are beginning to face their worst case scenario. With meat processing plants closing and institutional milk buyers shut down, some farmers have no choice now but to put the food they’ve produced to waste.
Dairy farmers are trying to decide between dumping their milk and selling their dairy cows for beef. Contract chicken growers on the Eastern Shore have been asked to “depopulate” nearly 2 million chickens. Hog farmers in Iowa and Minnesota are starting to euthanize their pigs. For contract and cooperative farmers—producers in the food system who are obligated to a larger entity—the options are limited.
Tomi Engdahl says:
Survey Finds 50 Million Americans Have Lost Their Job In Past 6 Weeks
https://www.zerohedge.com/markets/survey-finds-50-million-americans-have-lost-their-job-past-6-weeks
When Thursday’s initial claims report is published at 830am on Thursday, the Dept of Labor will confirm that the current depression is unlike any seen before, with approximately 30 million Americans losing their jobs in the past 6 weeks alone. That, however, may be underestimating the full number of Americans who have lost their jobs by as much as 50%.
According to an online poll by the left-wing Economic Policy Institute, millions of Americans who have been thrown out of work during the coronavirus pandemic have been unable to register for unemployment benefits. The poll found that for every 10 people who have successfully filed unemployment claims, three or four people have been unable to register and another two people have not tried to apply at a time of acute economic crisis.
Tomi Engdahl says:
Coronavirus quick fixes aren’t scalable. What’s your long-term strategy?
https://www.smartsheet.com/content-center/executive-center/reports-research/coronavirus-quick-fixes-arent-scalable-whats-your-longterm-strategy?utm_medium=sponcon&utm_source=techmeme
Given the rapidly changing circumstances and the potentially serious disruption businesses face from the COVID-19 crisis, organizations are understandably resorting to quick fixes and stopgap measures to support remote working.
Yet according to a recent report by 451 Research’s Chris Marsh, Research Director, Workforce Productivity and Collaboration, team communication and collaboration tools like chat and video conferencing alone aren’t the answer to the challenges businesses now face. “Shifting more work into email, virtual conferencing and other team collaboration tools won’t make up for the productivity losses many have already experienced,” writes Marsh. “They certainly aren’t their own long-term solutions, and they may actually introduce more friction into employee’s day-to-day work.”
As many organizations find their employees needing to do more “with more friction, but with fewer resources,” business leaders need a long-term strategy that empowers teams to respond to rapidly-changing conditions and execute effectively. Such a strategy is critical not only to navigate today’s complex and significant business challenges, but to be ready for any potential disruption in the future.
Tomi Engdahl says:
Korona iskee rajusti suomalaisyrityksiin loppukesästä
https://etn.fi/index.php/13-news/10714-korona-iskee-rajusti-suomalaisyrityksiin-loppukesasta
Koronaepidemia on iskemässä teknologiateollisuuteen ja Suomen vientiin rajulla tavalla. Teknologiateollisuuden tuoreen kyselyn mukaan tarjouspyyntöjen määrä suorastaan romahti huhtikuussa, ja heikko kysyntä vaikeuttaa yhä useamman yrityksen toimintaa merkittävästi. Kaksi kolmasosaa alan teollisuusyrityksistä ilmoittaa tilanteensa olevan kolmen kuukauden kuluttua huono tai erittäin huono.
Teknologiateollisuuden yrityskyselyiden perusteella vaikeudet lisääntyvät lähikuukausina, liikevaihto laskee, ja pohjakosketus tulee näillä näkymin vuoden loppupuolella. Tämänhetkisen arvion mukaan lähes kolmannes alan henkilöstöstä on jossakin vaiheessa lomautettuna.
Koronataantuma iskee teknologiateollisuuteen pienellä viiveellä, sillä viime vuoden lopun ja alkuvuoden tilauskertymästä on riittänyt töitä joksikin aikaa. Tilanne on kuitenkin kääntymässä selkeästi heikompaan. Tarjouspyyntöjen saldoluku romahti huhtikuussa alimmalle tasolleen (-42) sitten finanssikriisin heikoimman neljänneksen.
Tomi Engdahl says:
Is Medtech Prepared for Recovery?
https://www.mddionline.com/medtech-prepared-recovery?ADTRK=InformaMarkets&elq_mid=13019&elq_cid=876648
Having resources in the right place when the recovery happens is critical, advises Brian Chapman of ZS Associates.
While certain medical devices, supplies, and diagnostics necessary for treating COVID-19 patients have seen increased demand during the pandemic, the postponement of non-emergency procedures has impacted demand for many other products.
Medtech companies experiencing a drop in product demand have been responding in various ways, with some taking drastic measures to cut costs and others just “waiting for the storm to pass,” he said. While these companies do have an obligation to ensure their “cash burn is appropriate,” he said, and “in some cases there are reasons for concern because of the cash position or exposure,” there doesn’t appear to be a uniform response across affected sectors. “Some are worried about money and employees, and others are not even having a conversation,” he added. The differences may be due to leadership, structure, or other reasons, he said.
