The Bankwatch

Tracking the consumer evolution of financial services

Dengue fever introduces a new complication in Indonesia during COVID-19 battle

Dengue fever introduces a new complication in Indonesia during the COVID-19 battle.

I have heard of this fever but only in Asia. it is mosquito borne.  according to wikipdia, About 390 million people are infected a year and approximately 40,000 die.[5][6] annually.

Dengue complicates Southeast Asia’s coronavirus fight
Tropical disease presents health care systems in region with a two-front war

People cover their faces as a neighborhood in Jakarta is sprayed with insecticide to kill mosquitoes, which carry dengue fever, on March 23. © AP
KOYA JIBIKI, Nikkei staff writer
May 27, 2020 18:01 JST
JAKARTA — Southeast Asian countries are bracing for possible outbreaks of infectious diseases that show symptoms similar to those of the novel coronavirus ahead of the rainy season. Treatments for these seasonal infections are very different from those for COVID-19, complicating the work of front-line medical workers.

As of May 8, there were 53,660 cases of dengue fever in Indonesia. Infections are rising at a faster pace than last year. In 2019, Southeast Asia’s most populous country had 137,761 dengue fever infections, more than double the previous year, according to the country’s Health Ministry

Written by Colin Henderson

May 27, 2020 at 05:39

Posted in Uncategorized

A Banking crisis product behind the financing of the US Healthcare system

During the 2008 Banking crisis, one created by investment bankers loomed large – Collateralised Debt Obligations (CDO).

They inner workings of these products created by spreadsheet junkies (not real bankers imho) was to create a debt product for sale that comprised a mix of A, B, n and junk mortgages. The key was the junk component made up of mortgages issued by likes of Wells Fargo with little or no diligence and which had little or no chance of being repaid on a normal regular payment schedule.

Fast forward to recent events (before covid-19) and similar tools have been used by likes of KKR to fund purchase of US Health Care companies. The same bundling approach of debt tranches from top tier to junk is used and the resultant product gets a top tier rating and interest rate despite containing junk bonds.

This is where the perfect storm comes in. In one exam KKR funded Envision, a $10 bn purchase with CLO. Envision is a health care provider.

Patients are resisting visiting hospitals due to fear of contracting covid-19. The business result is reduced revenue.
To manage this financial crisis, Envison is cutting back hours, bonuses and staff to meet the terms of the management contracts within the CLO. To state the obvious these are the very hospitals required to managed covid-19 and offer any non covid-19 media service.

This series of events has gone largely un-noticed while the massive Quantitative Easing (QE) by the US Fed is deployed. But we know one way this can end – think Sept 2008 and Lehman Brothers.

Due to their “expertise” in the space, the likes of KKR sell the product (the CLO) and earn fees as CLO managers.

Norinchukin Bank, Japan’s largest agricultural lender

There is another twist to this story. During the lead up to the 2008 banking crisis a trigger point was a failed loan payment between US and France.

On August 7, 2007 the French bank BNP Paribas halted withdrawals from its three investment funds and suspended calculation of their net asset values

KKR received much of their financing from Norinchukin Bank, and agricultural bank in Japan that is punching way above its weight. Its primmer customers are small local farmers who rely on the bank for deposit and loan services.

Could Norinchukin Bank be the next trigger point.

Written by Colin Henderson

May 13, 2020 at 07:41

Posted in Uncategorized

HM Government – Lockdown – “Our Plan to Rebuild”

Boris Johnson received a lot of criticism following release of this document yesterday.  I would suggest that this is a well written business document, and while it may not be something 99% of the population would take the time to read, for the 1% the document provides a business oriented history and timeline of the lockdown process and a way out.

Now the way out is open to debate, but it is a roadmap with clear targets and measurable actions.


Written by Colin Henderson

May 12, 2020 at 07:31

Posted in Uncategorized

US Fed Balance sheet almost doubles in May 2020

Here is the US Federal Reserve Balance Sheet comparing pre and post 2008 Banking crisis on the left then the Covid-19 impact on the right.  These numbers are in Trillions of US dollars.

The big news is the $3 trillion growth in May 2020, and almost doubling (92.5% growth).  This is important because of the relative size of the US economy compared to other world economies.

As the Fed performs its market operations generally referred to as Quantitative Easing the Fed Balance Sheet is the result.  The US Government has bought or taken over debt from Banks, corporations, and government related institutions and taken on that liability into the name of US taxpayers.


  • pre 2008 Crisis: $1Tn
  • post 2008 crisis $2Tn
  • QE 2009 – 2020 $4Tn
  • immediately pre Covid-19 $4Tn
  • current May 2020 $7Tn

in summary the balance sheet is now $6 Tn higher than pre 2008 Banking crisis.

Fed BS 2020-05-10

Written by Colin Henderson

May 11, 2020 at 07:22

Posted in Uncategorized

Banks’ considerations for the end of covid-19 lockdown – followup – 2

Here is my follow up to April 5th, 2020 post.

