Coronavirus Economic News 04April 2020

Written by rjs, MarketWatch 666

The news posted last week about economic effects related to the coronavirus 2019-nCoV, which produces COVID-19 disease, has been surveyed and some articles are summarized here. This includes both monetary policy and fiscal measures enacted this week in the face of the virus, the politics surrounding that, plus financial regulations that were eased to grease the economic skids. The second part of this article reviews some economic impacts of businesses closing and jobs lost, both US and overseas. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) Articles are primarily related to the U.S. political and economic impacts. News items about epidemiology and other medical news for the virus are reported in a companion article.

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The Federal Reserve Now Owns 15 Percent of the U.S. Treasury Market; At Its Current Rate, It Could Own the Whole Market in Less than Two Years – Pam Martens – According to the U.S. Treasury, as of February 29, 2020, there was $16.9 trillion in marketable U.S. Treasury securities outstanding. Of that amount, at the end of February, the Federal Reserve held $2.47 trillion or 14.6 percent – making it, by far, the largest single holder of U.S. Treasuries anywhere in the world .By this past Friday, the Fed’s ownership of the Treasury market had increased to $3.12 trillion. It had grown by an unprecedented $650 billion in one month’s time. And on March 23, the Fed announced that it would buy unlimited amounts of both Treasury securities and agency mortgage-backed securities “to support smooth market functioning.” But exactly how can a so-called “free market” function smoothly if the country’s own central bank is cornering the market. Salomon Brothers paid a $290 million fine and came close to getting slapped with criminal charges by the U.S. Department of Justice in 1992 for manipulating prices in the Treasury market. And make no mistake about it, the Fed’s massive purchases are having a demonstrative impact on driving up prices in the Treasury market while driving down yields – meaning the income that determines if senior citizens in America can buy real groceries or have to live on one pot of soup for the week.At the end of 2007, before the Wall Street crash in 2008, a senior citizen could invest $10,000 in a 10-year Treasury note and get $400 a year in income, or 4 percent. Today,that same $10,000 generates just 0.67 percent or $67. Seniors who were living on their Treasury income have experienced an 83 percent drop in income while food costs and pharmaceutical costs have soared.If the Fed keeps up this pace of Treasury buying, it will own the entire Treasury market in about 22 months. If you look at the New York Fed’s list of the Treasury securities that are being submitted to it for sale by Wall Street’s trading houses versus the amounts the New York Fed is buying, you will see that Wall Street is puking up Treasuries in something akin to projectile vomiting.

The Federal Reserve’s One Last Hail Mary – Over the last few weeks, the Federal Reserve has been in utter desperation mode to try to revive and keep the American economy on life support. What many in the mainstream media have failed to include in this recent coronavirus economic narrative is that the virus was just the pin of one the biggest bubbles ever created, which we call the central bank bubble revolving around U.S sovereign bonds. Before we dive deep into this, let’s start with what the Fed has been doing to combat against the coronavirus and to keep markets alive for the time being. To begin, welcome back to the era of the printing press, but this time they have made it clear they will conduct “QE infinity” if this is a prolonged depression, which it will be. For some prospective, previous QE programs were:

• QE1: $1.7 Trillion
• QE2: $600 Billion
• QE3: $1.6 Trillion

With this latest being:

• QE4:$1.6 Trillion

An overwhelming number in such a short period, making previous QE programs look like peanuts in comparison. In fact, the Fed printed roughly $970,000 every second last week to keep the market afloat. To validate that the Fed is artificially keeping the market alive, just look at this next chart: This chart showcases that while the Fed balance sheet has shot up ($5.2 Trillion), corporate earnings have plummeted. The market is clearly on life support with the Federal Reserve as its temporary backstop. Presently, the aviation, hotel, and automotive industries, to name a few, are in a major crisis. This applies to all businesses, but since 2008 companies have taken advantage of prolonged zero interest rates and have gone on a total debt binge, with the majority of this debt going strictly to share buybacks and dividends to shareholders.It is expected the Federal government will bail some of these companies out with the unprecedented stimulus package passed last week. Which displays we don’t live in a real capitalistic society, wealth effects have been the primary mandate for the Federal Reserve for the past three decades (beginning with Greenspan).But we now face a severe issue, which resides in the bond markets. The Fed has made it very clear that they will conduct QE forever if needed to normalize things; however, the more and more they print, and as more stimulus gets announced from the U.S government, the confidence in the U.S dollar will begin to dwindle.Many prominent investors are calling for a significant dollar rally, as they believe the USD will forever be the world’s most sought out currency given its reserve currency status. However, they fail to realize this is a much different world we are navigating through then the 2008 financial crisis.

Fed Launches New Lending Facility for Foreign Central Banks – – The Federal Reserve said Tuesday it would launch a temporary lending facility that for the first time will allow foreign central banks to convert their holdings of Treasury securities into dollars, its latest bid to alleviate strains in global markets. The program is designed to alleviate stresses in currency markets that had prompted more foreign central banks to sell their holdings of Treasurys. The Fed has been aggressively purchasing Treasury and mortgage securities to reduce market strains, and the latest move could reduce the supply of those securities hitting the market if foreign central banks can more easily exchange them for dollars. The program could allow around 170 foreign central banks and other international monetary authorities that maintain accounts at the New York Fed and aren’t subject to U.S. sanctions to enter a lending arrangement called a repurchase agreement, or repo, in which borrowers temporarily exchange their Treasury securities for dollars. “This facility should help support the smooth functioning of the U.S. Treasury market by providing an alternative temporary source U.S. dollars other than sales of securities in the open market,” the Fed said in a statement. The repo facility for foreign central banks will be available beginning April 6 for at least six months. The latest dollar-lending programs will complement separate tools the Fed has launched to lend dollars to 14 other central banks in Europe, Canada, Mexico, Japan, Brazil and Australia to ensure markets don’t run short of currency outside of the U.S. Many business transactions abroad take place in dollars and foreign institutions also lend in the currency. The Fed used these “swap” lines aggressively in 2008 and 2009 during the financial crisis. But the latest lending program goes beyond what the Fed employed during the financial crisis or the 2011-12 eurozone crisis by making available dollar funding to a far broader cohort of emerging-market reserve banks. It underscores the growing primacy of the dollar in global finance and the demands that has placed on the Fed to serve as a central bank to the world. The new lending facility is likely to reach a much broader set of foreign central banks, especially those with acute dollar demands that don’t have Fed swap lines, including in India, China and Saudi Arabia.

The Fed Blows Biggest Bond Bubble Ever- March IG Bond Issuance Hits $271BN, An Absolute Record – When the Fed broke the last frontier of moral hazard – at least until it starts openly purchasing ETFs and single stocks after the next market crash, thereby fully nationalizing the market – and announced it, or rather Blackrock, would not only expand its QE to “unlimited” but also buy investment grade bonds and the IG ETF, LQD, it effectively tore the bond market into two categories: that backstopped by the Fed, and that which isn’t (something we described in “Bond Market Tears In Two: Distressed Debt Is Cratering, As Fed Buying Of Investment Grade Sends LQD NAV Soaring“). It also unleashed the biggest debt bubble of all time. Why? Because by explicitly guaranteeing investment grade debt, the Fed – by making BBB and higher rated debt effectively risk-free – not only precipitated the biggest one-day surge and inflow into LQD, but unleashed an unprecedented free for all as every single investment grade company – especially those soon to be fallen angels who will be downgraded to junk – have rushed into the bond market to issue debt and raise cash while they can at artificially low yields. And the data confirms it: according to BofA, after the IG market was largely shut down in the two weeks ahead of the Fed’s March 23 bond buying announcement, US new issuance reached a new monthly record of $260.7 billion in March 2020, bringing YtD to $509.7 billion – the fastest ever start to a year and 47% ahead of 2019’s pace. Looking at the use of proceeds, BofA observes that refinancings continued at a strong $79.8bn, but as the commercial paper market froze $51.8bn was specifically earmarked for terming that out. In addition, there was roughly $69bn of COVID-19 liquidity-related issuance from banks and companies that drew credit lines or mentioned liquidity in the use of proceeds language. What is more remarkable is that is that another $57bn was for frontloaded issuance for capex, M&A as well as – drumroll – share buybacks and dividends. Yes, even at this moment, having seen the Boeing blowback which repurchased over $50BN in stock pushing its debt load to record highs and now demands a $60BN bailout, companies have the gall to issue debt and buyback stock!

$9,000,000,000,000- Former Fed Strategist Now Expects Fed’s Balance Sheet To Double This Year – Late on Thursday, we calculated that as of the end of this turbulent week, the Fed will have added a record $625 billion to its balance sheet, bringing the total to $5.5 trillion, an increase of $1.3 trillion in two weeks (6% of GDP), which was the amount the Fed monetized during all of QE1 in response to the financial crisis, but which took place over a period of almost 2 years. That’s just the start of what will soon become the most aggressive expansion in Fed balance sheet history because according to BofA’s Fed guru Mark Cabana, who was a former officer in the New York Fed’s Markets Group, the Fed’s balance sheet is now set to double to $9 trillion by the end of the year, to wit: We acknowledge there is elevated uncertainty around the outlook for the balance sheet, but anticipate it will approximately double in size from end ’19 to end ’20. The estimates for the Fed’s balance sheet “after unlimited QE and new programs” currently imply that between end ’19 & end ’20:

• Fed balance sheet to US GDP will rise from 20% to 40%, in the process unleashing an unprecedented liquidity tsunami that will send asset prices soaring once the pandemic is over yet the Fed refuses to shrink its balance sheet (Chart 2)
• Fed UST as percentage of marketable debt will rise from 20% to 50%, in other words the Fed will now monetize all US Treasury issuance and then some (Chart 4)
• Fed UST holdings will increase by $1.8tn and agency MBS by $700+bn
• Reserves will increase three- to four-fold

All of the above in table format: To arrive at these estimates, Cabana make the following assumptions about Fed purchases and use of the Fed’s facilities: UST and MBS purchases: expect two phases:

• (1) initial bazooka to support market functioning. The Fed has purchased $75bn/day of USTs and $50bn/day of MBS. Through next week Cabana anticipates an average of $60bn/day of USTs and $40bn/day of MBS, which is fascinating because Cabana published this report in the early morning hours of Friday, and just a few hours later the Fed announced that it would follow precisely this schedule, tapering TSY QE from $75BN to $60BN and MBS from $50BN to $40, which announcement sent stocks sharply lower in the last 30 minutes of trading on Friday.
• (2) standard QE from April through December with $75bn/month of USTs and $50bn/month of MBS; this would help with the glut of upcoming UST supply.

Fed facilities – The Fed has announced five facilities: CPFF, MMLF, PMCCF, SMCCF and TALF. Treasury made an initial investment of $10bn in these facilities, which can be 10x levered. Congress is set to allocate another $454bn to the Fed facilities, which can be 10x levered. This implies the max size of these facilities is roughly $5tn, and BofA anticipates 50% takeup spread across three months. In ’08, TALF saw 35% takeup, so assume about 1.5x takeup of facilities now vs ’08 levels. Discount window and PDFC – Assume discount window and PDCF use peaks at around $120bn in the near term then gradually declines. FX swap lines – Assume FX swap line use peaks around $200bn, and current 84 day operations roll off in June.While the former NY Fed staffer acknowledges that there is an elevated uncertainty around these estimates, he sees the risks to his estimates “as skewed to the high side.”In short, once you start helicopter money you never stop.

A Global Conundrum: How to Pause the Economy and Avoid Ruin – The coronavirus has produced something new in economic history. Never before have governments tried to put swaths of national economies in an induced coma, artificially maintain their vital organs, and awaken them gradually. Some past societies, such as medieval Europe, abandoned economic activities as people tried to escape plagues, and suffered heavy disruptions to their social order. In other pandemics,such as the flu of 1918, economic interactions continued with only limited quarantine measures, as authorities accepted contagion and deaths as the price of continuity. Today, many nations are more willing – or feel more able – to try to have it both ways. Their hope is to press pause on the economy, save lives, and then press play again. If it works cleanly, it will be a testament to the flexibility of modern capitalism and the ingenuity of modern government. More likely, much will go wrong. “We’re in unknown territory. Inevitably there’s a lot of guesswork,” The problem is that the economy has no pause button. Social-distancing measures, such as telling people to stay home and businesses to close unless essential, can suspend the buying and selling of most goods and services. But many costs keep on running. Households have rent or mortgages to pay, as well as bills for food and other necessities. Businesses have payrolls, debts and other fixed overheads. Banks owe money and so must collect it. The conundrum of how to pay wages, rents and interest in the absence of sales has three kinds of answer. People and businesses could live off their savings until the restrictions end. But many don’t have enough reserves. The longer the health emergency lasts, the more people will run out of money. The private sector could cut its outlays to match the commerce that is still permitted. But that raises the specter of mass unemployment and bankruptcies, the destruction of countless normally viable businesses, the scattering of workforces, and perhaps a lasting depression. To avoid such armageddon, the government can substitute for sales for a while, sending or lending enough money to cover wages, interest and other fixed costs. In theory, the state could preserve today’s companies and jobs for months on end, provided it can borrow or print enough money and target the aid perfectly, and that people trust normality will return. But politics has inevitably meant disagreement about how to target the aid, and how far to go in subsidizing the private sector. The U.S.’s aid package came too late to avoid a sudden jump in job losses last week. “We’re seeing unprecedented liquidity support in many countries, but the collapse of private consumption is so big that many firms will go under,” In the U.S. and Europe, there is debate over which sectors and companies deserve handouts, which parts of the private sector should be asked to absorb some of the cost themselves, and how to avoid pumping money into ailing companies that would have gone bust anyway. There is also reluctance in some countries to borrow too much, only a decade after the global financial crisis pushed up public debts.

CBO Reveals Apocalyptic Forecast- Expects -28% GDP, 10% Unemployment Rate – One of the many side effects of the coronavirus pandemic is that it has thrown out all recent economic forecasts right out of the window, certainly those of the perpetually cheerful CBO. In a publication released on Thursday afternoon, the CBO said that it now expects the economy to contract sharply during the second quarter of 2020 as a result of the continued disruption of commerce stemming from the spread of the novel coronavirus. What it expects now is, at least in the short-run, nothing short of a depression, with Q2 GDP expected to plunge to -28% as unemployment soars to 10%. The following are CBO’s latest preliminary estimates, based on information about the economy that was available through this morning and which include the effects of an economic boost from recently enacted legislation.

• Gross domestic product is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate reported by the Bureau of Economic Analysis would be about four times larger and would exceed 28 percent. Those declines could be much larger, however.
• The unemployment rate is expected to exceed 10 percent during the second quarter, in part reflecting the 3.3 million new unemployment insurance claims reported on March 26 and the 6.6 million new claims reported this morning. (The number of new claims was about 10 times larger this morning than it had been in any single week during the recession from 2007 to 2009.)
• Interest rates on 10-year Treasury notes are expected to be below 1% during the second quarter as a result of the Federal Reserve’s actions and market conditions. This is hardly a surprise, and the real question is when will rates turn negative.

And visually: That’s about as far as the CBO will go. As it admits, its “economic projections, especially for later periods, are highly uncertain at this time.” Below are some details on what specific updates are incorporated in Today’s Cost Estimate:To estimate the costs of legislation that is especially sensitive to economic conditions, such as provisions affecting unemployment insurance benefits, CBO is taking into account as much economic information as possible. Later today, CBO will publish a preliminary estimate of the costs of H.R. 6201, the Families First Coronavirus Response Act, which was enacted as Public Law 116-127 on March 18. The estimate incorporates an updated projection of the unemployment rate that was based on information that was available about the economy through March 27. It was not based on all information available as of this morning because of the time needed to process new information about economic developments and incorporate it into cost estimates. (Also, following the conventions of cost estimating, the economic projections used for the estimate do not include the effects of the act itself or the larger effects of P.L. 116-136, the subsequently enacted CARES Act.)The unemployment rate underlying the cost estimate for H.R. 6201 was 12 percent in the second quarter of 2020. The extent of social distancing was a key factor in that projection. The analysis incorporated an expectation that the current extent of social distancing across the country would continue – on average, and with local variation – for the next three months. That expectation was broadly consistent with the projections of the virus’s spread that have been reported by the Administration’s coronavirus task force.CBO’s projections also included the possibility of later outbreaks of the virus. To account for that possibility, social distancing was projected to diminish by only three-quarters, on average, during the second half of the year. And CBO expected the effects of job losses and business closures to be felt for some time; the unemployment rate underlying the cost estimate was 9 percent at the end of 2021.

Extra $2 Trillion Looted from Public Coffer to Replenish US Treasury’s Murky Exchange Stabilization Fund – The massive emergency relief bill (aka the hara-kiri bill) passed on Capitol Hill last week and approved by Trump on Friday provides for “replenishment” of the U.S. Treasury Department’s murky and secretive Exchange Stabilization Fund (ESF). This is what Trumpian mucky muck Lawrence Kudlow said at the press conference: “And finally, I want to mention the Treasury’s Exchange Stabilization Fund. That will be replenished. It’s important because that fund opens the door for Federal Reserve fire power to deal in a broad-based way through the economy for distressed industries, for small businesses, for financial turbulence.You’ve already seen the Fed take action. They intend to take more action. And in order to get this we have to replenish the Treasury’s emergency fund. It’s very, very important. Not everybody understands that.That fund, by the way, will be overseen by an oversight board and an Inspector General. It will be completely transparent.So, the total package here comes to roughly $6 trillion – $2 trillion direct assistance, roughly $4 trillion in Federal Reserve lending power.”Constitutionally, the U.S. Secretary of the Treasury can only spend money that has been appropriated by Congress. But with the consent of the president, the secretary has substantial leeway to use the money in the Exchange Stabilization Fund (ESF) that Congress created in the Gold Reserve Act in 1934. The act initially established the ESF as a reserve to stabilize the U.S. dollar in case of turmoil in foreign currency markets after the U.S. abandoned the gold standard. But the U.S. Treasury has mostly used it to provide loans to other economies on the brink of default. For example, it was used to stabilize Mexican government debt in the 1994 peso crisis.

After Three Coronavirus Stimulus Packages, Congress Is Already Prepping Phase Four – WSJ – As lawmakers last week completed a record-shattering economic-rescue package estimated at $2 trillion, Senate Minority Leader Chuck Schumer (D., N.Y.) predicted: “This is certainly not the end of our work here in Congress – rather the end of the beginning.” Legislators from both parties, administration officials, economists, think tanks and lobbyists are already roughing out the contours of yet another emergency-spending package – perhaps larger than the last – to try to keep the coronavirus crisis from turning into a 21st-century Great Depression. Many expect the debate to begin in earnest by late April. “There’s talk of a multi-trillion-dollar program, given the size of the shutdown,” says Stephen Moore, a fellow at the conservative Heritage Foundation. “There’s a general recognition that we need something big to get some juice into the economy,” adds Mr. Moore, an outside economic consultant to the Trump administration and some congressional Republicans. The ideas being floated include extending last week’s package to make the benefits last longer, as well as plugging in likely holes in the hastily assembled bill. One item in particular cited by both President Trump and Democratic leaders is a desire for more money to shore up state government budgets collapsing under lost tax revenues and new spending demands. A common theme from economists and legislators across the political spectrum: The latest measure was mainly about keeping U.S. commerce on life support while it endures a medically induced coma. That is, paying businesses and workers revenues and wages lost during the shutdown. A next phase would likely pivot from stabilization to stimulus – providing the patient a robust regimen of physical therapy in an attempt to get the economy back to full health. Action so far has been “about mitigation,” House Speaker Nancy Pelosi (D., Calif.) said at a Thursday press conference. “Next, we’ll go from emergency mitigation to recovery … to grow the economy and create more jobs.” She later called the new law “a very big down payment.”

Pelosi floats undoing SALT deduction cap in next coronavirus bill – Speaker Nancy Pelosi (D-Calif.) on Monday suggested that a controversial portion of President Trump’s 2017 tax law could be retroactively rolled back in the next coronavirus relief bill. In an interview with The New York Times, Pelosi suggested that reversing the tax law’s $10,000 cap on the state and local tax (SALT) deduction for 2018 and 2019 could be a way to provide individuals with more money. “They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are,” Pelosi told the Times. The cap on the SALT deduction has been strongly disliked by politicians in high-tax, Democratic-leaning states such as New York, New Jersey and California, who argue that it has punished their residents and makes it harder for their states to provide public services. But most Republicans support the SALT deduction cap, arguing that it helps to prevent the tax code from subsidizing higher state taxes. Tax-policy experts across the ideological spectrum criticized Pelosi’s idea late Monday, arguing that repealing the SALT deduction cap would largely benefit high-income taxpayers. Pelosi spokesman Henry Connelly said in a statement to The Hill that “action on SALT would be tailored to focus the benefits on middle class earners and include limitations on the high-end.” Legislation that repeals the SALT deduction cap would struggle to pass the Republican-controlled Senate, and it could also face some resistance in the House. In December, the House passed legislation to temporarily repeal the SALT deduction cap on a near party-line vote, but only after Democrats agreed to accept a Republican motion to amend the measure to prevent the repeal of the cap from applying to taxpayers with income of more $100 million. Sixteen Democrats voted against the bill.

McConnell hits brakes on next economic stimulus package – Senate Majority Leader Mitch McConnell (R-Ky.) hit the brakes Tuesday on Speaker Nancy Pelosi’s (D-Calif.) plan to move ahead with a fourth stimulus package that would include major infrastructure spending and other Democratic priorities. “I think we need to wait a few days here, a few weeks, and see how things are working out,” McConnell said on “The Hugh Hewitt Show.” “Let’s see how things are going and respond accordingly,” he added. “I’m not going to allow this to be an opportunity for the Democrats to achieve unrelated policy items that they would not otherwise be able to pass.” McConnell’s remarks came the same day that President Trump encouraged Congress to pass a $2 trillion infrastructure bill as the next piece of coronavirus legislation. “With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Trump tweeted. Pelosi on Monday told reporters in a conference call that she is already looking a new round of coronavirus relief legislation and that it would likely include a major infrastructure component. “There are infrastructure needs that our country has that directly relate to how we are proceeding with the coronavirus,” Pelosi told reporters. “And we would like to see in what comes next something that has always been nonpartisan, bipartisan, and that is an infrastructure piece that takes us into the future.” House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) on the same call argued that infrastructure projects like expanded broadband access could help fight the pandemic. “If you don’t have access to the internet, you can’t do telemedicine and you can’t learn when you’re not going to school in person,” he said. But McConnell on Tuesday noted that the Senate and House are not expected to return to work in Washington until April 20 at the earliest. “First, we need to see what the effect of the current bill is. The Treasury, of course, is wrestling with all this complicated effort to speed checks to individuals and small businesses to get us through this period until the health care pandemic begins to subside,” he said. The GOP leader said the Senate will resume confirming Trump’s judicial nominees when it reconvenes later next month. Confirming federal judges was McConnell’s top priority on the Senate floor before it was interrupted by Trump’s impeachment trial and debate on coronavirus legislation. “We will go back to judges,” he said. “My motto for the rest of the year is leave no vacancy behind.”

Trump Calls for New $2 Trillion Infrastructure Bill – – President Trump on Tuesday said a significant investment in infrastructure should be part of a fourth congressional coronavirus relief package, citing an opportunity in low interest rates.”With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Mr. Trump wrote on Twitter. “It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!”Asked at a press briefing later Tuesday how he proposes to pay for the plan, Mr. Trump said, “we’re going to borrow the money at zero-percent interest.”He added: “Our interest payments would be almost zero and we can borrow long term. People want to be in the United States. They want to be invested in the United States.”In a reference to a possible fourth round of legislation responding to the coronavirus outbreak, which has killed more than 3,000 people in the U.S., Mr. Trump tweeted: “Phase 4.” The divided Congress has already passed three major pieces of legislation to address the pandemic: a roughly $2 trillion stimulus bill that includes checks to households, bailouts for airlines and other distressed industries, and loans and grants for small business; an earlier package of tax credits and increases for unemployment benefits and food assistance; and fresh funds for health agencies and virus testing.