Tomi Engdahl says:
Ohjelmistot ja it-palvelut kasvoivat Suomessa melkoista tahtia – ala kestää poikkeustilaa paremmin kuin teollisuus
https://www.tivi.fi/uutiset/tv/9ec99f7e-cbfe-4abc-8193-7782ed7020f6
Teknologiateollisuus ry:n katsauksen mukaan Suomen teknologia-ala ottaa pahasti takkiin koronaviruksesta, mutta it-ala vain vähän. Viime vuonna ohjelmistot ja it-palvelut kasvoivat 9 prosenttia vuodesta 2018.
Tomi Engdahl says:
– Yleinen mielipide tuomitsee kaikki, jotka yrittävät yhtään optimoida tilannetta talouden ja terveyden välillä, Osmo Soininvaara kirjoittaa. Oletko samaa mieltä?
“Aika kevyesti ollaan uhraamassa nuoret sukupolvet” – Osmo Soininvaara: Terveys ensin tarkoittaa, ettei taloutta saa julkisesti ajatella
https://www.helsinginuutiset.fi/paikalliset/1645475
Sosiaali- ja terveysministeriö sekä THL tiedottivat maanantaina, että koronavirusepidemia on hidastunut voimakkaasti Suomessa ja “nykytilanne mahdollistaa keskustelun rajoitusten osittaisesta höllentämisestä”.
Esimerkiksi opettajien ammattijärjestö OAJ on vaatinut koulujen avaamista seuraavan kerran vasta syksyllä.
Jotkut ovat väläytelleet erilaisten rajoitusten jatkamista jopa vuoteen 2021, kunnes koronaan olisi mahdollisesti saatavilla rokote.
HELSINKILÄINEN pitkän linjan poliitikko ja tietokirjailija Osmo Soininvaara (vihr.) pohti maanantaina julkaisemassaan blogikirjoituksessa, että “lockdownin” jatkaminen syksyyn 2021 kaatuu taloudelliseen mahdottomuuteen sekä ihmisten kyllästymiseen.
– Yleinen mielipide tuomitsee kaikki, jotka yrittävät yhtään optimoida tilannetta talouden ja terveyden välillä. Terveys ensin tarkoittaa tällä kielellä, ettei taloutta saa julkisesti ajatella, Soininvaara kirjoittaa.
Hänen mukaansa ne, jotka kuvittelevat, että terveys ohittaa aina talouden, eivät tunne lainkaan tilannetta budjettirajoitusten alaisessa terveydenhuollossa.
Tomi Engdahl says:
Fortumin ja EK:n Pekka Lundmark ja UPM:n Jussi Pesonen kertovat näkemyksiään miten Suomalaiset pörssiyritykset selviävät talouden romahduksesta
https://areena.yle.fi/1-50331006
Nordean pääekonomisti Tuuli Koivu ja ja analyytikko Kristian Nummelin esittelivät tuoreessa webinaarissa mielenkiintoista dataa reaalitalouden romahduksesta -> https://youtu.be/QxhKNs99A-w.
Tomi Engdahl says:
Lomautettuja jo yli 160 000 – käppyrä näyttää, miten lomautettujen määrä nousi ennätystasolle maalis-huhtikuussa
https://www.iltalehti.fi/talous/a/1c38c82c-fc50-462c-bac8-22df99a6c4ab
Tomi Engdahl says:
We Built the Supply Chain We Wanted … Not the One Needed
https://www.eetimes.com/we-built-the-supply-chain-we-wanted-not-the-one-needed/
The lessons of COVID-19 may be numerous but one stands out. The global supply chain is skewed towards one part of the world. This represents a great danger to everyone. If this wasn’t clear before, despite attempts by some to point out the dangers of this imbalance, it is now obvious the system needs to be corrected. And corrected it will be. Globally, and by the different regions.
The price of production outsourcing to China is too high. Today, it is measured in the loss of lives — by the tens of thousands. The expected cost-efficiencies cannot be justified anymore.
This isn’t a rant about China and the out-sized role it plays in the global manufacturing supply chain. Rather, it is about a lopsided system put in place over the last decades, resulting in the transfer of manufacturing activities to one part of the globe in the hope for production- and cost-efficiencies.
The initial idea for outsourcing of production worked very well. Much of global manufacturing activities now take place in China and in other Asia-Pacific countries. Production has been whittled down in the rest of the world to critical goods often solely defined in terms of national security. Even in this area, the defense capabilities of many countries have been compromised as a result of the outsourcing of manufacturing to the East.
Coronavirus ended the illusion that a single country or region can be responsible for the bulk of global manufacturing. Countries from Europe to North America and Africa were unable to secure critical medical supplies, including basic items such as face masks and more advanced equipment such as ventilators and thermostats. The mad dash to secure supplies fractured regional alliances and demonstrated visibly the huge gap in resources between advanced economies and developing nations.
Worse, even developed countries such as the United States found their manufacturing muscles have withered, wasted during years of neglect. The humiliating image of the world’s leading economy begging Beijing for masks and other protective devices needed by medical personnel played repeatedly across the globe, leaving impoverished countries of South America and Africa wondering how they would survive the pandemic if the U.S. couldn’t swiftly make what it needed.
