Mar 23, 2020

Market Meltdown

It has been absolutely stunning to behold the meltdown on Wall Street. Over the past few weeks, I have witnessed financial events that most economists would have never thought possible. All this activity reminds me of the insanity that occurred in the 2008/2009 Great Recession.

Treasury Secretary Steven Mnuchin raised the possibility with Republican senators that U.S. unemployment could rise to 20% without government intervention because of the impact of the coronavirus. The unemployment scenario raised by Mnuchin would be a dramatic turn from February, when U.S. employment surged. The jobless rate fell back to a half-century low of 3.5% as average hourly earnings climbed a steady 3% from a year earlier.

“Social distancing,” the now-prevalent practice of maintaining approximately six feet of distance from all persons, has been a death knell for businesses that service large groups of people. Airline bookings are down 70%, sit down restaurant traffic is down 95%, movie ticket sales are down 97%, and the cruise-lines industry is halting operations and mothballing ships as they face the biggest challenge since 9/11. In a growing number of cities, food-serving facilities are only allowed to provide delivery or carry-out services.

The economy is like some sharks. If it stops swimming, it dies. I would liken the decision to shut down a vast swath of the economy as airplane pilots announcing he is going to turn off all engines because air traffic control (ATC) announced that the fuel is contaminated with a gritty substance that can damage the engines.

The largest drop in oil demand in history is underway due to the coronavirus. When the price of oil crashed after Russia refused to work with OPEC in cutting the supply of oil, US oil producers got slaughtered. The stock price of Occidental Petroleum was cut in half in a single day. Many of the shale oil companies saw 60-70% declines in their stock value.

Ford, General Motors (GM), and Fiat Chrysler announced plans to close all factories in the United States to protect workers from possible coronavirus infection. The shutdown will last until the end of the month, but the virus will still be here in April. The closure will have a massive impact on the economy.

The downfall of the Boeing Company shows how fast good times can turn bad. The stock price for Boeing was right at $400 per share for several months. The firm repurchased over $100 billion in stock, which helped maintain that high stock price. After the coronavirus triggered dozens of plane cancellations, Boeing’s stock price declined by 75%. Fitch downgraded the company’s debt to BBB, and there are now rumors that Boeing is seeking a “Short-Term” Bailout. A firm that started the year with a $200 billion market cap has now dropped to a modest $57 billion.

The White House is working on a $1.3 trillion rescue plan, which includes sending two large checks to many Americans and devoting $300 billion toward helping small businesses avoid mass layoffs. Priorities laid out in a two-page Treasury Department document also include $50 billion to help rescue the airline industry and $150 billion to prop up other sectors, which could include hotels.

The coronavirus is going to be an absolute disaster for the federal budget. During a good year of economic growth, we still added $1.4 trillion to the national debt. If the early financial numbers are a reflection of the national economy, we are headed for a major recession. Tax revenue is about to plunge, while demand for unemployment insurance and food stamps are set to soar. It is very likely that we will have a $4- to $5-trillion deficit in the coming year.

The U.S. government now owes over $23.5 trillion in debt, or about $71,000 for every man, woman and child living within its borders. It has risen $3 trillion since President Trump took office in 2017 and is almost double what it was just 10 years ago.

The real flood of money is taking place behind the scenes. Federal Reserve head Jerome Powell has committed the Fed to loan agreements of a trillion dollars a day. As I’m writing, he has made repo commitments that total $6.45 trillion. The Fed is buying up bonds, stocks, and mortgages at 100% face value even though many of these assets have gone down in value. Powell can hold onto the bad loans forever.

There is some early indication that bond traders are starting to realize the impact of all this dollar- printing madness will have on the markets. The 10-Year bond got as low as 0.4% on March 9th. It has now soared back up to 1.26%.

My greatest financial fear is that the world will wake up some day and realize they made a huge mistake by making the dollar the world’s reserve currency. It amazes me that every time there is a panic, the greenback is the preferred choice compared to all other major currencies.

Common sense tells me that there is no way for us to pull out of this financial nose-dive. Since God is in complete control, a miracle cure for the coronavirus could suddenly appear and, within a year’s time, traders on Wall Street would dust off their Dow 30,000 hats.

“God has not given us a spirit of fear, but of power and of love and of a sound mind” (2 Timothy 1:7).

— Todd

Persia’s Prophetic Preparation

Last week in this column, I gave an excerpt from an article I wrote some years ago that told of God’s promises to Abraham, Isaac, and Jacob. Those promises came from Genesis 12:1–3 and involved the fact that God would bless those who bless Israel and curse those who curse His chosen people of Israel.

I then wrote:

My words of those earlier times have continued to prove true, because the facts involved come directly from God’s Word. Israel continues to be an amazing fulfilling of stage-setting for ultimate fulfillment of prophecy yet future.

In this week’s commentary, I hope to show that Iran, the modern nation that covers much of the territory that encompassed the ancient Persian Empire, likewise gives absolute proof of God’s promises coming true. Whereas Israel has dramatically proven to be the beneficiary of the Lord’s promise to “bless” that nation, Iran continues to prove the veracity of God’s promise to “curse” those who curse Israel.