McConnell says there will be a fourth coronavirus bill – Senate Majority Leader Mitch McConnell (R-Ky.) said Friday that there will be a fourth coronavirus bill and that health care should be a top priority as lawmakers draft the legislation.McConnell, in an interview with The Associated Press, said that “there will be a next measure.” “[It] should be more a targeted response to what we got wrong and what we didn’t do enough for – and at the top of the list there would have to be the health care part of it,” he said. The comments from the GOP leader, who remains in Washington, D.C., during the Senate’s three-week break, are the firmest he has offered yet about the possibility for additional legislation. Speaker Nancy Pelosi (D-Calif.) and House Democrats have held near-daily conference calls with reporters as they’ve raced to outline their ideas for another coronavirus package that would include infrastructure, free coronavirus treatment and other issues like improved worker protections and expanded family and sick leave. McConnell acknowledged that he and Pelosi have a “little different point of view” on the timing of the next coronavirus bill, and that he is still “not in favor of rushing” additional legislation. The GOP leader indicated in a separate tweet that Senate Republicans are focused, for now, on implementing the $2.2 trillion package passed by Congress late last week, which includes direct cash assistance for individuals and hundreds of billions for small businesses and hard-hit industries like airlines. “Senate Republicans are closely tracking the implementation of our historic CARES Act as the Administration puts it into effect for the American people. We are committed to supporting American workers, families, and small businesses as our nation confronts this historic emergency,” he tweeted.

The stimulus bill includes a tax break for the 1% – CNN – We face a frightening pandemic. More than 100,000 American have been infected with Covid-19, while tens of millions more continue to shelter at home. Meanwhile, the markets are crashing. And yet the more things change, the more they stay the same.While health care workers and local governments frantically race against the clock to keep up with the escalating medical caseloads while trying to keep themselves and their families safe, Congress was still able to find the time to give money away to rich people.Thanks to a stunning new report from the New York Times, which has been relentless on the tax beat during the Trump administration, we’ve learned that a provision has been included in the 880-page coronavirus stimulus bill to help the very wealthy in a way that is breathtaking in its scope and detail.It is worth taking a minute — many of us have more of those now in our quarantined states — to explain. When individuals buy real estate, even if they do so using loans or other people’s money, they can “depreciate” — or write off, over time — the cost of the physical property on their taxes. Suppose, for example, that a taxpayer bought a $2 million building as an investment. He would be able to deduct, or subtract from his taxes, something like $100,000 a year for 20 years to defray the costs of buying and improving the property. The taxpayer would be able to take these deductions even if the building were going up in value. This is why Donald Trump loves depreciation, as he told the nation during a presidential debate in 2016 — it’s one of many ways he avoided paying millions in taxes. Such love seems to runs in the family: Jared Kushner has utilized tax depreciation, too. Now here is what changed in the historic $2 trillion stimulus bill. Previously, if a married couple had depreciation deductions that exceeded their real estate business income, the couple could claim that “loss” to write off taxes on a maximum of $500,000 in income from other sources, like wages from a day job. Under the change, our rich taxpayer couple — and this applies only for individuals, not corporations — can now deduct an unlimited amount of “excess losses” in real estate against income from other sources. So now real estate moguls with lucrative day jobs or bountiful capital gains from other investments can go back to living tax-free, the Kushner way, before limits were put in place as part of the 2017 tax reform bill.

Bailouts for the Rich, the Virus for the Rest of Us – For the second time in a generation, the President and Congress are creating an economy under the guise of ‘saving the economy.’ Through bailouts for the executives of corporations and institutions whose coffers have been emptied for their own personal enrichment, a corporate kleptocracy is having its class power secured. And through token payments and pandemic profiteering for the masses, the American precariat is being deepened and broadened to solidify its place as desperate and expendable.With Donald Trump’s threat to ‘get America working again’ by Easter (April12th), the same tactic that turned Italy’s pandemic from tragedy to catastrophe is being repeated on a much larger scale here. And for what? In an economy where the richest 1% takes all the gains while the poor and working class haven’t seen a raise in four decades, it is the rich who will reap the benefits while workers get sick and die. It is finance capitalism that is being bailed out when it should have suffocated under its own weight in 2009. Graph: in times of crisis the powers that be call for solidarity through national unity. However, there is little solidarity shown in who owns the economy. The rich own the economy, represented here in shares of stock. Since the Fall of 2019 – long before the coronavirus arrived, the Federal Reserve has been once again bailing out Wall Street to the tune of several trillion dollars (graph below). There aren’t enough virus test kits, ventilators or protective equipment, but at least the rich don’t have to worry about not being rich anymore. Source: Edward Wolff / NBER.Where are the bailouts for the people? $1,200 checks against $30,000 bills for being treated for coronavirus? Why isn’t providing healthcare for all of the people the primary objective of the bailouts? Mr. Trump says he will send workers back to work while Democrats leave them no alternative but to work or starve. Without providing them the means – assured by meager bailouts, Democrats are every bit as guilty as Donald Trump of sending working people to die in a pandemic to add a few more dollars to the bank accounts of the rich.More to the point, where are the virus test kits, ventilators and protective equipment for health care workers and the rest of us? Nick Turse of The Intercept puts a lie to the claim that the need for these couldn’t have been foreseen. For decades epidemiologists and health care professionals have been shouting from the rooftops about the need to prepare for a pandemic caused by a respiratory virus. Successive neoliberal governments dismissed the warnings and here we are to suffer the consequences.

Bigger Unemployment Payments to Reach States This Week, Labor Secretary Says – The federal government will this week release funds from a coronavirus stimulus package to boost jobless benefits, but how quickly those payments reach laid-off workers depends on overburdened state unemployment systems, the head of the U.S. Labor Department said in an interview. A record-shattering 3.3 million Americans applied for unemployment benefits two weeks ago as a result of U.S. shutdowns due to the coronavirus pandemic. Economists forecast weekly data to be released Thursday will show another 3.1 million sought assistance last week. The recent levels of people seeking jobless claims are more than four-times previous records, causing delays in applications and putting pressure on state benefit systems. Laid-off workers have reported waiting on the phone for hours and websites crashing, leaving them unable to apply. Those who do successfully file are waiting for the additional $600 a week in jobless payments, approved by Congress and President Trump last week. “What we’re focused on now is making the system that we have in place function as effectively as possible,” Labor Secretary Eugene Scalia said. He said funds to increase jobless payments by $600 a week – more than double the existing maximum in some states – will be distributed to states this week, but he doesn’t know when states will make such payments to individuals. The enhanced benefits were included in the roughly $2 trillion stimulus package that was recently signed into law. Mr. Scalia urged businesses to use federal loans in the stimulus plan to keep workers on payrolls, rather than lay them off. “People taking unemployment assistance is not our first choice,” Mr. Scalia said. Instead, he said businesses should seek out federal loans that can be forgiven if they maintain their workforce. Such loans will be a “powerful incentive for small businesses” to retain workers, putting companies in a better position to ramp up operations when the virus is contained.

Who’s Left Out of Coronavirus Stimulus Payments? Many College Students, Adult Dependents – WSJ – The government is preparing to send one-time payments to most Americans to help them cope with the coronavirus outbreak, but that is little comfort for many college students and adult dependents who are left out. The economic-relief law signed by President Trump on Friday provides $1,200 to most adults and $500 for children under age 17. That money – $292 billion – will start flowing within weeks from the Internal Revenue Service into bank accounts. People with little or no income can qualify, which means money will flow to retired people and people who don’t normally file tax returns. The benefit phases out for individuals with income above $75,000 and married couples with income above $150,000. However, the plan excludes anyone who isn’t a child and who can be claimed as someone else’s dependent. Who is in that group? Some high-school students, college students and some disabled and elderly people, many of whom show up on the tax returns of the people they live with who provide most of their support. They won’t get money directly, and no one will get money for them. In all, that is about 21 million Americans, according to the Tax Policy Center. Immigrants who don’t have Social Security numbers also aren’t eligible. “That [$500] could be a month’s worth of food,” said Fern Maklin, 71 years old, who is a dependent of her daughter and son-in-law in Palm Harbor, Fla., and contributes her Social Security payments to the household. “The stress and the anxiety, we try to keep it low key, but it’s there.” Parents and adults who have those dependents will still be able to claim the $1,200 for themselves. They just won’t get an additional $500 for each of those dependents. “Dependents, by definition, aren’t responsible for a majority of their financial support,” said Michael Zona, a spokesman for the Senate Finance Committee, which wrote the legislation. “The goal of the recovery rebates is to provide support for Americans who are responsible for their own financial well-being or that of another during this pandemic.”

The CARES Act: Stimulus and Unemployment Checks – Lambert Strether -I am sure the hilariously named CARES (“Coronavirus Aid, Relief, and Economic Security”) Act isjust as horried as the 2008 bailouts, if not moreso – if only because the people in charge are even more greedy and venal than 2008’s crew[1] – but in this post, I’ll focus exclusively concrete material benefits for the working class – sadly, not universal – as opposed to whatever meagre benefits will “trickle down” from however our betters reconfigure “the economy.” this time. (There will, apparently, be more stimulus to come, when our lawmakers return from their vacation[2]. The unemployment provisions should be beefed up as well.)The key point of the CARES that means-testing and complex eligibility requirements will only be pried from the cold, dead hands of the political class. As Peggy Noonan wrote (Links, this morning):Eight days in I entered the living hell of attempting to find my results through websites and patient portals. I downloaded unnavigable apps, was pressed for passwords I’d not been given, followed dead-end prompts. The whole system is built to winnow out the weak, to make you stop bothering them. This is what it’s like, in a robot voice: “How to get out of the forest: There will be trees. If you aren’t rescued in three to seven days, please try screaming into the void.”I’ve been considering filing material like this under “Failed State,” but it also seems to me that our State is doing exactly what it is designed to do. If you think about it, one of the most remarkable features of this whole ongoing debacle is that even after the last Crash, the Federal Government still does not have a simple, universal way to send every eligible resident in the country money. In Canada, by contrast:Trudeau says new federal benefits for those losing income due to COVID-19 will be in people’s pockets within 10 days of their applications. He says the government has redeployed thousands of civil servants to work on the benefits package so the funds can flow to people as soon as possible. Who gets a stimulus check? Here is a handy chart of the eligibility requirements (source; qualifications): Owing back taxes or other debt to the government is not a problem, according to Sen. Chuck Grassley, R-Iowa, the chairman of the Finance Committee and a key author of the bill. The legislation “turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments,” Grassley wrote in a medium.com post.

These workers won’t qualify for beefed-up unemployment in the coronavirus relief package – The $2 trillion coronavirus relief package President Donald Trump signed into law Friday significantly expands unemployment benefits for out-of-work Americans. The law pays laid-off and furloughed workers an extra $600 a week, for up to four months, and extends existing state benefits by 13 weeks. It also offers jobless benefits to previously ineligible groups, such as gig workers and freelancers. Nearly 3.3 million people filed first-time claims for unemployment last week – shattering the previous record, set in 1982, by around 2.6 million people, according to the Labor Department. “It truly is, in a lot of ways, a very generous package,” said Chris Moran, a partner in the labor and employment practice group at law firm Pepper Hamilton in Philadelphia. Yet, some could receive smaller payments than others or miss out entirely. Here are some of those groups. Workers who derive a big chunk of their paychecks from tips, like waiters and bartenders, may get smaller unemployment checks than they hope to. It largely depends on whether an employer reports those tips as income. Tips are considered part of compensation for unemployment benefits. But some employers underreport that tip income. The state, without a record of tips, would pay a smaller unemployment check – one based off of nontip income. In some extreme cases, such a worker may not have enough income to qualify for unemployment, according to a House Ways and Means Committee document. However, it’s likely these workers would still qualify for a smaller federal payment, depending on the state, it said.

Trump’s Labor Department Takes A Hacksaw To Coronavirus Paid Sick Leave – What started out as a valiant effort to provide Americans with paid sick leave during an unprecedented health care crisis has ended with a paltry measure that will barely cover anyone who is still working in the COVID-19 economy.On Thursday, the Department of Labor published guidelines on the new paid sick leave and family leave provisions enacted last month as part of Congress’s second coronavirus relief act.The measures in the law were already a watered-down version of what Democrats and advocates wanted: real paid time off for all workers who get sick, are quarantined, or have to care long-term for a family member who is sick or a child home due to a school closure. Instead, the law made 10 days of paid sick time and 10 weeks more of longer-term leave available to those working at companies with fewer than 500 employees. Millions were left out.Now the Department of Labor has further hollowed out those provisions. It’s totally exempting the estimated 9 million people who work in the health care industry ― from a doctor to a pharmacy clerk to a janitor in a hospital. These are workers who are most likely to be in contact with infected patients, at high risk of getting sick. And under the new law, they can’t get a guaranteed sick day.”Thanks to Republican opposition, the steps we’ve taken on paid leave are inadequate in light of the crisis, and now, the Trump Administration is twisting the law to allow employers to shirk their responsibility and is significantly narrowing which workers are eligible for paid leave. This simply can’t stand,” said Sen. Patty Murray (D-Wash.) in a statement slamming the “gratuitous loopholes.”The new regulations give wide leeway to very small businesses, who can pretty much automatically bow out of providing longer-term leave to parents with kids at home from school. Bottom line: Millions of more people ― including the workers who are most likely to come into contact with the coronavirus ― will be unable to do what the law intended to encourage: stay home if they’re sick and not be penalized for it.

Trump officials: $1.8B in small business loans processed on first day of program – The Trump administration said Friday that more than $1.8 billion in loans have already been processed under a new program aimed at helping small businesses during the coronavirus pandemic, but not all banks have started accepting applications. Small Business Administration (SBA) chief Jovita Carranza and Treasury Secretary Steven Mnuchin tweeted around 2 p.m. Friday, the first day of the program, that more than 5,000 loan applications had been filed, valued at more than $1.8 billion.The $349 billion Paycheck Protection Program, created under the $2 trillion coronavirus relief package President Trump signed last week, allows businesses with 500 or fewer employees to apply for loans to cover eight weeks of payroll and other expenses. The loans will be forgiven if businesses that receive them retain or hire back their employees.The Treasury Department and SBA raced to get guidance out to applicants and banks prior to Friday, issuing interim rules on the program and the final application form Thursday evening. Businesses and banks have been expressing interest in the program, but there have been concerns about whether its launch will be successful. Bank of America on Friday morning became the first of the large U.S. banks to be ready to accept online applications, according to CNBC. But Sen. Marco Rubio (R-Fla.), chair of the Senate Small Business and Entrepreneurship Committee, expressed frustration about reports that banks were restricting applications. “I’m reading that some of the big banks, not all, but some, are creating all these crazy restrictions about you don’t just have to have a small business account with them, you might also have to have a credit card,” he said in avideo message posted on Twitter. “So, let me just say this as nicely as I possibly can: Please don’t be a bunch of jerks, OK. When you needed the country to help you, they did. Now, the country needs you to help them, and we’re paying you to do it.”

Bank executives sought guidance on small business loan program from Ivanka Trump: report – Bank executives who were concerned about the $349 billion emergency small business program created in the $2.2 trillion coronavirus stimulus bill passed last week reached out to President Trump’s daughter and senior adviser Ivanka Trump as they tried to negotiate higher interest rates, according to Bloomberg. The calls came from multiple major bank executives, including from Bank of America Corp., who questioned the Paycheck Protection Program, which provides generous loans to small businesses with the caveat that they use at least 75 percent to pay their employees. As a result of those negotiations, Treasury Secretary Steven Mnuchin and other administration officials requested to increase the interest rates on the forgivable, government-backed loans, and worked to encourage smaller banks to participate, as well. Mnuchin announced Thursday that the Treasury Department would cut interest rates in half in an effort to convince those smaller banks to participate and alleviate the load from major lenders. “I’ve told these bankers they should take all their traders and put them in the branches. There’ll never be another opportunity to earn five points on a 90-day fully government-guaranteed loan,” Mnuchin said on Thursday. “To make this attractive for community banks, we’ve agreed to raise the interest rate.” The new program was off to a rough start this week as banks and other lenders said the $349 billion program lacks clear guidelines to handle a looming wave of loan applications that could overwhelm the system while leaving some firms in the lurch.

Treasury makes coronavirus loan terms less favorable for small businesses – The Treasury Department changed the terms on some loans it’s offering to small businesses during the coronavirus pandemic, making them less favorable for borrowers, experts say. The loans at issue are being made through the Paycheck Protection Program, which offers up to $10 million in forgivable loans to businesses with 500 or fewer employees. The program, which officially opened for many borrowers on Friday morning, will dole out up to $349 billion to ailing small businesses to help cover costs like payroll, rent and utilities. The loans are made through lenders approved by the Small Business Administration and other institutions. It’s worse than was initially laid out [for borrowers]. In initial guidance, the Treasury Department had said banks would charge a 0.5% fixed interest rate and that a loan’s unforgiven portion could be repaid over 10 years. However, loans now carry a higher interest rate – 1% – and come due in a much shorter period – two years – than originally stipulated, according to Treasury guidance released Thursday. Banks were loath to offer loans under the initial terms and pressured federal officials to change them, according to Roger DaSilva, founder of Realm Startup Advisory, which serves as an outsourced chief financial officer for small businesses.

Wall Street Wins Again- Banks Force Treasury To Double Rate On Small Business Rescue Loan -After we warned earlier that the SBA’s $350BN Paycheck Protection Program, which is expected to be launched at midnight tonight and is meant to bailout America’s small and medium business (<500 employees), may never even get off the ground because the proposed interest rate on the loan of 0.5% is too low lender banks (alongside with various other considerations as listed below) with JPM saying it “will most likely not be able to start accepting applications on Friday, April 3rd as we had hoped”, in a press conference late on Thursday, Steven Mnuchin said that he will double the interest rate on the SBA loan from 0.50% to 1.00% in order to appease banks seeking higher interest rates to participate in the Treasury’s bailout program and lend money to the same taxpayers who bailed them out 12 years ago. These are same banks, mind you, that just sold all $1.6 trillion in securities to the Fed to expand their balance sheets capacity in the past three weeks, and which also just benefited from the Fed’s decision to remove Treasurys and deposits from the Fed’s SLR test, freeing up another $1.6 trillion in liquidity.Furthermore, these loans are guaranteed by the federal government and don’t require collateral, and will be forgiven if funds are used for payroll costs, mortgage interest, rent and utility payments for two months and if businesses retain and rehire employees. So bank don’t take any risk – why are they charging any interest at all, or rather why do they have any say in what the rate should be?And yet, despite all this, these banks – which include JPMorgan Chase, Bank of America, Wells Fargo Citigroup, Truist Bank and PNC – which were bailed out in 2008 and again bailed out 3 weeks ago with the Fed’s various alphabet soup programs, couldn’t agree to give Main Street a helping hand, and instead of offering loans at a modest 0.5%, demanded no less than 1%, which is 75-100 bps above where they can borrow cash from the Fed. Because charging America’s middle class a record 17% credit card interest rate is not enough, and anything less than 1.0% on a loan that is explicitly backstopped by the Treasury would be uneconomical.

Millions Of Small Businesses Stunned To Learn They Are Not Eligible For Bailout Loans – It’s the first day that America’s small businesses can apply for the SBA’s Paycheck Protection Program, i.e., the $350BN program that is part of the bigger $2 trillion bailout package designed to provide small businesses access to capital for payroll and other overhead costs to the tune of 2.5 months of average payroll and which must be accessed via an existing banking relationship – and the rollout is predictably a mess, with some banks such as BofA already accepting loans (which convert to grants if used exclusively for payrolls and business continuity purposes), while others like JPM delaying the roll out to 1pm; a third group of banks such as Wells Fargo has conspicuously failed to provide its rollout plans – perhaps it is scheming how to cross-sell bailout loans with auto insurance or engage in some other typically Wellsfargoian fraud.$WFC will not be ready to take applications for #PaycheckProtectionPlan today. They’re doing all the can and testing constantly. When you and running you will have to have a checking account and be an online banking customer to qualify. No previous loan requirement. – Wilfred Frost (@WilfredFrost) April 3, 2020But a recurring shock as millions of small business owners head to these bank websites to apply for the PPP funds is that contrary to the SBA’s guidance that any small business with 500 or less employees can apply, going to lender portals shows that only a very narrow subset of America’s millions in small businesses are be eligible. In fact, only those companies that already have a lending relationship, i.e., an outstanding loan with a given bank are – at least as of this moment – able to apply for the rescue funds. Moynihan making clear on @SquawkStreet that small businesses should not only apply to their existing bank – but primarily to their existing LENDER. Just having a small business checking account will not suffice initially – you need to have borrowed from $BAC in recent past. https://t.co/LvSqMg3Rf8 – Wilfred Frost (@WilfredFrost) April 3, 2020 Bank of America’s website confirms as much, stating on its eligibility page that only “clients with a business lending and a business deposit relationship at Bank of America are eligible to apply for a Paycheck Protection Program through our bank.” In other words, any business that only has a deposit account and no loan or business card is out of luck.

The Mankiw CV Plan – Greg Mankiw has posted a suggestion for delivering money to people that targets the benefit to those who need it the most. The idea is clever:

• 1. Pay people the benefit B. (This could be spread over many weeks or months.) Everyone gets the same B.
• 2. Next year at tax time, compute the ratio r Y(2020)/Y(2019), the ratio of each filer’s 2020 income, net of B, to their 2019 income and capped at 1. Impose a surcharge of rB on tax liability. This way people would pay back a proportion of B based on how much they needed it. If their 2020 income was greater than or equal to 2019, r = 1 and they would repay B in its entirety. If their 2020 income was zero, r = 0 and there is no surcharge. (And no tax at all for that matter.) Partial income losses would lie in between.

Clever and well-intended, but there are problems.First, what’s income? Does it include capital gains and losses? If so, everyone who has a substantial chunk of financial assets will be able to claim zero income in 2020. What about business losses? Clearly, if income is defined expansively, as it should be for tax purposes, those who derive income from capital will come out ahead of those who rely on labor.Second, how will repayment work? For low to moderate income people who keep their jobs, tax liability for 2020 may be immense – a large proportion of their annual income. Yes, if such people save all their B they can just apply it to next year’s payment, but how likely is that? In practical terms, if the country is facing a wave of enforcement actions and bankruptcies a year from now, the repayment mechanism is likely to be abandoned. Third, what are the incentives? Mankiw predictably worries about labor supply, but I think the bigger problem is the immense incentive to work off the books. Instead of saving only your fractional tax rate when you transact in cash, now you will add the savings on your surcharge. No one who can escape official scrutiny will report any payments or receipts. If your goal was to drive as much of the economy underground as quickly as possible, you would have succeeded. I appreciate Mankiw’s attempt to tie provision of government support to the level of need. One of the virtues of universal, untargeted social insurance, however, is that it requires a smaller enforcement apparatus and doesn’t turn people who play by the rules into suckers.

Fauci says US could have ‘millions’ of coronavirus cases and over 100,000 deaths -Dr. Anthony Fauci, one of the faces of the Trump administration’s coronavirus task force, on Sunday warned that the novel coronavirus could infect millions of people in the United States and account for more than 100,000 deaths. Speaking on CNN’s “State of the Union,” Fauci said that, based on what he’s seeing, the U.S. could experience between 100,000 and 200,000 deaths from COVID-19. “We’re going to have millions of cases,” Fauci, the head of the National Institute of Allergy and Infectious Diseases, said, noting that projections are subject to change, given that the disease’s outbreak is “such a moving target.” The novel coronavirus, which first appeared in China in December, has infected more than 124,000 people in the U.S. and accounted for more than 2,000 deaths, according to a Johns Hopkins University database. The U.S. has reported the most confirmed cases of the virus worldwide. The outbreak has upended everyday life, resulting in a mass closure of businesses and schools as federal and state officials enforce measures designed to slow the spread of the disease. The New York metropolitan area has been hit particularly hard, leading to concerns about a surge in patients overwhelming its health care system. Fauci has repeatedly called for social distancing requirements to remain in place for an extended period of time. He said Sunday that lifting those restrictions would depend on the availability of testing kits that will be able to confirm a diagnosis within about 15 minutes. “It’s going to be a matter of weeks. It’s not going to be tomorrow, and it’s certainly not going to be next week,” he said. Fauci added that he wanted to to see a substantial flattening of the curve in terms of cases before curbing social distancing restrictions. “As I have said before, it’s true the virus itself determines that timetable. You can try and influence that timetable by mitigating against the virus, but, ultimately, it’s what the virus does,” he said.