The several trillion dollars the United States Congress has voted to fight the economic impact of COVID-19 pales beside the country’s glaring impotence in providing basic tests and equipment. Outsourcing has spawned a disaster almost as ugly as the scourge of COVID-19.
Some countries have fared better. Germany, Europe’s economic and manufacturing powerhouse, had enough of everything it needed. There were no panic buying of food, medical equipment, ventilators or masks. Hospitals, reportedly, had enough materials, helping to keep its death rate from the coronavirus to one of the lowest rates globally.
While deaths spiraled in neighboring Italy and farther off Spain, Germans ramped up tests and, generally, waited for the easing of restrictions on movement. The few protests restrictions were generally about the curbs on “freedom.” Death is not stalking German cities as it is doing unchecked in the U.S. Outsourced production wasn’t the main reason but it sure has contributed to minimizing the disaster. A rethink of how we got here, and the realignment of global production centers, has become necessary.
Not just for the U.S. and European nations but for every part of the globe.
Tomi Engdahl says:
Cybersecurity and Remote Workers in the Age of Covid-19
https://www.eetimes.com/cybersecurity-and-remote-workers-in-the-age-of-covid-19/
What happens when practically everyone on the planet is suddenly told to stay home, all depending on their digital connections to the outside world? And what happens when many are working remotely for the first time, with little or no preparation for securing their computers, networks, and equipment connected to the enterprise?
It’s “perhaps the fastest, starkest change to working patterns around the world in living memory,” as Check Point Software Technologies put it in a recent blog.
A huge increase in cyberthreats spawned by the coronavirus pandemic — combined with mass remote working and many others idled at home — is threatening the security of digital data and communications. This includes engineers and IT managers, government employees and intelligence service workers, as well as consumers and cybersecurity professionals. And it’s occurring on a scale not seen before.
Tomi Engdahl says:
The Economy Shrank 4.8% Last Quarter—The Biggest
Contraction Since 2009—But The Worst Is Still To Come
https://www.forbes.com/sites/sarahhansen/2020/04/29/the-economy-shrank-48-last-quarter-the-biggest-contraction-since-2009-but-the-worst-is-still-to-come/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Gordie/#676f7264696
U.S. gross domestic product—a measure of the value of all the goods and services produced by the economy—declined 4.8% in the first three months of 2020, according to data released by the Commerce Department; this is the worst quarterly decline in a decade, but experts agree that the numbers haven’t even begun to reflect the scope of the economic damage caused by the coronavirus.
Economic output hasn’t shrunk at all since the beginning of 2014, when it fell 1.1%, and there hasn’t been a drop this steep since the height of the Great Recession in 2009.
After an 11-year period of strong economic performance, temporary unemployment claims ballooned to more than 26 million in a matter of weeks as the coronavirus crisis took hold.
Experts were predicting a contraction of about 4% for the first quarter, and there is widespread consensus that next quarter’s numbers will be even more dire.
Last week, the Congressional Budget Office predicted that GDP growth will plunge a jaw-dropping 40% in the second quarter from the same time last year; the CBO also predicts that growth will slow 11.8% from the first quarter, which would be the biggest loss since the Commerce Department began tracking GDP data in 1947.
“Prior to the coronavirus shock, the economy was doing relatively well,” Gregory Daco, chief U.S. economist for Oxford Economics, told NPR. “The shock that we experienced in the second half of March actually has led to a sudden stop in spending on a lot of services and even spending on some goods.” Unfortunately, Daco said, that shock is “only the tip of the iceberg.”
$3.7 trillion. That’s how high the Congressional Budget Office expects the federal budget deficit will be by the end of the current fiscal year after a month of historic government spending on emergency rescue initiatives like the CARES Act.
Tomi Engdahl says:
Streaming films are temporarily eligible for Oscars, no theatrical run required
https://techcrunch.com/2020/04/28/oscars-streaming-coronavirus/?tpcc=ECFB2020
Tomi Engdahl says:
Reuters:
A deep dive on pitches to governments from cyber-intel firms like Cellebrite, NSO Group, and Intellexa to use their spy tools to trace the coronavirus
Special Report: Cyber-intel firms pitch governments on spy tools to trace coronavirus
https://www.reuters.com/article/us-health-coronavirus-spy-specialreport/special-report-cyber-intel-firms-pitch-governments-on-spy-tools-to-trace-coronavirus-idUSKCN22A2G1
When law enforcement agencies want to gather evidence locked inside an iPhone, they often turn to hacking software from the Israeli firm Cellebrite. By manually plugging the software into a suspect’s phone, police can break in and determine where the person has gone and whom he or she has met.
Now, as governments fight the spread of COVID-19, Cellebrite is pitching the same capability to help authorities learn who a coronavirus sufferer may have infected. When someone tests positive, authorities can siphon up the patient’s location data and contacts, making it easy to “quarantine the right people,” according to a Cellebrite email pitch to the Delhi police force this month.