My own non-scientific assessments as of April 5th, 2020. [it is remarkable how much information has been shared since that date]

Here are the available options that I can see.

- wait for the antidote (Q2 2021)
- wait for the antibody test (Months away)
- muddle through: slowly re-introduce working in the office for low risk staff. Possibly introduce random or systemic testing of employees who have returned (if such is available)
- UBC model featuring on/ off approach based on Government indication that hospital capacity, particularly ICU, is adequate to accept new cases. Other ICU options are at the Government policy planning level and probably beyond control, or meaningfulness for business options
** Much of the improved mood is because of the Fed, which has acted more dramatically than other central banks, buying up assets on an unimagined scale. It is committed to purchasing even more corporate debt, including high-yield “junk” bonds. The market for new issues of corporate bonds, which froze in February, has reopened in spectacular style. Companies have issued $560bn of bonds in the past six weeks, double the normal level. Even beached cruise-line firms have been able to raise cash, albeit at a high price. A cascade of bankruptcies at big firms has been forestalled. The central bank has, in effect, backstopped the cashflow of America Inc. The stockmarket has taken the hint and climbed.

Since then we have observed some amazing activity.

  • Limited Government support for individuals
  • massive and ongoing Government support for business particularly in the US where Quantitative Easing has far exceeded 2008 levels and is open-ended **
  • focus switches from number of covid-19 cases, switch to deaths, switch [still underway] to R factor less than 1.0 [Basic Reproductive Index – average number of people infected by transmitters].
    • [side story] acceptance of a number of deaths as an outcome which suggests some form of the Herd Immunity approach exemplified by Sweden. [Governor of Colorado]
  • pressure for untested drug alternatives to vaccines that will offer solutions that support systematic fading in an end of lockdown possibly calibrated and measured by R factor and pending vaccine earliest sometime in 2021. [I have not heard this measured action approach articulated by Government yet]

In short the target has been a moving one. These shifts in target reflect lack of knowledge, evolving facts and increased available data and finally political pressure to have an answer.

There is also what I will call the populist government factor (Trump, Ford, US States, UK) which focusses less on facts and more on voter acceptance.

There are macro economic trends such as  Emirates Airlines announcement to raise debt because they estimate Air travel not coming back for 18 months. Retail is experiencing an accelerated shift to a new and to be determined model, as large names go Bankrupt [e.g. J Crew, Neiman Marcus, JC Penney, Army and Navy,  + + )

One common theme in North America and Europe is the shift to mindless end of lockdown with politicians using commentary inferring we are at the beginning of the end of lockdown. This has the appearance of ready, shoot aim as a strategy.

Asia provides the appearance of control. But there is an undertow of information control even in normally systematic Japan which by my observation is drastically understating cases and deaths after the disastrous fiasco created by senior politicians (Mori San) to accept the demise of the 2020 Olympics. China and Hong Kong data cannot be trusted.

North American and European Governments have begun taking isolated actions which provide the appearance of opening the economy but do nothing to offer a clear understanding of what the measure of success will be. These actions have two possibilities of success and move to a second phase of lockdown end or reversion to a position worse than mid February or earlier.

It has to be said the approaches being taken offer no guidance to Banks or any business how they should address covid-19 unless you are a Garden Centre or Hardware Store which are the primary focus of many Government actions.

No disrespect to Garden Centres but this is hardly a cohesive end of Lockdown strategy.

Written by Colin Henderson

May 10, 2020 at 13:14

Posted in Uncategorized

Government of Ontario weekly growth 2020-05-09

Government of Ontario weekly growth numbers.  Note Ontario which began “re-opening” remains at R=~ 1


Written by Colin Henderson

May 9, 2020 at 12:13

Posted in Uncategorized

He said in some parts of the province, the reproduction number or R0 has fallen to about 0.8

In more positive news, Williams said that for the first time, Ontario’s basic reproduction number has fallen below one, meaning that on average, each newly infected person is passing the virus on to less than one other person.

He said in some parts of the province, the reproduction number or R0 has fallen to about 0.8, but in other parts, it remains well above 1, closer to 1.3.

The 477 new cases confirmed on Friday translate into a positive rate of about 2.9 per cent on the more than 16,000 tests conducted. That’s up marginally from a positive rate of around 2.6 per cent on about 1,000 thousand fewer tests one day prior but is down from May 6 when there were 412 confirmed cases on just under 13,000 tests.

Written by Colin Henderson

May 9, 2020 at 09:13

Posted in Uncategorized

6 countries, 6 curves: how nations that moved fast against COVID-19 avoided disaster

Hassan Vally, La Trobe University

To understand the spread of COVID-19, the pandemic is more usefully viewed as a series of distinct local epidemics. The way the virus has spread in different countries, and even in particular states or regions within them, has been quite varied.

