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Week Ahead – World battles spread of Covid-19 and its economic destruction, a bigger OPEC +cut deal, and big bank stress tests

Week Ahead – World battles spread of Covid-19 and its economic destruction, a bigger OPEC +cut deal, and big bank stress tests



Financial markets are still primarily focused with the fight against Covid-19.  In the US, coronavirus deaths are now climbing at a staggering pace and concerns are high that many states have acted too slowly in providing measures to mitigate the spread of the virus.  Europe is also having terrible news on the virus front as  both the UK and France have had some of their deadliest days with the outbreak.  Italy may have some optimism that deaths and new cases are stabilizing and Spain may be showing signs that the death rate might be declining.  Asia is once again tightening their borders as a new wave of infections may have been imported.  Global economic activity will not return anytime as over 90% of the world’s GDP has some type of social distancing measure in place.

Over the next couple of months, the economic data will be disastrous in both Europe and the US.  A lot of the negative sentiment is already priced into the market, but if traders become skeptical that much of the global economy will not reopen by June, risk aversion could reassert itself firmly back into the driver seat.



It is that time of year for the largest US banks to show how prepared they are prepared for worst-case scenarios that probably fall short of what financial markets are currently living. The annual stress tests begin by the banks submitting their data and capital plans on Monday. Results are expected in June and will try to restore confidence that the financial system will be able to handle the worst-ever quarterly contraction and an astronomical surge in unemployment. 

The primary focus in the US will remain on containing the outbreak as it makes it way across the country. Much attention will also fall on the economic data that will start to show the impact of much of the country falling to a stop. Economists are trying to figure out how bad the economy will contract and how high the unemployment rate will skyrocket. On Wednesday, the Fed will release their minutes to their second intra-policy March 15th meeting. The Fed threw the kitchen sink at this last meeting and the minutes will likely reiterate their aggressive stance on tackling the coronavirus crisis.   The problem for the Fed is that the balance sheet is growing astronomically.  The Fed can’t keep up this pace and will have to gradually slow down purchases before the economy is on sound footing.  

US Politics 

President Trump will continue to push forward in delivering an infrastructure deal. The implementation of the fiscal stimulus package will be closely monitored and scrutinized. On the election front, Democrats are becoming skeptical that states will be able to get the polls opened before the June 9th DNC deadline. Bernie Sanders is not dropping out yet, but Democrats are confident he will throw his support to Biden at that the right time. 


The UK is still seeing accelerating coronavirus and cases as the lockdown continues. The number of cases and deaths are continuing to accelerate, although only the latter is really important given the number of people not being tested. It’s going to be an awful couple of weeks, with many predicting that the lockdown measures continue for months to come. 

UK Epidemiologist, Neil Ferguson, offered some hope earlier this week that there were early signs that the numbers could stabilize over the next couple of weeks, both in the UK and Europe. That is encouraging, but so much of the last few months has taught us that predicting the future is extraordinarily difficult and even the most qualified among us are just making the best predictions with the information we have. The more information we continue to gather, the more reliable these predictions will be. For now, we cross our fingers. 


While the death toll in Italy continues to look frightening and the road ahead is likely to continue to be hazardous, there are signs that a corner has been turned. The number of daily deaths is finally heading in the right direction which suggests we may be seeing the light at the end of the tunnel. Italy remains the country with the most deaths so far but the situation is Spain is also dire and the next two weeks is likely to be particularly troubling for the US. Hopefully Italy is now on the right track but the problems then unfortunately turn to the economy and little room the country has to support it, with coronabonds no nearer becoming a reality. This will only spur support for long-term eurosceptic, Matteo Salvini. 


Spain has also had a torrid time of it but new cases and deaths appear to be plateauing which will give some cause for optimism. There’s still a long way to go and the trend could easily reverse but it’s possible that Europe may be turning a corner, with its two worst hit countries now seeing the light at the end of the tunnel. Unfortunately for the euro area, its fiscal response hasn’t matched its monetary one and unless that changes, this may well fuel another rise in euroscepticism that triggers yet another crisis in the region. In every crisis there is opportunity and eurosceptics across Europe may turn out to be the biggest winners in all of this. 

South Africa 

The South African rand has fallen to a record low after the country lost its last investment-credit rating. The aftermath is likely to be disastrous for outflows with some analysts seeing foreign investors pulling several billion dollars. The pressure will remain on the rand until the government delivers structural reforms and delivers aggressive measures to ensure financial stability. 