This would usually be done with consent, the email said. But in legally justified cases, such as when a patient violates a law against public gatherings, police could use the tools to break into a confiscated device, Cellebrite advised. “We do not need the phone passcode to collect the data,” the salesman wrote to a senior officer in an April 22 email reviewed by Reuters.
Cellebrite’s marketing overtures are part of a wave of efforts by at least eight surveillance and cyber-intelligence companies attempting to sell repurposed spy and law enforcement tools to track the virus and enforce quarantines, according to interviews with executives and non-public company promotional materials reviewed by Reuters.
Surveillance-tech companies have flourished in recent years as law enforcement and spy agencies around the world have sought new methods for countering adversaries who now often communicate through encrypted mobile apps.
Tomi Engdahl says:
Rajoituksilla korona ei poistu – HUSin Järvinen: Uskon, että tauti on tullut jäädäkseen
https://www.iltalehti.fi/iltv-paivarinta/a/fb61fcb3-6c7d-4758-aa9b-b24f2fa53216
Husin infektioylilääkäri Asko Järvinen toteaa Sensuroimattomassa Päivärinnassa uskovansa, että korona on hyvin todennäköisesti tullut jäädäkseen
Tomi Engdahl says:
Companies’ use of AI thermal cameras to speed return to work sparks worries about civil liberties
Companies’ use of thermal cameras to speed return to work sparks worries about civil liberties
https://www.seattletimes.com/business/companies-use-of-thermal-cameras-to-speed-return-to-work-sparks-worries-about-civil-liberties/
The workers wore masks and kept their distance on the factory floor, but the health-care manufacturing plant still had a problem: People were standing too closely together on smoke breaks.
So engineers at Landing AI, a start-up that builds artificial-intelligence systems for industrial clients, designed a “social distancing detector”: Camera software that rings a buzzer or alerts security staff when two people stand less than six feet apart.
“It’s not to punish them,” said Kai Yang, a company director. “The intention is to try to keep them safe.”
As corporate America itches to reopen, company leaders are scrambling to install fever-screening stations, digital trackers and other security systems as part of a vast experiment designed to flag the potential risks of the coronavirus’ spread.
They range from standard thermometer guns to more sophisticated social-distancing and heat-detection cameras, some of which are paired with facial-recognition software that security officials can use to track and identify the suspected unwell.
Public-health experts expect that temperature-scanning systems, like metal detectors and security pat-downs before them, will become a widespread staple of public life. In the weeks to come, they could be installed not only at airports and arenas but workplaces, schools, housing complexes and anywhere else Americans gather en masse.
Tomi Engdahl says:
In four U.S. state prisons, nearly 3,300 inmates test positive for coronavirus — 96% without symptoms
https://www.reuters.com/article/us-health-coronavirus-prisons-testing-in/in-four-u-s-state-prisons-nearly-3300-inmates-test-positive-for-coronavirus-96-without-symptoms-idUSKCN2270RX
As mass coronavirus testing expands in prisons, large numbers of inmates are showing no symptoms. In four state prison systems — Arkansas, North Carolina, Ohio and Virginia — 96% of 3,277 inmates who tested positive for the coronavirus were asymptomatic
The numbers are the latest evidence to suggest that people who are asymptomatic — contagious but not physically sick — may be driving the spread of the virus, not only in state prisons that house 1.3 million inmates across the country, but also in communities across the globe. The figures also reinforce questions over whether testing of just people suspected of being infected is actually capturing the spread of the virus.
“It adds to the understanding that we have a severe undercount of cases in the U.S.,”
Tomi Engdahl says:
The world is on lockdown. So where are all the carbon emissions coming from?
https://grist.org/climate/the-world-is-on-lockdown-so-where-are-all-the-carbon-emissions-coming-from/?fbclid=IwAR1IZEGQAuK7yMXmdYs94KhbYo29ywpHe0LrsYgfk9SLMp547WjLRxGoArw
Pedestrians have taken over city streets, people have almost entirely stopped flying, skies are blue (even in Los Angeles!) for the first time in decades, and global CO2 emissions are on-track to drop by … about 5.5 percent.
Wait, what? Even with the global economy at a near-standstill, the best analysis suggests that the world is still on track to release 95 percent of the carbon dioxide emitted in a typical year, continuing to heat up the planet and driving climate change even as we’re stuck at home.
A 5.5-percent drop in carbon dioxide emissions would still be the largest yearly change on record, beating out the financial crisis of 2008 and World War II. But it’s worth wondering: Where do all of those emissions come from? And if stopping most travel and transport isn’t enough to slow down climate change, what will be?
“I think the main issue is that people focus way, way too much on people’s personal footprints, and whether they fly or not, without really dealing with the structural things that really cause carbon dioxide levels to go up,”
Transportation makes up a little over 20 percent of global carbon dioxide emissions, according to the International Energy Agency. (In the United States, it makes up around 28 percent.)
