Saturday, February 29, 2020

"Social Responses to Epidemics Depicted by Cinema"

A great resource for portfolio risk managers.

As just one example, what is the trade if the world is confronted by a real-life version of  "Blindness (2008, Fernando Meirelles), which deals with a fictional disease that causes epidemic blindness, leading to collective hysteria?"
I mean beyond the simplistic "short Luxottica." Duh.

From Emerging Infectious Diseases Journal, Volume 26, Number 2—February 2020:

Qijun Han and Daniel R. Curtis 
Author affiliations: Nanjing University of Science and Technology, Nanjing, China (Q. Han); Erasmus University Rotterdam, Rotterdam, the Netherlands (D.R. Curtis)
Abstract Films illustrate 2 ways that epidemics can affect societies: fear leading to a breakdown in sociability and fear stimulating preservation of tightly held social norms. The first response is often informed by concern over perceived moral failings within society, the second response by the application of arbitrary or excessive controls from outside the community.
Films related to themes of disease, infection, and contagion often fall into 1 of 3 broad categories connected to fantasy, science fiction, or horror: apocalyptic destruction or near destruction of the whole of humanity, rising concerns over bioterrorism, and the rise of an undead or form of zombie existence (1). Although films traditionally deal sensitively or realistically with the topic of HIV/AIDS (e.g., Dallas Buyers Club, Philadelphia, And the Band Played On, Kids), often through melodrama, fewer films have dealt with other epidemic diseases, as either direct subject material or background context. Of these more realistic or semirealistic films about epidemics, scholarly literature has focused on the inadequacy of capturing the correct science behind disease transmission, spread, and illness (24) or anachronistic characters in films concerning historical epidemics (5).

Notwithstanding broader discussions of society–disease interaction in the media (6), the social responses to various diseases portrayed in films have been discussed less frequently.
In this article, we bring together a sample of films that we manually selected from a consolidated database of epidemic-related films built from assorted scholarly literature and catalogs (2,4,5,79). This database was supplemented by accessing “Films about viral outbreaks” on Wikipedia  
https://en.wikipedia.org/wiki/Category:Films_about_viral_outbreaks  and a list of “Apocalyptic, epidemic, pandemic and disaster movies” on the Internet Movie Database https://www.imdb.com/list/ls058975821.

We manually selected the films and eliminated those that corresponded to the 3 broad categories mentioned above (i.e., those that are overly fantastical, not based or loosely based on an actual epidemic disease) and focused on films that pay explicit attention to social responses to disease (rather than being a peripheral backdrop to an unrelated story). Furthermore, the absence of comprehensive indexing of films containing narratives around epidemics makes construction of a systematic sample impractical (4).

Scholarly literature that focuses on contemporary disease psychology holds central a connection between fear, panic, and epidemics (10), often focusing on the unique characteristics of infectious diseases themselves (11). Indeed, in an article about the psychosocial effects of diseases, the disproportionate degree of fear was describe as connected to the fact that “it is transmitted rapidly and invisibly; historically, it has accounted for major morbidity and mortality; old forms re-emerge and new forms emerge; and both the media and society are often in awe” (12). However, after analyzing this selection of epidemics-related films, we suggest that although social reactions such as panic (an emotive response caused by fear) are typically found in films concerning epidemics, films also remind us that the fear seen during epidemics is often little associated with the disease itself. In fact, films show that epidemics can push societies in 2 directions: fear leading to a breakdown in sociability, but also fear stimulating the preservation of tightly held social norms. The first social response to epidemics is often informed by concern over broader moral failings within society at large, leading, for example, to violence or scapegoating. In accordance with the “outbreak narrative,” a concept developed by Priscilla Wald, a fear of the spread of disease is developed in only 1 direction, from marginalized, deviant, or underdeveloped groups to native, mainstream, or developed society (6). In recent films, this kind of orientalization (perpetuating stereotypes about Middle Eastern, Asian, and North African societies) and othering (viewing or treating others as intrinsically different from and alien to oneself) has been taken a step further as traditional or underdeveloped societies are heroically saved by outsiders. The second social response to epidemics is often informed by the perceived application of arbitrary or excessive controls from above or outside the community in question. Films have shown that epidemics produce active responses such as resistance or unrest—sometimes violent—to paradoxically retain aspects of normal life under threat (often from elites and authorities), such as perceived freedoms and liberties and customary traditions and practices.

Social Morality during Epidemics in Cinema
Many films dealing with epidemics have tended to see panic as an inevitable social response; their main focus has been the process of authorities withholding information to guard against chaos or the circulation of misinformation by the media. For example, in Panic on the Streets (1950, directed by Elia Kazan), to avoid mass panic across the city of New Orleans, the US Public Health Service and the police agree to not notify the press of a death resulting from pneumonic plague. Appearing in the same year, The Killer That Stalked New York (1950, Earl McEvoy) was based on an actual threat of smallpox that occurred in New York in 1947. In the film, public health officials develop a widespread vaccination program, but after the necessary serum runs out, the city descends into mass panic—after the authorities tried to cover up this information. In the UK film 80,000 Suspects (1963, Val Guest), the doctor tackling an outbreak of smallpox uses a quarantining process with the explicitly mentioned goal of reducing the chances of public panic. In Morte a Venezia (1971, Luchino Visconti), a film based on the 1912 novel by German author Thomas Mann, Der Tod in Venedig [Death in Venice], the city authorities do not inform those on vacation of cholera problems within the city for fear they will frantically leave—an approach also taken by town officials in John Ford’s depiction of a community during a typhoid epidemic, Dr. Bull (1933). Another common feature is defiance of the film’s protagonists against a perceived lack of official information. For example, in Quiet Killer (1992, Sheldon Larry), when the doctor realizes that her patient has succumbed to plague, she tries to push authorities to warn the citizens of New York, against considerable reluctance from the mayor, who envisages widespread panic.

Other films, however, have gone further and tried to examine some of the causes of this fear and panic; in many films, the roots lie in society’s response to perceived declines in social morality. One of the earliest examples is Die Pest in Florenz [The Plague of Florence] (1918, Fritz Lang), which focused on the real outbreak of the Black Death in Florence in the mid-14th century and portrayed death from plague as a response to immoral behavior and sexual debauchery. The connection between disease and deteriorating social morality came from actual observations of contemporaries at the time, for example, the views of Giovanni Villani (Nuova Cronica) and Giovanni Boccaccio (Decameron). In several films, the plague became used as an explicit punishment for immorality and wrongdoing: The Pied Piper (1972, Jacques Demy), The Hour of the Pig (1993, Leslie Megahey), and especially Anazapta (2002, Alberto Sciamma), in which plague was a supposed consequence of the brutal rape of a lord’s wife by the village.

Similar kinds of existentialist angst and pessimism over social values in connection with the Black Death were later famously exploited by Ingmar Bergman in The Seventh Seal (1957), Lars von Trier in Epidemic (1987), Luis Puenzo in The Plague (1992), and Christopher Smith in The Black Death (2010). Those 4 films focus especially on intolerance in the form of scapegoating and persecution of women as witches, but visualization of dread had already appeared earlier in lesser known films, such as Singoalla (1949, Christian-Jaque), Häxan (1922, Benjamin Christensen), and Skeleton on Horseback (1937, Hugo Haas). In the film Trollsyn (1994, Ola Solum), set in Norway, the initial stage of the Black Death outbreak is presented as mass hysteria among the villagers: crying and shouting, desperate prayers, suicides, and frantic searching for buboes and panicked movements. Also, in reference to social decline, one scene shows simultaneously the aggressive inquisition of a female scapegoat while amid the chaos a couple are having sex and others have taken off their clothes and are rolling down a grassy hill.