Trump now urging U.S. to hunker down through April – President Donald Trump announced Sunday evening that he was extending social distancing guidelines through the end of April rather than easing them as early as this week, and took credit for avoiding a worst-case scenario death toll that could have exceeded 2 million. The president, who had considered getting the economy restarted by Easter, now said that timeline had been “aspirational.” He said he expected the country to be on its way to recovery by June 1. “Nothing would be worse than declaring victory before the victory is won,” he said at the daily White House task force briefing, in which he again overstated the U.S. record in fighting the pandemic, questioned whether hospitals really needed all the protective gear and ventilators they were begging for, and sparred with a reporter who asked him how life-saving equipment was being apportioned among the states. Trump in a Rose Garden appearance referred several times to earlier projections showing as many as 2.2 million deaths in the U.S. – a worst case scenario if the country did not take any steps to fight the coronavirus. The current forecasts, cited by leading members of the White House task force, still go as high as 200,000 deaths – though continued efforts to keep people at home and limit social interaction could bring that number down. “Now we’re looking at numbers that are going to be much much much lower than that, and it makes everything we’re doing feel much better to me,” Trump said of the 2.2 million scenario. Numerous governors had already declared they would keep enforcing social distancing policies, even if Trump had lifted them. As of Sunday evening, the U.S. has more than 142,000 confirmed cases and 2,479 deaths, according to the Johns Hopkins University tracker. Despite improvements in testing, some people with symptoms are still reporting being unable to get the diagnosis confirmed. Trump also said he wanted to restore tax breaks so that businesses could write off more of the cost of meals, which he said would help restaurants recover. Congress would have to enact that, reversing a provision in the 2017 overhaul that Trump signed. It’s unclear how many restaurants, particularly smaller ones, would benefit from such a change in the code.

Fauci says April 30 extension is ‘a wise and prudent decision’ – Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases who is also helping lead the White House’s coronavirus task force, called President Trump’s decision to keep the government’s current social distancing guidelines in place through the end of April a “wise” one. “We feel that the mitigation that we’re doing right now is having an effect. It’s very difficult to quantitate it because you have two dynamic things going on at the same time,” Fauci said a press conference outside the White House on Sunday. “You have the virus going up, and you have the mitigation trying to push it down,” he continued. But Fauci added that Trump’s decision “to extend this mitigation process until the end of end April … was a wise and prudent decision.” “Dr. Birx and I spent a considerable amount of time going over the all the data, why we felt this was a best choice of us, and the president accepted it,” Fauci continued, referring to White House coronavirus task force coordinator Dr. Deborah Birx. Fauci, who warned earlier on Sunday that millions in the U.S. could be infected by the virus in the coming weeks given the rapid pace of the COVID-19 outbreak, added that the possibility of the number of cases ballooning in the country played “a role in our decision in trying to makes sure that we don’t do something prematurely and pull back when we should be pushing.” Trump drew headlines last week after he floated the idea of lifting restrictions in certain areas of the country in efforts to boost the economy, as a number of states have ordered nonessential business to close in recent weeks to curb the spread of the coronavirus.

Brace Yourselves: The US Is Setting Up a Ghastly “Natural Experiment” — When I began my “Coronavirus Dashboard,” I was hopeful that it would document the slow progress towards turning a bad situation around, and the ultimate tamping down of the pandemic. Surely increasingly intense and overwhelming public pressure would force a critical mass of government officials to do what was necessary? Now I am not so sure. The number of cases continue to climb at a double-digit exponential rate, if a less aggressive one than earlier in March. Most importantly, GOP governors in the Confederacy and in the High Plains, plus Arizona, have completely put the brakes on any statewide “stay in place” orders.And even in those States which have taken relatively aggressive efforts at containment, the level of testing, let alone isolation and quarantine of identified cases, is running far below what is necessary. In fact it looks like it is falling further and further behind. In short, I suspect that my dashboard is instead going to document the catastrophe of a deadly pandemic allowed to get completely out of control. The US has 3 regions of coronavirus response:

• 1. Every State in the Mountain and Pacific West, plus Alaska and Hawaii, is under statewide or nearly statewide lockdown, with the exception of Wyoming, Nevada, and Arizona.
• 2. Every State in the old Union, except for Iowa, Maine, and Maryland, plus North Carolina, is under statewide lockdowns (and really wtf is up with Governor Northam of Virginia, who is a physician?!?)
• 3. No State in the old Confederacy run by a GOP governor, with the exception of Louisiana, or in the Great Plains west of the Mississippi, except for Kansas, is under a lockdown.

The “natural experiment” that is going to take place over the next few weeks is the rate of spread in the first two regions vs. the third region.Most likely, over the next two weeks the rate of increase in – and possibly the actual number of – infections in the locked down regions will decrease, while number of infections in the region not locked down will likely continue to grow at an exponential rate, albeit perhaps at a slower one. Brace yourselves. What has happened in March with regard to the effects of this pandemic is akin to only the first inning of a baseball game. This is almost certainly going to get a lot worse.

White House Projects 100,000 to 240,000 U.S. Coronavirus Deaths – The White House projected the U.S. could face 100,000 to 240,000 deaths from the coronavirus pandemic, as President Trump warned Americans to brace for an unprecedented crisis in the days ahead. “This could be a hell of a bad two weeks,” Mr. Trump said during a briefing at the White House on Tuesday afternoon, then quickly expanded upon his own dire assessment: “This is going to be three weeks like we’ve never seen before.” The president’s comments on Tuesday marked his starkest warning to date about the pandemic that is coursing its way across the country, with a peak of infections in the U.S. still projected to be at least two weeks away. Mr. Trump, appearing at the briefing with two of his top medical advisers, repeatedly urged Americans to follow federal social-distancing guidelines, which have now been extended through the end of April.”We’ve got to brace ourselves,” said Dr. Anthony Fauci, a member of the White House coronavirus task force. But Dr. Fauci said that continued protective social-distancing measures could help prevent the worst-case scenario. “In the next several days to a week or so, we’re going to continue to see things go up,” Dr. Fauci said. “We cannot be discouraged by that. Because the mitigation is actually working, and will work.” The U.S. has more confirmed cases than any other country, with more than 189,000 infections, according to data compiled by Johns Hopkins University. The death toll, now greater than China’s, passed 4,000. That is still far less than Italy, where fatalities rose to 12,428 Tuesday, or Spain, which has reported 8,464 deaths.Projections from the University of Washington show the illness could result in nearly 84,000 deaths in the U.S. by early August, with 2,214 deaths a day at the nation’s peak in two weeks. Nearly half of the 50 states have now reported more than 1,000 confirmed cases of Covid-19, the respiratory disease caused by the new coronavirus. And much of America is expected to experience extended closures of schools, offices, restaurants and other venues as concerns about a coming surge in patients have pushed mayors and governors to take steps unprecedented in modern times to fight the contagion.

Trump boasts holding US pandemic deaths to 200,000 would be “a good job” – In a press briefing held Monday in the White House Rose Garden, President Donald Trump declared that a death toll of 100,000 to 200,000 in the United States as a result of the COVID-19 pandemic would represent “a good job” by his administration.Trump’s self-congratulating indifference to death on such a massive scale followed by several hours the statement of the coronavirus response coordinator for the Trump White House that 100,000 to 200,000 American deaths was a “best case” outcome of the pandemic, and that the death toll could rise substantially above that figure – into the millions – unless “we do things almost perfectly.”The comments by Dr. Deborah Birx shocked her interviewer, Savannah Guthrie of NBC’s “Today” show, to the point where she declared that “you kind of take my breath away.”The exchange is worth quoting:

• Birx: The worst-case scenario is between 1.6 million and 2.2 million deaths if you do nothing. If we do things together well, almost perfectly, we could get in the range of 100,000 to 200,000 fatalities. We don’t even want to see that …
• Guthrie: I know, but you kind of take my breath away with that, when I hear you say that’s sort of the best-case scenario. If everything works and people do the things you’re asking them to do, maybe you can hold the deaths to one to two hundred thousand, in this country.
• Birx: The best-case scenario would be 100 percent of Americans doing precisely what is required, but we’re not sure, based on the data you’re sharing from around the world, and seeing these pictures [of people on beaches and at church services] that all of America is responding in a uniform way and protecting one another. So we also have to factor that in.

The estimate put forward by Dr. Birx is a considerably more ominous projection than that advanced by Dr. Tony Fauci, the top federal infectious disease scientist, in television interviews the day before. Fauci presented the figure of 100,000 to 200,000 deaths as a middle-range outcome that could still be reduced significantly if the correct actions were taken. Birx presented the same number as the best-case scenario, the lowest possible number, and one likely to be surpassed significantly. The projected minimum death toll of 100,000 to 200,000 people in the United States is more than combined American deaths in the imperialist wars of the past 75 years – the Korean War, the Vietnam War, the Persian Gulf War, the ongoing conflicts in Afghanistan and Iraq. It is more than the official death toll of 116,500 from World War I, and could quickly approach, as Birx indicated, the US death toll of 405,000 in World War II.

Pentagon Orders Essential Staff To Deep Underground Mountain Bunker As Pandemic Prep Escalates – North American Aerospace Defense Command (NORAD) & the US’ Northern Command (NORTHCOM) held a Facebook Live town hall meeting on Tuesday, March 24, informing the public how their essential teams in charge of homeland security are isolating at the Cheyenne Mountain bunker in Colorado amid the COVID-19 pandemic. Air Force General Terrence O’Shaughnessy, who commands NORAD and NORTHCOM, told reporters on Facebook Live last Tuesday that essential staff is being moved from Peterson Air Force Base in Colorado to the underground bunker complex that is 24 miles away in Cheyenne Mountain. The facility is more than 2,000 feet underground and can survive a 30 megaton nuclear explosion.“To ensure that we can defend the homeland despite this pandemic, our command and control watch teams here in the headquarters split into multiple shifts and portions of our watch team began working from Cheyenne Mountain Air Force Station, creating a third team at an alternate location as well,” O’Shaughnessy said. “Our dedicated professionals of the NORAD and NORTHCOM command and control watch have left their homes, said goodbye to their families and are isolated from everyone to ensure that they can stand the watch each and every day to defend our homeland.“It’s certainly not optimal, but it’s absolutely necessary and appropriate given the situation.”NORAD and NORTHCOM have already used up about 30% of the underground facility, according to The Drive. O’Shaughnessy said with the increased personnel, his “primary concern was … are we going to have the space inside the mountain for everybody who wants to move in there, and I’m not at liberty to discuss who’s moving in there.”If the staff at Cheyenne are infected, there is a third team of higher-ranking military officials operating at another facility that can remotely assume command.

Trump and Fauci discuss likelihood of second outbreak in the fall – Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told reporters on Monday that it is likely there will be another coronavirus outbreak in the fall. “In fact, I would anticipate that that would actually happen,” said Fauci, who is a key member of the White House’s coronavirus task force. President Trump said he hopes “it doesn’t happen” when asked about a second outbreak. Trump said the administration was prepared in the event the virus returns after a period of fading over the summer, after social distancing measures. Fauci echoed that sentiment, saying if the virus returns “in the fall, it would be a totally different ball game.” He said the differences would include greater testing ability at the beginning of the outbreak as well as better contact tracing when individuals fall ill. Fauci said the administration’s abilities would be “orders of magnitude better.” “We have a vaccine that’s on track” for development on an accelerated timeline, Fauci noted. Watch:

Fauci Says Lockdown Will Continue Until There Are No New Cases Of COVID-19 – Dr. Anthony S. Fauci says that the United States will not come out of lockdown until there are no “new cases” of coronavirus, prompting some to question precisely how long that will be. During yesterday’s White House briefing, Fauci, who has become the face of America’s response to the coronavirus, was asked by a reporter whether social distancing measures will be imposed until there is a drug or vaccine to treat COVID-19.“I think if we get to the part of the curve that Dr. Birx showed yesterday when it goes down to essentially no new cases, no new deaths at a period of time. I think it makes sense that you will have to relax social distancing,” Fauci said. “The one thing we hopefully would have in place, and I believe we will have in place, is a much more robust system to be able to identify someone who was infected, isolate them and then do contact tracing,” he added.The prospect of there ever being zero new coronavirus cases appears to be a very long way off, leading some to question if Fauci was asking Americans to adopt social distancing indefinitely, or at least until a vaccine is available. “Fauci said that we can start to “relax” social distancing once there are “no new cases, no deaths.” Is it just me or is that completely batshit insane?” asked Matt Walsh. “That would keep us in a lockdown for many months or years. And if the virus becomes endemic, forever. How can that be the plan?”

Trump says he’s considering restricting travel to coronavirus ‘hot spots’ –President Trump said Wednesday that officials are considering temporarily limiting flights to and from “hot spots” in the United States that have seen significant numbers of coronavirus cases. “I am looking at hot spots. I am looking at where flights are going into hot spots. Some of those flights I didn’t like from the beginning, but closing up every single flight on every single airline, that’s a very, very, very rough decision,” Trump told reporters at a White House briefing Wednesday evening. Trump then suggested restricting travel between hot spots in the country, adding that the administration would be “late in the process” if it took such a step because domestic cases of COVID-19 will likely peak in two weeks. “We’re thinking about hot spots where you go from spot to spot, both hot. We’ll let you know fairly soon,” Trump said. Trump was asked repeatedly at Wednesday’s briefing whether he was considering restrictions on domestic travel as his administration seeks to mitigate the spread of the coronavirus across the U.S. The New York metro area has emerged as the epicenter of the coronavirus outbreak in the U.S., and health officials have warned of spikes in cases in areas such as Chicago, Detroit and New Orleans. The White House on Tuesday released estimates projecting between 100,000 and 240,000 Americans could die from the coronavirus even if individuals adhere to the 30-day social distancing guidelines recommended by the administration. Sen. Lindsey Graham (R-S.C.), one of Trump’s key Capitol Hill allies, tweeted late Tuesday that the Trump administration should consider limiting or banning domestic and international air travel over the next 30 days as part of its mitigation strategy. “We’re thinking about doing that. At the same time, to start these airlines, to start this whole thing over again is very tough,” Trump told reporters Wednesday when asked about Graham’s suggestion. Trump said domestic travel restrictions could deeply hurt the airline industry, which has already suffered amid the coronavirus outbreak as the administration has recommended Americans avoid nonessential travel and restricted international travel from China and most of Europe. “We’re certainly looking at it, but once you do that you really are clamping down an industry that is desperately needed,” Trump continued.

Coronavirus live updates: US braces for ‘horrific’ weeks as deaths top 5,100; unemployment claims soar; Dr. Fauci gets security – Jobless numbers soared and Dr. Anthony Fauci, the nation’s preeminent coronavirus expert, required a security detail Thursday as the nation braced for what President Donald Trump predicted would be a “horrific” couple of weeks. More than 1,000 people died of the coronavirus in the United States on Wednesday alone, raising the death toll over 5,000. A week ago the total was less than 1,300. Trump and federal health officials predicted a “very painful” period in the country’s fight against the public health emergency.Jobless numbers released Thursday were stunning. New unemployment claims doubled to 6.6 million from last week’s record-setting 3.3 million. “This is eye watering and we are still only at the beginning of the layoffs spurred by the lockdowns throughout the country,” said James McCann, senior global economist at Aberdeen Standard Investments. “Unemployment could well rocket in coming months to more than 10%, comfortably a post-war record.” Meanwhile, several states joined the stay-at-home movement. In Los Angeles, the mayor has urged residents to wear masks. In New York, a former police commissioner was brought back to serve as the medical supplies czar. The U.S. death toll was at 5,137 early Thursday, according to the Johns Hopkins University data dashboard. Worldwide, the virus has killed more than 48,000 and infected more than 956,000.

How deadly is the coronavirus? – How deadly is the coronavirus? It is a simple but vital question that we don’t know the answer to right now. With American lives and livelihoods on the line, we need a science-based baseline from which to make public policy decisions. Hopefully those answers come sooner than later as the White House looks to do random sampling, something I recently reported. To be clear, every single life has value, and the overburdening of hospitals in places such as New York City is real and devastating. The toll on our doctors and nurses, many of whom have contracted the coronavirus by selflessly putting their own lives on the line to save others, is also real. We mourn the loss of each precious life and are in debt to the heroes on the front line. The economic toll of shutting down nonessential businesses across the country is also real. A record-shattering 10 million Americans filing for unemployment in just two weeks and the largest bailout in United States history – $2.2 trillion – are sobering numbers that reflect the economic calamity we are facing. As government and public health officials make decisions of enormous magnitude, shouldn’t we know how infectious and lethal the coronavirus is? That is why random sampling is important. John Ioannidis, a Stanford epidemiologist who is famous fordebunking bad research, has been pushing for it. He told me that random sampling is needed and could be done with a couple of thousand tests. “Random representative testing is like polling. We run thousands of opinion polls in this country. We should similarly get a representative sample of the population and get them tested. It is just so easy.” A recent television interview with Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and member of the White House Coronavirus Task Force, underscores the need. After estimating that 100,000 to 200,000 Americans could die of the coronavirus, he said that projections are a “moving target” and that models are “only as good and as accurate as your assumptions.” But how good are models if the data is insufficient?

The Uncertain Path of the Coronavirus Pandemic Poses Its Own Risk – WSJ – The monthly jobs report is usually a moment of maximum economic clarity. It’s a rich and timely snapshot that calibrates assessments of where the economy is and where it’s headed. Not this time. Bad as Friday’s report is – showing more than 700,000 jobs lost in March – it shows us conditions before the worst of the coronavirus-related layoffs hit. Even Thursday’s jaw-dropping tally of more than 6 million initial claims for unemployment insurance filed last week doesn’t tell us how deep the job loss will be or how long it will last. It isn’t just the magnitude of this shock that is unprecedented but the uncertainty surrounding almost every facet of it – uncertainty that is corrosive in its own right.In normal times, we know enough about the historical probabilities of certain things, whether mortality rates, recessions or bear markets, to quantify the risks around the future. Today we are struggling not with risk but what the late economist Frank Knight defined as uncertainty: we don’t know enough about the underlying nature of our circumstances to meaningfully measure risk. It’s been described as calculating the odds of rolling a seven without knowing whether the die is fair or how many sides it has.Today, there are at least four distinct sources of uncertainty: first, the severity and spread of the pandemic; second, the breadth and duration of social-distancing measures; third, the economic and financial impact of those measures; and fourth, the policy response. Moreover, they all interact: the more infectious the disease proves to be, the tougher the social-distancing measures must be and the greater the economic fallout and the more aggressive a policy response is needed.Humans hate uncertainty and gravitate to those with the most confidence in their predictions, but these days, excessive confidence should be greeted with skepticism. In a moving blog post, Gordon Dougan, a Cambridge University professor who has spent his career researching vaccines and disease, recently wrote: “What is the value of experts like me? I likely know more about infection, epidemics and vaccines than most. I have studied epidemics across the world. I have made and designed vaccines. Do I know what will happen next with this epidemic? Which of the experts are right? The World Health Organisation (WHO)? The politicians and their teams of scientists and modellers? In reality, we are all trying to take informed guesses.”The same goes for the economists. On Thursday, the nonpartisan Congressional Budget Office projected the unemployment rate would triple to 12% this quarter and still stand at 9% by the end of next year. The CBO devoted an entire section of the accompanying letter to the “extraordinary degree” of uncertainty around its assumptions: “The policies implemented in the United States and around the world in response to the virus are varied and still evolving, in part because understanding of the potential scale and duration of the pandemic … remains incomplete.” Uncertainty has real world consequences. In a study recently published by the National Bureau of Economic Research, Guglielmo Briscese of the University of Chicago and three co-authors found locked-down Italians were more likely to comply with self-isolation instructions if they thought the lockdown was short and finite. The longer the deadline was extended past what they expected, the less willing they were to comply.

Trump gets help from Kushner and rails against new ‘witch-hunt’ at coronavirus briefing – Donald Trump sparked fresh criticism on Thursday by deploying his son-in-law at a White House coronavirus taskforce briefing and accusing Democrats of launching a fresh “witch-hunt”. Jared Kushner, a senior adviser to the US president who is married to his daughter, Ivanka, made a surprise appearance on the podium and said Trump had instructed him to “break down every barrier needed to make sure the teams can succeed”. He added: “The president also wanted us to make sure that we think outside the box, make sure we’re finding all the best thinkers in the country, making sure we’re getting all the best ideas.” But by way of example, Kushner said Trump became concerned about supply shortages after hearing about them “just this morning” from “friends of his in New York” – implying the president responds to anecdotes rather than the state governor or public health officials. “We went to the president today,” Kushner continued. “And earlier today, the president called Mayor [Bill] de Blasio to inform him that we are going to send a month of supply to New York public hospital system.” The vice-president, Mike Pence, later said there would 200,000 masks sent to New York. Kushner said: “We’ll be doing similar things with all the different public hospitals that are in the hotspot zones and making sure that we’re constantly in communications with the local communities.” Media reports have suggested that Kushner, a property developer with no medical expertise, is running a “shadow taskforce” – a rival power base that conflicts with the official task force led by Pence. Earlier on Thursday, Nancy Pelosi, the House speaker, announced a new House committee would oversee “all aspects” of the federal response to the coronavirus pandemic and did not rule out an investigation in the style of the commission on the 11 September 2001 terrorist attacks. Such a prospect clearly stung Trump, who compared it to the special counsel Robert Mueller’s Russia investigation and the congressional hearings into his dealings with Ukraine that led to his impeachment.

Bill Gates calls for nationwide shutdown: ‘Shutdown anywhere means shutdown everywhere’ – Microsoft founder and billionaire philanthropist Bill Gates called for a nationwide shutdown on Tuesday, arguing it would be the most effective way to combat the spread of the coronavirus. Gates wrote in a Washington Post op-ed that he has spoken with experts through his work with his charity who said a national policy would be more effective over having a hodgepodge of states issue stay-at-home orders while others remain more open. He argued that the country needs a “consistent nationwide approach to shutting down.” “Despite urging from public health experts, some states and counties haven’t shut down completely. In some states, beaches are still open; in others, restaurants still serve sit-down meals,” Gates wrote. “This is a recipe for disaster. Because people can travel freely across state lines, so can the virus. The country’s leaders need to be clear: Shutdown anywhere means shutdown everywhere,” he added. “Until the case numbers start to go down across America – which could take 10 weeks or more – no one can continue business as usual or relax the shutdown.” Gates also noted that while a potential vaccine for the coronavirus could come within 18 months, “creating a vaccine is only half the battle” and production of the vaccine would need to be ramped up dramatically to meet demand for those impacted around the world. “We can start now by building the facilities where these vaccines will be made,” Gates wrote. “Because many of the top candidates are made using unique equipment, we’ll have to build facilities for each of them, knowing that some won’t get used.” “Private companies can’t take that kind of risk, but the federal government can. It’s a great sign that the administration made deals this week with at least two companies to prepare for vaccine manufacturing. I hope more deals will follow,” he added. The remarks come as states like New York, New Jersey and Washington, which have been particularly hit hard by the COVID-19 pandemic, force residents to shelter in place, while other states with fewer cases impose more lax guidelines. Over 189,000 people have been infected in the U.S. with the coronavirus, while roughly 3,900 have died.

Dr. Ron Paul On COVID-19 Panic: The Real Danger “Is The Government’s Overreaction” – In a recent interview, Dr. Ron Paul opined on his son Rand, who has tested positive for the coronavirus. Dr. Paul said that the dangers of the coronavirus have been “blown way out of proportion” and some people benefit from crises, like politicians who want more power.Dr. Paul begins his interview with Lior Gantz of the Wealth Research Group saying Rand Paul had no symptoms of the virus and is feeling fine, like the majority of people who have gotten. Many are already immune and have been exposed without showing any signs. “I think millions of people have probably had the infection and still do,” says Dr. Paul. “But it’s used by an excuse by those who have a special interest … and I think that is sad.” The problem is that this crisis was blown up so some people (the ruling class) could expand and broaden their power over the public, and Dr. Paul says hopefully, the masses will “wake up soon” to what the government is doing to them and their future.“Somebody is making political use out of this and it’s [the political usage of the coronavirus] is out of control,” Dr. Paul (an OBYN) added. Just look at who has been hurt the most so far: the poorest Americans in service industries that the ruling class demanded to shut down. Dr. Paul says the only real danger is the government’s expansion of power and the already sick or elderly who will get the coronavirus. But that danger to our susceptible population already exists and has for years in the form of colds and several strains of the flu, so the panic and shut down is unwarranted. Unless you want more power and totalitarian control.

US regulator gives anti-malaria drugs emergency approval to treat coronavirus – In a statement published Sunday, the US Department of Health and Human Services detailed recent donations of medicine to a national stockpile – including chloroquine and hydroxychloroquine, both being investigated as potential COVID-19 treatments.It said the FDA had allowed them “to be distributed and prescribed by doctors to hospitalized teen and adult patients with COVID-19, as appropriate, when a clinical trial is not available or feasible.”Trump said last week that the two drugs could be a “gift from God,” despite scientists warning against the dangers of overhyping unproven treatments.Many researchers including Anthony Fauci, the United States’ leading infectious disease expert, have urged the public to remain cautious until larger clinical trials validate smaller studies.Two US medical bodies – the National Institutes of Health and the Biomedical Advanced Research and Development Authority – are currently working to plan such trials. Some in the scientific community fear Trump’s endorsement of the medicines could create shortages for patients who need them to treat lupus and rheumatoid arthritis, diseases for which they are approved.