So where are all those emissions coming from? For one thing, utilities are still generating roughly the same amount of electricity — even if more of it’s going to houses instead of workplaces. Electricity and heating combined account for over 40 percent of global emissions. Many people around the world rely on wood, coal, and natural gas to keep their homes warm and cook their food — and in most places, electricity isn’t so green either.
Manufacturing, construction, and other types of industry account for approximately 20 percent of CO2 emissions. Certain industrial processes like steel production and aluminum smelting use huge amounts of fossil fuels — and so far, Schmidt says, that type of production has mostly continued despite the pandemic.
The reality is that emissions need to be cut by 7.6 percent every year to keep global warming from surpassing 1.5 degrees Celsius above pre-industrial levels — the threshold associated with the most dangerous climate threats — according to an analysis by the United Nations Environment Program. Even if the global lockdown and economic slump reduce emissions by 7.6 percent this year, emissions would have to fall even more the year after that. And the year after that. And so on.
In the middle of the pandemic, it’s become common to point to clear skies in Los Angeles and the cleaner waters of Venice as evidence that people can make a difference on climate change. “
But these arguments conflate air and water pollution — crucial environmental issues in their own right! — with CO2 emissions. Carbon dioxide is invisible, and power plants and oil refineries are still pumping it into the atmosphere. Meanwhile, natural gas companies and livestock farming (think cow burps) keep releasing methane.
“I think people should bike instead of driving, and they should take the train instead of flying,” said Schmidt. “But those are small, compared to the really big structural things that haven’t changed.”
It’s worth remembering that a dip in carbon emissions won’t lead to any changes in the Earth’s warming trend.
That helps explain why 2020 is already on track to be the warmest ever recorded, beating out 2016. In a sad irony, the decrease in air pollution may make it even hotter.
Tomi Engdahl says:
Trolls and bots are flooding social media with disinformation encouraging states to end quarantine
https://www.businessinsider.com/trolls-bots-flooding-social-media-with-anti-quarantine-disinformation-2020-4
Protests have popped up around the US calling for states to end quarantine and reopen businesses.
An analysis from Bot Sentinel, a bot tracking platform, found that bots and trolls have been stoking sentiments online that have fueled the protests, using hashtags like #ReopenAmericaNow and #StopTheMadness.
Christopher Bouzy, the founder of bot tracking platform Bot Sentinel, conducted a Twitter analysis for Business Insider and found bots and trolls are using hashtags like #ReOpenNC, #ReopenAmericaNow, #StopTheMadness, #ENDTHESHUTDOWN, and #OperationGridlock to spread disinformation. According to Bouzy, the bots and trolls are spreading conspiracy theories about Democrats wanting to hurt the economy to make Trump look bad, Democrats trying to take away people’s civil liberties, and Democrats trying to prevent people from voting. The accounts are also using false data to underplay the threat of the coronavirus.
Tomi Engdahl says:
Coronavirus: Greeks ponder ban on fax machines in state offices
https://www.bbc.co.uk/news/world-europe-52472144
Fax machines could be banned in government offices as part of new digital reforms proposed in Greece.
Minister of State and Digital Governance Kyriakos Pierrakakis wants to make all departments collect and issue documents electronically.
Coronavirus lockdown measures have forced many Greeks to use online services for the first time.
Prime Minister Kyriakos Mitsotakis told parliament the website was “the portal of the new, digital state”. Everything from prescriptions to residence certificates can now be processed online.
Tomi Engdahl says:
Costco Will Require All Shoppers To Wear Face Masks Starting Monday
https://www.forbes.com/sites/rachelsandler/2020/04/29/costco-will-require-all-shoppers-to-wear-face-masks-starting-monday/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Gordie/#676f7264696
All Costco customers will be required to wear a face mask inside stores starting Monday, the company announced Wednesday, making it the first major U.S. retailer to mandate its customers wear face coverings.
Costco members and guests must wear a mask or face covering that covers their mouth and nose at all times while inside the store, the company says.
Children under the age of 2 and people who are unable to wear a face covering due to a medical condition are exempt.
Some cities and states, including Maryland and San Francisco, have issued their own mask orders, but to date Costco is the only major retailer to require masks in all its stores.
The U.S. Centers for Disease Control recommends that all Americans, especially in public settings where other social distancing measures are difficult to maintain, such as grocery stores
“The use of a mask or face covering should not be seen as a substitute for social distancing. Please continue to observe rules regarding appropriate distancing while on Costco premises,” the company said.
Tomi Engdahl says:
https://thl.fi/fi/-/lasten-koronavirustartunnat-ovat-yleensa-lievaoireisia-suomessa-lapsilla-ei-vakavia-tautitapauksia-
Tomi Engdahl says:
Employing AI and Remote Patient Monitoring in the Fight Against COVID-19
https://www.mddionline.com/employing-ai-and-remote-patient-monitoring-fight-against-covid-19?ADTRK=InformaMarkets&elq_mid=13032&elq_cid=876648
Current Health is launching a collaboration with Mayo Clinic to develop monitoring solutions that accelerate the identification of COVID-19 patients and predict symptom and disease severity.