Many films focusing on outbreaks of epidemic disease focus on outbreaks of senseless violence indicative of a society completely out of control. In The Horseman on the Roof (1995, Jean-Paul Rappeneau), set during a cholera epidemic in 19th-century Manosque, southern France, the film’s protagonist, Angelo, is captured by a paranoid mob who accuse him of poisoning the town fountain and take him to the authorities. Elsewhere, in the Masque of the Red Death (1964, Roger Corman [adapted in 1989 by Larry Brand/Jeffrey Delman]), which focuses on a fictional disease with loose parallels to plague, rural villagers become increasingly desperate and seek to escape the devastating death, only to have soldiers shoot them down by crossbow. In Jezebel (1939, William Wyler), chaotic and violent scenes of 19th-century New Orleans are overlaid with a dramatic, flashing, capitalized “YELLOW FEVER” text across the screen, as if to heighten the emphasis on uncontrolled panic....
....MUCH MORE

Shipping: "Coronavirus container impact to spread far beyond blank sailings"

Following up on "Shipping: The Revenue Loss From Cancelled Sailings Alone Is Approaching $1 Billion Per Month".
From JOC.com:
Lars Jensen, CEO, Sea-Intelligence Consulting | Feb 25, 2020 11:56AM EST
As the container shipping industry entered 2020, all eyes were on the potential disruptive effects of IMO 2020 and the phasing-in of low-sulfur fuel. The concerns were plentiful, and questions abounded. Would the carriers be successful in passing on the additional costs? Would there be sufficient amounts of low-sulfur fuel available? Could the fuel quality be trusted? Would the rules even be enforced? Is scrubber installation more economically viable for carriers? Is liquefied natural gas (LNG)?

But before the industry could even begin to answer any of these questions, a new virus emerged in China and in a scant few weeks, managed to take front and center stage in terms of disruption.
We do not yet know what the eventual full scale and impact of the coronavirus disease 2019 (COVID-19) will be, but one can already predict a series of events which will impact global trade — both directly and tangentially — as well as recognize a deeper systemic risk within the liner shipping industry.

Please note that the following only focuses on the ramifications for container shipping. The core of the crisis is humanitarian in nature, but we will leave that discussion to those more qualified.
The coronavirus outbreak has started to topple a series of dominoes. The first domino was the failure to reopen Chinese manufacturing facilities following annual Chinese New Year closures. This created a massive shortfall in Chinese exports and, therefore, a drop in container demand. 

That sharp drop in demand led container carriers to cancel numerous sailings — domino number two. As of Feb. 23, the number of blank sailings announced by carriers equated to a staggering estimated total demand shortfall of 1.7 million TEU.

The new blank sailings will inevitably lead to a raft of blank sailings for export cargo back to Asia anywhere from three to 10 weeks into the future, depending on transit times and the timing of the headhaul blank sailing — domino number three.

The pre-Chinese New Year peak, which is cargo now being delivered, results in a substantial number of empty containers building up in places such as Europe and North America. With the sudden additional shortfall in capacity due to the blank sailings, carriers will be hard pressed to cater appropriately for the repatriation of empties in combination with the actual export cargo to Asia — domino number four.
The squeeze on capacity on backhauls to Asia will also drive up backhaul rates — domino number five.

Best-case scenario
Meanwhile, in the most positive outlooks, the outbreak will subside, and Chinese factories will ramp back up again, and at a higher rate than usual in order to catch up with lost production. This will create a surge in demand for container transportation. But due to the previous dominoes, the carriers will have had problems getting their equipment back to China, and exports will be hampered by an equipment shortage — domino number six.

The equipment shortage in China will then lead to the ordering of new containers in China to make up for the shortfall — domino number seven. This sets the stage for domino number eight, dropping values of containers, as the capacity from the new containers will reflect a short-term issue and not a structural shortage of supply. But that temporary shortage will, in turn, drive domino number nine: increasing headhaul rates.

At the same time, refrigerated (reefer) containers will continue to stack up in Chinese ports, exhausting plug capacity — domino 10. This will trigger domino 11....
....MUCH MORE

World Births and Deaths Per Day (check out India)

A lot of  folks are linking to the coronavirus stats on Worldometers but there is much more to the site.

Here are the world birth and death stats in—sorta, not really but averaged per second—real time

And if you scroll down to country population it is eye-opening how fast the counter for India upticks vs China.

"It’s the end of the world every day, for someone"

From Lapham's Quarterly's Disaster Issue:

It’s the end of the world every day, for someone.
—Margaret Atwood, 2000

https://www.laphamsquarterly.org/sites/default/files/images/charts_graphs/scapegoats.png
Shock and Awe
The neverending end times.
By Lewis H. Lapham
Catastrophe is our bedtime story.
—Don DeLillo

’Tis not contrary to reason to prefer the destruction of the whole world to the scratching of my finger.
—David Hume
Nor is it contrary to reason to prefer the sight of a raging inferno or restless typhoon to the view of a worm in one’s apple or a fly in the soup. The spectacle of disaster—real and imagined, past, present, and imminent—is blockbuster box office, its magnitude measured by the number of dead and square miles of devastation, the cost of property, rates of insurance, long-term consequences, short-form shock and awe....
....MUCH MORE 

And In Medical News "Doctors Warn Not To Put Frozen Potatoes In Your Butt"

Roger that, no Pommes de Terre de pooper, over.

Coventry Telegraph

On the Passing Of Freeman Dyson

I always thought he was an interesting guy but it turns out he was a really interesting guy.
Some of the headlines:
Physics World
Freeman Dyson dies age 96
NPR
Physicist And Iconoclastic Thinker Freeman Dyson Dies At 96
The Register
RIP Freeman Dyson: The super-boffin who applied his mathematical brain to nuclear magic, quantum physics, space travel, and more
Swarajya Magazine
Obit: Freeman Dyson, The Genius Physicist Who Helped Bring Japan’s ‘Sacred’ Math To The World, Dies At 96
San Diego Union-Tribune
Remembering famed physicist Freeman Dyson and his La Jolla years
c|net
Freeman Dyson, famed physicist and creative force, dies at 96
Science 2.0 
Freeman Dyson. Don't Call Him Doctor. He Was Too Smart For That.

And some of our visits with the old boy:
"The Brain Is Full of Maps A Talk By Freeman Dyson"

"The Key to Everything" Freeman Dyson on Geoffrey West's "Scale..." 
Until seeing this I wasn't aware Professor Dyson was still alive. The old boy hung out at Princeton's Institute for Advanced Studies at the same time Einstein was there. He knew all the physics brainiacs of the day, Feynman in particular and was sharp enough himself that Princeton grabbed him and made Dyson a Professor despite his lack of a PhD.
This review was recommended by one of the commenters on Izabella Kaminska's last posting at FT Alphaville which we linked in "UPDATED—A Map of Every City (plus Izabella Kaminska does a drive-by)".
And speaking of Ms Kaminska, why haven't the tech boffins at the Financial Times come up with a robo-Izzy until her return?

