With extreme regret ....
USA markets closed at 4pm NY time and CV19 cases were 16,000-
By days close and west cost they were 19,400-.
Right now 24 hours after this .... reported cases are 24,148* with the West coast still in daylight.
A rise of 50% in 24 hours.
As mentioned .... testing levels were virtually ZERO till very recently as some imbecile believed they were immune.
Where it is by USA futures open tomorrow morning which proceeds our open ... the CV19 total ...
PLEASE CLOSE the market.
We close stores, pubs, even beaches and our borders.
If there were tornado's here only the stupid would stand outside.
A cyclone is known to be coming ... only an imbecile does not close and shutter their house.
USA markets rule the world. An act of stupidity led by a dictator who denied CV19, denied testing or action and a medical system the kleptocracy which runs the USA sadly now exposed is NOTHING to do with other economies or financial systems. IF as USA says USA first and repeatedly has taken self interested actions for the very few, the fate, of the many in our case, the AUSTRALIAN financial system swings in the balance.
I hope and wish those infected in the USA get better, hold extreme fears for the 500,000 homeless in the USA and the 1.5 million living out of cars who will be discarded, as usual. Change in an Oligarchy or Kleptocracy with a delusional leader is not possible. At 24,000 cases and population 13 times our size ... testing STILL at less than 20% of where it should be .... USA even right now is likely DOUBLE the relative numbers of Australia and sadly, the total is assured to rise and rise.
What this has to do with our system and our way of life is virtually nothing. They have a voting system and whilst recently they rejected some trying to get healthcare for all .... in fact Oligarchy leaders and the worlds 3rd richest man ran to block any and all change and it was revealed he spent 860 million USD or 1.3 billion AUD to do that. If Australia could offer aid to the USA ... we would ... they are our friends on the main despite our PM being hung up on the phone and treated as third class citizens and threatened with tariffs.
With regret we CAN do nothing other than watch the Tornado approach and hope, it is NOT as bad as it will be. Placing blame is an aside normally, but, CDC numbers on testing with 2.5 samples per person up till even last week were, not a good thing.
https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/testing-in-us.html
Numbers are behind and
Number of specimens tested ... is NOT number of people ... its 2 if not 3 per person.
Does the RBA stand along with Scott Morrison like a stunned potato in the face of a tornado ?
Suggesting there is nothing to be gained by a pause in trading shows an extreme lack of knowledge of virtually every aspect of markets that is stunning to actually be shared, argued and displayed as a valid choice.
USA catches a cold in financial markets, as they used to say, and its very poor taste to USA this analogy, because the total and complete opposite is occurring right now.
What happens inside the USA, where this event ends and whilst longer term a vaccine will be found and anti viral s that appear to work will become more widespread in use. In the meantime, USA numbers of reported CV19 will sadly likely surpass Italy. Will they test the 500,000 homeless or families living in cars often bankrupted by the cost of medial care.
Does any of it have a single thing to do with the stability of the Australian financial system ? Rightly or wrongly Australian elected leaders implemented Medicare a long time ago and free universal healthcare. Both parties supported this along with a way of life we cherish but dont fully appreciate WHAT WE HAVE.
If you get sick, you get care if you loose your job you get help to get a new one that does not stop after 3 months and you end up on the street.
This crisis, whilst not a time to highlight the differences, is an event that exposed and until its passed which will be some time, exposes the hideous nature of the USA Kleptocracy. I dont have to be polite as a politician has to be. Don't have to fawn over the dear leader of the USA as our PM did and does. A dinner at the white house and he is the new lap dog.
We as a nation have 24 hours to choose to stand outside in an event like Cyclone Tracy which hit Darwin or to shelter till it passes. USA I am sure, even if they keep their markets open will emerge eventually.
Sadly we lack any and all political leadership in this nation. RBA has the mandate, and whilst its normally with goverment backing, rate decision and ones like this,
they ARE independent. Phillip Lowe the RBA head and various other heads, some of whom I have met at various times NEED irrespective of instruction or guidance ... being independent ... must possibly, even against the governments wishes, take action. I have extreme respect for the RBA and its leaders and its BOARD.
Sadly they may need to take leadership over the desires or wishes of MR Potato head and his instructions via the White House. I know in the GFC, the RBA looked with disbelief at the USA and its actions leading to the event, for 3 minutes they globally went good on you Australia for polices, then ... well did the same again.
Liquidity was BAD ....
prior to this, volatility exceeding even GFC levels and the storm is about to hit. Money markets and along with FX will operate as normal and RBA, as always, will provide liquidity and stability as is their role ALWAYS. As for equities, derivatives and high speed trading there is NO case that they contribute anything other than pain. TO say its a free market or whatever shows a stunning lack of understanding the the RBA and its herculean task at times like this to avert disaster.
