Wednesday, February 26, 2020
Who's Bringing the Marshmallows?
Listening to BBC World Service, I finally realized how futile Trump's response to Covid-19 is, and is going to be. And it's not just because he's slashed the CDC budget or put loyal idiots in charge of important government agencies, or will be forced to say "Brownie, you did a heckuva job" (though how cool would that be?).
Trump thinks his Administration talking about the dangers of the virus is spooking Wall Street. But why would Wall Street be so afraid of people getting sick, when the only cases of the virus in America are being held in quarantine on military bases? (There may be a case or two in hospitals, but vanishingly few at this point. Pray it stays that way.) Wall Street doesn't really give a wet snap for how many people die of flu, this flu or "plain" flu. What Wall Street is looking at is factories shutting down in China.
Apple's value dropped precipitously because its factories and supplying factories closed in China, to reopen who knows when? Now Milan is becoming Ground Zero for the spread of the virus again, even as cases fall in China. Milan is a major economic hub of Italy, and lots of people travel there (more than to Wunan), and Milan is as shut down as Wuhan; and as likely to reopen just as soon (as in "God knows, and isn't talking.") So now Europe is at risk, and quarantine means business activity comes to a complete halt. British Airways has already canceled round trip flights to Milan just because of lack of interest. They literally can't sell enough tickets to bother with sending the planes. If you've flown in the last few years you know airplanes run constantly and ceaselessly and are always packed like sardine cans because everybody and his (comfort animal) dog wants to fly. And now people won't fly to Milan?
That's what Wall Street is looking at. No amount of happy talk from anyone in the Administration is going to make a difference, either. And then there's part 2 of the whole thing: Trump as the calming presence who can reassure an anxious nation.
I know, I can't envision it either. This is a guy who calls kids on Christmas Eve to tell them there is no Santa Claus, the NORAD tracking is fake news. His specialty is disruption and chaos, is sowing dragon's teeth and reaping the whirlwind. This is the guy who's going to make America sit by the fireside in an hour and feel warm and cozy and not fear the Reaper or the pandemic that's coming? This is the guy who's going to jawbone Wall Street into thinking happy thoughts even as the factory of the world closes for business, re-opening unknown, and as more and more of the world closes its business doors the better to simply stay alive? This is the guy who's going to make us all ignore the fact the second largest economy in the world is sick as a dog (sorry, dogs, to keep picking on you) and won't be better anytime soon, and even when it is trade and manufacture will be so disrupted it may be months before it recovers (or years; I understand some trade affected by SARS has still yet to recover), and then what about Milan and when this thing goes big in Europe?
Yeah, we're gonna be fine. And Mr. Throw Some More Gasoline On that Fire is just the guy who can reassure us.
Posted by Rmj at 4:03 PM