A New Zealand study has mapped the coronavirus epidemic curve for 25 countries and modelled how the spread of the virus has changed in response to the various lockdown measures.

Read more: Latest coronavirus modelling suggests Australia on track, detecting most cases – but we must keep going

The research, which is yet to be peer-reviewed, classifies each country’s public health response using New Zealand’s four-level alert system. Levels 1 and 2 represent relatively relaxed controls, whereas levels 3 and 4 are stricter.

By mapping the change in the effective reproduction number (Reff, an indicator of the actual spread of the virus in the community) against response measures, the research shows countries that implemented level 3 and 4 restrictions sooner had greater success in pushing Reff to below 1.

R0 can be viewed as an intrinsic property of the virus, whereas the Reff takes into account the effect of implemented control measures. The Conversation, CC BY-ND

An Reff of less than 1 means each infected person spreads the virus to less than one other person, on average. By keeping Reff below 1, the number of new infections will fall and the virus will ultimately disappear from the community.

Conversely, the larger the Reff value, the more freely the virus is spreading in the community and thus the faster the number of new cases will rise. This means a higher number of cases at the peak of the epidemic, a greater risk of the health system becoming overwhelmed, and ultimately more deaths.

Here are some of study’s findings from states and nations around the world:

New South Wales, Australia

The effect of Australia’s strict border control measures, implemented relatively early in the pandemic, can clearly be seen in the graph below. Federal and state governments introduced strict social distancing rules; schools, pubs, churches, community centres, entertainment venues and even some beaches were closed.

This prompted the Reff value to drop below 1, where it has stayed for some time. Australia is rightly regarded as a success story in controlling the spread of COVID-19, and all states and territories are now mapping their paths towards relaxing restrictions in the coming weeks.

The Conversation, CC BY-ND

Read more: 90% out of work with one week’s notice. These 8 charts show the unemployment impacts of coronavirus in Australia


Italy was relatively slow to respond to the epidemic, and experienced a high Reff for many weeks. This led to an explosion of cases which overwhelmed the health system, particularly in the country’s north. This was followed by some of the strictest public health control measures in Europe, which has finally seen the Reff fall to below 1.

Unfortunately, the time lag has cost many lives. Italy’s death toll of over 27,000 serves as a warning of what can happen if the virus is allowed to spread unchecked, even if strict measures are brought in later.

The Conversation, CC BY-ND

United Kingdom

The UK’s initial response to COVID-19 was characterised by a series of missteps. The government prevaricated while it considered pursuing a controversial “herd immunity” strategy, before finally ordering an Italy-style lockdown to regain control over the virus’s transmission.

As in Italy, the result was an initial surge in case numbers, a belatedly successful effort to bring Reff below 1, and a huge death toll of over 20,000 to date.

The Conversation, CC BY-ND

New York, USA

New York City, with its field hospital in Central Park resembling a scene from a disaster movie, is another testament to the power of uncontrolled virus spread to overwhelm the health system.

Its Reff peaked at a staggeringly high value of 8, before the city slammed on the brakes and went into complete lockdown. It took a protracted battle to finally bring the Reff below 1. Perhaps more than any other city, New York will feel the economic shock of this epidemic for many years to come.

The Conversation, CC BY-ND


Sweden has taken a markedly relaxed approach to its public health response. Barring a few minor restrictions, the country remains more or less open as usual, and the focus has been on individuals to take personal responsibility for controlling the virus through social distancing.

This is understandably contentious, and the number of cases and deaths in Sweden are far higher than its neighbouring countries. But Reff indicates that the curve is flattening.

The Conversation, CC BY-ND


Singapore is a lesson on why you can’t ever relax when it comes to coronavirus. It was hailed as an early success story in bringing the virus to heel, through extensive testing, effective contact tracing and strict quarantining, with no need for a full lockdown.

But the virus has bounced back. Infection clusters originating among migrant workers has prompted tighter restrictions. The Reff currently sits at around 2, and Singapore still has a lot of work to do to bring it down.

The Conversation, CC BY-ND

Read more: This is why Singapore’s coronavirus cases are growing: a look inside the dismal living conditions of migrant workers

Individually, these graphs each tell their own story. Together, they have one clear message: places that moved quickly to implement strict interventions brought the coronavirus under control much more effectively, with less death and disease.

And our final example, Singapore, adds an important coda: the situation can change rapidly, and there is no room for complacency.

Hassan Vally, Associate Professor, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Written by Colin Henderson

May 3, 2020 at 10:49

Posted in Uncategorized

Brussels goes bike friendly before end of lockdown

Brussels goes bike friendly before end of lockdown

Written by Colin Henderson

May 1, 2020 at 11:52

Posted in Uncategorized

New model released by Province of Ontario

New covid-19 model released by Province of Ontario.

Written by Colin Henderson

April 20, 2020 at 11:46

Posted in Uncategorized

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