Written by rjs, MarketWatch 666
The news posted last week about economic effects related to the coronavirus 2019-nCoV (aka SARS-CoV-2), which produces COVID-19 disease, has been surveyed and some articles are summarized here. Last week, much of the ‘economic impact’ news is on unemployment, those who don’t quality, resulting food banks, and the like. There is less than past weeks about monetary and fiscal policy, but there are some retrospectives on the bailouts and the politics around the response. Near the end there are a few Asia and Europe links. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) News items about epidemiology and other medical news for the virus are reported in a companion article.
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The Federal Reserve Is Changing What It Means to Be a Central Bank – WSJ – The Federal Reserve is redefining central banking. By lending widely to businesses, states and cities in its effort to insulate the U.S. economy from the coronavirus pandemic, it is breaking century-old taboos about who gets money from the central bank in a crisis, on what terms, and what risks it will take about getting that money back.And with large-scale purchases of U.S. Treasury securities, the Federal Reserve is stretching the boundaries for what a central bank will do to finance soaring federal debt – actions that move it deeper into political decisions it usually tries to avoid.Fed leaders don’t like doing any of this. They believe they have no better alternative.“None of us has the luxury of choosing our challenges; fate and history provide them for us,” Fed Chairman Jerome Powell said in a speech this month. “Our job is to meet the tests we are presented.”Economists project the central bank’s portfolio of bonds, loans and new programs will swell to between $8 trillion and $11 trillion from less than $4 trillion last year. In that range, the portfolio would be twice the size reached after the 2007-09 financial crisis and nearly half the value of U.S. annual economic output.It would make its role in the economy far greater than during the Great Depression or World War II, according to Wall Street Journal calculations. The portfolio had reached $6.57 trillion by April 22. “The Fed is being sent on a mission to places it has never been before,” says Adam Tooze, a Columbia University history professor who writes about financial crisis and war. Due to the financial and economic shocks caused by the virus, he says, central-bank officials “are being sucked into a series of entanglements that they cannot control and that they normally will not touch with a long pole, but this time felt they had to go in, and go in hard.”
The New York Fed Is Exercising Powers Never Bestowed on It by any Law – Pam Martens -Earlier this month President Trump advanced the viewthat during a national emergency the President has “total power.” The real power, however, is being exercised by the Federal Reserve Bank of New York (New York Fed) with not so much as one vote by any elected representatives of the citizens of the U.S.The speed at which the New York Fed, owned by multinational banks, can create trillions of U.S. dollarsby pushing an electronic button and bring financial relief to the 1 percent on Wall Street stands in sharp contrast to the millions of mom and pop small businesses across America who are still waiting to see a dime in relief from an elected Congress, forcing a growing number of small businesses to close permanently and thus further consolidating money and power in the United States.On September 17, 2019, months before any case of coronavirus COVID-19 had been discovered anywhere in the world, the New York Fed began pumping out hundreds of billions of dollars a week in super cheap loans to the trading houses of Wall Street, a group of 24 firms it calls its “primary dealers.” This action in the repo loan market was the first by the New York Fed since the financial crisis of 2008. By January 27, 2020, before one death had been announced in the United States from the virus, the New York Fed had pumped $6.6 trillion cumulatively in revolving loans to the trading houses of Wall Street. By March 14, the loan tally was more than $9 trillion and climbing.In addition to those repo loans, the New York Fed is running an alphabet soup of emergency relief programs for the mega banks and trading houses on Wall Street in addition to the billions the Fed is loaning through its Discount Window at 1/4 of one percent interest. U.S. Treasury Secretary Steve Mnuchin has made a grand gesture to the 1 percent on Wall Street by authorizing $454 billion of taxpayer money to be used to absorb losses on these emergency facilities for Wall Street. In the past 90 years there have been three financial crises on Wall Street that required emergency operations by the Federal Reserve. Two of those three crises occurred in the past 12 years. That should send a very clear signal to every American and to Congress that Wall Street is bleeding the system dry.
Fed Drastically Slashed Helicopter Money for Wall Street. QE Down 86% From Peak Week in March – Wolf Richter – Total assets on the Fed’s balance sheet rose by only $83 billion during the week ending April 29, to $6.656 trillion. That $83 billion was the smallest weekly increase since this show started on March 15, and down by 86% from peak-bailout in the week ended March 25. This chart shows the weekly increases of total assets on Fed’s balance sheet: The Fed is thereby following its playbook laid out over the past two years in various Fed-head talks that it would front-load the bailout-QE during the next crisis, and that, after the initial blast, it would then cut back these asset purchases when no longer needed, rather than let them drag out for years.On January 1, the balance sheet stopped expanding as the Fed’s repo market bailout had ended. However, in late February, all heck was breaking loose, and the Fed first increased its repo offerings and then on March 15, started massively throwing freshly created money at the markets, peaking with $586 billion in the single week ended March 25.But since then, the Fed has slashed its weekly increases in assets, which shows up in the flattening curve of the Fed’s total assets in 2020: The Fed cut its purchases of Treasury securities. The balance of its mortgage-backed securities (MBS) actually fell. Repurchase agreements (repos) have fallen into disuse. Lending to Special Purpose Vehicles (SPVs) has not gone anywhere in five weeks. And foreign central bank liquidity swaps, after spiking in the first two weeks, only rose modestly, with most of the increase coming from the Bank of Japan, which is by far the largest user of those swaps. The Fed added only $62 billion of Treasury securities to its balance sheet during the week, the smallest amount since this show began, down 83% from the $362 billion during peak-Wall-Street-helicopter-money. This chart shows the weekly increases of Treasury securities on the Fed’s balance sheet: The chart below shows this effect: The curve of Treasury securities has been flattening over the past few weeks, after the massive frontloading of purchases in March. The total is now $3.97 trillion: The Fed has drastically cut its purchases of mortgage-backed securities over the past five weeks, as reported by the New York Fed transaction summary (net purchases, for the weeks ended):
- $157 billion (Mar 25)
- $145 billion (Apr 1)
- $109 billion (Apr 8)
- $58 billion (Apr 15)
- $56 billion (Apr 22)
- $38.5 billion (Apr 29)
MBS trades take weeks to settle. All of the $38.5 billion in MBS the Fed bought this week will settle in May. Since the Fed books the MBS trades only after they settle, the balance sheet lags by some time the actual trades. In addition, if the Fed buys no MBS at all, the MBS on its balance sheet will decline due to the pass-through principal payments that all holders of MBS receive as the underlying mortgages are paid down or are paid off. There is currently a boom in mortgage refinancing underway, which creates a torrent of these pass-through principal payments. Just to keep its MBS at a steady level, the Fed would need to buy a significant amount of MBS.
FOMC Statement: “committed to using its full range of tools to support the U.S. economy in this challenging time” — FOMC Statement:The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health are inducing sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation. The disruptions to economic activity here and abroad have significantly affected financial conditions and have impaired the flow of credit to U.S. households and businesses.The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. […] To support the flow of credit to households and businesses, the Federal Reserve will continue to purchase Treasury securities and agency residential and commercial mortgage-backed securities in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor market conditions and is prepared to adjust its plans as appropriate.
Fed opens Municipal Liquidity Facility to smaller cities and counties – The Federal Reserve is expanding the reach of its Municipal Liquidity Facility to smaller U.S. cities and counties as pressure mounts on the federal government to support localities that are short on cash due to the coronavirus pandemic. The Municipal Liquidity Facility will still purchase up to $500 billion in short-term notes, but will now be available to counties with at least 500,000 residents and cities with at least 250,000 residents. Previously, the facility only made short-term financing available to cities with a population of more than 1 million or counties with a population of greater than 2 million.“The new population thresholds allow substantially more entities to borrow directly from the MLF than the initial plan announced on April 9,” the Fed said in a release. The notes that municipalities will be able to sell through the facility are intended to help cities and states get through a period of time with limited spending and lower tax revenues as many operate under stay-at-home orders. The Fed also said Monday that it is considering allowing government entities that issue bonds backed by their own revenue to participate in the Municipal Liquidity Facility as eligible issuers. The central bank said it would continue to monitor conditions in the municipal security markets and “will evaluate whether additional measures are needed to support the flow of credit and liquidity to state and local governments.”
Fed to Extend Loans to More Cities, Counties – WSJ — The Federal Reserve said Monday it would broaden the number of local governments from which it will buy debt through a forthcoming lending program. The Fed will allow one borrower for each county of at least 500,000 people and city of at least 250,000, down from earlier cutoffs of 2 million and 1 million, respectively. The central bank will also purchase debt with maturities of up to three years, instead of any earlier cap of two years. The Fed will lend up to $500 billion through the facility, and the Treasury Department has provided $35 billion to cover any losses. After announcing the program earlier this month, the central bank faced strong support from lawmakers and other elected officials to expand the number of municipalities that would be allowed to borrow. Lawmakers in both parties had chafed against the larger population cutoffs, with several saying it would improperly exclude American cities with large minority populations. The Fed unveiled the program more than two weeks ago and initially limited participation to around 75 issuers – including all 50 states and the District of Columbia. The latest change will allow for as many as 261 state, city and county issuers to participate. The central bank will require issuers to have been highly rated as of April 8, which is the day before the it announced the creation of the municipal lending program. That could pose a challenge for the city of Detroit, which is now large enough to qualify for the program but has a speculative-grade rating from Moody’s Investors Service and S&P Global Ratings.
$500 billion Fed aid program for corporations won’t require them to preserve jobs – A Federal Reserve program expected to begin within weeks will provide hundreds of billions in emergency aid to large American corporations without requiring them to save jobs or limit payments to executives and shareholders.Under the program, the central bank will buy up to $500 billion in bonds issued by large companies. The companies will use the influx of cash as a financial lifeline but are required to pay it back with interest.Unlike other portions of the relief for American businesses, however, this aid will be exempt from rules passed by Congress requiring recipients to limit dividends, executive compensation and stock buybacks and does not direct the companies to maintain certain employment levels.Critics say the program could allow large companies that take the federal help to reward shareholders and executives without saving any jobs. The program was set up jointly by the Federal Reserve and the Treasury Department. “I am struck that the administration is relying on the good will of the companies receiving this assistance,” said Eswar Prasad, a former official at the International Monetary Fund and economist at Cornell University. “A few months down the road, after the government purchases its debt, the company can turn around and issue a bunch of dividends to shareholders or fire its workers, and there’s no clear path to get it back.” Treasury Secretary Steven Mnuchin defended the corporate aid program, saying that the lack of restrictions on recipients had been discussed and agreed to by Congress. “This was highly discussed on a bipartisan basis. This was thought through carefully,” he said in an interview with The Washington Post. “What we agreed upon was direct loans would carry the restrictions, and the capital markets transactions would not carry the restrictions.” Democrats asked for restrictions on how companies can use the money from the central bank’s bond purchases but were rebuffed by the administration during negotiations about the Cares Act, said a spokesman for Senate Minority Leader Charles E. Schumer (D-N.Y.). The spokesman said Democrats won meaningful concessions from the administration on reporting transparency in the final agreement. (Transparency requirements do not apply to the small-business loans, the biggest business aid program rolled out to date.) Mnuchin also said the program had already bolstered investor confidence in U.S. capital markets, which in turn helped firms raise capital they used to avoid layoffs. “The mere announcement of these facilities, quite frankly, led to a reopening of a lot of these capital markets,” Mnuchin said in an interview. “Even before these facilities are up and running, they’ve had their desired impact of having stability in the markets. Stability in the markets allows companies to function, and raise money and allows them to keep and retain workers and get back to work.”
Is There Deflation or Inflation in Our Future? –– Olivier Blanchard – Will falling commodity prices, stumbling oil prices, and a depressed labour market bring low inflation and perhaps even deflation, or will very large increases in fiscal deficits and central bank balance sheets bring inflation? This column argues that it is hard to see strong demand leading to inflation. Precautionary saving is likely to play a lasting role, leading to low consumption, and uncertainty is likely to lead to low investment. The challenge for monetary and fiscal policy is thus likely to be to sustain demand and avoid deflation rather than the reverse. Is there deflation or inflation in our future? Some observers point to falling commodity prices, stumbling oil prices, and a depressed labour market and see low inflation, perhaps even deflation as far as forecasts go. Others point to the very large increases in fiscal deficits and central bank balance sheets and see inflation, perhaps even high inflation. I put most of my probability mass on the low inflation forecast. But I cannot completely dismiss a small probability of high inflation.1 Let me explain.
Fed’s Powell: More stimulus needed from Congress – Federal Reserve Chairman Jerome Powell committed on Wednesday to use the central bank’s complete range of tools to limit the economic fallout from the coronavirus, while at the same time urging Congress to do more to enact fiscal stimulus for American businesses and households. In Powell’s first press conference since the Fed slashed interest rates to zero last month – and his first by web videoconference – he did not mince words, calling the current downturn “unlike anything certainly that’s happened in my lifetime.”“While many standard economic statistics have yet to catch up with the reality we’re experiencing, it’s clear that the effects on the economy are severe,” he said in his opening remarks at the conclusion of the Federal Open Market Committee’s meeting. “The severity of the downturn will also depend on the policy actions taken at all levels of government to cushion the blow and to support the recovery when the public health crisis passes,” he said. Although Powell said borrowers and the economy overall would benefit from the Fed’s programs, he also said that more fiscal stimulus from Congress would be needed to aid in an eventual recovery. Key policies needed for a smooth recovery include those “that protect workers, businesses and households from avoidable insolvency and keep businesses going so that they’re able to produce goods, and to either hold on to their employees or quickly rehire them,” Powell said. “Those are going to be key policies,” he said. “They’ll come with a hefty price tag, but we would come out of this event, actually, with a stronger economy with less long-run damage to the economy, so that’s a key thing that really Congress could do.”The Fed has launched 10 credit facilities to inject liquidity into areas of the economy that have been experiencing strain. The central bank has announced yet not fully implemented other facilities, such as its Main Street Lending Program and facilities for both the primary and secondary corporate credit markets.
Q1 GDP Advance Estimate: Real GDP at -4.8% — The Advance Estimate for Q1 GDP, to one decimal, came in at -4.8% (-4.78% to two decimal places), a major drop from 2.1% (2.13% to two decimal places) for the Q4 Third Estimate. Investing.com had a consensus of -4.0%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release: Real gross domestic product (GDP) decreased at an annual rate of 4.8 percent in the first quarter of 2020 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1 percent.The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the first quarter, based on more complete data, will be released on May 28, 2020. The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.18% average (arithmetic mean) and the 10-year moving average, currently at 2.12. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 15.1% below trend.A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Four of the eleven recessions over this timeframe have begun at a lower level of current real YoY GDP.
BEA: Real GDP decreased at 4.8% Annualized Rate in Q1 –Note: This is the advance release. Most analysts expect downward revisions as more data become available. From the BEA: Gross Domestic Product, 1st Quarter 2020 (Advance Estimate): Real gross domestic product (GDP) decreased at an annual rate of 4.8 percent in the first quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1 percent….The decrease in real GDP in the first quarter reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and private inventory investment that were partly offset by positive contributions from residential fixed investment, federal government spending, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.The decrease in PCE reflected decreases in services, led by health care, and goods, led by motor vehicles and parts. The decrease in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment. The decrease in exports primarily reflected a decrease in services, led by travel. The advance Q1 GDP report, at minus 4.8% annualized, was close to expectations. Personal consumption expenditures (PCE) decreased at 7.6% annualized rate in Q1, down from 1.8% increase in Q4. Residential investment (RI) increased at a 21.0% rate in Q1. Equipment investment decreased at a 15.2% annualized rate, and investment in non-residential structures decreased at a 9.7% pace.
GDP sinks 4.8% in the first quarter, biggest drop since 2008 and there is worse to come – The collapse in the U.S. economy caused by the coronavirus pandemic triggered the biggest drop in gross domestic product in the first quarter since 2008 in a prelude to an even more massive decline in the spring. GDP, the official scorecard for economic growth, shrank at a 4.8% annualized pace.GDP, the official scorecard for the economy, shrank at a 4.8% annualized pace from the beginning of January to the end of March, the government said Wednesday. Economists polled by MarketWatch had forecast a 3.9% decrease.The worldwide spread of the coronavirus begin to nip at the edges of the U.S. economy early in the quarter before exploding in March into the biggest crisis since the Great Depression some 90 years ago. The economy is likely to contract by 25% or more in the second quarter, with some forecasts putting the decline at a record 40%.Before the crisis, the U.S. had been expanding at a steady 2% pace during what had become the longest expansion in history at 11 years. : Consumer spending, the main engine of the economy, fell at a 7.6% annual pace. That’s the largest retreat since 1980.Americans slashed spending on cars, clothes, travel, eating out and most other goods and services as millions of people lost their jobs, stores were closed, and households tried to save more money to get them through the crisis.Most notably, health-care spending declined a sharp 2.3% despite an ongoing pandemic. Hospitals have canceled or delayed many elective procedures and patients have stayed away for fear of contracting the virus, causing many hospitals with relatively few coronavirus patients to lay off or furlough workers.Businesses investment also pulled back. Spending on buildings sank almost 10% and investment in equipment tumbled 15%. The value of unsold goods, or inventories, also fell by a $29.4 billion annual rate. The housing industry was one of the few bright spots. Investment surged 21% as low mortgage rates encouraged construction companies to build more houses to meet rising demand. The surge is all but certain to fizzle out in the second quarter, however. With the entire world economy under siege, trade has suffered everywhere. U.S. exports slid 8.7% and imports fell an even steeper 15.3%. A smaller trade deficit adds to GDP, but it’s no solace when U.S. companies can’t sell their goods overseas and Americans can’t afford to buy imports. Government spending rose just slightly in the first quarter. Most of the nearly $3 trillion in federal aid to unemployed workers and closed businesses didn’t start flowing until April. Still, only direct government spending is included in GDP. Financial aid and transfers such as Social Security are not. The rate of inflation was little changed at 1.3%. Inflation was low before the crisis and could go even lower still.The economy has already plunged into a deep recession and is likely to be weak for quite some time. How quickly the U.S. turns around and begins to grow again will depend on how well the states and federal government limit the spread of COVID-19 and allow individuals and businesses to get back to work. Even then, lingering worries about the virus are likely to cause many Americans to continue to practice social distancing, an outcome that will harm industries such as airlines, hotels and restaurants.
GDP: Economy Shrank At 4.8% Pace In 1st Quarter. But Worst Is Yet To Come : Coronavirus Live Updates – The coronavirus pandemic is likely to trigger the sharpest recession in the United States since the Great Depression. An early signal of that came Wednesday, when the Commerce Department said the economy shrank at a 4.8% annual rate in the first three months of the year – the first quarterly contraction since 2014 and the largest since the Great Recession. For the first 2 1/2 of those months, the economy was chugging along at a steady, if not spectacular pace. But the plug was suddenly pulled in mid-March – when bars, restaurants and retail shops were abruptly closed and tens of millions of Americans were ordered to stay home in an effort to slow the spread of the deadly disease. “The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world,” the Federal Reserve said in a statement. “The virus and the measures taken to protect public health are inducing sharp declines in economic activity and a surge in job losses.”The first-quarter drop in GDP was the biggest since an 8.4% dive in the fourth quarter of 2008. It marked a reversal from the 2.1% growth rate at the end of 2019.Consumer spending – which accounts for about 70% of GDP – plummeted at a 7.6% rate in the first quarter – the most since 1980.More than 26 million people suddenly out of work have filed unemployment claims in recent weeks. Half of all Americans say they or someone in their household has either lost hours or a job because of the coronavirus, according to a new NPR/PBS NewsHour/Marist poll.”Prior to the coronavirus shock, the economy was doing relatively well,” said Gregory Daco, chief U.S. economist for Oxford Economics. “The shock that we experienced in the second half of March actually has led to a sudden stop in spending on a lot of services and even spending on some goods.”Analysts say even though that shock affected only the last few weeks of the quarter, it was more than enough to erase the gains of the previous 2 1/2 months.Daco said the first-quarter decline is “only the tip of the iceberg.”The bulk of the pandemic’s economic impact will be felt in the current quarter – April through June. By the end of June, Daco estimates the economy will be 12% smaller than it was at the beginning of the year. “To put that into perspective, that [drop] would be three times as large as what we experienced in the global financial crisis,” Daco said. It would be comparable to what the economy experienced at the end of World War II, when factories abruptly stopped churning out tanks and warplanes but had not yet shifted to making civilian goods.
Q1 GDP: Investment –Investment has been weak for some time, and most investment categories were even weaker in Q1 due to COVID-19. However residential investment was very strong in Q1 (increased at 21.0% annual rate in Q1).The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy.In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern – both into and out of recessions is – red, green, blue. Of course – with the sudden economic stop due to COVID-19 – the usual pattern doesn’t apply. The dashed gray line is the contribution from the change in private inventories.Residential investment (RI) increased in Q1 (21.0% annual rate in Q1). Equipment investment decreased at a 15.2% annual rate, and investment in non-residential structures decreased at a 9.7% annual rate.On a 3 quarter trailing average basis, RI (red) is up solidly, equipment (green) is negative, and nonresidential structures (blue) is also down.The second graph shows residential investment as a percent of GDP.Residential Investment as a percent of GDP increased in Q1. RI as a percent of GDP is close to the bottom of the previous recessions – and prior to the pandemic, I expected RI to continue to increase further in this cycle. Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker’s commissions, and a few minor categories. The third graph shows non-residential investment in structures, equipment and “intellectual property products”. Investment in equipment and non-residential structures – as a percent of GDP – declined further.
Q1 Real GDP Per Capita: -5.31% Versus the -4.78% Headline Real GDP -The Advance Estimate for Q1 GDP came in at -4.8% (-4.78% to two decimals), down from 2.1% (2.13% to two decimals) in Q4. With a per-capita adjustment, the headline number is lower at -5.31% to two decimal points. Here is a chart of real GDP per capita growth since 1960. For this analysis, we’ve chained in today’s dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale.The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 8.9% below the pre-recession trend. The real per-capita series gives us a better understanding of the depth and duration of GDP contractions. As we can see, since our 1960 starting point, the recession that began in December 2007 is associated with a deeper trough than previous contractions, which perhaps justifies its nickname as the Great Recession. The standard measure of GDP in the US is expressed as the compounded annual rate of change from one quarter to the next. The current real GDP is -4.78%. But with a per-capita adjustment, the data series is lower at -5.31%. The 10-year moving average illustrates that US economic growth has slowed dramatically since the last recession. GDP per capita, as we’ve seen, is a weaker series than GDP. What does it suggest about our current recession risk? The next chart shows the YoY change in real GDP per capita since 1960. We’ve again highlighted recessions. The red dots show the YoY real GDP for the quarter before the recession began, and the dotted line gives us a sense of how the current level compares to recession starts since 1960. This chart suggests that, despite chronic weakness in the economy, this indicator is not recessionary. That said, we must remember that GDP is a heavily revised lagging indicator. The current YoY at -0.20% is below the 1.32% average value of the eight recession starts in the chart above.
Coronavirus Projected to Trigger Worst Economic Downturn Since 1940s – WSJ – The coronavirus shutdown will induce the sharpest economic downturn and push the U.S. budget deficit to the highest levels since the 1940s, the Congressional Budget Office projects. The economy is likely to shrink 12% in the second quarter – a 40% drop if it were to persist for a year – and the jobless rate will average 14%, the nonpartisan research service said Friday. Job losses will come to 27 million in the second and third quarters. The federal budget deficit is expected to reach $3.7 trillion by the end of the fiscal year on Sept. 30, the CBO said, up from about $1 trillion in the 12 months through March. Congress has authorized unprecedented deficit spending to offset the shutdown of vast swaths of the U.S. economy. As a proportion of gross domestic product, the deficit will end the fiscal year at almost 18%, its highest level since the year after World War II ended and up from 4.6% in 2019, the CBO said. Federal debt held by the public is projected to hit 101% of gross domestic product by the end of the fiscal year, up from 79% at the end of fiscal 2019, the CBO said. The silver lining is that interest rates are projected to fall so low that the government’s net borrowing costs will decline even with the dramatic increase in borrowing, the CBO said. It sees the yield on 10-year Treasury notes hovering at 0.7% in the second half of this year and through 2021. The updated forecasts, published in a blog post by CBO Director Phillip Swagel, rest on assumptions that are “subject to enormous uncertainty.” These include the extent to which the coronavirus is brought under control in the coming months and the possibility of a subsequent re-emergence. Some degree of social distancing is expected to continue through the first half of 2021, the CBO said. But those measures are projected to diminish by roughly 75% in the second half of this year relative to the April-June quarter and continue easing into 2021. As a result, economic activity is projected to recover from its current nadir, but only gradually. GDP is expected to contract 5.6% in 2020 from last year and to grow 2.8% in 2021. The unemployment rate is seen topping out at 16% in the third quarter and declining to 9.5% by the end of 2021. But the CBO cautioned that those numbers understate the extent of damage because they only count people who are actively looking for a job.
