Saturday, February 29, 2020
As he detailed to CNBC the threat the coronavirus poses to corporate earnings and the U.S. economy if the pandemic spreads.
At the same time that long Treasury yields are making new historic lows, credit spreads, while widening, remain relatively tight. This does not make any sense given the fundamental backdrop which indicate that defaults will rise significantly, particularly in energy, airlines, retailing, and hospitality. Nevertheless, central bank liquidity continues to drive flows into bonds at a record pace. These flows are keeping spreads tight and, until there is an interruption of the inflows, credit spreads will be contained.
The coronavirus is showing us the unpredictable path that an exogenous force can play in interrupting an economy that is already exhibiting many late-cycle symptoms. And it is far from over. The Center for Disease Control (CDC) has been firm in its warnings, as Dr. Nancy Messonnier of the CDC urged, “We are asking the American public to prepare for the expectation that this might be bad.”
When the Commander of NATO says he is a fan of flexible first strike at the same time that NATO is flexing its military muscle on Russia’s border, the risk of inadvertent nuclear war is real.
US Air Force Gen. Tod D Wolters told the Senate this week he “is a fan of flexible first strike” regarding NATO’s nuclear weapons, thereby exposing the fatal fallacy of the alliance’s embrace of American nuclear deterrence policy.
It was one of the most remarkable yet underreported exchanges in recent Senate history. Earlier this week, during the testimony before the Senate Armed Services Committee of General Tod Wolters, the commander of US European Command and, concurrently, as the Supreme Allied Commander in Europe (SACEUR) also the military head of all NATO armed forces, General Wolters engaged in a short yet informative exchange with Senator Deb Fischer, a Republican from the state of Nebraska.
Following some initial questions and answers focused on the alignment of NATO’s military strategy with the 2018 National Defense Strategy of the US, which codified what Wolters called “the malign influence on behalf of Russia” toward European security, Senator Fischer asked about the growing recognition on the part of NATO of the important role of US nuclear deterrence in keeping the peace. “We all understand that our deterrent, the TRIAD, is the bedrock of the security of this country,” Fischer noted. “Can you tell us about what you are hearing…from our NATO partners about this deterrent?”
Wolters responded by linking the deterrence provided to Europe by the US nuclear TRIAD with the peace enjoyed on the European continent over the past seven decades. Fischer asked if the US nuclear umbrella was “vital in the freedom of NATO members”; Wolters agreed. Remarkably, Wolters linked the role of nuclear deterrence with the NATO missions in Iraq, Afghanistan and elsewhere outside the European continent. NATO’s mission, he said, was to “proliferate deterrence to the max extent practical to achieve greater peace.”
Then came the piece de resistance of the hearing. “What are your views, Sir,” Senator Fischer asked, “of adopting a so-called no-first-use policy. Do you believe that that would strengthen deterrence?”
General Wolters’ response was straight to the point. “Senator, I’m a fan of flexible first use policy.”
Under any circumstance, the public embrace of a “flexible first strike” policy regarding nuclear weapons employment by the Supreme Allied Commander in Europe should generate widespread attention. When seen in the context of the recent deployment by the US of a low-yield nuclear warhead on submarine-launched ballistic missiles carried onboard a Trident submarine, however, Wolters’ statement is downright explosive. Add to the mix the fact the US recently carried out a wargame where the US Secretary of Defense practiced the procedures for launching this very same “low yield” weapon against a Russian target during simulated combat between Russia and NATO in Europe, and the reaction should be off the charts. And yet there has been deafening silence from both the European and US press on this topic.
Complicating matters further are the ‘Defender 2020’ NATO military exercises underway in Europe, involving tens of thousands of US troops in one of the largest training operations since the end of the Cold War. The fact that these exercises are taking place at a time when the issue of US nuclear weapons and NATO’s doctrine regarding their employment against Russia is being actively tracked by senior Russian authorities only highlights the danger posed.
On February 6, General Valery Gerasimov, the Russian Chief of Staff, met with General Wolters to discuss ‘Defender 2020’ and concurrent Russian military exercises to be held nearby to deconflict their respective operations and avoid any unforeseen incidents. This meeting, however, was held prior to the reports about a US/NATO nuclear wargame targeting Russian forces going public, and prior to General Wolters’ statement about “flexible first use” of NATO nuclear weapons.
So concerned was Moscow about these exercises, and the possibility that NATO might use them as a cover for an attack against Soviet forces in East Germany, that the Soviet nuclear forces were placed on high alert. Historians have since observed that the threat of nuclear war between the US and the USSR was at that time the highest it had been since the Cuban Missile Crisis in 1962.
US and NATO officials would do well to recall the danger to European and world security posed by the “Able Archer ‘83” exercise and the potential for Soviet miscalculations when assessing the concerns expressed by General Gerasimov today. The unprecedented concentration of offensive NATO military power on Russia’s border, coupled with the cavalier public embrace by General Wolters of a “flexible first strike” nuclear posture by NATO, has more than replicated the threat model presented by Able Archer ’83. In this context, it would not be a stretch to conclude that the threat of nuclear war between the US and Russia is the highest it has been since Able Archer ’83.