Tensions are rising between the US and China again, with China accused of not being truthful about their true COVID-19 infections data. US refusing to let US importers forgo collecting China tariffs. Chinese PMI data has rebounded into expansionary, albeit from a low base, giving hope that China will lead the world economy from the bottom as it gets back to work and life returns to normal. 

No significant data next week. The success of getting people out of their apartments and back to work, shopping, socialising and life will be closely watched. Worries persist about a 2nd wave of infections. US/China tensions are not helpful when the world requires leadership from both. 

Hong Kong 

No significant data next week. Retail sales and IP show the economy is still very deep in recession. Worries persist about imported cases of COVID-19 causing a 2nd contraction. 


MAS eased policy, but generally was underwhelming in its scope. Content to leave the heavy lifting to the government. Singapore to tap reserves to pay for further stimulus. No significant data releases next week. 

Despite its best efforts, COVID-19 cases, both imported and domestic, keep increasing. Risk that Singapore imposes more drastic lockdown measures to control, which will be another large negative for the economy. 


No significant data this coming week. RBI announced a 3-month moratorium on all loans (including credit cards) this week. Allowed Indian Banks to access the offshore INR NDF market as INR makes record lows against USD at 76.4000. 

Much of India is in a partial lockdown. But serious doubts persist about the ability of Indian authorities to manage the COVID-19 outbreak. The numbers suggest that India is just at the beginning of the outbreak. Serious impact on economic activity and more pressure on the INR to come. 


Low Australian Dollar has seen bargain hunting in Australian shares this past week.The good times are unlikely to last as the AUD remains at record lows, a resource demand shock internationally, and a slowdown in domestic activity as the country is partially locked down. 

RBA rate decision Tuesday, expected to be unchanged. Financial stability outlook Thursday will be more closely watched. Expect RBA to announce further QE and possibly instruct Australian Banks and large corporates to suspend dividend payments. 

New Zealand 

No significant data next week. Focus remains on the country’s level 4 lockdown of population. To date COVID-19 cases continue to increase though. Potential for stronger measures from the Government, including deployment of the military to enforce. Negative for NZD with the economy set for another leg lower. 

RBNZ instructed NZ banks today to suspect dividend payments and buy-backs to provide increased capital buffers. 


Japan PMI data and IP data were less worse than expected this week. That said, markets are still awaiting Japan’s new stimulus package. Confidence eroding as government inaction persists and doubts continue over their COVID-19 response. 

Household spending Tuesday expected to shrink 4.0%. Machinery Orders expected to fall by 2.0% on Wednesday. Potential for upside surprises in data though following a decent performance this week from china, South korea and Japan. If the government finally announces its package details next week, that could provide more upside momentum in the short term for Japanese stocks. 



The dollar remains a complicated trade. The Fed’s unprecedented measures have ameliorated the funding of dollar liabilities and that has put a dent in the dollar’s rally. The dollar’s days are far from over since not all strains are alleviated in the funding markets and the sharp global recession will likely keep Treasuries in high demand. The big question macro traders have is how long will the Fed’s extraordinary policy actions remain in place and will other central banks remain ultra-accommodative just as long as he Fed. 


Thursday’s surge came as Trump tweeted that a deal including Saudi Arabia and Russia to cut production by at least 10 million barrels was in the offing. As ever, this was accompanied by mixed messages from the various parties but it does seem that there is a willingness to address this common problem. But how? And who’s involved? 

How Trump would get domestic producers on board, I’m not sure, but I struggle to see a deal being done that doesn’t include the US and others, OPEC+++ if you will. A failure to get a deal over the line now will undoubtedly cause prices to crash again, maybe even more severely, so Monday’s emergency virtual meeting will be one to watch! 


The disconnect in the market remains, with gold rallying around 1.5% yesterday – more than 2% from its lows – alongside the dollar and the stock market. It’s slightly lower at the time of writing but is basically hovering around breakeven on the day but holding its position back above $1,600. Going into another uncertain weekend that could see some dire numbers, particularly from the US, it’s perhaps not surprising to see the nerves creeping in. 


Bitcoin finally managed to smash through $7,000 on Thursday and what an hour it was. Unfortunately, the cryptocurrency was quickly driven back below which may be worrying for those so keen to see this barrier broken down. Not to be deterred, we’re seeing another attempt today but the result is currently the same. This level is being well defended and if it’s not broken soon, the buyers may start to fade. 

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Comments on February Employment Report

The headline jobs number in the February employment report was above expectations; however, December and January payrolls were revised down by 167,000 combined.   The participation rate was unchanged, the employment population ratio decreased, and the …



The headline jobs number in the February employment report was above expectations; however, December and January payrolls were revised down by 167,000 combined.   The participation rate was unchanged, the employment population ratio decreased, and the unemployment rate was increased to 3.9%.