Every day .... every single day the RBA changes and effects liquidity to implement its monetary policy. Something some seem to be oblivious totally to their daily role. In times of crisis the actions become more extreme if needed. When the currency goes troppo, to even suggest our currency is NOT a dirty float with serious intervention and at times support, or tapping on the brakes if needed is what THEY DO.
Having say a rout as a high speed computer senses some stock is vulnerable and sends it to 10% of the level it was last week, will and does send waves not just though equities but every single level of the financial system they are attempting to keep afloat.
USA .... with regret and my deepest sympathies for those whom I love dearly from the USA is facing a sobering reality about many things. This will continue till they are testing not 10,000 samples which is 4,000 people a day .... but likely the extent continues to be unknown till they reach our sort of levels of testing in relative terms which is 10,000 people a day .... so 13 times that for the USA and that's 130,000 people or say 300,000 samples and as of the 16th March they appear merely still only to be at 10,000 samples a day .... so double it for today .... they will have no idea for 10 or so days !!
Sobering .... having a system in the USA most ignored and took for granted if one had decent healthcare insurance as say 33% have, reality is 66% DO not and 33% HAVE NONE ....
This threat is an existential one, a global threat above and way beyond CV19.
USA itself and NOT CV19 is the threat. CV19 in time will be defeated and a vaccine along with anti virals clearly is on the way.
What the USA infected numbers reach is IRRELEVANT to most activities in Australia, Harsh but true. Our debt to GDP ratio is one of the lowest globally and forgotten and dismissed. Our banks just slashed dividends to shore up capital and then ISSUED and raised 10% more capital to make them even stronger PRIOR to any of these events. We have ZERO Federal debt denominated in foreign currency and whilst the idiot savant computer trading systems love trying to beat our currency down as they have in the past, and nearly 20 years ago, hedge funds attacked and sent it under 50 cents during the Asian Financial crisis when we didn't even have ANY federal net debt.
Either the RBA acts, or it does NOT. Either the Government and Treasury and RBA act together or, they stand outside during a cyclone and KNOWING what will occur and the Contagion of a financial crisis is akin to the spread of this damm Virus.
Why not make tongue kissing mandatory right now to help with CV19 ?
For the love of god, ACT ..... NOW and announce it tonight .... well prior to OPEN.
If USA wishes to keep its Equity and Derivative markets open good on them. The market exists both to provide avenues to raise and exchange ownership and capital. IT IS NON FUNCTIONING .... right at this very point of time and the STORM is YET to hit full force.
As a student as always of the markets, the 1929 fiasco and demise where 90% of value was shed and it took decades to recover spring to mind. I am not suggesting a depression or longer term impacts as a Vaccine will occur, social distancing works and whilst 1929 they did not act fiscally till too lat and NO real action occurred till after the event, this is not the case in 2020. Interest rates were slow to move as well.
We have .... and hopefully some more announcements prior to Monday occur and spending via govt here occurs. Rates are 0.25% and if anything NEGATIVE real rates.
That said, whilst equities were overvalued with NO risk factored in and 10% plus too high a month ago, to be in the USA 30% if not 40% lower and if we open Monday GFC shredding is passed likely is only going to get worse as USA CV19 cases rise and they face cascading stop losses as one market implodes it causes another to implode and panic and taking a 60% loss is better than 100%. Illogical, but having seen 50 or more of these events, its what occurs.
Oil and OPEC is side issue. At $20- a barrel 70% of all oil production is not profitable. NO new development, no wells to replace old ones, USA high cost fracking at break even of $60- and Tar sands the same, well .... in 2 years, whilst abundant supply for 100 years via new technology and awful things allowed such as dirty Tar sands, the price rises, and well at $100- every spigot will open and correct.
Can I say with any confidence if say we see, a sharp 50% loss from here to say 33% of current highs on equities, as illogical as it is, even for a brief instant in time ... weeks ... that many of our companies will cease to exist totally and sold for pennies, only to wake up in say 6 weeks from this delusional fog and CV19 cases being reported close to ZERO ... a vaccine well on its way, not 3 Anti Virals that work but 10 that seem to ...
Its a bit late to close the windows and shutter them for a cyclone Tracy event like the one that hit Darwin 12 hours after it and the bloody house itself is gone.
I am merely a student despite my years in the markets. Each event has its own causes, likely cures and at times needed central action.
It will be, what it will be.
I ask merely with good cause to TAKE ACTION ... prior to the event.
One could actually see what is going to occur PRIOR to our markets even opening as the USA equity derivatives open 40 minutes I think prior to ours.
If as I sadly suspect, the likely ... at this point ... opening does NOT occur, the opening price is Minus 5% and NO real trading occurs, sadly, the 13% next limit will I suspect be tested again without trading and then the 20% limit depending on where the CV19 case numbers are in the USA. Likely and with extreme remorse and sympathy and regret, mixed with disgust .... they are above 30,000 Morrow verses 16,000 prior to when the USA market was last open.
PLEASE JUST HIT THE PAUSE and stop trading for 14 days.