There’ll be too much pandemonium enveloping for me to keep up with blogging about.
The Economic Path Forward May Lead Over A Cliff
The DJIA temporarily peaked on Armstrong’s epic January 18, 2020 Economic Confidence Model (ECM) turn date, along with being the approximate date the coronavirus (nCov) reached critical mass (although the first infection appears to have been December 8, 2019). The DJIA will probably form a slingshot correction possibly down to 27,000 now until probably May. Out of this correction the DJIA will likely slingshot up to the 35,000 to 38,000 level by the next significant ECM turn date on March 14, 2022.
The Dow & the Economic Confidence Model
The nCov pandemic has caused a final slingshot low in interest rates, with the Fed and other central banks prepared to goose the liquidity as necessary (Fed stating until at least April) to prevent financial contagion. Thus we have risk-off move into safe haven assets such as Treasury bonds, gold, and Bitcoin, while simultaneously a risk-on sentiment because the world is flooded with liquidity with no good place to park (nor invest) it.
Yet the DJIA will come roaring back when the spread of the pandemic slows because of increased containment (aka quarantine) efforts, the dollar short that the stress on the financial system being amplified by the various crises which will continue to send international capital flows into the dollar (and possibly UK pound) markets.
The Dow & the Economic Confidence Model
Armstrong blogged in Capital Flows & the Next ECM:
So far, it appears that the capital flows will continue pointing to the USA going into 2022. Thereafter, we should expect a change in that trend in the same position of the ECM, which created the 1987 Crash also due to a capital flight from the dollar.
Essentially the DJIA, gold, and Bitcoin bottomed at the end of 2018 on the ECM’s turn date, and have all been in bullish mode since:
But Bitcoin raced out of the gate from $3k up to $13.8k then corrected to $6.4k in what will be a slingshot move to probably ~$40+k before the May 14, 2020 mining reward halving event. Whereas the DJIA and gold have been rising more steadily with the DJIA recently making a bullish move toward 30,000 with the phase 1 trade deal with China, but it will now correct because of the fears about the financial system. I believe after May, the legacy Bitcoin will align with a phase transition blowoff peak above $1 million before 2022 as the DJIA heads towards 40,000 and gold to $2000+ (and possibly ultimately $5000 by 2024). Looks like the DJIA may crash after 2022 and remember there’s also some speculation about Trump not surviving in office beyond 2022.
Read also my latest comment post updates and especially my comment post update about altcoins.
See also How Long Does it Take to Accept the Revelations of the Economic Confidence Model?.
The Economic Confidence Model & the European Economy:
The economies of France and Italy shrank in the fourth quarter of 2019 […] The German auto manufacture, which is the backbone of the German export-economic model built upon the old mercantilist system […] is also in a bearish position. Production of cars, the largest export product in a German manufacturing sector dependent on exports, has fallen by about 16% over the past year […] In fact, German auto production has hit a 23 year low.
[…] With Britain exiting the EU, they will find a huge hole in their budget […] means that either the EU breaks up, or they are compelled to raise taxes on the remaining member states.
[…] headed into a Euro turning point 2021.73 […] 2021/2022 will be a critical turning point in world currencies.
nCov Updates; SARS combined with HIV
I don’t have enough time to compose a well articulated, organized prose. I will just copy and paste from my numerous frantic email updates (operating on basically no sleep for 3 days).
Cremate coronavirus dead nearby—Chinese authorities
Novel coronavirus may spread via digestive system—experts
https://youtu.be/hSIt496d82s
Coronavirus: first human transmission in Thailand as death toll hits 258:
Suspected infection of taxi driver by traveller raises fears virus could reach tourist areas
A new analysis, published in The Lancet on Friday, estimated that as many as 75,800 people in Wuhan may have been infected as of 25 January and that several major Chinese cities might already have enough people infected to initiate local epidemics. “It is possible that epidemics could be already growing in multiple major Chinese cities, with a time lag of one to two weeks behind the Wuhan outbreak,” said the lead author, Prof Joseph Wu of the University of Hong Kong.
Quote from that Lancet paper:
Findings In our baseline scenario, we estimated that the basic reproductive number for 2019-nCoV was 2·68 (95% CrI 2·47–2·86) and that 75 815 individuals (95% CrI 37 304–130 330) have been infected in Wuhan as of Jan 25, 2020. The epidemic doubling time was 6·4 days (95% CrI 5·8–7·1). We estimated that in the baseline scenario, Chongqing, Beijing, Shanghai, Guangzhou, and Shenzhen had imported 461 (95% CrI 227–805), 113 (57–193), 98 (49–168), 111 (56–191), and 80 (40–139) infections from Wuhan, respectively. If the transmissibility of 2019-nCoV were similar everywhere domestically and over time, we inferred that epidemics are already growing exponentially in multiple major cities of China with a lag time behind the Wuhan outbreak of about 1–2 weeks.