Global arms spending tops $1.9 trillion as fight against COVID-19 is starved of resources – Amid the grim worldwide tally of over 3 million confirmed coronavirus cases and roughly 220,000 deaths – along with the scientific certainty that both figures grossly underestimate the real toll of the deadly virus – a report released this week provided another set of sobering statistics. According to the annual report issued by the Stockholm International Peace Research Institute (SIPRI), global military spending has reached a new post-Cold War high, topping $1.9 trillion in 2019. This is a vast quantity of social resources that has been funneled into the preparations for a new world war, under conditions in which humanity is confronting the ravages of a global pandemic. “This is the highest level of spending since the 2008 global financial crisis and probably represents a peak in expenditure,” Nan Tian, a researcher at SIPRI, told the AFP news agency. As always, US imperialism led the surge in ever more obscene levels of expenditure on militarism, accounting for 38 percent of global arms spending. Washington’s military budget for 2019 (fiscal 2020) was $738 billion, a 5.3 percent increase over the previous year, and equal to 3.4 percent of US GDP. US military spending exceeded that of the next 10 highest-spending countries combined. Driving this spike are the massive appropriations being made for the Pentagon’s nuclear triad – including new land-based intercontinental ballistic missiles, new long-range bombers, a new cruise missile and a new nuclear-armed submarine. There has also been a focus on producing new smaller, more “usable” nuclear weapons, bringing the threat of a catastrophic war ever closer. The total figure given by the SIPRI does not include $12.6 billion appropriated to the National Nuclear Security Administration (NNSA), a semi-autonomous agency within the Department of Energy, for “Weapons Activities,” i.e., manufacturing, maintaining and modernizing US imperialism’s stockpile of nuclear missile warheads and bombs. The immense sums being spent to modernize and develop the US arsenal are in preparation for what US strategy documents define as “great power conflicts,” with China and Russia first among the targets. The Pentagon expects to spend $500 billion over ten years in modernizing all aspects of the US nuclear triad. US imperialism’s arms expenditures far exceed those of its “great power” rivals. In 2019, it spent well over two and a half times more than its chief economic rival, China, whose $261 billion military budget is the world’s second largest, and well over 10 times more than the supposed arch menace, Russia ($61.4 billion), which placed fourth on the list of top spending nations.
Coronavirus: WHO row between US, China sees G20 leaders summit called off at last minute, source says –A planned video conference between G20 leaders on Friday was called off at the last minute due to a bitter quarrel between China and United States over the role of World Health Organisation, according to a source who was involved in the preparation for the call.The source, who declined to be named due to the private nature of the debates, said that the US has been insisting on holding the World Health Organisation (WHO) accountable for its early activities in handling the coronavirus outbreak, which has killed over 190,000 people across the globe, including close to 50,000 in the US.China, on the other hand, strongly refuses to discuss proposals to investigate the WHO, the source said.“As such, the conference was called off at the last minute,” they said, adding that the summit could still happen in the near future, if both sides can agree on a compromise over the WHO, or at least over the wording on the WHO in the G20 communique
Trump threatens new tariffs on China in retaliation for coronavirus – (Reuters) – U.S. President Donald Trump said on Thursday his hard-fought trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak. Trump’s sharpened rhetoric against China reflected his growing frustration with Beijing over the pandemic, which has cost tens of thousands of lives in the United States alone, sparked an economic contraction and threatened his chances of re-election in November. Two U.S. officials, speaking on condition of anonymity, said a range of options against China were under discussion, but cautioned that efforts were in the early stages. Recommendations have not yet reached the level of Trump’s top national security team or the president, one official told Reuters. “There is a discussion as to how hard to hit China and how to calibrate it properly,” one of the sources said as Washington walks a tightrope in its ties with Beijing while it imports personal protection equipment (PPE) from there and is wary of harming a sensitive trade deal. Trump made clear, however, that his concerns about China’s role in the origin and spread of the coronavirus were taking priority for now over his efforts to build on an initial trade agreement with Beijing that long dominated his dealings with the world’s second-largest economy. “We signed a trade deal where they’re supposed to buy, and they’ve been buying a lot, actually. But that now becomes secondary to what took place with the virus,” Trump told reporters. “The virus situation is just not acceptable.” The Washington Post, citing two people with knowledge of internal discussions, reported on Thursday that some officials had discussed the idea of canceling some of the massive U.S. debt held by China as a way to strike at Beijing for perceived shortfalls in its candidness on the COVID-19 pandemic. Trump’s top economic adviser denied the report. “The full faith and credit of U.S. debt obligations is sacrosanct. Period. Full stop,” White House economic adviser Larry Kudlow told Reuters. Asked whether he would consider having the United States stop payment of its debt obligations as a way to punish Beijing, Trump said: “Well, I can do it differently. I can do the same thing, but even for more money, just by putting on tariffs. So, I don’t have to do that.”
Coronavirus relief: Investment firms spent millions lobbying Trump, Congress – Some of the world’s largest investment firms combined to spend at least $3 million lobbying members of the Trump administration and lawmakers on a bill that was meant to give relief to those that have taken a financial hit due tothe coronavirus. Blackstone, the Carlyle Group and SoftBank took aim at the $2 trillion stimulus package that was signed by President Donald Trump in late March as the global pandemic was shaking the stock market and forcing millions of people out of work. These companies and their lobbyists engaged with Treasury officials and leaders in the House and Senate, records show. People close to two of these companies say the lobbying goals ranged from pushing for their portfolio companies to participate in the federal loan program to monitoring the legislation as it developed. None appear to be trying to get small business loans to go directly into the private equity industry. The discovery was made by CNBC after reviewing new first-quarter lobbying reports. Many leaders of these companies have ties to Trump himself, including Steve Schwarzman, CEO of private equity giant Blackstone. Schwarzman took part in a March 24 call with Trump and prominent investors such as Third Point’s Dan Loeb, Intercontinental Exchange’s Jeffrey Sprecher and Paul Tudor Jones. Though not all the forms say what the firms were specifically hoping to see in the bill, the move came as the American Investment Council, an organization whose members include the three firms, tried to influence the legislation on its own. The organization pushed for the Treasury’s $500 billion economic stabilization fund to provide enough liquidity to larger businesses. The group also called on the $350 billion small business paycheck program to not discriminate on deciding who qualified for a relief loan, particularly if they’re backed by private equity firms. The American Investment Council ended up spending $640,000 on lobbying in the first quarter alone, records show. The Small Business Administration last week announced that private equity firms and hedge funds were not getting any of the loans intended for small businesses. Trump recently signed a separate $484 billion stimulus bill with more than $300 billion of that total going to the small business loan system, which is officially known as the Paycheck Protection Program. SoftBank, a Japan-based conglomerate run by Masayoshi Son, with large tech investments and offices in the United States, said its lobbying campaign focused on the government allowing financial technology companies to be lenders for the PPP. The company, which has a market cap of close to $90 billion, spent $1.2 million on lobbying that in part went toward the bill. A representative told CNBC that two of its portfolio companies, Kabbage and SoFi, are now participating in the wake of their efforts.
Small-Business Loan Program Resumes With Reports of Delays – WSJ – The U.S. government reopened the pipeline for small-business loans and grants Monday, triggering a fresh chorus of complaints from lenders and borrowers about delays and glitches plaguing the approval process. The Small Business Administration’s electronic loan portal was overwhelmed by demand shortly after it opened Monday morning, according to banking industry groups, that say the process was also stymied by last-minute changes in guidance on how to submit applications. “The SBA’s systems were not designed to and are not capable of handling the volume of loans banks processed over the last several weeks for small businesses,” said Richard Hunt, chief executive of the Consumer Bankers Association, which represents national and regional banks. According to Mr. Hunt, the problems included extended periods when loans couldn’t be processed as well as system instability. At Resource Bank, an Illinois community lender located outside of Chicago, bankers successfully submitted half a dozen loans soon after the opening – but said the SBA’s portal became unresponsive within an hour and remained down the rest of the day. “I have a sense that money is going to go quickly, and here we are, we are locked out somehow while others drain the bucket.” The Paycheck Protection Program got off to a bumpy start April 3 as businesses rushed to get $350 billion worth of forgivable loans to help them survive fallout from the coronavirus pandemic. The loans are made by banks and other lenders, and can be forgiven if companies use the money primarily to retain staff and for approved expenses such as rent. After funds were exhausted April 16 Congress last week appropriated an additional $310 billion for loans, which many have predicted would be insufficient to meet demand. Seeking a better process this time around, the SBA on Sunday unveiled steps aimed at preventing system crashes and smoothing out distribution of funds among participating banks. As part of that effort, the agency asked banks to submit applications in batches of 15,000 loans when its E-Tran loan portal reopened Monday morning. But by midday, the batch size was cut to 5,000, said SBA spokesman Jim Billimoria, a change made to address complaints by smaller banks that they were cut out of the process by the minimum.
Second round of PPP runs into familiar problems The Small Business Administration’s second round of Paycheck Protection Program loans opened on Monday, “triggering a fresh chorus of complaints from lenders and borrowers about delays and glitches plaguing the approval process,” the Wall Street Journal reported. The agency’s “electronic loan portal was overwhelmed by demand shortly after it opened Monday morning, according to banking industry groups, that say the process was also stymied by last-minute changes in guidance on how to submit applications. The SBA said it had processed more than 100,000 PPP loans through more than 4,000 lenders by late Monday afternoon.”“Many bankers complained about new technology glitches and fresh questions were raised about the mostly anonymous list of beneficiaries,” the Washington Post said. The program “has been overwhelmed, both because of a surge in applications and the uneven process by which some companies receive loans and others do not. Within an hour after the SBA reopened its online portal, known as E-Tran, for submissions Monday, banking officials began to complain that the system was either not working or was painfully slow.”“Some said they had been unable to load the web page at all, while others said they could load the portal but were unable to log in,” the Financial Times reported.The portal “kept crashing all day,” the New York Times said, “much to the frustration of bankers around the country who were trying – and failing – to apply on behalf of desperate clients.” Meanwhile, another high-profile entity – the NBA’s Los Angeles Lakers, “one of the league’s richest teams” valued at more than $4 billion – disclosed that it “received and then returned” a $4.6 million PPP loan “amid the public uproar over the messy rollout as major brands were given millions of dollars while local mom-and-pop shops were shut out,” the Journal said. “Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need,” the team said. “A handful of publicly traded companies say they aren’t planning to return loans despite pressure from the Trump administration to repay the funds,” the Post reports. “Companies in the hotel, cruise ship and medical-device sectors said they are qualified to receive the money and need the funds to stay in business.”
Coronavirus loan program approves more than $52 billion in relief – The Trump administration said it’s approved more than $52 billion in loan requests for small businesses so far in the relaunch of a coronavirus relief program, even as lenders said they’ve struggled to submit applications and advocates worry that funds will run out before many mom-and-pop businesses get help. The U.S. Small Business Administration said it’s processed almost 476,000 loan applications from almost 5,200 lenders as of 1 p.m. New York time Tuesday. The Paycheck Protection Program offers loans of as much as $10 million meant to keep workers at small businesses employed amid state stay-at-home orders. President Trump said there were twice as many lenders accessing the SBA’s system in the first 24 hours after the program’s restart than on any day of the initial round of funding. He said the agency also processed 30% more applications than on any previous day, and in smaller amounts. “Demand is extraordinarily high,” Trump said at a White House event featuring a coffee shop owner, an optometrist and others from small businesses that have received funding under the program. The initiative restarted Monday with an additional $320 billion that Congress approved last week, after the initial $349 billion ran out on April 16 in just 13 days. At the current pace of approvals, the additional funding will be exhausted in a matter of days. But the relaunch has been rocky, with lenders reporting they can’t access the SBA’s system amid a flood of applications. The program allows loans to become grants if proceeds are spent to maintain payrolls and for certain expenses for two months. The SBA on Tuesday told lenders they could not use robotic systems to help submit applications. With that measure, it said, the system “will be more reliable, accessible, and equitable for all small businesses.”
These businesses plan to keep their PPP loans, despite pressure from the Trump administration – A handful of publicly traded companies say they aren’t planning to return loans received from a small-business rescue program, despite pressure from the Trump administration to repay the funds.Companies in the hotel, cruise ship and medical-device sectors said they are qualified to receive the money under the Paycheck Protection Program and need the funds to stay in business.Their resistance comes days after the Small Business Administration suggested dozens of publicly held companies should give back money received from the Paycheck Protection Program by May 7.The agency said public companies with “substantial market value” and the ability to raise money through capital markets were not the intended recipients of the funds, which were meant to help small businesses battered by the novel coronavirus pandemic.ADTreasury Secretary Steven Mnuchin increased the pressure Tuesday morning, saying the government plans to audit all loans over $2 million before it forgives them. The rules call for the government to forgive the loans if companies use them to keep employees on the payroll.”Anybody that took the money that shouldn’t have taken the money, one, it won’t be forgiven and two, they may be subject to criminal liability, which is a big deal,” Mnuchin said in an interview on Fox Business. “I encourage everybody to look at this and pay back these loans now so we can recycle the money if you made a mistake.”Some public companies, including Shake Shack, Kura Sushi USA and Ruth’s Chris Steak House, have already announced plans to return the money.Half a dozen lesser-known public companies contacted by The Washington Post, including CalAmp, a tech firm in Irvine, Calif., and Graham, a manufacturer in Batavia, N.Y., also said they would return the funds. Dozens of firms did not respond to requests for comment.
Government Is On The Hook To Forgive Hundreds Of Billions In PPP Loans, Has No Idea How They’ll Do It – As with any piss-broke society that functions purely by taking on massive amounts of debt via money printing to try and keep itself afloat, the next obvious step after Central Banks make “loans” by printing money, is inevitable defaults. It looks like that’s exactly what the U.S. government is now gearing up for with regards to loans they made just weeks ago and are continuing to make. The administration’s Small Business Administration’s Paycheck Protection Program launched its second round on Monday, which allowed lenders to issue forgivable government guaranteed loans to small businesses affected by the coronavirus outbreak. Or, maybe just to anyone that fills out an application. We don’t really know – the oversight has been a bit shaky to say the least, thus far. Regardless, the key element to the loan program (it’s hilarious to even call them “loans”) is the idea that the loans can be forgiven. After all, if given the choice to pay back your loan or have the government forgive it, which would you choose? Exactly. And that’s why “smoothing the forgiveness process is critical for the program to succeed,” according to Reuters. But the program is that the government hasn’t issued any guidelines and exactly how to go about getting the loans forgiven. Plus, we think this will likely mean the obvious: we’ll have fraud from both people who received the loans and from those who will eventually turn back to the government to have them “forgiven”. Paul Merski, an executive at the Independent Community Bankers of America said: “Probably every PPP borrower expects their loan to be forgiven, but it is not that simple. There are rules and regulation to consider. So the borrower best have their information and paperwork in order.” Ah, yes. The rock-solid compliance step of good old fashioned paperwork. The terms of forgiveness for the loans are relatively simple: “…borrowers must spend 75% of the loan on payroll costs, such as salaries, tips, leave, severance pay and health insurance, within the first two months. The remaining 25% can be spent on other running costs, such as rent and utilities. Money spent on non-qualifying expenses must be repaid at an annual rate of 1% within two years.”
Why Don’t We Just Provide an Emergency Basic Income to Businesses? – On April 1st I used the Small Business Administration’s Payroll Protection Program as an example of a program from the CARES act congress most egregiously designed from a budgetary point of view: As I predicted, the program ran out of funds last week. Congress did indeed drag its feet for a week in negotiations over extending it, finally approving a paltry 310 billion dollars yesterday. In addition to the predictions I made, there were problems I didn’t discuss (though have been concerned about). The structure of the compensation (as well as the incentives banks face in general) meant they prioritized larger and wealthier clients in access to the funds. This was worsened by the structure of the fees, which should have been lump sum amounts (or even provided greater compensation for processing smaller dollar loans) but instead provided compensation based on percentages of loan size. This created the obvious incentive to focus energy on processing large loans for big clients rather than small clients. As if all this wasn’t enough, Small Business Administration rules meant that the 500 employee limit applied per establishment and not per business as a whole so a number of medium sized businesses were able to get access. In addition, franchises of larger businesses also qualify since they aren’t technically considered under the control of their large multinational corporation franchisors. Medium sized enterprises have been returning funds amid the public backlash. In other words, the Payroll Protection Program has been a mess. Its cap has created a political battle that has reinforced for the public that there isn’t enough to go around so we must fight each other over what little we can eek out. It has created administrative hurdles that have delayed the process of getting money out the door and threatened the capacity for the program to preserve payroll. Its time limited nature has meant that this is only a stop-gap, even for those who get funds. This adds to longstanding problems with the Small Business Administration. It has always had a race problem both in being unwilling to take on additional credit uncertainty (which cuts out Black borrowers with little equity), including not being willing to provide start-up financing. This brings me to the title of this post- why are we bothering with this complicated structure in the first place? Why rely on banks which are used to providing credit screening when the purpose of our desired oversight isn’t repayment and we want to save as many businesses and jobs as possible?
‘No Consequences for Negligence That Kills’: McConnell Wants Corporate Immunity From Covid-19 Lawsuits – Senate Majority Leader Mitch McConnell is demanding that Congress use the next Covid-19 stimulus bill to shield corporations from legal responsibility for workers who contract the novel coronavirus on the job, throwing his support behind a proposal pushed in recent weeks by the U.S. Chamber of Commerce and other right-wing organizations.The Kentucky Republican said in a statement Monday that companies could be hit with “years of endless lawsuits” if Congress doesn’t provide employers with liability protections as states begin reopening their economies.“McConnell wants to immunize companies from liability when they make their workers go back to work, and those workers inevitably get sick,” tweeted The Atlantic‘s Adam Serwer.In a Monday interview on Fox News Radio on the heels of his statement, McConnell said he considers liability protections for companies a non-negotiable demand for the next coronavirus stimulus legislation. Progressives are calling for a package that provides more protections for frontline workers and the unemployed.“That’s going to be my red line,” McConnell said. “Trial lawyers are sharpening their pencils to come after healthcare providers and businesses, arguing that somehow the decision they made with regard to reopening adversely affected the health of someone else.”Justin Wolfers, an economics professor at the University of Michigan, tweeted that McConnell is arguing that companies “should have the right to be negligent, and suffer no consequences for negligence that kills their staff.” “At the present moment, do we want to tweak incentives to make employers more negligent, or less negligent?” Wolfers asked.Senate Minority Leader Chuck Schumer (D-N.Y) called McConnell’s demand for corporate immunity “subterfuge” in an interview on MSNBC Tuesday morning, but did not rule out the proposal as part of a broader relief package.Drew Hammill, deputy chief of staff for House Speaker Nancy Pelosi (D-Calif.), told Politico that “the House has no interest in diminishing protections for employees and customers.”McConnell’s comments came a week after President Donald Trump said the White House is looking for ways to protect companies from legal action by workers who are infected with Covid-19 on the job.“We are trying to take liability away from these companies,” Trump told reporters during a Coronavirus Task Force briefing last Monday. “We just don’t want that because we want the companies to open and to open strong.”
Looking at “The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for COVID-19″ with a Critical Eye –Lambert Strether -The Wall Street produced an intriguing piece the other day, “The Secret Group of Scientists and Billionaires Pushing a Manhattan Project for Covid-19,” which while picked up and signal-boosted by other venues – Business Insider, Daily Mail, Newsweek, Beckers Hospital Review (the best) – doesn’t seem to have generated any additional reporting. The scientists, billing themselves as “Scientists to Stop COVID-19,” have produced an oddly untitled deliverable[1] (PDF, seventeen pages) dated March and April 2020. It’s worth a read. (Two hours ago, news came that the administration has initiated “Project Warp Speed,” which seems inspired by this project, but there’s no reporting on personnel, and it’s not clear they adopted the recommendations of the scientists. I’m guessing that the issues I am about to raise for the deliverable of the “Secret Group” will also apply to Project Warp Speed[2].)Given that “personnel is policy,” I’ll first reduce people mentioned in the Wall Street Journal story, and the scientists who signed the March-April deliverable to tabular form. After that, I will take a quick look at the scientists’ deliverable, focusing especially on issues of governance and restoring our economy. Now let’s look at the billionaire and multimillionaire backers of… well, whatever the project is really called; I’ll call it, following the Wall Street Journal, the Secret Group. In addition to backers, there are also fixers, who connect the backers and the scientists to the administration, agencies, and other firms, primarily in Big Pharma. I have ordered the backers and fixers not alphabetically but by net worth.
US billionaires increase wealth by $280 billion since March, as millions unable to get unemployment benefits – The billionaires in the United States have increased their wealth by $282 billion since the mid-March stock decline, according to a new report by the Institute for Policy Studies. While more than one fifth of the American population is now unemployed, and millions are deprived of basic needs and confront an uncertain future, the fortunes of the ultra-rich have not only recovered, they are improving substantially. Jeff Bezos’s fortune increased by $25 billion between January 1 and April 15. Never in history has any individual made so much wealth so quickly. As the report noted, “this is larger than the Gross Domestic Product of Honduras, which was $23.9 billion in 2018.”Eight billionaires, so-called “pandemic profiteers,” have increased their wealth, each, by over $1 billion during this time: Jeff Bezos (Amazon), MacKenzie Bezos (Amazon), Eric Yuan (Zoom), Steve Ballmer (Microsoft), John Albert Sobrato (Silicon Valley real estate), Elon Musk, Joshua Harris (Apollo, financial asset management) and Rocco Comisso (Mediacom, cable and internet). The $2.2 trillion CARES Act gives only $550 billion to direct payments and extended unemployment, which most people have yet to receive. Of the remaining more than $1.7 trillion, $500 billion goes directly to bailing out major corporations. While $377 billion ostensibly goes to small businesses, most have not seen a penny, as the banks pocketed $10 billion in fees and larger companies largely consumed the available funds.The CARES Act also contains within it an additional $173 billion in tax breaks to super-wealthy individuals and companies. For example, it allows households earning at least $500,000 a year to reduce their taxes by substantially increasing deductions from business losses and applying them to taxable money earned on the stock market.All of this is on top of trillions being funneled into the financial markets and corporate coffers by the Federal Reserve.
Pelosi says universal basic income could be ‘worthy of attention now’ as coronavirus stifles economy – House Speaker Nancy Pelosi said Monday that Congress may need to consider a guaranteed minimum income for Americans as one way to meet people’s basic needs while the country remains paralyzed by the coronavirus pandemic. “Let’s see what works, what is operational and what needs attention,” Pelosi, D-Calif., said in an interview with MSNBC. “Others have suggested a minimum income, a guaranteed income for people. Is that worthy of attention now? Perhaps so. Because there are many more people than just in small business and hired by small business … that may need some assistance as well,” she added. The idea of a government-guaranteed minimum income has gained attention in the past year thanks largely to Andrew Yang, who ran in the 2020 Democratic presidential primary on a platform built around universal basic income. Yang failed to win any delegates in the primary, but he built a devoted campaign following and raised the issue of UBI onto the national debate stage. More recently, as the coronavirus pandemic has ravaged the U.S. economy and forced more than 25 million Americans to seek unemployment benefits, the idea of guaranteed income has reemerged as a possible way to stabilize the economy and help people meet their basic needs while millions of businesses are under forced closures. In one of the last policy speeches of his 2020 presidential campaign, Vermont Sen. Bernie Sanders proposed in mid-March that Congress give every household in America $2,000 a month for the duration of the Covid-19 outbreak. “We need to provide a direct emergency $2,000 cash payment to every household in America every month for the duration of the crisis to provide them with the assistance they need to pay their bills and take care of their families,” said Sanders. Supporters of UBI have also noted the similarities between guaranteed income plans and the $1,200 cash payment for every American making less than $90,000 annually, which was included in the $2 trillion CARES Act passed by Congress and signed into law by the president March 27.