Most who study Bible prophecy are more than aware that the ayatollahs of Iran have, particularly since the fall of Iran’s shah, uttered the most damnable curses imaginable against Israel. They have organized Iran’s peoples into hate-Israel frenzy. The chants include “Death to Israel!” and the Islamic regime declares America “the big satan” and Israel “the little satan.”

It is reported that Iran is now suffering from the coronavirus more terribly than even China, the center from which the disease apparently sprang.

At least 429 people had died in Iran from the disease as of Thursday March 12 and more than 10,000 people were confirmed as infected as of that date. Sources estimated that because of the regime’s oppressive and reclusive modus operandi the real tallies of the infected and dead are much higher.

Hatred is so deeply ingrained in Islamic leadership that, even though Israel leads the way in developing effective vaccines and treatments for the disease, they still curse that nation. Their reluctance to accept Israel in any way seems to condemn the people of Iran to a tragic outcome.

Grand Ayatollah Naser Makarem Shirazi took a break from hating Israel long enough to announce a religious ruling that it would be permitted to use a “Zionist” vaccine against the coronavirus.

“It is not permissible to buy and sell from Zionists and Israel,” Shirazi said Wednesday to the Iranian daily Hamdeli. “Unless the treatment is unique and there is no substitute.”

Shirazis statement comes in response to a Hebrew media report on Wednesday citing unidentified officials as saying that scientists at the Ness Ziona-based Institute for Biological Research were close to developing a vaccine for the coronavirus. (Adam Eliyaho Berkowitz, “Holocaust-Denying Grand Ayatollah Okays Buying Israeli Cure for Coronavirus,” Breaking Israel News | Latest News)

While the Grand Ayatollah might at some point allow the use of vaccine produced by the hated Israel, the general attitude of the Islamic hardliners in control is reflected in a statement by Roshan Salih, a prominent journalist for Press TV. He tweeted a Haaretz article about an announcement that an Israeli research center had developed a vaccine for the coronavirus. Salih commented, “I’d rather take my chances with the virus than consume an Israeli vaccine.”

The Iranian government mullahs, it can be argued, brought the curse of COVID-19 down on their own heads. While America and much of the Western world isolated China because of it being the center of the disease, the mullahs decided to take advantage and fully embrace China to get trade deals so desperately needed.

The sanctions President Trump and other leaders placed on Iran have greatly affected the regime’s ability to do business worldwide. They are struggling mightily to stay afloat economically, and the people of Iran are protesting with increasing anger and vigor. The embrace of China, apparently, with the intermingling of people doing business, is one major factor that brought the coronavirus into even the highest levels of the clergy-leadership.

It is reported that some top Islamic leaders are infected, and a number—perhaps much greater than reported—have died from the disease.

The “Butcher of Tehran,” Mohammad Haj Abolghasemi, for example, has died of the disease. He was in charge of the sadistic repression of Iranian dissidents during recent antigovernment riots. The Iranian public rejoiced when Abolghasemi became one of the early fatalities associated with COVID-19.

Other reports leaking out of Iran paint ominous portraits of a nation that might be said to be under curse.

Two days after Iran declared its first cases of the novel coronavirus—in what would become one of the largest outbreaks of the illness outside of China—evidence of unusual activity appeared at a cemetery near where the infections emerged.

At the Behesht-e Masoumeh complex in Qom, about 80 miles south of Tehran, the excavation of a new section of the graveyard began as early as Feb. 21, satellite images show, and then rapidly expanded as the virus spread. By the end of the month, two large trenches—their lengths totaling 100 yards—were visible at the site from space.

In[a stunning] video, shared by the BBC’s Persian service March 3, the narrator [described] the scene at Behesht-e Masoumeh cemetery as men carry a casket toward a trench with multiple graves. Qom, like other parts of Iran, is grappling with the coronavirus outbreak that has sickened thousands of people and overwhelmed the public health infrastructure.

“This is the section for coronavirus victims,” the narrator says, as the camera pans across a small portion of the trench, showing mounds of dirt and small, simple markers. People wearing blue protective suits are seen standing nearby. “More than 80 [people] have been buried in this section so far, and they say only 34 deaths,” he says, citing the official death toll on Feb. 28. (Erin Cunningham and Dalton Bennett, “Iran’s Coronavirus Burial Pits Are So Vast They’re Visible from Space,” Connecticut Post, Washington Post, March 12, 2020)

Pressure is enormous on modern-day Persian leaders to bring relief from the suffering of the nation’s enraged population. Instead of joining the more reasonable nations of the world and starting to act in a more civilized manner, thus bringing about better economic conditions, the mullahs double down on their hatred for Israel.

God’s prophet Ezekiel foretold millennia ago the results of the things we are seeing develop at this time of history.

Iran (Persia) will be offered by Gog to share in the “spoil” of the riches they expect when attacking the Jewish state. It is not difficult to believe that Iran’s hate-filled leaders will eagerly join in the assault. It will be the most disastrous outcome for an aggressor in human history to that point. Only Armageddon itself will bring greater destruction to Israel’s enemies.