A new collaboration between Current Health and Mayo Clinic will combine artificial intelligence and remote patient management to tackle the novel coronavirus (COVID-19).
Edinburgh-based Current Health said the collaboration is aimed at accelerating the identification of COVID-19-positive patients and predict symptom and disease severity in patients, healthcare workers, and other at-risk individuals in critical service sectors.
To do this, digital biomarkers collected by Current Health’s FDA-cleared remote monitoring sensors and platform will be used.
“We currently help manage care for hundreds of patients infected with the coronavirus, and we saw an opportunity to use patient data to better understand how the coronavirus presents and evolves across diverse populations,” Chris McCann, CEO and Co-Founder, Current Health, told MD+DI. “Through this collaboration, we believe we can add to Mayo Clinic’s major advancements in accelerating COVID-19 detection and diagnosis, and further efforts to understand and treat this disease.”
Telemedicine Is Changing the Game in Diabetes Management
https://www.mddionline.com/telemedicine-changing-game-diabetes-management?ADTRK=InformaMarkets&elq_mid=13032&elq_cid=876648
Telemedicine is emerging as the hero technology during COVID-19. In the diabetes space, the technology is enabling new patient access to continuous glucose monitoring devices during a time when physician office visits have drastically declined.
Tomi Engdahl says:
https://www.mddionline.com/feds-take-pandemic-profiteering-seriously
Tomi Engdahl says:
India to build contact-tracing app for feature phones that still use 2G, don’t have Bluetooth and can’t run apps
There’s hundreds of millions in India alone
https://www.theregister.co.uk/2020/04/30/india_to_develop_contact_tracing_for_feature_phones/
The Indian government has signaled it will develop a COVID-19 contact-tracing that will work on the feature phones that comprise over half of the national mobile phone fleet.
India has already created a contact-tracing app for iOS and Android called “Aarogya Setu” that has scored 75m downloads. Aarogya Setu relies on Bluetooth to detect device that come into close proximity and India’s government has promoted using Aarogya Setu as just-about a patriotic duty and a critical part of its COVID-19 response.
But according to Navkendar Singh, a research director at IDC India, the nation has around 450m smartphone users compared to 550m feature phone users.
“The majority of feature phones are not data enabled, and most have no Bluetooth or GPS capability,” Singh said.
“Given the constraints of feature phone operating systems, getting the contact tracing app installed on basic phones is a big challenge.”
Implementing the system on feature phones will be “extremely problematic”,
“This means the only option is to do location tracking at a network level and on 2G and 3G, but the granularity of the location is not usually particularly accurate.”
India’s efforts will be watched closely because Bluetooth is not baked into around a quarter of the world’s mobile phones – about 1.5 billion in total, according to Counterpoint Research – and nations where feature phones are prevalent are likely to have modest health systems that could benefit from contact-tracing.
Tomi Engdahl says:
Ohhoh näitä lukuja! Yhdysvalloissa n. 50 miljonaa on menettänyt työpaikkansa 6 viikossa. Vaikka nämä luvut ovat luultavasti yläkanttiin, tämä on siis entisten työttömien lisäksi uusia työttömiä. Edes 1930-luvun suuressa lamassa eivät työpaikat hävinneet näin nopeasti.
Survey Finds 50 Million Americans Have Lost Their Job In Past 6 Weeks
https://www.zerohedge.com/markets/survey-finds-50-million-americans-have-lost-their-job-past-6-weeks
When Thursday’s initial claims report is published at 830am on Thursday, the Dept of Labor will confirm that the current depression is unlike any seen before, with approximately 30 million Americans losing their jobs in the past 6 weeks alone. That, however, may be underestimating the full number of Americans who have lost their jobs by as much as 50%.
Official statistics show that 26.5 million people have applied for unemployment benefits since mid-March, wiping out all of the jobs gained during the longest employment boom in U.S.
However, EPI’s survey indicates that an additional 8.9 million to 13.9 million people have been shut out of the system, said Ben Zipperer, the study’s lead author, which means that as of this week, just shy of 50 million American have lost their job since the start of March. “This study validates the anecdotes and news reports we’re seeing about people having trouble filing for benefits they need and deserve,” Zipperer said.
Labor Department statistics show that 71% who apply are getting payments, although that figure varies significantly by state.
Tomi Engdahl says:
It’s the economy, stupid!
https://www.youtube.com/watch?v=Ygln5S-9hIw
Tomi Engdahl says:
Jopa 20 000 ruotsalaista voi kuolla koronaan – valtionepidemiologin mukaan arvio kuulostaa uskottavalta
https://www.iltalehti.fi/ulkomaat/a/faa78752-2945-4d9b-8380-0de3c9b4e697
Kahden ruotsalaisprofessorin laskelmien mukaan koronavirus voi tappaa jopa 8000–20000 ruotsalaista.