Birx says US needs a testing ‘breakthrough’ to screen large numbers of people – The percentage of people who die after testing positive for the coronavirus is rising even as thousands of new U.S. cases are identified each day, a troubling preview of the weeks and months that lie ahead. Epidemiologists and experts say increased case fatality rates are a natural function of a deadly virus running its course: The people who succumb today were probably infected as long as a month ago, when the number of cases began accelerating. “As the epidemic picks up and you see a sudden rise [in cases], deaths will be very low,” said Michael Osterholm, director of the Center for Infectious Disease Research and Prevention at the University of Minnesota. “It’s just new onsets. And then as they work through the process, becoming severely ill, becoming hospitalized, being in the ICU and then dying, it’s a long-term process of three or up to four weeks.” That long-term process is starting to show itself in states that were at the heart of the second wave of the outbreak in the U.S. In Connecticut, where commuter communities outside New York City have been hit hard, the case fatality rate has risen 3 percentage points in just two weeks. Today, 7.6 percent of all confirmed COVID-19 patients have died, among the highest rates in the nation. That equates to 1,431 deaths over just the last two weeks. In Massachusetts, Louisiana and Minnesota, case fatality rates are up 2 points, to 5.3 percent, 6.2 percent and 7.5 percent, respectively. Massachusetts has been hit particularly hard. Nearly 30,000 Bay State residents have tested positive in just the past two weeks, and 2,143 have died. Other states where fatality rates are on the rise include large states with significant outbreaks such as California and Illinois and smaller states that have seen fewer cases such as Maine, Vermont and West Virginia. The overall mortality rate among those who contract the coronavirus is unknown because so many people can be asymptomatic and might never be tested. Antibody tests conducted in some U.S. cities suggest that hundreds of thousands of people, and perhaps as many as a million in New York City, have been infected – far greater than the number of people who have tested positive.
Trump health official says US will ‘easily’ conduct 8 million coronavirus tests in May– A top Trump administration health official said Monday the U.S. will “easily” perform eight million tests next month, as the White House rolled out steps aimed at increasing testing capacity. “According to the governors plans for next month, we will easily double that 4 million number,” Brett Giroir, an assistant secretary of Health and Human Services, said during a press conference at the White House. He said the administration would be sending out more of the key testing items that have been in short supply recently, including 20 million swabs and 15 million tubes needed to transport samples. However, 8 million tests in May would still fall well short of the amount leading health experts say is needed to safely reopen the economy. Harvard researchers said last week that at least 500,000 tests per day, or about 15 million tests per month are needed. Dr. Anthony Fauci, the government’s top infectious disease expert, recently said the country’s needs are “closer to” 3 million tests per week, or about 12 million per month. In the past week, the U.S. was conducting an average of 200,000 tests per day, according to the Covid Tracking Project. In addition to Giroir, various CEOs spoke Monday’s press briefing and announced plans to increase testing, such as setting up more testing sites at CVS parking lots. As pressure mounts on the administration to increase testing, the White House released a “blueprint” on testing strategy. The document largely summarized actions the administration has already taken and put the responsibility on states for key tasks. It did not include specific testing targets.
White House releases coronavirus testing plan, claims most of its work is done – The Trump administration unveiled a new strategy Monday to help states ramp up their capacity to test for coronavirus, claiming most of its work is done, according to new documents. The two documents obtained by NBC News include a testing “overview” and a testing “blueprint.” “We’re deploying the full power and strength of the federal government to help states, cities, to help local government get this plague over with,” Trump said when he formally announced the plan at a news conference in the Rose Garden on Monday afternoon. The first document, the testing overview, largely serves as a defense of the administration’s widely criticized handling of the coronavirus testing since the start of the epidemic. It outlines eight responsibilities that it says belong to the federal government, and claims to have already completed seven of these. The other document, a testing “blueprint,” describes what it calls a “partnership” between states, the federal government and the private sector. The partnership it describes leaves the lion’s share of responsibility for funding, designing and executing a coronavirus testing plan to individual states. But states have repeatedly called for the federal government to shoulder the bulk of the responsibility for testing and tracing future coronavirus infections, arguing that they lack the funding and the expertise the federal government possesses. Trump is also expected to announce Monday that the federal government is prepared to send all 50 states enough tests and testing materials to screen at least 2% of the population of each state per month. The Wall Street Journal first reported on the new federal testing efforts. Before heading out to the Rose Garden, Trump told reporters in an Oval Office briefing that the plan is aimed at expanding testing, particularly in African American and Hispanic communities. The ability to repeatedly and widely test at-risk populations is the cornerstone of any responsible plan to reopen the nation’s economy. The president has called on states to lift stay-at-home orders and reopen, but most governors still think it is too early. Trump’s critics have zeroed in on the nationwide shortages of effective coronavirus tests, testing supplies, and labs able to process test results as a central failure of the federal government’s response to the deadly pandemic. Trump has angrily rejected this criticism, however. “States, not the Federal Government, should be doing the Testing,” he said in a tweet last week. Monday’s new documents underscore the limited role Trump wants the federal government to take in expanding testing, despite their repeated mentions of “partnering” with states.
Coronavirus testing chief says ‘no way on Earth’ US can test 5 million a day – There’s “no way on Earth” the U.S. can test 5 million people a day for the coronavirus, the government’s top testing official said in an interview, just hours before President Donald Trump vowed that the country would be able to test that many people daily “very soon.””There is absolutely no way on Earth, on this planet or any other planet, that we can do 20 million tests a day, or even five million tests a day,” Adm. Brett Giroir, assistant secretary of health who is in charge of the government’s testing response, told TIME in an interview he gave Tuesday morning that was published later in the evening. The interview took place before Trump’s eye-popping pledge about testing.Speaking to reporters the following day, Trump denied having said there would be 5 million tests per day, but he added that he does believe there will, in fact, be 5 million tests per day at some point.”Somebody came out with a study of 5 million people. Do I think we will? I think we will, but I never said it,” Trump claimed during an event at the White House. “Somebody started throwing around 5 million. I didn’t say 5 million,” the president insisted, adding, “Well, we will be there. But I didn’t say it. I didn’t say it.”The U.S. will be able to test 8 million per month by May, Giroir told Time. Giroir was responding to a new study’s findings. Harvard University published a report last week that said the U.S. would need to ramp up testing capacity to at least 5 million tests a day by early June, and 20 million per day by late July, in order to reopen the economy. Giroir told TIME that the assessment is “an Ivory Tower, unreasonable benchmark,” adding that it’s not needed based on current modelling. Trump, when asked at a news briefing about the 5 million figure later Tuesday, said, “We’re going to be there very soon.”
Coronavirus: U.S. to become 1st country with a million cases – The United States is set to become the first country in the world to confirm 1 million coronavirus cases, more than four times the number of infections in each of Europe’s two hardest-hit nations, Spain and Italy. The seven-figure milestone, expected to be confirmed Monday by Johns Hopkins University, comes three months after U.S. officials detected the country’s first case in Washington state, where a Seattle-area man tested positive for COVID-19 days after returning from Wuhan, the Chinese city where the virus is believed to have originated. Since then, the fast-spreading disease has spread to all 50 states, killed more than 55,000 Americans and forced millions of people into isolation. Several states are now beginning to lift restrictions even as U.S. officials warn that social isolation needs to continue for months. The Trump administration on Monday was reviewing draft guidance from the Centers for Disease Control and Prevention for how schools, restaurants, churches and businesses can safely reopen. “Social distancing will be with us through the summer to really ensure that we protect one another as we move through these phases,” Dr. Deborah Birx, the White House coronavirus task force coordinator, told NBC News’ “Meet the Press” on Sunday. In New York, Gov. Cuomo said each business that wants to reopen would have to submit a plan seeking approval. Speaking to reporters at his daily coronavirus news briefing, Cuomo said the disease is still spreading even though the number of hospitalizations and deaths continues to fall. Advertisement “The number is down from the past few days, but that’s no solace for 337 families who are suffering today,” he said, referring to the number of coronavirus patients who died across the state on Sunday. New testing data suggests that nearly one in four New Yorkers – or about 2 million people – have contracted COVID-19 since the pandemic began spreading in the city about two months ago. Johns Hopkins’ data also shows that more than 100,000 Americans who tested positive for the virus have fully recovered. Another milestone reached on Monday was the number of confirmed global cases, which surpassed 3 million for the first time.
Feinstein to McConnell: Cancel plan to bring Senate back amid coronavirus pandemic -Sen. Dianne Feinstein (D-Calif.) is urging Senate Majority Leader Mitch McConnell (R-Ky.) to cancel his plan to bring the Senate back to Washington, D.C., on Monday, saying the House did the “right thing” by deciding not to return next week. “I ask the majority leader to reconsider his plan to reconvene the Senate. He would bring 100 senators and many more staff members and reporters into close proximity while Washington itself remains under a stay-at-home order. There is no way to do this without increased risk. This is the wrong example for the country,” Feinstein said in a statement. Feinstein – who at 86 is the oldest senator – sent a letter to McConnell and Senate Minority Leader Charles Schumer (D-N.Y.) on Wednesday that said the GOP leader should change his plans “in the interest of public health and sending the right message to the nation.” “The only things that have been shown to reduce the rate of infection are sheltering in place and social distancing, neither of which is possible if we return to the Capitol. This is not the time to back off of protective measures when the disease is not yet in check,” Feinstein wrote. McConnell has doubled down on his plan to bring the Senate back to Washington next week, telling Fox News Radio earlier Wednesday that senators would not “sit on the sidelines.” “We feel like if people on the front lines are willing to work during the pandemic, we should be as well. And so the Senate will come back; we’ll be in session next week,” he added.
Dr. Anthony Fauci warns US could ‘be in for a bad fall’ if coronavirus treatments don’t work – The United States “could be in for a bad fall” if researchers don’t find an effective treatment to fight the coronavirus by then, White House health advisor Dr. Anthony Fauci said Tuesday. The virus will certainly make a comeback in the U.S. even as cases begin to stabilize, Fauci, director of the National Institute of Allergy and Infectious Disease, said during an interview with The Economic Club of Washington, D.C. Covid-19 is “not going to disappear from the planet,” he said, adding infectious disease experts are learning about how the virus behaves by watching emerging outbreaks in other regions such as southern Africa that are starting to enter their colder seasons. “In my mind, it’s inevitable that we will have a return of the virus, or maybe even that it never went away,” he said. Fauci also warned against states reopening businesses prematurely, saying it could cause “a rebound to get us right back in the same boat that we were in a few weeks ago.” The virus, which emerged in Wuhan, China, almost four months ago, has sickened more than 3 million people worldwide and killed at least 212,000 as of Tuesday morning, according to data compiled by Johns Hopkins University. Roughly a third of the global cases are in the United States, making it the worst outbreak in the world. U.S. officials say that they are preparing to battle two bad viruses circulating at the same time as the coronavirus outbreak runs into flu season next fall and winter. Fauci said Tuesday that he is “cautiously optimistic” researchers can develop a vaccine to prevent Covid-19, but added nothing is ever “a guarantee.” U.S. health officials have been fast-tracking work with biotech company Moderna to develop a vaccine to prevent the disease. They began their first human trials on March 16. Fauci said the virus has been shown to be “highly transmissible,” adding the emergence of this virus “exploded upon us” and has kept him up at night. “Everyone is at risk unlike some infections,” he said.
Fauci Warns Bad Second Wave of Coronavirus Could Hit U.S. – Dr. Anthony Fauci, the nation’s leading infectious disease specialist and a member of the White House Coronavirus Task Force, warned that the U.S. “could be in for a bad fall” and a bad winter if it does not contain COVID-19 before then, according to CNBC.His assessment backed predictions from the Centers for Disease Control, which released a report that said a second wave could be worse because it may coincide with cold and flu season, according to USA Today. However, last week, President Trump seemed to refute that assessment, saying last week “it may not come back at all.”Speaking to reporters of the report that CDC Director Robert Redfield released, Trump said, “He’s talking about a worst-case scenario where you have a big flu and you have some (coronavirus). And if it does come back, it’s not going to come back … like it was. Also, we have much better containment now.”Before nobody knew about it. Nobody knew anything about it. Now, if we have pockets, a little pocket here or there, we’re going to have it put out. It goes out, and it’s going to go out fast. We’re going to be watching for it. But it’s also possible it doesn’t come back at all.”On Tuesday, Dr. Fauci, director of the National Institute of Allergy and Infectious Disease, was interviewed by The Economic Club in Washington, DC, when he said that COVID-19 is not going away and leading infectious disease specialists like him are watching how the virus behaves in the southern hemisphere, which is moving toward its cold season, according to CNBC.He added that how the fall and winter looks in the U.S. will depend on what types of preventive steps are put in place now.”If by that time we have put into place all of the countermeasures that you need to address this, we should do reasonably well,” said Dr. Fauci, as CNN reported. “If we don’t do that successfully, we could be in for a bad fall and a bad winter.”He noted that if states are start to lift social distancing guidelines too early, the country may the virus rebound and “get us right back in the same boat that we were a few weeks ago,” adding that the country could see many more deaths than are currently predicted, according to CNN.To thwart a second wave, Fauci said the U.S. needed to have improved testing; a way to track cases; and the ability to isolate infected Americans so the virus does not spread.
A Judge Sided With Native American Tribes Challenging How The Trump Administration Is Handling Coronavirus Relief Money The Trump administration cannot distribute coronavirus relief money intended to help Native American communities respond to the coronavirus pandemic to certain for-profit Native corporations, a federal judge ruled Monday evening. It’s the first loss in court for the government over how administration officials are managing the billions of dollars that Congress approved in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Dozens of tribal governments raced to court in the past two weeks to challenge the Treasury Department’s decision to make Alaska Native Corporations (ANCs) eligible for $8 billion in funding set aside to benefit Native American tribes. The tribal governments that sued argued that they stood to lose out on potentially millions of dollars if they had to share the pool with ANCs. The ANCs, established by a 1971 law governing how Alaska Natives manage and benefit from their land, have shareholders – primarily members of Native American tribes – and boards of directors, and they serve as holding companies for businesses that range from construction and pipeline maintenance to janitorial and food services. There are 574 federally recognized Native American tribes and 237 ANCs across Alaska, according to court papers. Tribal governments argued they needed the money to deliver services to communities hit hard by COVID-19, the disease caused by the novel coronavirus, including providing health care, buying personal protective equipment, and delivering meals to the elderly and children. They asked the court to enter an immediate injunction since the Treasury Department was set to begin sending the money as early as April 28. US District Judge Amit Mehta, who heard arguments last week, agreed with the tribal governments that ANCs didn’t qualify as the type of “tribal government” that Congress referenced in approving the relief money. Under the definition of “tribal government” that Congress relied on in the CARES Act, the judge wrote, a tribal government had to be eligible for special programs provided by the US government to Native Americans, and it had to be formally recognized by the US government as the governing body of a tribe. The ANCs don’t fall into those categories, he wrote.
We Need a Shadow Government – Peter Dorman – To overcome the pandemic we need four things:
- A rapid increase in the production and dissemination of personal protective equipment, first to the health care sector and then to other workers who can’t avoid social contact. This should be mandated and organized by the government through established emergency powers.
- Mandatory use of face masks in public by everyone – no exceptions. Masks, even simple homemade cloth coverings, are highly effective in reducing transmission. (No, they don’t do much to shield the wearer from ambient exposures; yes they eliminate most transmission by the wearer.)
- The government should make an immense expansion of testing capability its top priority. No resources should be spared. In addition, all available R&D capability should be directed toward improving the specificity and sensitivity of testing methods.
- Measures should be taken immediately to establish a network of local and regional contact tracing systems. Doing this in a manner that minimizes broader loss of privacy risks should be a primary concern. Between vastly expanded testing and contact tracing, we have a pathway out of economic lockdown without inviting an even more devastating second wave of infections and deaths.
Economically, we need three broad initiatives:
- A payments moratorium, with no accrued interest. No rents, mortgages, premiums or other payments for essential services. This means stopping the clock for the duration of unavoidable economic restrictions.
- Universal income maintenance. Income streams disrupted by the response to the pandemic should be sustained at public expense, with some percent reduction to reflect reduced spending opportunities – especially if a payments moratorium is also in effect.
- Liberal use of the Fed’s asset book to finance public services and sustain incomes. We should have unrestricted ability to borrow to achieve all of the above, and the Fed should be authorized to purchase all such loan instruments. Money should never be a constraint on policy, only realconstraints like people, skills, resources and productive capacity.
My reading of the policy chatter is that, while emphases differ, in broad terms both agendas have overwhelming professional support. What they lack is a political vehicle. In a better world, that vehicle would be the Democratic Party, which would establish a shadow government to refine these proposals and push for their adoption. It would assemble committees for particular policy areas, conduct regular – even daily – press briefings, organize petition campaigns, and in general act as though it had responsibility for progress in this country in economics and public health. In their absence, which is the world we actually live in, no one is assuming this responsibility, and policy is in chaos.
The US Political System Is to Blame for This Pandemic – When historians ask why the United States became the world’s epicenter for the coronavirus, the temptation will be to blame it all on Donald Trump. After all, why wouldn’t they? Trump disbanded the National Security Council’s pandemic response team in 2018. He scrapped an early warning program for pandemics just three months before the current outbreak. Most of his appointees who had been briefed on possible scenarios by outgoing Obama officials fell victim to his administration’s record-breaking turnover rate. And despite having been repeatedly warned about the virus, not least in his January intelligence briefings, Trump played down its severity for months, fatally misinforming his supporters, and even held rallies. And yet this isn’t the whole story. The breathtaking failure of the wealthiest, most technologically advanced empire in human history to deal with this pandemic is the result of a perfect storm of decades of bipartisan decision-making.Perhaps the clearest factor is the continued lack of any form of universal health care in the United States. Opposition to this essential reform has been the official position of the leadership of both major parties since at least 2016. With anywhere between 25 and 54 percent of Americans delaying their search for health care for fear of what it would cost, the reluctance of countless people to get tested or treated certainly assisted the spread of the virus.Those that did seek testing or treatment suffered the consequences, hit withthousands of dollars in medical bills – nearly $35,000 for one woman. This problem has only gotten worse since millions began losing their employer-provided insurance due to the dizzying number of job losses that accompanied weeks of lockdown.But universal coverage is only part of the sorry picture. The US for-profit health care “system” has brought about a spate of closures of hospitals that had ceased being profitable, including at least thirty that went bankrupt in 2019. Things have been particularly severe in rural areas, with 120 rural hospitals closing over the last decade, reaching a high with nineteen closures last year. Not only do such closures push patients to seek treatment outside of their insurance network, meaning more sky-high medical bills. For some people, particularly in isolated rural areas, it leaves them with nowhere to go in the middle of a pandemic.
No leadership and no plan: is Trump about to fail the US on coronavirus testing? – A broad coalition of US health systems has mobilized to ramp up coronavirus testing in a national effort on a scale not seen since the second world war. But declarations of false victory by the Trump administration and a vacuum of federal leadership have undermined the endeavor, leading experts to warn that reopening the US could result in a disaster. Interviews with agents on the frontlines of the coronavirus battle – lab directors, chemists, manufacturers, epidemiologists, academics and technologists – reveal as diverse an application of the legendary American ingenuity as the century has seen. Test kit manufacturers are running production lines around the clock to triple their output, and triple it again. A private healthcare institute in California has constructed a mega-lab to process thousands of tests daily and deliver the results by text message alert. In smaller labs across the country, microbiologists improvise each day to fill unpredictable supply chain gaps that might leave them without swabs one day, and without crucial chemicals the next. “It’s incredible what we’ve done together over a short period of time,” Donald Trump said at a White House briefing this week, praising his administration’s response to the pandemic. But analysts say that without centralized governance and coordination, the national effort remains a competing coalition of state and local outfits hampered by duplicated work, competition for supplies, siloed pursuits of non-transferable solutions and red tape that leaves some labs with testing backlogs and others with excess capacity. All of which leaves the US without a unified, coherent strategy for testing and contact tracing to contain a virus that does not respect state borders and has already killed more than 60,000 Americans. Without it, the imminent experiment of reopening the country could be catastrophic, warned Harvard epidemiologist Michael Mina in a conference call with reporters this week. “My concern is that we’ll end up right where we have been, with major cities having healthcare systems that get overrun quickly because of major outbreaks,” Mina said. Meanwhile, as states begin to relax social distancing measures, the Trump administration is spreading dangerous misinformation, denying persistent supply shortages, underestimating the number of Covid-19 cases and exaggerating the margin of safety conferred by the current volume of testing and contact-tracing, experts say. “We’ve done more than 200,000 tests in a single day,” Mike Pence said at a taskforce briefing this week, in which Trump touted testing as “one of the great assets that we have” in reopening the US. But at current testing levels, with only rudimentary plans for contact tracing for new cases, the US will be flying virtually blind as it reopens, said Glen Weyl, a technologist who co-authored a report issued by Harvard’s Safra Center for Ethics that calls for 5m tests a day by early June.
GOP memo urges anti-China assault over coronavirus – The National Republican Senatorial Committee has sent campaigns a detailed, 57-page memo authored by a top Republican strategist advising GOP candidates to address the coronavirus crisis by aggressively attacking China. The memo includes advice on everything from how to tie Democratic candidates to the Chinese government to how to deal with accusations of racism. It stresses three main lines of assault: That China caused the virus “by covering it up,” that Democrats are “soft on China,” and that Republicans will “push for sanctions on China for its role in spreading this pandemic.” “Coronavirus was a Chinese hit-and-run followed by a cover-up that cost thousands of lives,” the April 17 memo states.The document urges candidates to stay relentlessly on message against the country when responding to any questions about the virus. When asked whether the spread of the coronavirus is Trump’s fault, candidates are advised to respond by pivoting to China. “Don’t defend Trump, other than the China Travel Ban – attack China,” the memo states.Republicans have indicated they plan to make China a centerpiece of the 2020 campaign. Trump’s reelection campaign recently released a web videopainting Joe Biden as cozy with the authoritarian country. The pro-Trump super PAC America First Action has launched several TV commercials tying Biden to China.The GOP’s planned China-focused assault, however, is complicated by Trump’s occasional praise for President Xi Jinping. The liberal organization American Bridge recently launched a commercial which plays a clip of the president praising Xi and declares that Trump “gave China his trust.”
AOC and her communist buddies embrace a COVID-19 world – Two theories are circulating about the origin of the COVID-19 coronavirus. The media are still selling the idea that it probably arose from an infected bat at an outdoor live-animal food market in Wuhan. That’s also the Chinese Communist Party’s line. The media don’t want people thinking that communist researchers at the Wuhan Virology Institute’s BSL-4 lab might have been directly responsible. However, the most plausible scenario is that the virus was, indeed, cooked up in the lab. Former CIA officer Clare Lopez makes that case in her April 20 article “Made in China” for the Citizens Commission on National Security. Beyond debate is that the communists covered up the outbreak for weeks – assisted by the World Health Organization (WHO) – as it morphed into a worldwide pandemic that has killed hundreds of thousands and crushed the world’s economy. Not everyone is unhappy about the latter. New York Rep. Alexandria Ocasio-Cortez (AOC) says she’s thrilled by the crash of the oil industry, which has cost hundreds of thousands of jobs and could put many U.S. producers out of business.“You absolutely love to see it,” she tweeted. “This along with record low interest rates means it’s the right time for a worker-led, mass investment in green infrastructure to save our planet.” AOC’s lurch into green insanity was promptly deleted. But it was only the latest such blast from the young face of the Marxist wing of the Democratic Party, which has taken over its host.
President Trump Confirms “High Degree Of Confidence” That COVID-19 Originated In Wuhan Lab: Live Updates – During a Q&A session with the press after his remarks on “Protecting America’s Seniors”, President Trump confirmed that he has seen evidence that COVID-19 originated in the Wuhan Institute of Virology… Reporter:“Have you seen anything at this point that gives you a high degree of confidence that the [Wuhan lab] was the origin? Trump:“Yes, I have… Yeah I have, and I think the WHO should be ashamed of themselves because they were like the public relations agency for China.”“They shouldn’t be making excuses when people make horrible mistakes, especially mistakes that are causing hundreds of thousands of people around the world to die,” the president continued. “I think the World Health Organization should be ashamed of themselves.”The conversation drifted but the reporter came back to confirm:“What gives you a high degree of confidence that this originated in the [Wuhan lab]…”Trump responded:“I can’t tell you that… I am not allowed to tell you that.”Earlier during the same event, Trump was asked whether Chinese President Xi Jinping should be held responsible for the coronavirus outbreak.“I don’t want to say that, but certainly it could have been stopped,” the president said. “I wish they stopped it. The whole world wishes they stopped it.”
China Accuses US ‘Telling Barefaced Lies’ On Coronavirus – Beijing accuses the United States of deflecting blame from its own ‘poor epidemic prevention and control measures’. Beijing urged Washington on Tuesday to stop blaming others to cover up its poor handling of the COVID-19 pandemic in the United States. Geng Shuang, spokesperson for the Chinese Foreign Ministry, made the remarks at a regular press briefing in response to U.S. President Donald Trump’s latest attacks on China over the pandemic. Geng stressed that the timeline of China’s response to the outbreak is quite clear and criticized some U.S. politicians for telling lies in disregard of the facts. The only purpose of their lies is to shift the blame for their poor handling of the outbreak, he said, noting that “facts speak louder than words.” The attempt to shift the blame will not erase the achievements of the Chinese people in fighting COVID-19 through arduous efforts, or will it help with the pandemic response in the U.S., he said. The spokesperson urged U.S. politicians to review their own problems and control the outbreak at home as soon as possible, rather than slandering others and shifting the blame. Geng also responded to White House trade adviser Peter Navarro’s accusation that China sent low-quality and even counterfeit coronavirus antibody testing kits to the United States.