The Virus & The Party - "We Are Now In Phase 3...":
The timeline is quite literally terribly obvious. In early December -and it could have been even earlier-, it was obvious to doctors and Communist Party (CCP) politicians in Wuhan that something was wrong. But their painfully predictable reaction was to hope this would pass. Never a bad word should be uttered about the Party, and nothing said that could embarrass it.
December passed, as news was getting worse and more obvious due to a large number of “pneumonia” patients. Chinese doctors published an article in the Lancet this week (this week, 6 weeks after the fact!) saying human-to-human transmission had been established by mid-December.
But the code of silence was not broken, even when a man died from the virus on January 9. It took until mid-January before word got out, a full week later. By then millions of people had left and/or entered Wuhan, a city of 11 million, potentially infecting millions of other Chinese and perhaps people abroad. 5 million later left the city for Lunar New Year.
On January 10, the virus was defined and the sequence was shared, but testing didn’t start for another week; patients were registered as pneumonia sufferers, including those that died (we have no idea how many there were).
Then, mid January, doctors starting testing for the virus. The first “exported” case was noted in Thailand on January 13, but it still took more time for the potential threat to be realized and reported. The Party boys were still hoping it would all pass. Can you blame them? They are civil servants, they don’t know anything about viruses, or their threat.
It’s good to note how fast the novel virus has spread. If only to show what those who are determined to keep such a thing silent are up against. Can’t be easy. 291 cases on Jan 20, 14,562 cases 13 days later. Those are exponential numbers, even if the number of fatalities “only” rose by 46 overnight.
It’s also good to keep in mind that the main threat in viruses is their ability to mutate and become deadlier. This virus now has at least those 14,562 hosts which they can use to mutate in. Hong Kong University doctor and epidemiologist Gabriel Leung and his team said in a Jan 31 report: “In our baseline scenario, we estimated 75,185 infections as of Jan 25.” . And they were reporting on Wuhan alone. In other words, well over 5 times as many hosts and chances for the virus to mutate in just one city. In a city of 11 million people, numbers like that are perhaps not that extreme.
Back to politics.
We have had two phases so far.
is first discovery followed by total silence.
is damage control, and deflecting all blame from the Party.
We are now in phase 3.
The WHO, which was caught napping as much as the Party in phase 2, lavishes great praise on that same Party now for its “extraordinary safety measures”. Locking down entire cities (increasingly people are not even allowed to leave their homes), speed-building hospitals, you name it. And the WHO is not the only entity praising the Party.
The reason why there is so much emphasis on this is that the CCP is desperate to show everyone, at home and abroad, that it is in control. That there is no reason to worry, at least not due to actions by the Party. If other countries have problems, that is not the Party’s fault.
If the Party is allowed to get away with this behavior aimed at self-preservation above anything else, including human lives of both Chinese and foreigners, something bad is sure to happen. Maybe not this time, maybe this one will fizzle out. But the next one, or the one after that, will not.
It is obvious how dangerous this is, putting the interests of the Party, or the economy, above the risk of spreading global pandemic. But is is also obvious why it happens. And it wouldn’t or couldn’t happen only in China. Though the country in its present state is a ideal breeding ground.
When viewing those two charts cited in the above quote, keep in mind Armstrong’s pivotal January 18 ECM turn date and what I blogged in McAfee’s Dick Math: illuminating Bitcoin’s ACCELERATING price:
Dr. Albert Bartlett stated, “The greatest shortcoming of the human race is our inability to understand the exponential function.”
Imagine a caretaker that comes to check on his lily pond once a month. It requires 36 visits (i.e. months) for the pond to be completely covered with lily pads. But on the 35th visit the pond is only half covered. If not thinking in terms of exponential math, the typical human caretaker’s linear extrapolating, visual mind will be fooled into thinking there’s 35 more visits after the 35th visit before the pond will be fully covered.
The One Number That Could Reveal A Chinese Coronavirus Cover-Up:
In addition, it appears as though the numbers coming out of Hubei province are accelerating, with the area reporting 1,921 new cases and 45 new deaths as of Saturday night.
Yes, I already saw the numbers and put them in a graph!! This is MUCH higher than any previous report from the Province of Hubei, the epicenter of #Wuhan #Coronavirus. Very alarming! Starting to get out of control now!
