Senior White House officials briefed powerful financiers on their concerns about the impending coronavirus pandemic, while continuing to insist publicly that you have nothing to worry about, it said.
The behind-the-scenes briefings gave traders an extremely valuable insight into the impending catastrophe.
“In short, everything” was the reaction of an investor, using the term “Wall Street” to bet on the idea that the share prices of companies will soon fall.
The New York Times received a note written by William Callanan, a hedge fund veteran and board member of the Hoover Institution.
Kalanan summed up a series of private sessions held by the Hoover Institution in February with senior members of the president̵
His note, writes the New York Times, was circulated among the financial elite.
In a session at the White House on February 24 for the members of the board of the Hoover Institution, Thomas J. Phillipson, the president’s senior economic adviser, told the group he could not yet assess the effects of the virus on the US economy.
Larry Cudlow told CNBC on February 24 that there were not many reasons to worry about COVID
In particular, representatives of the White House economy give a far more pessimistic picture
Those who have access to the information have managed to manage their money amid the crisis
That morning, he told the National Association for Business Economics at a public gathering that the potential economic effects were “exaggerated.”
The next day, Larry Kudlow, director of the National Economic Council, told the board that the virus “is present in the United States so far, but now we just don’t know.”
Hours earlier, Kudlow had appeared on CNBC to say that the virus was blocked in a way that was “quite close to hermetically sealed” and that there was no cause for concern.
“We restrained him,” he said.
“I won’t say airtight, but it’s pretty close to airtight.”
He added that while the outbreak was a “human tragedy”, it was unlikely to be an “economic tragedy”.
“There will be stumbles.” We look at the numbers; “It’s a little difficult,” Kudlow said.
“But at the moment – there are still no supply disruptions.”
Hoover board members were briefed at the White House in February
Kudlow confirmed to the New York Times that he had made the remarks at Hoover’s meeting, adding that in his mind they were essentially the same as his remarks on CNBC.
“It was never my intention to misinform,” he said, noting that the number of cases in the United States at the time was no more than 20 and that he expected travel restrictions to limit further spread.
At the end of the three-day meeting of the board of the Hoover Institute, however, Kalanan’s remark showed a private level of concern that did not match the public statements.
“What impressed me,” the consultant wrote, according to a copy of the note received from the newspaper, was that almost every employee had raised the virus “as disturbing, completely unprovoked.”
The impact of Kalanan’s note was quick.
By the late afternoon of Feb. 26, the day email bounced from Appaloosa to other trading companies, U.S. stock markets had fallen close to 300 points from their peak the previous week.
Donald Trump also knew more than he could afford.
In his book, Bob Woodward revealed that on February 7, Trump told him that the coronavirus “passes into the air” and is “even more deadly than your strong flu.”
At the time, he was telling the public that it was no worse than the flu.