ADAM GELLER, PAUL WISEMAN and CHRISTOPHER RUGABER
Massive numbers of Afghan and Arab migrants are gathered at the border of Turkey and Greece after the Erdogan government announced on Friday to give third world migrants free passage to Europe.
If you have never seen this video on the invasion of Europe you must watch this now…(video in main link above)
The second thing going on: “Nothing goes to heck in a straight line.”
Over the last 48 Hours:
5.3 Tonga Islands
5.1 Loyalty Islands
4.7 Fiji Islands
5.1 S Sandwich Islands
4.8 New Britain Region
4.7 Columbia (coastal)
4.6 Venezuela (coastal)
Dan De Luce and Leila Gharagozlou and Emmanuelle Saliba and Robert Windrem
Iran has the highest reported number of deaths from the coronavirus outside China, raising questions about how the government is handling the public health crisis and whether the often secretive regime has been fully transparent about the extent of the outbreak.
Iran's health ministry spokesman said on Friday that 34 Iranians have died out of a total of 388 positive cases. Iran has now suspended parliament indefinitely due to the outbreak.
Four doctors in Iran who are familiar with how authorities are handling the outbreak, including two who work at hospitals where infected patients have been treated, told an NBC News reporter in New York that the total number of those infected is likely substantially higher than the number released by health authorities.
Dr. Mike Ryan, executive director of the World Health Organization’s emergencies program, told reporters Thursday that the virus "came unseen and undetected into Iran, so the extent of infection may be broader than what we may be seeing."
U.S. Secretary of State Mike Pompeo told Congress Friday that the U.S. had offered to help Iran respond to the virus.
Apart from China, where it was first detected in December, Iran has recorded the most deaths from the new form of coronavirus. There have been 2,747 deaths in China, out of a total of at least 78,497 confirmed cases.
But Iran's reported mortality rate — now just nine under percent — surpasses the rate for other countries by a wide margin. Earlier this week, it was 16 percent. China's reported mortality rate is currently at 3.5 percent. In South Korea, 13 patients have died out of 1,766 cases, for a reported mortality rate of slightly less than 1 percent. A U.S. soldier is among those infected in South Korea.
A top official in Iran, Masoumeh Ebtekar, the highest ranking woman in Iran’s government and a vice president for women and family affairs, has tested positive for the corona virus, state media reported, the latest senior official to contract the COVID-19 illness. Ebtekar, the English-speaking spokesperson for the group of Iranian students who seized hostages at the U.S. embassy in Tehran in 1979, was captured in a photo attending a meeting with Iranian President Hassan Rouhani on Wednesday.
Two members of Iran’s parliament have contracted the virus as well as the deputy health minister, who was seen wiping his brow and looking feverish at a press conference a day before he announced he had tested positive.
While the government has imposed some restrictions on holy sites and called off some Friday prayer services, President Rouhani has said there are no plans to quarantine entire cities hit by the virus.
Amid a shortage of surgical masks and hand sanitizer in shops, public health experts say Iran could become the hub of a major outbreak across the Middle East, especially given its porous borders with unstable countries at war or in turmoil.
Iranian officials reported the first case of virus in the religious city of Qom last week, and coronavirus has spread to at least seven other provinces. Other countries in the region, including Iraq, Kuwait, Oman and Afghanistan, reported their first cases this week and said the patients had recently visited Iran.
In an echo of public reaction in China, critics of the Iranian regime in and outside the country are questioning whether officials in Tehran have given the public a full and accurate picture of the outbreak. But Iranian officials have rejected any suggestion that they are playing down the epidemic
The head of Medical Science University in Qom, Mohammad Reza Ghadir, said on state television that the Health Ministry had banned releasing figures on the outbreak in the city.
Asked how many people had been placed in quarantine, Ghadir said, "The Health Ministry has told us not to announce any new statistics."
Ghadir also said that "most of the tests have to be done in Tehran, and Tehran announces it." His comments suggested that diagnostic tests were mainly being conducted in the capital.
It's unclear whether Iran has the ability to find out how many people have been infected, which would require venturing out to towns and villages to conduct tests and not simply relying on who goes to large hospitals with severe symptoms, said Dr. William Schaffner, a professor of preventive medicine and infectious diseases at Vanderbilt University Medical Center.
"That means going to the neighborhood and knocking on doors and really aggressively trying to find cases," Schaffner said in an interview. "I don't know if they have that capacity. Many countries do not, and they don't have that tradition in their public health systems. This would be a very new thing for them to do."
Another possibility is that the patients are from an elderly, more vulnerable part of the population, Schaffner said.
If the virus "was introduced to a population that was older and as a consequence has a bunch of underlying illnesses, [that] could explain a high fatality rate," Schaffner said.
Coronavirus Updates, Updates From Israel - "We're willing to do a great deal to topple Netanyahu"