Written by rjs, MarketWatch 666
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. We cover the latest economic data, especially mortgage delinquencies and nonpayment of rent and utility bills, plus another batch of articles on schools’ plans for this fall. The bulk of the news is from the U.S., with about a dozen articles from overseas at the end. (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.
Please share this article – Go to very top of page, right hand side, for social media buttons.
FOMC Minutes: “Uncertainty surrounding the economic outlook remained very elevated” – From the Fed: Minutes of the Federal Open Market Committee July 28-29, 2020. A few excerpts: Participants observed that uncertainty surrounding the economic outlook remained very elevated, with the path of the economy highly dependent on the course of the virus and the public sector’s response to it. Several risks to the outlook were noted, including the possibility that additional waves of virus outbreaks could result in extended economic disruptions and a protracted period of reduced economic activity. In such scenarios, banks and other lenders could tighten conditions in credit markets appreciably and restrain the availability of credit to households and businesses. Other risks cited included the possibility that fiscal support for households, businesses, and state and local governments might not provide sufficient relief of financial strains in these sectors and that some foreign economies could come under greater pressure than anticipated as a result of the spread of the pandemic abroad. Several participants noted potential longer-run effects of the pandemic associated with possible restructuring in some sectors of the economy that could slow the growth of the economy’s productive capacity for some time. A number of participants commented on various potential risks to financial stability. Banks and other financial institutions could come under significant stress, particularly if one of the more adverse scenarios regarding the spread of the virus and its effects on economic activity was realized. Nonfinancial corporations had carried high levels of indebtedness into the pandemic, increasing their risk of insolvency. There were also concerns that the anticipated increase in Treasury debt over the next few years could have implications for market functioning. There was general agreement that these institutions, activities, and markets should be monitored closely, and a few participants noted that improved data would be helpful for doing so. Several participants observed that the Federal Reserve had recently taken steps to help ensure that banks remain resilient through the pandemic, including by conducting additional sensitivity analysis in conjunction with the most recent bank stress tests and imposing temporary restrictions on shareholder payouts to preserve banks’ capital. A couple of participants noted that they believed that restrictions on shareholder payouts should be extended, while another judged that such a step would be premature.
Eight High Frequency Indicators for the Economy – (graphs) These indicators are mostly for travel and entertainment – some of the sectors that will recover very slowly. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red). This data is as of August 16th. The seven day average is down 71% from last year. The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. Thanks to OpenTable for providing this restaurant data: This data is updated through Aug 15, 2020. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year.” The 7 day average for New York is still off 70% YoY, and down 47% in Texas. This data shows domestic box office for each week (red) and the maximum and minimum for the previous four years. Data is from BoxOfficeMojo through August 13th. Movie ticket sales have picked up a slightly from the bottom, but are still under $1 million per week (compared to usually around $300 million per week), and ticket sales have essentially been at zero for twenty one weeks. This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. This data is through August 8th. COVID-19 crushed hotel occupancy, however the occupancy rate has increased in 16 of the last 17 weeks, and is currently down 33% year-over-year. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline consumption compared to the same week last year of . As of August 7th, gasoline consumption was only off about 11% YoY (about 89% of normal).—– This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index.This data is through August 15th for the United States and several selected cities. According to the Apple data directions requests, public transit in the 7 day average for the US is still only about 55% of the January level. It is at 50% in New York, and 56% in Houston.
Conference Board Leading Economic Index Increased in July – The latest Conference Board Leading Economic Index (LEI) for July was up 1.4% from the June final figure of 103.0.Investing.com predicted a 1.1% increase.Here’s an excerpt from the technical notes.The Conference Board LEI for the U.S. increased for the third consecutive month in July. The largest positive contributions came from average weekly manufacturing hours, building permits, and initial claims for unemployment insurance (inverted). In the six-month period ending July 2020, the leading economic index decreased 6.8 percent (about a -13.1 percent annual rate), down from no growth over the previous six months. In addition, the weaknesses among the leading indicators have remained widespread.The Conference Board CEI for the U.S., a measure of current economic activity, also increased in July. However, the coincident economic index declined 7.6 percent (about a -14.7 percent annual rate) between January and July 2020, a reversal from the growth of 0.9 percent (about a 1.9 percent annual rate) for the previous six months. Also, the weaknesses among the coincident indicators have remained very widespread, with all components declining over the past six months. The lagging economicindex continued to decline, while the CEI is improving. As a result, the coincident-to-lagging ratio has been increasing. Real GDP contracted at a 32.9 percent annual rate in the second quarter, after declining 5.0 percent (annual rate) in the first quarter.Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.
U.S. Economic Recovery Gains Steam While Others Stutter – WSJ – The U.S. economy picked up momentum this month as companies shook off the effects of the pandemic-induced downturn, though recoveries in other parts of the world slowed, according to new surveys of purchasing managers. The data released Friday suggest U.S. firms are seeing demand return as they reopen from the lockdowns imposed in the spring and early summer. They also indicate the economy has so far managed to weather July’s sharp rise in new coronavirus infections and business closures that threatened to knock the recovery off course. Data firm IHS Markit said its composite purchasing-managers index, a measure of manufacturing and services activity, rose to 54.7 from 50.3 in July, an 18-month high, with both sectors seeing a big increase. A reading above 50 is a sign of expansion while a reading below 50 is a sign of contraction. The index of manufacturing output was up to 53.6 from 50.9 in July. The services activity index rose to 54.8 from 50. A manufacturing worker in Italy. The slowdown in Europe comes as infections are again surging. PHOTO: MASSIMO PINCA/REUTERS “It’s solid,” said Michael Pearce, senior U.S. economist at Capital Economics. “We’ve had a few reasons to worry that the recovery might have lost momentum or gone into a bit of a reverse but they don’t seem to have materialized. The economy seems to be powering ahead.” In a separate report Friday, the National Association of Realtors said sales of previously-owned homes surged 24.7% in July from June, propelled by low interest rates and people’s desire for more space. Economists warned that the unusual economic environment – a sharp and deep contraction in the spring caused by a global pandemic – makes it harder to interpret recent data. For instance, Mr. Pearce said, since the PMI numbers only measure month-to-month change, they don’t show how much ground the U.S. still needs to make up. U.S. output fell at an annualized rate of 32.9% in the second quarter, the worst contraction on record, the Commerce Department said. Economists surveyed by The Wall Street Journal earlier this month expected an 18.3% annualized pace of increase in the third quarter. Other indicators suggest the U.S. economy remains vulnerable. New applications for jobless benefits rose last week, the Labor Department reported Thursday. Payroll gains slowed in July from June. More pain could be on the way as several companies, including Boeing Co., have announced job cuts. The Federal Reserve said last week that industrial production was still 8.2% below its level a year ago. Restaurant reservations are about 50% of where they were a year ago, according to OpenTable, an improvement from April and May, when they had almost completely frozen up.
Contemplating the (No Deal) Cliff – Menzie Chinn – The recovery package cliff, that is. DeutscheBank research outlines what they think is likely (baseline) and what a no-deal means for disposable personal income. Source: “Outlook for consumers,” Deutsche Bank research, August 19, 2020. What does this mean for disposable personal income? Holding constant other components (about $4021 billion SAAR), here’s what it looks like in the two scenarios. Figure 1: Disposable personal income (blue), disposable personal income assuming DB baseline of Phase IV fiscal package $1.5-$2 trn and no other changes in other components (dark blue open triangle), disposable personal income assuming no deal and no other changes in other components (solid blue triangle). Source: BEA, DB, Ryan et al., (2020), author’s calculations. What happens to consumption then depends on (1) the marginal propensity to consume out of disposable income, and (2) the sensitivity consumption to both household wealth, and to uncertainty, with the former having a positive impact, the latter a negative. Here’s the evolution of the two variables, up to the most recent data. Figure 2: Household net worth, end-of-quarter, billions of Ch.2012$ (blue, left log scale), Economic Policy Uncertainty index (brown, right scale). Household wealth deflated using personal consumption expenditure deflator. Source: Federal Reserve Flow of Funds, BEA, policyuncertainty.com, author’s calculations. What will happen to consumption, given the uncertainty regarding parameter stability (who knows what the MPC will be in the aggregate? The benefit cuts will weight on low and middle income consumers heavily, who have a higher MPC, but account for a smaller share of overall consumption), and wealth elasticity, and the impact of uncertainty – of all types, not just policy uncertainty. What we do know is that holding all else constant, a drop in household income will exert a depressing effect on consumption ceteris paribus. Note, the multiplier effect is not contained in the calculations in the table..
Who Bought the Gigantic $4.5 Trillion in US Government Debt Added in the Past 12 Months? Everyone but China? – — Remember the ridiculous and quaint charade around the “Debt Ceiling” in Congress and the White House? Me neither. But those were the Good Times. So what we now have is the Pandemic Economy with the Incredibly Spiking US Gross National Debt, which spiked incredibly by $4.45 trillion over the past 12 months, to $26.5 trillion. WHOOSH go the trillions, flying by. But here is the thing: These are all Treasury Securities – and someone had to buy them, every single one of them. But who? With today’s release by the Treasury Department’s Treasury International Capital (TIC) data through June 30, and with other data released by the Federal Reserve, we can piece together the puzzle who bought those $4.45 trillion in Treasury Securities over the past 12 months. Foreign central banks, governments, companies, commercial banks, bond funds, other funds, and individuals, all combined added $90 billion to their holdings in June compared to May. Over the 12-month period through June, they added $413 billion. They now hold a total of $7.04 trillion, a huge record pile. But given the incredibly spiking US Treasury debt ($26.45 trillion on June 30), their share of this debt plunged to just 26.6% – the lowest since 2008. The quarterly chart shows foreign holdings in billion dollars (blue line, left scale); and the percentage of total US debt (red line, right scale): Japan and China, the two largest foreign creditors of the US, combined held 8.8% of the US debt, the lowest share going back many years. Back at the end of 2015, their combined holdings were still 12.8% of the total US debt. Japan maintained its holdings in June for the third month in a row at $1.26 trillion, but over the 12-month period increased its holdings by $138 billion. China cut its holdings in June by $9 billion, to $1.07 trillion, and over the 12-month period by $38 billion, which follows the trend since 2015, with exception of the V-shaped plunge during peak-capital flight, and the recovery afterwards: The next 10 largest foreign holders include many tax havens and financial centers, such as the UK (City of London financial center), Belgium (home to Euroclear), Ireland, the fertile breeding ground of mailbox-entities of many US corporations established there to dodge US taxes. Despite the mega-trade deficits that the US has with Mexico and Germany, their holdings of US Treasury securities are relatively small: Germany held $80 billion and Mexico $47 billion. The Social Security Trust Fund, pension funds for federal civilian employees, pension funds for the US military, and other government funds added $50 billion in June and $112 billion over the 12-month period to their holdings, which reached $5.95 trillion, or about 22.5% of total US debt. In June, the Fed added just $95 billion to its pile of Treasuries, having already cut back its purchases, after having added $1.6 trillion from March 11 through the end of May, bringing its total holdings at the end of June to $4.2 trillion. It holds about 15.9% of the US debt. Just over the month of June, US commercial banks added $121 billion in Treasury securities, to a total of $1.07 trillion, according to the Federal Reserve’s data release on bank balance sheets. This brought the 12-month increase to $220 billion. They hold about 4.0% of the total US debt.
Major General Dennis Laich: Pentagon Needs a Bad Guy – video – Yves here. Get a cup of coffee so you can give this meaty talk wth retired Major General Dennis Laich the attention it deserves, With the news dominated by Covid-19 stories, and now the Democratic Party convention, a break of sorts is in order. Aside from Bernie Sanders’ quixotic call for Pentagon belt-tightening on the order of 10%, no budget proposal calls for cutting US military spending, despite its ever-rising pork to production ratio (admittedly, Congress just had a failed budget amendments to cut spending, but I am not aware of adequate groundwork being laid). The fact that Russia, with an economy the size of South Korea’s, has war toys shown in combat in the Middle East to be able to go toe-to-toe with ours illustrates how out of control Pentagon grifting has become. Paul Jay talks to retired Major General Dennis Laich about the crude but effective means that the defense-surveillance complex uses to justify its bloated spending, namely, the embellishment of foreign threats. “We are always at war with Eurasia”.
Trump says could ‘decouple’ and not do business with China – (Reuters) – U.S. President Donald Trump, in a Fox News interview airing Sunday, raised the possibility of decoupling the U.S. economy from China, a major purchaser of U.S. goods. In a video excerpt, Trump initially told interviewer Steve Hilton “we don’t have to” do business with China, and then later said about decoupling: “Well it’s something that if they don’t treat us right I would certainly, I would certainly do that.” Trump entered into a high-stakes trade war with China before reaching a partial Phase 1 trade deal in January. Trump has since shut the door on Phase 2 negotiations, saying he was unhappy with Beijing’s handling of the pandemic. In June U.S. Treasury Secretary Steven Mnuchin said a decoupling of the U.S. and Chinese economies will result if U.S. companies are not allowed to compete on a fair and level basis in China’s economy.
The End Of Special Fiscal Stimulus– A week ago a two week long negotiation between Dem Congress people, Nancy Pelosi from the House and Chuck Schumer from the Senate and Treasury Secretary Steve Mnuchin, who cut deals with Pelosi and Schumer three times earlier this year, but now Trump’s Chief of Staff, former Freedom Caucus leader in the House, Mark Meadows, notorious for only destroying deals and never making any. And in this case, all the reporting is that a week ago he “blew up” the negotiations, taking a hard line on orders from Trump. So, where are we at now?For starters yesterday the Senate adjourned until after Labor Day. So, the market expectations that a deal will be cut soon are a joke. There will be no deal anytime soon, and maybe never. Many things have run out, whose impact has not fully arrived: end of extra unemployment, end of PPP assistance for small businesses, end of no evictions, and several other things. Yes, there have been vague noises in the past week about restarting the negotiations, but they went nowhere. Dems indicated that they were willing to compromise on many issues. To pick a big symbolic one has to do with the total spending level. Going into this the Dems were pushing $3+ trillion and the GOP was pushing $1 trillion. Gosh, looks like $ 2 trillion would be an obvious compromise, and the Dems have publicly indicated they would be willing to go to that, but, no, Meadows held the hard-line, and, along with some other issues, such as a roughly $800 billion difference over state and local aid, which is clearly the largest chunk of this stalemate. As it is, Meadows left town and the Senate has gone on leave until after Labor Day. No deal.
South Dakota declines unemployment aid from Trump executive orders – South Dakota appeared to become the first state to decline boosted federal unemployment aid that was designated under an executive order signed by President Trump this month amid the continuing pandemic.Gov. Kristi Noem (R), a vocal ally of the White House, said South Dakota did not need the additional funds because workers in her state have been rehired and that its economy is rebounding after suffering economic fallout from the coronavirus pandemic. “My administration is very grateful for the additional flexibility that this effort would have provided, but South Dakota is in the fortunate position of not needing to accept it. South Dakota’s economy, having never been shut down, has recovered nearly 80% of our job losses. South Dakota is the only state in the nation that didn’t have extended benefits kick in because our insured unemployment rate has been the lowest in the nation,” she said in a statement. Trump signed an executive order earlier this month allowing the federal government to use money already allocated for disaster assistance to help unemployed Americans, adding at least $300 more to their weekly benefit amounts, with state governments expected to provide an additional $100, for a total of $400. But the order blindsided many states, some of which are still reeling from the pandemic’s economic repercussions and may not be in a position to add their part of the benefits boost. The order drew fierce criticism from Pennsylvania Gov. Tom Wolf (D), who wrote in a letter that the “convoluted and short-lived proposal” will “delay payments to unemployed Pennsylvanians and create unnecessary and costly administrative burdens for the states who must administer the funds.”