“China Did A Lot Of Things Right”: Bill Gates Defends CCP, Slams America Over Handling Of Coronavirus – Bill Gates vehemently defended China’s initial response to the coronavirus outbreak on Sunday, telling CNN’s Fareed Zakaria that the communist country – which silenced whistleblowers and lied about transmissibility – “did a lot of things right.” “How would you respond to the charge that the Chinese covered this up. They’ve essentially deceived the rest of the world, and as a result, they should be held in some way responsible for this?” asked Zakaria.To which Gates responded: “Well, I don’t think that’s a timely thing because it doesn’t affect how we act today. You know, China did a lot of things right. At the beginning, like any country where a virus first shows up, they can look back and say that they missed some things,” Gates said, adding “Some countries did respond very quickly and get their testing in place, and they avoided the incredible economic pain – and it’s sad that even the US that you would have expected to do this well, did it particularly poorly – but it’s not time to talk about that.”Gates then suggested that this is the time “to take the great science we have, the fact that we’re in this together, fix testing and treatments and get that vaccine, and minimize the trillions in dollars and many things that you can’t even dimensionalize in economic terms that are awful about the situation that we’re in.”That’s a distraction,” Gates added, regarding placing the blame on China. “I think there’s a lot of incorrect and unfair things said.” Watch:
Bank of China asks CME to probe ‘abnormal fluctuations’ in oil futures – (Reuters) – Bank of China (BoC) said it had hired lawyers to formally send a letter to CME Group, urging the U.S. exchange operator to investigate reasons behind “abnormal fluctuations” in crude oil futures prices on April 21. The bank is facing investor fury over heavy losses on an oil-related investment product after an unprecedented crash in energy markets. BoC said in a statement late on Wednesday that it would continue negotiating with investors, would shoulder responsibilities under the current legal framework and was seeking to respond to customers’ “reasonable requests” as early as possible. Prices for the May West Texas Intermediate (WTI) crude oil contract fell below zero for the first time on April 20, ending at minus $37.63 a barrel. Oil prices have tumbled this year due to a slump in global demand caused by the coronavirus, a price war triggered by Saudi Arabia and Russia, and a shortage of storage for excess oil, leading to steep falls in many oil-linked products. CME, which owns the New York Mercantile Exchange where WTI futures trade, had updated its systems in early April to be able to process negative prices. BoC said last week it would settle trades for its retail investor crude oil product, also known as crude oil “bao”, at negative prices, causing investor outrage as they felt BoC should have done more to protect their interests.
‘Once Upon a Virus’: China mocks U.S. coronavirus response in Lego-like animation – (Reuters) – China has published a short animation titled “Once Upon a Virus” mocking the U.S. response to the new coronavirus using Lego-like figures to represent the two countries. Washington and Beijing are locked in a war of words over the origins of the disease, which emerged in the Chinese city of Wuhan and has grown into a global pandemic. U.S. President Donald Trump said on Thursday he was confident the coronavirus may have originated in a Chinese virology lab, but declined to describe the evidence. In the animation posted online by China’s official Xinhua news agency, red curtains open to reveal a stage featuring Lego-like figures in the form of a terracotta warrior wearing a face mask and the Statue of Liberty. “We discovered a new virus,” says the warrior. “So what?” replies the Statue of Liberty. “It’s only a flu.” As the warrior issues warnings about the virus and counts off the grim milestones in China’s outbreak, the Statue of Liberty replies dismissively with echoes of Trump’s press conferences in which he played down the severity of the illness. “Are you listening to yourselves?” asks the warrior as the statue begins to turn red with fever and gets hooked up to an intravenous drip. “We are always correct, even though we contradict ourselves,” the statue replies. “That’s what I love about you Americans, your consistency,” says the warrior. The United States and other countries have accused China of misleading the world about the severity of the outbreak, and there are growing calls for an international inquiry into the origins of the virus. In an interview with Reuters, Trump said he believes China’s handling of the coronavirus pandemic is proof that Beijing “will do anything they can” to make him lose his re-election bid in November.
Trump orders meat plants to stay open in pandemic – President Trump signed an executive order Tuesday evening compelling meat processors to remain open to head off shortages in the nation’s food supply chains, despite mounting reports of plant worker deaths due to covid-19. Trump invoked the Defense Production Act to classify meat plants as essential infrastructure that must remain open. Under the order, the government will provide additional protective gear for employees as well as guidance, according to a person familiar with the action who spoke about the order before it was signed by the president. The person was not authorized to disclose details of the order. Trump’s plan to sign the order was first reported by Bloomberg News. Trump alluded to the plan Tuesday morning during an Oval Office meeting with Florida Gov. Ron DeSantis (R). “We’re going to sign an executive order today, I believe,” Trump said. “It was a very unique circumstance because of liability.” He did not elaborate. Worker safety experts say such an order would prevent local health officials from ordering meat companies to use their the most effective weapon available to protect their employees from the coronavirus – closures. They also fear that it would also undercut newly issued federal health guidelines designed to put space between plant workers. Trump has not publicly explained which provisions within the act he will rely on to compel plants to remain open or grant companies protection from workplace safety requirements. At least 20 meatpacking plants have closed in recent weeks because of covid-19 outbreaks, according to an analysis by The Washington Post. The United Food and Commercial Workers, which represents thousands of workers at U.S. meat plants, said Tuesday that at least 17 have died of covid-19, the disease caused by the coronavirus, and at least 5,000 have been directly affected by the virus.
The Price of Meat – Yves Smith – Meatpacking plants have become the new front where workers are fighting management over Covid-19 risk. But unlike medical professionals, who in theory can be hazmat suited up so as to greatly reduce exposure to contagion but aren’t due to the lack of PPE, you can rest assured that level of safety precaution will never happen in slaughterhouses because the pricing and margins of meat production won’t allow for its.The stakes for meat are high not simply due to the concentration of production, that that loss of not all that many plants has crippled on pork and beef supplies, with pork down by 1/4 and beef off by over 10%. It also results from the fact that the number of cases in these plants is so high that they’ve made their communities into hot spots. So even if the plants were kept open, people in the area would be put at even more health risk. That’s why, three weeks ago, Governor Kristi Noem pressed Smithfield Foods to halt in its ginormous Sioux Falls operation, which had over 200 positive cases. Since then, coronavirus has shuttered at least 15 more plants. Wholesalers arewarning of meat shortages in some regions, while in other areas, grocers are engaging in rationing lite (limiting the number of meat purchases), so as to keep shelves stocked and prevent panic buying.John Tyson of Tyson Foods appears to have goaded Trump into acting via a series of newspaper ads blaring that “The food supply chain is breaking.” Cynics wondered if that was just cover for jacking up prices and giving Tyson cover so as not to be accused of profiteering. But it seems that the industry honchos really did want the meat plants back in service. Trump quickly issued an executive order, using the Defense Production Act to authorize the plants to reopen. However, the press appears to have gotten out over its skis. Trump’s order isn’t forcing meat processors back into operation: However, the order does override state orders to suspend operations. And it gives the producers a big fat liability shield. From Mother Jones: Already, 20 meatpacking and food-processing workers have died from COVID-19, and more than 5,000 have contracted the disease, according to the United Food and Commercial Workers International Union. What if workers and their families start suing, claiming that the companies’ practices made them sick? Already, one worker – at a Smithfield plant in Milan, Mo. – filed a lawsuit claiming management was not sufficiently protecting workers from the risk of COID-19, and demanding that it follow Centers for Disease Control and Prevention guidelines.A president invoking the Defense Production Act to require meatpacking firms to keep their plants running during outbreaks would provide a “solid basis” for shielding the firms from suits like this, said Jennifer Zwagerman, director of Drake University’s Agricultural Law Center. She noted that Walmart was recently sued for wrongful death by the family of a worker who died from COVID-19 complications.
Thousands of IRS employees offer to go back to work after agency offers incentive pay amid backlog – Thousands of Internal Revenue Service (IRS) employees have reportedly volunteered to go back to work as the agency struggles amid the pandemic to overcome a backlog of tax filings and coronavirus stimulus payments.CNN reported Monday that a number of employees ranging in the thousands would return to work at 10 different locations across the country as the IRS works to get through tax season as well as the relief payments passed by Congress and signed into law by President Trump. Those working amid the backlog will reportedly receive a 10 percent pay raise, while some workers in areas deemed to be higher risks for coronavirus transmission, such as the mailroom, would receive up to 25 percent raises. The news was confirmed to CNN by the Professional Managers Association, a national organization representing non-union IRS workers and others in the federal government. Workers will be required to wear face masks while on the job, the association’s president told CNN. The agency took heat from some lawmakers last week for a memo requiring IRS workers to fund their own masks. The agency has since moved to provide one mask per employee, officials told CNN in a statement. “The IRS will continue to do everything possible to protect employees while also providing important services and assistance to the nation’s taxpayers,” the agency said. Tax season has already been extended through July 15 as millions of Americans are out of work and many federal employees are working from home, compounding the agency’s ability to assist taxpayers with questions or answer physical mail.
Judge says Virginia gun range can open despite stay-at-home order – A gun range in Virginia will be able to remain open amid the COVID-19 pandemic after a circuit court judge ruled the constitutional right to bear arms meant the state did not have the authority to order the business to close, The Associated Press reports. The ruling by Lynchburg Circuit Judge F. Patrick Yeatts comes in a case the SafeSide gun range and a handful of gun rights groups brought against the state over Gov. Ralph Northam’s (D) stay-at-home order. Northam ordered residents to temporarily avoid unnecessary travel and large gatherings, as well as the closure of nonessential businesses, including shooting ranges. SafeSide, Virginia Citizens Defense League, Gun Owners of America, the Association of Virginia Gun Ranges and the Virginia Citizens Defense League accused the state of violating the rights of residents afforded by the Second Amendment. “The Governor has no such power. He is barred from closing shooting ranges under the Virginia ‘Emergency Services and Disaster Law,’” the groups said in the suit. “But even more importantly, his closure order infringes on rights recognized and protected by Article I, 13 of the Virginia Constitution and the Second Amendment of the United States Constitution.” “It does not matter that the Governor has issued an emergency declaration or declared a state of emergency, as no elected official has the discretionary authority to suspend the protections the People wrote into their Constitution which also created the office in which the Governor serves,” the suit continued.
We Can’t Get Together Until Tests Get Better -The debate about when and whether the world can reopen keeps coming back to testing. If only we could test everyone all the time, the logic goes, we could isolate the ill and everyone else could go back to school, work and life as we once knew it.Sadly, that’s not quite right. The prerequisite for reopening is better tests, not just more tests.A “good test” has three properties: It’s rapid (like less than an hour), accurate and widely available. Only with all three can it be used to screen people before they go to the office, get on an airplane, or attend a class or conference. And only then – barring an effective vaccine – can authorities safely allow people to do all those things.Current tests fall short. The turnaround time for typical nasal swabs that detect the virus’s RNA can be hours or days – far too long to be useful as a screen, and plenty of time for people to get infected while awaiting the results. And even if people were willing to wait in quarantine for days, many of the available tests are not accurate. They have very high false negative rates, meaning that they would erroneously allow a lot of sick people to interact with everyone else, all but guaranteeing more super-spreader incidents. There are some promising tests that are both fast and relatively accurate, but they require nearby expensive machines, so they won’t become universally available.Checking people’s temperatures is no substitute. Thermometer guns and cameras are famously inaccurate, in part because the temperature of your face doesn’t necessarily reflect your internal temperature. More important, people infected with coronavirus are highly contagious long before they show any symptoms, and many never experience a fever.Granted, current tests do have their uses. New York, for example, recently used antibody tests to estimate that about 15% of people in the state – and about 25% in New York City – had already been infected. This might be useful for understanding whether a place is nearing “herd immunity” – but only if infection grants immunity for a significant period, which we don’t know yet. Also, it’s worth noting that New York’s test wasn’t a random sample: Participants were selected at shopping centers, so the results aren’t representative of a population that is to some extent hunkering down at home. None of this means that people shouldn’t use the available tests. Done right, testing and tracing can slow the pandemic’s spread. And even slow bad tests can provide some marginal risk mitigation for people working in hot spots. Hospitals should get access to the expensive machines to further mitigate risk. But the remaining danger, unavoidable in a hospital, is unacceptable in a college dormitory or industry conference. Which leaves sticking with social distancing, and requiring businesses to gear up with splash guards, partitions and credit card machines placed at a safe distance from cashiers. All imperfect, but helpful in reducing risk until a good test comes along.
McConnell: Battle for control of the Senate will be a ‘dog fight’ – Senate Majority Leader Mitch McConnell (R-Ky.) warned on Monday that the battle for control of the Senate in the November election will be a “dog fight,” with neither party currently having a “lock” on winning the majority. McConnell, speaking to Fox News Radio, said Republicans are “on the defense” as they try to keep their Senate majority. Republicans are defending 23 seats to Democrats 12, though many of them are in deep red states. “Let me just say that the Senate majority has not been a certainty at any point this cycle. We always knew from the beginning, and I’ve said consistently, that it’s going to be a dog fight,” McConnell said. McConnell added that the makeup of the Senate map means Republicans have “a lot of exposure,” where Democrats will try to unseat GOP incumbents. But he also pointed to Alabama and Michigan – where Democratic Sens. Doug Jones (Ala.) and Gary Peters (Mich.) are on the ballot – as “really good” pick up opportunities for Republicans. “I think it’s a tough fight. We don’t have a lock on it, nor do they. It’s going to be a fight to the finish. Sort of like a knife fight in an alley,” McConnell said. Democrats are feeling increasingly bullish about their chances of taking back the majority in November as tightening in several key races have put them increasingly in striking distance in states including Arizona, Colorado, Maine and North Carolina where GOP Sens. Martha McSally (Ariz.), Cory Gardner (Colo.), Susan Collins (Maine) and Thom Tillis (N.C.) are on the ballot. Democrats need to pick up three seats to win control of the chamber if the party also wins the White House, or a net total of four seats to get an outright simple majority.
Democratic House leaders plan vote next week on allowing proxy voting during pandemic — House Democratic leaders told lawmakers on Monday that they plan to hold a vote next week on proposed rules changes to allow a form of remote voting during the coronavirus pandemic, regardless of whether Republicans get on board. According to a Democratic aide, Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) told the Democratic caucus on a conference call that they expect to vote on allowing proxy voting, in which absent lawmakers can authorize other lawmakers physically present in the Capitol to cast votes on their behalf. Democratic leaders initially planned to vote on the rules change last week while the House was in session to vote on an interim $484 billion coronavirus relief package for small-business loans and hospitals. But Democrats decided to reverse course in response to opposition from Republicans who argued that lawmakers should be voting in person like other essential workers across the country who can’t work remotely. Hoyer has since been in bipartisan discussions with House Minority Leader Kevin McCarthy (R-Calif.) and leaders of the Rules and Administration committees about a path forward on how the House can resume its business. Many Democrats have been pushing leadership to find ways for the House to conduct its business remotely as they grow frustrated with being unable to hold committee hearings to grill Trump administration officials about the pandemic response or cast more votes on bills. At the same time, lawmakers remain worried about risking contagion by traveling back to Washington from all over the country and then congregating in large groups in the Capitol. The original proposal unveiled last week by House Rules Committee Chairman Jim McGovern (D-Mass.) would have allowed proxy voting and virtual committee proceedings, including hearings and markups of legislation. The resolution would have also directed a study on how to use technology so lawmakers could participate in floor debate remotely.
New York strikes Sanders from ballot, cancels Democratic presidential primary – The New York State Board of Elections on Monday canceled its Democratic presidential primary, scheduled for June 23, after striking off Sen. Bernie Sanders’ name from the ballot. The move was made in an effort to protect New Yorkers during the coronavirus outbreak that has hit the state harder than any other in the nation. Now, voters in about 20 counties that had no other contests on their ballot will not have to go to the polls, according to the New York Times. “I think it’s time for us to recognize that the presidential contest is over,” Commissioner Doug Kellner explained during a livestream announcing the decision. Sanders, the independent senator from Vermont, dropped out of the presidential race on April 13 and endorsed former Vice President Joe Biden, who built a near-insurmountable lead in pledged delegates after several key wins. Despite dropping out, Sanders urged his followers to vote for him in the remaining primaries in order to pick up delegates and influence the party platform at the Democratic National Convention, which is slated for August. He and his supporters have pushed for Biden, now the apparent nominee, to embrace more liberal proposals on a range of issues. A spokesman for Sanders’ campaign did not immediately respond to CNBC’s request to comment.
JPMorgan Chase sent 225,000 small-business applications this week – JPMorgan Chase has submitted more than 225,000 applications for the second round of the Small Business Administration’s relief program. The largest U.S. lender continues to process and submit applications, and plans to email clients as it receives responses from the SBA, Jennifer Roberts, chief of the consumer unit’s business-banking division, said in a note to clients Wednesday. “We don’t know timing yet, but we’ll email you as soon as the SBA notifies us of their decision on your loan,” Roberts wrote. The SBA’s Paycheck Protection Program, aimed at helping the nation’s smallest businesses weather the coronavirus pandemic, relaunched Monday with $320 billion of funds after an initial round of $349 billion was exhausted in just 13 days earlier this month. JPMorgan’s submissions total about $17.8 billion in requested funding for the second round, with an average loan size of $81,000, according to company spokeswoman Trish Wexler. In the first round, JPMorgan secured about $14 billion in funding, with an average loan size of more than $500,000. The largest U.S. lenders had hundreds of thousands of applications ready to go when the program restarted. Bank of America sent 184,000 applications from Sunday to early Monday, while Wells Fargo sent more than 100,000 applications Monday. The Trump administration said Tuesday that it had approved more than $52 billion in loan requests, even as lenders were beset by glitches that slowed down the SBA’s platform.
JPMorgan turned SBA borrowers away before second round started – JPMorgan Chase stopped taking new applications from small businesses seeking loans under the U.S. government’s Paycheck Protection Program before the initiative relaunched Monday. The bank told customers that it wasn’t accepting new applications for the rescue loans because it was trying to work through a backlog of requests already in its pipeline, Jennifer Roberts, chief of the consumer unit’s business-banking division, said in a note to clients Monday, expanding on a message it gave last Thursday. “I wish we could help every business through this program, but funds could run out again quickly and we have preexisting applications in our queue,” Roberts wrote. The SBA’s Paycheck Protection Program relaunched Monday at 10:30 a.m. New York time with an additional $320 billion. The initial $349 billion to support small business during the coronavirus pandemic ran out in just 13 days. Some lenders had thousands of applications to go when the system restarted, creating pent-up demand and fueling concerns the extra money would run out quickly. On Monday, some banks reported that they either couldn’t access the agency’s system or were being kicked out as they tried to process applications. JPMorgan said it would monitor funding availability in case it can take new loan applications in the future.
Tilt toward smallest lenders is latest PPP wrinkle to confound banks – A flurry of changes to the Paycheck Protection Program – new filing requirements, a planned audit of big loans and a last-minute decision to temporarily restrict many banks’ ability to submit applications – is confounding lenders of all sizes. The effort to infuse nearly $660 billion into small businesses harmed by the coronavirus pandemic initially frustrated bankers as they struggled to gain approvals for a backlog of applications. Now those lenders are dealing with ever-changing guidance from the Small Business Administration and the Treasury Department. Smaller banks were pleased with the agencies’ decision Wednesday to block lenders with more than $1 billion in assets from using the SBA’s E-Tran portal over an eight-hour period that evening. Still, some expressed frustration with a requirement to complete a form that has yet to be distributed to lenders. And the decision to scrutinize large-dollar loans, without guidance on what will be reviewed, has also left many bankers scratching their heads.Keeping up with the evolving directives “is very challenging,” said Todd Nagle, CEO of the $1.4 billion-asset IncredibleBank in Wausau, Wis. Most of the policies benefit borrowers and protect banks, but, “Unfortunately, now the program is getting political and seems to be straying from its original mission, which was to keep employees working,” Nagle said. “It’s frustrating to get new guidance and FAQs daily,” said Brad Bolton, president and CEO of the $150 million-asset Community Spirit Bank in Red Bay, Ala. The agencies are relying on a hodgepodge of tactics instead of an upfront strategy, industry experts said. “Changing the rules midstream is so unsettling for small business owners,” Gonzalez said. “Banks should have specific rules for distribution.”
Congress was wrong to leave PPP disbursement up to banks – The coronavirus pandemic has exposed the weaknesses of federal crisis response capabilities across the entire U.S. economy. Nowhere has this weakness been more evident than in the government’s efforts to rescue the small businesses that account for almost half of U.S. jobs and economic activity. Instead of providing quick, efficient and fair employee retention assistance directly through employers – like the method used in the European Union and elsewhere globally – the U.S. relies on bank lenders as the primary conduit for delivery of assistance to employers and their employees. “To wake up one day and assume everyone in America is going to be above average at math and above average rational is crazy,” says Ethan Bloch. This reliance on lender intermediaries means that assistance must come in the form of “loans” rather than direct support payments. It also exposes how frequently the government’s policy goals conflict with lenders’ economic goals and incentives. This is an inefficient and ineffective solution for the problem it intended to solve. There are numerous issues emerging from the use of banks to distribute the first, and now second, round of emergency small- business assistance under the Paycheck Protection Program. But lawmakers who created the PPP through the first coronavirus relief bill should likely be forgiven for not creating a better method out of thin air. An emergency is an emergency after all. But the practice of channeling small-business and employee support assistance through banks is going to become very problematic very fast if the crisis drags on. The government can continue to use banks to deliver aid to small businesses if it has to, but it shouldn’t try to outsource the hardest political and policy decisions to banks. If this continues, the vulnerable small businesses that lawmakers want to help the most will end up paying the price. As the coronavirus crisis stretches on, and the need for additional small-business support grows, the government has one absolutely critical decision to make: whether to try preserving every small business that was in operation through mid-March 2020 or assist only those that will remain viable when the government assistance ends, based on choosing the likely “winners” and “losers” post-crisis.
Fed Allows Banks to Eliminate Limits, Fees on Monthly Withdrawals From Savings Accounts – WSJ – The Federal Reserve wants to make it easier for consumers to access cash in savings accounts and money-market accounts during the pandemic. On Friday, the central bank said it was eliminating a rule that generally limits individuals from making more than six withdrawals from such accounts each month without paying a fee. The Fed said in a release that it is acting because “financial events associated with the coronavirus pandemic” have made access to cash “more urgent.” The move enables banks to allow for unlimited withdrawals and transfers each month, though lenders aren’t required to eliminate the existing limits and can retain their existing fees on transactions of more than six a month, the Fed said.
CFPB eases disclosure rules to help consumers affected by COVID-19 – The Consumer Financial Protection Bureau is relaxing certain disclosure requirements for consumers who have a financial emergency due to the coronavirus pandemic and need to obtain funds through the quick closing of a loan.The CFPB issued an interpretive rule Wednesday clarifying that consumers can exercise their rights to modify or waive waiting periods required by the Truth in Lending Act and the Real Estate Settlement Procedures Act, known as TRID. The CFPB is encouraging mortgage lenders to voluntarily tell consumers of their ability to obtain waivers for certain required waiting periods under TRID, which is codified in Regulation Z. “The steps we are taking today will help consumers facing financial emergencies obtain access to mortgage credit faster,” CFPB Director Kathy Kraninger said in a press release. “The pandemic is resulting in consumers facing various challenges, and our temporary and targeted solutions are intended to ensure that consumers receive the credit they need in a timely manner.” The CFPB said that the waiting period under TRID may result in the delay of some transactions for consumers who have a bona fide personal financial emergency.Under the new guidance, the CFPB will allow a consumer with a financial emergency to waive waiting periods if three conditions are met: the extension of credit is needed to meet a financial emergency; the consumer provides a brief statement saying the financial need is due to COVID-19; and the emergency necessitates closing a mortgage credit transaction before the end of TRID’s waiting period.