Tomi Engdahl says:
4 Simulations Reveal Coronavirus from Different Perspectives
Videos show pandemic simulation, office sneezes, social distancing, AI-based CT-Scans, and respiratory digital twin modeling.
https://www.designnews.com/covid-19/4-simulations-reveal-coronavirus-different-perspectives/180769054162813
Tomi Engdahl says:
The algorithms big companies use to manage their supply chains don’t work during pandemics
The data the algorithms use isn’t reliable
https://www.theverge.com/2020/4/27/21238229/algorithms-supply-chain-model-pandemic-disruption-amazon-walmart
Even during a pandemic, Walmart’s supply chain managers have to make sure stores and warehouses are stocked with the things customers want and need. COVID-19, though, has thrown off the digital program that helps them predict how many diapers and garden hoses they need to keep on the shelves.
Normally, the system can reliably analyze things like inventory levels, historical purchasing trends, and discounts to recommend how much of a product to order. During the worldwide disruption caused by the COVID-19 pandemic, the program’s recommendations are changing more frequently.
“When you have something like COVID-19, it’s just a total outlier,” says Joel Beal, the co-founder of the consumer goods analytics company Alloy. “No model can predict that.”
Researchers have some understanding of how shocks to the system like natural disasters can disrupt supply chains and how impacts demand predictions. Disasters like hurricanes or floods, though, are usually regional. The pandemic is impacting the entire world. Even if companies stress-tested their demand forecasting models against diseases like H1N1 and SARS, they wouldn’t have accounted for something of this size. “This coronavirus pandemic is on another level entirely,”
The radical changes in people’s behavior, transportation, and production during this pandemic mean that the usually predictable ebb and flow is upended.
Tomi Engdahl says:
Covid-19 Deaths: How Much Are They Understated?
https://www.thestreet.com/mishtalk/economics/covid-19-deaths-how-much-are-they-understated
Based on dramatic changes in overall death counts we can estimate Covid-19 death undercounts.
The Financial Times reports the Global Coronavirus Death Toll Could be 60% Higher Than Reported.
Overall Death Increase
60% Belgium
51% Spain
42% Netherlands
34% France
299% New York City
155% Italy Lombardy Region
75% Stockholm Sweden
1,400% Jakarta Indonesia
The FT did not calculate excess deaths for the US, just New York City.
U.S. Coronavirus Death Toll Is Far Higher Than Reported, C.D.C. Data Suggests
Yes, older people are more at risk. But Judging from some reader comments, we should just say that we don’t give damn because these people would have died anyway, so who cares?
The facts are, hospitals were not prepared those excess cases, nor were mortuaries.
In case you missed it, please consider New York Forced to Send Bodies Out of State for Cremation
Without a doubt, we need top open up the US.
The focus ought to be opening things up safely. But we do not have enough tests yet.
Tomi Engdahl says:
The Stages of the Collapse
https://gnseconomics.com/2020/02/10/the-stages-of-the-collapse/
The coronavirus, Covid-19, is a true Black Swan which has thrust the world onto a path to an economic collapse of epic proportions. In this constantly updated blog we will follow the progress of the crisis.
The Onset of the crisis
In the Q-Review 4/2019 we specified that at the onset, stresses that had been building in the credit markets since the summer of 2019 would explode, shrinking if not eliminating entirely the exits from many parts of that market.
Downgrades of corporate debt in the U.S. and peripheral sovereign debt in the Eurozone would push large fixed-income investors, including pension funds, into higher-rated bonds, which would in turn lead to large-scale selling of lower-rated bonds, forcing wider spreads and even more selling.
late February 2020, when a sudden panic gripped investors in both credit and equity markets after a surge in reported Covid-19 deaths and cases in Italy combined with the collapse of OPEC talks.
For a brief period of time in mid-March, we were on the brink of a complete financial market meltdown. Then, as we also had envisaged in December, there was a frantic rush on a never-seen-before scale by global and local authorities to rescue the situation.
The Counterattack
We envisaged that the second phase of the collapse would be the desperate efforts of authorities to stop the crisis by a counterattack.
We said these were likely to include the restarting and acceleration of QE-programs and other market support programs, gigantic fiscal stimulus, increasing trade protectionism and possibly even calls for direct debt monetization
These tactics are now in effect in full force. The U.S. government in now engaged in an absurdly enormous stimulus program of $2 trillion. Governments all over the world are pushing vast amounts of debt-financed stimulus into their respective economies. This seriously undermines their ability to respond to future shocks.
If Germany, France, Finland and other stronger countries agree to significantly increase the budget of the Eurozone, in the range of 20%-30% of Eurozone GDP, and to issue Eurozone bonds, they might be able to muster enough firepower to stem the crisis.
As the funds would be specifically used to bail-out the banks of other nations, any ‘transfer union’ would become even more unpopular. Realizing a true federal union without the broad and popular support of the citizens of Europe would be an extremely risky endeavour. It would also violate the constitutions of many member countries as well as Article 125 of the TFEU, setting the stage for an existential constitutional crisis in the EU.
The Flood
If the desperate efforts of global authorities to uphold the credit and stock markets succeed, as it now seems, we will still be faced with a flood of corporate bankruptcies.
So-called “zombie” corporations, faced with collapsing global economic demand will start to fail on a scale unseen in decades. Unemployment will skyrocket and tax revenues will collapse. And, at some points, credit markets will crash despite of the massive efforts of central banks.