Although Einstein was at the Institute for Advanced Studies when Dyson arrived they didn't pal around. From the Nautil.us interview with Dyson:
...There were many famous scientists at Princeton when you got there, including Albert Einstein. Did you ever get to know him?
No, and he didn’t encourage young people to get to know him. He never came to seminars, never came to lunch. We always saw him walk by every day. He was tremendously busy with affairs of the world, so he was very much in demand. People came every day. Important people came to visit, so he just didn’t have time for saying hello to the kids.

But it sounds like he didn’t want to say hello. Was it simply not part of his makeup to talk with the up-and-coming generation?
That was true. He didn’t enjoy teaching. There were two important things for him. There was his own work, which he always continued, and there was his public activity as a politician, which he did extremely well. He was a really serious player in the international game and actually had a good effect....
"Alien Civilizations and Energy"

Following Up on "Emanuel Derman: 'Trading Volatility'"

What?
You don't remember? It was July 12, 2019, 10:03 pm, PDT.
Emanuel Derman: "Trading Volatility"

And the follow-up, from Inference Review, December, 2019:

On Louis Bachelier
To the editors:
In Emanuel Derman’s essay on the Black–Scholes Equation, the French mathematician Louis Jean-Baptiste Alphonse Bachelier is mentioned in passing. Published at the turn of the twentieth century, Bachelier’s PhD thesis was the foundation for the later work of Fischer Black, Myron Scholes, and Robert Merton.1 Scholes and Merton were jointly awarded the 1997 Nobel Prize in Economics for developing “a pioneering formula for the valuation of stock options.”2 Black had passed away in 1995. While brief sketches of Bachelier’s life can be found, no one, as far as I know, has written a full biography. Since Bachelier’s only lasting contribution to mathematics seems to have been his thesis, it is not clear what one would say in such a biography. It is a curious and rather sad story.

Bachelier was born in Le Havre on March 11, 1870.3 His father was a wine merchant. Bachelier would certainly have been headed for one of the grandes écoles, but in 1889 both his parents died. He took over the family wine business and then did his compulsory military service. It was not until 1892 that he was able to begin his studies at the Sorbonne. During this period, he may have worked at the Bourse, although the details remain elusive. In any event, he became interested in the question of how to predict the future price of a stock. It is not clear whether he had heard of Brownian motion, or if he simply invented the idea for himself. He assumed that, on its next move, it was equally likely for the price of a stock to go up or go down. This is Brownian motion. Upon hearing of it for the first time, a natural reaction is to inquire how the price goes anywhere. Of course, after the first move, it is as likely for a price to advance further as it is to go backwards. This results in the random walk that is characteristic of Brownian motion....MORE
"Pricing the Future: Finance, Physics, and the 300-Year Journey to the Black-Scholes Equation "


PAKISTAN-STOCKS-YEAR
Variables: σ = volatility of returns of the underlying asset/commodity; S = its spot (current) price; δ = rate of change; V = price of financial derivative; r = risk-free interest rate; t = time.
Finally a cautionary tale from a very smart guy: 
"Volatility as the new Black-Scholes" (VIX; VXX; CVOL)

"Ask an Economist: Which Bond Villain Plan Would Have Worked (and Which Not)?"

From Vulture, Nov. 9, 2012:


A VIEW TO A KILL US / BR 1985 CHRISTOPHER WALKEN rear center. Date 1985.


A VIEW TO A KILL US / BR 1985 CHRISTOPHER WALKEN rear center
While the bad guy in Skyfall is obsessed primarily with revenge and humiliation, many of James Bond’s chief adversaries over the years have wanted something more simple and tangible: cash money. The Bond villain is often deranged and grandiose, sure, but he (or she) is also capable of hatching elaborate plans to increase their bottom line, often by secretly manipulating the world’s economic systems (sometimes with the aid of a clandestine nuclear weapon or two). So, could they have succeeded? If James Bond hadn’t foiled these plots, could these Bond villains have fulfilled their dreams of financial glory? We looked through their schemes, and asked Jean-Jacques Dethier, a development economist at the World Bank (and a lifelong Bond fan), what he thought.
Goldfinger
Plot: Gold tycoon Auric Goldfinger’s (Gert Frobe) plan is quite simple: He wants to attack the U.S. Bullion Depository in Fort Knox and detonate an atomic bomb, thus irradiating the gold stored there, rendering it worthless for decades. This will in turn increase the value of Goldfinger’s own gold and cause economic chaos in the Western world.
Plausibility: “This looks plausible to me,” says Dethier. “If you irradiate the gold, you can’t touch it — which will effectively reduce the gold supply, at a time when the United States currency was still on the gold standard.” However, there is one potential problem — the vast majority of the gold in the U.S. wasn’t in Fort Knox — it was (and remains) in the basement of the Federal Reserve Bank of New York, in downtown Manhattan. (But most of the gold in New York belongs to other nations, so Goldfinger’s evil plan is still fairly solid.)
Live and Let Die
Plot: Caribbean dictator/drug lord Dr. Kananga (Yaphet Kotto) is practically enslaving the poppy farmers of his nation, and plans to distribute heroin for free through his chain of U.S. restaurants, which he expects will simultaneously put his competitors (such as the Mafia) out of business and also create an America full of addicts. Then, faced with huge demand and no competitors, he will start charging high prices for his heroin.
Plausibility: “This is a bit harebrained,” says Dethier. “First of all, I think you can’t just grow opium poppies anywhere, which is why Afghanistan is considered such a high value location.” Additionally, he notes, it’d be almost impossible to eliminate competitors by monopolizing one drug, since they can still produce and distribute other drugs, such as cocaine and marijuana.
A View to a Kill
Plot: Max Zorin (Christopher Walken) wants to secretly trigger a massive earthquake that will destroy Silicon Valley. This will then allow him and his investor allies to monopolize the microchip manufacturing market.
Plausibility: “As far as I know, microchips aren’t actually manufactured in Silicon Valley,” says Dethier. “They’re made all over the world, in China and other places, though the guys who commission the work may be in Silicon Valley.” Therefore, while taking out Silicon Valley would obviously be cataclysmic for the tech industry, he notes, it also wouldn’t entirely remove your competitors, and wouldn’t ultimately affect manufacturing that much....
...MORE 

Friday, February 28, 2020

Ah, The FT's Jemima Kelly is on the Trail of the Billionaire Barclay Bros.

From FT Alphaville:

Why is Sir Frederick Barclay’s name not on his father’s gravestone? 
You might have noticed that the family of the billionaire Brexiteer Barclay brothers is feuding. And in the most spectacular, Shakespearean fashion.

The normally reclusive clan’s affairs were thrust into the spotlight this week as it emerged in a High Court hearing that Alistair Barclay, the youngest son of Sir David Barclay, had been caught secretly recording the conservatory of the Ritz Hotel, owned by the Barclays. That is the room Sir Frederick Barclay (Sir David’s twin brother) likes to unwind by smoking a cigar, or to spend one-on-one time with his daughter Amanda.

Sir Frederick and Amanda, his only daughter, are now bringing a legal action against Alistair as well as his older brothers Aidan and Howard Barclay and Aidan’s son Andrew, all of whom are alleged to have been aware of the secret recordings carried out over several months.
But this isn’t the only indication that relations in the family have broken down in recent months and years. Nor is it the darkest incident.