Agencies signal support for more capital relief in midst of crisis – The Federal Reserve Board and Federal Deposit Insurance Corp. are eyeing further changes to bank capital rules to help the industry confront the economic impact of the COVID-19 crisis, according to letters the two agencies sent Congress.In a letter to Senate Banking Committee Chairman Mike Crapo, R-Idaho, the Fed’s head of bank supervision said lawmakers should consider easing statutory requirements – known as the Dodd-Frank Act’s Collins amendment – dealing with a bank’s Tier 1 leverage capital ratio.Fed Vice Chair of Supervision Randal Quarles said that that amendment is straining banks’ ability to handle an influx of deposits in the stressed economic environment. “Congress has amended … [the Collins amendment] before, recognizing the complications it presents in tailoring a capital regime to a diverse financial sector and to changing risks in the financial system over time,” Quarles said in the April 22 letter to Crapo. “In the current environment, it poses an additional challenge: complicating the regulatory agencies’ ability to address a severe economic stress period. Banking organizations are receiving significant inflows of customer deposits and the ability of these banking organizations to continue accepting significant deposits may become constrained due to Tier 1 leverage requirements.”The Senate Banking Committee posted the letters from Quarles and FDIC Chair Jelena McWilliams on its website this week. They were in response to Crapo’s request for details about regulators’ efforts during the crisis. Quarles’ request echoes steps the central bank took on its own at the beginning of April to ease its supplementary leverage ratio. The Fed announced at the time that it would exclude for one-year Treasury securities and deposits held at Federal Reserve banks from the SLR calculation.”Liquidity conditions in Treasury markets have deteriorated rapidly, and financial institutions are receiving significant inflows of customer deposits along with increased reserve levels,” the Fed said in its April 1 statement. “The regulatory restrictions that accompany this balance sheet growth may constrain the firms’ ability to continue to serve as financial intermediaries and to provide credit to households and businesses.”In an April 10 letter to Crapo, McWilliams said her agency was considering steps to ease capital requirements to address the market strain for banks dealing with the effects of the pandemic crisis. Yet her letter notably left out any calls for congressional reforms.The FDIC is considering “temporary changes to supplementary and tier 1 leverage ratios that would allow banking organizations to expand their balance sheets through deposits at the Federal Reserve Banks and/or acquisition of U.S. Treasury securities,” McWilliams wrote.
Pandemic Triggers a Wave of Distress, Bankruptcy in Corporate America – WSJ – The economic earthquake the coronavirus has unleashed is likely to trigger a wave of corporate distress and bankruptcy unseen in years. Stay-at-home orders and the shutdown of nonessential business have driven broad swaths of the economy into panic mode, ending a long period of calm as markets rose and cheap capital abounded. In industries that were already in a precarious position before the crisis, including retail and energy, the pandemic has tipped many companies over the edge. A host of oil companies have sought chapter 11 protection, while J.C. Penney Co. JCP 3.07% and Neiman Marcus Group Inc. are expected to file for bankruptcy soon. Companies in areas that were previously stable, such as the automotive, travel and leisure industries – and even health care – may soon face similar pressures. U.S. corporate debt downgraded to selective default, meaning a borrower has failed to meet one or more of its obligations, totaled $64.1 billion for the 12 months ended April 17, according to S&P Global Ratings. That represents only a slight uptick over the pace at the end of January, but the numbers are about to get a lot more bleak. In the coming months, that figure could top the roughly $340 billion reached at the height of the financial crisis, according to the worst-case scenario estimates from S&P. Even in a less grim scenario, the figure could approach levels reached after the dot-com bust in the early 2000s. Companies of all stripes are scrambling to avoid a painful reorganization of their capital structures and operations, default or bankruptcy. Many have tapped lines of credit and slashed costs. Many, such as Carnival Corp., Expedia Group Inc. and Airbnb Inc., have issued new equity or debt to public investors or private-equity firms. For some, those efforts could tide them over until conditions improve. But should the recession prove deeper than envisioned, there could be a second – potentially bigger – wave of corporate restructuring later this year as companies labor under the weight of additional debt taken on during the shutdown, advisers warn. “We will definitely see an uptick in defaults and an uptick in restructurings,” said William “Tuck” Hardie of investment bank Houlihan Lokey Inc. “The question is: Is it a 2,000-foot mountain or is it Mt. Everest?” U.S. companies drew down about $230 billion from revolving credit lines from the beginning of March through April 9, according to an analysis by Goldman Sachs Group Inc. The largest portion – around 17% – went to companies in the automotive industry, with about 15% going to retailers and 10% to travel and leisure purveyors.
Unprecedented Pace Of Corporate Debt Issuance Has Crippled Corporate Fundamentals – (graphs) When the Fed breached a monetary taboo even Ben Bernanke did not violate when Jerome Powell announced last month he would buy investment grade bonds, it was clear that the Fed’s only solution to avoiding the bursting of the corporate debt bubble was to make it even bigger. And sure enough, the Fed’s explicit backstop of the bond market has meant the supply of IG bonds has set a record pace in 2020. According to Morgan Stanley, IG supply has totaled $693 billion through mid-April, up a staggering 63% y/y… … with $435 billion pricing since the beginning of March alone. March supply set an all-time record at $264 billion, breaking the prior record by over $80 billion and a further $170 billion in the first half of April. To put that in perspective, the March total surpasses the prior record for the busiest month (January 2017) by over $80 billion. Issuance just in the first half of April already ranks in the top five busiest months on record. Four of the top 10 busiest weeks on record have occurred since the beginning of March, with the week of March 30 ranking as the busiest ever, at $118 billion of issuance. All to say that this was truly an unprecedented pace. Year-to-date through April 17, total supply of $693 billion is tracking 63% ahead of last year. And confirming what we said a month ago in “Bond Market Tears In Two“, issuance has been heavily skewed toward high-quality issuers, with issuance rated “A” making up 57% of supply from the beginning of March onwards, for obvious reasons: these are the bonds that will find a willing buyer in the Fed via Blackrock’s purchases of the LQD ETF. Drilling down, consumer Discretionary companies have raised the most new debt financing when combined with revolver draws.Of course, the Fed’s enabling of this epic bond bubble burst would have been impossible without the coronavirus crisis: the pandemic has produced an unprecedented market shock, with issuers experiencing an extremely sharp drop in earnings, without clarity on when the economy will begin to recover. Indeed, IG issuers have tapped financing wherever possible, including drawing on revolvers. Through April 20, IG issuers had tapped $134 billion in revolvers, putting combined bond issuance and revolver draws at $568 billion since the beginning of March. And while trends in the use of those proceeds point to companies using debt issuance to shore up liquidity, the IG issuance momentum has been so powerful, companies have been using corporate bonds to refi some of the revolver draws in recent weeks, as we reported last week.
Buffett’s Berkshire posts nearly $50 billion loss as coronavirus causes pain – (Reuters) – Warren Buffett’s Berkshire Hathaway Inc is being hit hard by the coronavirus pandemic, posting a record quarterly net loss of nearly $50 billion on Saturday and saying performance is suffering in several major operating businesses. Berkshire said most of its more than 90 businesses have faced “relatively minor to severe” negative effects from COVID-19, the illness caused by the novel coronavirus, with revenue slowing considerably in April even at businesses deemed “essential.” The BNSF railroad saw shipping volumes fall, Geico set aside money for car insurance premiums it doesn’t expect to collect, and some businesses cut wages and furloughed workers. Retailers such as See’s Candies and the Nebraska Furniture Mart closed stores. Buffett also allowed Berkshire’s cash stake to rise to a record $137.3 billion from $128 billion at the end of 2019. That reflected the 89-year-old billionaire’s inability to make large, “elephant” size acquisitions, now in its fifth year, and caution in buying more stocks. Berkshire repurchased $1.7 billion of its own stock. Berkshire’s first-quarter net loss totaled $49.75 billion, or $30,653 per Class A share, reflecting $54.52 billion of losses from investments, mainly common stocks. A year earlier, net earnings totaled $21.66 billion, or $13,209 per share. An accounting rule requires Berkshire to report unrealized stock losses and gains with earnings. This causes huge swings in Berkshire’s net results that Buffett considers meaningless. Quarterly operating profit, which Buffett considers a better performance measure, rose 6% to $5.87 billion, or about $3,624 per Class A share, from $5.56 billion, or about $3,388 per share. Year-earlier results reflected a charge on investments linked to what prosecutors called a fraud at a solar company. Operating profit at Berkshire’s business units fell 3%, with lower profit from BNSF, utilities and energy, and manufacturing, service and retailing businesses.
Fed expands yet-to-be-launched lending backstop for larger firms – The Federal Reserve is expanding its yet-to-be-launched credit program for larger businesses and cutting by half the minimum loan amount available through the program to $500,000.When the Fed first announced the details of the Main Street Lending Program on April 9, it said U.S. businesses with up to 10,000 employees or up to $2.5 billion in annual revenue would be eligible for loans to help them weather the economic effects of the coronavirus outbreak.But after receiving extensive feedback, the Fed will make the program available to companies with up to 15,000 employees or $5 billion in annual revenue, the agency said Thursday. “With the changes, the program will now offer more options to a wider set of eligible small and medium-size businesses,” the Fed said in a press release. The central bank added that it is also evaluating “a separate approach” to offer loans to nonprofit organizations. The Fed’s lending facilities effectively provide a credit option to larger firms in addition to the Paycheck Protection Program, which was authorized by Congress to provide loans to small businesses that in many cases can be forgiven.The Fed program originally had two components: the Main Street New Loan Facility and the Main Street Expanded Loan Facility. But the Fed is adding a new option, the Main Street Priority Loan Facility, which will issue loans up to either $25 million or six times the borrower’s 2019 earnings before interest, taxes, depreciation and amortization. Under the new Main Street Priority Loan Facility, lenders will retain a 15% share in loans, compared to the other two facilities where lenders retain just a 5% share on loans.
CFPB issues guidance on making mortgage servicing transfers ‘seamless’ –The Consumer Financial Protection Bureau said it will consider “good-faith efforts” by mortgage servicers to prevent consumer harm and comply with regulations in the event that a government agency requests a servicing transfer.The agency released an 18-page bulletin Friday with examples of practices that servicers may deem in compliance with Regulation X. The regulation requires servicers to maintain procedures “reasonably designed” to ensure that information and documents are transferred to another servicer in a timely manner.Although the CFPB said it began developing the guidance before the coronavirus pandemic, the issue of servicing transfers has drawn more attention lately with the economic fallout of the virus outbreak. Earlier this month, the head regulator of the government-sponsored enterprises Fannie Mae and Freddie Mac said the two companies may transfer servicing rights away from firms experiencing financial troubles because homeowners are missing their mortgage payments. While officials have allowed borrowers to seek loan forbearance plans, servicers must still send advances of principal interest to investors in mortgage-backed securities.”We’ve seen that we can transfer servicing in a way that’s not too disruptive,” Mark Calabria, director of the Federal Housing Finance Agency, was quoted as saying in an article published in HousingWire.Since 2014, when Regulation X mortgage servicing rules took effect, the CFPB has found weakness in how some servicers manage transfers. “Consumers should experience a seamless process when their mortgage servicer changes,” CFPB Director Kathy Kraninger said in a press release. “The guidance we released today will facilitate a well-functioning mortgage servicer transfer process, providing a roadmap for servicers that will prevent consumer harm. The guidance provides insights the CFPB has gained through years of supervisory and enforcement work to oversee compliance with regulations updated after the financial crisis.”Mortgage servicers collect principal and interest payments on behalf of borrowers but government entities such as Fannie and Freddie may require the transfer of servicing to another entity if certain requirements are not being met. The CFPB said it intends to focus any supervisory feedback for institutions, if needed, on “identifying issues, correcting deficiencies, and ensuring appropriate remediation for consumers.”
Cost of GSEs’ mortgage market support may be too steep for lenders – Lenders welcomed the Federal Housing Finance Agency’s recent announcement that Fannie Mae and Freddie Mac can buy loans already in forbearance, but that relief comes with a catch.Originators are now weighing whether the plan makes sense for them after learning that Fannie and Freddie will charge a fee for taking on more risk. The fee, known as a loan-level price adjustment, is 5% of the unpaid principal balance for first-time homebuyers and 7% for all others. The new cost adjustment, which was developed in consultation with the FHFA, is yet another challenge for lenders as the government encourages forbearance for borrowers coping with the coronavirus pandemic. Normally, borrowers would be on the hook for additional fees tacked onto a loan. But in this case, since loans in forbearance will have already closed, the lender is responsible for the loan-level price adjustment. The fees Fannie and Freddie have set could be too high to provide any relief to lenders at all. “FHFA is trying to have it both ways,” “On the other hand, they’re trying to act like a company in conservatorship by pricing those loans in a way that makes it unattractive.” FHFA Director Mark Calabria has made clear his view of how the government-sponsored enterprises should behave while they are in conservatorship, and has said that he doesn’t believe it is their responsibility to assist mortgage companies facing a liquidity crunch due to the coronavirus pandemic. Instead, he is focused on building up the capital cushions at Fannie and Freddie, which pale in comparison to financial companies of similar size. Right now, the companies are permitted to hold a combined $45 billion in capital, and can access a credit line at the Treasury Department if their own capital is depleted. Buying loans in forbearance could very well set Fannie and Freddie up for losses, which is likely the reason the GSEs are imposing the high loan-level price adjustment. “There is a heightened level of risk for them that these loans will either maintain a delinquent status or trend into a delinquent status from forbearance,”. The FHFA announced on April 22 its new policy allowing the GSEs to back loans in forbearance. Fannie and Freddie outlined the loan-level price adjustments on their websites shortly thereafter. The GSEs said the fees were priced as such to “address the risk of these temporary measures” and to protect taxpayers. Balancing the safety and soundness of Fannie and Freddie while at the same time fulfilling the companies’ original purposes of expanding the secondary mortgage market is no easy feat, particularly in the midst of a global pandemic. Lenders of all sizes are urging the FHFA to focus on the latter.
MBA Survey: “Share of Mortgage Loans in Forbearance Increases to 6.99%” of Portfolio Volume -Note: To put these numbers in perspective, the MBA notes “For the week of March 2, only 0.25% of all loans were in forbearance.” From the MBA: Share of Mortgage Loans in Forbearance Increases to 6.99%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased from 5.95% of servicers’ portfolio volume in the prior week to 6.99% as of April 19, 2020. “Over 26 million Americans have filed for unemployment over the last month, leading to nearly 7 percent – 3.5 million – of all mortgage borrowers asking to be put into forbearance plans. For FHA and VA borrowers, the share of loans in forbearance is even higher, at 10 percent,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance requests fell relative to the prior week but remain roughly 100 times greater than the early March baseline. While the pace of job losses have slowed from the astronomical heights of just a few weeks ago, millions of people continue to file for unemployment. We expect forbearance requests will pick up again as we approach May payment due dates.”Added Fratantoni, “The combination of stimulus payments, expanded unemployment insurance benefits, further fiscal and monetary actions, and states reopening will hopefully begin to stabilize forbearance requests and the overall economy.” This graph shows the weekly forbearance requests as a percent of servicer’s portfolio volume.The requests peaked in the week of March 30th to April 5th, but might pick up again when May payments are due.The MBA notes: “Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 1.79% to 1.14%.”
NAR: Pending Home Sales Decrease 20.8% in March — From the NAR: NAR Calls Housing Market Slump Temporary as Pending Home Sales Fall in March – Pending home sales fell in March, seeing expected declines as a result of the coronavirus outbreak, according to the National Association of Realtors®. Each of the four major regions saw drops in month-over-month contract activity and year-over-year pending home sales transactions. The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings,decreased 20.8% to 88.2 in March. Year-over-year, contract signings declined 16.3%. An index of 100 is equal to the level of contract activity in 2001. … The Northeast PHSI dropped 14.5% to 82.3 in March, 11.0% lower than a year ago. In the Midwest, the index decreased 22.0% to 85.6 last month, down 12.4% from March 2019. Pending home sales in the South sank 19.5% to an index of 103.7 in March, a 17.8% drop from March 2019. The index in the West fell 26.8% in March 2020 to 71.4, down 21.5% from a year ago. This was well below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in April and May. Some of these sales will be cancelled or delayed due to COVID-19.
Homebuilders suddenly see sales jump as renters flee small urban apartments – Diana Olick – Home sales nearly ground to a halt at the end of March, as the coronavirus pandemic forced an economic shutdown that scuttled open houses and shattered consumer confidence. Now, demand appears to be coming back, especially for newly built homes. In the initial four weeks of the national shutdown, sales of newly built homes began falling precipitously, down 85% from normal spring activity by the fourth week. In the past two weeks, however, the numbers have started to climb, according to John Burns Real Estate Consulting, which tracks hundreds of builders nationwide. “We’re still down roughly 65%, but more positive news is coming out of the new home market, particularly for builders who are targeting the first time and entry level buyers,” said Devyn Bachman, manager of research at JBRC. She noted that a wave of renters are leaving their apartments and eyeing new homes. In her research, Bachman found demand for new construction heavily skewed toward renters, especially young couples with two incomes who feel secure in their employment. “Just this week we have experienced an increase in sales, as well as continued website engagement activity,” . He said all three of those sales were for speculative homes built without a buyer that were either completed or under construction for a quicker delivery. He added that his company rarely builds on speculation, “however I think buyers would rather just walk through a new home and buy it.” Paul said that Mid-Atlantic is now starting to plan more speculative homes. Zillow, the nation’s largest real estate listing site, reported last week a slight increase in overall search traffic after volume had dropped dramatically. Redfin, a real estate brokerage, also reported an increase potential buyer inquiries to agents. While the overall numbers are still very low, the builders may recover first for several reasons, not the least of which is they appeal to the newly germophobic. “It’s safe, it’s clean, it’s new, and it’s easy to show at this point,”
Real Disposable Income Per Capita in March – With the release of this morning’s report on March Personal Incomes and Outlays, we can now take a closer look at “Real” Disposable Personal Income Per Capita. At two decimal places, the nominal -2.02% month-over-month change in disposable income was at -1.75% when we adjust for inflation. This is a decrease from last month’s 0.49% nominal and 0.41% real increases last month. The year-over-year metrics are 0.95% nominal and -0.36% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015. Disposable income began a faster increase in 2012 and 2013 that continues.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013. It will be interesting to see how the recent tax legislation affects the trend over time. The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let’s compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 95.6% since then. But the real purchasing power of those dollars is up only 36.9%.
Most Americans Will Be Scared To Return To Malls When Stores Finally Reopen – Over the weekend, we wrote why if one uses Wuhan as a template for what “reopening” could look like, anyone still expecting a V-shaped recovery, or even U-shaped one, could be in for a major shock: the reason – it will take months if not years for consumer fears to subside and for behavior to return to normal.This could prove catastrophic for America’s already teetering shopping malls and “bricks and mortar” retailers. According to a new study by retail analytics company First Insights conducted on April 20, only one-third of American adults surveyed said that they will feel safe shopping in a mall after stores reopen. More respondents said they’ll feel safe shopping in grocery, drug and big-box stores like Target and Walmart, outlets which mostly remained open during the outbreak to sell essential goods. In an act of painful irony, before the Coronavirus pandemic hit, malls – which were already suffering from historic traffic losses, went all in in their attempts to lure shoppers people back and added such “social” elements as amusement parks, movie theaters and upgraded food courts – just the types of crowded places that have became off-limits when social distancing began.As retailers reopen after mandatory stay-at-home periods, Greg Petro, chief executive officer of First Insight, said in a statement that “malls in particular need to be thinking of ways to inspire a sense of safety for consumers, and it will need to go beyond offering gloves and masks at the door.”And, as Bloomberg notes, China may show the way again:As the nation reopened businesses following its quarantines, it’s become standard to check the temperatures of patrons entering shopping destinations. Some stores in China are being cleaned multiple times during the day. And fitting rooms and products that have been tried on are being disinfected after each use — no more just picking up a sweater and throwing it back on the rack if it’s not the right fit.
More than 50 Atlanta restaurant owners unite in decision not to reopen – As Georgia restaurants have been given the green light to reopen their restaurants for dine-in service, with restrictions, as early as today, a group of more than 50 restaurant owners in Atlanta and Savannah, have prepared a unified statement that will be published as a full-page, paid advertisement in The Atlanta Journal-Constitution in Tuesday’s print and e-paper version. The group is operating under the hashtag #GAHospitality together. Collectively, its owners operate more than 120 restaurants, the majority in greater Atlanta. None of these operators has announced plans to reopen for dine-in service. The #GAHospitality statement emphasizes the responsibility of restaurant owners in managing their operations during the COVID-19 pandemic and their role in safeguarding the health and welfare of guests and employees. “We agree that it’s in the best interest of our employees, our guest, our community, and our industry to keep our dining room closed at this time,” it reads. The ad bears the name of each restaurateur along with their place or places of business.
Wave Of Repos Imminent As Subprime Auto-Buyers Miss Payments – Subprime car lenders report a sharp drop in auto loan payments. In a sign of upcoming trouble, Subprime Car Buyers Miss Loan Payments. Credit Acceptance Corp., the lender to car buyers with subprime credit scores, warned it’s seeing a sharp drop-off in payments as people shift their financial priorities to get through the coronavirus pandemic.As unemployment soars, borrowers are putting off payments or “reallocating resources,” Credit Acceptance said in a regulatory filing Monday, explaining that it needs more time to publish a quarterly report.New lending is also slowing as dealerships across the U.S. are forced to shutter their lots, the company said.Ally Financial Inc. said on Monday that about 25% of its auto-loan customers have taken advantage of its payment-deferral program. The filing by Credit Acceptance shows some consumers already can’t keep up. Meanwhile, loan applications have plunged as dealers have closed their lots.
Dallas Fed: “Contraction in Texas Manufacturing Sector Worsens”, Record Low Activity Index –From the Dallas Fed: Contraction in Texas Manufacturing Sector Worsens: Texas factory activity declined further in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, pushed further negative from -35.3 to -55.3, suggesting the contraction in output has steepened since last month. Other measures of manufacturing activity also point to a sharper decline in April. The new orders index dropped 26 points to -67.0, its lowest reading since the survey began in 2004. Similarly, the growth rate of orders index fell to -62.2. The capacity utilization and shipments indexes fell to -54.5 and -56.6, respectively. The capital expenditures index declined 20 points to -54.3. Each of these April readings represents a historical low. Perceptions of broader business conditions remained very pessimistic in April. The general business activity index inched down from -70.0 to -73.7, pushing to a new historical low. The company outlook index remained near an all-time low but inched up from -65.6 to -62.6. The index measuring uncertainty regarding companies’ outlooks retreated slightly to 54.4, a reading still indicative of sharply increased uncertainty. Labor market measures indicate further employment declines and shorter workweeks this month. The employment index held steady at -21.2. Three percent of firms noted net hiring, while 24 percent noted net layoffs. The hours worked index dropped 18 points to -40.2, signaling a notably reduced workweek length.
Richmond Fed: “Fifth District Manufacturing Activity Declined Sharply in April”, Lowest Reading on Record –From the Richmond Fed: Manufacturing Activity Declined Sharply in April Fifth District manufacturing activity declined sharply in April, according to the most recent survey from the Richmond Fed. The composite index plummeted from 2 in March to −53 in April, its lowest reading and largest one-month drop on record. All three components – shipments, new orders, and employment – fell, and the indexes for shipments and new orders reached record lows. Firms reported weakened local business conditions and expected conditions to remain soft in the next six months.Survey results reflected a deterioration in employment conditions in April. More contacts reported drops in employment and average work week, although the wage index remained flat. Manufacturers expected these conditions to persist. This was the last of the regional Fed surveys for April.Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
April Regional Fed Manufacturing Overview – Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country’s GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, “The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated.” Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for April is -23.8, down from the previous month’s -1.7. It is well below its all-time high of 25.1, set in May 2004.
ISM Manufacturing index Decreased to 41.5 in April – The ISM manufacturing index indicated contraction in April. The PMI was at 41.5% in April, down from 49.1% in March. The employment index was at 27.5%, down from 43.8% last month, and the new orders index was at 27.1%, down from 42.2%. From the Institute for Supply Management: April 2020 Manufacturing ISM® Report On Business® “The April PMI® registered 41.5 percent, down 7.6 percentage points from the March reading of 49.1 percent. The New Orders Index registered 27.1 percent, a decrease of 15.1 percentage points from the March reading of 42.2 percent. The Production Index registered 27.5 percent, down 20.2 percentage points compared to the March reading of 47.7 percent. The Backlog of Orders Index registered 37.8 percent, a decrease of 8.1 percentage points compared to the March reading of 45.9 percent. The Employment Index registered 27.5 percent, a decrease of 16.3 percentage points from the March reading of 43.8 percent. The Supplier Deliveries Index registered 76 percent, up 11 percentage points from the March reading of 65 percent, limiting the decrease in the composite PMI®. Here is a long term graph of the ISM manufacturing index. This was slightly above expectations of 36.7%, but the declines in new orders and employment were even worse than the headline. This suggests manufacturing contracted sharply in April.