18 states committed to Trump’s expanded unemployment plan: report – Eighteen states have committed to President Trump’s plan for augmented temporary unemployment benefits, which would reduce the amount of individual payments and require states to contribute 25 percent of the payments. An Associated Press survey found the majority of states remain uncommitted as of Tuesday. Thirty have reportedly said they are continuing to analyze the proposal, while two, Mississippi and South Dakota, have turned it down outright. New Mexico was the first state to apply for the assistance, but the head of the state’s Department of Workforce Solutions said the logistics remain largely unclear. “People need help and they need it right now,” Bill McCamley told the AP. “These dollars are so important, not only to the claimants, but because the claimants turn that money around, sometimes immediately to pay for things like rent, child care, utilities.” Mississippi Gov. Tate Reeves (R), meanwhile, has turned the plan down, calling it too expensive. The second governor to reject it, South Dakota Gov. Kristi Noem (R), called it unnecessary. “South Dakota’s economy, having never been shut down, has recovered nearly 80 percent of our job losses,” Noem, one of only a few governors never to impose lockdown measures, said in a statement on Friday. “South Dakota is open for business – that applies to our business owners and their employees.” In contrast, California Gov. Gavin Newsom (D), despite his frequent criticisms of the president, has announced the state will take the deal. “As I say, don’t look a gift horse in the mouth,” he said last week, the AP noted. An aid package passed by Congress earlier this year provided an additional $600 a week to those who have lost their jobs during the coronavirus pandemic. After the extension expired, President Trump announced an executive order that extended the benefit but at a reduced rate of $400 a week, with states contributing $100.
Trump’s payroll tax holiday may haunt workers next year, business groups warn – President Donald Trump’s recent executive action creating a payroll tax holiday for the remainder of the year could boomerang as a higher tax bill for American workers in 2021, the nation’s business leaders warned this week in a letter to Congress and the Treasury Department. The letter was sent Tuesday by the U.S. Chamber of Commerce and signed by more than 30 trade groups, including manufacturers, restaurants, retailers and building contractors. The letter addressed the uncertainty of how Trump planned to compensate for the upcoming shortfall so that workers are not on the hook to pay the money back in the future, CNN reported. As it stands the president’s plan does not forgive the 6.2% in payroll tax deferment, which is meant for workers who earn less than $104,000 annually. The letter noted that workers making $50,000 a year could wind up owing nearly $1,100 in payroll taxes in 2021, while those earning the max of $104,000 could be hit with a tax bill of more than $2,200, CNN reports. “Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year,” the letter states. Trump promised last week to permanently abolish the payroll tax – which largely funds Social Security and Medicare – days after signing an executive measure to defer the tax from September to December. “On the assumption I win, we are going to be terminating the payroll tax after the beginning of the new year,” Trump said. Trump made the unilateral moves after lawmakers on Capitol Hill failed to agree on another legislative relief package, saying he wanted to quickly put more money in the pockets of consumers as the coronavirus pandemic continues to pummel the nation’s economy. The president’s other actions included deferred student loan payments, discouraged evictions and provisions for enhanced unemployment benefits if states agree to contribute money to the program.
Pelosi Hints Democrats Might Pare Stimulus Plan, Seek More Later – House Speaker Nancy Pelosi suggested that Democrats might be willing to make more cuts to their stimulus proposal to seal a deal with Republicans and speed Covid-19 relief, then come back after the November elections with additional agenda items. “We’re willing to cut our bill in half to meet the needs right now,” she said Tuesday at a Politico Playbook event. “We’ll take it up again in January.” Pelosi’s spokesman Drew Hammill later said that she was referring to previous offers to meet Republicans “halfway, not cutting our bill in half.” But both sides in the stalemate over a stimulus bill appeared to be probing for openings for a break that could restart negotiations. Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell said Pelosi’s decision to break out $25 billion in funding for the Postal Service from the original Democratic relief plan as an opening for talks. That “could open the opportunity for discussion about something smaller than what the speaker and the Democratic Senate leader were insisting on at the point of impasse,” McConnell said in an interview with the Louisville Courier Journal. He added that the Senate was unlikely to take up the Democrats’ post office bill, which the House is set to pass Saturday. Pelosi said she’s eager to get a stimulus package through Congress before lawmakers next month have to take up a bill needed to keep the government running when the new fiscal year starts Oct. 1. “We have to try to come to that agreement now,” Pelosi said.
Mnuchin Says Stimulus Talks Remain Stalled – WSJ – Treasury Secretary Steven Mnuchin said Tuesday that talks remain stalled between Republicans and Democrats over another round of stimulus funding, though bipartisan appetite for a deal remains high. Mr. Mnuchin also suggested that House Speaker Nancy Pelosi (D., Calif.) might be willing to resume negotiations this week when she reconvenes the chamber to consider legislation prohibiting the U.S. Postal Service from implementing changes that Democrats say could affect the presidential election. “Speaker Pelosi is coming back to look at Postal; hopefully she’ll be more interested in sitting down,” the Treasury secretary said in an interview on CNBC. Mr. Mnuchin has repeatedly traded barbs with Mrs. Pelosi and Senate Minority Leader Chuck Schumer (D., N.Y.) over the size and contents of the next major round of relief to combat the economic effects of the coronavirus pandemic. Both sides have accused the other of being unwilling to engage in earnest negotiations. Democrats have said they are willing to move to $2 trillion on the next coronavirus bill, down from the $3.5 trillion of a bill the House passed in May. The administration has set its goal for the size of the next bill at $1 trillion but has indicated willingness to go higher. Mr. Mnuchin on Tuesday gave little indication that the battle lines have budged, saying, “I really don’t know,” when asked why a deal seems so far off. “We started with a trillion dollars. We agreed to increase that in several areas in an effort to compromise,” he said. “They didn’t come down. They never made us a proposal at two trillion; they never gave us a line-by-line counter.”
Why there’s still hope for second $1,200 stimulus checks despite stalled congressional talks – When it comes to a second round of $1,200 stimulus checks, there’s good news and bad news.The good news: Both political parties have said they want to send Americans more direct payments.The bad news: Congress needs to agree on the next coronavirus stimulus package in order for that money to come through.Talks between top Democrats and the White House broke down because they could not come to a compromise on how much to spend on that legislation. Democrats have proposed more than $3 trillion in aid, while Republicans have said their target is $1 trillion. “Neither side wants to give the other side a victory right now,” said Ed Mills, Washington policy analyst at Raymond James.The impasse prompted President Donald Trump to sign a series of executive orders earlier this month, addressing unemployment benefits, student loans, eviction protections and payroll tax deferrals.But other areas were left untouched, including state and local funding and aid for schools.Other initiatives with more popular support, such as the stimulus checks and aid for small businesses, could help bring politicians back to the negotiating table, Mills said. The big question is how soon that could happen. Congress has a Sept. 30 deadline to come up with a budget for the next fiscal year. House Democrats are working on new legislation to provide support to the U.S. Postal Service, which some hope could help reopen stimulus talks.In the meantime, spending could slow down as household savings start to dwindle and with enhanced unemployment benefits only expected to lastseveral weeks. When lawmakers do resume talks, stimulus checks are expected to stay in the package.”It’s one of the only areas that truly has bipartisan support,” Mills said. “The longer we go without enhanced unemployment, the longer we go with the economy still not fully reopened, the greater the economic need is for those checks.”
UI claims remain historically high and the president’s sham executive memorandum is doing next to nothing: Congress must reinstate the $600 – EPI – Last week 1.4 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 892,000 applied for regular state unemployment insurance (not seasonally adjusted), and 543,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.1 million UI claims last week, but that’s not the right number to use. For one thing, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments. Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week was the third week of unemployment in this pandemic for which recipients did not get the extra $600. That means people on UI are now are forced to get by on the meager benefits which are in place without the extra payment, which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain. Earlier this month, President Trump issued a sham of an executive memorandum. It was purported to give recipients an additional $300 in benefits. But in reality, even this drastically reduced benefit is only available to recipients in a handful of small states, and only for a few weeks. The executive memorandum is a false promise that actually does more harm than good because it diverts attention from the desperate need for the real relief that can only come through legislation. This is cruel, and terrible economics. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs – it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog postshows many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. We remain 12.9 million jobs below where we were before the virus hit, and the unemployment rate is higher than it ever was during the Great Recession. Now isn’t the time to cut benefits that support jobs
Billions in Federal Covid-19 Testing Funds Still Unspent – WSJ – Billions of dollars in federal funds earmarked for boosting nationwide Covid-19 testing remain unspent months after Congress made the money available, according to the U.S. Department of Health and Human Services. In April, Congress allocated roughly $25 billion for federal agencies and states to expand testing, develop contact-tracing initiatives and broaden disease surveillance. According to HHS data, only about 10% to 15% of that total has been drawn down, meaning the cash has been spent or committed to various efforts. The funds for various testing initiatives were part of the Paycheck Protection Program and Health Care Enhancement Act. The Trump administration has taken a state-led approach to testing Americans for Covid-19, dispatching funds and helping states procure the swabs and reagents they need to facilitate testing. The strategy, federal officials say, helps states identify and cater to their specific needs. Of the $25 billion, some $10.25 billion was sent to states and U.S. territories in May to expand testing and develop contact-tracing programs at their discretion, but as of Aug. 14, just $121 million of that pool of funds had been drawn down. Reasons for the lack of spending vary. Some states are still identifying the testing and contact-tracing services they think will be the most effective. It can take time to solicit bids, award contracts and pay for services rendered. Also, states aren’t spending money on some testing materials such as reagents that the federal government helps them source, HHS spokeswoman Mia Heck said. HHS won’t know how the funds were used until the fiscal year ends Sept. 30., she said. HHS is focused on expanding testing and sending the right types of tests to the right types of settings, Adm. Brett Giroir, assistant secretary for health at the agency, said on a call with reporters Wednesday. “There are plenty of tests and that’s growing substantially,” said Adm. Giroir, who has overseen U.S. testing efforts.
More than 200 of the US’s worst-performing nursing homes received millions of dollars from the Paycheck Protection Program – According to a Business Insider review of data compiled by ProPublica, the Centers for Medicare and Medicaid Services (CMS), the Paycheck Protection Program, and Medicare.gov, about 220 nursing homes that have been flagged for a litany of violations benefited to the tune of millions of dollars by way of Small Business Administration Paycheck Protection Program (PPP) loans. This lending program is part of the Coronavirus Aid, Relief, and Economic Security Act, a $2.2 trillion bill that was passed by Congress in March in response to the pandemic’s blow to the economy. In all, nursing homes cited by CMS’s Special Focus Facility (SFF) Program, as well as hospitals and business entities that own and/or manage those facilities received $149 million to $427 million.* “If Chrysler provided nonfunctioning cars to the federal government, people would demand that the government not pay for them. But for some reason, we hand out billions to poorly performing nursing homes with no accountability whatsoever,” Alex Lawson, the executive director of advocacy group Social Security Works, told Business Insider. Nursing homes serve the most vulnerable segments of society, which makes a yearslong history of violations particularly egregious, Brian Lee, the executive director of Families for Better Care, said. Lee said in some cases, poor quality of care has transformed nursing homes into coronavirus “killing fields.” “The downplaying of infection-control infractions and the ‘look-the-other-way’ staffing enforcement exacerbated the invasion of COVID-19 into nursing homes,” Lee said.
Dozens of public health officials are quitting during pandemic Health officials across the country are calling it quits in the midst of a global pandemic as otherwise below-the-radar public servants become the targets of anger and frustration in a hyperpartisan age. In some cases, government health officials have quit or been removed from their jobs after clashing with elected leaders. New York City Health Commissioner Oxiris Barbot resigned this month after feuding with Mayor Bill de Blasio (D). Health officials in Texas, Indiana and Montana have quit in recent weeks after politicians overrode their advice on requiring masks and prohibiting public events. In other states, health officials have been fired for data reporting errors. California’s public health director, Sonia Angell, quit suddenly this month after a software breakdown showed the state may have underreported the number of coronavirus infections. West Virginia Gov. Jim Justice (R) fired his public health commissioner, Cathy Slemp, over another reporting issue. In the most troubling cases, public health officials have left their jobs after receiving threats. In Ohio last week, Amy Acton quit her post as Gov. Mike DeWine’s chief health adviser, two months after giving up her position as director of the state’s Department of Health. Armed demonstrators protested outside her home earlier this year. A tally maintained by Kaiser Health News and The Associated Press finds that almost 50 state and local health officials have resigned, retired or been fired since April. “To see this kind of really widespread resignations from critical roles at a time of great importance for our country ought to be a source for everyone to be concerned,” National Institutes of Health Director Francis Collins told The Hill in an interview. “I am very troubled to see that kind of turnover.” Collins and other public health experts pinned blame on the heightened partisan atmosphere in America, one that has even infected the response to the coronavirus pandemic. “These are public servants who are trying their best to look at an unprecedented situation and make recommendations to keep people safe. Those recommendations unfortunately in our polarized society often take on some political spin, which I’m sure is not their intention, and results in a great deal of pressure upon those individuals to change their opinions,” Collins said. “Some of them are getting vicious attacks or even threats to themselves or their families. That is really heartbreaking.” Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and a member of the White House coronavirus task force, has received so many threats that he now has a security detail. In interviews, Fauci has said people have even threatened his adult daughters. At the local level, and especially in areas controlled by Republican elected officials, health experts have quit in frustration when county executives or commissioners have refused to follow their advice. In Fishers, Ind., epidemiologist Eileen White resigned Sunday after pressure from Mayor Scott Fadness (R), who she said was pushing to open schools before the area got coronavirus infections under control. “This is a level of interference I had never seen before in a public health agency,” White told the Indianapolis Star. In Ravalli County, Mont., public health officer Carol Calderwood resigned in July after county commissioners refused to enforce a public mask mandate ordered by Gov. Steve Bullock (D). “The idea that you have to either pick to support the economy or pick public health measures is so upside down. The public health measures are going to help us get our economy going again,” . “They are a pathway towards getting our schools started up again. And yet somehow in many of these situations these are pitted against each other in a way that causes a great deal of anger and resentment and political furor to kick in.”