Administration says it will reimburse hospitals for treating uninsured coronavirus patients – The Trump administration announced Friday that the federal government will reimburse hospitals treating uninsured patients for the novel coronavirus using funds allocated in a the recent relief package passed by Congress. “Today, I can so proudly announce that hospitals and health care providers treating uninsured coronavirus patients will be reimbursed by the fed government using funds from the economic relief packed Congress passed last month,” President Trump said at a White House briefing. “This should alleviate any concerns uninsured Americans may have seeking the coronavirus treatment,” he added. The announcement came after the administration said it would not reopen ObamaCare enrollment in order for uninsured Americans to purchase health care on federally run exchanges. After being pressed on the decision, Trump indicated Thursday that he was considering a plan to cover costs of medical care for uninsured Americans. Health and Human Services Secretary Alex Azar said Friday that the administration would use a portion of the $100 billion allocated for health care providers in the $2.2 trillion CARES Act, which Congress passed and Trump signed last week, to cover the costs. “We will use a portion of that funding to cover providers costs of delivering COVID-19 care for the uninsured,” Azar said, noting that the department would soon release more specific information about how the rest of the money would be spent.

Never Built To Fight A 50-State Pandemic – DHS Medical Emergency Stockpile Nearly Depleted – In yet more dire outbreak-induced medical supplies shortage news, the federal government’s own emergency stockpile of respirator masks, gloves, and ventilators is already nearly depleted. Two Homeland Security Department officials told the Washington Post that crucial supplies kept in the Health and Human Services Department’s Strategic National Stockpile are woefully low and will run out amid the pandemic. “The stockpile was designed to respond to a handful of cities. It was never built or designed to fight a 50-state pandemic,” one official said. “This is not only a U.S. government problem. The supply chain for PPE worldwide has broken down, and there is a lot of price gouging happening.” Image source: NPR via Strategic National Stockpile/U.S. Department of Health and Human Services The national supply chain has already broken down, indicated by what now seems like daily stories of hospital staff in hard-hit major cities having to reuse protective gear, and in other instances actually attempt to make their own out of things like trash bags and household items. Though in reporting on the federal emergency stockpile crisis The Washington Post and others are emphasizing rampant price gouging as driving it, creating “a Wild-West-style online marketplace for bulk medical supplies dominated by intermediaries and hoarders who are selling N95 respirator masks and other gear at huge markups” – as the Post put it, it remains that the national shortages are rooted in over-reliance on Chinese manufacturing, which itself in the opening months of this year was ravaged by the coronavirus outbreak, causing the shuttering of factories and disruption of ports. The resultant huge drop in medical supply imports into the the US (a drop in up to over half normal numbers in the case of crucial supplies like the N95 mask), led to the emergence of instances such as what the AP earlier alarmingly detailed: “Doctors, nurses and first responders in the U.S. are resorting to spraying their masks with bleach at the end of each day and hanging them up at home to dry to use for another day, according to the American College of Emergency Physicians.”

Taxpayers Paid Millions to Design a Low-Cost Ventilator for a Pandemic. Instead, the Company Is Selling Versions of It Overseas. – Five years ago, the U.S. Department of Health and Human Services tried to plug a crucial hole in its preparations for a global pandemic, signing a $13.8 million contract with a Pennsylvania manufacturer to create a low-cost, portable, easy-to-use ventilator that could be stockpiled for emergencies.This past September, with the design of the new Trilogy Evo Universal finally cleared by the Food and Drug Administration, HHS ordered 10,000 of the ventilators for the Strategic National Stockpile at a cost of $3,280 each.But as the pandemic continues to spread across the globe, there is still not a single Trilogy Evo Universal in the stockpile.Instead last summer, soon after the FDA’s approval, the Pennsylvania company that designed the device – a subsidiary of the Dutch appliance and technology giant Royal Philips N.V. – began selling two higher-priced commercial versions of the same ventilator around the world.”We sell to whoever calls,” said a saleswoman at a small medical-supply company on Staten Island that bought 50 Trilogy Evo ventilators from Philips in early March and last week hiked its online price from $12,495 to $17,154. “We have hundreds of orders to fill. I think America didn’t take this seriously at first, and now everyone’s frantic.” Last Friday, President Donald Trump invoked the Defense Production Act to compel General Motors to begin mass-producing another company’s ventilator under a federal contract. But neither Trump nor other senior officials made any mention of the Trilogy Evo Universal. Nor did HHS officials explain why they did not force Philips to accelerate delivery of these ventilators earlier this year, when it became clear that the virus was overwhelming medical facilities around the world.An HHS spokeswoman told ProPublica that Philips had agreed to make the Trilogy Evo Universal ventilator “as soon as possible.” However, a Philips spokesman said the company has no plan to even begin production anytime this year. Instead, Philips is negotiating with a White House team led by Trump’s son-in-law, Jared Kushner, to build 43,000 more complex and expensive hospital ventilators for Americans stricken by the virus.

3M warns Trump: Halting exports under DPA would reduce number of masks available to US – company to stop exporting respirator masks could actually make the protective gear less available in the United States. The Minnesota manufacturing giant issued the warning a day after President Donald Trump invoked the Defense Production Act to force 3M to step up its production of desperately needed respirator masks for front-line health workers to use in the fight against the coronavirus. The text of Trump’s order issued Thursday night directs acting Homeland Security Secretary Chad Wolf to “use any and all authority available under the Act to acquire, from any appropriate subsidiary or affiliate of 3M Company, the number of N-95 respirators that the Administrator determines to be appropriate.” In its statement, the company said the Trump administration “also requested that 3M cease exporting respirators that we currently manufacture in the United States to the Canadian and Latin American markets.” It added that “there are, however, significant humanitarian implications of ceasing respirator supplies” to health care workers in those countries, where 3M is a “critical supplier of respirators.” “In addition, ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done,” 3M added. “If that were to occur, the net number of respirators being made available to the United States would actually decrease.” “That is the opposite of what we and the Administration, on behalf of the American people, both seek.”

ICE under pressure to release detainees threatened by coronavirus – The Trump administration is facing calls to release thousands of nonviolent detainees amid growing fears of coronavirus breakouts at immigrant detention centers. Democratic lawmakers and immigration advocates clamoring for a release order got something of a boost this week when a federal judge in Washington, D.C., warned officials at Immigration and Customs Enforcement (ICE) that the agency had a week to demonstrate adequate sanitary conditions in three family detention centers. But advocates and lawmakers say that doesn’t go far enough, arguing a detention center outbreak would ultimately spill over to regional health care facilities and put even more people at risk. “There are at least four confirmed cases of immigrants in custody who have coronavirus, and five ICE facility employees who had tested positive — that was as of yesterday,” Rep. Joaquin Castro (D-Texas), chairman of the Congressional Hispanic Caucus (CHC), said in a press call Tuesday. “Immigrants are staging peaceful protests and hunger strikes to be released on concern for their life and subpar detention conditions,” he added. A federal judge in Pennsylvania this week ordered a local detention center to release 11 detainees with underlying conditions making them more susceptible to contracting COVID-19. “We know that as our medical experts have said, it’s not a question of if, but when COVID actually reaches the facility. And the danger is what happens once a COVID is inside of the facility. I think we all can see the danger that would happen in that case — people are in congregate environments in these detention centers,” said Eunice Cho, senior staff attorney at the American Civil Liberties Union (ACLU) National Prison Project, who has been leading the group’s litigation to release at-risk detainees.

Media Silent as Poll Workers Contract Covid-19 at Primaries That DNC, Biden Campaign Claimed Were Safe – Donald Trump is the single individual in US society most responsible for spreading dangerous misinformation about Covid-19 in the midst of a global pandemic. Anyone who echoes him, or his administration’s entreaties to not take going out in public too seriously, is engaging in public endangerment. Anyone who actively encourages people to gather in mass, and in close proximity, is doing so at a mass scale. So why, in contravention of CDC guidelines and health experts’ urgings, did the DNC and Joe Biden’s campaign do just that at immense scale earlier this month, as major cities were already closing up public spaces? And why have media that have deservedly taken Trump and his administration to task for their fatal failures not done the same with Democratic leadership? If a senior adviser to President Donald Trump falsely claimed on national television that the Centers for Disease Control (CDC) had declared that it was safe to vote in person, despite its actual recommendation to the contrary, the adviser and the president would be rightly condemned by much of corporate media as, at best, incompetent and ignorant, and, at worst, dishonest and reckless in encouraging people to put their lives at risk. And if poll workers had contracted Covid-19 at locations which violated CDC recommendations, the adviser and the president would be rightly blamed for exposing them to the virus. Yet after the CDC on March 15 advised the public to cancel all gatherings of more than 50 people, a senior adviser to Joe Biden, the current frontrunning Democratic presidential candidate, went on CNN (3/15/20) and claimed the CDC had deemed in-person voting safe. And not a single major media outlet reported on it.Nor did they report on the actual dangerous conditions at multiple primary voting sites, and the exposure of trusting citizens to the coronavirus that the adviser’s reckless advice had encouraged. And it wasn’t just one irresponsible adviser that put people at risk: Democratic National Committee chair Tom Perez made misleading statements, downplayed the dangers and exaggerated the preparedness of voting sites, and criticized and threatened states which wanted to postpone their primaries. The Biden campaign as well as the DNC put politics over people, exposing countless voters to a fatal virus. We now know that at least two poll workers at locations described as safe by Perez and the Biden campaign have contracted Covid-19. It’s unknown how many more poll workers, voters and the people they came into contact with will also contract the virus.

DOJ probing stock transactions made by lawmakers ahead of coronavirus crisis: report – The Justice Department is reportedly probing decisions made by at least one lawmaker to sell stock in the days before the market turned downward as a result of the coronavirus outbreak. CNN reported Sunday that the inquiry, which was launched in cooperation with the Securities & Exchange Commission (SEC), is still in its early stages, according to two people familiar with the matter. However, at least one lawmaker, Sen. Richard Burr (R-N.C.), has been contacted by investigators, according to CNN. Burr is one of four senators who sold thousands of dollars’ worth of stock in the days before the stock market began a historical downturn amid nationwide travel and work restrictions implemented to stop the spread of coronavirus, as well as reports of jobless claims jumping to historic levels due to the crisis. A spokeswoman for the North Carolina senator insisted that Burr used no nonpublic information when making his financial decisions, as is required by the STOCK Act, and pointed to the Senate ethics inquiry Burr had requested upon news of the trades becoming public in a comment to CNN. “The law is clear that any American — including a Senator — may participate in the stock market based on public information, as Senator Burr did. When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry,” said Alice Fisher, Burr’s lawyer.

Icahn Called BlackRock “An Extremely Dangerous Company”; the Fed Has Chosen It to Manage Its Corporate Bond Bailout Programs – Pam Martens – In 2015, the legendary Wall Street investor, Carl Icahn, called BlackRock “an extremely dangerous company.” (See video clip below.) Icahn was specifically talking about BlackRock’s packaging of junk bonds into Exchange Traded Funds (ETFs) and calling them “High Yield,” which the average American doesn’t understand is a junk-rated bond. The ETFs trade during market hours on the New York Stock Exchange, giving them the aura of liquidity when one needs it. Icahn said: “I used to laugh with some of these guys … I used to say, you know, the mafia has a better code of ethics than you guys. You know you’re selling this crap.” Icahn warned that “if and when there’s a real problem in the economy, there’s going to be a rush for the exits like in a movie theatre, and people want to sell those bonds, and think they can sell them, there is no market for them.” BlackRock not only sells junk-rated bond ETFs under the brand name iShares, but it has some of the largest investment grade corporate bond ETFs, including one that trades under the stock symbol LQD, which was experiencing serious losses and seeing major outflows of money until the Federal Reserve announced recently that it was creating three facilities to buy investment grade corporate debt from the primary and secondary markets, as well as investment grade corporate bond ETFs, along with agency commercial mortgage-backed securities.And just who is going to be running these facilities for the Federal Reserve? None other than BlackRock – posing an enormous conflict of interest which was readily observable in the market as BlackRock’s investment grade ETFs rallied dramatically on the news.According to the “Terms of Assignment” the New York Fed released, BlackRock will be allowed to buy up its own corporate bond ETFs as well as those of its competitors. The only caveat in the contract is this concerning the Fed’s Secondary Market Corporate Credit Facility (SMCCF):”BlackRock will treat BlackRock-sponsored ETFs on the same neutral footing as third-party ETFs. All ETF transactions will be effected through intermediaries at market prices on a best execution basis, whether in the secondary market or via primary creations and redemptions. If the share of the SMCCF’s holding of BlackRock-sponsored ETFs exceeds or is expected to exceed the then-current market share of BlackRock-sponsored ETFs in the corporate bond ETF market on average over a given calendar month, BlackRock will notify the New York Fed for review and consultation. The New York Fed may direct portfolio adjustments at any time.”This document labeled “Terms of Assignment” does not appear to be the full contract between the Fed and BlackRock for purchasing, selling and managing the Fed’s corporate bond portfolios.A much more detailed contract appears on the New York Fed’s website for BlackRock’s management of the agency commercial mortgage-backed securities facility.

Does FSOC have a role to play in coronavirus response? – Following the last upheaval in the financial markets, policymakers created an interagency body to serve as an early-warning system to identify future threats before the next crisis.Yet with the coronavirus now wreaking havoc on the economy, observers are questioning if the Financial Stability Oversight Council is up to the job.The FSOC was established in essence as regulators’ vehicle to address turmoil like that brought on by the pandemic. But the council has been largely silent as the Federal Reserve Board along with the bank regulatory agencies have played a more visible role in responding to the economic fallout from the virus. “We have a highly fragmented financial regulatory architecture here in the United States and FSOC was designed to provide a place where all of these regulators could better coordinate with one another, manage a crisis response, and they haven’t done that,” said Gregg Gelzinis, a senior policy analyst at the Center for American Progress. Gelzinis and others say efforts earlier during the Trump administration to cut the FSOC’s budget and staff, and shift the council’s focus away from its most tangible job under the Dodd-Frank Act – subjecting systemically risky nonbanks to stricter supervision – have blunted its mission.”In the middle of an economic crisis, it’s hard to go from having really downplayed or ignored the importance of an agency to turning around on a dime,” said Michael Barr, a former Treasury official in the Obama administration and a law professor at the University of Michigan.

Coronavirus phishing scams proliferate – It’s no surprise to see hackers taking advantage of the confusion around the coronavirus pandemic to do their worst, including preying on the estimated 75 million people suddenly working from home.But the numbers are nonetheless hair-raising.Researchers at Barracuda Networks, which provides network security to 220,000 corporate customers, reported Thursday that the number of coronavirus-related email attacks began increasing in January. Then, in the first three weeks of March, it exploded. The volume of such attacks spiked 667% from February to more than 9,000 incidents. The company has not seen anything on this scale since the 2008 financial crisis. “This is all fear driven,” said Fleming Shi, chief technology officer at Barracuda Networks. “People are scared or learning about the truth every day on the news, and the bad guys are weaponizing it. They see it as an opportunity.” Between March 1 and March 23, Barracuda detected 467,825 spear-phishing email attacks, and 9,116 of those detections were related to COVID-19. In comparison, the company detected 1,188 coronavirus-related email attacks in February and just 137 in January.”A lot of times [phishing attacks are] seasonal,” said. “This time of the year, usually it’s tax-related scams.”Of the coronavirus-related attacks detected by the company through March 23, 54% were scams, 34% were brand-impersonation attacks, 11% were blackmail, and 1% percent were business email compromise. Only a couple of years ago, business email compromise was a top concern for bank chief information security officers, because hackers were using it to successfully carry out fraudulent wire transfers.In the scams, some cybercriminals are looking to sell coronavirus cures or face masks or asking for investments in fake companies that claim to be developing vaccines. Others are asking for donations to fake charities.

As Coronavirus Spreads, Community Banks Brace for Fallout – Mike Estes, the president of Fisher National Bank in Fisher, Ill., population 1,900. knows the agricultural community well, including the handful of small businesses that dot the road. In recent days, he has worried about their fate. The state has shut down nonessential business as the coronavirus spreads. “We’ve got some small restaurants here, and it could be devastating for them,” Mr. Estes said. “I’m not sure if they would be able to come back.” The economic fallout of the novel coronavirus poses a new challenge for small banks across the country. Most of America’s banks are like Fisher National – woven into the local economy and a key source of credit for small businesses. As the downturn squeezes more industries, community banks must balance helping these businesses with protecting their own bottom lines. Some community bankers say they have already started getting calls from businesses and individuals who say their cash flow might be tight for a while. At Stephenson National Bank and Trust in Marinette, Wis., business customers have expressed interest in short-term loans and additional lines of credit. The seven-branch bank decided this month to offer three-month payment deferrals on all loans. It is reaching out to customers, encouraging them to communicate any problems. The coronavirus pandemic is disrupting the global economy. WSJ’s Greg Ip explains what the Federal Reserve can do to stem the damage. Illustration: Carlos Waters/WSJ “We are ready, willing and able to help borrowers or businesses,” said Chief Executive Daniel Peterson. Stephenson lists on its website the trials it has weathered since its 1874 founding: wars, panics and the Great Depression. Management plans to add the current crisis to the list. But the coronavirus, unlike previous emergencies, is forcing millions of people to stay home and avoid contact with others. That is depriving community banks of one of their hallmarks – face-to-face interactions. Both Stephenson and Fisher, like many larger banks, have limited their branch access to drive-throughs and appointments, meaning they have to dole out personal attention largely over the phone. Community banks, often categorized as those with less than $10 billion in assets, were already challenged before the coronavirus pandemic. They increasingly have to compete with big banks that are attracting young customers more interested in flashy apps than a friendly branch.

Anatomy of an Outbreak: How Coronavirus Swept Through JPMorgan’s Trading Floor – WSJ – March 9 was supposed to be the start of a new routine for JPMorgan Chase & Co. employees. With coronavirus spreading, the bank had told the staff in its stock-trading operation to head to three separate sites around New York City. Hours before the workday began, with global markets plunging, technology at the sites wasn’t ready. JPMorgan top brass reversed the order and told many traders to report for duty, as usual, to the firm’s Manhattan headquarters, employees said. An employee who wasn’t feeling well came to the office. JPMorgan traded more shares that Monday than any day in the bank’s history. The sick employee turned out to have Covid-19, and over the past three weeks, about 20 employees on a single floor at the bank’s headquarters have tested positive for the virus, with another 65 quarantined as a result. Wall Street is used to making tough choices in seconds, but the coronavirus pandemic has added a dimension of life or death. Amid the wildest trading conditions in more than a decade, banks are loath to fully allow the thousands of traders and salespeople who keep the markets humming to work from home. Setups in home offices lack the multibillion-dollar technology infrastructure of the trading floor. Even slight delays in speed could cost money. Wall Street trading has been deemed an “essential service” by New York authorities, and though the New York Stock Exchange has shut its floor, the major banks continue to have some employees report to work. For JPMorgan, the consequences of keeping employees in the office have been swift and painful. The outbreak has rattled rank-and-file employees, who said they feel the bank took a gamble with their health to protect a prized business. Traders and salespeople said they feel pressure to come in. Managers, many of whom have stayed in the office themselves, have reminded staff that their compensation may be tied to their performance in recent weeks. On Thursday, head of global equities Jason Sippel told subordinates they had a responsibility to come into the office, according to a person on the call. “There are risks to personal health, there are risks to public health,” Mr. Sippel said. “We are called upon to balance.” JPMorgan’s coronavirus outbreak is concentrated on the fifth floor of the bank’s Madison Avenue headquarters, a tight web of desks for those who buy and sell stocks and pitch clients on trades.

Jefferies’ CFO Dies From Coronavirus –In a shocking and tragic development, the deadly Coronavirus has struck at the epicenter of Wall Street: moments ago, investment bank Jefferies announced that its CFO Peg Broadbent, has passed away from coronavirus complications, making him the first top financial executive to pass away from the deadly pandemic. The full press release is below:

The Dark Secrets in the Fed’s Last Wall Street Bailout Are Getting a Devious Makeover in Today’s Bailout – Pam Martens – From December 2007 to November 10, 2011, the Federal Reserve, secretly and without the awareness of Congress, funneled $19.6 trillion in cumulative loans to bail out the trading houses on Wall Street. Just 14 global financial institutions received 83.9 percent of those loans or $16.41 trillion. (See chart above.) A number of those banks were insolvent at the time and did not, under the law, qualify for these Fed loans. Significant amounts of these loans were collateralized with junk bonds and stocks, at a time when both markets were in freefall. Under the law, the Fed is only allowed to make loans against “good” collateral. Six of the institutions receiving massive loans from the Fed were not even U.S. banks but global foreign banks that had to be saved because they were heavily interconnected to the Wall Street banks through unregulated derivatives. These same banks, as we write this, are currently receiving the next round of bailouts from the New York Fed, using many of the identical programs that the New York Fed used the last time around, like the Commercial Paper Funding Facility(CPFF), the Primary Dealer Credit Facility (PDCF), and the Term Asset-Backed Securities Loan Facility (TALF) along with a host of others. The goal of the New York Fed in using so many programs with so many alphabet-soup acronyms is to make it mind-numbingly difficult to keep track of the trillions of dollars it is spewing to Wall Street banks and their foreign peers. It took almost four years after the onset of the last unaccountable Fed money spigot to get accurate reports to the public about what it had done. The Fed spent more than two years in court battling to keep the public from learning the details. How do we know that the same banks are receiving the new bailout funds? Because the New York Fed publishes a list of its 24 “primary dealers,” the Wall Street trading houses with which it conducts its open market trading operations and are eligible for its loans. (Yes, the New York Fed has its own trading floor – the only one of the 12 regional Fed banks to have one.) With the exception of AIG, which is an insurance company, Bear Stearns, which was taken over by JPMorgan Chase, and Royal Bank of Scotland (RBS), every bank listed in the chart above is currently eligible for the trillions of dollars in Fed loans that have been spewing out of the New York Fed since September 17, 2019 – four months before the first reported death from coronavirus in China and five months before the first reported death in the United States.

Fed Unlikely to Order Big U.S. Banks to Suspend Dividends – WSJ – U.S. banks will likely be allowed to keep paying dividends to shareholders, according to people familiar with the matter, even as the coronavirus pandemic threatens to create a mountain of bad loans that could eventually weaken the lenders. Some former U.S. regulators have said the Federal Reserve should order the largest banks to suspend payouts to preserve capital at a time of soaring unemployment and business disruption that may eclipse the 2008 financial crisis. “If things work out well, banks can distribute income later on,” said Janet Yellen, a former Fed chairwoman. “If not, they’ll have a buffer that will be needed to support the credit needs of the economy.” The European Central Bank and the Bank of England have pressured banks to stop using their capital to make dividend payments to shareholders, raising questions about whether the Fed would follow suit in the U.S. But Fed officials are unlikely to do so, at least in the short term. They see key differences in how lenders distribute capital on the two continents, and they plan to conduct a more deliberate analysis of the U.S. banking system’s health,the people said. Cleveland Fed President Loretta Mester said she prefers to await the results of the next set of the banks’ “stress tests” in June before deciding whether to limit dividend payments. The tests are used to assess banks’ ability to continue lending in a crisis. Banks are required to submit plans showing how they would weather a deep recession and maintain sufficient capital by Monday. The central bank will announce the results of the tests by the end of June. “Our stress test can give us insight into where capital should be needed,” said Ms. Mester in an interview Thursday. “My preference would be to wait for the stress tests, but different people can have different opinions about that.”Any decision to halt dividends lies with the five members of the Federal Reserve Board of Governors; Fed bank presidents don’t have a vote. U.S. central bankers may fear that halting dividends now would send a signal that they are worried about the solvency of the banking system. And because dividends are paid quarterly in the U.S. instead of annually as in Europe, the Fed has the ability to reassess the situation in the coming weeks and months. Ordering banks to suspend dividend payments would be tantamount to “kicking them in the shins” at a time when the government is relying on them to continue lending through the downturn, said Christopher Marinac, director of research for Janney Montgomery Scott LLC. “It’s telling the banks they did something wrong when in fact they did a lot right by building capital and strong earnings,” Mr. Marinac said. “If we learn later that bank earnings and bank capital is not as strong as we thought, that’s a different matter.”