The United States
The US unemployment rate may have already reached 20%. In just six weeks, the pandemic and lockdowns have eliminated all the job gains since the GFC in 2008. One survey found that close to 50 million Americans might already have lost their jobs. The hit to the consumer demand, the main driver of the US economy, will be massive.
This, combined with the crashing global demand, will hit the US corporate sector hard.
Eurozone
It’s estimated that over 10 percent of companies in Europe are ‘zombies’. Their existence is also tightly connected to the existence of weak (or zombified) banks. And, remember that Europe holds the largest concentration of Global Systemically Important Banks, or G-SIBs, which means that the European banking crisis will “go global” in an instant
China
The first estimate of China’s Q1 growth came at -6.8% (Y-o-Y), which is the largest decline since at least 1992. It’s now estimated that there could be as much as 205 million newly unemployed people unable to return to work or to find a job in China.
Moreover, over 20 percent of companies in China are estimated to be zombies, and the extremely levered China’s banking system (see Figure 2) greatly exacerbates the fragility of the Chinese economy. China’s banking system will be unable to cope with any prolonged recession and a large rise in unemployment, which have both now materialized.
Considering the recent ghastly economic figures, we can safely assume that the Chinese banking sector is teetering on the edge of a collapse.
The skyrocketing unemployment is very likely to collapse of the highly inflated real-estate and financial bubbles. These, combined with the crash in global demand, will push the Chinese economy into a ‘hard landing’.
Global ramifications
The value of the holdings of public and private pension funds, charitable endowments, bank trust funds, insurance company general and variable accounts, and stock and bond mutual funds will crash in short order in the flood. Even lowly money-market funds may be at risk, just as they were in the Financial Crisis.
The Calamity
Due to both crashing capital markets and banking sector bankruptcies, joblessness and poverty are likely to explode. Simultaneously, government tax revenues will collapse as incomes retreat and capital gains evaporate.
As governments spending skyrockets in an orgy of Keynesian counter-cyclicality, national deficits will hit all-time highs on both an absolute and relative basis. Those central banks that have initiated debt monetization, have no other alternatives than to accelerate their programs. In their desperation, many other central banks are likely to follow.
Governments will try to save critically-important banks, which will require large-scale funding many countries—such as those in the Eurozone—cannot afford and will not be able to finance in paralyzed capital markets. This economic reality makes depositor bail-ins the only, if politically-unpalatable, option.
Confronted by new and harsh fiscal realities, pensions and other social security programs are likely to face serious cutbacks, by desperate governments. An economic calamity sets in.
Finally, at this point we will know, whether the central bankers are ready to take the final step in their monetary destruction -scheme: the helicopter drops, which can naturally be enacted earlier. They would bring an end to the monetary system as currently know it.
While some will applaud to such extreme move, they don’t usually bother to think its implications through.
From Q-Review 4/2019:
“Considering that global central banks would underwrite governments and possibly even citizens expenditures hyperinflation would be likely to ignite, at least in some countries. This would erode public faith in fiat currencies and require some heavy-handed tactics to bring it under control.
Economic growth would falter, stagnate—or drop, which is likely to be permanent. Because economic growth is the source of growing income, we would be transformed into a modern version of feudalism, where land-owners and the holders of concentrated capital would rise as the ruling class, as they would hold the one asset class that would yield constant profit, while the middle-class would become extinct.”
The Recovery
If the full socialization of our economies and financial markets does not occur, we expect the global depression to last 3-5 years. The initial collapse is likely to be over within three years (2020-2022).
If the banking sector implodes completely, the economic deficit will naturally be made much deeper leading to a systemic crisis.
However, if the essential functions of the banking sector are sustained, especially in Europe, we would avoid the deepest malaise. Moreover, if unsound banks and “zombie” corporations are allowed to go-under or are wound-down methodically, it will clear much of the malinvestment from the economy, creating the foundation for a strong and sustained recovery.
However, debt monetization, Modern Monetary Theory (“MMT”), helicopter drops and other money-conjuring schemes would corrupt the economy further making a sustained recovery impossible (see more from Q-Review 4/2019). This, unfortunately, is the path we currently are on.
We can do nothing more than hope that wise, courageous and far-sighted political leadership will spare us from that horrible fate.
It’s clear that the ‘zombified’ junk rated companies cannot sustain the elevated yields and collapsing demand for long, before they start to fail. Yet, the massive collapse in demand, reflected in the flash PMI:s, will be the main driver of corporate bankruptcies worldwide.
First signs of the approaching flood have already emerged. There are already reports of acute cash shortfalls among small- and medium-sized companies in the US and also globally.
Moreover, the Nikkei Asian Review has calculated that quarter of world’s largest companies are in risk of running out of cash, if there’s a 30% drop in sales lasting for a period of six months.
As the negative economic effects of the pandemic and lockdowns accumulate in the global economy, a 30% drop in sales can easily materialize. And, if (when) it does, we have an one-way ticket to the bottom.