Trump says without proof that FDA ‘deep state’ slowing COVID trials – (Reuters) – U.S. President Donald Trump on Saturday accused members of the “deep state” at the Food and Drug Administration, without providing evidence, of working to slow testing of COVID-19 vaccines until after the November presidential election. In a Twitter post, Trump said the deep state “or whoever” at the FDA was making it very difficult for drug companies to enroll people in clinical trials to test vaccines and therapies for the novel coronavirus. The comment came after Reuters exclusively reported on Thursday that a top FDA official said he would resign if the Trump administration approved a vaccine before it was shown to be safe and effective. “Obviously, they are hoping to delay the answer until after November 3rd. Must focus on speed, and saving lives!” Trump wrote, tagging FDA Commissioner Stephen Hahn in the tweet. U.S. House Speaker Nancy Pelosi said it was a “dangerous statement” and that the president was “beyond the pale” for accusing the FDA of playing politics. The FDA could not immediately be reached for comment. Drug manufacturers in coordination with the FDA and National Institutes of Health are ramping up production while testing is underway in order to respond as soon as possible with a vaccine for COVID-19, which has killed nearly 800,000 people worldwide. Trump often uses Twitter to criticize federal agencies, sometimes accusing them of being controlled by the “deep state” in an apparent reference to long-serving staff who, in Trump’s eyes, are determined to undermine his agenda. His tweet increases the pressure on the FDA after Peter Marks, director of its Center for Biologics Evaluation and Research, last week said on a conference call with government officials, pharmaceutical executives and academics that he would resign if the agency rubber-stamped an unproven vaccine. Scientists, public health officials and lawmakers are worried that the Trump administration will push the FDA to approve a vaccine in advance of the vote, even if data from clinical trials do not support its widespread use.
Who is Scott Atlas, Trump’s new adviser on the COVID-19 pandemic? – Dr. Scott Atlas was introduced last week by Trump at the coronavirus task force press brief as a new member and adviser to the president on the pandemic. Trump declared: “The gentlemen, this is Scott Atlas … he is working with us and will be working with us on the coronavirus. He has many great ideas, and he thinks what we’ve done is really good, and now we will take it to a new level.” After butting heads with his medical adviser Dr. Anthony Fauci for several months and more recently upset by the warnings from Dr. Deborah Birx, coordinator of the White House task force, about the consequences of the pandemic, the White House has turned to a stalwart of reaction. Dr. Scott Atlas has supported Trump’s policies on masks, opening the economy and calling for school reopening. Not to mince words, ultra-right talkshow host Rush Limbaugh said last week, “Scott Atlas is now part of the coronavirus task force meeting with the President. And he is countering Fauci.” White House sources told CNN that Dr. Atlas had been informally advising Trump for many weeks after Trump saw him speaking on Fox News, echoing the President’s position on school reopening and general skepticism toward the pandemic and the president’s medical experts. His medical credentials will now allow Trump to align his policy with “medical advice.” Dr. Atlas, who has been busy making the media circuit among conservative outlets, always prefaces his comments with remarks about strictly adhering to science and data behind the issues, before diving into a tirade against proponents of lockdowns and school closures. On Fox News, he has admitted that the goal of the administration is not to prevent infections, claiming that young people mostly have no risk of dying, and therefore whether they are infected or not is immaterial. In an interview with former Congressman Andy Biggs of Arizona, Dr. Atlas spewed many unsubstantiated facts and calling actions that attempt to contain the virus as causing more harm or deaths. In one of his inflammatory statements from April, he said, “In the absence of immunization, society needs circulation of the virus, assuming high-risk people can be isolated.” This has been the essence of the herd immunity policy that has had disastrous consequences for the population of those countries adhering to them. On May 25, in an opinion piece for the Hill, Dr. Atlas wrote, “Although well-intentioned, the lockdown was imposed without consideration of its consequences beyond those directly from the pandemic. The policies have created the greatest global economic disruption in history, with trillions of dollars of lost economic output. These financial losses have been falsely portrayed as purely economic. To the contrary … we calculate that these policies will cause devastating non-economic consequences that will total millions of accumulated years of life lost in the United States, far beyond what the virus itself has caused.”
An overwhelming majority of Americans say the US response to coronavirus makes them feel embarrassed – Almost seven in 10 Americans in a new CNN poll said the US response to the coronavirus pandemic made them feel embarrassed. Sixty-eight percent said that, compared with 28% who said they were proud. Democrats overwhelmingly said they were more embarrassed than proud (93% embarrassed, 5% proud), while 61% of Republicans said they were proud. The poll found that 33% of Republicans said they were embarrassed by the US response. The US has the most reported coronavirus cases and deaths in the world. President Donald Trump has repeatedly downplayed the threat of the virus despite the mounting death toll. He’s taken an anti-scientific approach, repeatedly contradicting the nation’s top public-health experts. The president at one point even dangerously suggested that researchers should look into injecting disinfectant as a cure, prompting companies that produce such products to forcefully warn consumers against doing so. More recently, when confronted with the staggering six-figure death toll from coronavirus in the US, Trump said: “They are dying. That’s true. And you – it is what it is.” Public-health experts have said the Trump administration’s handling of the pandemic has been “abysmal” and has mirrored that of authoritarian governments. As of Wednesday, there had been nearly 5.5 million reported coronavirus cases in the US and more than 171,000 confirmed deaths.
Just 12 US Billionaires Now Own More Than $1 Trillion in Combined Wealth – New research published Monday by the Institute for Policy Studies shows that the dozen richest American billionaires now collectively own more than $1 trillion in wealth, a finding one analyst described as “a disturbing milestone in the U.S. history of concentrated wealth and power.”According to IPS, a progressive think tank, the 12 top U.S. billionaires have seen their combined wealth soar by 40% – or $283 billion – since the coronavirus began spreading rapidly across the U.S. in mid-March, sparking widespread economic shutdowns and mass job loss. “During the first stage of the pandemic, between January 1 and March 18, the collective wealth of the Oligarchic Dozen declined by $96 billion,” wrote IPS researchers Chuck Collins and Omar Ocampo. “But their wealth quickly rebounded and surpassed their September 2019 Forbes 400 wealth level. The only exception is Warren Buffett, who is still $2 billion below his September 2019 wealth, but is currently worth $80 billion.”Last Thursday, the billionaires’ combined wealth reached $1.015 trillion – the first time in U.S. history that the collective net worth of the top 12 American billionaires has topped the trillion-dollar mark. According to IPS, Tesla and SpaceX CEO Elon Musk has seen his wealth jump by $48.5 billion since mid-March, making him the “biggest pandemic profiteer” of the group.”This is simply too much economic and political power in the hands of twelve people,” Collins, director of IPS’ Program on Inequality and the Common Good, said in a statement.The dozen wealthiest U.S. billionaires and their respective net worth as of August 13 are listed below:
- Jeff Bezos – $189.5 billion
- Bill Gates – $114.1 billion
- Mark Zuckerberg – $95.5 billion
- Warren Buffett – $80.6 billion
- Elon Musk – $73.1 billion
- Steve Ballmer – $71.5 billion
- Larry Ellison – $70.9 billion
- Larry Page – $67.4 billion
- Sergey Brin – $65.6 billion
- Alice Walton – $62.6 billion
- Jim Walton – $62.3 billion
- Rob Walton – $62.03 billion
“The total wealth of the Oligarchic Dozen is greater than the GDP of Belgium and Austria combined,” said Ocampo. “Meanwhile, tens of millions of Americans are unemployed or living paycheck to paycheck, and 170,000 people have died from Covid-19 in the United States.”
Would McWilliams stay on at FDIC if Biden wins? – – At the end of 2008, in the midst of a financial crisis, then-Federal Deposit Insurance Corp. Chair Sheila Bair – a Republican appointed by the George W. Bush administration – told Barack Obama’s transition team that she would resign if the newly elected president wanted to choose a replacement. With U.S. banks on shaky ground following a historic housing crash, the Obama team opted to keep Bair on board. For the next two and a half years, she helped steer the agency and the industry through a wave of bank collapses, leading a bipartisan FDIC board of mostly Democratic appointees. Twelve years later, the economy has again been dealt a severe blow just ahead of a presidential election, and the FDIC – like the other bank regulators – is facing uncertainty about its post-2020 leadership. Some observers wonder whether a similar scenario might play out for current FDIC Chair Jelena McWilliams – whose term lasts until mid-2023 – if the likely Democratic nominee Joe Biden wins in November. Unlike many other presidential appointees, the FDIC chief is protected from presidential firings. An incoming administration may want McWilliams to stay on to deal with financial effects of the coronavirus pandemic. But if McWilliams remains, she could be leading an FDIC board that looks very different. “The president does not have authority to replace the FDIC chairman. That should be clear. It is the chairman’s choice,” Bair said in an interview. But she added, “At the same time, you need to take a hard look at the political landscape when you decide whether to stay and whether you can continue to be effective as a minority chair.” To date, McWilliams has been in lockstep with other Trump-appointed regulators favoring steps to reduce supervisory and compliance burdens, including supporting measures to ease capital and liquidity requirements for smaller institutions, and spearheading an FDIC plan to provide banks relief from brokered deposit restrictions. An FDIC spokesperson said McWilliams “was confirmed to a five-year term and she intends to fulfill it. Any speculation to the contrary is just that, speculation.” But if Biden were to win, his administration would potentially seek to appoint new leaders for the Office of the Comptroller of the Currency and Consumer Financial Protection Bureau, which both hold seats on the five-member FDIC board. McWilliams would likely lose support for regulatory relief policies she tried to bring before the board. (A fourth seat is currently held by former FDIC Chair Martin Gruenberg, a Democrat, and the fifth seat is vacant.) “It is not fun to chair a board if you don’t have the votes,” said Aaron Klein, policy director of the Center on Regulation and Markets at the Brookings Institution. “If Biden wins, his administration would almost immediately appoint a new comptroller and a … [CFPB] director who would presumably be more aligned with the president.” Recalling her own decision, Bair later wrote in her memoir that she “had no desire to continue serving against the president’s wishes. I would be hopelessly compromised if I did not have the president’s support to continue my job.” But the choice would ultimately be McWilliams’s to make, observers said.
Banks prevail in first court decision over PPP fees for agents — Four Southeast banks have prevailed in the first major court decision following a wave of lawsuits filed by accountants, lawyers and consultants who helped small-business owners apply for Paycheck Protection Program loans.The plaintiffs in the cases contend that they are entitled to fees from the banks that processed PPP loans. Banks argue that they are not obligated to make those payments unless they reached upfront agreements with people who were acting as the agents of small-business applicants.In an opinion issued Monday, U.S. District Judge T. Kent Wetherell II sided with the lenders. He wrote that banks were not required to make the payments under either the March 2020 law that established the Paycheck Program Program or a subsequent regulation from the Small Business Administration. Instead, the regulation explains that if the borrower’s agent is to be paid a fee, that money must come from the fee that the SBA pays to the bank, the judge found. The lawsuit was filed in April by Sport & Wheat, a Florida-based certified public accounting firm. It sought a total of $4,526 from ServisFirst Bank in Birmingham, Ala.; Truist Financial in Charlotte, N.C.; Synovus Financial in Columbus, Ga.; and The First in Hattiesburg, Miss. Though the dollar amounts sought from those four banks were small, the plaintiffs were seeking class-action status on behalf of other Florida-based companies that helped prepare PPP loan applications.The judge’s ruling also has implications for a slew of related lawsuits. Graham Ryan, a partner at Jones Walker, a law firm that has been tracking PPP litigation, said several dozen similar cases have been filed across the country in recent months.”It’s quickly become the fastest-growing chunk of litigation,” Ryan said.The plaintiffs in one of the cases argued that an estimated $3.85 billion was at stake in these suits, though lawyers for banks have said that number is inflated. As of the program’s Aug. 8 expiration, lenders had made 5.2 million loans totaling $525 billion, according to the SBA.The defense lawyers argue that the plaintiffs’ calculation assumes that every PPP borrower got assistance with its application, and note that the math was based on the maximum fee that could be paid, rather than on how much work the lawyers and accountants actually performed.The SBA has said that the total amount a borrower’s agent may collect from a PPP lender may not exceed 1% of the loan amount on loans of $350,000 or less. The maximum percentages are smaller for larger loans and may not exceed 0.25% on loans of $2 million or more. Wetherell, a federal judge in the northern district of Florida, told the accounting firm that it could either appeal his ruling to the 11th Circuit Court of Appeals or amend its complaint, though he wrote that he finds it “highly unlikely” that the plaintiff will be able to state a valid claim against the banks.
Small banks are dominating the Fed’s Main Street Lending Program – Recent data from the Federal Reserve shows that community banks have been far more eager to participate in the central bank’s Main Street Lending Program aimed at stemming losses related to the COVID-19 pandemic, a trend that is likely to continue even as the middle-market business rescue program gains steam. The Fed started purchasing majority stakes in loans made under the Main Street Lending Program in early July, and although the program has been slow to start, recent data has shown that more lenders are beginning to originate loans. As of last week, the Fed had purchased participations in 32 loans amounting to about $250 million, with another 55 loans totaling $574 million under review, according to the Federal Reserve Bank of Boston, which is administering the program. But the Fed’s data shows all the banks behind those loans have less than $16 billion of assets. “The loans that we’ve seen through our portal on the Main Street facility are disproportionately community banks and those banks under $10 billion, which highlights that they’re adapting very quickly,” said Boston Fed President Eric Rosengren, speaking Aug. 12 to the South Shore Chamber of Commerce in Massachusetts. The $600 billion Main Street Lending Program, which is being funded by the Fed and the Treasury Department through congressional appropriations in the Coronavirus Aid, Relief and Economic Security Act, is available to businesses with fewer than 15,000 employees or less than $5 billion in annual revenue. Eligible companies can receive a loan of between $250,000 and $300 million through the program. Under the terms of the program, the Fed will purchase a 95% stake in Main Street loans, while the lender retains 5% of the loan on its books. The program was intended to cater to businesses that may have been too large to tap into the Small Business Administration’s Paycheck Protection Program, which offered forgivable loans to businesses with up to 500 employees. Many bankers anticipated that the PPP was better suited to larger banks serving larger customers than smaller banks serving smaller ones. “You’d almost think would be the other way around: the larger, more leveraged banks are able to take on this risk rather than the small ones,” But that has not proved to be the case. The $16 billion-asset City National Bank of Florida in Miami is the largest lender by far of the five the Fed has disclosed in its loan-level transaction data.
Earlier Fed Survey: Banks reported Tighter Standards, Weaker Demand for Loans except Residential Real Estate – This was released in early August, and is worth a note. From the Federal Reserve: The July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices: Regarding loans to businesses, respondents to the July survey indicated that, on balance, they tightened their standards and terms on commercial and industrial (C&I) loans to firms of all sizes. Banks reported weaker demand for C&I loans from firms of all sizes. Meanwhile, banks tightened standards and reported weaker demand across all three major commercial real estate (CRE) loan categories – construction and land development loans, nonfarm nonresidential loans, and multifamily loans – over the second quarter of 2020. For loans to households, banks tightened standards across all categories of residential real estate (RRE) loans and across all three consumer loan categories – credit card loans, auto loans, and other consumer loans – over the second quarter of 2020 on net. Banks reported stronger demand for all categories of RRE loans and weaker demand for all categories of consumer loans.Banks also responded to a set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks, on balance, reported that their lending standards across all loan categories are currently at the tighter end of the range of standards between 2005 and the present. This graph on Commercial Real Estate lending is from the Senior Loan Officer Survey Charts. This shows that banks have tightened standards, and that there is weak demand for CRE loans.