US Manufacturing Surveys Show Record Collapse In Output, Orders, & Jobs — Following the utter devastation across all regional Fed surveys, it should be no surprise that this morning’s national manufacturing surveys (ISM and Markit) are a disaster. •Markit US Manufacturing 36.1 – 11-year low (weaker than expected and worse than the flash print) •PMI US Manufacturing 41.5 – 11 year lows (but better than the 36.0 expected due to the farcical surge in supplier delivery times) April data signaled an unprecedented contraction in production across the U.S. manufacturing sector, overwhelmingly linked to measures implemented to contain the COVID-19 outbreak. Factory closures were widely reported and the frequent cancellation or postponement of orders resulted in the largest monthly drop in the new orders index on record. Spare capacity across the sector and pessimism about the year ahead meanwhile resulted in the fastest fall in employment since March 2009, despite efforts to furlough staff. Both input costs and output charges fell sharply as companies and their suppliers offered discounts to boost sales. The headline reading was the lowest for just over eleven years… Source: Bloomberg Which confirms the collapse in regional Fed surveys…
Coronavirus: US farm sales to China hit by bumper soybean crop from Brazil, supply chain disruptions – The coronavirus pandemic and strong foreign competition are obstructing a US push to increase sales of farm products to China, even as Washington banks on Beijing buying more of its agricultural goods as part of the phase one trade deal signed in January. While analysts say the pandemic has not affected soybean shipments from the United States, cheaper beans from Brazil have made them less competitive. The South American country is also benefiting from its largest harvest on record. US pork exports, meanwhile, have been hit from coronavirus-related supply chain disruptions, forcing cuts to production capacity. China is exploring ways to accelerate purchases of farm products such as soybeans by asking state-owned firms to buy them for government reserves, Bloomberg and trade publication Agribusiness reported, citing unidentified sources. US pork and soybean farmers had high hopes of increasing their exports to China after Beijing waived a 25 per cent tariff on the American products, which was imposed in July 2018 as a countermeasure to tariffs levied by Washington in the first days of the trade war. But new data shows that any gains made late last year have tailed off. Between April 10 and 16, net sales of US soybeans for delivery during the 2019-20 crop year to all foreign buyers rose 41 per cent to 344,900 tonnes compared to the previous week, according to a weekly report released by the US Department of Agriculture (USDA). However, export sales of US soybeans were down 48 per cent compared to a four-week average prior to April 10 to 16. China did not buy any soybeans between April 10 and 16 for the 2019-20 crop year, the report said. Demand for US soybeans from China have been especially weak over the last few months.“Tariff waivers have been issued to Chinese processors for the purchase of US supplies, but heavy volumes [of Chinese purchases] have still not been secured,” he said.“We saw big purchases by China through to mid-December as trade negotiations with the US progressed, but there has been very little since.”China planned to import 92.48 million tonnes of soybeans this year, up from 88.59 million t onnes in 2019, according to China’s Ministry of Agriculture.
Farms in Maryland, Delaware to Destroy 2 Million Chickens Due to Staffing Shortages – Coronavirus-related staffing shortages at chicken processing plants will lead farms in Maryland and Delaware to destroy nearly 2 million chickens.The Baltimore Sun reported Friday that the plants are unable to keep pace with the number of birds that are ready for harvest. They had been placed into poultry houses as chicks several weeks ago. The chickens will not be processed for meat. The trade group the Delmarva Poultry Industry said that every poultry plant on the Delmarva Peninsula has struggled with reduced worker attendance. The reasons include workers being sick with the coronavirus and people following guidance to stay home if sick.The Delmarva Peninsula includes parts of Delaware, Maryland and Virginia.The trade group said that one unidentified company has become the first to do what’s called “depopulation.” The trade group said the company was unable to find other options, such as allowing another company to take the chickens.The trade group said that the extermination methods have been approved by the American Veterinary Medical Association for handling cases of infectious avian disease.Animal activists are raising concerns. Save Delmarva Chickens said it’s inhumane to use measures designed to control avian flu on healthy birds.
American Farms Cull Millions Of Chickens Amid Virus-Related Staff Shortages At Processing Plants – A significant concern that readers should have during an economic collapse and pandemic is food security. We’ve noted over April that troubling news is developing deep inside America’s food supply chain network, suggesting shortages and rapid food inflation could be ahead. The reason behind the disruptions begins with meatpacking plants across the country are shuttering operations because of virus-related issues. At the moment, we’ve reported at least 10-12 large operations have gone offline in the last several weeks, which could result in pork shortages in the first or second week in May.“Almost a third of U.S. pork capacity is down, the first big poultry plants closed on Friday and experts are warning that domestic shortages are just weeks away,” reported Bloomberg. We also highlighted additional risks to beef and poultry capacity at processing plants that were starting to develop.Now, more specifically, diving into the world of poultry, new developments from Maryland, Delaware, and Virginia, a region known to be a top producer of chickens not just in the country but the world, is experiencing logistical issues due to coronavirus.The Baltimore Sun is reporting that 2 million chickens are set to be culled across farms in Maryland and Delaware amid coronavirus-related staffing shortages at meatpacking plants.We’ve heard the same story with pork, turkey, and beef processing plants across the country. Reducing operations or shutting down due to virus-related illnesses among staff. “With reduced staffing, many plants are not able to harvest chickens at the pace they planned for when placing those chicks in chicken houses several weeks ago,” before strict social distancing rules went into effect, trade group for the Delmarva poultry industry said in a statement. The trade group said poultry plants across the Delmarva Peninsula, which includes parts of Delaware, Maryland, and Virginia, are struggling to keep plants operating as worker attendance plunges because of virus-related illnesses. The group said a large farm on the peninsula has turned to “depopulation” this month after processing plants were unable to accept chickens because of reduced capacity. It said culling chickens are last-resort options.
Farmer ends thousands of pig pregnancies as demand for meat drops during pandemic – A farmer in Iowa says he had to ordered his staff to terminate 7,500 pig pregnancies as a number of farmers across the country struggle to sell livestock amid a drop in demand for meat during the coronavirus pandemic, Reuters reports. The farmer, Al Van Beek, told the international news agency that the move to terminate the pregnancies was a difficult decision for him. “We have nowhere to go with the pigs,” he told the outlet. “What are we going to do?” As more farmers run out of places to sell their livestock and crops, Van Beek told Reuters he had to pay more than four times the cost it usually takes for him to have pigs transported for slaughter. The Iowa farmer said he used to have the animals taken to a plant run by Smithfield Foods in Sioux Falls, S.D. But after the pork producer closed that plant, he said he had to have to animals transported to another plant further away in Illinois. Another Iowa farmer in Iowa, Dean Meyer, also told Reuters his farm has had to euthanize some of their smallest piglets and others in order to adjust to the current needs of the market. “Packers are backed up every day, more and more,” he said. Around the country, more farmers have also reported having to euthanize their livestock or plow over their crops as a number of food processing plants and restaurants have closed or seen a dramatic drop in business amid the pandemic. A pair of dairy farmers from Wisconsin told the news agency that they even received death threats after they had to throw out milk.
Americans on Cusp of Meat Shortage With Food Chain Breaking Down – The coronavirus pandemic is pushing the food supply chain to its limits. Plant shutdowns are leaving Americans dangerously close to seeing meat shortages at grocery stores. Meanwhile, farmers are facing the likely culling of millions of animals and mass burial graves could soon be dug across the heartland. “The food supply chain is breaking,” said John Tyson, chairman of Tyson Foods Inc., the biggest U.S. meat company. Outbreaks are forcing the closure of some of the country’s biggest slaughterhouses, where tens of thousands of animals are processed daily. As the plants shutter, producers are left with nowhere to sell their livestock. It’s forcing farmers to make gut-wrenching decisions to dispose of their animals. The situation is so severe that the U.S. government is setting up a center partly to assist on “depopulation and disposal methods.” “Millions of pounds of meat will disappear” as plants close, Tyson said in a blog post on the company’s website. “In addition to meat shortages, this is a serious food waste issue. Farmers across the nation simply will not have anywhere to sell their livestock to be processed, when they could have fed the nation. Millions of animals – chickens, pigs and cattle – will be depopulated.” His comments echoed warnings from Smithfield Foods Inc., the world’s No. 1 pork producer, and JBS SA, the biggest global meat company, that consumers are likely to see meat shortfalls. Almost a third of U.S. pork capacity is down, and JBS said Sunday it will shutter another beef production facility in Wisconsin. Brazil, the world’s No. 1 shipper of chicken and beef, saw its first major closure with the halt of a poultry plant, and key operations are also down in Canada, the latest being a British Columbia poultry plant. While hundreds of plants in the Americas are still running, the staggering acceleration of supply disruptions is alarming. Taken together, the U.S., Brazil and Canada account for about 65% of world meat trade. “It’s absolutely unprecedented,” said Brett Stuart, president of Denver-based consulting firm Global AgriTrends. “It’s a lose-lose situation where we have producers at the risk of losing everything and consumers at the risk of paying higher prices. Restaurants in a week could be out of fresh ground beef.” Meat prices are surging on the supply disruptions. U.S. wholesale beef has surged to a record, and wholesale pork soared almost 30% last week. Jersey Mike’s Franchise Systems Inc., which has 1,750 stores across the U.S., is working with its ham supplier Clemens Food Group to ensure its supply of pork, something they sell quite a bit of in their sub sandwiches. “We’re backing it up already because of the coming — we feel — the coming shortages,” said Peter Cancro, chief executive officer. To be sure, some plants have restarted after testing workers and improving conditions, and most Brazilian facilities are still operating. Another point to consider: There haven’t yet been big shutdowns in Europe. The European Union accounts for about a fifth of global meat exports, U.S. government data show.
US consumers rush to buy meat amid concerns over Covid-19 shortages –US meat production has continued to decline as the coronavirus crisis forces the shutdown of more processing facilities, sparking fears of shortages at grocery stores nationwide. The US Department of Agriculture’s weekly report found that from 27 April, beef production was down nearly 25% compared to the same time last year. Pork production was down 15%. While Sonny Perdue, the agriculture secretary, has said the US has “plenty of food for all of [its] citizens”, fewer pigs are being slaughtered at processing plants, down by nearly 50% since mid-March. Meat processing companies have paused operations as some workers have tested positive for Covid-19, the disease caused by the coronavirus. Last month, Tyson Foods, one of America’s largest meat producers, warned “the food supply chain is breaking” in a full-page ad in newspapers including the New York Times. “There will be limited supply of products,” the Arkansas-based company said, until it can reopen closed facilities. On Thursday, Tyson temporarily suspended operations at its beef processing plant outside Sioux City, Iowa, after more than 900 workers tested positive for the coronavirus. The company said it would close through the weekend for deep cleaning. The facility is one of the largest beef plants in the country, employing about 4,300 people. An analysis from USA Today and the Midwest Center for Investigative Reporting found at least 4,400 workers had tested positive for the virus across 80 plants, causing 28 to close for at least one day. According to the United Food and Commercial Workers International Unions, at least 20 workers have died. “I wouldn’t say the food system is breaking, but at least the meat sector is in real serious, critical condition at the moment,” said Jayson Lusk, the head of the Department of Agricultural Economics at Purdue University, told USA Today. However, there were some signs on Friday that some meat-packing plants could be reopening. A Smithfield Foods pork processing plant in South Dakota where more than 850 workers tested positive will partially reopen on Monday after shuttering for more than two weeks, a union that represents plant workers said late on Friday. Arkansas-based Tyson Foods said its Logansport, Indiana, pork processing plant where nearly 900 employees tested positive will also resume “limited production” on Monday.
Nearly 28 million workers applied for unemployment insurance benefits in the last six weeks – The number of workers applying for unemployment insurance (UI) benefits has risen to never-before-seen levels as a result of the coronavirus shock. In the last six weeks, nearly 28 million workers have applied for unemployment compensation. That is more than one in six workers, and over five times theworst period of the Great Recession. I should note that the Department of Labor (DOL) reports that 30.3 million workers applied for UI during the last six weeks on a “seasonally adjusted” basis, compared with 27.9 million on an unadjusted basis. Seasonal adjustments are typically helpful – they are used to even out seasonal changes in claims that have nothing to do with the underlying strength or weakness of the labor market, providing a clearer picture of underlying trends. However, the way DOL does seasonal adjustments is distortionary at a time like this, so I focus on unadjusted numbers here. All else equal, job loss of the magnitude reflected in the UI claims of the last six weeks would translate into an unemployment rate of 20.5%. It’s worth remembering that unemployment hits different racial groups differently as a result of things like occupational segregation, differences in access to educational credentials, discrimination, and other labor market disparities related to race. In our economy, in good times and bad, the white unemployment rate tends to be about 0.9 times the overall unemployment rate, and the black unemployment rate tends to be about 1.8 times the overall unemployment rate. That means that an overall unemployment rate of 20.5% would translate into a white unemployment rate of 18.4% and a black unemployment rate of 36.8%. However, the official unemployment rates, when they are released, will likelynot reflect all coronavirus-related layoffs. This is due to the fact that jobless workers are only counted as unemployed if they are available to work and actively seeking work. That means many workers who lose their job as a result of the virus will be counted as dropping out of the labor force instead of as unemployed, because they are unable to search for work due to the lockdown, or because they are not available to work because they are, for example, caring for children whose day care has closed. March data suggest that roughly half of workers who are out of work as a result of the virus will be counted as unemployed, and half are being counted as dropping out of the labor force.
New survey confirms that millions of jobless were unable to file an unemployment insurance claim — Millions of the newly jobless are going without benefits as the unemployment system buckles under the weight of new claims, according to our new national survey, conducted in mid-April. For every 10 people who said they successfully filed for unemployment benefits during the previous four weeks:
- Three to four additional people tried to apply but could not get through the system to make a claim.
- Two additional people did not try to apply because it was too difficult to do so.
These findings imply the official count of unemployment insurance claims likely drastically understates the extent of employment reductions and the need for economic relief during the coronavirus crisis. To quantify the undercount, we look at the 21.5 million workers who filed for unemployment benefits from March 22 to April 18. Our results suggest:
- An additional 7.8 to 12.2 million people could have filed for benefits had the process been easier.
- After accounting for these workers – who applied but could not get through or did not try because of the difficult process – about half of potential UI applicants are actually receiving benefits.
When we extrapolate our survey findings to the full five weeks of UI claims since March 15, we estimate that an additional 8.9 – 13.9 million people could have filed for benefits had the process been easier. These findings on the millions of frustrated filers and the UI system’s low payment rate highlight the need for policies to improve rather than hinder the UI application process. At a minimum, states should presume everyone is eligible and immediately pay benefits, only verifying eligibility and reviewing claims after the unprecedented wave of claims slows down.
Millions of Americans can’t access unemployment benefits: EPI survey – The number of Americans who have lost their jobs during the coronavirus pandemic could be even bleaker than official government data suggests.For every 10 people who successfully filed for unemployment insurance benefits over four weeks in March and April, an additional three to four people tried and failed to make claims, according to a survey released Tuesday by the Economic Policy Institute.”These findings imply the official count of unemployment insurance claims likely drastically understates the extent of employment reductions and the need for economic relief during the coronavirus crisis,” the study’s authors Ben Zipperer and Elise Gould wrote.An unprecedented 26.4 million Americans have filed for unemployment insurance benefits since mid-March, according to the Labor Department.Unemployment has risen at a record pace as businesses across the country have shut down to comply with stay-at-home orders.State unemployment offices are overwhelmed by the surge in claims from newly-laid off workers. Residents in states like Florida have complained they have been unable to reach their local offices to file for benefits. The EPI survey estimated between 8.9 million and 13.9 million more Americans would have filed for claims over the past five weeks had the process been easier. “These findings on the millions of frustrated filers and the UI (unemployment insurance) system’s low payment rate highlight the need for policies to improve rather than hinder the UI application process,” the authors said.The process for filing for unemployment benefits varies widely across the country. Some states rely almost exclusively on telephone and in-person filings, while others use forms online.”How difficult it is to get unemployment benefits matters for how many claims get approved and how big the backlog is in the system,” Deutsche Bank Chief Economist Torsten Slok wrote in a note Monday. The EPI survey of 24,607 Americans was conducted online from April 14 to April 24. 9.4% of survey respondents said they “applied successfully” for unemployment insurance benefits, while 3.4% said they tried but could not get through. An additional 1.9% of respondents said they did not apply because it was too difficult.
States Made It Harder to Get Jobless Benefits. Now That’s Hard to Undo – The state unemployment systems that were supposed to help millions of jobless workers were full of boxes to check and mandates to meet that couldn’t possibly apply in a pandemic. States required workers to document their job searches, weekly; to register with employment services, in person; to take a wait period before their first check, up to 10 days.Such requirements increased in the years following the Great Recession, as many states moved to tighten access to or reduce unemployment benefits. With them, most states cut the share of jobless workers they helped. Now these requirements have been getting in the way. Effectively, many states have been trying to scale up aid with systems built to keep claims low. “In a time when pretty much everybody who’s applying should be eligible, we’re working with a system that got us to a 26 percent recipiency rate,” said Steve Gray, the director of Michigan’s Unemployment Insurance Agency. That means Michigan was giving aid to one in four unemployed workers in 2019, following restrictions adopted by the Michigan legislature after the Great Recession. That system, Mr. Gray said, was “built to assume that you’re guilty and make you prove that you’re innocent.”The crush of claims has demanded of states not just more server capacity and call-center workers, but also an abrupt change in the premise of the safety net: Systems trained to treat each case as potentially fraudulent must now presume that millions have legitimately lost their jobs.System crashes and website glitches are tied to this challenge, too. Requirements embedded in the architecture of unemployment must be turned off, worked around, or simply ignored.“If after you submit your application, you receive a message that states you are not covered and your claim has been denied, please disregard,” Kentucky’s unemployment website reads.“The Department of Economic Opportunity has suspended the requirement to provide work search contacts,” Florida’s system said, in red letters. But forms asking workers to document their job searches remained online for weeks. The hitches have frustrated Congress’s intent to steer trillions of dollars to workers.
Study: 71 percent of jobless Americans didn’t receive March unemployment benefits The majority of unemployed Americans did not receive unemployment benefits in March – a month that shattered US records for job loss claims – according to a new study.The Pew Research Center has found that, although more than 11 million Americans filed first-time unemployment claims in March, the wide variety of methods states and territories use to administer their jobless programs have resulted in wide disparities in who has received their payments, and how much those payments were worth.As a result, only 29 percent of jobless Americans received benefits in March, according to Pew’s analysis of Labor Department statistics. The disbursement rate of unemployment payments was found to vary widely, with nearly 66 percent of unemployed Massachusetts residents receiving their benefits, compared to only 7.6 percent of unemployed Florida residents.The federal CARES Act, the $2.2 trillion stimulus package aimed at addressing coronavirus-related economic fallout, featured provisions meant to boost the size and scope of unemployment benefits. But it left the distribution of funds to the states – many of which have outdated, underfunded, and inefficient methods for enrolling the newly unemployed, asVox’s Ella Nilsen has explained.Also at issue, Pew notes, is those seeking support “face a hodgepodge of different state rules governing how they can qualify for benefits, how much they’ll get and how long they can collect them.”For example, in some states, workers must wait a week before they can start collecting benefits. In others, workers who receive commission, rather than standard wages, are ineligible for aid. And, in many states, people may exhaust their benefits after a certain period of time – a scenario that is unworkable in a job market in which standard employment is largely on hold for the foreseeable future. (The CARES Act does extend the length of people’s eligibility for federal benefits after their state benefits run out, the study notes.) These different scenarios result in regional disparities in who receives benefits – and mean that millions of those eligible did not, and perhaps still have not, received aid. By and large, the states where the fewest jobless people (under 15 percent) received benefits were in the South, and the states where the most jobless people (more than 40 percent) received benefits were in the Northeast and Midwest.
Florida has overtaken California as the US jobless claims capital – Florida overtook California on Thursday as the U.S. state with the most weekly unemployment claims as Tallahassee began to process in earnest its sizable backlog of filings. Florida, which reported 432,465 jobless claims for the week ended April 25, topped California’s 328,042, marking the first time since the week ended March 21 that the Golden State didn’t lead the nation in the number of workers filing for unemployment benefits. Though both states reported declines in the number of workers seeking insurance from the prior week, that Florida is now leading the chart is notable since its labor force is about half that of California’s. Texas and Georgia also saw a significant number of claims last week with each state reporting at least 250,000. The relative surge in Florida claims is likely thanks to an improvement in the state’s ability to process filings. The Associated Press reported last week that nearly 7 of every 8 Floridians who managed to file claims during the three weeks from mid-March until early April were waiting to have them processed. California and Texas had about two-thirds of claims backlogged, while New York had about 30% of claims waiting, AP reported. “A look at unemployment claims around the country by state strongly implies that there will be a surge in unemployment claims in two states: Texas and Florida,” Joe Brusuelas, chief economist at RSM US, said in a note. “The collapse of the oil and energy complex in Texas will certainly cause a surge in claims, as well as in Florida, where widespread issues in processing so many claims will almost surely cause a jump in first-time claims over the next month,” he added.
12.7 million workers have likely lost employer-provided health insurance since the coronavirus shock began — EPI –Since the economic fallout of the coronavirus shock began in early March, the number of workers laid-off or furloughed – as measured by new claims for unemployment insurance (UI) – has skyrocketed. We have used data from states that track UI claims by industry to get a rough estimate of how many workers are at high risk of losing their employer-provided health insurance (EPHI) over this as well.The methodology is described in this blog post, and the underlying data (which has begun to include more and more states tracking UI claims by industry) can be found here. Table 1 below shows UI claims by industry across states that collect this data, and also shows employer-provided health insurance (EPHI) coverage rates in those industries in 2018. As of April 30, just under 28 million workers had been laid off or furloughed since early March. We find that this translates into likely EPHI losses of 12.7 million.Because the United States is unique among rich countries in tying health insurance benefits to employment, many of the newly unemployed will suddenly face prohibitively costly insurance options. A comprehensive policy solution would be to extend Medicare and Medicaid to all those suffering job losses during the pandemic period, with the federal government funding this expansion. It has been proposed that the federal government pay for all of COBRA coverage so that workers who are laid off or furloughed may continue their employer-provided coverage. While this policy proposal will help many workers continue coverage, in some states it will not help workers from small businesses with fewer than 20 employees, who are not eligible for COBRA.The linkage between specific jobs and the availability of health insurance is a prime source of inefficiency and inequity in the U.S. health system. It is especially terrifying for workers to lose their health insurance as a result of, and during, an ongoing pandemic.
Los Angeles mayor releases plan for massive budget cutting and city worker furloughs – As of Thursday, the official COVID-19 case count in Los Angeles stood at 16,449 with 732 deaths. The Los Angeles County Department of Health Services released a new projection this week estimating that the virus would infect 11 percent of the population instead of an earlier projected 30 percent. This figure relies entirely on the continuance of strict social distancing measures; however, city and state officials are beginning plans to force workers back to work, meaning the death count could increase substantially. Late implementation of social distancing measures and virtually nonexistent testing and contact tracing will still result in upwards of 4,500 deaths according to the department’s new estimate. The economic impact of the pandemic has also been felt particularly hard in Los Angeles. A significant percentage of the city’s workforce is employed in the entertainment, tourism and hospitality industries, which have been entirely shut down. According to an April study conducted by the University of Southern California, less than half of Los Angeles County residents reported having a job in April. Only 45 percent of Angelinos reported having a job that month. This represents a 16 percent slide from mid-March, when 61 percent reporting having a job. The figure, representing 1.6 million jobs lost in a total population of 10.3 million, is even larger than the national average fall of 10 percent during the same period. The massive job losses have led to a 10 percent decrease in the amount of city residents able to pay rent in April, a number that is sure to increase as the job losses continue to mount and hours are cut. Quite alarmingly, the percentage of Los Angeles residents reporting psychological distress increased by 12 percent to 48 percent during the same time period. Los Angeles County has barred evictions throughout the length of the shutdown. However, back-due rent will have to be repaid once the shutdown ends. The city council is proposing a rental subsidy of $1,000 per household per month for those unable to pay, but the measure depends on a combination of federal government subsidies and private “philanthropy.” In other words, it is highly unlikely that even this inadequate measure will secure passage.