BofA offers emergency loans to borrowers first, freezing out depositors – Bank of America is initially taking applications for a government-backed emergency loan program only from its existing small-business borrowers, shutting out customers that have checking accounts but not loans. The Charlotte, N.C., company’s decision could freeze many small businesses out of a $349 billion program that is meant to provide relief from the economic crisis brought on by the coronavirus pandemic. If other banks follow Bank of America’s lead, the number of small businesses that are eligible to apply for loans in the program’s early days will shrink even further. Many small-business owners are concerned that if they cannot apply for relief soon, they will not receive funding because the program operates on a first-come, first-served basis, and application volume is expected to be enormous. As of Friday morning, which was when the program was scheduled to open, many banks were not yet taking any applications. BofA Chairman and CEO Brian Moynihan said in a CNBC interview on Friday that the bank has 1 million business customers with borrowing relationships, and that its first priority is getting those customers through the system. The bank said that small-business customers will qualify to apply if they have a corporate credit card or another business borrowing product at BofA. Moynihan said that Bank of America is encouraging business customers that have lending relationships with other banks to apply through those institutions. “If you borrow with another bank, please, go back and work with them,” Moynihan said. “They’re your core bank, and they know you the best and can process you the fastest.”

Wall Street Had Cut 68,000 Jobs and Received Trillions in Emergency Loans Prior to COVID-19 Anywhere in the World Pam Martens – On March 26 Federal Reserve Chairman Jerome Powell went on theToday show to deliver one message: “There is nothing fundamentally wrong with our economy.” Recently U.S. Treasury Secretary Steve Mnuchin has appeared on the White House lawn to tell reporters that this is nothing like the last financial crisis. Fed regional bank presidents have appeared on cable news asserting that the Wall Street banks have plenty of capital and today’s economic distress is caused solely by the coronavirus. Even New York Times columnist and perpetual Wall Street cheerleader, Paul Krugman, was on CNBC this week reassuring viewers that today’s problem was not like the last financial crisis.And yet – the facts keep getting in the way of this “official” narrative.The first coronavirus COVID-19 case was discovered in China in December 2019 and didn’t become a major issue in the United States until February 2020. But on October 7, 2019 we reported that Wall Street banks had announced a staggering 68,000 job cuts as the Fed pumped $310 billion more in unprecedented loans to Wall Street. That doesn’t sound like there was “nothing fundamentally wrong with our economy,” the narrative that Powell is pushing.On October 9 we reported that Powell had appeared at a speaking event in Denver at the National Association of Business Economists and acknowledged that a larger, long-term bailout of Wall Street was on its way. That also doesn’t sound like everything was fine in the financial world before the coronavirus hit. On January 27, 2020, again before any reported death from coronavirus in the U.S., we reported that Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash. Again, that doesn’t sound like there was nothing fundamentally wrong before the coronavirus hit. Now the Office of the Comptroller of the Currency (OCC), the federal regulator of national banks, has finally released its quarterly “Report on Bank Trading and Derivatives Activities” for the last quarter of 2019. The new report shows just how highly-leveraged the biggest Wall Street banks are if you include their exposure to derivatives. The chart above is based on data from that report (see Table 4 in the Appendix).

CFTC Quietly Bails Out Capital One – Last Friday, around the time of the quad-witching collapse which sent the S&P to levels not seen since Trump’s inauguration, amid the flurry of headlines bombarding shell-shocked traders, was one that was particularly ominous if bizarrely incomplete. Shortly after the close, Bloomberg blasted the following headline:There was little additional information to go with the report, aside from the CFTC saying it would temporarily exempt a U.S. bank from a requirement to register as a “Major Swap Participant” even though its growing energy swaps exposure would technically require it to do so by the end of the next quarter, and since the bank was not named, traders’ attention quickly shifted to whatever the next crisis du jour, or rather du minute was. However, late last week, Reuters reported citing two sources, that the bank in question was Virginia-based Capital One, best known for questionable retail lending and cheesy credit card commercials starting Samuel L Jackson.So what exactly happened? According to a spokesman for the CFTC, the commodities regulator issued a waiver to protect the bank and its energy clients from “undue disruption,” given the unprecedented market conditions over the past month amid the coronavirus outbreak.”We have actively encouraged all market participants to identify regulatory relief or other assistance that may be needed to help support robust, orderly and liquid markets in the face of this pandemic,” the spokesman said, implicitly admitting that the CFTC intervention amounted to what was an effective bailout of the bank.At the core of the issue were plunging oil prices, which ended up having a margin call effect on the bank’s swaps exposure; and since Capital One’s waiver lasts until Sept. 30, if energy prices remain low or the bank’s exposure remains above the threshold, it will register as a swap participant or make business adjustments, the CFTC said on Friday.

Ag lenders were already stressed. Then came the coronavirus.– Across the Midwest, the coronavirus outbreak threatens to pack years’ worth of frustration and hardship into a single growing season.Farmers across the region are becoming increasingly nervous as the disease expands beyond early hot spots in coastal markets. That anxiety is also being felt by their lenders.”Just weeks ago, a lot of people were thinking this was a New York problem, that it wouldn’t be much of an issue here,” said Shan Hanes, president and CEO of the $122 million-asset Heartland Tri-State Bank in Elkhart, Kan. “But reality has set in, and it’s serious,” Hanes added. “It’s sucked the energy out of our community just like it has almost everywhere.” Concern is building that the economic freeze imposed by the pandemic will inflict harsh tolls on farmers and their rural communities – and lead to elevated loan losses at a number of community banks.Ag lenders note that they have already weathered a multitude of challenges in recent years.Robust harvests produced excess supply that drove down crop prices and farm profits, and the U.S.-China trade war further weakened demand for American soybeans and other crops.Adjusting for inflation, the Agriculture Department projected in February that 2020 net cash farm income would decline by 10.7% from a year earlier, to $13.1 billion. It also forecast that farm debt would rise by $10 billion, to a record $425 billion.Many farmers have borrowed more to offset lower income to make sure they can afford seed, supplies and equipment. The pandemic has exposed new vulnerabilities and pressures on crop and livestock prices, and is creating challenges for businesses that sell into the farm sector, industry experts said.Restrictions on worker density to ward off spread of the virus hinders productivity at meatpacking plants. Depressed oil prices – resulting from the pandemic and an international price war – have also hurt ethanol values.Social distancing measures have also cut into sales at farm equipment dealers and other businesses that round out the agricultural sector.

Dodd-Frank didn’t build stress testing for coronavirus – Anyone who experienced the 2008 financial crisis knew it was only a matter of time before there was another disruption that tested the system. Still, it was difficult to imagine exactly when and how it would materialize. Like the mortgage crisis, the coronavirus pandemic comes at a time when corporate profits were high, unemployment was low and growth was steady. But unlike the last crisis, the triggering event originated outside the financial system. The recession accompanying this pandemic will further test the resilience of the financial sector, and the 2010 Dodd-Frank Act reforms along with it. Some lessons are already coming into focus. The first, and perhaps most striking takeaway at the moment, is that there are vulnerabilities in some of the very same markets as 2008. It very much feels like deja vu all over again, with short-term funding markets like repo and money market funds requiring Federal Reserve intervention. It is frankly difficult to view this state of affairs as anything other than an indictment of the Dodd-Frank created Financial Stability Oversight Council. That many of these markets and entities are back in the soup indicates that meaningful reforms took too long; came up short when they eventually happened; and were rolled back too quickly. It is unclear how FSOC will evolve from here – former regulators are already saying that they have more work to do. But using it as a forum for regulators to get together and talk, with little meaningful action, simply will not get the job done. In response to the turmoil in credit markets, the limitations on the Federal Reserve’s emergency lending authorities have also taken center stage. A number of the former regulators that presided over the last crisis have argued that those reforms would unduly constrain the central bank during a new panic. But by all indications that hasn’t been the case. The Fed has reopened a number of the same facilities that were around in 2008 – an alphabet soup of acronyms like CPFF, MMLF and PDCF – to backstop commercial paper, money market funds and investment-grade corporate debt. The centrality of the stress-testing regime, what Professor Mehrsa Baradaran calls “regulation by hypothetical,” has become one of the most touted elements of macroprudential regulation. Yet the actual conditions created by the COVID-19 pandemic have quickly eclipsed some of the worst-case hypotheticals of supervisory stress tests, with warnings of potentially even worse things to come. Stress testing deserves significant attention in this moment, followed by a reckoning with whether it is a useful predictive tool, or merely a time-intensive check-the-box exercise. Stress testing is critical because it’s not only meant to be an intellectual exercise; it influences capital regulation – another area that will surely be tested again.

Regulators extend comment deadline for Volcker Rule changes — – Regulators are giving the industry more time to comment on proposed revisions to the Volcker Rule dealing with banks’ stakes in certain investment funds. The proposal – which was put forth in January by five agencies including the Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corp. – would revise the definition of a so-called covered fund. The plan would allow financial institutions to invest in funds that many stakeholders say were not meant to be the target of the Volcker Rule.The comment period on that proposal was set to expire on Wednesday, but the regulators said Thursday they would welcome comments until May 1. “The agencies will continue to consider comments to provide interested persons more time to analyze the issues and prepare their comments in light of potential disruptions resulting from the coronavirus,” the regulators said in a press release. The original 2013 Volcker Rule – first proposed as an amendment to the Dodd-Frank Act by former Fed Chairman Paul Volcker – not only banned proprietary trading but also limited bank stakes in private-equity and hedge funds to prevent the type of short-term risky bets that helped precipitate the financial crisis.But banking agencies sought to revamp the Volcker Rule last year, finalizing a rule in August that changed the “rebuttable presumption” and implemented a three-tiered approach meant to tailor compliance requirements. The January proposal focused on the covered funds portion of the rule suggested that banks be allowed to invest in instruments such as credit funds, venture capital funds, customer facilitation funds and family wealth management vehicles – even if those funds contained multiple investments.Regulators argued that allowing banks to invest in a fund structure rather than taking more direct stakes in companies would help them to diversify risk, which could in turn bolster safety and soundness.Big banks get Fed’s blessing to extend leverage amid market stress

Calls to cease non-coronavirus rulemaking grow louder – Community bankers are calling for a six-month halt in rulemaking except for regulations dealing with the coronavirus outbreak.In a March 30 letter, Independent Community Bankers of America CEO Rebeca Romero Rainey urged the heads of several financial regulators to suspend non-COVID-19-related rules to allow banks to focus on the fallout from the pandemic.”Combating the COVID-19 crisis demands the full attention and all available resources from the public, from state, local, and federal government entities, as well as all industries, including the vital financial services industry,” Rainey wrote to seven agencies. “Not only are financial institutions impacted, but the voices of those institutions are also engaged in this all hands-on deck reality.” The trade group joined community groups and lawmakers who have made similar requests.Last week, the National Community Reinvestment Coalition and National Alliance of Community Economic Development Associations separately called on the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to suspend their rulemaking process for proposed reforms to the Community Reinvestment Act. Public comments for that proposal are due April 8.”This grave pandemic demands a comprehensive and all-encompassing response. The health and wellbeing of our fellow citizens and residents are at stake,” the NCRC wrote. “The undersigned organizations must immediately drop all policy-related matters and help their clients and communities with basic survival.” In its letter, the economic development group alliance wrote that “as our networks begin to address the dire public health and economic situations playing out in our communities nationwide, we felt an urgent need to double down on our request that you immediately suspend the rulemaking process.” Similarly, the California Reinvestment Coalition is preparing to submit a letter to the OCC and FDIC signed by its members arguing that enforcing the April 8 deadline for comments on the CRA proposal “will not at all reflect the unknown needs of low and moderate income communities in a new post COVID-19 America.”

Fed delays effective date of bank control rule due to coronavirus – The Federal Reserve is postponing the effective date of a rule dealing with regulatory requirements for investors who own less than a quarter of a bank.The central bank said Tuesday it will delay implementation by six months, to Sept. 30, of a January rule clarifying standards under the Fed’s bank control framework. The extension is meant to allow banks to focus on effects of the coronavirus pandemic.The rule, first proposed in April 2019, sought to standardize how those owning less than a quarter of a bank can determine if they hold a “controlling” stake, and therefore must register as a bank holding company. For wealth managers to make smarter business decisions, get to market faster, and connect more effectively with their clients, data is the key. The framework was originally supposed to go into effect April 1, but the Fed said it was pushing back the deadline in order to limit operational burden. “The Board recognizes that, as a result of COVID-19, there have been recent dislocations in the U.S. economy,” the Fed said. “Many companies, including regulated financial institutions, have also expressed a desire to consult with Board staff about the effect of the new control rule on various existing investments and relationships.”The extended time frame “should provide companies affected by the new control rule additional time to analyze the impact of the rule on existing investments and relationships,” the agency said.

Big banks get Fed’s blessing to extend leverage amid market stress – The Federal Reserve will let Wall Street banks take on more leverage so they can absorb a severe lack of liquidity for Treasuries and a surge in customer deposits amid the coronavirus pandemic.A key limit on big banks’ indebtedness – the so-called leverage ratio – will be temporarily relaxed with lenders getting “significant inflows of customer deposits,” the Fed said in a Wednesday statement. For one year, the biggest U.S. banks will no longer have to add their Treasuries and reserves into the basket of assets they’re required to maintain capital for – significantly reducing capital requirements.In its statement, the Fed was clear that the move was meant for banks “to expand their balance sheets as appropriate to continue to serve as financial intermediaries, rather than to allow banking organizations to increase capital distributions.” The Fed added that it made the decision because “liquidity conditions in Treasury markets have deteriorated rapidly.”The change – effective immediately – will reduce capital demands by about 2% overall, the Fed estimated, and will be open for a 45-day comment period. The unanimous decision got the backing of Fed Gov. Lael Brainard, who hasn’t supported other recent agency decisions to overhaul regulations put in place after the 2008 financial crisis.The leverage ratio is one of the most fundamental limits implemented in response to the last meltdown. It’s meant to be a very simple calculation of each bank’s capital against all its assets. The requirement functions in tandem with the other big capital constraint on banks – a cushion based on the riskiness of the lender’s assets.The disruption in Treasury markets threatened to prevent Wall Street banks from executing transactions the Fed wants them to amid the current tumult, including funding short-term borrowing arrangements known as repurchase agreements. By not counting Treasuries in their leverage ratios, banks should have more ability to provide such financing.

Card brands delay spring swipe-fee update to July, citing coronavirus’ effect on retail – With the semiannual interchange update from the major card brands due in April, acquirers began notifying merchants late last week that those changes – which in some cases represent higher rates for certain types of businesses and cards – have been postponed until July.With coronavirus presenting significant challenges for retailers and the technical challenges of imposing interchange fee changes in the networks, Visa, Mastercard, American Express and Discover are holding off on the updates.The so-called spring update on April 17 has been moved to July 17, in a move to support business continuity at a time when payment habits are dramatically shifting to digital channels. The coronavirus pandemic is forcing many people to shelter at home, leading many brick-and-mortar stores to shut down temporarily or permanently. “With so many resources working from home and having reduced capabilities to deal with unforeseen challenges and the changes, the card networks felt it was in everyone’s best interest to hold off,” said John Drechny, CEO of the Merchant Advisory Group. Normally, during the release of new interchange rates, the networks monitor transaction traffic and data quality so that any irregularities that occur can be fixed quickly, said Drechny, who noted all four card brands had notified his organization of their intentions. Mastercard confirmed its intention to institute a delay in a note to PaymentsSource, saying it is “pausing updates to some systems while delivering the same level of security and service they receive every day … this is one way we can help them focus on their core systems operations and resiliency efforts to meet the needs of consumers and business.” Meanwhile, Visa said it is “committed to partnering with our clients during this difficult time. We are actively implementing and considering a number of ways we can proactively support our clients to ensure the stability, security, reliability and resiliency of the digital payments ecosystem.” In confirming its intentions to delay its spring interchange release until July 17, Discover noted it was taking the necessary steps to “maintain our commitment to our clients and customers.”

CFPB urged to take more active role in coronavirus response – Pressure is building on the Consumer Financial Protection Bureau to take more aggressive steps to directly benefit consumers who are hurting financially from the COVID-19 pandemic.The bureau has joined other regulators in encouraging financial institutions to work with struggling borrowers and other consumers with financial services needs, but critics say the agency’s response has been tepid at best.They point to the lack of specific guidance protecting consumers in the mortgage servicing process, restricting debt collectors from contacting consumers during the crisis, or requiring credit reporting agencies to factor in pandemic-related hardships on credit reports. “In this time of national emergency, the CFPB needs to be thinking hard about what consumers need right now,” said Diane Thompson, of counsel at the National Consumer Law Center and a former CFPB deputy assistant director of regulations.Industry lawyers are also speaking up, saying mortgage servicers need better direction from the agency on how to deal with the flood of incoming calls from borrowers with forbearance requests and on how servicers can prepare for a potential wave of defaults.

CFPB clarifies credit reporting procedures in light of coronavirus – Lenders should avoid reporting delinquent payments to credit bureaus for consumers who seek mortgage relief, the Consumer Financial Protection Bureau said Wednesday.The agency provided several recommendations in new guidance on the credit reporting process in light of the COVID-19 pandemic. The bureau said it will now allow lenders 45 days to investigate credit disputes, increasing the duration by 15 days. In the policy statement, the CFPB said it supports lenders’ “voluntary efforts” to provide payment relief to consumers. The CFPB said it will not take enforcement actions against or cite in examinations any company that provides information to credit reporting agencies that accurately reflects payment relief measures or makes a good-faith effort to investigate disputes as quickly as possible.”During this time of uncertainty, we are providing clarity to ensure the consumer reporting industry can continue to function,” CFPB Director Kathy Kraninger said in a press release. “Consumers rely on their credit report to purchase a new car, their new home, or to finance their college education. An effective consumer reporting system is critical in promoting fair and efficient access to credit in the consumer financial services market.”The Coronavirus Aid, Relief, and Economic Security Act that Congress passed last week requires lenders to report to credit bureaus that consumers are current on their loans if their payments are adjusted through a loan modification.A section of the CARES Act also amends the Fair Credit Reporting Act, which generally requires that credit bureaus and furnishers of information investigate disputes within 30 days of being notified by a consumer. The CFPB said it is extending the investigation period to 45 days as a result of the pandemic, but with a caveat that “the consumer provides additional information that is relevant to the investigation during the 30-day period.”

Congress mulls further coronavirus relief for consumers – – Although the $2 trillion economic rescue plan passed by Congress included key consumer protections, Democrats are not done seeking help for those struggling to make ends meet during the coronavirus pandemic.With many expecting Congress to mull yet another round of stimulus, analysts expect House and Senate Democratic leaders to be even more aggressive in pushing for temporary measures such as a ban on bank overdraft fees, a national cap on consumer loan interest rates and a broader moratorium on negative information being posted to consumer credit reports.The sweeping package signed into law last week includes direct payments of $1,200 per adult and $500 per child, as well as some relief for borrowers of federally backed mortgages. But observers said Congress could face more pressure to give consumers relief if those payments do not arrive in time for consumers to make their monthly bills. “The longer Treasury delays in getting money into peoples’ hands, the stronger the argument comes for providing people temporary relief,” said Aaron Klein, policy director at the Brookings Institution’s Center on Regulation and Markets. “I think the longer this pandemic goes on, the more consumers will need relief.” House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and Sen. Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee, both supported the stimulus effort but said more still needs to be done to protect families hurting economically from the COVID-19 pandemic. “I am pleased that this legislation includes important provisions that Democrats fought for to support individuals, families, workers, small businesses and communities, and support the bill’s passage,” Waters said in a press release Tuesday. “But, the legislation is far from sufficient to fully support our nation through this crisis.”Waters had called for a measure to prevent lenders from reporting missed or late payments to credit bureaus, a temporary ban on debt collection, and a nationwide ban on all evictions and foreclosures, among other things. Brown introduced a temporary ban on overdraft fees, a 36% cap on consumer loan interest rates, and free digital wallets for consumers to receive coronavirus relief funds. But none of those proposals were included in the legislation.

Banks may get boost from loan program; Trouble for mortgages not backed by U.S –American banks “stand to collect billions of dollars in fees on the $350 billion in loans that are being offered to U.S. small businesses as part of the federal response to the coronavirus pandemic,” the Financial Times says. “Banks will receive processing fees, paid by the federal government, for making the loans. The fees will vary with loan size: 5% for loans under $350,000, 3% for loans under $2 million and 1% for loans greater than $2 million.” The loans, which will be forgiven if the business doesn’t lay off workers, will not incur a capital charge.Banks are likely to be swamped with applications for the loans when they begin taking applications on Friday, the Washington Post says. But “many bankers say they lack the detailed guidance needed to administer the loans. Some lenders that are new to working with the SBA could struggle with staffing and software problems once they are approved to join the program.””While fintech lenders are seeking to participate in the program as direct lenders, none of those companies are currently authorized to participate in the 7(a) program,” American Banker reports.. Dividends, buybacks haltedFollowing the lead of the European Central Bank, the European Banking Authority, the euro zone’s banking regulator, “demanded that all EU lenders stop their planned dividend payments and share buybacks,” the Financial Times reports. A group of the largest U.S. banks, including Bank of America and Citigroup, said they would suspend share buybacks, but are expected to pay previously announced dividends,” the Wall Street Journal reports. “Switzerland’s Credit Suisse and UBS have indicated they will pay out 2019 dividends as planned.” The Federal Reserve rescued the government-backed mortgage market, “but the market for loans in which the government doesn’t shoulder the risk is coming undone,” the paper says. “Investors are abandoning that market, starving the lenders that extend mortgages to borrowers who don’t qualify for conventional loans. Those lenders are halting operations, bracing for a sharp rise in missed mortgage payments during the coronavirus shutdown.” Big Wall Street banks “have quietly joined” with the Mortgage Bankers Association “in calling for regulatory action to prevent the Federal Reserve’s emergency purchases of mortgage-backed securities from unintentionally upending the hedging strategies of mortgage originators.” On Sunday the MBA asked the Securities and Exchange Commission “to discourage securities firms from making margin calls on mortgage lenders for hedges they bought to protect themselves from a fall in the value of their loans.” In its appeal to the SEC, the MBA warned mass enforcement of those margin calls could have a “destabilizing” impact on mortgage originators.

Hotels: Occupancy Rate Declined 67% Year-over-year to All Time Record Low – From HotelNewsNow.com: STR: US hotel results for week ending 28 March Reflecting the continued impact of the COVID-19 pandemic, the U.S. hotel industry reported significant year-over-year declines in the three key performance metrics during the week of 22-28 March 2020, according to data from STR. In comparison with the week of 24-30 March 2019, the industry recorded the following:

Occupancy: -67.5% to 22.6%

Average daily rate (ADR): -39.4% to US$79.92

Revenue per available room (RevPAR): -80.3% to US$18.05

“Year-over-year declines of this magnitude will unfortunately be the ‘new normal’ until the number of new COVID-19 cases slows significantly,” said Jan Freitag, STR’s senior VP of lodging insights. “Occupancy continues to fall to unprecedented lows, with more than 75% of rooms empty around the nation last week. As projected in our U.S. forecast revision, 2020 will be the worst year on record for occupancy. We do, however, expect the industry to begin to recover once the economy reignites and travel resumes.” The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).2020 was off to a solid start, however, COVID-19 has crushed hotel occupancy. This is the lowest weekly occupancy on record, even considering seasonality. Note the graph is a 4-week average.

Half of Small Businesses Haven’t Paid Full April Rent, Early Poll Suggests – WSJ – About half of U.S. small businesses haven’t paid their full rent or mortgage yet this month as a result of the coronavirus pandemic, a new survey suggests. In the poll, conducted on Thursday and Friday by Alignable, a small business social networking company, about 30% of the more than 1,000 respondents reported making no rent or mortgage payment in April, while 20% said they had made only a partial payment. The remaining half reported paying their entire rent on time. Only a quarter of respondents said their landlord or bank offered a reduction or deferral on what they owed. The survey was of companies with up to 50 employees, including retail, restaurant, auto-repair and other small businesses. The preliminary findings illustrate the crisis affecting small businesses and how their troubles could set off a financial chain reaction that could inflict heavy damage on landlords and lenders across the U.S. “I think this shows the time-sensitive need for the policy response to get liquidity in the hands of small businesses,” said Michael Feroli, chief U.S. economist at JPMorgan. “Half of all small businesses have only 15 days or less worth of cash buffers, and with shelter-in-place orders likely to persist they will need to replace lost revenue in a hurry.”

Consumer Confidence “Declined Sharply in March – “The headline number of 120.0 was a decrease from the final reading of 132.6 for February. Today’s number was above theInvesting.com consensus of 110.0. “Consumer confidence declined sharply in March due to a deterioration in the short-term outlook,” said Lynn Franco, Senior Director of E- conomic Indicators at The Conference Board. “The Present Situation Index remained relatively strong, reflective of an economy that was on solid footing, and prior to the recent surge in unemployment claims. However, the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow.” Read more The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.