CFPB proposes a new category of ‘seasoned’ qualified mortgages – The Consumer Financial Protection Bureau is proposing the creation of an entirely new category of loans known as “seasoned” qualified mortgages that would protect lenders from legal liability for making risky loans. The CFPB said Tuesday in a 130-page notice of proposed rulemaking that first-lien, fixed-rate loans that have been held on a lender’s balance sheet for over 36 months could become eligible for so-called QM status – the current gold standard for home loans – based in part on a borrower’s past three years of payment history. Consumer advocates immediately criticized the plan, saying it would permit lenders to make high-cost loans with no consequences and that it contradicts the Dodd-Frank Act’s requirement that lenders make a good faith determination of a borrower’s ability to repay a loan. The CFPB said loans could gain “seasoned” QM status even if they have two, 30-day delinquencies at the end of a roughly three-year seasoning period. Loans in forbearance plans whereby the borrower can forgo mortgage payments for up to a year due to the coronavirus pandemic could ultimately become eligible for seasoned QM status as well, the CFPB said, as long as certain conditions are met. The bureau said that a disaster or pandemic-related national emergency would not disqualify a loan from becoming a seasoned QM loan if the borrower received a temporary payment accommodation and made full contractual payments. “Today’s proposal continues the Bureau’s work to encourage safe and responsible innovation in the mortgage origination market,” CFPB Director Kathy Kraninger said in a press release. “Our goal through our very deliberative rulemaking process is to protect, promote and preserve the financial well-being of American consumers while at the same time offering access to responsible, affordable mortgage credit.” The CFPB is asking for comments within 30 days. The CFPB has two other proposed rulemakings on QM loans in the works that deal with the competitive advantages given to loans sold to Fannie Mae and Freddie Mac. The CFPB in June said it planned to revise the definition of what constitutes a “qualified mortgage,” by replacing a 43% debt-to-income ratio limit with a price-based approach. The CFPB also has extended an exemption given to the government-sponsored enterprises known as the GSE patch until mid-2021. Consumer advocates said the proposal would be subject to a challenge under the Administrative Procedure Act, which governs how agencies issue regulations.
Refi fee will wipe out millions in mortgage profits – Banks, mortgage lenders and brokers could easily end up paying hundreds of millions of dollars on refinanced loans whose fixed rates have already been locked in to bolster the finances of Fannie Mae and Freddie Mac. A plan by Fannie and Freddie to charge lenders an extra 0.5% on most purchases of refinanced loans comes with an unexpected price tag for lenders, mortgage experts say. Lenders face the prospect of millions of dollars in lower profits, and potentially losses, for an extended period because the fee will be collected on loans in which interest rates already have been locked in and cannot be adjusted. Lenders typically lock in interest rates for 45 or 60 days to ensure a borrower gets a rate that does not change during the closing process, meaning the fee couldn’t be passed along to consumers for at least a month or two. The fee, approved without prior notice by the Federal Housing Finance Agency, which oversees Fannie and Freddie, is set to be collected starting Sept. 1. “The way they did this is very, very damaging to banks and other mortgage bankers and brokers who have loans in the pipeline,” said Scott Buchta, head of fixed-income strategy at Brean Capital. “In the first month, the bulk of the fee will come out of the pockets of bankers and brokers that locked in a lot of loans.” The so-called adverse market fee will cost originators an additional $1,400 or so for a $280,000 loan. The fee is likely to reduce profits for mortgage lenders given that the net profit per loan in the first quarter was $1,600, according to the Mortgage Bankers Association. Still, ultralow interest rates have led to a wave of refinancing that has sent loan officer commissions skyrocketing. Retail loan officers earned an average of $24,200 a month in commissions in the second quarter, according to LBA Ware, a Macon, Ga., mortgage software firm that tracks loan officer compensation. By contrast, retail loan officers’ monthly commissions in the second quarter of 2019 was $15,190 a month. Loan officer compensation plans are created annually or semiannually and cannot be changed on a per-loan or per-month basis, said Lori Brewer, LBA Ware’s chief executive.
BankThink: GSEs’ new refi fee will hurt borrowers most — Fannie Mae and Freddie Mac recently announced a surprise 0.5% price hike on most refinance mortgages purchased by the government-sponsored enterprises. Unfortunately for Americans dealing with the pandemic-induced economic downturn, this misguided rate increase will raise the cost of mortgage credit and hamper efforts to support consumers and the economy. Announced late Aug. 13 after financial markets closed, and blessed by the Federal Housing Finance Agency, the new “adverse market refinance fee” is designed to shore up the GSEs’ finances in preparation for higher defaults and loan losses due to the coronavirus pandemic. However, the fee increase comes at a significant cost to homeowners at precisely the wrong time. The new fee is effective for nearly all refinance mortgage loans delivered to the GSEs starting Sept. 1. Meaning, it will apply to anyone who has not yet refinanced their mortgage at current record-low interest rates or locked in their interest rate on pending refinance applications. Because Fannie Mae and Freddie Mac buy most conventional U.S. mortgage loans – and because 2020 will likely be a $3 trillion mortgage-origination year – the new fee will affect many homeowners now and for years to come. Applying the fee retroactively also will impose financial losses on lenders already struggling to comply with government-mandated forbearance, loan workouts and modifications on all forms of credit in response to the pandemic. This will pose increased risks to the financial system and to the lenders that have implemented much of the federal relief to support struggling small businesses. Further, housing is one of the U.S. economy’s few bright spots, raising questions over whether it is an “adverse market.” The number of loans in forbearance is declining. And unlike with the housing crisis of 2008, these loans were properly underwritten and should perform better through the current recession. With Fannie and Freddie returning more than $300 billion to the U.S. Treasury since 2013 and posting $4.3 billion in second-quarter earnings, they hardly need an emergency bake sale to cover their operations. Defenders of the fee increase argue that it is merely 50 basis points, equating to a $1,400 price hike on a $280,000 mortgage loan, which is the GSE average. But an additional $1,400 is a big deal for U.S. families amid a global pandemic. In real dollars, that amount could otherwise cover up to 10 weeks of groceries, a year of electric bills, an average monthly mortgage payment or several laptops for homeschooling. Because the new fee will likely be covered by lenders raising the interest rate, the resulting loan payment will be higher than homeowners had originally planned, offsetting much of the savings of refinancing mortgage loans. This will directly affect families’ monthly budgets, especially with many dealing with job losses and reduced hours at work. For many Americans, $1,400 means a lot. Congress and the Trump administration have approved more than $3 trillion in aid to help Americans through the economic crisis, and they are locked in a debate over the next round of support. Now is not the time for one segment of the economy to lay claim to some of that relief. Fannie, Freddie and the FHFA should immediately rescind this costly and unnecessary tax on U.S. homeowners.
Delinquent FHA Mortgages Soar By Record 60% To All Time High, As Homeowner Budgets Implode – Last month we quoted from Wolf Richter to remind readers of something we discussed several months ago when we went over the details of the forbearance process and why so many banks have chosen to use it instead of rushing to admit their balance sheets are hammered with a record surge in delinquencies and defaults. As a reminder, “mortgages that are in forbearance and have not missed a payment before going into forbearance don’t count as delinquent. They’re reported as “current.” And 8.2% of all mortgages in the US, some 4.1 million loans, are currently in forbearance according to the Mortgage Bankers Association. But if they did not miss a payment before entering forbearance, they don’t count in the suddenly spiking delinquency data.”Everything changed in April when there was a sudden onslaught of delinquencies according to CoreLogic, which came after 27 months in a row of declining delinquency rates. These delinquency rates move in stages – and the early stages are now getting hit, with the Transition from “Current” to 30-days past due suddenly soaring. To wit, in April, the share of all mortgages that were past due, but less than 30 days, soared to 3.4% of all mortgages, the highest in the data going back to 1999. This was up from 0.7% in April last year. During the Housing Bust, this rate peaked in November 2008 at 2% (chart via CoreLogic):Fast forward to today, when the dam of pent up mortgage delinquencies cracked some more, with the Federal Housing Administration reporting that its mortgages which represent the affordable path to homeownership for many first-time buyers, minorities and low-income Americans, now have the highest delinquency rate in at least four decades.The share of delinquent FHA loans rose to 15.7% in the second quarter, up a whopping 60% from about 9.7% in the previous three months and the highest level in records dating back to 1979, the Mortgage Bankers Association said Monday. The delinquency rate for conventional loans, by comparison, was 6.7%.With million of Americans losing their jobs due to the covid shutdowns, they have become reliant on government stimulus checks which continue thanks to Trump’s executive orders but were notably slashed. It is those Americans on the lower end of the income scale are most likely to have FHA loans, which allow borrowers with shaky credit to buy homes with small down payments. Still, despite their inability to pay, most remain protected from foreclosure by the federal forbearance program, in which borrowers with pandemic-related hardships can delay payments for as much as a year without penalty. What happens when the program ends finally ends and when several months of payments (or more) are due at once is a world which few want to even imagine.
MBA: “Mortgage Delinquencies Spike in the Second Quarter of 2020” From the MBA: Mortgage Delinquencies Spike in the Second Quarter of 2020 The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.22 percent of all loans outstanding at the end of the second quarter of 2020, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.The delinquency rate increased 386 basis points from the first quarter of 2020 and was up 369 basis points from one year ago. For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.”The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high delinquency rate for FHA loans.”Added Walsh, “There was also a movement of loans to later stages of delinquency, with the 60-day delinquency rate reaching a new survey-high, and the 90+-day delinquency rate climbing to its highest level since the third quarter of 2010. On a more positive note, 30-day delinquencies dropped in the second quarter, which is an indication that the flood of new delinquencies may be dissipating.” This graph shows the percent of loans delinquent by days past due. Delinquencies increased sharply in Q2.The increase was mostly in the 60 and day buckets. From the MBA: “the 60-day delinquency rate increased 138 basis points to 2.15 percent – the highest rate since the survey began in 1979 – and the 90-day delinquency bucket increased 279 basis points to 3.72 percent – the highest rate since the third quarter of 2010.”This sharp increase was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus). The percent of loans in the foreclosure process declined further, and was at the lowest level since at least 1985.
Mortgage Delinquencies Jump by Most Ever. 60-Day Delinquencies Hit Highest Level Ever. Record 16% of FHA Mortgages Delinquent. What a Mess – Wolf Richter – The mortgage delinquency-and-forbearance mess keeps getting messier – in record-setting ways. At the same time, the record-low mortgage rates continue to push certain other segments of the housing industry toward ever greater exuberance. That contradiction became humorously obvious on the Bloomberg News Economics front page, where side-by-side these two headlines appeared: The overall delinquency rate for mortgages on one-to-four-unit residential properties soared by nearly 4 percentage points (386 basis points) during the second quarter, and by June 30 reached 8.22% (seasonally adjusted), the highest in nine years, according to the Mortgage Bankers Association’s National Delinquency Survey. This nearly 4-percentage point jump in the overall delinquency rate was the largest in the history of MBA’s survey going back to 1979. Delinquencies started soaring in April. A month ago, CoreLogic had reported that the percentage of mortgages entering the early stages of delinquencies – from 0 days to 30 days delinquent – had spiked phenomenally in April beyond all prior records. What we’re seeing now is that many of these mortgages are becoming more seriously delinquent. This shows up in the stages of delinquencies, according to the MBA today. At the end of June:
- The 30-day delinquency rate fell by 33 basis points to 2.34%
- The 60-day delinquency rate rose by 138 basis points to 2.15%, the highest since the survey began in 1979.
- The 90-day delinquency rate jumped by 279 basis points to 3.72%, the highest since Q3 2010
The delinquency rate of FHA mortgages jumped by nearly 6 percentage points (596 basis points), the biggest jump in survey history (since 1979), to a delinquency rate of 15.65%, the highest delinquency rate in survey history. The delinquency rate of VA mortgages jumped by 340 basis points to 8.05%, the highest since Q3 2009. The delinquency rate of conventional mortgages jumped by 352 basis points, to 6.68%, the highest rate since Q2 2012. Delinquency rates here include mortgages that were already at least one month delinquent before they entered into a forbearance program. So these mortgages are still delinquent, and the borrower has stopped making payments before entering into forbearance, but the lender has agreed to not pursue its legal rights for the agreed-upon period of forbearance. Instead of the borrower either catching up, or the mortgage going into foreclosure, the mortgage is put on ice during forbearance. The borrower doesn’t need to make payments. And the lender, after putting the delinquent mortgage into forbearance, may no longer consider the mortgage delinquent, and may therefore still show the mortgages as “performing,” and may still show interest income from it, though no one is making payments. There are now 4.2 million mortgages in forbearance, according to estimates by the MBA. Meaning 4.2 million homeowners have stopped making payments, in addition to the homeowners that have stopped making payments but are not in forbearance programs. The delinquency rates here do not include mortgages that have undertaken the final steps: moving into foreclosure. But the current trend for lenders is to move mortgages into forbearance and put them on ice for as long as possible – “extend and pretend” – rather than foreclosing on the property.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases for the Ninth Straight Week to 7.21%” –Note: This is as of August 9th. From the MBA: Share of Mortgage Loans in Forbearance Decreases for the Ninth Straight Week to 7.21% – The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 23 basis points from 7.44% of servicers’ portfolio volume in the prior week to 7.21% as of August 9, 2020. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans….”More homeowners exited forbearance last week, leading to the ninth straight drop in the share of loans in forbearance. However, the decline in Ginnie Mae loans in forbearance was again because of buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “In a sign that more FHA and VA borrowers are struggling with a very tough job market, more Ginnie Mae borrowers requested than exited forbearance.”By stage, 38.80% of total loans in forbearance are in the initial forbearance plan stage, while 60.49% are in a forbearance extension. The remaining 0.70% are forbearance re-entries.. This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April, and has been trending down for the last nine weeks.The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.12% to 0.11%.” There hasn’t been a pickup in forbearance activity related to the end of the extra unemployment benefits.
Hotels Are Headed For An “Unprecedented Wave Of Foreclosures”, Lodging Group Warns – Payments on nearly one-fourth of all loans backed by hotel real estate are delinquent by at least 30 days, signaling an imminent and unprecedented wave of foreclosures, according to the American Hotel & Lodging Association (AH&LA). It notes that the $20.6 billion in delinquent payments on commercial mortgage-backed securities (CMBS) – 23.4% of all CMBS loans extended to hotels – compares with overdue payments of $1.15 billion at the end of 2019, or 1.3% of outstanding CMBS loans at the time. The current level of delinquencies even surpasses the $13.5 billion that lenders were owed during the Great Recession that started in 2008, according to the association. The report, compiled for the AH&LA by a research company called Trepp, is the latest in a torrent of bad news from the association about the state of its industry. Its release was accompanied by the announcement that 4,000 lodging executives have signed a letter to Congress, urging lawmakers to save the business by pushing through a federal relief package aimed specifically at the lodging trade. Similar industry-specific measures are being pushed by the restaurant industry, with lobbying from both the National Restaurant Association and the Independent Restaurants Coalition. The measure supported by the AH&LA, a bill known as the HOPE Act, would create an emergency fund to help hotels repay their CMBS loans. “With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently,” Chip Rogers, CEO of the AH&LA, said in a statement. “Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate.” The industry has been stung by the sheer drop-off in travel that followed the implementation of stay-at-home policies in nearly every state at the start of the pandemic.