Several states starting to reopen this weekend | TheHill — 04/25/20 A handful of states in the U.S. are beginning to reopen some businesses starting this weekend as governors across the country grapple with when and how to ease restrictions put in place to curb the spread of the coronavirus. Georgia’s stay-at-home order expires on April 30, but Gov. Brian Kemp (R) announced this week that he would allow some businesses, including hair salons and gyms, to resume business starting Friday, which resulted in some backlash from local and national leaders. “Certainly as mayor, my power does not supersede that of governor, but I do have the power of my voice,” Atlanta Mayor Keisha Lance Bottoms (D) told MSNBC on Tuesday, one day after Kemp announced he would allow some businesses to reopen. “I am asking people to please stay home.” Oklahoma, which has far fewer positive cases and deaths than Georgia, began opening hair and nail salons and other personal care businesses along with state parks on Friday. Oklahoma also allowed hospitals to resume elective surgeries Friday. In Tennessee, Gov. Bill Lee (R ) said on Monday that “the vast majority of businesses” will be allowed to reopen when the state’s stay-at-home order expires on April 30, and as of Friday state parks and dine-in restaurants were allowed to open with reduced capacity. Tennessee was one of the last states to issue a stay-at-home order. Tennessee’s largest cities such as Nashville and Memphis are drafting their own reopening plans. “We want to have the majority of businesses open before May 1,” Lee said Friday. “Not every industry will be in a position open safely immediately.” Mississippi Gov. Tate Reeves (R) announced Friday that his stay-at-home order is expiring Sunday and that a “safer at home” order will go into effect on Monday. In Texas, some stores were allowed to offer “retail to go” starting Friday. The businesses allowed to open must do so at reduced capacity, and residents are still required to wear face masks. The state’s stay-at-home order remains in effect until April 30, while state parks reopened earlier this week. Colorado Gov. Jared Polis (D) said earlier in the week that after the state’s stay-at-home order expires on Sunday, the state will enter a “safer at home” phase during which residents will be recommended to stay home but not obligated to do so. The new restrictions allow small businesses and “personal services” such as hair salons to reopen Monday, though they’ll be under health restrictions and must follow certain guidelines not yet provided by the state. Alaska’s stay-at-home order expired this week, and Gov. Mike Dunleavy (R) allowed restaurants and other retail businesses to reopen Friday as long as they follow the health mandates issued by the state. Montana Gov. Steve Bullock (D) announced a phased reopening starting Sunday, when churches will be allowed to reopen with social distancing measures in place. Restaurants serving customers at reduced capacity and schools will be allowed to reopen May 7. Georgia, Tennessee, Texas, Colorado, Mississippi and Alaska all have closed K-12 schools for the remainder of the academic year. Public health experts have warned that reopening too soon could potentially result in a second wave of the virus just as the U.S. is beginning to see the pandemic’s horizon. However, economic pressure has forced government officials to make difficult decisions as over 26 million Americans have applied for their first round of unemployment insurance since March, and jobless claims have broken historic highs.
Tennessee state government plans to lift social-distancing measures as health care crisis looms A social catastrophe is threatening to occur as Tennessee Republican Governor Bill Lee prepares to lift the state’s mandatory two-week “safer at home” response to the COVID-19 pandemic. Lee, who only reluctantly established the two-week stay-at-home order, has set May 1 for the restriction to be lifted in 89 of the state’s 95 counties. The major cities and metropolitan areas of Nashville, Knoxville, Memphis and Chattanooga, along with two other counties will be exempt from the lifting of restrictions. Those exemptions, according to Lee, are because the various localities have their own health departments. The remainder of the state relies on the Tennessee Department of Health for services. Lee, along with Republican governors in Georgia and South Carolina has put plans into motion or has already implemented plans to partially lift COVID-19 restrictions. As of Friday, the state of Tennessee has recorded 8,266 cases and 170 deaths, as well as 3,828 recovered. Shelby County, which includes the city of Memphis, had the second highest number of cases, 2,001, and the highest number of deaths with 42. Nashville had only 10 more cases, 2,011, but exactly half the number of deaths at 21. These numbers are likely to be vast underestimates due to the relatively limited number of tests that have been provided in the state. The rate of testing in the state is roughly 16 people per 1,000, or about 1.5 percent. “As of Tuesday… More than 181,100 people have been tested in Tennessee so far, a small fraction of the more than 6.8 million people who live in the state,” stated Tennessee’s NewsChannel 5 Investigates television program. Lee’s decision, which is based on nothing more than cold-blooded financial calculation, amounts to a policy of social murder. The decision has been met with immediate criticism from the medical and scientific community. Dr. Aaron Milstone, a pulmonologist who several weeks before organized a petition of 9,500 physicians and healthcare workers urging Lee to adopt basic social distancing measures, lambasted the governor’s latest move.
Newport Folk And Jazz Festivals Canceled Due To Coronavirus – On Wednesday, two storied, sibling American music festivals – the Newport Folk Festival and the Newport Jazz Festival – announced that they are being canceled for 2020, due to coronavirus concerns. Each event is scheduled to return in the summer of 2021. In a set of nearly twin messages, the executive director of the Newport Festivals Foundation, Jay Sweet, announced the cancellations. In a press release, Sweet said that “together with our local leaders and [Rhode Island] governor Gina Raimondo, we have concluded that at this time we risk too much in having a gathering of our size. ” Currently, all gatherings of more than five people are banned across the state. As of now, there is a stay-at-home order in place until May 8. For both festivals, Sweet says, all artists who were invited to perform in 2020 have already been invited for the 2021 editions. He also promised that “we will all commune one way or another on our festival weekend[s].”
Conservative New Yorkers trust Cuomo over Trump on reopening state: poll — Conservative New Yorkers said they trust Gov. Andrew Cuomo (N.Y.) more than President Trump to make a decision to reopen the state, according to a poll released Monday. The Siena College Research Institute poll found that 57 percent of New Yorkers who identify as conservative favor the governor to decide when the state reopens, while 34 percent of conservatives would rather Trump make the call. Out of Republicans, 56 percent favor Cuomo, and 36 percent favor Trump make the decision.Overall, 78 percent of New York respondents said Cuomo should decide to reopen the state after it has been hit by the coronavirus pandemic. A total of 16 percent believed the decision should fall to Trump.”When it comes to whom New Yorkers trust more to make decisions about reopening the state and its economy – the President or the Governor – it’s not even close,” said Siena College pollster Steven Greenberg in a press release.Legal experts have said governors ultimately have the power to reopen their states after Trump had asserted earlier this month that he had that authority. A total of 87 percent of New Yorkers back Cuomo’s closures of non-essential businesses, including 81 percent of Republicans and 79 percent of conservatives. Cuomo’s order requiring people to wear face coverings in public had 92 percent approval, with 91 percent of Republicans and 88 percent of conservatives. The governor’s favorability reached an all-time high of 77 percent in the poll, with 21 percent of respondents disapproving. In the meantime, 31 percent of respondents found Trump favorable, and 66 percent found him unfavorable.
With over 1 million coronavirus cases and 60,000 fatalities in the US, markets eager to get back to business –World Health Organization (WHO) Director-General Dr. Tedros Adhanom Ghebreyesus stated, in a briefing last week, “Make no mistake, we have a long way to go. This virus will be with us for a long time…while social distancing measures put in place in numerous countries to slow the spread of the coronavirus have been successful, the virus remains extremely dangerous. Current data shows that most of the world’s population remains susceptible.” During Monday’s briefing, Dr. Mike Ryan, in response to a Brazilian reporter’s question on his country’s decision to ease restrictions based on figures that are clearly underreported, stated that if countries begin the opening of their economies too quickly, it may have more dire consequences on the livelihood of the nation, as they would have to reimpose lockdown measures to mitigate a second acceleration of the outbreak.Dr. Maria Van Kerkhove carefully noted that it was insufficient to base decisions to loosen these measures solely on the basis of case numbers and deaths alone. More importantly is the need to have a workforce in place to track contacts, to implement an expansive infrastructure to detect the location and movement of the virus, appreciate the status of hospitalization and critical care capacity, and have schools and workplaces reconfigured to begin slowly receiving people into these physical spaces. The entire population needs to be engaged, informed and cooperative with these processes. “It requires mental preparation,” Van Kerkhove said. Globally the number of daily cases has been declining slowly since peaking at the beginning of the month and has now reached over 3.1 million cases. Nearly 1 million people have recovered from COVID-19. Similarly, the daily number of fatalities has seen a steady decline, with the number of total critical cases around 56,000. Country after country have been in some form of discussion to begin easing restrictions given these seemingly favorable developments. However, as much as the response to the pandemic was of an improvisational character, the manner and approach to opening economies are disorganized, woefully unsystematic and grossly premature. Rather than heeding the advice of institutions like the WHO or their own public health officials and epidemiologists, the argument that the economy has suffered too much finds open and unapologetic expression among governors and political leaders.Majority of Americans support another two weeks of lockdown: poll – About three-quarters of Americans favor continuing shutdowns for another two weeks to stem the spread of the coronavirus, compared to only about 10 percent who oppose doing so, according to a poll by Business Insider and SurveyMonkey. The poll, conducted April 28-29 among 1,099 respondents, found 50 percent strongly support at least another two weeks of social distancing measures, with another 25 percent saying they supported them. Six percent said they opposed continuing the measures, compared to 4 percent who were strongly opposed. A larger portion – 14 percent – said they had no opinion. The survey comes as a handful of states have announced the lifting of some restrictions, including Texas, where Gov. Greg Abbott (R) has announced some businesses may begin the reopening process on Friday, as well as Georgia, which began the reopening process at the end of last week. It also comes days after Attorney General William Barr suggested the Justice Department will intervene if it feels state or local measures infringe on the constitution. “If a state or local ordinance crosses the line from an appropriate exercise of authority to stop the spread of COVID-19 into an overbearing infringement of constitutional and statutory protections, the Department of Justice may have an obligation to address that overreach in federal court,” Barr wrote in a memo Monday. Pollsters conducted the poll based on a national sample balanced by census data on age and gender. It has a margin of error of three points and a 95 percent confidence level. A statewide poll of Colorado, meanwhile, indicated that a majority of residents of the state who have lost work as a result of the pandemic oppose an immediate reopening. Sixty-four percent of those who lost a job, income or hours due to the pandemic were in favor of keeping the state’s businesses closed despite the Sunday expiration of the stay-at-home order.
10,000 nursing home workers vote to strike in Illinois in the face of life-threatening working conditions – On Monday, 10,000 workers at 40 Illinois nursing homes, the majority in the Chicago area, voted to strike May 8, one week after the current collective bargaining agreement with the nursing home companies and the Service Employees International Union Healthcare Illinois-Indiana (SEIU HCII) union officially ends. The workers are demanding personal protective equipment (PPE), safety protocols, hazard pay, an increase in base pay, paid time off for COVID-related illness, increased staffing, health insurance and transparency about COVID-19 cases in the nursing homes, where in Illinois 35 percent of the states’ nearly 2,000 deaths have occurred. Nursing home workers, nurses and nursing assistants risk their lives each day while working during the COVID-19 pandemic. Many have been fired for requesting adequate PPE in facilities with confirmed cases. In a livestreamed video on the SEIU Healthcare IL & IN Facebook page, one worker recounted that she was fired for demanding PPE, more staff, and transparent communication from the Alden Wentworth nursing home in Chicago, part of the Chicago-area Alden Network of for-profit long-term care facilities where patients and workers have died from COVID-19. “How hard is it for the governor to get us a proper mask? Can you imagine telling a child that her mother is dead from something that was completely preventable?” she asked. The parasitic for-profit nursing home industry brings in billions of dollars for private equity firms, real estate trusts and Wall Street investors. Before the pandemic broke out, the value of the US long-term care market was projected to reach $737.1 billion by 2026 with a compounded annual growth rate of over 7 percent. A registered nurse who has worked at nursing homes throughout the Chicago area said, “I’m in agreement with them going on strike. It’s about time they stand up for themselves. I have been in contact with old co-workers, and can only imagine the conditions now that COVID-19 is here. If they were lacking the supplies before, imagine what it is like now. One of my old workplaces was a 146-bed facility, and on the night shift there were two nurses and two assistants (CNAs) for one eight-hour shift. “People are scared to go to work because of COVID-19. It’s not worth losing their lives for $9 to $10 per hour. That’s why there is a short supply of CNAs and nurses. At one facility I heard all the CNAs except one quit after they heard about COVID-19. “These conditions are dangerous for patients and staff. We need to get proper rest so we can care for the patients. The workers are paid very low wages, there are not enough staff, and [the nursing homes] ask you to work 16 hours every day, to the point that you can’t say no. Instead of hiring more staff, they give out overtime. “At that facility, they had no proper PPE, no masks, and were told they could not wear a mask because of ‘dignity.’ As soon as there were confirmed COVID-19 cases they got masks, but they had to wear the same one all week. We are taught in nursing school that we are supposed to discard the mask between rooms.
TSA checkpoint travel numbers – The TSA is providing daily travel numbers. This is another measure that will be useful to track when the economy starts to reopen. This data shows the daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red). On April 26th there were 128,875 travelers compared to 2,506,809 a year ago. That is a decline of 95%.
Oregon Strip Club Opens Drive-Thru And Delivery Service – We’ve covered the recent invention of drive-thru swabbing for covid-19 testing, but one strip club in Oregon has taken things to a new level – they opened a drive-thru right through the stage so people can still come get a show. Yes, the performers are wearing proper PPE. The Lucky Devil Lounge in Portland, Oregon has pivoted to serve food pickup and delivery service for drive-thru motorists and customers at home, which it started doing the day after it was ordered to close on March 16 over the novel coronavirus outbreak. The only issue was people weren’t coming for the food. The draw of the business was obviously the performers on stage. So Lucky Devil owner Shon Boulden decided to set up a big tent in the parking lot with a drive-thru stage, so customers could come pick up their food and still tip their favorite performer. Taking it one step further, Boulden also got the performers to start doing deliveries. Here’s more from Reuters: The club’s drive-through, promoted on social media with the hashtag “Food 2 Go-Go,” drew a steady stream of cars on Friday night. Motorized customers were directed into a large tent, where they were greeted from stages on both sides by pole-dancing women wearing sequined masks and gloves, and little else but nipple paisties, G-string bikini bottoms and stiletto boots. The performances included throbbing music furnished by a D.J., stage lights, and prizes presented to customers at a safe distance by dancers using long plastic grabbers – like those used to pick up litter. Giveaways have included samples from a local cannabis dispensary and rolls of toilet paper. One dancer, who goes by the stage name Karma Jane, performed on Friday night in a gas mask. Hey, business is business. If there’s demand for people to come pick up their food from almost naked people in a parking lot tent – and pay $30 extra on top of the food price for it – then I say why stop when the epidemic cools down?
‘It feels like nobody cares’: the Americans living without running water amid Covid-19 – Joshua Haynes was raised to work hard and take care of his family without asking for outside help. But when the utility bills arrived last month, he knew there would be trouble. Haynes, 34, a construction worker from Newbern, Tennessee, was left without income after the governor issued a stay-at-home order in early April. As a cash-in-hand builder, he is not eligible to claim unemployment insurance, and the stimulus cheque still had not arrived. “I always pay my bills on time, but without work, I just didn’t have the money to cover everything, so I asked for an extension. They said no,” Haynes said. Haynes, who lives with his wife and three children, managed to get the money just six days after the bill was due, but the city refused to accept the payment unless he also paid a $70 reconnection charge. He didn’t have it, and the charge didn’t make sense as they had not been disconnected. A few hours after his payment was turned down, the taps were turned off, even as the Centers for Disease Control and Prevention (CDC) urged people to frequently wash their hands in order to prevent the virus spreading. For a week, the family survived on sodas and microwave meals, cleaning their hands with gel and flushing the toilet with buckets of water filled at a neighbour’s. In the end, Haynes returned to work despite the stay-at-home order so that he could get an advance on his wages to pay the reconnection fee. “It’s wrong what they did, especially with so many people out of work. I felt angry and embarrassed. I’d never missed a bill before … I had no choice but to go back to work,” he said. Haynes is among a rapidly growing number of working people faced with impossible economic and health tradeoffs during the coronavirus pandemic – which has so far left more than 61,000 Americans dead and 30 million unemployed. A third of American households – about 120 million people – still risk having their water disconnected and racking up exorbitant fees, despite calls from a coalition of lawmakers and advocates to suspend all utility shutoffs until the country drags itself out of this unprecedented crisis. And while more than 600 localities and 13 states have mandated moratoriums on disconnecting residents since early March, some of these will soon expire as states reopen for business.
U.S. food banks run short on staples as hunger soars– It’s pitch black in El Paso, Texas, when the minivans and pickups start lining up at 4 a.m., snaking for more than a mile down the desert roadway leading to the city’s largest food bank. When rations are finally distributed five hours later, many boxes are filled with too many castoff beefsteak tomatoes but no pasta. Nor is there any rice, beans or other dry or canned goods. “We really have no dry goods,” said Bonnie Escobar, chief development officer of El Pasoans Fighting Hunger. Food banks nationwide are squeezed between short supplies and surging demand from needy families as the coronavirus pandemic has put more than 26 million Americans out of work. In New York City, the mayor appointed a food czar as lines of masked people form outside overstretched charities. More than a third of the city’s food banks have closed for lack of supplies, donations or volunteers, who are harder to recruit because of infection fears, according to the New York Mission Society. In San Diego, a local food bank waits on a $1 million order it placed weeks ago. Chicago and Houston food banks say they are nearly out of staples. Before the pandemic, 1 in 7 Americans relied on food banks, according to Feeding America, a national network of the charities. Now, demand has doubled or tripled at many organizations, U.S. food bank operators told Reuters. And yet farmers are destroying produce, dumping milk and culling livestock because the pandemic has upended supply chains, making it impossible for many to get crops to market. Grocery stores struggle to stock shelves because suppliers can’t adjust to the sudden shift of demand away from shuttered restaurants to retailers, which requires different packaging and distribution networks. “The U.S. likely has a surplus of food right now,” said Keith Dailey, group vice president of corporate affairs at Kroger Co, the No. 1 U.S. supermarket operator. “It’s just hard to recover and redistribute.” Before the pandemic, Feeding America member organizations received about a third of their food from grocery store programs that “rescue” fresh food and dry goods that are imperfect or close to expiration. Almost a quarter came from government programs that provide meat, cheese and other products. The rest came through donations from farmers and grocers and purchases by the food banks.
Food banks face supply and volunteer shortages as mass hunger rises in the US – Food banks in the United States are facing a crisis of epic proportions as tens of millions of people across the country are finding themselves in need of aid from food pantries and soup kitchens to stave off hunger. The coronavirus pandemic has brought alongside it a staggering rise in joblessness and wage reductions, driving underfunded charitable food services to the brink due to the explosion in need. In scenes that recall the long breadlines during the great depression of the 1930s, millions over the past month have been compelled to wait in massive line ups and drive-through food banks to seek emergency food assistance. Major cities such as San Antonio, Las Vegas and Cleveland are witnessing lines up to six miles long at pop-up distribution points, where thousands of recently furloughed and unemployed people are waiting hours for grocery boxes. Now, the shortening of food supplies in food banks is bringing a significant portion of the American population face to face with the very real prospect of starvation. Demand for food aid is growing against the backdrop of an unprecedented economic and health care crisis. In the United States, the death toll from COVID-19 accounts for more than one-quarter of the global total, surpassing 61,000, and is poised to climb to more than 70,000 next week. US infections have now reached over 1 million, one-third of all infections worldwide. Since late March, over 27 million people filed unemployment claims, on top of 7 million that had already been unemployed. This is a significant undercount of the number now out of work, with millions ineligible to file since they are independent contractors or undocumented immigrants. The corporate and financial oligarchy, along with the media and political establishment is exploiting the widespread social suffering sparked by the virus’ spread in a reckless effort to compel workers to risk their lives going back to work under conditions in which the pandemic is showing no signs of slowing down. Health experts have warned that a hasty return to work will result in a second wave, which could cause a return to nationwide lockdowns and business closures on an even greater scale, not to mention an acceleration of the already skyrocketing death toll. Under the current conditions, Feeding America, which is one of the largest non-profit food bank organizations in the US, is already struggling to maintain its supplies. According to Chief Operating Officer Katie Fitzgerald, its food banks are seeing a 40 percent increase in demand. Officials for the organization are reporting that they are fielding double to quadruple the number of requests for assistance than they have normally had to deal with. In an interview with CNN earlier this month, Fitzgerald said her organization has suffered a “significant and fast plummet” of meal lending from their retail and supermarket partners. Its donations from food manufacturers total 580 million meals and their inventory has dropped by over half just this month. Due to the decline in donations, Feeding America and many other non-profits have turned to purchasing supplies directly from food manufacturers and distributors, but this may take up to four weeks to reach the hundreds of food banks in the organization’s network. Inventories for food banks depend mostly on donations from giant supermarket conglomerates such as Walmart and Kroger. But due to the rise of purchases from consumers, supplies for food banks are beginning to diminish rapidly as shelves in retail and grocery stores go empty. As a result, deliveries to food pantries have been vastly reduced, making it nearly impossible to accommodate the flood of newly unemployed clients
National Guard Deployed At Nation’s Food Banks To Ensure Stability During Unprecedented Times – There is increasing evidence on social media that the National Guard has been deployed to the nation’s food banks to ensure food supply chain networks are not severed, and shortages do not materialize. This comes at a challenging period for the country, one where 26.5 million people have filed for unemployment benefits in five weeks as the economy crashes into depression. We have documented the unprecedented volume of Americans flooding food banks across the country in the last four weeks as a hunger crisis develops. Now it appears National Guard troops have been deployed to food banks in many states to make sure logistical pipelines of food to these facilities can continue dishing out care packages to the working poor.And why would the Pentagon, likely instructed by the Trump administration, deploy military assets to food banks? Because food shortages are already starting to develop as facilities are overwhelmed with hungry people. The deployment of military assets to these facilities is a reflection of where the government believes the most vulnerable parts of instabilities reside at the moment. Just imagine if some of these places ran out of food, and people in mile-long lines were told to go home empty-handed. That would leave many in an untenable hangry state where social instabilities could be seen. So, without further ado, here is the military deployed at the nation’s food banks:
- A very cool #timelapse of the #Delaware #NationalGuard assisting a food bank … https://t.co/FTMes5YZtB #COVID19 pic.twitter.com/u2urIovGO7
- Yesterday, Texas Army National Guard Soldiers supported local food bank efforts in Coldspring, Texas, serving over 2,000 families. We are #InThisTogether.#COVID19NationalGuard pic.twitter.com/WHcn567ww1
- U.S. Army National Guard Soldiers with Joint Task Force 59, #SCGuard, assist the Harvest Hope Food Bank in Columbia, April 22, with loading food for people in need (: Sgt. Tim Andrews) #NationalGuard #Covid_19 #InThisTogether pic.twitter.com/VZltT2G0ds
- 4/8 The National Guard brought 5 truckloads of food to The Salvation Army for The Shared Harvest Food Bank but no forklift. Off.Lusk called Denny Lumber & was able to get one lined up and escorted it.Denny Lumber saved the day! #InThisTogetherOhio pic.twitter.com/b3pLvJT9DK
- Always Ready, Always There! @AZNationalGuard deliver food & supplies for Navajo Nation residents April 17, 2020, at a local food bank in Black Mesa, Arizona.#InThisTogether #ArmyCOVID19Fight
- (see many more)
‘A phantom plague’: America’s Bible Belt played down the pandemic and even cashed in. Now dozens of pastors are dead – Dozens of pastors across the Bible Belt have succumbed to coronavirus after churches and televangelists played down the pandemic and actively encouraged churchgoers to flout self-distancing guidelines. As many as 30 church leaders from the nation’s largest African American Pentecostal denomination have now been confirmed to have died in the outbreak, as members defied public health warnings to avoid large gatherings to prevent transmitting the virus. Deaths across the US in areas where the Church of God in Christ has a presence have reportedly stemmed from funerals and other meetings among clergy and other church staff held during the pandemic. The tragedy among one of the largest black Pentecostal groups follows a message of defiance from many American churches, particularly conservative Christian groups, to ignore state and local government mandates against group gatherings, with police increasingly called in to enforce the bans and hold preachers accountable. The virus has had a wildly disproportionate impact among black congregations, many of which have relied on group worship. Yet despite the climbing death toll, many US church leaders throughout the Bible Belt have not only continued to hold services but have urged worshippers to continue paying tithes – including recent stimulus checks – to support their mission. Most congregations are following stay-at-home guidelines, according to recent polling that found that nearly 90 per cent of congregations have closed their churches and been encouraged to worship at home. But 20 per cent of parishioners say they’re encouraged to attend in-person services, and another 17 per cent continue to do so. The survey found that evangelicals were more likely to report worshipping in person. In states with restrictions on attending church as well as those without, nearly a third of church-attending evangelicals said they continued to attend in person.