Alphaville got a tip that Sir David Barclay, 85 years old, had installed a gravestone for the twins' father, also called Frederick, without his brother Frederick's name on it, in Mortlake Cemetery, in West London. So we thought we would go and check it out.
https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F3c81b4ca-abec-4107-b626-53e6d658801d.jpg?source=Alphaville
As you might have guessed from the headline, and as you can see, Sir Frederick’s name is not there, and neither are the names of five of the other six siblings. One sibling is on the gravestone, however: the twins’ older brother, Andrew Roy Barclay. Family members not involved in the arrangements of this headstone are said to feel “deeply hurt”.

You can also see that two other people -- John George Capsalis and Michael Stavros Kapsalis -- are apparently buried in the same grave. They don’t seem to be connected to the family, and indeed when Frederick Hugh Barclay died in 1947, the family was not rich, so a shared grave would probably have been quite normal.

Both times Alphaville visited the grave, there were flowers on it, though the second time the flowers were slightly wilted....
....MORE

Just as, or even more, interesting is her story in the paper:
I probably shouldn't say "her" story, she had a couple helpers.

Not so equivalent after all: Cutting off the City of London would be a disaster for the eurozone

From Reaction Magazine, February 28:

A leading City lawyer claims that Britain’s departure from the EU exposes such great systemic risks at the heart of the eurozone that it could trigger another global financial crisis.
In a dynamite new report, Barney Reynolds of US law firm, Shearman & Sterling, lifts the lid on what he calls hidden systemic flaws in the EU’s financial system which are currently mitigated by the role played by the UK’s financial markets.

The report, Managing Euro Risk: Saving Investors from Systemic Risk, and published by the Politea think tankclaims that as a member of the European Union and a global financial hub, the UK’s supervision of much of the EU banking system has protected the world’s financial markets from significant oversights in EU law. As a host of the global financial market, the UK has been performing a supervisory function, one that has shielded the world economy from risk by counteracting EU assumptions that eurozone debt is sovereign.

But Reynolds, who is head of the Shearman’s financial regulatory practice, adds: “EU financial regulations conceal financial risk which is dangerous to the world economy. This is because the eurozone system has misleadingly treated member-state debt as sovereign for years, despite no one country having sovereign control over its currency.”

Until now, he says the UK has played a vital role in mitigating this eurozone risk. But this protection will not automatically continue on the current basis after Brexit, unless the two parties can put their heads together and agree a mutually beneficial trade deal on financial services, such as Enhanced Equivalence, which is now the preferred outcome for the government. “Failure to foster a deal could lead to disaster for the eurozone.”

Reynolds is the brains behind the concept of “enhanced equivalence” and has been campaigning for years that it’s the best solution for both parties because it is relatively straightforward, and has the merit of being adaptable as regulations change. Under enhanced equivalence, the EU would allow UK financial businesses to trade in the EU under UK law, so long as UK regulations meet international standards and outcomes.

Reynolds told Reaction: “This acknowledgement of the role the UK plays in eurozone debt is a game-changer for the dynamics of how the government negotiates with the EU. It re-boots discussions onto the right footing by identifying the key role the UK plays for the EU and the terms on which it does so.”

“It shows how extraordinary Michel Barnier’s demands for a level playing field and for the UK to apply EU laws like state-aid actually are, since the EU is running the Eurozone at the risk of investors all over the world, which is far from operating on a level playing field.”

Reynolds adds the problem arises because EU financial regulations misrepresent the risk levels of Eurozone debt. Despite the inability of Eurozone member states individually to issue their own currency, EU regulatory institutions still register their debt as “sovereign”.....
....MORE

If interested see Politeia:

Statistics: Suspicious Discontinuities

From Dan Luu:

Suspicious discontinuities
If you read any personal finance forums late last year, there's a decent chance you ran across a question from someone who was desperately trying to lose money before the end of the year. There are a number of ways someone could do this; one commonly suggested scheme was to buy put options that were expected to expire worthless, allowing the buyer to (probably) take a loss.

One reason people were looking for ways to lose money was that, in the U.S., there's a hard income cutoff for a health insurance subsidy at $48,560 for individuals (higher for larger households; $100,400 for a family of four). There are a number of factors that can cause the details to vary (age, location, household size, type of plan), but across all circumstances, it wouldn't have been uncommon for an individual going from one side of the cut-off to the other to have their health insurance cost increase by roughly $7200/yr. That means if an individual buying ACA insurance was going to earn $55k, they'd be better off reducing their income by $6440 and getting under the $48,560 subsidy ceiling than they are earning $55k.

Although that's an unusually severe example, U.S. tax policy is full of discontinuities that disincentivize increasing earnings and, in some cases, actually incentivize decreasing earnings. Some other discontinuities are the TANF income limit, the Medicaid income limit, the CHIP income limit for free coverage, and the CHIP income limit for reduced-cost coverage. These vary by location and circumstance; the TANF and Medicaid income limits fall into ranges generally considered to be "low income" and the CHIP limits fall into ranges generally considered to be "middle class". These subsidy discontinuities have the same impact as the ACA subsidy discontinuity -- at certain income levels, people are incentivized to lose money.
Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.
If you agree with the famous Learned Hand quote then losing money in order to reduce effective tax rate, increasing disposable income, is completely legitimate behavior at the individual level. However, a tax system that encourages people to lose money, perhaps by funneling it to (on average) much wealthier options traders by buying put options, seems sub-optimal.

A simple fix for the problems mentioned above would be to have slow phase-outs instead of sharp thresholds. Slow phase-outs are actually done for some subsidies and, while that can also have problems, they are typically less problematic than introducing a sharp discontinuity in tax/subsidy policy.
In this post, we'll look at a variety of discontinuities.

Hardware or software queues
A naive queue has discontinuous behavior. If the queue is full, new entries are dropped. If the queue isn't full, new entries are not dropped. Depending on your goals, this can often have impacts that are non-ideal. For example, in networking, a naive queue might be considered "unfair" to bursty workloads that have low overall bandwidth utilization because workloads that have low bandwidth utilization "shouldn't" suffer more drops than workloads that are less bursty but use more bandwidth (this is also arguably not unfair, depending on what your goals are).

A class of solutions to this problem are random early drop and its variants, which gives incoming items a probability of being dropped which can be determined by queue fullness (and possibly other factors), smoothing out the discontinuity and mitigating issues caused by having a discontinuous probability of queue drops.

This post on voting in link aggregators is fundamentally the same idea although, in some sense, the polarity is reversed. There's a very sharp discontinuity in how much traffic something gets based on whether or not it's on the front page. You could view this as a link getting dropped from a queue if it only receives N-1 votes and not getting dropped if it receives N votes.

College admissions and Pell Grant recipients
 
Pell Grants started getting used as a proxy for how serious schools are about helping/admitting low-income students. The first order impact is that students above the Pell Grant threshold had a significantly reduced probability of being admitted while students below the Pell Grant threshold had a significantly higher chance of being admitted. Phrased that way, it sounds like things are working as intended.

However, when we look at what happens within each group, we see outcomes that are the opposite of what we'd want if the goal is to benefit students from low income families. Among people who don't qualify for a Pell Grant, it's those with the lowest income who are the most severely impacted and have the most severely reduced probability of admission. Among people who do qualify, it's those with the highest income who are mostly likely to benefit, again the opposite of what you'd probably want if your goal is to benefit students from low income families.