NMHC: Rent Payment Tracker Finds Decline in People Paying Rent in August – From the NMHC: NMHC Rent Payment Tracker Finds 86.9 Percent of Apartment Households Paid Rent as of August 13: The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 86.9 percent of apartment households made a full or partial rent payment by August 13 in its survey of 11.4 million units of professionally managed apartment units across the country. This is a 2.0-percentage point, or 222,543 -household decrease from the share who paid rent through August 13, 2019 and compares to 87.6 percent that had paid by July 13, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price. “At a time when the country is continuing to face a pandemic and suffering from a recession, lawmakers in Congress and the Trump administration must come back to the table and work together on passing comprehensive legislation in the next COVID-19 relief package,” said Doug Bibby, NMHC President. “While NMHC’s Rent Payment Tracker continues to show that many residents have continued to meet their monthly housing obligations, that is due in large part to the relief enacted under the CARES Act. With that support now having expired more than two weeks ago, households across the country are grappling with even greater financial distress. We strongly urge Congressional leaders and administration officials to extend critical unemployment benefits and create a rental assistance fund so that America’s tens of millions of apartment residents can remain safely and securely housed.” CR Note: This is mostly for large, professionally managed properties. It appears fewer people are paying their rent this year compared to last year (down 2.0 percentage points from a year ago). But this hasn’t fallen off a cliff – yet. People were still receiving the extra unemployment benefits for most of July, and were able to make their August rent payment. Without more disaster relief, I expect more people will miss their September rent payment.
250,000 Las Vegans Face Eviction Next Month – Las Vegas is expected to become one of the focal points of the eviction crisis as nearly a quarter-million people could be removed from their homes in the coming weeks, reported AP News. The Las Vegas Review-Journal reports a perfect storm of factors in Clark County including high unemployment, a high percentage of renters, collapsed travel and tourism industry, expiration of the state’s eviction mortarium, and the end of federal unemployment benefits could result in an eviction wave beginning as early as next month. Las Vegas research group Guinn Center and the COVID-19 Eviction Defense Project in Denver estimates about 250,000 people in Clark County, or approximately 10% of the population, are at risk of eviction in September. Nancy Brune, Guinn Center executive director, called the situation “a bad confluence of events.” Brune said the virus-induced downturn had severely damaged Las Vegas as fewer people are coming to gamble at casinos. Brune said 47% of households in the county are renters, of the renters, about 38% are currently unemployed. The bust cycle of Las Vegas could linger for a couple of years as the city must shrink to survive. Las Vegas economic analyst Jeremy Aguero recently warned, an economic recovery in the town could take upward of three years.
Home prices climb to record in coronavirus pandemic as buyers seek space – A renter most of his adult life, Clarence Swann became fearful that landlords would use the coronavirus pandemic as an excuse to gouge their tenants. So, with a desire to move near family, the retired veteran bought his first home last month at the age of 74. Swann is one of tens of thousands of buyers who dove into the housing market this spring and summer even as the coronavirus upended the U.S. economy. The presence of these buyers, plus a sharp drop in the numbers of homes on the market, drove home prices to record highs in most parts of the United States, according to an analysis of housing price data by The Associated Press and Core Logic. The average home price in the U.S. in May rose 4.2% compared to a year ago. The data shows that prices for cheaper homes – those found in the lower third of prices in metropolitan areas and a typical target for first-time buyers – grew faster than the rest of the market, rising 6.7% from a year ago. The coronavirus pandemic helped shape the housing market by influencing everything from the direction of mortgage rates to the inventory of homes on the market to the types of homes in demand and the desired locations. The pandemic pushed the U.S. economy into a deep recession as many businesses shut down, which in turn forced the hand of the Federal Reserve to dramatically lower interest rates. The average mortgage rate fell from around 3.75% at the beginning of the year to under 3% in a matter of weeks after the pandemic struck the U.S. That sudden drop in mortgage rates was an instant boon to home affordability, economists said, allowing many buyers to afford much more expensive homes while keeping the same monthly payments. “A 0.75 percentage point drop may not seem like a lot, but it’s like handing $40,000 to a buyer of a $475,000 home, who is able to get more house for the same monthly payment,” said Taylor Marr, senior economist at Redfin. The pandemic also caused sellers to delay putting their homes on the market. Sellers, who are typically older than buyers, were either concerned about the economy, worried about their jobs, generally reluctant to have strangers enter their homes, or some combination of all three. The supply of homes available for sale in May dropped nearly 30% from a year earlier. The lack of foreclosed properties for sale was also a minor factor, as states and the federal government-imposed moratoriums on evictions and foreclosures. “Supply and demand is all out of whack. I have less than a month’s supply of homes in my area,” said Jay Rinehart, a real estate agent in the Charlotte, N.C. metropolitan area.
U.S. Existing-Home Sales Rose Nearly 25% in July – WSJ – U.S. home sales soared in July as homeowners sought more space to work from home and renters took advantage of low interest rates to become homeowners. Home shoppers who didn’t venture out much in March and April when the coronavirus exploded are returning to the market. With lockdowns easing, summer has replaced spring this year as the strongest buying season. The pandemic also spurred some households to move closer to family or into bigger homes farther from cities now that many workers aren’t commuting every day. “The housing market is actually past the recovery phase and is now in a booming stage,” said Lawrence Yun, chief economist of the National Association of Realtors. “New demand has been created because of the pandemic, with the work-from-home flexibility.” A strong housing market could help boost the economy, as consumers spend more on home goods and renovations and home builders ramp up activity. But the strong demand and a shortage of supply has pushed the median home price to a record high, which could make houses less affordable for first-time buyers. Sales of previously owned homes jumped 24.7% in July from a month earlier to a seasonally adjusted annual rate of 5.86 million, the highest rate since December 2006, NAR said Friday. The July sales marked a 8.7% increase from a year earlier. The market has fully rebounded from the spring, when sales dropped for three straight months as the pandemic spooked sellers and kept potential buyers at home. Homes typically go under contract a month or two before the contract closes, so the July figures largely reflect purchase decisions made in May or June, when many states were lifting lockdowns and house shoppers felt more comfortable touring houses. About 40% of home buyers surveyed by Realtor.com in June said they are looking to buy a home sooner because of Covid-19, while 15% said the pandemic slowed down their timeline. ( News Corp, parent of The Wall Street Journal, operates Realtor.com.) Brittani Baynard and Sam Krueger decided to spend the money they had saved for their wedding to buy a four-bedroom home in Madison, Wis., in June. They had planned to buy a house in the next two years, but the pandemic made them want to move sooner out of their apartment into a house with more space for Ms. Baynard’s 8-year-old daughter, Ms. Baynard said. “The next time this happens, because it will, or when phase 2 [of the pandemic] comes, because it is, I want us all to be comfortable,” she said. Economists say the current housing boom doesn’t yet have the hallmarks of a bubble. Compared to the last time sales were this high, in 2006, lending standards are tighter and the supply of homes for sale is much lower, Mr. Yun said. Demand is so robust that 68% of the houses that sold in July were on the market for less than a month, NAR said. Brokerage Redfin Corp. said more than half of its offers in July faced at least one competing bid.
Existing Home Sales Soar By Record To Highest In 14 Years; Median Price Breaches $300K For First Time – As we noted earlier, existing home sales are expected to surge in July (the latest data), playing catch up to the huge rebound in new- and pending-home sales in June. After a 20.7% MoM surge in June, July’s existing home sales were up a stunning 24.7% MoM (crushing expectations of a 14.6% MoM) and sending home sales up 8.72% YoY graphs: Bloomberg The SAAR rose from 4.70mm to 5.86mm in July, the highest since Dec 2006… “The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.” The median existing-home price for all housing types in July was $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region. July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.
Comments on July Existing Home Sales – McBride – Earlier: NAR: Existing-Home Sales Increased to 5.86 million in July – A few key points:
1) This was the highest sales rate since 2006. Existing home sales are counted at the close of escrow, so the July report was mostly for contracts signed in May and June – when the economy was much more open than in the previous months. Some of the increase over the last two months was probably related to pent up demand from the shutdowns in March and April. However, with the high unemployment rate, the high rate of COVID infections, the increase in mortgage rates (still low, but up from recent lows) housing might be under some pressure later this year. That is difficult to predict and depends on the course of the pandemic.
2) Inventory is very low, and was down 21.1% year-over-year (YoY) in July. This is the lowest level of inventory for July since at least the early 1990s.
3) As usual, housing economist Tom Lawler was much closer to the actual NAR report than the consensus forecast. For July, Lawler forecast the NAR would report 5.85 million, and the NAR reported 5.86 million (almost exact). The consensus was 5.39 million. .
This graph shows existing home sales by month for 2019 and 2020.Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined.Even with weak sales in April, May, and June, sales to date are only down about 5% compared to the same period in 2019. The second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019. Sales NSA in July (597,000) were 10.6% above sales last year in July (540,000).
Is the pandemic causing an exodus from big cities? – Today, many big-city dwellers appear to be seeking refuge in less crowded towns and rural landscapes. The wealthy, at least, are seeking “bugout” homes away from major cities as places to ride out the pandemic, the economic downturn and the civil unrest that are gripping the world. Beyond news reports, I’ve heard from friends that homes are being snapped up in eastern Washington state and New York’s Hudson Valley by coastal city dwellers looking for a refuge in turbulent times. It’s not just residents who are leaving. The New York Times reports that retail restaurant and merchandise chains are exiting Manhattan because it is “unsustainable.” New York City no longer teams with tourists, and its office towers are largely empty. That makes for empty streets with few customers for the city’s many retail establishments. This story is being repeated in other major cities including Atlanta, Chicago, Denver,Houston, Los Angeles, Seattle, and St. Louis. In an op-ed appearing in The Globe and Mail, Homer-Dixon explained the underlying structural problems that have opened our global society to increasing risk: The relatively new science of complex systems shows that such tipping events are made more likely by the unprecedented connectivity in the networks that humanity has laid down in a dense web across Earth’s surface – air traffic, financial, energy, manufacturing, food distribution, shipping and communication networks, to name just a few. This science also shows that until we manage this connectivity better – which could mean, among other changes, reducing our international travel, simplifying global supply chains and bringing some production processes closer to home – we’re likely to experience more frequent tipping events of ever-higher destructive force. The idea that we are going to return to the world of 2019 seems increasingly unlikely. That world was highly fragile which is why it shattered in so many pieces with so many casualties when the coronavirus pandemic hit. Returning to that world would mean, in Homer-Dixon’s words, “more frequent tipping events of ever-higher destructive force.” That hardly seems like the destination we should seek.
Housing Starts increased to 1.496 Million Annual Rate in July – From the Census Bureau: Permits, Starts and Completions: Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,496,000. This is 22.6 percent above the revised June estimate of 1,220,000 and is 23.4 percent above the July 2019 rate of 1,212,000. Single-family housing starts in July were at a rate of 940,000; this is 8.2 percent above the revised June figure of 869,000. The July rate for units in buildings with five units or more was 547,000. Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,495,000. This is 18.8 percent above the revised June rate of 1,258,000 and is 9.4 percent (plus/minus 1.5 percent) above the July 2019 rate of 1,366,000. Single-family authorizations in July were at a rate of 983,000; this is 17.0 percent above the revised June figure of 840,000. Authorizations of units in buildings with five units or more were at a rate of 467,000 in July. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) were up in July compared to June. Multi-family starts were up solidly year-over-year in July. Single-family starts (blue) increased in July, and were up 7.4% year-over-year. Total Housing Starts and Single Family Housing Starts The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then eventual recovery (but still historically low). Total housing starts in July were above expectations, and starts in May and June were revised up.
Housing roars back — As I wrote yesterday, the background longer term fundamental factors for the economy, most importantly all-time low interest rates, are very positive. In particular I wrote, this “has already made an impact on the housing market ….Lower mortgage rates cause more people to buy houses. Housing permits have already made back about half of their pandemic losses as a result.” Well, with this morning’s report on July housing permits and starts, I can amend that to read that housing permits [and starts] have now made back almost *all* of their pandemic losses. To cut to the chase, here is a graph of the past 3 years of housing permits (blue), starts (green), and the least volatile of all the metrics, single family permits (red, right scale): Permits are within 3% of their expansion highs from January, and are only exceeded by that month plus October and November of 2019. Starts, which tend to lag permits by a month or so, and are much more volatile, are within 8% of their January expansion high, and above every other expansion reading except for November and December 2019. Single family permits were only exceeded in one month – this past February – during the last expansion, and are only 1.1% below that peak. Since housing tends to help power the economy for the next 12 to 18 months, this is a very positive sign over the longer term once we have competent political leadership in Washington, and especially if a workable vaccine is available as well.
Comments on July Housing Starts -As expected, housing starts increased further in July, and were up solidly year-over-year, but are still below the pre-recession level. Earlier: Housing Starts increased to 1.496 Million Annual Rate in July Total housing starts in July were above expectations, and revisions to prior months were positive. Low mortgage rates and limited existing home inventory is giving a boost to housing starts.The housing starts report showed starts were up 22.6% in July compared to June, and starts were up 23.4% year-over-year compared to July 2019 (easy comparison).Single family starts were up 7.4% year-over-year.This first graph shows the month to month comparison for total starts between 2019 (blue) and 2020 (red). Starts were up 22.6% in July compared to July 2019.Last year, in 2019, starts picked up towards the end of the year, so the comparisons were easy in the first seven months of the year… This is below my forecast for 2020, but I didn’t expect a pandemic!I expect a further increase in starts in August, but the growth rate will slow.Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). These graphs use a 12 month rolling total for NSA starts and completions. The blue line is for multifamily starts and the red line is for multifamily completions. The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession – then mostly moved sideways. Completions (red line) had lagged behind – then completions caught up with starts- although starts picked up a little again lately. The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion – so the lines are much closer. The “wide bottom” was what I was forecasting following the recession, and now I expect some further increases in single family starts and completions once the crisis abates.
New Residential Building Permits: 1.5M in July – The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for July new residential building permits. The latest reading of 1.495M was an increase from 1.258M in June and above the Investing.com forecast of 1.320M.Here is the opening of this morning’s monthly report, including a note regarding revisions:Statement Regarding COVIDâ€19 Impact: Due to recent events surrounding COVIDâ€19, many governments and businesses are operating on a limited capacity or have ceased operations completely. The Census Bureau has monitored response and data quality and determined estimates in this release meet publication standards. Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,495,000. This is 18.8 percent (plus/minus 1.1 percent) above the revised June rate of 1,258,000 and is 9.4 percent (plus/minus 1.5 percent) above the July 2019 rate of 1,366,000. Single-family authorizations in July were at a rate of 983,000; this is 17.0 percent (plus/minus 1.2 percent) above the revised June figure of 840,000. Authorizations of units in buildings with five units or more were at a rate of 467,000 in July. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.