The skepticism around the Chinese government's data comes as no surprise to me. I have spent more than a half decade researching U.S. listed China based companies and working daily and directly with Chinese nationals to uncover fraud being perpetuated on American capital markets.
The research of our firm and the story of our firm's partner, Dan David, was featured in a documentary called The China Hustle that was produced by Academy Award winner Alex Gibney and backed by Mark Cuban's film company, Magnolia Pictures. While not an expert, I consider myself to have a better understanding of the ethos coming out of the country than most people.
And in my opinion, I believe people should harbor a skeptical opinion of anything that comes out of the Chinese government.
So, what data am I looking at to try and verify or contradict China's claims? I'm watching the fatality rate outside of China. As of right now, the fatality rate of about 2% (NY Times says "less than 3%"), according to China's numbers, is often cited as reason not to worry about the virus. Let us first remember that the normal flu has a fatality rate of about 0.4%, which makes the Wuhan coronavirus far more lethal. It also spreads quicker.
For these reasons, I am frightened by the amount of people writing this outbreak off with direct comparisons to the normal flu. I am also alarmed by the consistent travel in and out of China that has been occurring while the U.S. government has dragged its feet in suspending flights.
“China has about four times as many train and air passengers as it did during the SARS outbreak,” the New York Times commented. The number of people affected has already skyrocketed past the SARS outbreak.
Second Case Of Coronavirus Declared In California As NYT Suggests Pandemic:
Meanwhile, WBZ reports that two plans from Wuhan landed at Boston's Logan airport just hours before the nationwide travel ban on flights landing from China is set to begin.
In other news, according to an unconfirmed report citing TV Peru, a 72-year-old Peruvian woman died from coronavirus in Los Angeles, and his body was repatriated to Peru. According to the death certificate, the cause of his death is the deadly virus of Chinese origin that triggered pneumonia and other complications in his health.
According to the doctor Marco Almeri, the transfer of the body will not generate any type of epidemic. “When a body dies it changes the temperature and all the chemical conditions. Therefore, it is impossible for the virus to survive, ”he told TV Peru.
Update (1100ET): In a report that has since been deleted from the Chinese Internet, Chinese media company Caijing reported that many deaths and suspected cases of the virus haven't been counted due to intentional mislabeling, according to Bloomberg.
An unidentified doctor from a Wuhan hospital designated for coronavirus treatment said that they have admitted about 600 severe cases, but none of these patients were confirmed as having coronavirus due to a lack of tests.
[…]
And then holy shit! Look at this chart. SARS was initially only 3.5% death rate then it climbed to 10%. But the nCov virus is spreading exponentially faster! Oh this could be very, very bad if true:
'Burning Bodies In Secret' - New Accounts From Wuhan Detail Coronavirus Outbreak
[…]
In contrast, influenza while also very contagious and widespread, but only kills
~0.05%— nCov thus about 50X more deadly:
Coronavirus Death Toll Hits 257 As Confirmed Cases Top 10,000
Projections after the SARS infections concluded that with even a moderate pandemic the US would have been short 40,000 ventilators to treat patients. If the quarantines prove ineffective and as medical supplies become stretched to breaking the mortality rate will soar above twenty percent. Hundreds of millions corpses burned in ditches?
The real story is that only China can build new hospitals in 7 days and health care systems of the rest of the world are unprepared to handle the onslaught. This is going to reveal how horrible and deadly socialized healthcare really is. And how inefficient democracy can be, because surely politics will interfere as it has been with WHO and nations slow to declare travel bans to contain the spread before it became too late.
[…]
See important information below about corona virus being more virulent in E. Asians and men, than females and Europeans.
Remember that the Black Death that decimated Europe in the Dark Ages originated out of East Asia. It come into Europe via Ukraine as the attackers at the gates of Eastern Roman Empire were catapulting diseased corpses over the walls protecting against invasion.
Gerald Celente and others such as Martin Armstrong are conflating hysteria with science:
https://www.peakprosperity.com/coronavirus-now-that-its-a-national-emergency-is-it-too-late/#comment-300391
Note infections might not be slowing down in China. Might be the ability to test and confirm with PCR that is overwhelmed:
https://www.peakprosperity.com/coronavirus-now-that-its-a-national-emergency-is-it-too-late/#comment-299363
Or it might be sigmoidal:
https://www.peakprosperity.com/coronavirus-now-that-its-a-national-emergency-is-it-too-late/#comment-299603
Nicholas Taleb (160 I.Q. author of Black Swan and Antifragility) weighs in basically (and more eloquently) making the points I have been making about fat-tailed risk:
https://necsi.edu/systemic-risk-of-pandemic-via-novel-pathogens-coronavirus-a-note
The aut