Leisure and hospitality gained 58 thousand jobs in February.  At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 17 thousand jobs since February 2020.  So, leisure and hospitality has now essentially added back all of the jobs lost in March and April 2020. 

Construction employment increased 23 thousand and is now 547 thousand above the pre-pandemic level. 

Manufacturing employment decreased 4 thousand jobs and is now 184 thousand above the pre-pandemic level.

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate increased in February to 83.5% from 83.3% in January, and the 25 to 54 employment population ratio increased to 80.7% from 80.6% the previous month.

Both are above pre-pandemic levels.

Average Hourly Wages

WagesThe graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.3% YoY in February.   

Part Time for Economic Reasons

Part Time WorkersFrom the BLS report:
"The number of people employed part time for economic reasons, at 4.4 million, changed little in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."
The number of persons working part time for economic reasons decreased in February to 4.36 million from 4.42 million in February. This is slightly above pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.3% from 7.2% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

Unemployed Over 26 WeeksThis graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.203 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.277 million the previous month.

This is down from post-pandemic high of 4.174 million, and up from the recent low of 1.050 million.

This is close to pre-pandemic levels.

Job Streak

Through February 2024, the employment report indicated positive job growth for 38 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).

Headline Jobs, Top 10 Streaks
Year EndedStreak, Months
6 tie194333
6 tie198633
6 tie200033
1Currrent Streak


The headline monthly jobs number was above consensus expectations; however, December and January payrolls were revised down by 167,000 combined.  The participation rate was unchanged, the employment population ratio decreased, and the unemployment rate was increased to 3.9%.  Another solid report.

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Immune cells can adapt to invading pathogens, deciding whether to fight now or prepare for the next battle

When faced with a threat, T cells have the decision-making flexibility to both clear out the pathogen now and ready themselves for a future encounter.

Understanding the flexibility of T cell memory can lead to improved vaccines and immunotherapies. Juan Gaertner/Science Photo Library via Getty Images

How does your immune system decide between fighting invading pathogens now or preparing to fight them in the future? Turns out, it can change its mind.

Every person has 10 million to 100 million unique T cells that have a critical job in the immune system: patrolling the body for invading pathogens or cancerous cells to eliminate. Each of these T cells has a unique receptor that allows it to recognize foreign proteins on the surface of infected or cancerous cells. When the right T cell encounters the right protein, it rapidly forms many copies of itself to destroy the offending pathogen.

Diagram depicting a helper T cell differentiating into either a memory T cell or an effector T cell after exposure to an antigen
T cells can differentiate into different subtypes of cells after coming into contact with an antigen. Anatomy & Physiology/SBCCOE, CC BY-NC-SA

Importantly, this process of proliferation gives rise to both short-lived effector T cells that shut down the immediate pathogen attack and long-lived memory T cells that provide protection against future attacks. But how do T cells decide whether to form cells that kill pathogens now or protect against future infections?

We are a team of bioengineers studying how immune cells mature. In our recently published research, we found that having multiple pathways to decide whether to kill pathogens now or prepare for future invaders boosts the immune system’s ability to effectively respond to different types of challenges.

Fight or remember?

To understand when and how T cells decide to become effector cells that kill pathogens or memory cells that prepare for future infections, we took movies of T cells dividing in response to a stimulus mimicking an encounter with a pathogen.

Specifically, we tracked the activity of a gene called T cell factor 1, or TCF1. This gene is essential for the longevity of memory cells. We found that stochastic, or probabilistic, silencing of the TCF1 gene when cells confront invading pathogens and inflammation drives an early decision between whether T cells become effector or memory cells. Exposure to higher levels of pathogens or inflammation increases the probability of forming effector cells.

Surprisingly, though, we found that some effector cells that had turned off TCF1 early on were able to turn it back on after clearing the pathogen, later becoming memory cells.

Through mathematical modeling, we determined that this flexibility in decision making among memory T cells is critical to generating the right number of cells that respond immediately and cells that prepare for the future, appropriate to the severity of the infection.

Understanding immune memory

The proper formation of persistent, long-lived T cell memory is critical to a person’s ability to fend off diseases ranging from the common cold to COVID-19 to cancer.

From a social and cognitive science perspective, flexibility allows people to adapt and respond optimally to uncertain and dynamic environments. Similarly, for immune cells responding to a pathogen, flexibility in decision making around whether to become memory cells may enable greater responsiveness to an evolving immune challenge.

