There is a panic component, and a mistrust component to COVID-19, especially in the markets. The Federal Reserve has dusted off the 2008 playbook, starting with cutting interest rates back to zero as Fed Chairman Jerome Powell puts on his Helicopter Ben Bernanke hat and is dropping $700 billion on the markets.
The Big Casino is open for business again, gang!
The Federal Reserve, saying “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States,” cut interest rates to essentially zero on Sunday and launched a massive $700 billion quantitative easing program to shelter the economy from the effects of the virus.
The new fed funds rate, used as a benchmark both for short-term lending for financial institutions and as a peg to many consume rates, will now be targeted at 0%-0.25% down from a target range of 1% to 1.25%.
Facing highly disrupted financial markets, the Fed also slashed the rate of emergency lending at the discount window for banks by 125 bps to 0.25%, and lengthened the term of loans to 90 days.
The markets said "Thanks, I hate it" and immediately went limit down on futures, because the Fed agreeing to blowing all of its ammo this early in the proceedings (when the economy was in record low unemployment/record high markets territory just 30 days ago) now has everyone truly scared.
Powell added that the Fed would be "patient" before raising interest rates again thanks to COVID-19's massive downward effects on the economy.
But nobody's buying it (quite literally, everyone is selling it off). Trump's press conference yesterday was an absolute disaster. Again. Nobody believes him anymore, and the markets absolutely tanked as a result. The Dow was down 12% this morning, some 2,700 points, when trading resumed after the circuit breaker kicked in at the open.
Now the Trump regime is blaming the market losses on "foreign disinformation".
The Trump administration is alleging that a foreign disinformation campaign is underway aimed at spreading fear in the country amid the coronavirus pandemic, three U.S. officials said Monday.
On Sunday, federal officials began confronting what they said was a deliberate effort by a foreign entity to sow fears of a nationwide quarantine amid the virus outbreak. Agencies took coordinated action Sunday evening to deny that any such plans were put in place, as they tried to calm a nation already on edge by disruptions to daily life caused by the virus.
The three U.S. officials did not name the foreign entity they believe to be responsible. They spoke on the condition of anonymity to discuss the sensitive matter.
“Text message rumors of a national #quarantine are FAKE,” tweeted the National Security Council Sunday night. “There is no national lockdown.” The NSC encouraged Americans to follow official government guidance.
The Trump regime is bound and determined to escape any responsibility for this, aren't they?
It won't work, though. Trump spent the day telling the nation's governors that they were on their own and that they needed to "do more" Trump especially singled out NY Gov. Andrew Cuomo to attack.
President Trump on Monday chided New York Gov. Andrew Cuomo (D) following a call with governors across the country on the coronavirus, saying the New York governor "has to 'do more.'"
The president swiped at Cuomo in a tweet in which he declared that the teleconference "went very well."
Just had a very good tele-conference with Nations’s Governors. Went very well. Cuomo of New York has to “do more”.— Donald J. Trump (@realDonaldTrump) March 16, 2020
Cuomo, who has at times been sharply critical of the administration's handling of the pandemic, quickly hit back, tweeting that Trump is the one who is "supposed to be the president."
As I said before, Trump is going to dump the blame for this on as many blue state governors as he can, and I'm convinced Fox News State TV will be calling on all of them to resign by the end of the month.
How bad are things? This bad.
Reported US coronavirus cases in March via @CNN:— Ryan Struyk (@ryanstruyk) March 16, 2020
3/1 - 89
3/2 - 105
3/3 - 125
3/4 - 159
3/5 - 227
3/6 - 331
3/7 - 444
3/8 - 564
3/9 - 728
3/10 - 1,000
3/11 - 1,267
3/12 - 1,645
3/13 - 2,204
3/14 - 2,826
Now - 3,485
The math doesn't lie. Add at least one zero, if not two, to those numbers for the true figure.
It's going to be bad within weeks, if not days, not months.
Trump's daily COVID-19 "task force" press conference held a few minutes ago in another effort to try to salvage the markets failed spectacularly as the Dow crashed by 3,000 points at closing. He dragged out the experts and finally let them speak, and they basically scared the crap out everyone.
It was needed. But it came at a price, just like Trump's years of lies and attacking the media.
The grim reality is here. We're now at a net loss in the markets for the Trump era. Things are not going to improve soon.
Buckle up, and buckle in.