U.S. homebuilder confidence matches record high – (Reuters) – U.S. home builder confidence rose for a third straight month in August to match a record high as record-low interest rates spur a surge in customer traffic, especially in suburban markets that are growing in appeal as a result of the coronavirus pandemic, data released on Monday showed. The National Association of Home Builders/Wells Fargo Housing Market Index rose 6 points to 78, matching a series record set in 1998. The median expectation among 30 economists in a Reuters poll was for a rise to 73 from July’s reading of 72. NAHB’s measures of both current and future home sales improved. “Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” said NAHB Chief Economist Robert Dietz. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”
AIA: “July architectural billings remained stalled” – Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: July architectural billings remained stalled Architectural billings failed to show any progress during July, and business conditions continued to be soft at firms, according to a new report from the American Institute of Architects (AIA).The pace of decline during July remained at about the same level as in June with both months posting an ABI score of 40.0 (any score below 50 indicates a decline in firm billings). While firms reported a modest decline for inquiries into new projects – slipping from 49.3 in June to 49.1 in July – newly signed design contracts declined more critically, falling from a June level of 44.0 to 41.7 in July.”It’s clear the pandemic continued to contribute to uncertainty in business conditions, especially as cases spiked in states across the country,” . “While clients expressed interest in exploring new projects, many are hesitant to sign onto new contracts with the exception of the multifamily residential sector, which came close to seeing billings growth in July.”
Regional averages: West (40.9); South (40.7); Midwest (40.1); Northeast (36.8)
Sector index breakdown: multi-family residential (47.5); mixed practice (44.0); institutional (39.5); commercial/industrial (35.4)
This graph shows the Architecture Billings Index since 1996. The index was at 40.0 in July, unchanged from 40.0 in June.. Anything below 50 indicates contraction in demand for architects’ services.This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.This index has been below 50 for five consecutive months. This represents a significant decrease in design services, and suggests a decline in CRE investment in the first half of 2021 (This usually leads CRE investment by 9 to 12 months). This weakness is not surprising since certain segments of CRE are struggling, especially offices and retail.
Hotels: Occupancy Rate Declined 30% Year-over-year -From HotelNewsNow.com: STR: US hotel results for week ending 15 August – U.S. weekly hotel occupancy hit 50.0% for the first time since mid-March, according to the latest data from STR. 9-15 August 2020 (percentage change from comparable week in 2019):
Occupancy: 50.2% (-30.0%)
Average daily rate (ADR): US$101.41 (-23.0%)
Revenue per available room (RevPAR): US$50.87 (-46.1%)
U.S. occupancy has risen week over week for 17 of the last 18 weeks, although growth in demand (room nights sold) has slowed. The week ending 14 March was the last with occupancy of at least 50.0%. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. As STR noted, the occupancy rate has increased week-to-week in “17 of the last 18 weeks”. The increases in occupancy have slowed and are well below the level for this week last year of 72%.The leisure travel season usually peaks at the beginning of August (right now), and the occupancy rate typically declines sharply in the Fall. With so many schools closed, the leisure travel season might be lasting longer this year than usual.
Home Depot Beats Profit Forecasts on Pandemic Sales Surge – Home Depot Inc posted much stronger-than-expected second quarter earnings Tuesday as sales far outpaced analysts’ forecasts even amid the peak of the coronavirus pandemic. Home Depot said earnings for the three months ending on August 2, the group’s fiscal second quarter, were pegged at $4.02 per share, up 26.8% from the same period last year and firmly ahead of the Street consensus forecast. Group revenues, Home Depot said, rose 24.75% to $38.1 billion, again topping analysts’ estimates of a $34.5 billion tally. Home Depot said same-store sales rose 23.4% — more than double analysts’s forecasts of a 10.5% gain — as coronavirus lockdowns, and soaring house prices, enticed more buyers to spend cash on hoe repair projects.
Walmart Q2 earnings soar, led by nearly 100% surge in e-commerce – Walmart (WMT), the world’s largest retailer, reported better-than-expected second-quarter earnings results, bolstered by online sales that skyrocketed 97% during the period, as the coronavirus crisis prompted consumers to flock to e-commerce for their needs. Here were the main numbers compared to Bloomberg consensus forecasts:
- Revenue: $137.7 billion vs. expectations of $135.6 billion
- Adjusted EPS: $1.56 vs. expectations of $1.24
- Walmart U.S. comp-store sales (excluding gas): 9.3% versus 5.3% expectations
- Walmart U.S. e-commerce sales: up 97 %
During the quarter, Walmart’r revenue rose 5.6%, or $7.4 billion, from the same quarter a year ago – benefiting from its status as an essential business that remained open during the darkest days of the COVID-19 lockdown.
Why Do We Care about Retail Sales – Menzie Chinn – In these times? Among other reasons, it’s: (1) An indicator of household consumption behavior; (2) An indicator of conditions for business – including small/medium size enterprises. Hence, the recovery of retail sales has been much lauded. But if you thought the recovery was in brick-and-mortar retailers, you’d be somewhat misguided. First, for retail sales and food services, sales are clearly up relative to trend, in real (CPI-deflated) terms. But then, interestingly, real sales were essentially flat at the end of last year, coming into this year. Figure 1: Total retail and food service sales (black), excluding e-commerce sales (teal), excluding nonstore sales (brown), all in millions of 1982-84$, s.a., on log scale. E-commerce sales quarterly data converted to monthly by dividing by three. All deflated by CPI-all. Second, there is a definite recovery of real retail sales (ex-food services), indeed jump above (flat) trend. However, the excess over pre-shock trend seems attributable to e-commerce. Figure 2: Total retail sales (black), excluding e-commerce sales (teal), excluding nonstore sales (brown), all in millions of 1982-84$, s.a., on log scale. E-commerce sales quarterly data converted to monthly by dividing by three. All deflated by CPI-all. E-commerce sales quarterly data converted to monthly by dividing by three. Third, even if real retail sales have recovered in levels, that still means that there was a loss of sales relative to what would have occurred otherwise. In other words, just because the flow is back to pre-shock levels doesn’t mean accumulated flows (sales) are. To show this, consider the cumulative deviation from trend of nominal retail and food service sales; it’s about $233 billion. Figure 3: Cumulative deviation from trend of total retail and food service sales (black), in millions of dollars, s.a. Trend in sales calculated as time trend in logs, 2019-2020M02. As the bite from the reduction in enhanced unemployment insurance benefits increases, I expect sales to dive in September (and may have stalled in August as public health restrictions increased in many states).
AMC is reopening its theaters this month with 15-cent tickets – AMC is finally reopening its theaters, and guests will need to spend just 15 cents to get in. The world’s largest movie theater chain will reopen more than 100 US theaters on August 20, the company said on Thursday. In order to commemorate its centennial, AMC is offering “movies in 2020 at 1920 prices” on opening day. That’s 15 cents a ticket. AMC closed all of its theaters in the US in March as the pandemic took hold, and the reopening has been delayed several times. (Track how box-office sales have been hit on our recovery dashboard.)AMC added that it expects to open two-thirds of its more than 600 US theater locations by the time Christopher Nolan’s thriller “Tenet” hits theaters on September 3. AMC’s other US theaters will open “only after authorized to do so by state and local officials,” according to the company. AMC said that it’s implementing new safety and health measures to help keep moviegoers safe and curb the spread of coronavirus. That includes requiring all guests to wear masks, lowering theater capacity and upgrading ventilation systems. After opening day, tickets will still be available for cheaper than usual. Tickets for films like “Inception,” “Black Panther,” “Back to the Future” and “The Empire Strikes Back” will cost $5. AMC is bringing back old films since the North American box office has been essentially at a standstill with so many new movies have been delayed this year because of the outbreak.
Wisconsin regulators extend shutoff ban; third of households behind on utility bills – With a third of Wisconsin households behind on their utility bills, state regulators have extended a moratorium on shutoffs during the COVID-19 pandemic.The Public Service Commission voted 2-1 Thursday to continue a ban on disconnections until Oct. 1, temporarily preventing more than 93,000 customers from losing electricity, gas or water service next month.Chairwoman Rebecca Valcq said utility service remains critical to public health, noting the number of COVID-19 cases has continued to rise since July, when the PSC extended the moratorium to Sept. 1. “If we disconnect customers and send them out to places to congregate … in order to stay cool, or they lose the ability to maintain hygiene, that to me outweighs the ability to pay and the fact that the unemployment rate is getting better,” Valcq said. “We’re not going to get through this if we don’t start acting like adults. We have to start following the guidelines if we want to get out of this crisis.”
Used Vehicle Prices Explode To All Time Highs After Plunging Just Months Ago – Less than two months ago we were talking about the unprecedented crash in used car prices that had taken place as a result of the coronavirus pandemic slowing the economy. “Where’s the inflation?” everyone kept asking. We think we’ve found it. Today, according to new research from Manheim, those prices have exploded to hit new all time highs. The Manheim Used Vehicle Value index climbed to 163.4 in the first 15 days of August from 158.0 in July. “Prices rose another +3.4% sequentially in the first 15 days of August after rising +5.8% m/m in July,” a new note from J.P. Morgan highlights. It continues: “With the Manheim Index at 163.4 in early August (January 1995 = 100), used prices are now +13.9% higher vs. the then record level in February just prior to the pandemic and are +15.6% y/y.” J.P. Morgan notes that “Since April, the Manheim Used Vehicle Value index recovered +8.9% m/m in May, +9.0% m/m in June, +5.8% m/m in July, and is now +3.4% m/m in the first 15 days of August. Stronger prices suggest potential gains on sale of off-lease vehicles and higher collateral value, helping reduce loan losses.” The note predicts that prices should see some respite heading into the fall, as “pent up demand” as a result of the Covid-19 pandemic should subside. Most of this demand has already been satisfied, according to Manheim, and consumers are growing “increasingly frustrated” from the high prices. It’s worth noting, however, that these same prognosticators were predicting a “sharp drop” in prices heading into the back end of the summer. That obviously didn’t materialize. Additionally, the same note says that consumers could be waiting for a second round of stimulus to purchase a vehicle.
NY Fed: Manufacturing “Business activity edged slightly higher in New York State” in August — From the NY Fed: Empire State Manufacturing Survey Business activity edged slightly higher in New York State, according to firms responding to the August 2020 Empire State Manufacturing Survey. The headline general business conditions index fell fourteen points to 3.7, signaling a slower pace of growth than in July. New orders were little changed, and shipments increased modestly. Unfilled orders were down, and inventories declined. Employment inched higher, while the average workweek declined. … The index for number of employees edged up to 2.4, indicating that employment levels inched slightly higher. The average workweek index fell four points to -6.8, pointing to a decline in hours worked. This was well below expectations, and showed activity increased slightly in August.
Philly Fed Manufacturing “continued to expand” in August -Note: Be careful with diffusion indexes. This shows a rebound off the bottom – some improvement from May to August – but doesn’t show the level of activity. From the Philly Fed: August 2020 Manufacturing Business Outlook Survey: Manufacturing activity in the region continued to expand this month, according to firms responding to the August Manufacturing Business Outlook Survey. The survey’s current indicators for general activity, new orders, and shipments remained positive for the third consecutive month but fell from their readings in July. The employment index also fell from its reading in July but remained in positive territory for the second consecutive month. Most of the future indicators remained elevated, suggesting that the firms expect growth over the next six months. The diffusion index for current activity fell 7 points to 17.2 in August, its third consecutive positive reading after reaching long-term lows in April and May … On balance, the firms reported increases in manufacturing employment for the second consecutive month, but the current employment index fell 11 points to 9.0 this month. This was below the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Weekly Initial Unemployment Claims increase to 1,106,000 – The DOL reported: In the week ending August 15, the advance figure for seasonally adjusted initial claims was 1,106,000, an increase of 135,000 from the previous week’s revised level. The previous week’s level was revised up by 8,000 from 963,000 to 971,000. The 4-week moving average was 1,175,750, a decrease of 79,000 from the previous week’s revised average. The previous week’s average was revised up by 2,000 from 1,252,750 to 1,254,750. The previous week was revised up. This does not include the 542,797 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 489,639 the previous week. The following graph shows the 4-week moving average of weekly claims since 1971.
Comments on Weekly Unemployment Claims – Mcbride – In normal times, most analysts focus on initial unemployment claims for the BLS reference week of the employment report. For August, the BLS reference week is August 9th through the 15th, and the initial claims report this morning was for the reference week. The increase in initial claims in the report this morning would usually indicate weakness in the labor market. However, continued claims are probably much more useful now. Continued claims are released with a one week lag, so continued claims for the reference week will be released next week. Continued claims are down 2.1 million from the reference week in July, suggesting an increase in employment in August. There are an additional 11,224,774 receiving Pandemic Unemployment Assistance (PUA). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. The following graph shows regular initial unemployment claims (blue) and PUA claims (red) since early February. This was the 22nd consecutive week with extraordinarily high initial claims. We are probably seeing some layoffs related to the higher level of COVID cases and also from the end of some Payroll Protection Programs (PPP).
Employment: Preliminary annual benchmark revision shows downward adjustment of 173,000 jobs – Note: This is mostly before the sharp decline in employment due to COVID. The BLS released the preliminary annual benchmark revision showing 173,000 fewer payroll jobs as of March 2020. The final revision will be published when the January 2021 employment report is released in February 2021. Usually the preliminary estimate is pretty close to the final benchmark estimate. The annual revision is benchmarked to state tax records. From the BLS: In accordance with usual practice, the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2021 with the publication of the January 2021 Employment Situation news release. Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus two-tenths of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2020 total nonfarm employment of -173,000 (-0.1 percent). Using the preliminary benchmark estimate, this means that payroll employment in March 2020 was 173,000 lower than originally estimated. In February 2021, the payroll numbers will be revised down to reflect the final estimate. The number is then “wedged back” to the previous revision (March 2019). Construction was revised up by 6,000 jobs, and manufacturing revised down by 70,000 jobs. This preliminary estimate showed 229,000 fewer private sector jobs, and 56,000 more government jobs (as of March 2020).
Nearly 30% of Ohio’s unemployment claims have been denied since March – More than 400,000 Ohioans who have applied for unemployment benefits – nearly 30% of the total – have been turned down since the coronavirus pandemic hit the economy. The denial rate is consistent with pre-pandemic numbers. More than 21,000 Ohioans filed for their first unemployment benefits last week, but many of those applicants won’t get checks. Of the 1.6 million Ohio workers who have sought unemployment help since the coronavirus pandemic started clobbering the economy in March, 410,252 have been denied, according to figures from the Ohio Department of Job and Family Services. Department officials say the denial rate, approaching 30%, is consistent with pre-pandemic figures. (Many of the 1.6 million claims are still being processed.) Applicants have been turned down for several reasons, including failure to verify their identities, report outside income, or demonstrate that they are unemployed through no fault of their own. But the most common reason for denial, according to state officials, is the failure to meet monetary standards of at least 20 weeks of full employment and earnings of at least $269 a week. State officials noted that those who are denied can appeal the denial or apply for federal pandemic unemployment help. “The vast, vast majority of individuals denied for traditional unemployment will likely be eligible for Pandemic Unemployment Assistance because that program does not have an income requirement,” Job and Family Services spokesman Bret Crow said. The number of workers seeking unemployment assistance rose last week, both nationally and in Ohio, after several weeks of decline, illustrating that employers are still slashing jobs as the pandemic enters its sixth month. Nationally, 1.1 million workers sought benefits last week, according to figures released Thursday.