We can see these in the graphs below, which are histograms of parental income among students at two universities in 2008 (first graph) and 2016 (second graph), where the red line indicates the Pell Grant threshold.
Histogram of income distribution of students at two universities in 2008; high incomes are highly overrepresented relative to the general population, but the distribution is smooth
Histogram of income distribution of students at two universities in 2016; high incomes are still highly overrepresented, there's also a sharp discontinuity at the Pell grant threshold; plot looks roughly two upwards sloping piecewise linear functions, with a drop back to nearly 0 at the discontinuity at the Pell grant threshold
A second order effect of universities optimizing for Pell Grant recipients is that savvy parents can do the same thing that some people do to cut their taxable income at the last minute. Someone might put money into a traditional IRA instead of a Roth IRA and, if they're at their IRA contribution limit, they can try to lose money on options, effectively transferring money to options traders who are likely to be wealthier than them, in order to bring their income below the Pell Grant threshold, increasing the probability that their children will be admitted to a selective school.

Election statistics
The following histograms of Russian elections across polling stations shows curious spikes in turnout and results at nice, round, numbers (e.g., 95%) starting around 2004. This appears to indicate that there's election fraud via fabricated results and that at least some of the people fabricating results don't bother with fabricating results that have a smooth distribution....
....MUCH MORE

Dan Luu home

Mr. Luu's Twitter feed

Spiegel: "Will Tesla and Google Kill the German Car?"

This piece is from November 4, 2019. The implicit warning is, if anything, more relevant now than it was just four months ago.

From Der Spiegel:

Threatened by entrepreneurs in California and by Chinese upstarts, German automakers are urgently trying to find their place in a new world of robots and electric cars. BMW, Daimler, Audi and VW set the standards for a century but have now fallen behind.
History will be written on Nov. 4 at the VW plant in Zwickau, Germany. Anyone lucky enough to recently visit the factory, which is sealed behind blue rolling doors, entered into a secret world, a hidden industrial laboratory to which only a few Volkswagen employees have access. In its "ghost run," or test operation, orange-colored robots run by highly complex programs and aided by humans and machines assembled eight electric model-ID.3 cars per day for testing purposes. Serial production is now set to begin on Nov. 4. Depending on how you see it, this marks either the beginning or the end of an era. 

Norway's Sovereign Wealth Fund Enjoyed a Very Good Year In Both the Russian Stock and Bond Markets

From The Barents Observer:

Norwegian wealth fund’s value in Gazprom more than doubled in 2019
The world’s largest sovereign wealth fund enjoyed a very good year on both the Russian stock and bond markets. 

The Russian stock market is not very high on the list of Norwegian investments, but the wealth fund’s 51 companies listed on the Moscow stock exchange in average posted a serious growth in value last year.

Norway’s share of the Russian companies increased in value by seven billion Norwegian kroner (NOK) from 2018 to 2019, the wealth fund’s annual report published on Thursday shows.
The value grow from 23 billion NOK in 2018 to 31 billion NOK in 2019. The value increase in US dollars was $1,3 billion.

For Norway, which money are revenue from the oil and gas production, investments in Russia are still heavily focused on petroleum companies like Bashneft, Gazprom, Gazprom Neft, IG Seismic Services, LUKOIL, Novatek, Orsknefteorgsintez, Saratovskiy Neftepererabatyvayuschiy Zavod and Surgutneftegas.

LUKOIL and Gazprom are the two petroleum companies of which Norway’s wealth fund has the biggest stake among its Russian investments.
By the end of last year, the value of the wealth fund’s 1,07% of the stocks in LUKOIL were worth 6,6 billion NOK, up from 5,1 billion the year before....
....MORE

Shipping: The Revenue Loss From Cancelled Sailings Alone Is Approaching $1 Billion Per Month

That's not counting less-than-capacity trips and other hits to the top line.
From World Maritime News:

105 Sailings from Asia to North America and Europe Blanked in February
Ocean carriers canceled about 105 sailings on the routes from Asia to the North America and Europe/Mediterranean regions alone in February 2020, according to the data from the UK-based consultancy Drewry.

Carriers are blanking sailings as a way of dealing with the cargo volume slump caused by the coronavirus outbreak originating from China and the closure of manufacturing plans in the country as a precautionary measure.

All of the Chinese ports, apart from Wuhan, have remained open. However, they are not operating at full capacity with staff shortages arising from travel restrictions and quarantine measures.
Extended factory shutdowns have also limited movement of cargoes destined for those ports and when monthly port throughput data is finally released, Drewry predicts there will be a significant shortfall.
“The cancellation of 105 sailings per month represent a shortfall in revenue of roughly USD 1 billion (105 x 10,000 TEU x USD 1,000), of which a portion will be made up later via full ships and extra loaders, but the short term damage to carrier profits is large,” Drewry commented.
Chinese port operators indicate that volumes were down by 20-40% in the three weeks from January 20 to February 10, 2020.
Non-Chinese ports have not reported falling throughput volumes, however, the impact is expected to become visible in the next few weeks, when ships from Asia fail to arrive with containers from China, Drewry said.

As explained, a 30% fall in container volumes in China, which accounts for 30% of global throughout, means a 30% x 30% = 9% reduction in global container volume, unless the shortfall is caught up later.
Even though it is still difficult to estimate the impact of the outbreak on container trade, Drewry believes there will be at least 2 months of global port volume falls.

“Cargo owners and shipping lines are desperate for a swift resolution that will see Chinese factories resume production and start churning out the goods and parts that grease the global supply chain. It is inevitable that world port throughput will suffer a large contraction in 1Q20, but the question is now whether we can expect a v-shaped recovery later this year or something else entirely?” Drewry said....
 ....MORE

Previously:
Shipping: Coronavirus Costing Industry $350 Million/Week

"Ron Baron Believes Tesla Could Be Worth $1.5 Trillion In 2030" (TSLA)

We've bemusedly visited Mr. Baron a few times on this topic, links after the jump.
From OilPrice:
Billionaire investor Ron Baron believes that Tesla could be worth as much as US$1.5 trillion by 2030, because the recent stock rally and revenue rise is “only the beginning,” Baron, whose funds hold Tesla shares, told Barron’s in an interview published on Friday.

Baron, whose funds hold 1.62 million Tesla shares, thinks that Tesla’s recent stock rally is just the beginning as Elon Musk’s EV manufacturer is set to grow its revenues and operating profits exponentially over the next ten years.

Baron is a long-term investor and his funds bought almost all Tesla shares that they currently hold between 2014 and 2016, at a total cost of US$355 million. Baron doesn’t plan to divest any Tesla stock anytime soon because he believes the company has a lot more potential and is racing ahead of the competition on the EV market.

“We’re going to make 10 times our money from here,” Baron told Barron’s, referring to his funds’ holdings of Tesla stock.