Fitch Downgrades 9 Retailers In One Day, Including Macy’s, Nordstrom And J.C. Penney – Ratings agency Fitch has downgraded 11 consumer and retail companies because of the financial disruption caused by the COVID-19 pandemic. On Wednesday alone, Fitch downgraded credit ratings for nine retailers, according to emailed client notes. Among them were J.C. Penney, Macy’s, Nordstrom, Kohl’s, Dillard’s, Capri, Tapestry, Levi’s and Signet.As COVID-19 rips through the country, retailers have shuttered stores, furloughed employees, dipped into their credit lines and made other painful decisions about what costs to pay. As though the halt to physical sales wasn’t difficult enough, across the economy layoffs have surged into the millions and some economists say that the U.S. has already entered a recession. Many of the department stores downgraded Thursday by Fitch had struggled to maintain or grow sales even in a booming economy. Now they are trying to manage their operations through an unprecedented market shock. In modeling for the retailers, Fitch analysts assumed discretionary retailers would stay closed through mid-May as the country tries to slow COVID-19’s spread. Revenue could fall up to 90% for those retailers, even if some sales shift online. Even by 2021, sales for some retailers could down double digits, according to Fitch. Morgan Stanley analysts said this week that apparel retailers they cover have not signaled any material e-commerce sales growth to offset the collapse of store revenue. Moreover, they found retailers were discounting products online to drive traffic to their sites, which is likely to eat into their margins.As retailers manage the closures, the key to survival is cash. Cowen analysts found that department stores, as a group, have enough cash to stay afloat for five to eight months. Some, like Macy’s, have even less. And even once stores re-open, retailers face an uncertain selling environment. Will consumers feel safe returning to stores? Will the economy support discretionary spending? For now, nobody can answer these questions with certainty.

Walmart to limit number of customers, creates in-store social distancing measures — Walmart announced on Friday that it would begin implementing new social distancing measures this weekend as it seeks to protect shoppers and employees from the spread of coronavirus. Starting Saturday, April 4, the major retailer will begin limiting customers allowed into its store to no more than five customers for each 1,000 square feet of store space. Customers will then be admitted on a “1-out-1-in” basis when the store is full. “While many of our customers have been following the advice of the medical community regarding social distancing and safety, we have been concerned to still see some behaviors in our stores that put undue risk on our people,” Walmart’s Executive Vice President and COO Dacona Smith said in a press release. “We want to encourage customers to bring the fewest number of people per family necessary to shop, allow for space with other customers while shopping, and practice social distancing while waiting in lines.” Walmart said that other measures are being taken inside the store to encourage social distancing. One of those measures is the creation of one-way aisles, which will be guided through arrows on the floor. “We expect this to help more customers avoid coming into close contact with others as they shop,” the press release reads. “We’ll continue to put signage inside our stores to remind customers of the need to maintain social distancing – especially in lines. And once customers check out, they will be directed to exit through a different door than they entered, which should help lessen the instances of people closely passing each other.” Walmart said it has already taken actions to expand paid leave, increase the frequency of cleaning within stores and install sneeze guards. Gloves and masks are also being made available to employees.

Pandemic Widens Divide Between Online, Traditional Businesses – The new coronavirus pandemic is deepening a national digital divide, amplifying gains for businesses that cater to customers online, while businesses reliant on more traditional models fight for survival. The process is accelerating shifts already underway in parts of the U.S. economy in ways that could last long after the health crisis has passed, some analysts say. “What we’re in right now is a sudden and extreme version of what had been a much longer, slower-moving trend,” said Jed Kolko, chief economist at job site Indeed. Many bricks-and-mortar retailers, which had seen falling foot traffic for years due to online competition, have now shuttered their stores while online merchants watch sales boom. And sectors that had long resisted the move online are now joining in: Doctors and therapists offer telemedicine appointments while their offices sit nearly empty; yoga studios and other fitness providers are offering remote sessions; schools and universities have moved classes online. The news media is also seeing a longtime trend gain momentum. While the coronavirus pandemic is driving reader traffic to news sites, the crisis is delivering a punishing blow to already-struggling local publishers hit by declining advertising revenue. The transition is also driving labor force upheaval, with those who can work online still drawing paychecks while workers who depend on face-to-face contact suffer. A record 3.28 million workers applied for unemployment benefits in the week ended March 21 as widening swaths of American commerce were shut down, and economists surveyed by The Wall Street Journal predict data out Thursday will show 3.1 million more filed claims in the week ended March 28. The big question, economists say, is whether the changes created by this sudden, forced experiment will prove permanent after the coronavirus pandemic eases. If so, that could transform the U.S. economy and open the way to new types of businesses and providers. Nowhere is this more apparent than in the retail industry, one of the largest employment sectors in the country, with 15.7 million workers in February. As state and local authorities have ordered nonessential businesses to close to stem the spread of the virus, bricks-and-mortar stores are reeling and online sellers are accelerating their dominance. Macy’s Inc., Gap Inc. and other retailers will furlough tens of thousands of employees beginning this week. Meantime, Walmart Inc., Amazon.com Inc. and CVS Health Corp. are among about a dozen large companies looking to hire nearly 500,000 Americans in coming weeks – many of them in delivery and online fulfillment positions – to manage a shopping surge sparked by the coronavirus pandemic. As shoppers stayed away from stores, U.S. e-commerce sales rose 24% from March 1-17, compared to the same period a year ago, according to Rakuten Intelligence, which tracks electronic receipts. General-merchandise retailers have seen major increases, with Amazon.com, Target Corp. and Walmart all growing share as people stock up on household mainstays.

3% of restaurants have already closed permanently, NRA survey finds – Three percent of restaurants have already permanently closed due to the coronavirus crisis, according to research from the National Restaurant Association. Forty-four percent of operators have temporarily closed their restaurants, and 11% anticipate they will permanently close within 30 days. Restaurant sales dropped 47% across the U.S. from March 1 to March 22, and 54% of operators now offer off-premise services only, according to an NRA survey of more than 4,000 restaurant operators. Seventy percent of restaurants surveyed have had to lay off employees and reduce workers’ hours, and about half of restaurants expect further layoffs and hourly reductions in the next 30 days. More than 60% of restaurants have had to reduce their operating hours. The association’s research spotlights just how gutting the coronavirus crisis has been for the restaurant industry – and many market experts worry the damage done so far is just the tip of the iceberg. “This is uncharted territory,” Hudson Riehle, NRA SVP of research, said in a statement. “The industry has never experienced anything like this before.”Eighty-eight percent of restaurant operators also reported that total sales volumes between March 1 and March 22 this year was lower than it was during the year-ago period, per NRA research.The NRA requested more than $400 billion in financial relief, loans and insurance options for the industry from the government. On Wednesday, the Senate passed a $2 trillion stimulus package that included $350 billion in small business loans, $500 billion in loans for distressed companies and $250 billion in unemployment insurance benefits. This safety net could help some restaurant operators keep their heads above water, but the question is, for how long?And even though these loans will also offer forgivable debt if small- and medium-sized businesses continue to pay their employees, the stimulus package doesn’t address the NRA’s request of $100 billion in business interruption insurance. Major restaurant chains have already suffered fatal blows to their businesses in just a few weeks time. Punch Bowl Social, the growing eatertainment chain looking to expand into hotels and cruises, now faces foreclosure. The Cheesecake Factory has furloughed 41,000 employees,CraftWorks has closed all of its restaurants and Union Square Hospitality Group has laid of 80% of its employees. If deep-pocketed brands with strong operations and decades of experience are folding under coronavirus pressure, the future is especially grim for independent restaurants – especially with Moody’s predicting restaurant sales could slip 20% over the next 12 months.

Transportation Dept. warns airlines they must refund passengers on flights canceled over coronavirus – The Department of Transportation (DOT) issued a warning to airlines Friday telling them they must refund passengers for flights canceled due to the coronavirus pandemic. DOT said it has received an influx of complaints from passengers whose nonrefundable tickets were completely canceled or significantly delayed after airlines saw a sudden drop in passengers as public health officials began issuing travel advisories in March. The notice said DOT will refrain from enforcing the notice so long as airlines make refunds to affected customers in a timely fashion. “Because the COVID-19 public health emergency has had an unprecedented impact on air travel, DOT’s Aviation Enforcement Office will exercise its enforcement discretion and provide carriers with an opportunity to become compliant before taking further action,” the warning said. On Tuesday, nine Democratic senators called on domestic airline carriers to provide cash reimbursements for canceled flights, noting “Americans need money now to pay for basic necessities, not temporary credits towards future travel.” Officials noted that airlines were compliant with such standards during other crises that led to a reduction in air travel, such as Hurricane Katrina and the Sept. 11, 2001, attacks. However, airlines have repeatedly said that the sudden loss in sales they’ve seen in the past month is unprecedented. Though airlines were allocated $25 billion in bailouts in the $2.2 trillion stimulus bill passed last week, Delta said in a Friday memo that “those funds alone are not nearly enough,” adding they project their revenues in the second quarter will drop 90 percent. Most major airlines are expected to get a cut of the $25 billion in federal grants, though the money comes under the condition that they don’t lay off or furlough employees, which some have committed to.

US Auto Sales Plunge To Lowest In A Decade, But The Worst Is Yet To Come In Q2 – As we predicted in a a report we published just days ago, the U.S. auto industry is on the verge of total collapse. Numbers out of major automakers on Wednesday this week confirmed a worst case scenario: that the global pandemic is doing severe (and potentially irreversible) damage to an industry that was in ugly shape even before the coronavirus outbreak began.GM saw sales plunge 7.1% and Fiat saw sales drop 10% for the first quarter of 2020, both larger than expected declines, according to Bloomberg. It’s also worth noting that the industry didn’t quite grind to a halt until March, and so Q2 numbers could wind up being far worse. Toyota’s sales fell 37% in March, with even its best-selling RAV4 dropping 25%. Nissan had the weakest quarterly results, posting a 30% drop in sales for the first three months of the year. More than 25% of Nissan’s dealers are being negatively affected by state ordinances limiting sales. David Kershaw, division vice president of the Nissan brand in North America, said: “We obviously saw quite a big tail-off in business. We’re feeling it in arguably one of our best regions, which is the northeast. They are obviously significantly impacted.”Names like Volkswagen, Honda, Hyundai and Mazda all saw drops of over 40% for March. If automakers that report quarterly continue to follow this trend, Q2 numbers may be a sight to behold.The things that were barely holding the industry up to start 2020, namely low rates and modest consumer confidence, don’t matter. Businesses are closed, would-be buyers are strapped for cash and the country’s economy has simply been turned off.The industry’s annualized selling rate has slowed to just 11.4 million, marking its lowest point since April 2010.

Coronavirus concerns delay restart of Ford’s North American production – (Reuters) – Ford Motor Co said on Tuesday it was postponing its plan to restart production at its North America plants due to safety concerns for its workers amid the coronavirus pandemic. To generate cash, the No. 2 U.S. automaker had said last week it was poised to restart production at some plants in North America as early as April 6, bringing back such profitable vehicles as its top-selling F-150 full-sized pickup, the Transit commercial van and SUVs. But on Tuesday, Ford said that although it had been aiming to resume production at several key U.S. plants on April 14, it would now do so at dates to be announced later on. “The health and safety of our workforce, dealers, customers, partners and communities remains our highest priority,” Kumar Galhotra, president of Ford’s North American operations, said in a statement. Still, the automaker will open a plant in Ypsilanti, Michigan, during the week of April 20, that will make ventilators to treat patients afflicted by the coronavirus. Michigan, which is home to a large portion of the U.S. automotive industry, has also become a hot spot in the pandemic. Schools and all but essential businesses have been ordered closed through at least April 13 to slow the spread of the coronavirus. Galhotra said Ford was working closely with the United Auto Workers union to “develop additional health and safety procedures” to help keep hourly workers healthy.

Ford Is Delaying North American Production Indefinitely – With what are sure to be ugly March sales numbers looming, Ford has now decided it is cancelling plans to re-start production in the U.S. and Mexico over the next two weeks. Citing risks associated with the coronavirus, the automaker has said the the suspension is “indefinite” and has not set a timeline to bring its facilities back online, according to Bloomberg. The company is currently working with the UAW to establish new guidelines for safety procedures before re-opening. The union announced the death of two Ford plant workers on March 28 as a result of the coronavirus. UAW President Rory Gamble said on Tuesday: “Today’s decision by Ford is the right decision for our members, their families and our nation. Would I send my family member — my own son or daughter — into that plant and be 100% certain they are safe?”The shutdowns continue to cost Ford billions of dollars. Despite this, there is no rush to re-open as demand will likely be “depressed for months”. Meanwhile, Ford’s plans to produce ventilators during the week of April 20, in conjunction with GE, remains on schedule.

Markit Manufacturing: “Output declines at fastest pace since August 2009…” – The March US Manufacturing Purchasing Managers’ Index conducted by Markit came in at 48.5, down 2.2 from the 50.7 final February figure. Markit’s Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:“The final PMI data for March are even worse than the initial flash estimate, with manufacturing output slumping to the greatest extent since the height of the global financial crisis in 2009. “Growing numbers of company closures and lockdowns as the nation fights the COVID-19 outbreak mean business levels have collapsed. While some producers reported being busier as a result of stockpiling and anti-virus activities, notably in the food and healthcare sectors, these are very much the minority, and most sectors reported a rapid deterioration in demand and production.“Orders for capital equipment have deteriorated at a rate not seen since data were first available in 2009 as firms stopped investing in machinery. Companies have meanwhile reined-in spending on inputs and households have pulled back sharply on many forms of spending, especially for non-essential and big ticket items. With export sales also sliding, factories are facing a broad-based slide in demand which is already resulting in the largest job losses recorded since the global financial crisis. Worse is likely to come as consumer spending falls further in coming months as lockdowns intensify and unemployment spikes higher.” [Press Release]Here is a snapshot of the series since mid-2012.

US Manufacturing Slumps To Biggest Contraction Since Financial Crisis – After a bloodbath in European PMIs (and a ‘surprise’ surge back to growth in China), and following some serious collapses in regional Fed surveys (and this morning’s tumble in Canadian PMIs), today’s US manufacturing survey data was expected to slide further into contraction (though not as much as the Services surveys collapsed).

• Markit’s US Manufacturing PMI fell modestly from 49.2 to 48.5 in March (modestly better than the 48.0 flash print) – a considerably smaller drop than many expected.
• ISM’s US Manufacturing survey fell modestly from 50.1 to 49.1 in March (far better than the 44.5 print expected)

Charts Source: Bloomberg This move follows the carnage seen in US Services PMI and shows very little relative declines (perhaps the survey was premature)… Once again, the driver of this relatively positive print is the same as has caused problems with surveys since the crisis began – supplier delivery times rising at the fastest pace since 2005 – typically seen as a sign of expansion.

Dallas Fed: “Texas Manufacturing Activity Contracts Suddenly, Outlook Worsens”, Record Low Activity Index – From the Dallas Fed: Texas Manufacturing Expansion Continues Texas factory activity declined sharply in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, plummeted from 16.4 to -35.3, suggesting a notable contraction in output since last month. Other measures of manufacturing activity also point to a sudden decline in March. The new orders index dropped to -41.3, its lowest reading since March 2009 during the Great Recession. Similarly, the growth rate of orders index fell to -44.9. The capacity utilization and shipments indexes fell to -33.4 and -33.8, respectively, also the lowest readings since the Great Recession. Capital expenditures declined sharply, with the index dropping from 6.9 to -34.3. Perceptions of broader business conditions turned quite pessimistic in March. The general business activity index plunged from 1.2 to -70.0, and the company outlook index fell from 3.6 to -65.6. Both March readings are the lowest since the survey began in June 2004. The index measuring uncertainty regarding companies’ outlooks surged from 11.0 to 62.6. Labor market measures indicate employment declines and shorter workweeks this month. The employment index fell to -23.0 from its near-zero reading in February. This was the last of the regional Fed surveys for March. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index: The New York and Philly Fed surveys are averaged together (yellow, through March), and five Fed surveys are averaged (blue, through March) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through February (right axis).

Dallas Fed Manufacturing Survey Crashes To Lowest Level Ever– In a stunning miss to expectations, March’s Dallas Fed Manufacturing Outlook survey crashed like never before (from +1.2 in February to -70.0 – massively below the -10.0 expectation). Source: Bloomberg. As you can see, this is the weakest level ever and the most aggressive collapse ever. As one trader mocked when the data hit, “…is that a bad print?”The measures production and new orders both were lowest since 2009.The figures are consistent with severe declines in other regional gauges as unprecedented shutdowns freeze large parts of the industrial economy. Regional Fed bank measures of manufacturing in New York, the Philadelphia area, and Kansas City district all showed record monthly declines.

Instead Of Firing Everyone, Boeing Offers Voluntary Buyouts To Its Entire Workforce Of 161,000When Boeing requested a $60 billion bailout from the US government a few weeks ago, the implicit assumption was that the company may get some of this funding as long as the chronic stock repurchaser did not engage in layoffs. That, however, did not stop the brilliant financial alchemists at the aerospace giant who for the past 7 years turned debt lead into buyback gold, and instead of issuing a record amount of pink slips, Boeing generously offered voluntary buyouts to its entire staff of 161,000, in a bid to shed costs and adapt the massive manufacturer to a coronavirus crisis that could depress the aircraft market for years. “When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different,” Chief Executive Officer David Calhoun said in a message to employees Thursday. “It’s important we start adjusting to our new reality now.” According to Bloomberg which first reported about the offer, the buyout is being present companywide to all eligible employees of the Chicago-based company. Boeing will provide information on the terms within four weeks. “This move aims to reduce the need for other workforce actions,” Calhoun said. The move from the company which hopes to receive tens of billions whether or not it still employes workers or not, should preserve much-needed cash at Boeing, which is facing a sharp contraction in demand along with its European nemesis Airbus. About 44% of aircraft across the globe are in storage due to the coronavirus lockdown according to an estimate by Cirium, and with virus cases approaching 1 million worldwide, there’s no telling when carriers will return to normal schedules, no less buying planes.

GE Aviation Lays Off 50% Of Engine Manufacturing Staff – Unlike Boeing, which offered all of its 160,000 employees “voluntary buyouts” just so it can still keep its bailout option alive which would certainly be snuffed if the company were to announce mass layoffs, General Electric has no such qualms and moments ago the company told CNBC that it is planning to furlough half of its aviation unit’s engine-manufacturing staff as the coronavirus roils the industry.”Due to the unprecedented impact of COVID-19 on the commercial aviation industry, GE Aviation is implementing a temporary reduction in commercial engine assembly and some component manufacturing operations for up to four weeks,” a GE spokesperson said. “We appreciate the commitment of all our employees during this difficult time, and we regret having to take this action. We will continue to deliver for our customers and preserve our capability to respond when the industry recovers.” The move will involve thousands of jobs in the key unit – which has seen a total collapse in demand as a result of the shuttering of virtually all flight – and last for four weeks. The additional reductions come less than a month after the company said it would cut 10% of its aviation unit, affecting roughly 2,600 workers. But as the coronavirus’ devastating toll on travel demand has increased, airlines are parking hundreds of planes while deferring orders of new aircraft.

Toilet Paper Producers Roll’ing In The Dough –Because not only food, but – most importantly – toilet paper is being stockpiled during the worldwide coronavirus pandemic, producers of precious TP are on a roll. Sales of toilet paper in the U.S. rose by an estimated 60 percent in March compared to the same month last year. As Statista’s Katharina Buchholz notes, the increase was more than double that in Italy, which was hit by the outbreak earlier than the U.S. There, revenues generated with bathroom tissue rose by 140 percent.The Statista Consumer Market Outlook compared data and calculated estimates for 16 countries to show that revenues had risen most in Italy, followed by Vietnam and Australia. In other countries hit hard by the virus, for example Spain and France, the sale of toilet paper rose by 82 percent and 30 percent, respectively.

The toilet paper shortage is more complicated than you think – There was a time before the coronavirus pandemic when toilet paper was plentiful. Not anymore. Empty or sparsely stocked grocery store shelves are the new normal, and shoppers are left wondering: Where did all the toilet paper go? And when will it be widely available again? Toilet paper has become the definitive pandemic product that Americans thought to stock up on; not only is it a basic necessity, it’s relatively cheap to buy in bulk and will certainly be used at a later date. For the average customer, it’s much easier to assume that the lack of 4-packs at stores lies with some neighborhood panic-buyer who got their hands on multiple TP rolls before everyone else. Yet, the ongoing shortage isn’t entirely the result of hoarding. There are major problems in the supply chain: Demand is way up, and suppliers have experienced serious disruptions. This isn’t just true for toilet paper. As Hilary George-Parkin previously reported for The Goods, “the coronavirus outbreak has created an unlucky confluence of spiking demand and widespread supplier delays” since the crisis isn’t contained in a single state or country. To put it simply, many American companies are heavily reliant on overseas suppliers, primarily from China, for raw materials or finished products. Any delay overseas can create a domino effect in terms of product availability. For toilet paper suppliers like Kimberly-Clark and Georgia-Pacific, that means significantly ramping up the speed at which business is done. A Kimberly-Clark representative said the supplier has “plans in place to address the increased demand for our products to the extent possible, including accelerating production and reallocating inventory to help meet these needs.” In a statement on its website, Georgia-Pacific, a major toilet paper supplier based in Atlanta, admitted that “the timing is uncertain” as to when store shelves will be fully restocked with TP. “We are working hard to maximize the number of deliveries we can load and ship out of our facilities; you can just load and unload so fast,” a spokesperson told The Goods, adding that the company’s mills and distribution centers have increased 20 percent from normal capacity. “We are also working with customers to have direct shipments when possible to reduce distribution time.”

U.S. Service-Sector Index Suffers Record Decline – WSJ – The U.S. services sector suffered a record fall in activity in March amid efforts to slow the spread of the coronavirus – and analysts warned that subsequent months could show further declines. Private data firm IHS Markit said on Friday its U.S. services index – a survey-based measure of activity in industries such as communications, finance and transportation – saw its steepest one-month decline since the survey began a decade ago. The index fell to a seasonally adjusted 39.8 in March, down from 49.4 in February. The survey data was collected between March 12 and March 27, before some state-lockdown orders were in place. Data in the coming months could be worse, said Chris Williamson, chief business economist at IHS Markit. “With more measures to fight the virus outbreak being taken, this decline will likely be eclipsed by what we see in the second quarter,” he said. “More nonessential businesses are being forced to close, some are going bust, and lockdowns are leading to vastly reduced consumer spending.” A separate index released by the Institute for Supply Management showed several measures of service-sector activity slowed sharply in March. The index for business activity slowed to 48 from 57.8 in February, the lowest reading since July 2009. And the index for employment in the services sector for to 47 from 55.6 in February. A reading below 50 indicates a decline in activity in both indexes. The overall service sector index, however, showed continued growth, at 52.5 in March, slowing from 57.3 in February. But that figure largely reflects the unusual situation around an index for supplier deliveries. In normal times, when businesses are having a hard time getting supplies, it reflects strong demand, which pushes an index of supplier deliveries into positive territory. Now, with supply chains disrupted by the virus and consumers hoarding goods, that index is rising, even though it doesn’t reflect consumer strength. In March, the supplier delivery index rose to 62.1 from 52.4 in February, which helped pull the overall index into positive territory. “Because of the anomaly of what’s going on in the world, this is not something that’s typical in economic activity,”

U.S. weekly jobless claims blow past six million as coronavirus lockdowns spread – (Reuters) – The number of Americans filing claims for unemployment benefits shot to a record high of more than 6 million last week as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession. Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, reinforced economists’ views that the longest employment boom in U.S. history probably ended in March. With a majority of Americans now under some form of lockdown, claims are expected to rise further. Economists said worsening job losses underscored the need for additional fiscal and monetary stimulus. President Donald Trump last week signed a historic $2.3 trillion package, with provisions for companies and unemployed workers. The Federal Reserve has also undertaken extraordinary measures to help companies weather the highly contagious virus, which has brought the country to a halt. “These data underscore the magnitude of the stop-work order that has been imposed on the economy,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. “The scale of the increase should also focus policymakers on getting the cash into the economy with possibly a fourth fiscal package and additional Fed lending programs.”

