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🎙 "If you cannot find peace within yourself, you will never find it anywhere else." - See who said it and why it matters at the bottom.
Illustration: Eniola Odetunde/Axios
Many of the world's poor and developing countries could begin defaulting on their bonds in the coming weeks as the coronavirus outbreak has led to massive outflows from emerging market assets and real-world dollars being yanked from their coffers.
Why it matters: The wave of defaults is unlikely to be contained to EM assets and could exacerbate the global credit crisis forming in the world's debt markets.
Driving the news: Investors pulled a record-breaking $83.3 billion from EM securities in March, dwarfing outflows seen during previous "stress events" like the global financial crisis, the 2014 taper tantrum, and China's devaluation scare of 2015, the Institute of International Finance says.
What they're saying: "The huge fiscal costs and humanitarian consequences of coronavirus could incentivize a slew of distressed governments to default on their debts," Edward Glossop, emerging markets economist at Capital Economics, wrote last week.
State of play: The emerging world is being battered on all sides by a slowdown in manufacturing, cratering oil prices and the depression of aggregate demand as a result of the COVID-19 outbreak.
Yes, but: Bullish investors are banking on the IMF and World Bank to deploy up to $1 trillion in relief to help stave off mass defaults and worst possible outcomes.
Yes, but, but: That may not be nearly enough.
A number of emerging market central banks will likely begin quantitative easing measures, Capital Economics analysts say, further flooding the world with an abundance of cash never before imagined.
Why it matters: Quantitative easing is an extreme measure that has an unproven track record at stimulating economic growth and has never been attempted in emerging countries, which have higher interest rates than their industrialized peers.
Cruise line operator Carnival Corp. sold $4 billion worth of 3-year bonds at an astounding 12% coupon in a debt auction that was oversubscribed, with orders exceeding $10 billion.
U.S. intelligence has concluded China intentionally underreported both total cases and deaths related to its coronavirus outbreak, Bloomberg reported, citing unnamed U.S. officials who had viewed a classified report to the White House.
Why it matters: China's efforts to deal with and economic recovery from the outbreak are being closely watched by governments across the globe as a precursor of what's to come in their countries.
What they're saying: “The medical community ... interpreted the Chinese data as: This was serious, but smaller than anyone expected,” Deborah Birx, the State Department immunologist advising the White House on its response to the outbreak, said at a news conference Tuesday.
The big picture: The conclusion that China likely had substantially more cases than it reported, and the fact that the U.S. still has not instituted a nationwide quarantine despite mounting infection numbers, suggest the outbreak and commensurate economic impact will be more damaging than most economic models predict.
Threat level: It's not just China. Italy is undercounting thousands of deaths caused by COVID-19 because many who die don't make it to hospitals and are never tested, WSJ reports.
Of note: Using the numbers reported by China, Italy and others, the World Health Organization predicts the world will reach 1 million confirmed cases in the coming days.
Job losses over the past month have likely been worse than even some of the more extreme economic estimates, and are expected to get worse.
Driving the news: Led by small businesses, U.S. companies cut payrolls by 27,000 in early March, ADP's latest private payrolls report showed Wednesday, in a surge of cuts that predated many municipalities' mandated business closures.
Go deeper: The ADP headline number significantly underplays the level of carnage in labor markets, as service-related industries saw losses of just 18,000 during the month.
What they're saying: Mark Zandi, chief economist at Moody’s Analytics, notes that just 6% of companies indicated they are hiring, a level worse than during the financial crisis and comparable to about 40% during a typical month.
Goldman Sachs predicts unemployment will peak at around 15%, with a little more than 20 million unemployed.
After exceeding the record for weekly unemployment claims by more than five fold last week, economists are predicting even greater job losses when the government's report is revealed later today.
Details: The number of first-time jobless claims, which will reflect filings last week, could rise to 5.6 million, according to an analysis of individual state reports and Google search data by economists Paul Goldsmith-Pinkham and Aaron Sojourner.
Putting it in context: Sojourner and Goldsmith-Pinkham last week predicted claims would rise to 3.4 million, well above early economist predictions of around 1 million.
Quote: "If you cannot find peace within yourself, you will never find it anywhere else."
Why it matters: Marvin Gaye, the legendary crooner who made the gold standard for albums with "What's Going On," was born on April 2, 1939.