Memory cells can be subclassified into different types with distinct features and roles in protective immunity. It’s possible that the pathway where memory cells diverge from effector cells early on and the pathway where memory cells form from effector cells later on give rise to particular subtypes of memory cells.

Our study focuses on T cell memory in the context of acute infections the immune system can successfully clear in days, such as cold, the flu or food poisoning. In contrast, chronic conditions such as HIV and cancer require persistent immune responses; long-lived, memory-like cells are critical for this persistence. Our team is investigating whether flexible memory decision making also applies to chronic conditions and whether we can leverage that flexibility to improve cancer immunotherapy.

Resolving uncertainty surrounding how and when memory cells form could help improve vaccine design and therapies that boost the immune system’s ability to provide long-term protection against diverse infectious diseases.

Kathleen Abadie was funded by a NSF (National Science Foundation) Graduate Research Fellowships. She performed this research in affiliation with the University of Washington Department of Bioengineering.

Elisa Clark performed her research in affiliation with the University of Washington (UW) Department of Bioengineering and was funded by a National Science Foundation Graduate Research Fellowship (NSF-GRFP) and by a predoctoral fellowship through the UW Institute for Stem Cell and Regenerative Medicine (ISCRM).

Hao Yuan Kueh receives funding from the National Institutes of Health.

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President Biden Delivers The “Darkest, Most Un-American Speech Given By A President”

President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through…



President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through the State of The Union, President Biden can go back to his crypt now.

Whatever 'they' gave Biden, every American man, woman, and the other should be allowed to take it - though it seems the cocktail brings out 'dark Brandon'?

Tl;dw: Biden's Speech tonight ...

  • Fund Ukraine.

  • Trump is threat to democracy and America itself.

  • Abortion is good.

  • American Economy is stronger than ever.

  • Inflation wasn't Biden's fault.

  • Illegals are Americans too.

  • Republicans are responsible for the border crisis.

  • Trump is bad.

  • Biden stands with trans-children.

  • J6 was the worst insurrection since the Civil War.

(h/t @TCDMS99)

Tucker Carlson's response sums it all up perfectly:

"that was possibly the darkest, most un-American speech given by an American president. It wasn't a speech, it was a rant..."

Carlson continued: "The true measure of a nation's greatness lies within its capacity to control borders, yet Bid refuses to do it."

"In a fair election, Joe Biden cannot win"

And concluded:

“There was not a meaningful word for the entire duration about the things that actually matter to people who live here.”

Victor Davis Hanson added some excellent color, but this was probably the best line on Biden:

"he doesn't care... he lives in an alternative reality."

*  *  *

Watch SOTU Live here...

*   *   *

Mises' Connor O'Keeffe, warns: "Be on the Lookout for These Lies in Biden's State of the Union Address." 

On Thursday evening, President Joe Biden is set to give his third State of the Union address. The political press has been buzzing with speculation over what the president will say. That speculation, however, is focused more on how Biden will perform, and which issues he will prioritize. Much of the speech is expected to be familiar.

The story Biden will tell about what he has done as president and where the country finds itself as a result will be the same dishonest story he's been telling since at least the summer.

He'll cite government statistics to say the economy is growing, unemployment is low, and inflation is down.

Something that has been frustrating Biden, his team, and his allies in the media is that the American people do not feel as economically well off as the official data says they are. Despite what the White House and establishment-friendly journalists say, the problem lies with the data, not the American people's ability to perceive their own well-being.

As I wrote back in January, the reason for the discrepancy is the lack of distinction made between private economic activity and government spending in the most frequently cited economic indicators. There is an important difference between the two:

  • Government, unlike any other entity in the economy, can simply take money and resources from others to spend on things and hire people. Whether or not the spending brings people value is irrelevant

  • It's the private sector that's responsible for producing goods and services that actually meet people's needs and wants. So, the private components of the economy have the most significant effect on people's economic well-being.

Recently, government spending and hiring has accounted for a larger than normal share of both economic activity and employment. This means the government is propping up these traditional measures, making the economy appear better than it actually is. Also, many of the jobs Biden and his allies take credit for creating will quickly go away once it becomes clear that consumers don't actually want whatever the government encouraged these companies to produce.

On top of all that, the administration is dealing with the consequences of their chosen inflation rhetoric.

Since its peak in the summer of 2022, the president's team has talked about inflation "coming back down," which can easily give the impression that it's prices that will eventually come back down.

But that's not what that phrase means. It would be more honest to say that price increases are slowing down.

Americans are finally waking up to the fact that the cost of living will not return to prepandemic levels, and they're not happy about it.

The president has made some clumsy attempts at damage control, such as a Super Bowl Sunday video attacking food companies for "shrinkflation"—selling smaller portions at the same price instead of simply raising prices.