Emergency medical technicians are quitting their jobs – COVID-19 makes it too dangerous -Veteran emergency medical technicians and paramedics have spent decades intubating patients and performing many other medical procedures in cramped ambulances. Now, a growing number of EMS workers are exiting the field for good. The reason: COVID-19 makes the job too dangerous.”I knew it would probably kill me if I went out there and had multiple exposures – and I’m not a chicken,” said Robert Baer, an EMT in New York City with 29 years on the job, including 23 as an instructor. “I love the job, but my doctors were telling me I shouldn’t be going in the field, that it was very dangerous.”Baer was among the first responders to the September 11 terrorist attacks on the World Trade Center, and he now suffers from asthma, chronic bronchitis, sleep apnea and other conditions that make him more vulnerable to COVID-19. In March, Baer, 59, was set to be deployed to Elmhurst Hospital in Queens, New York, which at the time was deluged with coronavirus cases as the infection raced through the city. But he decided the risks were too high because of his own pre-existing health conditions. Rather than expose himself to a stream of infected patients in Queens, Baer opted to retire last month, ending his career at least a full year earlier than he’d planned. That disqualified him from collecting his full pension, and Baer estimates he gave up between $2,000 and $4,000 a year in retirement benefits – a decision he doesn’t regret. “It wasn’t about the money – it was about my health and surviving,” he said, noting the emotional toll of attending the funerals of colleagues who have died from COVID-19. Oren Barzilay, president of the FDNY-EMS Local 2507, representing New York City medics, said that a record 60 or so EMTs – many of them over the age of 50 – have left the department since March. Another factor that may be spurring this exodus is the modest pay EMT workers receive for a job that is stressful in the best of times and now, with the pandemic, potentially life-threatening. In New York, an EMT’s salary starts at around $35,000 and tops out at $50,000, according to Barzilay. Nationally, the job pays an average of $38,830 a year, according to the Bureau of Labor Statistics.
U.S. private equity giant banishes staff from the office for 14 days if they use buses or trains, over coronavirus fears – Employees at global asset manager Carlyle Group have been told to avoid public transport when offices reopen around the world. They must avoid public transport on their commute, and if they use public transport over weekends, they should work from home for 14 days, according to one report. Staff are expected to walk, bike or drive to the company’s offices, including in New York and Washington, D.C. as it looks to control the spread of the coronavirus and avoid staff outbreaks. Carlyle Group said that returning to its 31 offices globally would be “entirely voluntary” and the measures around public transport were to protect its staff. “Our global policy, which includes encouraging workers not to use public transportation, is designed to protect the health and well-being of every colleague,” it said. “As the situation continues to evolve, we are asking everyone to take an approach that works for their personal situation,” it added.
The Real Pandemic Gap Is Between the Comfortable and the Afflicted – The stories from the front lines of this country’s abandonment of the poor in the middle of the coronavirus pandemic are not in short supply. The Washington Post reports on the devastating stories of workers waiting for benefits from the cold and broken bureaucracy of D.C.’s unemployment bureau; one ends the story with $1 left in his wallet. The Guardian brings us stories from the Deep South, where a young Black woman named Sandy Oliver counts off the number of people she knows who have died from coronavirus – “at least 10.” Kaiser Health News details the agonizing inevitability of Covid-19 spreading through a cramped household of low-income Hispanic workers and their families in Marin County, where some of the richest people in America reside. These outrageous stories, and the millions more that remain unknown to the press, depict lives being lived in our failing nation. This is the real world. But another real world exists on top of this reality, smothering it: The world of the rich and powerful, where things are mostly fine. Walk up 14th Street NW in Washington, D.C., on any weeknight, and the bars and restaurants are almost as packed as they were before the pandemic. Le Diplomate, the trendy French restaurant, has spilled onto Q Street and never appears less than bustling. In a city where low-wage workers choose between the risk of dying of coronavirus or dying of hunger, the professional class of politicos and other workers from the Bullshit-Job Boom face an easier choice: Moules or Lobster Frites?The coronavirus pandemic is, at least, highly visible in the media. In that way, it’s different from many other problems to which we’ve become more accustomed: the income gap, the opioid crisis, the rise in homelessness. These and other ongoing disasters affected millions of people long before this virus appeared on these shores and have naturally become intensified and sharpened since then. But the arrival of an even worse situation doesn’t seem to have sparked action. It’s like there was already a raging fire that we were just letting burn, and now Godzilla has arrived – and we’re letting him rampage, too. Sure, why not. Go for it, dude. We’re left to wonder why Washington isn’t doing anything. But why aren’t we doing anything, either? How is it that Mitch McConnell leaves his house without being pelted with rotten tomatoes? How can our leaders, and the people who work for them, continue to show their faces in public? When is the fire going to reach them? What has to give? And why hasn’t it happened yet? One answer may be that the rich, including not just billionaires but the ordinary affluent of America, are not in anywhere near as much peril. And our politics is tuned to their frequency, whatever’s happening to the poor.
Amazon workers describe spread of COVID-19 at warehouse in Romulus, Michigan – COVID-19 is spreading at Amazon’s DTW1 fulfillment center in Romulus, Michigan. Wayne County, Michigan, where the warehouse is located, is the state’s epicenter for the virus, with 29,242 confirmed infections and 2,841 deaths as of this writing.In April, Amazon workers throughout the country and internationally carried out walkouts and other actions demanding the closure of facilities, full protective gear and an end to the company’s practice of concealing information about the spread of the virus. Meanwhile, Amazon has made money hand-over-fist during the pandemic, thanks to the surge in online sales as people avoid unnecessarily leaving their homes. The online retail giant doubled its net profit in the second quarter to $5.2 billion, and CEO Jeff Bezos, already the wealthiest human in history, has seen his wealth surge to $197.8 billion, including a $13 billion increase in a single day.Two workers from DTW1 spoke to the WSWS International Amazon Workers Voice to denounce the continuation of work despite rampant infections. Their names have been changed in this article to protect their anonymity. “The MSDT [Mask Social Distance Team] just walk around yelling at people all day,” Katie says. “We have cases on almost an everyday basis.” She explained as the pandemic wore on, MSDT, the group within the facility response for enforcing safety measures, became a means of harassment and intimidation of workers by management.”They [MSDT] started at the beginning of the pandemic, but they were about just safety then. But for the past couple months, they think they have some type of power now so they feel they can just yell at people for trying to catch a breath for a second. It’s impossible to stay six feet from each other in there. Amazon’s working conditions are very poor.”Having to wear these masks for the amount of time we do and in the heat; sometimes it’s like 130 degrees in there, it causes breathing problems. People are passing out, having bad headaches, feeling nauseous and feeling like they are going to vomit. To say the least, it’s not a great company to work for. They don’t care about you or other people, because they can replace you the same day. The air conditioning doesn’t work, and [the fact that there are] thousands of people in the building doesn’t help.”
States Secretly Stockpiling Food for Need Ahead – “To the Roof!” – YouTube – Washington State has been stocking away millions of dollars of non-perishable food — so have other US states, and the federal government — in anticipation of “the need ahead.” If states are preparing, so too must you be today.
Are bread riots coming to America? – Over the last week, just under 1 million people filed for ordinary unemployment benefits, plus another half-million under the special pandemic unemployment program for people who don’t ordinarily qualify, a substantial decline from some of the numbers seen since the beginning of the pandemic. At this rate, by mid-September or so, new unemployment claims will be merely as bad as they were during the worst of the Great Recession.Those unemployment benefits, however, because this country has systematically stripped and sabotaged its safety net, are extremely meager and often nearly impossible to actually get. Hundreds of thousands of private citizens who have lost their jobs are flocking to Reddit for help and advice, as state unemployment bureaucracies are so janky and swamped they often can’t deal with the flood of applications.In the past week, the r/unemployment subreddit has taken a dark turn with the expiration of the CARES Act’s super-unemployment and the failure of Republicans to even come to an agreement about what they want in the next round of pandemic relief. It’s become a de facto support group for people whose lives are collapsing around them for simple lack of income or jobs, and talk of suicide is common.One wonders: Is America about to see bread protests, or even riots? People around the country have been testifying how they are down to their last dollar or flat broke, facing eviction or living on the street, unable to afford vital prescriptions or even food. “I’ve got $18.91 in my bank account this morning. My cupboards are getting low, my dog will have to eat whatever me and my kids eat and my gas light will be back on shortly,”wrote one Redditor recently. “My car payment was due today and I’m still $200 short, 500 counting last month’s. My phone bill is due in a few days. I’m a month behind on the electric bill. I have about $60 to my name, I’m not going to make rent and my [landlords] have already said they will not be giving any allowances,” wrote another. “Well I’ve waited and now my power turns off at the end of today, in a house where my entire family has moved in with me … worst of all I have two toddlers and virtually nowhere to go. ‘Rona and the government have picked off my family one by one and this seems to be the final nail in the coffin,” wrote a third.
Couple charged in attack of teen Sesame Place worker over mask requirement – A New York couple has been charged in an attack on a 17-year-old employee at the Sesame Place amusement park in Pennsylvania earlier this month. Authorities say Troy McCoy, 39, and Shakkera Bonds, 31, both of the Bronx, punched the teenager on Aug. 9 during a visit to the park in Langhorne after he reminded them to wear a face mask. The park requires face coverings during the coronavirus pandemic.Police say the teenager asked the couple to comply with the policy earlier in the day, and when they saw the employee again, they both struck him in the face,CBS News reported.Lt. Stephen Forman of the Middletown Township Police Department confirmed that when another employee attempted to intervene, Bonds punched that employee as well, according to CBS.McCoy and Bonds were each charged with criminal conspiracy, disorderly conduct and harassment, NBC News reported. McCoy was also charged with aggravated assault, simple assault and recklessly endangering another person, while Bonds faces an additional charge of simple assault.McCoy was apprehended by authorities Wednesday. Bonds is expected to turn herself in.Federal authorities took McCoy into custody after serving an arrest warrant at his home. He allegedly attempted to “barricade himself in the residence,” although law enforcement officials were still able to enter his home, CBS reported.The teenage employee spent a week in the hospital recovering from surgery on his jaw and damage to his teeth. His jaw is now wired shut, Forman told CBS.
US child care in existential crisis as schools and businesses reopen – The Trump administration, backed by the entire political establishment, has placed great emphasis on the need to re-open schools as an essential component to the overall drive to force working people back on the job amid the COVID-19 pandemic. A pillar of this campaign is early childhood care, which faces an existential crisis in health, safety and funding.Parents suspecting the obvious dangers of COVID-19 have withdrawn children from day cares en masse. According to a National Association for the Education of Young Children (NAEYC) survey conducted in June, early childhood enrollment plummeted by 67 percent since March. Roughly five million small children normally in day cares are now largely being cared for by their parents who have had to stay home with them.In March, the US Congress passed the multi-trillion-dollar CARES Act, which included a meager $3.5 billion in child care spending while hundreds of billions were allotted to financial firms and other non-essential corporate entities. To date, this is all that has been done to help preserve child care’s continued existence in the US.At least 40 percent of all child care providers expect they will be forced to close unless they receive some sort of government support. Only 18 percent of such providers expect to last another year on their current resources. With the loss of providers, as well as forced limits on class sizes due to social distancing, an additional 450,000 children may be left without day care as facilities reopen.This shortage of supply will in turn entice businesses to cut corners on safety, licensing and other necessities for entering the child care industry.Even in places where day cares are able to remain open, teaching staff – forced to choose between making a living and maintaining their physical health – will be compelled to work under impossible conditions.”Staff and teachers are going to have a lot of anxiety and stress at day cares,” said Lorena, a child care provider that spoke at length with the World Socialist Web Site about the impact of COVID-19 on day care. “I hate to say it, but teachers are not trained for having kids all day, creating curriculum and lesson plans,” she said, adding, “If schools are closed, they’ll have to monitor a child’s actual academic progress” as school aged children will be expected to engage in distance learning.
Ohio 9-year-old dies after COVID-19 diagnosis; doctors call it ‘medical mystery’ – – A 9-year-old girl has died after being diagnosed with the coronavirus. Doctors called the cause of her death a “medical mystery.” Rehmert and Taylor Williamson taught Dorielis Reyes-Paula at Wildwood Elementary School. “We’ve all been praying and hoping for the miracle,” Chris Rehmert said. But that miracle didn’t come. The little girl passed away Wednesday night. “Last night, the news coming that she had passed was devastating,” Rehmert said. The girl’s mother detailed her illness online, saying Reyes-Paula first started walking strangely in May. She went to the hospital, where she was diagnosed with COVID-19. Her symptoms turned to inflammation and paralysis in her arms and legs. “Hearing that she was that sick in the beginning was hard, but hearing that was 10 times harder,” Rehmert said. Williamson and Rehmert visited Reyes-Paula at the hospital last week, retelling stories about the student. “While we were laughing at one of the stories that the doctors were telling us, her little eyes kept – not opening, but fluttering, like, ‘I’m laughing with you guys. I’m here, I’m laughing,'” Rehmert said. They told stories like this one … “She’s sitting there with a book in each hand, reading during math class. And I didn’t – I’d never have to tell a child but Dorielis, ‘Put your books away,'” Rehmert said. Reyes-Paula’s personality shined through the school and into the hearts of her teachers. “She, as a student, was just so energetic, bubbly, sweet,” Williamson said. “If we even started to look sad, she picked up on it and she was right there,” Rehmert said. “And she was like, ‘What can I do to help you?'” The women said they are carrying the girl’s memory close to their hearts, wearing shirts and masks with her initials and a Noah’s ark on them. Reyes-Paula wanted to visit the ark.
Education cannot be paused for a pandemic – More than our physical health is being affected by this novel coronavirus. With the nation moving towards virtual living to continue social distancing, we are risking under-educating a generation. Children need the option to have an in-person education. There are lessons and experiences a student receives in the classroom that cannot be replicated via technology. Distance learning is good, homeschooling is good, but not every student will succeed in those environments. Families need to have the option to send their child safely to school since a child only gets to experience the first grade once. My children are no longer school age, but my youngest is still in the classroom teaching middle schoolers. It is critical to evaluate the risks of having a child return to in-person learning alongside the benefits. Besides the home, school ranks second in influencing a student’s well-being and health. Schools offer so much more than academic instruction. Many students rely on daily meals, a safe environment, one-on-one counseling services, development of social and emotional skills, and physical activity. These are things that cannot be dialed in. When schools decided to go virtual in March, it highlighted the disparities within our broadband infrastructure. This posed a problem for students living in rural areas with limited internet access. Congress has recently prioritized broadband deployment, but these efforts must accelerate to provide adequate funding to expand broadband availability. What happens if a child does not have access to in-person learning and no broadband connection? The lack of in-person instruction could lead to severe educational inequality. Families in low-income communities cannot afford to hire tutors or ensure each child has access to their own computer with reliable internet access to participate in virtual learning. Having at-home virtual learning also comes with the distractions of everyday life. Children need a focused environment to thrive. Beyond the basic needs of these students, students with disabilities lack the tailored learning environment provided by special educators. It is impossible to virtually replicate the hands-on personal attention required to educate these children. Parents cannot turn into the special education teachers their child needs overnight to provide them with the occupational, physical, or speech therapy they would receive in the classroom.
