Global Stagnation; Disruption; Insider Trading: Tracking the Effects of Coronavirus

Senator Richard Burr (Getty Images/ Mark Wilson)

SENATORS UNDER SCRUTINY

Last week it was reported that some U.S. senators were accused of insider trading based on non-public information on Coronovirus. On 24th of January, Senators were given a closed door briefing on Coronovirus and then they sold millions of dollars’ worth of stocks, one week before the stock markets decreased to historic lows.

4 senators, 3 Republicans and 1 Democrat are under scrutiny over these claims. They’re accused of using classified information for their own enrichment.

Kelly Loeffler – (R) of Georgia

Richard Burr – (R) of North Carolina

Dianne Feinstein – (D) of California

Jim Inhofe – (R) of Oklahoma


ProPublica reports that North Carolina Republican Richard Burr, chairman of the Senate Intelligence Committee, was receiving daily coronavirus briefings as he “sold off a significant percentage of his stocks, unloading between $628,000 and $1.72m of his holdings” a week before the stock market tanked.

Separately, an investigation done by the Daily Beast found that Senator Loeffler, a member of the Senate Health Committee, and her husband Jeffrey Sprecher, chairman of New York Stock Exchange, sold millions of dollars in stocks, beginning on 24 January, the day her panel received a private briefing on the coronavirus from top US public health officials.

Loeffler then went on to invest in Citrix, a company that develops teleworking software. Technologies that are of high demand now, since many people are working from home and the only way of connecting with their colleagues is through these technologies. Not surprisingly, Citrix’s value of shares increased during the Covid-19 pandemic.


BURR’S DEFENSE

Senator Burr then responded by tweeting that his decision to sell stock was made “solely based on public news reports”. He specifically named Asian bureau of CNBC as the source of his decision making.

“Understanding the assumption many could make in hindsight however, I spoke with the chairman of the Senate Ethics Committee this morning and asked him to open a complete view of the matter with full transparency.” He said in his statement published on Friday.

Jim Cramer, the host of “Mad Money” on CNBC later checked Senator Burr’s portfolio and his transactions and tweeted “Senator Burr got some ideas from CNBC Asia? I look at his portfolio changes and I can’t imagine which ones were from CNBC Asia. Seems like an ill-advised stance”; implying that Burr’s claim about CNBC network might be far from reality.

If investigations find this allegations to be true, not only are they unethical, but also criminal, since the STOCK Act prohibits senators from insider trading.

On Sunday, Senator Rand Paul of Kentucky, became the first senator who tested positive for Coronavirus. Upon learning of his diagnosis, he left the Senate to self-quarantine.


MONMOUTH POLL

A recent poll conducted by ‘Monmouth’, shows how Americans think about the job performance of their governors and agencies involved in navigating the country through Coronavirus crisis:

Their state governor 72% favorable/ 18% unfavorable

Federal health agencies 65%/24%

President Trump 50%/45%

Congress 42%/37%

Media 45%/43%

American public 38%/45%


DEMOCRATIC PRIMARIES

Meanwhile, Democratic primary is still ongoing, although with less coverage and less enthusiasm. Tulsi Gabbard, congresswoman representing 2n district of state of Hawaii, and the last remaining Democratic candidate besides two front-runners, Biden and Sanders, dropped out of the race and endorsed Joe Biden. She endorsed Bernie Sanders in 2016 election.

Before dropping out, her favorable/unfavorable numbers among Democratic voters showed her in a tough position. According to Morning Consult poles, 29% of Democrats viewed her unfavorably. Only 23% favorably. The rest either had no opinion or never heard of her.

In January, Gabbard filed a defamation lawsuit against Hillary Clinton for $50 million, after Clinton suggested she was favored to win by the Russians and alluded to Gabbard being a “Russian asset”.

As of now, Joe Biden is ahead with 1,205 number of delegates and Bernie Sanders is trailing him with 905 delegates.

Here’s a graph showing each candidates’ support during their campaign. We can clearly see a historic and almost vertical surge in Joe Biden’s numbers in March.


Favorable/Unfavorable numbers:


In hypothetical matchups between the remaining candidates and president Trump, in the general election, polls seem to show Democrats’ situation as the following:

Source : Morning Consult

COVID-19 EFFECTS AROUND THE GLOBE

As the whole world tries to grasp with the new reality in which we are living now, businesses are hit hard, economies are grinding into a halt, and consumers are losing their confidence in the markets.

Japanese Prime Minister Shinzo Abe announced that Tokyo 2020 Olympics will be postponed by a year.

Germany is planning to unveil major stimulus packages, like increase borrowing for as much as 150 billion euros, and is expected to suspend its debt brake rules. As of Monday, there are 24,873 cases of people diagnosed with Coronavirus and 94 deaths in Germany.

In Britain, Prime Minister Boris Johnson ordered the country to go under a nationwide lockdown; drastically restricting movements, in an attempt to curb the coronavirus.

Italy is still dealing with surging number of death tolls caused by Covid-19. As of Wednesday, March 25, there has been 7,503 total fatalities.

The Italian government ordered the closure of almost all industries and public and private sectors, unless they contribute to producing “essentials”. On Saturday Prime minister Conte called this crisis “the most difficult crisis the country has faced since World War 2”.

Even though the cases are still rising, there are some signs that the government actions and the lockdown might be working.

Sunday and Monday have had the lowest day-over-day covid-19 case increases since the outbreak began.

So, maybe there is a glimpse of hope after all!


Maryam Rahmani

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