In his speech Thursday, Biden is expected to play up his desire to crack down on the "corporate greed" he's blaming for high prices.

In the name of "bringing down costs for Americans," the administration wants to implement targeted price ceilings - something anyone who has taken even a single economics class could tell you does more harm than good. Biden would never place the blame for the dramatic price increases we've experienced during his term where it actually belongs—on all the government spending that he and President Donald Trump oversaw during the pandemic, funded by the creation of $6 trillion out of thin air - because that kind of spending is precisely what he hopes to kick back up in a second term.

If reelected, the president wants to "revive" parts of his so-called Build Back Better agenda, which he tried and failed to pass in his first year. That would bring a significant expansion of domestic spending. And Biden remains committed to the idea that Americans must be forced to continue funding the war in Ukraine. That's another topic Biden is expected to highlight in the State of the Union, likely accompanied by the lie that Ukraine spending is good for the American economy. It isn't.

It's not possible to predict all the ways President Biden will exaggerate, mislead, and outright lie in his speech on Thursday. But we can be sure of two things. The "state of the Union" is not as strong as Biden will say it is. And his policy ambitions risk making it much worse.

*  *  *

The American people will be tuning in on their smartphones, laptops, and televisions on Thursday evening to see if 'sloppy joe' 81-year-old President Joe Biden can coherently put together more than two sentences (even with a teleprompter) as he gives his third State of the Union in front of a divided Congress. 

President Biden will speak on various topics to convince voters why he shouldn't be sent to a retirement home.

According to CNN sources, here are some of the topics Biden will discuss tonight:

  • Economic issues: Biden and his team have been drafting a speech heavy on economic populism, aides said, with calls for higher taxes on corporations and the wealthy – an attempt to draw a sharp contrast with Republicans and their likely presidential nominee, Donald Trump.

  • Health care expenses: Biden will also push for lowering health care costs and discuss his efforts to go after drug manufacturers to lower the cost of prescription medications — all issues his advisers believe can help buoy what have been sagging economic approval ratings.

  • Israel's war with Hamas: Also looming large over Biden's primetime address is the ongoing Israel-Hamas war, which has consumed much of the president's time and attention over the past few months. The president's top national security advisers have been working around the clock to try to finalize a ceasefire-hostages release deal by Ramadan, the Muslim holy month that begins next week.

  • An argument for reelection: Aides view Thursday's speech as a critical opportunity for the president to tout his accomplishments in office and lay out his plans for another four years in the nation's top job. Even though viewership has declined over the years, the yearly speech reliably draws tens of millions of households.

Sources provided more color on Biden's SOTU address: 

The speech is expected to be heavy on economic populism. The president will talk about raising taxes on corporations and the wealthy. He'll highlight efforts to cut costs for the American people, including pushing Congress to help make prescription drugs more affordable.

Biden will talk about the need to preserve democracy and freedom, a cornerstone of his re-election bid. That includes protecting and bolstering reproductive rights, an issue Democrats believe will energize voters in November. Biden is also expected to promote his unity agenda, a key feature of each of his addresses to Congress while in office.

Biden is also expected to give remarks on border security while the invasion of illegals has become one of the most heated topics among American voters. A majority of voters are frustrated with radical progressives in the White House facilitating the illegal migrant invasion. 

It is probable that the president will attribute the failure of the Senate border bill to the Republicans, a claim many voters view as unfounded. This is because the White House has the option to issue an executive order to restore border security, yet opts not to do so

Maybe this is why? 

While Biden addresses the nation, the Biden administration will be armed with a social media team to pump propaganda to at least 100 million Americans. 

"The White House hosted about 70 creators, digital publishers, and influencers across three separate events" on Wednesday and Thursday, a White House official told CNN. 

Not a very capable social media team... 

The administration's move to ramp up social media operations comes as users on X are mostly free from government censorship with Elon Musk at the helm. This infuriates Democrats, who can no longer censor their political enemies on X. 

Meanwhile, Democratic lawmakers tell Axios that the president's SOTU performance will be critical as he tries to dispel voter concerns about his elderly age. The address reached as many as 27 million people in 2023. 

"We are all nervous," said one House Democrat, citing concerns about the president's "ability to speak without blowing things."

The SOTU address comes as Biden's polling data is in the dumps

BetOnline has created several money-making opportunities for gamblers tonight, such as betting on what word Biden mentions the most. 

As well as...

We will update you when Tucker Carlson's live feed of SOTU is published. 

Tyler Durden Fri, 03/08/2024 - 07:44

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