26 FEBRUARY

Markets contract coronavirus

US markets have shown they aren’t immune to the coronavirus after they experienced their worst days of trade in two years. A total of US$1.7 trillion in value was wiped from S&P 500 during a two-day market sell-off. Increases in confirmed cases of the virus were mirrored in gold prices, which have spiked to a seven-year high as investors move to assets considered less risky amid intense fears of a coronavirus-induced slowdown in global growth.

In a bid to offer assurances, President Trump tweeted that the coronavirus “is very much under control in the USA” and stock markets were “starting to look very good to me!”. Separately, however, the President issued a warning during an address to business leaders in India, where he said: “If I don’t win, you’re going to see a crash like you’ve never seen before”.

Reports of new virus case clusters in Italy, Iran, and South Korea were a catalyst for the sharp drop in global stocks. In London the FTSE 100 had its worst one-day fall for four and a half years while coronavirus fears saw the Australian dollar fall to 66 US cents, an 11-year low.

NEWS WRAP

Titans clash in South Carolina

The Democratic candidates for the party’s presidential nomination duked it out on stage in Charleston, South Carolina. National front-runner Bernie Sanders drew the bulk of the criticism during the night, but the debate was marked by disorder and candidates speaking over the top of each other. Former Vice President Joe Biden desperately needs to win the 29 February primary in South Carolina to keep his campaign afloat. He currently leads the polls in the state and was received warmly by the audience throughout the night. As such, he used his debate to go after billionaire Democratic donor Tom Steyer whose relatively strong polling with black voters in the state could give Bernie Sanders an edge over Biden. READ MORE HERE.
Two anti-abortion bills have fallen in the US Senate, failing to get the sixty votes needed to pass. One measure sought to ban abortion after 20 weeks of pregnancy, the other would penalise doctors who failed to “exercise the proper degree of care in the case of a child who survives an abortion or attempted abortion”. Senate Majority Leader Mitch McConnell said that by not proceeding to debate the legislation, Democrats were sending a “chilling and clear” message. Senate Minority Leader Chuck Schumer labelled the effort a “shameless political stunt”. READ MORE HERE.
President Donald Trump has concluded a two-day trip to India, where he held a ‘Namaste Trump’ rally with Indian Prime Minister Narendra Modi. An estimated crowd of 125,000 packed the world’s largest cricket stadium to cheer on the president as he tried to name check a series of famous Indians. For the Indian prime minister, the warm words and presence of the US president failed to allay criticisms Modi's government has faced for revoking the autonomy of the contested Kashmir region and implementing a number of policies described as anti-Muslim. At least 11 people were killed in street violence unrelated but coinciding with the president's visit during his time in India. Both leaders agreed to launch negotiations on a long-elusive trade deal between the two countries. READ MORE HERE
Harvey Weinstein faces more than 25 years in jail after he was convicted of rape and sexual assault by a New York jury. The former Hollywood producer was found guilty of assaulting former production assistant Mimi Haleyi in 2006, and one-time aspiring actress Jessica Mann in 2013. He was also acquitted on two counts of predatory sexual assault and first-degree rape. He was ordered to be taken to jail immediately, where he is expected to serve time at New York’s notorious Rikers Island jail ahead of sentencing on 11 March. READ MORE HERE.
Extradition hearings for Julian Assange have begun in a UK court. The WikiLeaks founder and Australian citizen is sought by the United States on 18 counts of hacking US government computers and breaches of the Espionage Act. His lawyers told the extradition hearing that Assange is being targeted by President Donald Trump’s administration as “an enemy of America who must be brought down” and his life could be at risk if he is sent back to the United States. If he is convicted, Assange faces an effective life sentence of 175 years. READ MORE HERE.

It may not be an actual pandemic yet, but it’s an economic pandemic. It’s global in scope and disrupting activity around the world.