Purdue president: Smaller classes, face masks may be part of fall semester plan -Smaller classes and mandatory face masks are likely to be part ofPurdue University’s plans to return students to campus this fall, Mitch Daniels, its president, told CNBC on Monday. “You can expect smaller numbers in every context,” Daniels said on “Power Lunch.” “I know we’re looking for ways to reduce the size of classes, obviously keeping distance between people. Probably going to see masks as a requirement, at least for a long time here.” Daniels, the former two-term Republican governor of Indiana, where Purdue is located, said the university also would likely forgo the large events “that enliven life” on campus such as “lectures and guest speakers and convocations of that kind.” “All those things and many more, changes to our physical facilities, for instance, will be necessary for us to conclude that we are safe,” Daniels said. “We won’t move forward unless we believe that, but to get to that point, we have to get going now.” Daniels wrote a letter to the university communitylast week, in which he stressed many of the proposals to return to in-person classes were “preliminary.” They should be viewed “as examples, likely to be replaced by better ideas as we identify and validate them,” he wrote. Daniels wrote that at least 80% of Purdue’s population “is made up of young people, say, 35 and under. All data to date tell us that the COVID-19 virus, while it transmits rapidly in this age group, poses close to zero lethal threat to them.” Young people do have lower rates of hospitalization and mortality rates from Covid-19, but they can get severely ill and die. Young people are also at risk of spreading the virus to people who are more vulnerable to serious infection, which for a university means faculty and staff, as well as students’ parents and other family members, for example. Daniels told CNBC the most significant changes implemented by the university would be to protect those who are at higher risk of severe illness from the “very real danger that this virus poses to them.”
COVID-19’s devastating impact on artists – The coronavirus pandemic is having a devastating impact on every section of the working population. According to a recently published survey by Americans for the Arts, fully 95 percent of arts workers in the US have lost income due to the current crisis – with 62 percent now out of work. Sixty-seven percent of those polled reported unanticipated expenses related to COVID-19 which, taken together with lost income, have resulted in an average loss per arts worker of $21,000 over the past three months. The arts workers surveyed included visual artists (51 percent), musicians (22 percent), theater and performance artists (17.5 percent), writers and media artists (15 percent each), as well as community-based artists (27 percent), and a variety of other artistic disciplines. A significant proportion (30.5 percent) work as teaching artists and/or teachers in elementary through graduate level education. The impact of the pandemic has laid bare the already precarious economic conditions in which most artists live, as well as the inequality that exists between a handful of top-tier artists with gallery connections and wealthy collectors versus the majority who cobble together a living from multiple “gigs.” The latter include working in arts-related jobs that may or may not involve their own creative work (i.e., working in a gallery, museum or other arts organization, etc.) or in non-arts jobs (servers in restaurants, Uber drivers, etc.). Before the pandemic, almost 40 percent of arts workers earned $35,000 or less a year, while another 37 percent made between $35,000 and $75,000. Given that more than half live in urban areas such as New York City or Los Angeles where the cost of living is extremely high, this means three-quarters of artists face significant financial challenges at the best of times. Since the shutdown in the US beginning in March, most art workers’ jobs have been suspended or terminated. Every museum and gallery from major institutions such as the Metropolitan Museum of Art, the Louvre, and the National Gallery in London to thousands of small non-profit art spaces, theaters from Broadway to Lincoln Center, and hosts of prestigious art fairs and festivals like Art Basel and Cannes have either closed, postponed or cancelled their programs for the foreseeable future, many through the end of the 2020 season. This will continue to have a direct impact not only on the artists whose income and employment depends directly on these institutions for sales and commissions, but on a far larger number of related jobs, from museum staff to art-handlers, program designers to custodians for months if not longer.
Coronavirus Pushes Colleges to the Breaking Point, Forcing ‘Hard Choices’ About Education – WSJ – MacMurray College survived the Civil War, the Great Depression and two world wars, but not the coronavirus pandemic. The private liberal-arts school in central Illinois announced recently it will shut its doors for good in May, after 174 years. Like many small schools, it faced declining enrollment and financial shortfalls. To lure prospective students, it was using steep discounts to its $30,000 listed tuition. Then the global health crisis brought unexpected costs for shifting classes online and partially reimbursing room and board for students forced to finish out the spring term at home. The loss of a $3-million-plus bridge loan was the final straw. The pandemic “squeezed out the last rays of hope,” said President Beverly Rodgers. From schools already on the brink to the loftiest institutions, the pandemic is changing higher education in America with stunning speed. Schools sent students home when the coronavirus began to spread, and no one knows if they will be back on campus come fall. Some colleges say large lecture classes and shared living and dining spaces may not return. Athletics are suspended, and there is no sense of when, or if, packed stadiums, and their lucrative revenue streams, will return. Every source of funding is in doubt. Schools face tuition shortfalls because of unpredictable enrollment and market-driven endowment losses. Public institutions are digesting steep budget cuts, while families are questioning whether it’s worth paying for a private school if students will have to take classes online, from home. To brace for the pain, colleges and universities are cutting spending, freezing staff salaries and halting plans for campus building. For many schools, the pandemic is exposing flaws in their own business models. Even before the virus hit, many colleges and universities were running on razor-thin margins, with 30% of those rated by Moody’s Investors Service showing operating deficits. Published tuition rates had skyrocketed, but few students actually paid full price. That left schools fighting over a limited pool of wealthy prospects. Some schools had turned to international students to bolster revenue – a strategy that may now prove to be a liability.
Time For A Gap Year- Harvard Tells Students Prepare For Likelihood Of Online Only Fall Courses — In what could be a precedent-setting move by arguably the world’s most prestigious academic institution, Harvard University announced Monday that the extreme uncertainty surrounding the coronavirus pandemic and accompanying economic shutdowns means the school is mulling the possibility of going to online only classes for the Fall semester. “We cannot be certain that it will be safe to resume all usual activities” by autumn, university provost Alan Garber wrote in a school-wide memo on Monday, reports the WSJ. “Consequently, we will need to prepare for a scenario in which much or all learning will be conducted remotely.” And in a statement sure to be met with collective eye-rolling among a student body prepared to drop some $70,000+ only to kick the year off with months or possibly more of sub-par ‘remote learning’ courses, school spokesman Jason Newton added in an email, “The primary message is that the University is moving forward with the fall semester, rather than delaying it.” Harvard University, file image via Flickr We doubt the students and families, many of which are likely going into debt to get that top-rate and in most cases out-of-state education, will see it that way (though in Harvard’s case – an exception to the norm – its massive endowment and extremely selective acceptance rate means at least 70% of students receive typically massive financial aid, tuition breaks and scholarships via the school’s ample means). Last week Harvard announced it has cancelled freshman pre-orientation programs set to take place in August, suggesting further that the Fall semester just won’t happen like it normally would in physical classrooms and on campus.
Columbia University graduate workers strike against university’s COVID-19 response – Hundreds of graduate workers at Columbia University in New York City began a strike on April 24, demanding that the university sufficiently address the impact of the coronavirus pandemic on their lives, scholarship and research. Beginning on May 1, the strike will extend into a rent strike for residents of university-owned housing. The strikers are demanding emergency measures including, according to a graphic released by strike organizer Danielle Carr, cancellation of rent in university housing, extending funding and time to complete degree requirements by one year, the protection of international students, an emergency stipend and the ending of “university austerity to schools.” Columbia, located in the city with the most confirmed COVID-19 cases in the world, moved to all-online instruction in mid-March. Most students left their dormitories by March 17. However, Columbia also owns non-dormitory housing, which many graduate students rent and for which rent has not been canceled. Graduate teaching assistants are still instructing and grading students remotely as part of their work. Strikers have stopped teaching, but will not submit grades for students as the spring semester nears its end. Beginning on May 1, the graduate students will also begin a rent strike. Housing is a major concern even under normal circumstances. Many stipends amount to little more than rent for a bedroom in a university-owned apartment, which for one student who spoke to New York magazine is $1,400 a month. Students who were relying on subletting their unit during the summer months are out of luck given the cancellation of summer programs. According to the Columbia Spectator, the university will give graduate students on nine-month appointments $3,000, although that is unlikely to be much better than the two months of rent relief it gave small commercial tenants. Many Columbia programs are in danger due to the financial impact of the pandemic, which is expected to decimate tuition, clinical income, government grants and private support. The university has already announced hiring and salary freezes.
Coronavirus: China faces fight to hang onto foreign manufacturers as US, Japan, EU make Covid-19 exit plans | South China Morning Post –Over the space of two weeks, powerful figures from three of the world’s four largest economies have publicly announced or discussed plans to lure their countries out of China, with such rhetoric finding growing support after the supply shock caused by China’s coronavirus shutdown.On Tuesday, European Union trade commissioner Phil Hogan said the bloc would seek to “reduce our trade dependencies” after the pandemic, Politico reported.Last week, Japan unveiled a US$2.2 billion fund to tempt Japanese manufacturers back to the country or even to Southeast Asia – as long as they leave China – in response to supply chain disruptions stemming from the pandemic. This followed the director of the United States’ National Economic Council, Larry Kudlow, saying that Washington should pay the moving costs of American firms bringing manufacturing back from China. “I would say, 100 per cent immediate expensing across the board for plant, equipment, intellectual property, structures, renovations,” Kudlow told Fox News, adding to his comments in January that the coronavirus outbreak would be a boon for American employment. However, the US has no formal corporate repatriation programme as yet. Firms from the US, Japan and Europe have been moving manufacturing away from China for some time due to rising costs and the impact of the US-China trade war, but the pressure is now on to accelerate this, with the coronavirus highlighting how reliant the world is on goods made in China, particularly vital medical products. Michael Alkire, president of health care resource provider Premier, has already identified 22 items of protective clothing and 30 drugs that are likely “so critical that they need to be produced” in the US, even as the coronavirus continues to tear through American cities. Many are currently made in China, which dominates the world’s personal protective equipment (PPE) and pharmaceutical markets, as with many other manufacturing sectors.
China’s industrial firms’ profits contract in March but at slower pace (Reuters) – Profits at China’s industrial firms fell in March although at a slower pace than in the first two months, with many sectors seeing significant declines, suggesting the economy is still struggling to resume production after the coronavirus outbreak. The world’s No.2 economy is limping back after weeks of near paralysis caused by the health crisis and tough containment measures, but recovery has been patchy with worries about a second wave of infections and a global recession adding to the challenges for policymakers. China’s industrial firms earned 370.66 billion yuan ($52.43 billion) in March, down 34.9% from a year earlier, data from the National Bureau of Statistics showed. This follows a 38.3% slump in January-February, the steepest drop since at least 2010. For the quarter ended March, industrial firms’ profits fell 36.7% on an annual basis to 781.45 billion yuan. Electronics and drinks manufacturers saw some recoveries in profits from the first two months, the data showed. Eight out of 41 sectors surveyed marked profit increases in March, better than only four in January-February.The advanced manufacturing sector, as well as private, small-scale and foreign invested companies all saw narrower drops in profits in March compared with the first two months. The deep drop in industrial firms’ profits comes as China’s economy shrank for the first time since at least 1992 in the first three months. Factory gate prices, a key barometer for industrial demand, posted the deepest deflation in five months in March.
China seizes over 89 million shoddy face masks – China has confiscated over 89 million poor quality face masks, a government official said Sunday, as Beijing faces a slew of complaints about faulty protective gear exported worldwide. Demand for protective equipment has soared as nations across the globe battle the deadly coronavirus, which has infected around 2.9 million people. But a number of countries have complained about faulty masks and other products exported by China, mostly for use by medical workers and vulnerable groups. China’s market regulators had inspected nearly 16 million businesses and seized over 89 million masks and 418,000 pieces of protective gear as of Friday, said Gan Lin, deputy director of the State Administration of Market Regulation, at a press conference. Regulators had also seized ineffective disinfectants worth over 7.6 million yuan ($1.1 million), she said. It is unclear how much of the confiscated goods were destined for markets abroad. In a bid to eliminate poor-quality products, China released new rules Saturday saying even non-medical masks must meet both national and international quality standards.
Hong Kong police break up pro-democracy singing protest at mall (Reuters) – Hong Kong riot police armed with shields dispersed a crowd of 300 pro-democracy activists holding a singing protest in an upmarket shopping mall on Sunday, despite a ban on public gatherings of more than four people. Chanting popular protest slogans, mostly young activists clad in black swarmed the Cityplaza mall shouting “Liberate Hong Kong, revolution of our times!” while others called for the release of pro-democracy activists. The protest was the first sizable gathering since the government imposed the ban on public meetings at the end of March to curb a spike in coronavirus infections. Fears that Beijing is flexing its muscles over the Asian financial hub risk reviving anti-government protests after months of calm as social distancing rules start to ease. Political tensions have escalated over the past two weeks after the arrest of 15 pro-democracy activists in the city’s biggest crackdown on the movement. Beijing has said it supported the arrests in the Chinese special administrative region. On Sunday, police cordoned off sections of the Cityplaza mall, prompting some stores to shut as activists and shoppers, including families with children, were ordered to leave. “People were just singing, it’s very peaceful … we didn’t do anything illegally. Democracy and freedom is more important,” said a high school student surnamed Or who came to participate ahead of his university entrance exam on Monday. Adding to concerns that Beijing is increasingly meddling in the city’s affairs – a claim the central government rejects – Beijing’s top official in there urged local authorities last week to enact national security legislation as soon as possible.
India: Vicious attack on Maruti Suzuki trainees highlights plight of migrant workers during COVID-19 lockdown – A dozen or so young workers employed as trainees at the Maruti Suzuki’s Manesar car assembly plant in the north Indian state of Haryana were viciously attacked on April 8 by 25 to 30 goons who barged unannounced into their residences in the nearby Aliyar village.Shouting that the workers were spreading the COVID-19 disease, the goons armed with rods, stones and hockey sticks barged into the five-storey building, which contains several one-room apartments where workers reside five to a room.The Maruti Suzuki’s Manesar plant came to all-Indian and international prominence in 2011-12 when workers rebelled against a company and government-sponsored union and mounted a series of militant actions, including sit-down strikes, to challenge poverty wages and precarious contract jobs, and win recognition of the newly-founded Maruti Suzuki Workers Union (MSWU). Subsequently 13 workers, including the entire MSWU leadership, were sentenced to life in prison as result of a monstrous frame-up mounted by India’s largest automaker, its principal parties, the Bharatiya Janata Party (BJP) of Narendra Modi and the Congress Party, and the courts and police (see: Three years since Indian court ordered 13 framed-up Maruti Suzuki workers jailed for life).The trainee Maruti Suzuki workers who were attacked in Aliyar this month all hail from the eastern state of Bihar, which is one of the country’s most populous and impoverished states. There are large numbers of migrant workers from Bihar in most major cities and industrial areas, including Delhi and the nearby Gurgaon-Manesar industrial belt, Kolkata and Mumbai. According to reports that the World Socialist Web Site has received from the Provisional Committee of the Maruti Suzuki Workers Union (MSWU), the thugs who attacked the trainees appear to have been acting at the behest of the corrupt village head, a position known in Hindi as Sarpanch. Like tens if not hundreds of millions of domestic migrant workers, the trainees have been stranded, hundreds of kilometres from their home villages, and without any income or sustenance by Prime Minister Narendra Modi’s precipitous lockdown.Without any prior warning or planning, Modi announced on the evening of March 24 that just hours later India would be subject to a three-week anti-coronavirus lockdown, which was later extended for a further 19 days through May 3. Overnight, hundreds of millions of day-labourers, trainees, and contract workers found themselves without employment and income (see: Modi places India’s 1.3 billion people under lockdown).
India makes government tracing app mandatory for all workers – (Reuters) – India has mandated that all public and private sector employees use a government-backed Bluetooth tracing app and maintain social distancing in offices as New Delhi begins easing some of its lockdown measures in lower-risk areas. Prime Minister Narendra Modi’s government on Friday said India – the country with the largest number of people in lockdown – would extends its nationwide control measures for another two weeks from Monday to battle the spread of the coronavirus that causes the COVID-19 illness, but allow “considerable relaxations” in lower-risk districts. As part of its efforts to fight the deadly virus, India last month launched the app Aarogya Setu – meaning Health Bridge – a Bluetooth and GPS-based system developed by the country’s National Informatics Centre. The app alerts users who may have come in contact with people later found to be positive for COVID-19 or deemed to be at high risk. “Use of Aarogya Setu shall be made mandatory for all employees, both private and public,” India’s Ministry of Home Affairs said in a notification late on Friday. It will be the responsibility of the heads of companies and organizations “to ensure 100% coverage of this app among the employees,” the ministry said. Officials at India’s technology ministry and a lawyer who framed the privacy policy for Aarogya Setu told Reuters the app needs to be on at least 200 million phones for it to be effective in the country of 1.3 billion people. The app has been downloaded around 50 million times on Android phones, which dominate India’s smartphone user base of 500 million, according to Google Play Store data. The app’s compulsory use is raising concerns among privacy advocates, who say it is unclear how the data will be used and who stress that India lacks privacy laws to govern the app. “Such a move should be backed by a dedicated law which provides strong data protection cover and is under the oversight of an independent body,” said Udbhav Tiwari, Public Policy Advisor for internet company Mozilla. .
Quebec government threatens thousands of lives with precipitous return to work – Though Quebec remains the Canadian province most affected by the COVID-19 pandemic with over 25,000 confirmed cases and more than 1,675 deaths, Quebec Premier François Legault is intensifying his criminal policy of a hasty, premature return to work. Lying about the extremely fragile state of a public health care system ravaged by decades of austerity, Legault announced Monday the imminent reopening of daycare centers and primary schools. Those outside of Montreal will reopen on May 11 and those in the Greater Montreal area, the epicenter of the pandemic in Quebec, on May 19. Yesterday, Quebec’s premier announced that most retail stores outside of the Montreal region will be able to open as of next Monday, and all the province’s manufacturing facilities and construction sites will be allowed to resume their operations on May 11. Already last week, work on residential construction sites, which along with the rest of the building industry were only closed in late March because of angry worker protests, resumed. The Legault government is following in the footsteps of the Trump administration in the United States and the governments of the European Union. The repeated warnings of the World Health Organization (WHO) that the hasty lifting of lockdown measures could lead to a second, deadlier wave of COVID-19 cases are being brushed aside. Like its American and European counterparts, and the premiers of other Canadian provinces, the right-wing CAQ government (Coalition Avenir Quebec) wants to force workers to return to the workplace as quickly as possible. Without any guarantee that appropriate safety measures are in place, the ruling elite is demanding the ratcheting up of the exploitation of the working class in order to feed the insatiable thirst of big business and the financial markets for profits. Irrespective of the countless human lives that such a policy will cost under conditions of a continuing deadly pandemic, the authorities refuse to implement the measures prescribed by the scientific community to contain and defeat the coronavirus. These include systematic mass testing, treatment and isolation of infected people, contact-tracing, and massive investments in the health care system to build up surge capacity.
German students oppose reopening of schools – Under conditions of the worldwide spread of COVID-19, strong opposition among students in Germany to the reopening of schools is developing. Under the slogan “average grade 2020,” students are demanding the suspension of final exams and the closing of schools so long as the lives of students, teachers and their relatives are at risk. A petition which obtained 150,000 signatures in a short period of time called instead of exams for students to receive an average grade based on the work they have already completed during the school year. Students who want to improve their grade could take part in an oral exam via video conference, the petition suggested. Members of the International Youth and Students for Social Equality spoke to organisers of the initiative from several federal states. Vicky, 19, a final year high school student from North Rhine-Westphalia, said, “The politicians would like ‘normality’ to return but in my opinion, it’s much too soon for that. Although the infection curve is declining a little bit, this flattening off will not last long if so many people come together in a location where it’s impossible to stick to the hygiene regulations.” “I think it is irresponsible,” commented Nova, 19, angrily, a final year student from Bavaria. “It feels like an experiment to me – and in a few weeks we’ll see the effect and what happens when so many people come together in one place. Above all, I am personally affected by it, since I live with my grandparents, who both belong to the high-risk group. I don’t want to go into school every day with a bad conscience and worry about infecting them when I come home. Additionally, many students and teachers are also members of high-risk groups. What about them?” Nova, who sent a protest letter to political parties and politicians, firmly opposes the reopening of schools under these conditions. “It is a paradox for me when mass gatherings are banned and restrictions are rightly imposed on people going outdoors, but hundreds of us have to go to school. And the politicians decide all of this on a telephone conference!” If all final exams are held, Nova believes this will increase inequality in education. “Some students don’t have the chance to prepare for the exam, because, for example, they have to share a computer with someone else. The upper class naturally has an advantage there, because they can afford better equipment.”
Southern European Tourism (21% Of GDP) Is On Its Knees… Will It Ever Get Back Up Again? – The tourism industry is in the “eye of the hurricane”, says Manuel Butler, executive director of the World Tourism Organization. “It was the first sector to be afflicted by the virus crisis and, unlike other crises, is likely to be the last to recover from it.”Tourist spending across Europe already slumped 68% year-on-year in March, when the lockdowns began to spread across the continent, according to a recent UBS analysts’ note based on data from Planet, the VAT refund provider.“Chinese spend in Europe was down 84.6% y/y, with all other nationalities also declining in March,” the report said.Italy, the first European country to be hit by the virus and the first to enter full lockdown, on March 10, saw the biggest drop in tourist spending, down 96% year-over-year. Hotel occupancy in Italy also slumped to 4%, its lowest level ever.Overnight stays in hotels in Spain, which entered lockdown around ten days after Italy, plunged 61% year over year in March to 8.3 million, also the lowest number on record, according to Spain’s National Statistics Institute. In April, the number is likely to be much closer to zero since almost all of Spain’s hotels and other temporary lodgings have been closed since March 26.Spain’s government plans to gradually relax the country’s lockdown conditions, among the harshest in Europe, on May 10, but there will be little relief for the country’s tourism industry. Spain’s Minister of Work, Yolanda Diaz, said in a statement this week that the sector would not be returning to any semblance of normality until at least the end of the year. While her words infuriated some in the sector, most tourism businesses are grudgingly accepting that the summer season is as good as lost.Even as lockdown conditions are gradually lifted in places like Italy and Spain, many social-distancing restrictions will remain in place, including rules affecting travel. And consumers, still fearful of contracting the virus while also reeling from the deep economic recessions that are hitting just about every national economy on the planet, are unlikely to travel so far or with such frequency for some time.“Fear of traveling will probably last longer than the pandemic itself. It’s difficult to expect an immediate recovery of tourism once the lockdown measures are lifted,” said Steven Trypsteen, an economist at Dutch bank ING.
Global $6 Trillion Slump May Be Optimistic, Economists Warn – The coronavirus pandemic will cause the global economy to shrink 4% in 2020, according to a Bloomberg Economics estimate that assumes a recovery starts in the second half of the year. The economy has “entered a downturn of unprecedented speed and severity, with most advanced economies facing their weakest performance since the Great Depression,” Tom Orlik and Jamie Rush wrote in a report. “Relative to expectations at the start of the year, the cost of lost output is more than $6 trillion,” the wrote. That a contraction of this magnitude is based on “optimistic assumptions about both the outbreak and the recovery” underscores the challenge facing policy makers trying to cushion the blow of the pandemic. Under such scenario, U.S. gross domestic product will shrink 6.4%, while euro area GDP is set to contract 8.1%. Japan will shrink 4%, while China will expand at the slowest pace on record. World Outlook
COVID-19: Stimulating the economy and employment: ILO: As job losses escalate, nearly half of global workforce at risk of losing livelihoods (ILO) – The continued sharp decline in working hours globally due to the COVID-19 outbreak means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed, warns the International Labour Organization. According to the ILO Monitor third edition: COVID-19 and the world of work , the drop in working hours in the current (second) quarter of 2020 is expected to be significantly worse than previously estimated. Compared to pre-crisis levels (Q4 2019), a 10.5 per cent deterioration is now expected, equivalent to 305 million full-time jobs (assuming a 48-hour working week). The previous estimate was for a 6.7 per cent drop, equivalent to 195 million full-time workers. This is due to the prolongation and extension of lockdown measures. Regionally, the situation has worsened for all major regional groups. Estimates suggest a 12.4 per cent loss of working hours in Q2 for the Americas (compared to pre-crisis levels) and 11.8 per cent for Europe and Central Asia. The estimates for the rest of the regional groups follow closely and are all above 9.5 per cent. As a result of the economic crisis created by the pandemic, almost 1.6 billion informal economy workers (representing the most vulnerable in the labour market), out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living. This is due to lockdown measures and/or because they work in the hardest-hit sectors. The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally. This translates into a drop of 81 per cent in Africa and the Americas, 21.6 per cent in Asia and the Pacific, and 70 per cent in Europe and Central Asia. Without alternative income sources, these workers and their families will have no means to survive. The proportion of workers living in countries under recommended or required workplace closures has decreased from 81 to 68 per cent over the last two weeks. The decline from the previous estimate of 81 per cent in the second edition of the monitor (published April 7) is primarily a result of changes in China; elsewhere workplace closure measures have increased. Worldwide, more than 436 million enterprises face high risks of serious disruption. These enterprises are operating in the hardest-hit economic sectors, including some 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities. The ILO calls for urgent, targeted and flexible measures to support workers and businesses, particularly smaller enterprises, those in the informal economy and others who are vulnerable.
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