‘No words for this’: 10 million workers file jobless claims in just two weeks – Unemployment claims soared to a record-smashing 6.6 million last week, the Labor Department reported, more than double the previous week, signaling more economic pain from the coronavirus pandemic. The rush to claim unemployment benefits occurred as the number of people testing positive for the coronavirus rose above 200,000 and government measures to contain the epidemic shut down increasing swaths of the U.S. economy, with residents in 37 states now ordered to stay at home. The total job losses in just two weeks – almost 10 million Americans – amounts to a staggering, sudden blow to American workers never seen before in the U.S. economy. The labor market in the coming weeks could blow past the 15 million jobs lost at the peak of the 18-month Great Recession from 2007 to 2009. An official U.S. jobless rate that sat at 3.5% in February is poised to top 10% in April alone, eclipsing the peak of the last recession.”In one line: No words for this,” Pantheon Macroeconomics Chief Economist Ian Shepherdson wrote in reaction to the numbers.”What we are going through now dwarfs anything we’ve ever seen, including the worst weeks of the great recession,” tweeted Heidi Shierholz, chief economist at the left-leaning Economic Policy Institute. “I have spent the last twenty years studying the labor market and have never seen anything like it.”The new figure, which represents unemployment claims filed the week that ended March 28, marks the largest number of weekly claims ever recorded since the government began collecting such data in 1967. The second-highest number of claims were the 3.3 million filed the week before, and the third-highest about 700,000 claims filed one week in 1982. The new unemployment claims figure was seasonally adjusted, but the raw numerical increase was still a record-breaking 5.8 million claims. Reports from state unemployment offices, which are still struggling to meet the high volume of requests for unemployment benefits, continue to suggest DOL’s weekly claims figure significantly understates the real number of Americans seeking help.

Don’t Look Now But The People Responsible For The World’s Food Supply Are Starting To Get Sick – Sanderson Farms, a large poultry manufacturer and Smithfield Foods, the world’s largest pork producer, have both reported their first couple of positive cases of coronavirus. This raises the obvious question: what happens when people critical to the world’s food supply start to fall ill?As of now, there has been no such disruption – but it is beginning to morph into a massive threat, Bloomberg notes, with workers in close quarters preparing and processing food globally. Aside from the obvious threat of food not making it to consumers, things like fruits may also wind up rotting in fields if there aren’t enough workers to pick and cultivate them. Al Stehly, who operates a farm-management business in California’s North San Diego County said: “If we can’t flatten the curve, then that is going to affect farmers and farm laborers — and then we have to make choices about which crops we harvest and which ones we don’t. We hope no one gets sick. But I would expect some of us are going to get the virus.” And to clarify, it’s not the food itself that causes the threat of the virus. It’s the supply chain disruption that the virus can cause with workers.Sanderson was lucky in the sense that their one worker only worked at a small table by themselves. But other infections in the industry, where workers are closer together, could wreak more havoc. At some beef plants, workers are “elbow to elbow” and despite the employees wearing protective gear, there still remains risk of contagion. Dave MacLennan, chief executive officer of Cargill Inc., the world’s largest agricultural commodities trader said: “One of our beef plants feeds 22 million people per day, so it’s vital that these plants stay open.”Thomas Hesse, president of United Food and Commercial Workers Union Local 401 said: “There’s underlying tension, there’s fear and there’s anxiety.”

U.S. dairy farmers dump milk as pandemic upends food markets – (Reuters) – Dairy farmer Jason Leedle felt his stomach churn when he got the call on Tuesday evening. “We need you to start dumping your milk,” said his contact from Dairy Farmers of America (DFA), the largest U.S. dairy cooperative. Despite strong demand for basic foods like dairy products amid the coronavirus pandemic, the milk supply chain has seen a host of disruptions that are preventing dairy farmers from getting their products to market. Mass closures of restaurants and schools have forced a sudden shift from those wholesale food-service markets to retail grocery stores, creating logistical and packaging nightmares for plants processing milk, butter and cheese. Trucking companies that haul dairy products are scrambling to get enough drivers as some who fear the virus have stopped working. And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally. The dairy industry’s woes signal broader problems in the global food supply chain, according to farmers, agricultural economists and food distributors. The dairy business got hit harder and earlier than other agricultural commodities because the products are highly perishable – milk can’t be frozen, like meat, or stuck in a silo, like grain. Other food sectors, however, are also seeing disruptions worldwide as travel restrictions are limiting the workforce needed to plant, harvest and distribute fruits and vegetables, and a shortage of refrigerated containers and truck drivers have slowed the shipment of staples such as meat and grains in some places. Leedle could likely sell his milk if he could get it to market. Dairy products in grocery stores have been in high demand as consumers stay home during the pandemic, though panic buying may be slowing. Earlier this week, a local market told Leedle’s wife she could buy only two dairy products total per shopping trip as retailers nationwide ration many high-demand products.

U.S. Employers Cut 701,000 Jobs in March – WSJ – U.S. employers shed more jobs in March than in any month since the darkest days of the 2007-09 recession – the start of a much deeper labor-market collapse under way due to the coronavirus pandemic. Payrolls decreased by 701,000 jobs in March, the Labor Department said Friday, as efforts to contain the virus disrupted the U.S. economy. Job losses were widespread – from corner restaurants to manufacturing plants to international tourism – inflicting damage to the labor market that economists say dwarfs the most significant economic downturns of the post-World War II era. The payrolls decline was the largest monthly decline since March 2009, the worst month for job losses during the last recession.The unemployment rate for March rose to 4.4% from 3.5% in February, the largest one-month increase in the rate since January 1975. Stock markets fell as investors took in the jobs-market disruption caused by the virus. If shutdowns continue, the April jobs report, due out May 8, could show the largest ever one-month decline in the labor market. In March, more than half of the jobs lost, 417,000, were at restaurants and bars, among the first businesses to close because of efforts to contain the pandemic. The amount offset all the jobs added in the sector over the past two years. Hotels and other tourism and hospitality businesses – industries also hit early in the crisis – cut 42,000 jobs. Air-transportation jobs rose very slightly. In early March, airlines sought to avoid job cuts and instead asked employees to take voluntary leave. Retailers cut 46,000 jobs, including at clothing, furniture and general-merchandise stores. There are signs job loss is spreading across the economy. Health-care employment declined by 43,000, with jobs lost at dentists and physicians offices; and 19,000 day-care jobs were cut. Employment in temporary-help services fell by 50,000. Manufacturing employment was down 18,000. Employment in construction decreased by 29,000. Due to the timing of surveys, Friday’s figures don’t fully reveal the millions of unemployment-insurance claims individuals filed in the last two weeks of March. Jobs lost in recent weeks and additional expected losses this spring could push the U.S. unemployment rate to record highs. Forecasting firm Oxford Economics projects that by May, the U.S. will have lost 27.9 million jobs and have a 16% unemployment rate, erasing all the jobs gained since 2010 during the record-setting 113-month stretch, which ended in March. That job loss would be more than double the 8.7 million positions cut from payrolls during the 2007-09 recession and its aftermath. And those jobs were lost over 25 months. The nonpartisan Congressional Budget Office said Thursday that the unemployment rate would exceed 10% in the second quarter. The highest monthly unemployment rate on record, going back to 1948, is 10.8%, set in late 1982 during the deep recession under President Reagan.

March Jobs Disaster- 701,000 Jobs Lost, Unemployment Rate Soars Most In 45 Years As US Slides Into Depression – Just like that the 113 record straight months of employment growth is over with a bang. While today’s payrolls report was expected to be not quite as terrible as the recent initial claims suggested, especially since the March survey week took place around March 13 or ahead of the big shutdown and layoff announcements, it ended up being catastrophic nonetheless, with the BLS reporting moments ago that a whopping 701K jobs were lost in March, 7x more than the 100K expected, and just shy of the worst payrolls prints recorded during the financial crisis. That this happened well before the worst of the cronavirus induced coma hit, suggests that what comes next will be truly biblical. Not like it matters, but there were also revisions: the change in total nonfarm payroll employment for January was revised down by 59,000 from +273,000 to +214,000, and the change for February was revised up by 2,000 from +273,000 to +275,000. With these revisions, employment gains in January and February combined were 57,000 lower than previously reported.Private sector jobs dropped by 713K (vs Exp. 163K), with almost all the drop the result of a record collapse in service-providing jobs. And of all service jobs, leisure and hospitality were hardest hit: The unemployment rate soared from 3.5% to 4.3%, led by a record surge in Hispanic unemployment. In March, the unemployment rate increased by 0.9 percentage point to 4.4 percent. This is the largest over-the-month increase in the rate since January 1975, when the increase was also 0.9 percentage point. The number of unemployed persons rose by 1.4 million to 7.1 million in March. The sharp increases in these measures reflect the effects of the coronavirus and efforts to contain it. The participation rate plunged from a 7-year-high to tie the lowest level in 5 years.While hardly relevant at a time when the US economy slides into depression, the average hourly earnings actually rose as most of the jobs lost were low paying; that and a favorable base-effect helped push the average hourly earnings by 0.4% sequentially and 3.1% on an annual basis. Average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $28.62. Over the past 12 months, average hourly earnings have increased by 3.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 10 cents to $24.07 in March.The average workweek for all employees on private nonfarm payrolls fell by 0.2 hour to 34.2 hours in March. The decline in the average workweek was most pronounced in leisure and hospitality, where average weekly hours dropped by 1.4 hours. In manufacturing, the workweek declined by 0.3 hour to 40.4 hours, and overtime declined by 0.2 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.3 hour to 33.4 hours. Finally, a look at the various job sectors:

• March, employment in leisure and hospitality fell by 459,000. Most of the decline occurred in food services and drinking places (-417,000); this employment decline nearly offset gains over the previous 2 years. Employment in the accommodation industry also declined in March (-29,000).
• Employment in health care and social assistance fell by 61,000 in March. Health care employment declined by 43,000, with job losses in offices of dentists (-17,000), offices of physicians (-12,000), and offices of other health care practitioners (-7,000). Over the prior 12 months, health care employment had grown by 374,000. In March, social assistance saw an employment decline of 19,000, reflecting a job loss in child day care services (-19,000). Over the prior 12 months, social assistance added 193,000 jobs.
• Employment in professional and business services decreased by 52,000 in March, with the decline concentrated in temporary help services (-50,000). Employment also decreased in travel arrangement and reservation services (-7,000).In March, employment in retail trade declined by 46,000. Job losses occurred in clothing and clothing accessories stores (-16,000); furniture stores (-10,000); and sporting goods, hobby, book, and music stores (-9,000). General merchandise stores gained 10,000 jobs.
• Employment decreased over the month in construction (-29,000). In March, nonresidential building (-11,000) and heavy and civil engineering construction (-10,000) lost jobs. Construction employment had increased by 211,000 over the prior 12 months.
• Employment in the other services industry declined by 24,000 in March, with about half of the loss occurring in personal and laundry services (-13,000). Over the prior 12 months, other services had added 89,000 jobs.
• Mining lost 6,000 jobs in March, with much of the decline occurring in support activities for mining (-5,000). Since a recent peak in January 2019, mining employment has declined by 42,000.
• In March, manufacturing employment edged down (-18,000). Over the past 12 months, employment in the industry has shown little net change.
• Federal government employment rose by 18,000 in March, reflecting the hiring of 17,000 workers for the 2020 Census.
• Employment in other major industries, including wholesale trade, transportation and warehousing, information, and financial activities, changed little over the month.

And now we brace for April, when the really ugly number will be revealed, and when according to some, the US economy may lose as many as 10 million jobs.

Coronavirus Pandemic Deepens Labor Divide Between Online, Offline Workers – WSJ – The severe job losses reported this week provide a split-screen snapshot of a labor force increasingly divided between the can and can-nots – based in part on the ability to work online. The employment report released Friday showed employers slashed 701,000 U.S. jobs last month. About two-thirds of the drop occurred in leisure and hospitality, mainly in food services and drinking places – which includes restaurants and bars. Those who can work remotely – typically in more high-skilled, higher-income jobs such as information and financial activities – saw little change in payrolls last month. Employers in sectors such as computer systems design, management consulting, and scientific research even added jobs in March. The gap mirrors the divergent fortunes of thriving businesses that can easily cater to customers online compared with those struggling because they rely on bricks-and-mortar locations and in-person services, where the coronavirus pandemic appears to have accelerated trends already underway. “Work-from-home and telework are now seen as a privileged activity and for a privileged class,” said Amy Liu, director of the Metropolitan Policy Program at the Brookings Institution. Roughly a third of American jobs can be done from home, accrding to a recent University of Chicago study. More than 77% of professional, scientific and technical service jobs can be performed remotely, compared with just 3% of lodging and food services. Among the companies announcing recently they will boost employee compensation are Facebook Inc. and insurer Aflac Inc., both of which have many employees teleworking. Those furloughing staff include hotel giant Marriott International Inc. and food service provider Sysco Corp. Another sector with a relatively low share of jobs that can be performed remotely is retail – including department stores and automobile dealerships – which shed 46,200 jobs in March, according to the report.Friday’s employment report showed the unemployment rate for workers in management, business, and financial operations in March was just 2.2%. That compares with 6.3% for service occupations, 8.3% for construction workers and 7.1% for transportation occupations.

Coronavirus job losses could total 47 million, unemployment rate may hit 32%, Fed estimates – Millions of Americans already have lost their jobs due to the coronavirus crisis and the worst of the damage is yet to come, according to a Federal Reserve estimate. Economists at the Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate, according to a recent analysis of how bad things could get. The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30%. They reflect the high nature of at-risk jobs that ultimately could be lost to a government-induced economic freeze aimed at halting the coronavirus spread. “These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,” St. Louis Fed economist Miguel Faria-e-Castro wrote in a research paper posted last week. There are a couple of important caveats to what Faria-e-Castro calls “back-of-the-envelope” calculations: They don’t account for workers who may drop out of the labor force, thus bringing down the headline unemployment rate, and they do not estimate the impact of recently passed government stimulus, which will extend unemployment benefits and subsidize companies for not cutting staff. However, the jobless picture already looks bleak. A record 3.3 million Americans filed initial jobless claims for the week ended March 21. Economists surveyed by Dow Jones expect another 2.65 million to join them this week. Friday’s nonfarm payrolls count for March is expected to show a decline of just 56,000, but that’s largely due to a statistical distortion because of the sampling period for the count happening before the government implemented social distancing practices. The central part of Faria-e-Castro’s compilations comes from previous Fed research showing 66.8 million workers in “occupations with high risk of layoff.” They are sales, production, food preparation and services. Other research also identified 27.3 million people working in “high contact-intensive” jobs such as barbers and stylists, airline attendants, and food and beverage service. The paper then took an average of those workers and estimated a loss of just over 47 million positions. That would bring the U.S. unemployment rolls to 52.8 million, or more than three times worse than the peak of the Great Recession. The 30% unemployment rate would top the Great Depression peak of 24.9%.

St. Louis Fed says 50 million Americans could be unemployed by July – An estimate by St. Louis Federal Reserve economist Miguel Faria-e-Castro posted last week on the bank’s Web site predicts that 52.81 million Americans will be unemployed by the beginning of July. This would result in an official unemployment rate of 32.1 percent, exceeding the record 24.9 percent jobless rate recorded at the height of the Great Depression.Faria-e-Castro made his forecast by averaging a more pessimistic prognosis (40 percent unemployment) and a more optimistic one (10 percent). The estimate excludes those who give up looking for work and does not calculate the impact of whatever support may be given to small businesses.Meanwhile, as the public health and economic impact of the coronavirus pandemic grows at an exponential rate, fueled by government delay, indifference and incompetence, and the ruling class’s focus on propping up the financial markets, major corporations in the United States are announcing massive furloughs and wage cuts.

• * Macy’s, which owns Bloomingdale’s, announced it will furlough the majority of its 125,000 employees this week, citing the collapse of sales. All of the chain’s stores are closed. Its stock is down 68 percent since January.
• * Gap, which owns Banana Republic and Old Navy, will furlough 80,000 of its 129,000 employees.
• * Kohl’s will furlough 85,000 of its 120,000 employees.
• * Landry’s Inc., which owns Del Frisco’s, Golden Nugget Casinos and Bubba Gump Shrimp, will furlough 40,000 of its workers.
• * The parent-company of shoe giant DSW will furlough 80 percent of its workforce.
• * Marriott International, the world’s largest hotel chain, is laying off tens of thousands of its 130,000-strong US workforce.
• * Leaked documents from Delta show that airlines are making plans to reduce all workers’ pay by 20 to 35 percent. Currently, 21,000 Delta workers have been placed on unpaid leave.

These companies are only the largest that have announced layoffs. Hundreds of thousands of smaller businesses across the country and millions around the world have either laid workers off or placed them on indefinite paid leave. Hotels, airlines, restaurants, bars, casinos, resorts, coffee shops, airports, rental car services, museums, cinemas, conference venues and retailers have all shut down or significantly reduced operations, leaving workers without pay.Goldman Sachs now predicts that between April and June, the US economy will contract at an annualized rate of 34 percent – one of the biggest contractions in history. During the week ending March 21, a record 3.28 million people in the US applied for unemployment benefits. Goldman Sachs expects that this week’s Labor Department report will show that during the week ending March 28, another 5.5 million people applied. The investment bank upwardly revised its estimate of unemployment from 9 percent to 15 percent by July.

Airlines, auto companies cut pay even as US government bails out corporations – Citing the impact of the COVID 19 pandemic, major employers in the US are announcing significant pay reductions and other cost-cutting measures despite the billions corporations are slated to receive from the recently enacted stimulus package. Workers at major US-based airlines are having their hours and pay reduced and pay cuts and pay deferments are spreading to other sections of industry as well as state and local governments. The loans and grants provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES) stipulate that to be eligible businesses must not reduce their workforce before September 30, 2020. The CARES Act earmarks $58 billion for airlines; $29 billion in loans and $29 billion in grants, which is essentially free money. An ABC News/Washington Post poll found that one-third of Americans reported a job loss by themselves or a family member and one half experienced a pay cut or reduction of hours due to the coronavirus pandemic. Further, the poll found a higher impact of job losses or pay cuts on lower income workers. At United Airlines flight attendants will be paid the minimum required under the terms of their union contract, normally 71-78 hours a month. Typically, a flight attendant would work 85-110 hours or more. Management is therefore, in effect, cutting pay by 20-35 percent. In a letter to employees, United CEO Oscar Munoz said staff cuts would likely be imposed after September 30. Delta is imposing a cut in the workweek to three or four days instead of the normal five. CEO Ed Bastian told employees the cuts would impact ground employees. Invoking demagogy about “shared sacrifice,” Bastian – who made $15 million in total compensation last year – said he would take a 100 percent cut in his base pay, although he will not forgo stock awards, option awards, and other types of compensation. Some 21,000 of 91,000 Delta employees have reportedly taken voluntary short-term unpaid leaves. While Bastian framed the reduction in hours as “voluntary,” managers were reportedly telling employees the cuts were mandatory. In effect the company is furloughing workers, despite preparing to accept federal bailout money stipulating no job reductions. Southwest Airlines has imposed similar measures and American Airlines is expected to follow the lead of United and Delta.

Food Fight – BY NOW, the sight of ravaged grocery store shelves across the United States has become grimly familiar – and those right-wing memes about food shopping in Venezuela are suddenly as scarce as hen’s teeth – as the country struggles to contain the rapidly spreading coronavirus pandemic. Grocery stores have become ground zero in the battle over social distancing and the site of endless disheartening displays of misguided resource hoarding. Worse, millions of underpaid and overworked grocery store workers are now on the receiving end of the public’s panic over the pandemic – as well as their germs. Not only does the nature of their work put all grocery store employees – from cashiers to floor workers to those in the warehouse – at high risk of exposure to the virus, they’re also forced to deal with customers’ increasingly nasty attitudes, as supplies run out and shelves sit empty. This added emotional labor is, of course, unpaid, and many hourly workers are braving such conditions without the protection of a union or a living wage, to say nothing of paid sick leave or hazard pay. Through it all, there’s continued pressure coming from above for them to stay smiling as the world around them crumbles. These essential workers are being treated as disposable. As one told me yesterday, “It’s hard to feel like an essential worker when you don’t have health care.” Even people who work at supposedly more progressive chains like Trader Joe’s and Whole Foods (at least until its Amazon takeover) are anxious, tired, and afraid, and they certainly aren’t being paid enough to deal with these extraordinary circumstances – especially when the hand sanitizer runs out, and emotions at the cash register run high. “None of us ever expected to be emergency workers; the idea of an ‘essential worker’ is a totally new concept that no grocery store bag boy considers when they drop off an application,” a current Whole Foods worker who prefers to stay anonymous told me. “There’s all of this rhetoric around how we’re just as important as the doctors, and yes, that’s true, but we’re getting paid way less, and medical workers have a little bit more of an idea of the risks that they are setting themselves up for. . . . We’re not used to this shit.”

People are panic-buying chicks ‘like they did toilet paper’ in coronavirus pandemic –Jessica Pryor of Missouri says she’d been planning to raise chickens before the coronavirus pandemic drove her to buy 11 chicks, The Missourian reported. “If the stores close down, at least we can still feed the kids,” Pryor said, according to the publication. Coronavirus fears, scarce eggs and lockdown boredom are driving sales of live chickens, especially baby chicks, across the United States, The New York Times reports. “People are panic-buying chickens like they did toilet paper,” said Tom Watkins, vice president of Murray McMurray Hatchery in Webster, Iowa, according to the publication. In Utah, the Ogden Intermountain Farmers Association store sold 1,000 chicks in one day, and a Dallas Green Farm and Home store in West Haven sold 350 chicks at a one-day sales event, the Deseret News reported. Katy Cox, whose family has raised chickens as a hobby for four years, came to a Riverton IFA store planning to buy four chicks, but discovered long lines and sign-in sheets for buyers. She took home six new chicks – the per-customer limit, according to the publication. “I think there is kind of a herd mentality,” Cox said, the Deseret News reported. “If one person does it then everyone does it … it is definitely different times. People have never gone through anything like this. There was how life looked before COVID-19 and then life after COVID-19.” Feed stores across the nation report selling out of live chicks almost as fast as they come in, The New York Times reports. “I didn’t know I was jumping on a bandwagon,” said Erin Scheessele of Corvallis, Oregon, who bought chicks to give her two children “something to do” while they are out of school, according to the publication. And it’s not just in the United States. Self-isolating in the United Kingdom, actor Tom Holland of the “Spider-Man” films bought three chickens after being unable to find eggs in the supermarket, Metro reports. Between stress-baking and stockpiling, eggs have become scarce on supermarket shelves, The Washington Post reported. “The reality is we don’t have twice as many eggs as we did in January,” said Russell Diez-Canseco, chief executive of Vital Farms, the largest U.S. supplier of naturally raised eggs, according to the publication. Suppliers are working on increasing their flocks, but it takes about 22 weeks for a chick to start laying eggs, The Washington Post reported. Of course, that goes for newly purchased backyard chicks, too.

Cleveland, Ohio residents wait hours in food bank drive-thru line as unemployment skyrockets – On Tuesday, March 24, the Greater Cleveland Food Bank held its second drive-thru food giveaway to support individuals and families during the COVID-19 pandemic. Aided by volunteers and soldiers from the Ohio National Guard, the food bank served roughly 4,000 people from 1,500 households.Since the initiation of Ohio’s shelter in place order, the anti-hunger group has seen a significant increase in need. The food bank has also switched its regular scheduled walk-in hours to appointment-only and established weekly drive-thrus. The line for last week’s event snaked through surrounding city streets, with some individuals reporting a two-hour wait. Others parked their cars and walked to avoid the wait as well as out of fear that the food bank would run out of donations. As the event neared closing hours, many were turned away by police officers. Two-thirds of the individuals at Tuesday’s drive-in had never before sought assistance from the Greater Cleveland Food Bank and one-third have never before sought assistance from any food bank or emergency food assistance program.

Hundreds wait in mile-long line at Pittsburgh area food bank – Hundreds of Pittsburgh, Pennsylvania, area residents waited for hours in a mile-long line up of cars Monday to receive two boxes of food being given out by the Greater Pittsburgh Community Food Bank.Workers began lining up in their cars at 7 a.m., hours before the noon start of the drive-thru food bank, demonstrating the surge of need as thousands in the Pittsburgh region have been thrown out of their jobs as the coronavirus pandemic takes hold. Since March 23, Pennsylvania Governor Tom Wolf has been gradually expanding a county by county stay at home order which initially only applied to seven counties and now encompasses nearly half of them, closing all non-essential businesses – hitting workers in the retail, restaurant and service industries especially hard. Residents of these counties, including the Pittsburgh metro area, have been directed to remain in their homes as much as possible to help stop the spread of COVID-19. As of Tuesday, the coronavirus has killed 63 people in Pennsylvania and 4,843 infections have been confirmed across the state.When Greater Pittsburgh Community Food Bank volunteers began passing out the food parcels over 300 cars were already waiting. Police set up port-a-johns along the line so that people wouldn’t have to give up their place in line.Video taken by Andrew Rush, a staff photographer for the Pittsburgh Post-Gazette, of the line and posted on his Twitter account shows the double-lane line of cars snaking more than a mile as people waited hours for their turn. Greater Pittsburgh Food Bank volunteers had put together packages for 1,700 families. Each car received two boxes, one filed with canned and dry goods, the other with frozen meat. Foodbank officials hoped that the food could last a small family for five days. Last week, over 350,000 people signed up for unemployment benefits in Pennsylvania as retail, restaurants, offices and many factories sent their workers home. Many workers in the tenuous “gig economy” such as Uber and Lyft drivers suddenly found themselves with no work.

