Markets have good reason to sweat coronavirus

Follow Us This is Bloomberg Opinion Today, a haggis of Bloomberg Opinion's opinions. Sign up here. Today's Agenda The coronavirus is a real economic threat. Bolton's revelations add to the shame of Republicans. Those ESG ETFs aren't all they're cracked up to be. Enjoy that Permian shale oil while it lasts. Another week, another worry. Photographer: Spencer Platt/Getty Images North America Coronavirus Makes 2020 Even More 'Interesting' What an exhausting year this month has been. January began with the U.S. stumbling toward war with Iran, a scare that barely faded before the outbreak of Wuhan coronavirus. The stock market managed to clamber to new highs after the former incident, but had itself a wee freak-out today over the latter, briefly erasing the month's gains. Even if it doesn't become a pandemic, a rapidly spreading virus is another headache for a global economy still hurting from the trade war. It's certainly the last thing China's economy needs right now, writes Mohamed El-Erian. In the short term, the disruption to business during Lunar New Year celebrations will hurt growth. Tourism, for example, was already struggling even before the outbreak, notes Adam Minter. In the longer run, China keeps having to put off painful reforms it needs to modernize its economy. Meanwhile, the ability of American institutions to respond to a pandemic is mostly untested, writes Tyler Cowen. The likeliest outcome is this all blows over relatively quickly, making market panics a buying opportunity, writes John Authers. The key is to keep an eye on magazine covers: A rush for safe havens has driven investors to the bond market, where interest rates are once again scraping rock bottom. Market sages and dumb newsletter writers alike are, as usual, saying this can't last. These one-off incidents mask the economy's true resilience, arguing for higher interest rates, goes one theory. But as Brian Chappatta notes, these one-off incidents seem to be once-weekly in these interesting times. We could all use safe havens, and maybe a nap. Further coronavirus reading: Thanks to the National Institutes of Health, we're already working on cures for such viruses. — Faye Flam Impeachmentpalooza: It's Raining Smoking Guns Because the news cycle wasn't quite full enough, over the weekend we got the bombshell revelation John Bolton was an eyewitness to President Donald Trump committing impeachable offenses. It's a true smoking gun, much like the tape-recording of crimes that felled Richard Nixon, writes Jonathan Bernstein: It embarrasses Republicans that defended Trump by denying direct evidence of his wrongdoing. Today's Republicans probably won't abandon Trump as they did Nixon. But they may, and should, feel much ickier when they vote to acquit him. And that acquittal will forever be a mark against the GOP, writes Francis Wilkinson: It will make the party an official accomplice to Trump's high crimes and further weaken American democracy. Even if they can squint their eyes and overlook the specific charges in the two impeachment counts, they should consider Trump's general lawlessness and unfitness for office when they vote, writes Jonathan Bernstein. Bolton's revelation has raised the odds the Senate will call him and maybe other witnesses to testify. Even if it results in acquittal, this trial's record will be an important document for future generations to judge how well the political system handled a threat to itself, writes Noah Feldman. It's Not Easy Being ESG Most people strive to do maximal good with minimal effort, which makes the idea of "ESG" ETFs so exciting. These funds purport to invest in companies guided by "environmental, social and governance" principals. Investors thus encourage good corporate behavior without expending much more effort than mashing a "buy" button, while making some money in the bargain. Sounds great! Except these ETFs aren't always all they're cracked up to be. Many include companies that don't exactly scream "socially responsible," such as Facebook Inc., writes Mark Gilbert. Building ETFs that truly live up to ESG standards will cost money. Meanwhile, many ESG ETFs necessarily leave out hot stocks such as Amazon.com Inc., writes Eric Balchunas, making them lag the market. Investors should beware: There's no such thing as a free greenwashing. Permian Impermanence Definitely not appearing in ESG ETFs are shares of companies drilling for oil in the Permian basin. It's just as well; those companies may be in for a hard time, warns Julian Lee. This huge shale formation has been key to the recent surge in U.S. production that has helped keep oil prices low. But an analysis of trends there shows output may peak very soon — possibly as soon as this year. That would make Trump's goal of American "energy independence" a pipe dream. In the meantime, though, there is still a glut of oil around the world, and a threat of sagging long-term demand for the stuff, notes Liam Denning. That's a big reason why prices tumbled on the coronavirus outbreak but yawned about Mideast tensions. Telltale Charts Sure, the news is bad, and global warming may doom us all; but have you considered how far humanity has come in the past century or so, asks Andreas Kluth? Amsterdam and other global superstar cities are losing population, as housing costs soar and telecommuting becomes easier, writes Justin Fox. Further Reading A new study finds Trump's tariffs hurt manufacturing employment, the very thing he tried to boost. — Michael R. Strain A President Bernie Sanders may not get much done but would permanently shift the Overton Window to the left. — Ramesh Ponnuru Boris Johnson's promise to double British economic growth after Brexit looks impossible. — Vince Cable Emerging markets face a troubled future, between growing nationalism, slowing trade and rising automation. — Satyajit Das Matteo Salvini's weekend setback isn't the end for him, but gives Democrats a new lease on life. — Ferdinando Giugliano Russia and Poland profane the Auschwitz liberation anniversary by politicizing it. — Andreas Kluth Work requirements for food stamps are cruel and unnecessary. — Scott Duke Kominers No, the natural human lifespan isn't 38. — Faye Flam ICYMI Kobe Bryant's helicopter flew in a fog that grounded others. Prince Andrew has not cooperated in the Jeffrey Epstein investigation. Iguanas are taking over South Florida. Kickers Pigeons can recognize cancerous tissue as well as humans. (h/t Scott Kominers) Scientists grow tiny brain parts in Petri dishes. Area rat lives normal life with almost no brain. At 13, Gigi Bryant was already a great basketball player. Note: Please send pigeons and complaints to Mark Gongloff at mgongloff1@bloomberg.net. Sign up here and follow us on Twitter and Facebook.   Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more.   You received this message because you are subscribed to Bloomberg's Bloomberg Opinion Today newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022