According to the investor, Tesla—which increased annual revenues from US$2.5 billion in 2013 to US$25 billion in 2019—could book revenues of US$33 billion this year. In 2024, Tesla’s revenue could jump to US$100 billion-US$125 billion, and the company could be worth US$300 billion-US$400 billion, compared to US$150 billion currently....
....MUCH MORE

Tesla is down $29.00 at $650.00 on a generally down day (DJIA off 990.50 etc.)
Previously:
February 4
 Ron Baron Sees Tesla at $1 Trillion Revenues, Stock Crosses $900 Pre-Market (TSLA) 
I giggled, just a little, typing that headline.
It was a manly giggle. 
February 4 
CORRECTED—"Tesla investor Ron Baron sees $1 trillion in revenue in 10 years — and that won’t be the end" (TSLA)
June 2017
More on Ron Baron's "Tesla to $1000" Call (TSLA)
June 2017
Tesla to $1000; "Bitcoin May Hit $1,000,000"; Act Now Before It's Too Late! (and potcoin)  

Oil/Shipping: "Frontline Bets on Strong Market Rebound Once Coronavirus is Contained" (FRO; TNK; EURN)

As the owner of the world's largest tanker fleet these folks have as deep an understanding of oil supply and demand as the big oil traders, Vitol, Trafigura, and Gunvor, do.
From World Maritime News:

John Fredriksen’s shipping company Frontline posted the highest quarterly net income in more than eleven years, reaching USD 108.8 million for the fourth quarter of 2019, the company’s data shows.
The figures point to a major rebound when compared to a net loss of USD 10.0 million in the previous quarter. For the entire year, the company’s net income stood at USD 139.9 million.
“Frontline’s ability to generate significant income has been proven in our fourth quarter results, and the strong market continued into the first quarter of 2020, resulting in the strongest earnings period since 2008 for owners of modern, fuel-efficient vessels,”

Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS commented.
“However, primarily due to the effect of the coronavirus, we have a near-term macro headwind with a slowdown in oil demand, particularly in China. We can’t forecast the duration of this impact, but once the coronavirus is contained Frontline is exceptionally well positioned for the strong rebound we believe will follow.”

Frontline said that its performance in the fourth quarter was driven by higher tanker demand as ton-miles increased due to the growing Atlantic to Asia trade, tighter available fleet capacity and early effects of the IMO 2020 implementation.

These factors coincided with the attacks on oil facilities in Saudi Arabia and the sanctions on the Cosco fleet, which further strengthened the market.

“Just a few short weeks into 2020, the market strength reversed as Libya lost 1mb/day of oil production, Nigeria declared force majeure on Bonny crude and the world held its breath during attacks in the Middle East. Then the sanctions were lifted on the Cosco fleet and the coronavirus appeared, having made an immediate impact on world trade, oil demand and the freight market,” Frontline pointed out.

The VLCC segment is particularly weak as ton-miles demand has decreased, while suezmaxes and LR2/aframaxes, two segments where Frontline has significant exposure, are enjoying better earnings on a relative basis.
Despite the negative market sentiment created by the coronavirus, Frontline’s long-term view has not changed, as the company believes that crude demand will continue to increase and that the fallout will be temporary.

“We are cautiously optimistic that the spread of the virus will be contained sooner rather than later, even though it according to news headlines only is getting worse,” the tanker owner commented.
“Rates for modern vessels are still at reasonably high levels compared to the same period in recent years, which speaks to the underlying conditions and the IMO 2020 shift. Last year a very heavy refinery maintenance season contributed to weaker tanker markets before giving way to a surge of demand towards the end of the year. Combined with increasing sailing distance and reduced effective fleet supply, this is in the simplest of terms a powerful combination.”...
...MORE

We looked at the exceptional profitability of the tanker owners in February 5's Euronav Comments on the Tanker Market (EURN; TNK; FRO):
The almost war with Iran, from the seizure of the British tanker and the Houthi attack on Saudi Arabia last year and the burning of the entrance to the U.S. embassy and killing of Soleimani last month, was very good for the tanker business.
Image result for Suezmax Tanker Spot Rates 2019 clarksons
via Teekay

And speaking of the group here's American Shipper at FreightWaves:

Great Quarter For Tankers Coincides With Stock-Market Rout
Pity the public tanker owners. After years of suffering through terrible freight markets, they finally have a breakout quarter to boast about — and just as they do so, the broader stock market is crashing around them on coronavirus fears.

“It has actually felt like a bit of a horror movie at times, to be honest,” said Frontline (NYSE: FRO) CEO Robert Macleod during a conference call with analysts on Thursday. “It seems that the world is getting one shock after another but surely there must be some good news soon.”

Two of the largest publicly listed tanker owners have just reported results for the fourth quarter of 2019 — Frontline and Teekay Tankers (NYSE: TNK). Frontline announced “its highest quarterly income in more than 11 years.” Teekay Tankers CEO Kevin Mackay touted “one of the most profitable quarters since the end of the tanker-market super cycle in 2009.”

Despite this outperformance, shares of Frontline and Teekay Tankers are down around 45% and 38%, respectively, year to date (on a positive note, shares of both companies were up at midday on Thursday, Teekay Tankers in particular on strong forward guidance).

Strong first-quarter performance
Even more disappointing for tanker execs amidst the stock slide is that the first quarter of 2020 looks even better than the fourth quarter of 2019. A significant portion of quarterly bookings are done in the prior quarter, thus first-quarter voyage rates are buoyed not just by early bookings in the current period, but by bookings made at the end of last year, when rates were very strong.

On the call with analysts, Macleod said the company’s VLCCs (very large crude carriers, with capacity of around 300,000 deadweight tons or DWT) earned $58,000 per day in the fourth quarter and 83% of available VLCC days are booked in the first quarter at $90,000 per day. Frontline’s Suezmaxes (120,000-199,999 DWT) earned $38,000 per day in the fourth quarter and 75% of available days in the first quarter have been booked at around $72,000 per day.
Teekay Tankers’ has secured spot deals at an average rate of $51,700 per day for its Suezmaxes in the first quarter (77% of available days fixed), versus $39,100 per day in the fourth. Its Aframaxes (80,000-119,000 DWT) have been booked at $38,600 per day in the first quarter (63% of available days fixed), versus $33,000 per day in the fourth.

As Jefferies analyst Randy Giveans lamented during an interview with FreightWaves on Monday, “Stock prices are back to where they were during the third quarter of 2019. They’re priced as if the fourth quarter didn’t happen. They’re priced as if the first quarter — which could be even better than the fourth quarter — didn’t happen.”

Positive supply side factors ahead
Macleod stressed the positives going forward, while acknowledging the current weakness. “The negative market effect created by the coronavirus is certainly strong and has hit oil demand head on, but we believe the current situation is temporary rather than permanent,” he said....
....MUCH MORE

WTI   45.06 down 2.03
Brent 49.97 down 2.21
And some of the stocks (all via FinViz):

FRO Frontline Ltd. daily Stock Chart
TNK Teekay Tankers Ltd. daily Stock Chart
EURN Euronav NV daily Stock Chart

Meanwhile at ZeroHedge: "How To Entirely Empty Your Bowels Every Morning"

That's the ad I've been getting if I swing by ZeroHedge.
Don't the ad bots understand that I have markets to facilitate backside evacuation?