As 150,000 hotel rooms remain empty, Las Vegas government forces 500 homeless residents to sleep outside on asphalt parking lot — Following the closure of one of the largest homeless shelters in the Las Vegas valley on Wednesday, after someone staying there tested positive for COVID-19, government and civic leaders have consigned over 500 men to a fenced-in potion of a concrete parking lot, where they may stay from 6 p.m. through 8 a.m.Luxury hotel properties such as the MGM Grand, with over 5,000 rooms, including 1250-foot penthouse suites complete with “a king bed and a wet bar for four,” as well as convention centers, lay empty due to the belated shutdown of the casino industry for less than two weeks in an effort to stop the spread of the coronavirus. Meanwhile the men have been allocated one thin white blanket and are allowed to sleep within freshly painted white squares on the pavement. The squares are less than six feet apart from each other, in violation of Centers for Disease Control guidelines on social distancing to help stop the spread of the coronavirus. After photos of the deplorable conditions began circulating online, city of Las Vegas officials sought to literally cover up their inhumane practices by rolling out 25,000 feet of “blue carpet” over the squares so that residents of the parking lot would have a soft surface to sleep on. However when this reporter visited the elevated parking lot no “blue carpet” was found, nor any shade from the desert sun. The fenced-off portion of the parking lot is expected to serve as a “shelter” for the men until the Catholic Charities homeless shelter reopens on April 3.

Why COVID-19 Will Strain the Safety Net for Homeless Vets to the Breaking Point – Under normal circumstances, Jerry Porter would be spending his time helping the veterans he finds in tent camps and run-down housing. But the escalating threat of COVID-19 forces the community activist and retired Steelworker to remain at home for now, even though vulnerable vets need him more than ever. As the coronavirus spreads across America, the poor bear the brunt of a pandemic that’s exposed the deep class lines in U.S. society. The rich have big savings accounts and quality health care. They’ll emerge from the crisis just fine. But Americans at the margins, including homeless vets who rely on a frayed safety net stretched to the breaking point by COVID-19, now face an even greater struggle to survive. “I don’t know where they end up,” Porter and a group of friends work together to help veterans in the Quad Cities area of Iowa and Illinois. But now, they’re heeding the request of public health officials. They stay home to help their community slow the spread of COVID-19. That prevents them from helping veterans like the one Porter found sleeping on a squalid mattress in a “junky” house. He got the man into a clean apartment and – thanks to a friend who owned a bedding store – a new mattress and box spring for just $180. Just as alarming, COVID-19 halted the fund-raising supporting that kind of intervention. Local veterans groups just canceled a taco dinner and a poppy sale that together raise about $6,000 each year. For some veterans, that money is the difference between sleeping indoors or on the street. Porter and his friends use some of the funds to provide life’s basics to the homeless vets they move into government-subsidized housing with little but the clothes on their backs. “There’s nothing,” Porter explained. “There’s no bedding, silverware, dishes, glassware, towels, sheets.”

She Begged For Mercy. The Utility Cut Her Elderly Parents’ Power Anyway. –Angela Haislip begged the power company not to cut off service to her elderly mother and stepfather, both stroke victims who depend on oxygen machines and nebulizers to breathe. In more than 20 years, her parents had “never, ever, ever missed a payment” to the Halifax Electric Membership Corporation, the power co-operative that serves rural Warren County, North Carolina, she said. Haislip’s 70-year-old mother had actually overpaid last year by so much, she built up enough credit that she hadn’t had to pay for the first two months of 2020. But amid the chaos of the novel coronavirus pandemic, her mother fell behind. Haislip’s 61-year-old stepfather only recently moved back into the couple’s mobile home after spending time in a nursing home recovering from a stroke. His disability checks were still being sent to the home, and Haislip, who is unemployed, didn’t have the $303 owed on the account. She called the utility and promised to “give them my whole stimulus check to pay the bill” if they’d only give her a few more days. She lined up a family friend to loan them the money once the friend’s paycheck went through. “I even told them they were stroke victims, and the lady on the phone pretty much called me a liar,” said Haislip, 46, choking back tears. “It’s heartbreaking. It seems like there’s no trust in the world. People don’t care like they used to.” On March 23, the utility sent a notice warning that service would be shut off in four days. At the couple’s mobile home, which is 14 feet by 80 feet, the lights went out at 10 a.m. last Friday. “They still kicked them to the curb like they were nothing,” Haislip said. “It’s all about money to them. They don’t care who dies during this.”

North Carolina utilities ordered not to disconnect during coronavirus outbreak, governor orders – – North Carolina Gov. Roy Cooper on Tuesday ordered utility companies to give residential customers more time to pay their bills before disconnection during the coronavirus outbreak.Cooper held a news conference to discuss the latest coronavirus cases and the state’s response. Cooper’s latest order prohibits utilities from disconnecting people who are unable to pay during this pandemic.The order applies to electric, gas, water and wastewater services for the next 60 days.It directs utilities to give residential customers at least six months to pay outstanding bills and prohibits them from collecting fees, penalties or interest for late payment. Telecommunication companies that provide phone, cable and internet services are strongly urged to follow these same rules.”This action is particularly important since tomorrow is the first of the month, and I know that’s a date many families fear when they can’t make ends meet,” said Governor Cooper. “These protections will help families stay in their homes and keep vital services like electricity, water, and communications going as we Stay at Home.” The order also encourages banks not to charge customers for overdraft fees, late fees and other penalties.

Nunes claims it would be ‘way overkill’ to cancel school year in California due to coronavirus – Rep. Devin Nunes (R-Calif.) late Tuesday claimed that it would be “overkill” for California to cancel the rest of its school year over the outbreak of the novel coronavirus, even as the Trump administration warned that the month of April could be “painful” for the U.S. Speaking on Fox News‘ “The Ingraham Angle,” Nunes said that he was optimistic that the U.S. could contain the spread and reopen the economy and the nation’s schools within two to four weeks. “The schools were just canceled out here in California, which is way overkill,” he said, apparently referencing new comments from a state official about the likelihood of schools remaining closed. “It’s possible schools could’ve gone back to school in two to four weeks.” California has yet to officially cancel the rest of its school year. Though superintendent of public instruction, Tony Thurmond, said earlier Tuesday that it was likely students would not return to the classroom before the end of the school year because of the current social-distancing restrictions. The Republican congressman went on to tout a pair of anti-malaria drugs approved for emergency use by Federal Drug Administration (FDA) earlier this week. Nunes said that there was “a lot of optimism” about those treatments, though health officials have warned that not enough is known about the drugs’ effects to draw a definitive conclusion. “If we don’t start to get people back to work in this country over the next week to two weeks, I don’t believe we can wait until the end of April,” Nunes said. “I just don’t know of any economy that’s survived where you’ve unplugged the entire economy and expect things to go back and be normal.” The comments from Nunes arrived the same day that the Trump administration projected that between 100,000 and 240,000 people in the U.S. could die of COVID-19 even with social-distancing requirements in place. President Trump said during a White House briefing that Americans should also prepare for a “very, very painful” two weeks. The U.S. had reported nearly 190,000 confirmed cases of the novel coronavirus and more than 4,000 deaths stemming from it as of Wednesday morning, according to a Johns Hopkins University database. California is one of many states to issue a shelter-in-place order to help stem the spread of the disease.

Liberty University students report symptoms that suggest coronavirus: report – Around a dozen students at Virginia’s Liberty University have reported being sick with symptoms that are consistent with the coronavirus. The school’s director of student health services told The New York Times in an interview that nearly a dozen students had reported symptoms similar to those experienced in confirmed coronavirus cases, with three of those students later being sent to hospitals for testing. No cases of the virus have been confirmed on the school’s campus.Liberty was in the news this week after students began returning to the Virginia campus despite the increasing number of coronavirus cases across the nation.Students returning to campus are now reportedly being directed to self-quarantine for two weeks, while Liberty’s president, Jerry Falwell Jr., told the Times that around 800 of the 1,900 students who initially returned to on-campus housing for spring semester had voluntarily gone home. It was unclear, Falwell said, how many remained in off-campus housing.The director of student health services, Dr. Thomas Eppes Jr., told Falwell that the school had “lost the ability” to control how many students would be infected should classes resume on campus.”We’ve lost the ability to corral this thing,” Eppes said he told Falwell, according to the Times.But he stopped short of telling Falwell to send students home. “I just am not going to be so presumptuous as to say, ‘This is what you should do and this is what you shouldn’t do,'” Eppes said. Falwell, a public ally of President Trump, has publicly derided concern over the coronavirus outbreak and criticized other universities that have sent students home or moved to online classes to avoid in-person gatherings.

Thousands of Liberty University students expected to return to campus amid coronavirus outbreak – As the coronavirus threatens to spread across the Lynchburg region, Liberty University officials are preparing to welcome back up to 5,000 students from spring break this week. Defying a national trend of campus closures, President Jerry Falwell Jr. has invited students to return to residence halls and has directed faculty members to continue to report to campus even as most classes move online. In an interview Sunday night, Falwell said somewhere between several hundred to more than 5,000 students are expected to live in campus dorms, where they will continue coursework online rather than in classrooms. Meanwhile, hundreds of professors and instructors without a valid health exemption will come to campus to hold office hours. “I think we have a responsibility to our students – who paid to be here, who want to be here, who love it here – to give them the ability to be with their friends, to continue their studies, enjoy the room and board they’ve already paid for and to not interrupt their college life,” Falwell said. Falwell’s decision leaves Liberty as an outlier among the scores of colleges and universities across the country that have shut down to help limit the spread of the disease known as COVID-19. The threat of the coronavirus became more immediate for the region this weekend when the Virginia Department of Health announced cases in Amherst and Bedford counties. Statewide, as of Monday evening, more than 250 people have contracted the disease and seven have died. In response to the pandemic, several nearby institutions have instructed faculty to work remotely and have limited dorms to students unable to return home. Liberty’s dorms, academic buildings, library and fitness center remain open. The university has taken some steps to help slow the virus’ spread. Gatherings in campus buildings, including a handful of classes still holding in-person meetings, are capped at 10 people in accordance with an order by Gov. Ralph Northam. Similarly, dining halls are only providing take-out service, and campus visits have been suspended. Falwell, who has publicly downplayed the threat of the virus in recent weeks, said he is confident the school has taken the proper steps to prepare for a campus outbreak. He said Liberty officials have identified an old hotel owned by the university as a place to quarantine students who fall ill. “I think we, in a way, are protecting the students by having them on campus together,” he said. “Ninety-nine percent of them are not at the age to be at risk and they don’t have conditions that put them at risk.”

Dozens Of Spring Breakers Have Tested Positive For Coronavirus – Two weeks ago, around 70 spring breakers from the University of Texas at Austin went against the advice of the White House and chartered a plane to Cabo San Lucas, Mexico to party. Now, 44 of them have tested positive for coronavirus according to a university spokesman. Perhaps even more alarming is that some of the students took commercial flights home, according to CNN, citing the Austin Public Health Department. Those who tested positive are now in self-isolation (or at least they’re supposed to be).”Quit being an a**,” Texas House Speaker Dennis Bonnen told CNN affiliate KXAN, adding “Get over yourselves. Whether you think this is an issue or not, it is. Whether you think it could affect you or not, it does. The reality of it is, if I’m a college kid who’s going to spring break in Mexico, you’re affecting a lot of people. Grow up.” Dozens of other passengers from the chartered flight are being monitored, public health officials said.“The virus often hides in the healthy and is given to those who are at grave risk of being hospitalized or dying,” Austin-Travis County Interim Health Authority Dr. Mark Escott said in a statement. “While younger people have less risk for complications, they are not immune from severe illness and death from COVID-19.”The local public health department and UT Health UT Health Austin and University Health Services have contacted all of the passengers on the plane using flight manifests from the Centers for Disease Control and Prevention.The University of Texas at Austin is working to help public health officials. – CNN University officials are now scrambling to assist Austin Public Health to trace the students’ contacts, according to university spokesman J.B. Bird, who added “The incident is a reminder of the vital importance of taking seriously the warnings of public health authorities on the risks of becoming infected with COVID-19 and spreading it to others.”

Students with disabilities could lose with COVID-19 stimulus package The Individuals with Disabilities Education Act, or IDEA, is the nation’s federal special education law. It provides funding, technical assistance and monitoring to ensure students with disabilities receive a free and appropriate education. With the new COVID-19 stimulus package, the U.S. Congress will provide Secretary of Education Betsy DeVos with the right to provide waivers to states for the IDEA implementation. If DeVos’ past behavior has any predictive value for her future decisions related to equitable educational policies, then families of children with disabilities across the country should also be highly concerned. During DeVos’ Senate confirmation hearings three years ago, she struggled to respond to basic questions posed by Sen. Tim Kaine about special education. She was asked whether schools that receive tax dollars should be required to meet IDEA requirements, to which she replied, “I think that is a matter that’s best left for states.” Under federal law, the Department of Education is responsible for monitoring IDEA compliance, Just last year, a federal judge ruled that the Department of Education’s delay of a rule that required states to address racial disproportionally in special education was illegal. The Department of Education also planned to eliminate 29 programs and slash $17.6 million in funding for Special Olympics in the 2020 budget. U.S. Rep. Mark Pocan asked whether she knew how many students would be affected. DeVos replied, “I don’t know the number of kids.” The budget also included millions of dollars in cuts to the Helen Keller National Center for Deaf-Blind Youths and Adults, the American Printing House for the Blind, and the National Technical Institute for the Deaf. Congress needs to reconsider providing DeVos with the power to grant waivers for IDEA implementation. Families need to join in solidarity with disability advocates and educators to demand special education remain intact and that stimulus money is directed toward preventing disruption of services.

Workers Return to China’s Factories, but Coronavirus Hurts Global Demand – Chinese workers returned to factory floors in March, but operations remained slow due to sluggish demand, dampening hopes for a speedy recovery as the coronavirus pandemic continues to paralyze the global economy. Chinese factory activity expanded in March, following sharp contractions in January and February, when Beijing locked down much of central Hubei province and took other drastic measures to contain the virus. However, smaller companies appeared to lag behind larger companies, many of them state-owned enterprises, in the recovery, according to new private and official surveys of China’s manufacturers. The Caixin China manufacturing purchasing managers index, which is tilted toward smaller private manufacturers, rose to 50.1 in March from 40.3 in February, Caixin Media Co. and research firm Markit said Wednesday. The March result is just above the 50 mark, which separates contraction from expansion. A day earlier, on Tuesday, China’s official manufacturing PMI, which focuses more on larger state-owned companies, showed a jump to 52.0 in March from a record low of 35.7 in February. Though the official survey of 3,000 manufacturers, which is conducted by the National Bureau of Statistics, covers a much larger sample size than the private Caixin survey’s 500 manufacturers, the surveys for the most part paint a similar picture of the broader trend. Both surveys recorded their lowest readings in February.The bounceback in the March readings offered some hope for the economy, said Yang Weixiao, an economist at Founder Securities, though there is still cause for concern after such a severe disruption to industrial activity. “The good news is that things are recovering; the bad news is the recovery path ahead of us is going to be slow and long,” Mr. Yang said. The rebound in the manufacturing PMIs “is more of a reflection on sequential recovery in March compared with February, and does not suggest a strong activity level,” Goldman Sachs analysts wrote in a note to clients Wednesday.

China Unexpectedly Cuts Reverse Repo Rate To The Lowest On Record – China’s central bank joined the global easing bandwagon early on Monday when it unexpectedly cut the rate on reverse repurchase agreements by 20 basis points, the largest in nearly five years, as authorities stepped up measures to relieve pressure on an economy ravaged by coronavirus pandemic. Without giving a reason for the move, the People’s Bank of China said on its website that it was lowering the 7-day reverse repo rate to 2.20% from 2.40%, the lowest on record. This was the first rate cut since a 10bps cut in December 2019, and the third cut in the 7-day rate since November. “The larger-than-usual rate cut is an expression that China is willing to join the coordinated consortium for economic stabilization,” said Raymond Yeung, chief China economist at Australia & New Zealand Banking Group in Hong Kong as quoted by Bloomberg. “Small and medium-sized businesses are collapsing for lack of cash flow.”Also on Monday, the PBOC injected 50 billion yuan ($7 billion) into money markets through seven-day reverse repos, breaking a hiatus of 29 trading days with no fresh fund injections via the liquidity tool.”The unexpected cut is a response to the politburo meeting last Friday,” said Xing Zhaopeng, markets economist at ANZ in Shanghai. “The medium-term lending facility (MLF) rate and Loan Prime Rate (LPR) will be cut at the same pace this month. We believe this cut is a signal to urge all loans to refer LPR as the benchmark so that the PBOC can improve the effectiveness of monetary policy transmission.”

Black-clad men hurl petrol bombs at Hong Kong police station A Hong Kong police station came under attack during Monday’s early hours, when three black-clad men hurled petrol bombs into the compound, sparking a search for the perpetrators. Firefighters were called to Happy Valley Police Station on Sing Woo Road when the firebombing happened at about 2.20am. A police source said he believed three petrol bombs were hurled into the station car park. The fire burned out before firefighters arrived. He said the fourth flaming projectile landed on Kwai Fong Street near the junction with Sing Woo Road, leaving a parked car blackened. Officers scouted the area, but no arrests were made. According to police, no one was injured and no evacuation was needed. “Officers seized glass fragments at the scene for examination. The case has been classified as arson,” police said in a press statement.

Duterte reacts to COVID-19 with military repression – As of Sunday evening, 1,418 people in the Philippines had been official recorded as infected with COVID-19, a number which includes 343 new cases reported that day. Of the confirmed cases, 71 people have died thus far. Twelve of them were doctors who contracted the virus while courageously caring for patients despite not having received adequate Personal Protective Equipment (PPE). The 71 reported deaths are only those who have been officially tested for COVID-19. Given the very limited testing thus far, the actual death toll is almost certainly an order of magnitude larger. The Philippine government did nothing to prepare for this catastrophe. In late February, when the global impact of the virus was clear, Duterte delivered an incoherent and vile public address in which he said that he would personally “slap the f..king idiot virus,” but declared that Filipinos would not get sick because they prayed regularly. No medical supplies were stockpiled; no facilities were readied. On March 16, long after the catastrophe was apparent, Duterte abruptly announced that he was placing significant portions of the country under Enhanced Community Quarantine (ECQ). The response of the Duterte administration to the pandemic has been the deployment not of masks and tests and treatment, but heavily-armed military checkpoints, armored personnel carriers, and police state repression. The entire island of Luzon, the largest and most populous region in the country, including the capital city of Manila, has now been placed on total lockdown until April 13. Over 50 million people have been confined to their homes under threat of arrest if they leave. Beyond Luzon, other provinces and regions have been placed under de facto martial law, on orders from governors and provincial officials. One member of every household has been given a quarantine pass that authorizes them at certain limited hours to leave their home in search of groceries or medicine. Anyone found outside without a quarantine pass, or traveling to a job deemed essential, can be arrested on the spot. Flights out of the country have effectively stopped and all public transportation has been suspended. Nurses, grocery store workers, bank employees, pharmacy workers, many of whom live great distances from their workplace, are compelled to walk for hours to get to their employment each day.

‪Duterte Orders Philippine Police To Shoot Dead Virus-Lockdown Violators – The Philippines could be on the brink of social chaos, sparked because the virus pandemic forced the government to lockdown 57 million residents, many of which are living in poverty and left jobless in the last month. Social unrest broke out mid-week in a Manila slum as food and health equipment are in short supply, reported AFP. DZRH, Manila Broadcasting Company, posted a chilling video of the social unrest, as low-income folks clashed with government forces during the quarantine. WATCH: While other reports suggest social unrest could soon erupt in the country, Philippine President Rodrigo Duterte made it very clear on government media on April 1 that police will shot any citizen defying the public health order to shelter-in-place. “Shoot them dead”: After Filipinos defied a coronavirus lockdown to protest a lack of food, their president, Rodrigo Duterte, took to the airwaves declaring that he will order the military to shoot troublemakers deadhttps://t.co/dcJFXgsOua pic.twitter.com/ttbaXF3hml – CBS News (@CBSNews) April 2, 2020 “I will not hesitate. My orders are to the police and military, as well as village officials, if there is any trouble, or occasions where there’s violence and your lives are in danger, shoot them dead,” Duterte said. “Do not intimidate the government. Do not challenge the government. You will lose.” “Instead of causing trouble, I’ll send you to the grave,” he warned, adding that COVID-19 is quickly spreading across the country despite a lockdown. According to Johns Hopkins, the Philippines (on Friday morning, April 3) has recorded 3,018 confirmed cases of the virus and 136 deaths – much less than surrounding countries.

“Unprecedented Decline” – The Collapse In World Trade Is A Once In A Generation Shock – COVID-19 is expected to produce a global recession depression as nearly all of the world’s major economies have ground to a halt between February and March, expected to continue through April. The crash in China’s economic activity, shown last month, suggests that Europe and the US will face similar outcomes. There is some concern that the longest economic expansion on record will end this quarter as the global economy has been battered by bat soup.As the fast-spreading virus terrorizes the US, China, Italy, Spain, Germany, France, Iran, the UK, Switzerland, South Korea, and other countries, more than 537,000 confirmed cases had been recorded across the world, with 24,100 deaths. Governments have had no other choice than to order a complete shutdown of their respected economies to flatten the curve and slowdown infections. As World Trade Organization (WTO) Chief Economist Robert Koopman told Bloomberg, mass quarantines and shuttering of businesses has resulted in a plunge in world trade — “could be seen as a war-like scenario without the physical asset destruction.” Data from the world’s busiest ports in China showed containers were piling up with no place to go after supply chain disruptions were seen due to shutdowns in the country. There’s also been a significant decline in maritime activity from China to North America, China to the Mediterranean, and China to Europe as the virus crisis worsens in the Western Hemisphere.In early March, we showed how supply chain disruptions from China started to wash ashore on US West Coast ports, especially collapsing containerized volumes at the Port of Long Beach. IHS Markit data compiled by Bloomberg shows US import and export volumes dramatically slowed in the weeks leading up to the shutdowns of US cities.Former White House economist Phil Levy told Bloomberg that the US economy is expected to fall ‘very sharply’ over the second quarter, calling it an “unprecedented decline … because of the speed at which it is happening.”“If we are already starting to match Great Recession statistics, that means we are on pace for the modern record,” said Levy, now the chief economist at freight logistics company Flexport.And to sum up, so far, the global economy has likely crashed, as per JPMorgan’s chief US economist, Michael Feroli, who recently slashed his Q2 US GDP forecast to a staggering -14%

UN warns that COVID-19 pandemic could trigger global food shortage – The United Nations Food and Agriculture Organization (FAO) warned of the impact of the COVID-19 virus on the global food supply chain in a notice on their website writing: “We risk a looming food crisis unless measures are taken fast to protect the most vulnerable, keep global food supply chains alive and mitigate the pandemic’s impacts across the food system.” The United Nations Food and Agriculture Organisation’s chief economist Maximo Torero Cullen explained that while the supply of foodstocks is plentiful, the lockdowns, restrictions on all but essential work, shuttering of schools and border closures imposed around the world to limit the spread of the coronavirus are impacting farm workers and disrupting supply chains. This in turn is leading to a slowdown in the shipping industry, as many countries implement tighter controls on cargo vessels, as well as air cargo. These new measures will particularly affect fresh food produce and livestock. Travelers wearing protective masks arrive to the main bus station in Bogota, Colombia, March 13, 2020 [Credit: AP Photo/Fernando Vergara] The hardest hit will be the world’s most vulnerable people, including 300 million children who rely on school meals as their one reliable meal of the day. UN-supported school meals programs in Latin America and the Caribbean, for example, benefit 85 million children, with 10 million depending on them for the main source of food. Mass layoffs and lower incomes will make it harder than ever for the most impoverished families to put food on the table. In an interview with the Guardian, Torero urged countries not to ban the export of foodstuffs saying, “The worst that can happen is that governments restrict the flow of food.” Protectionist measures and trade barriers would only make matters worse, creating “extreme volatility” in prices. Some countries have already begun to take such measures. March 20, for example, Russia called a halt to the export of buckwheat and other grains for 10 days, while Kazakhstan introduced restrictions on shipments of wheat flour, buckwheat, sugar, several types of vegetables and sunflower oil. Torero insisted that global food trade had to be kept going, warning against the beggar-thy-neighbor policies of the global food price crisis of 2008 when some countries imposed higher export taxes or export bans that provoked tit-for-tat reactions.

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