Diane Swonk, Grant Thornton chief economist
Responding to coronavirus' impact on the market
25 February 2020

ANALYSIS

Not so sweet South Carolina: The 10th Democratic Debate

Bruce Wolpe
Non-resident Senior Fellow

Going into the Democratic debate in South Carolina, the key objectives of the three major protagonists were clear: Bernie Sanders had to augment his front-runner position and effectively stave off the incoming missiles; Michael Bloomberg had to get back on track with an appearance that matched the quality of his $500 million ad spend; and Joe Biden had to show he is still forcefully in the game. Pete Buttigieg, Elizabeth Warren, Amy Klobuchar and Tom Steyer were playing to cement a position of power to accumulate delegates across several states next week.

Sanders held his ground but was shaken by attacks on electability, ideology, and costs so his momentum took a hit. Bloomberg recovered after a shaky debate debut in Nevada and stressed his record of action and achievement, and Biden showed the confidence he needed to project. The surprise was Buttigieg, who presented with common sense, humour, and fresh leadership, but his campaign will need a miracle to survive the coming week.

Let’s look ahead over the next few days:

Tomorrow I expect Rep Jim Clyburn, who is from South Carolina, to endorse Joe Biden. Clyburn is the most prominent African American leader in the US Congress and represents a Democratic electorate which is 60 per cent African American. From there, I anticipate Biden will win South Carolina and use the victory to gain as much momentum as possible for Super Tuesday (3 March). If Biden loses South Carolina, he’s done; anything short of a victory over Sanders will leave his campaign gravely wounded.
On Super Tuesday, I expect Sanders to win Texas, California, Massachusetts and Colorado among others. By the end of the night, the top three finishers will likely be Sanders, Bloomberg and Biden; though it’s still too early to project who will be a clear runner up and who will be lagging in third.
The force of that result, by later next week, will prompt other candidates to drop out. Without gaining enough ground on Super Tuesday, they cannot accumulate a critical mass of delegates to win the nomination or sustain the money required to stay in the race.

Right after Super Tuesday, the question already consuming the Democratic Party – what Politico has called “The Bernie Freakout” – will be in hyper-drive. Who will emerge as the true anti-Bernie, and how will that be put together? From there, how well will the anti-Bernie forces do in the primaries on 10 March (Michigan, Missouri, Washington) and 17 March (Florida, Illinois, Ohio)?

On top of this, there is a wildcard to watch over the next two weeks. The pressures to curb Sanders’ ability to seize control of the party and potentially doom its prospects in November may lead to extraordinary guidance from a higher authority. Will President Obama orchestrate discussions that can lead to a true unity ticket which is competitive with Trump, can save the House, and possibly take the Senate?

The urgency of this moment for the Democrats and the country requires extraordinary decisions so that, in 2020, the Democrats don’t mirror the Republicans’ capitulation to Trump in 2016.

Uncertain future: US foreign policy, regional powers and Indo-Pacific competition

The Indo-Pacific is becoming more contested with troubling implications for countries like Australia. Against a backdrop of rising Chinese assertiveness, deepening uncertainty about the future direction of US strategy, and intensifying rivalry between both great powers, regional nations are struggling to adjust their foreign policy settings for a more turbulent era.

What is the likely trajectory of US and Chinese foreign policy in the Indo-Pacific? How are domestic debates about America’s role in the world affecting US strategy in the lead up to the 2020 election? How are other Indo-Pacific nations reacting to their shifting strategic environment? And what does all of this mean for Australia’s own strategic future?

To explore these issues, please join us for a public panel discussion with the following experts:

Bruce Jentleson, Professor of Public Policy and Political Science at Duke University, leading scholar of American foreign policy and former official in a number US administrations
Nadège Rolland, Senior Fellow for Political and Security Affairs at the National Bureau of Asian Research and author of China’s Vision for a New World Order
Ashley J. Tellis, Research Director of the Strategic Asia Program at the National Bureau of Asian Research and Tata Chair for Strategic Affairs at Carnegie Endowment for International Peace
Ashley Townshend, Director of Foreign Policy and Defence at the United States Studies Centre