It plays hell with the underwear supply chain, and I've found if one depends (poopy pun) on just-in-time delivery one may face social ostracism and worse, but who needs this:
"How To Entirely Empty Your Bowels Every Morning "
When your ZH visit yields this: 
CDC Confirms 2 New Coronavirus Cases In US; WHO Raises Global Alert Rating To "Very High": Live Updates 
Russia Blames Turkey For Its 33 Troops Killed Embedded With "Terrorists"; Turkey Vows To Escalate 
Massive Fire Breaks Out After Immigrant Protest Near Central Paris Train Station 
Could The Covid-19 Pandemic Collapse The U.S. Healthcare System? 
The Entire Treasury Yield Curve Is 'Inverted' 
Iran's Clerics "Put World At Risk" - Urging Pilgrims To Visit Qom Shrine, Outbreak Epicenter, As "House For Cure" 
NYSE Announces Disaster-Recovery Test Due To Virus Fears 
European Nightmare As Turkey "Opens The Gates" On Refugees While Covid-19 Ravages Nearby Iran
Ah hell, gotta run.

I Wonder If All Editors Talk Like This

From Martin Doyle, books editor at the Irish Times:
Image

As NVDA Turns Green: "Five more Chinese regions lower emergency response level as COVID-19 threat recedes"

From Channel News Asia:
(Updated: )
SHANGHAI: Five Chinese regions have downgraded their emergency response level after assessing that health risks from the coronavirus outbreak have receded, state media and government authorities reported.
The northwestern Chinese regions of Inner Mongolia and Xinjiang, the southwestern province of Sichuan, the northeastern province of Jilin and the southern island of Hainan have all cut their emergency response levels.

China has a four-tier response system for public health emergencies that determines what measures a region will implement, with level I the most serious.

Sichuan announced it would adjust its measures from level I to level II, while Inner Mongolia will change from level I to level III, state news agency Xinhua said on Wednesday (Feb 26).....
....MUCH MORE
   
S&P 500     2,897.34   down 81.42  (-2.73%)  
Dow 30     24,978.83   down 787.81(-3.06%)

NVDA        $258.61 up $6.01 (+2.38%)

NVIDIA has had its own little bear market since the all-time high on February 19, down 23.5% to this morning's lows.

It's dangerous to buy going into the weekend when hysteria is in the air but some China exposed issues are catching a bid as short-sellers retreat.
Just be aware that there seems to be a concerted effort to put a bad face on things as ownership of huge swaths of American business is changing hands.
Also, stocks don't usually bottom on Fridays.

Manic Panic Its Just Like The Titanic: The Year 2000 As Analogue For The Recent Decline In Equities

We're coming up on the 20th anniversary of the March 10, 2000 top tick in the Nasdaq stock index.
Here's what we posted on the 10th commemoration of 5048:
Happy Anniversary Mr. Market: Ten Years Ago Today...
...Internet.com put out this press release:

INTERNET.COM'S ISDEX, THE INTERNET STOCK INDEX, BREAKS 1,000, A GAIN OF 1000% IN LESS THAN FOUR YEARS

(New York, NY-March 10, 2000)-internet.com Corporation's (Nasdaq: INTM) ISDEX(r), the Internet Stock Index (http://www.isdex.com), rose above 1,000 for the first time last week. Since its inception in 1996, ISDEX has posted a 1,012% gain, outpacing the Dow and S&P 500, which have only increased 104% and 120%, respectively, during the same period. The ISDEX has also outpaced these indices for this year, with the ISDEX up 29% and both the Dow and S&P down 13% and 5%, respectively.
"With a gain of more than 29% since January 1 alone, it is clear that Internet stocks continue as one of the overall economy's strongest sectors," said Alan M. Meckler, chairman and CEO of internet.com Corporation....
The Nasdaq closed that Friday at 5048.62, it's all-time high.
On the following Monday the Naz was down 141 points. Tuesday, 200.
The index had begun a 30-month decline to it's September 24, 2002 intra-day low of 1,169.04,
down 77%.....
Analogues have their limits and we are not forecasting anything near as bad as the crash of the Naz.
It's just that in its rapidity the recent action in the S&P 500 has precedent.
And what a fine precedent it was, giving birth to the first half of our headline as part of one of my favorite songs.
Note especially the multiple references to how fast things went bad:

The Day the NASDAQ Died
Humble Pie (sung to the tune of American Pie)

A long, long week ago
I can still remember how the market used to make me smile
What I'd do when I had the chance
Is get myself a cash advance
And add another tech stock to the pile. 
.
But Alan Greenspan made me shiver
With every speech that he delivered
Bad news on the rate front
Still I'd take one more punt
I can't remember if I cried
When I heard about the CPI
I lost my fortune and my pride
The day the NASDAQ died 
.
So bye-bye to my piece of the pie
I poured my paycheck into Datek
Now my cash account's dry
It's just two weeks from a new all-time high
And now we're right back where we were in July
We're right back where we were in July 
.
Did you buy stocks you never heard of?
Q COM at 150 or above?
'Cos your plumber told you so
Now do you believe in Home Depot?
Can Wal-Mart save your portfolio?
And can you teach me what's a P/E ratio? 
.
Well, I know that you were leveraged too
So you can't just take a long-term view
Your broker shut you down
No more margin could be found
I never worried on the whole way up
Buying dot coms from the back of a pickup truck
But Friday I ran out of luck
It was the day the NAAAASDAQ died
I started singin'
.
Bye-bye to my piece of the pie
I poured my paycheck into Datek
Now my cash account's dry
It's just two weeks from a new all-time high
And now we're right back where we were in July
Yeah we're right back where we were in July 
.
Now for ten days, we've been on our own
And E-trade won't pick up the phone
But that's not how it used to be
When investors snapped up EMC
With cash they borrowed easily
And a quote that flashed up permanently green
Oh, and just as things were turning 'round
Joel Klein slapped Mister Softee down
The courtroom was adjourned
A guilty verdict was returned
And while Gilder read a book on quarks
Buffet smirked and Greenspan barked
The bulls were eaten by the sharks
The day, the NASDAQ died
I started singin' ... 
.
Manic panic, it's just like the Titanic
Unsinkable and now under the Atlantic
We're at four thou and falling fast
All at once the bottom-fishers pounced
But that just caused a dead-cat bounce
'Cos Mister Softee, from the sidelines, preannounced
.
Now the graph-lines showed complete collapse
While the margin calls were coming fast
We all were forced to sell
Our Apple, E-Bay and Intel
Then the bear funds moved to take the field
And the long bond shed a point of yield
Was Glass-Steagall ever really repealed?
The day, the NASDAQ day
.
We started singing...
Oh, and suddenly we're underwater
Millionaires all hot and bothered
With no cash left to buy again
So come on, Fed be anxious, com-pen-sate
By lowering the discount rate
'Cause easy money is a bubble's only friend
.
Oh, and as I watched the index fall
I received the dreaded margin call
No broker born in hell
Could make me want to sell
But as my gains fell fast into the crash
E-Trade began demanding cash
The talking heads were talking trash
The day, the NASDAQ died
They were singing...
.
I met an analyst for Micromuse
I asked him for their earnings news
But he just smiled and turned away
I logged on to the trading floor
Where I made my fortune weeks before
But they demanded to see cash before I played
And on T.V. the ticker streamed
Kudlow cried and Barton dreamed
Not a bullish word was spoken
The daytraders were choking
And the three stocks I acquired last
AMAT, Dell and Infocast
Couldn't catch a bid and faded fast
The day, the NASDAQ died
And they were singing....
Bye-bye to my piece of the pie
I poured my paycheck into Datek
Now my cash account's dry
It's just two weeks from a new all-time high
And now we're right back where we were in July
Yeah we're right back where we were in July
-Brady/Kearny
Thanks to iTulip for giving it eternal cyber-life.



EIA Natural Gas Weekly Update

From the Energy Information Administration:
for week ending February 26, 2020   |  Release date:  February 27, 2020   
In the News:
India’s sixth LNG import terminal comes online
In January 2020 India commissioned its sixth liquefied natural gas (LNG) import terminal, Mundra LNG, with a nominal import capacity of 0.7 billion cubic feet per day (Bcf/d). Mundra LNG is the third LNG import terminal located in India’s westernmost state, close to major natural gas consumption centers and a well-developed pipeline network.

All LNG import terminals in India except one are located on the west coast along the Arabian Sea. The first two terminals in operation—Dahej (2.3 Bcf/d capacity) and Hazira (0.7 Bcf/d capacity)—were placed in service in 2004 and 2005, respectively. These two terminals are the most utilized LNG facilities in India, operating at nearly 100% capacity utilization. In 2013, the Konkan terminal (formerly called Dabhol LNG, 0.3 Bcf/d capacity), located south of Mumbai, and Kochi LNG (0.7 Bcf/d), located adjacent to the Kochi refinery in southern India, were placed in service. Last year, India commissioned its first terminal on the southeast coast—Ennore LNG (0.7 Bcf/d)—primarily to serve customers in the Chennai area.

In the next three years, India’s LNG import capacity is expected to increase by one-third, with four terminals under construction expected to come online by 2023:....
.... Overview:

(For the week ending Wednesday, February 26, 2019)

  • Natural gas spot prices fell at most locations this report week (Wednesday, February 19 to Wednesday, February 26). The Henry Hub spot price fell from $2.02 per million British thermal units (MMBtu) last Wednesday to $1.92/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the March 2020 contract expired yesterday at $1.821/MMBtu, down 13¢/MMBtu from last Wednesday. The April 2020 contract price decreased to $1.837/MMBtu, down 13¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging April 2020 through March 2021 futures contracts declined 8¢/MMBtu to $2.171/MMBtu.
  • The net withdrawal from working gas totaled 143 billion cubic feet (Bcf) for the week ending February 21. Working natural gas stocks total 2,200 Bcf, which is 41% more than the year-ago level and 9% more than the five-year (2015–19) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 9¢/MMBtu, averaging $4.64/MMBtu for the week ending February 26. The prices of natural gasoline and butane fell by 4% and 1%, respectively. The prices of propane and isobutane rose by 8% and 4%, respectively. The price of ethane remained flat week over week.
  • According to Baker Hughes, for the week ending Tuesday, February 18, the natural gas rig count remained flat at 110. The number of oil-directed rigs rose by 1 to 679. The total rig count increased by 1, and it now stands at 791.

Prices/Supply/Demand: Prices fall across the Lower 48 states. This report week (Wednesday, February 19 to Wednesday, February 26), the Henry Hub spot price fell 10¢ from a high of $2.02/MMBtu last Wednesday to $1.92/MMBtu yesterday, after reaching a low of $1.89/MMBtu on Monday. Temperatures were generally close to normal across most of the country and warmer than normal in the Northeast and upper Midwest. At the Chicago Citygate, the price decreased 14¢ from a high of $1.90/MMBtu last Wednesday to $1.76/MMBtu yesterday. The price at PG&E Citygate in Northern California fell 3¢, down from a high of $2.68/MMBtu last Wednesday to $2.65/MMBtu yesterday. The price at SoCal Citygate in Southern California decreased 19¢ from a high of $2.39/MMBtu last Wednesday to $2.20/MMBtu yesterday....
....MUCH MORE 

Yesterday:
EIA Natural Gas Storage Report, February 27, 2019: No Help For the Longs

Two week's of futures prices:
April futures down  0.0430 at 1.7090 

Meanwhile In North Korea: Their First Confirmed Coronavirus Case Has Been Executed

From ZeroHedge who, for some reason seem concerned about sourcing and attribution:
February 27
To loosely quote Stalin, "No Patient Zero, No Problem."

For weeks, the outside world has speculated about the severity of the coronavirus outbreak in North Korea. And the entire time, North Korea has persisted in insisting that it doesn't have a coronavirus problem, even growing furious at a public offer of assistance from the State Department.

For all we know about the North Korean virus response, the government might have simply brainwashed the North Korean people into believing that loyalty to the Workers Party and Supreme Leader Kim Jong Un grants immunity to the virus. However, there have been whispers.

A few weeks ago, there were whispers that one of the first coronavirus patients in the country was brutally killed by the regime after escaping from a (probably unimaginably brutal) quarantine. Moreover, according to the rumor, he was executed via the traditional North Korean punishment of extirpating criminals by shooting them with an anti-aircraft slug.

Now, IB Times, a shady English-language news website with a reputation for occasionally scooping its more cautious competitors, is reporting that Kim Jong Un allegedly ordered the execution of the country's first coronavirus patient. IBT cited an anonymous twitter account called "Secret Beijing", claiming it has a history of reporting accurately.
According to Secret Beijing, an anonymous social media commentator, who terms himself as an analyst on China affairs, the patient was shot dead. The story is still developing and there is still no clarity on the details of the patient executed by North Korea.
The account points out that such brutal tactics are in line with the regime's reputation....MORE
And here with official comment on what the regime thinks it's doing:

The Equity Markets Are Down, Analysts React

From FT Alphaville, although not 'of'' FT Alphaville, more Alphaville-adjacent but still within the penumbra of Alphaville (penumbra—from the Latin paene "almost, nearly") Markets not Live:

Okay, so are we having fun yet?
***
It’s the worst week since 2008, apparently, including but not only for market reporters who have now written “contagion” and “risk-off” so often that the individual words have lost all meaning. What can we add today? Not much other than sellside tbqf so here: have some sellside. (If you want to skip to the corporate stuff -- and who’d blame you? -- please feel free scroll past the next 2,600 words and look for the picture of a shelf.)

Have Citigroup’s new cut of global earnings expectations.
Citi View — The weakening outlook for the global economy means we now expect flat global EPS in 2020, down from our previous +4% forecast. We cut our MSCI AC World target to 660 (from 690). Our global Bear Market Checklist (5.5/18 red flags) still says “buy this dip” although our US Panic-Euphoria indicator says “not yet”.
Cutting GDP Forecasts — Citi’s 2020 Global GDP forecast is already down to 2.5% from 2.7% at the start of the year. Our China GDP forecast is down to 5.3%, but that could be 4.4% if the virus is not contained until May.
Cutting EPS Forecasts — Top-down, we now expect flat global EPS in 2020, below our previous +4% forecast and way below the +9% still expected by the bottom-up analyst consensus.
Cutting Market Targets — We cut our market targets in line with these EPS reductions. We now forecast MSCI AC World 660 for end-2020, down from previous 690. That implies a 5% gain from here.
Strategy: BMC Says Buy The Dip — Our Bear Market Checklist shows 5.5/18 red flags, the highest in this market cycle but still too low to call the start of the next major bear market. The latest indicator to turn amber is US IG spreads.
Tactics: Panic Euphoria Says Not Yet — Tobias Levkovich’s sentiment indicator hit Euphoria in January. We would prefer it to be closer to Panic before going all-in. It is not there yet.


And here, have JPMorgan to do the buy-the-dip thesis for US equities:....
....MUCH MORE