Analysis: Ventilation should be part of the conversation on school reopening. Why isn’t it? – – Like every other parent with a school-age child, I want schools to reopen in the fall – including the one I’m attending. But I am also an epidemiologist, and after reading the Centers for Disease Control and Prevention’s guidelines for school reopening and the various accompanying news coverage and think-pieces, I can’t convince myself that following its rules will keep my family – or yours – safe. Why? Because the primary way COVID-19 is transmitted is throughrespiratory droplets that careen through the air, and yet the capricious nature of air circulation and the lack of filtration systems in our already underfunded public school systems is absent from the conversation. Since New York state started reopening, I have received emails from my medical school’s working group about the plan to bring us back to campus. Its plan is to follow the basic script seen in school reopening strategies all over the country: frequently sanitized high-touch surfaces, 6-foot distances, unidirectional hallways, reduced capacity elevators and classrooms, health questionnaires, and contact-free temperature checks upon entry (more on that in a minute). My school is not negligent, but like many other educational institutions, its efforts are dangerously misdirected. We are collectively engaging in what Derek Thompson describes in the Atlantic as “hygiene theater,” in which organizations looking to reopen focus intensively on arduous decontamination strategies to mitigate surface transmission – even though that is not the primary route for COVID-19 transmission, and some scientists argue that there is no direct evidence the virus spreads this way at all. I’d also like to add temperature checks to the hygiene theater playbill, as they too fail to successfully screen potential COVID-19 carriers, but have somehow made their way onto every screening list I’ve seen. Why is this happening? The CDC is supposed to determine the national priorities for American health. Of the eight bullet points in its “staff safety” section, four address surface transmission. The three bullet points dedicated to respiratory droplets warn people to stay 6 feet away from each other, cough into their elbows, and wear a mask. It does not mention air filtration, or the fact that we have pretty good data to suggest that without addressing air filtration and circulation, the 6-feet rule does not prevent transmission indoors.
Jared Kushner will ‘absolutely’ send his children to school despite Covid-19 risks – White House adviser and son-in-law of the president Jared Kushner has said he will “absolutely” send his children back to school when classes reopen, despite widespread concerns that in-person learning puts children, faculty and their families at risk from Covid-19.The Trump administration has pushed for schools across the country to reopen, despite the concerns. One public school district in Arizona was forced to cancel plans to reopen on Monday after more than 100 teachers and other staff members called in sick.In its latest guidance, the Centers for Disease Control and Prevention (CDC) said the number and rate of coronavirus cases in children had risen “steadily” from March to July, but the true number of cases remains unknown due to a lack of testing.However, Kushner, a member of the White House coronavirus taskforce, told CBS’s Face the Nation on Sunday morning that he had no concerns about his children returning to class “because children have a six times higher chance to die from the flu than from the coronavirus, so based on the data I’ve seen I don’t believe that’s a risk.”Kushner has three children with Ivanka Trump, the president’s daughter. “This virus impacts different people at different rates,” he said. “Our school’s not opening back up five days a week, I wish they would but we absolutely will be sending our kids back.”In its guidance update, the CDC said school closures could have contributed to initially low rates of cases in children early in the pandemic.”This may explain the low incidence in children compared with adults,” the agency said. “Comparing trends in pediatric infections before and after the return to in-person school and other activities may provide additional understanding about infections in children.”
With pandemic raging, Florida governor deepens drive to reopen schools – Florida state officials are pressing ahead with the reckless and premature reopening of public schools. As the state approaches 9,300 deaths from COVID-19 and daily infections have again risen above 5,000, politicians are insisting that millions of children be herded back to schools, endangering the lives of themselves, countless teachers and millions of families. Florida’s Republican Governor Ron DeSantis is a well-known acolyte of Trump and one of the most vocal proponents for the president’s back-to-work and school reopening campaigns. He has consistently claimed that the supposed “educational benefits” of in-person learning outweigh health concerns, prompting the Department of Education to issue an emergency order last month requiring brick-and-mortar schools to open by Aug. 31. Despite pushback and massive hostility from teachers towards the back-to-school drive, the political establishment, backed by the unions, school boards, and county judges, have been relentless in pursuing this homicidal policy and have even resorted to intimidation and threats to force the school districts to open up classrooms for in-person schooling.This has found its sharpest expression in Hillsborough County, the eighth-largest school district in the country and third-largest in Florida. DeSantis and Education Commissioner Richard Corcoran traveled to the county last Monday to demand that the district drop plans to hold fully online classes for its 223,300 students for the first four weeks of the school year, threatening to strip the county of nearly $200 million in funding. Hillsborough immediately revised its plan after being issued the ultimatum. Instead, the county now plans to do just one week of online schooling starting August 24, and then transition to a hybrid style of physical and remote learning on August 31. Hillsborough County Superintendent Addison Davis stated in a Thursday press conference that the policy reversal was necessary, saying, “It was very clear, if we do not follow their emergency order, we will be financially hindered,” adding, “That would bankrupt us. It would put us in a terrible financial situation.” Hillsborough reported a 13 percent COVID-19 positivity rate on Monday, the fifth highest in the state. Of the 68 deaths from COVID-19 in the greater Tampa Bay region last Tuesday, 31 were in Hillsborough County.
Calls for nationwide sickout as Arizona school district cancels reopening – An Arizona public school district was forced to cancel its plans to reopen on Monday after more than 100 teachers and other staff members called in sick. “We have received an overwhelming response from staff indicating that they do not feel safe returning to classrooms with students,” Gregory Wyman, district superintendent, said in a statement on Friday.Now some activists in Arizona, which saw a high-profile teachers’ strike in 2018, said they hope teachers across America will adopt a similar strategy to keep educators safe, as some parents and politicians continue to push for schools in the US to reopen during the coronavirus pandemic.”I’d love to see a nationwide sickout,” Kelley Fisher, an Arizona kindergarten teacher who has led protests in the state, told Reuters on Friday. In San Tan Valley, a suburb of Phoenix, the JO Combs unified school district’s board of governors had voted to resume in-person classes on Monday. Another school district nearby had made a similar choice, pressured by some parents who argued that reopening schools would be best for their children. The president of the Arizona Education Association, a teacher’s union, told the Arizona Republic that the two districts both decided to reopen despite not meeting the health metrics as recommended by Arizona’s department of public health. Not a single district in Arizona currently meets all three metrics for a safe resumption of mixed in-person and online learning, the Arizona Republic reported, citing the most recently available state public health data.By late Friday afternoon, 109 teachers and other staff members from JO Combs had already called in sick, a district spokeswoman said. That number represents nearly 20% of the district’s total staff of about 600. “Due to these insufficient staffing levels, schools will not be able to reopen on Monday as planned,” Wyman, the superintendent, said, noting that “all classes, including virtual learning, will be canceled” until further notice. Elsewhere in Arizona, the debate over when to reopen schools remained at a standstill. In Lake Havasu, Arizona, the local school district pushed back the discussion of when to reopen schools to this coming week, the local paper reported. “At some point, we are going to have to come up with an acceptable casualty rate, and nobody wants to have that conversation,”
Thousands of students are leaving Anchorage schools. It could mean a loss of millions in funding -Thousands of students are leaving Anchorage schools, and it could mean a loss of millions of dollars in revenue this year for the district, according to administrators. The Anchorage School District could face, at a maximum, a $30.1 million decrease in revenue this fiscal year due to the “significant” decline in enrollment, according to a presentation Tuesday by chief financial officer Jim Anderson to the school board’s finance committee. But it is impossible to know what the deficit will actually be until later in the year, he said.”We could have a very low deficit this year all the way up to a $30 million deficit, depending on – on the number of students we have,” he said to the full school board at its meeting Tuesday. “There are some bigger unknown variables that we simply don’t have the answer.”Anderson presented to the committee multiple scenarios based on factors including enrollment changes and possible changes the state legislature could make to how schools are funded.In early August, enrollment was down by about 5,000 students from the previous year. As of Monday, that deficit had shrunk to 4,000 fewer students than at the same time last year, according to district data presented at the meeting. Andy Ratliff, senior director of management and budget, said that it’s difficult to predict just what parents will choose and that some may be waiting to see what changes as the pandemic continues before they enroll their children. Still, 2,736 students had fully unenrolled from the district as of Monday, Anderson said. More than 1,000 of those students have switched to state home schools, data from the school board’s finance committee shows.
“Refuse to Return” Facebook group cofounder describes explosion of opposition to unsafe school openings – “No teacher signed up for this,” Tracy Campbell, a 35-year veteran music teacher from Colorado, told the World Socialist Web Site about the demand that educators return to the classroom in the midst of the COVID-19 pandemic. “The part that is left out in the news coverage is that teachers weren’t asked. “Why weren’t the unions organizing in March? If they were strong, we wouldn’t have to do this organizing,” she said, explaining why she and several others set up an independent Facebook group, “Colorado Schools for Safe Openings-14 Days No New Cases.” Their “Refuse to Return” group has attracted 9,469 members and helped inspire at least 35 other groups across the US, including in Illinois (32,555 members), Indiana (13,392 members), Oregon (13,565 members), Tennessee (6,133 members), Pennsylvania (7,831 members), Mississippi (2,210 members) and more. Social media opposition has erupted nationally, while educators have mounted protests, petitions and sickouts to oppose the ruling-class campaign to reopen schools. The Facebook groups opposed to this homicidal campaign have become centers for organizing protests, sharing scientific and political developments, venting anxiety and frustration, and increasingly for discussing local, statewide and national strike action to halt the reopening of schools. The Educators Rank-and-File Safety Committee was launched on August 15 to unify educators, school workers, parents and students independently of the unions to oppose the forced return to work and school by the Democrats and Republicans. The statement that accompanied the announcement called for a nationwide general strike, emphasizing, “The central lesson of the 2018 – 19 wave of wildcat strikes in West Virginia, Oklahoma and other states, along with the strikes in Los Angeles, Oakland and Chicago, is that it is essential that teachers must rely on their own independent strength to fight.” Tracy has been a music teacher for 35 years, and lives near the Navajo Nation reservations that have been devastated by COVID-19. Like other educators, Tracy has carefully followed the science of the pandemic and has been acutely aware of the immense dangers posed by the reopening of schools. When she was asked to return for in-person instruction at her school, she refused. “I decided not to take any contract teaching jobs this year, since I have grandsons and my health is more important,”
Maryland’s Republican governor overrules county order for private schools to remain closed – Maryland Governor Larry Hogan (R) came out against an order by Montgomery County, Maryland Health Officer Dr. Travis Gayles barring private schools in the county from opening before October 1 for the upcoming academic year. Hogan issued an emergency executive order barring blanket closures of schools, reversing an earlier order that gave local health authorities that power. Hogan said in a statement that the decision on reopening should be left up to individual schools. He derided the “blanket closure mandate imposed by Montgomery County” as “overly broad and inconsistent with the powers intended to be delegated to the county health officer.” Public schools in Montgomery County will remain closed for online-only education starting at the end of the month. As of Tuesday, Maryland had over 101,000 cumulative confirmed cases of coronavirus, according to the state’s Department of Health. Montgomery County, which lies northwest of the District of Columbia, has been among the hardest-hit counties in the state, reporting over 19,166 cases and 812 dead. While Maryland initially was one of the first states in the Mid-Atlantic region to impose lockdowns on businesses deemed nonessential, in May it also became one of the earliest in the region to begin reopening shuttered businesses, even as the number of cases continued to rise. Hogan at the time made it clear that rather than basing public health decisions on the data on new daily cases, the state would instead focus on hospitalization rates. In May alone, the total number of confirmed cases in the state rose from about 23,000 on May 1 to over 52,000 on May 31. The number of new daily cases bottomed out in mid-June but are almost back to May levels of over 1,000 new cases a day. The decision to force the reopening of private schools in Montgomery County places thousands of students, faculty, and staff at a direct risk of contracting and spreading the virus, potentially bringing infection home to families and exacerbating the spread, inevitably leading to more deaths from COVID-19. This disastrous policy, however, met with only a tepid response from Democrats, who control not only the legislative and executive branches of Montgomery County but both houses of the state general assembly.
Disastrous US school openings lead to 3,000 infections across 44 states – Within weeks, the reopening of schools across the United States has already become a complete catastrophe. Outside of the mobilization of educators, parents and the broader working class to halt this homicidal policy, there will be rapid acceleration of the spread of the deadly COVID-19 disease throughout every region of the country.Because no government agency at the local, state or federal level is systematically tracking work-related COVID-19 cases and deaths, Kansas teacher Alisha Morris took it upon herself to begin compiling this data in a spreadsheet. The list, which is now curated by roughly 35 people, has been shared in the dozens of Facebook groups that have been set up to oppose the unsafe reopening of schools and has been viewed tens of thousands of times by educators, parents and students. The data compiled in the spreadsheet paints a chilling picture of the spread of the pandemic in schools across the US. According to this data and an official account from Mississippi released Monday, since schools began reopening during the week of July 27, roughly 2,500 teachers, students and staff have tested positive for COVID-19 from hundreds of schools across the country. All but six states – Alaska, Washington, Delaware, Vermont, North Dakota, and New Hampshire – have at least one school that has already experienced an outbreak of COVID-19.As of Tuesday, there are over 900 entries on the spreadsheet, with each one representing a separate school that has had at least one positive or suspected case since the start of the pandemic. Most entries are based on local news reports since the beginning of August.The devastation has been most extreme in the South, which for weeks has been a major epicenter of the pandemic in the US. Largely controlled by the Republican Party, these states most closely followed the “herd immunity” strategy of letting the virus rip through the population, as advanced by the Trump administration. These officials were the most aggressive and earliest to reopen their economies and have now been the most strident in demanding full in-person instruction, often with the bare minimum of personal protective equipment (PPE) provided to teachers and staff.
Detroit teachers vote overwhelmingly to strike against unsafe school openings – On Wednesday, Detroit educators voted by a margin of 91-9 percent to authorize the Detroit Federation of Teachers (DFT) to call a “safety strike” to block plans by the district to start in-person teaching when schools reopen on September 8. The overwhelming vote is another expression of popular opposition to the unsafe opening of schools, which includes sickouts by Phoenix area teachers and an explosion of social media groups that have organized protests across the country. The DFT only called the strike vote out of concern that there would be a revolt by educators, parents and students against the plans Detroit Mayor Mike Duggan and Michigan Governor Gretchen Whitmer to open the largest school district in the state, which was an earlier epicenter of the deadly COVID-19 virus. Workers throughout the city know that herding 55,000 students and more than 4,000 school employees into dilapidated and poorly ventilated school buildings will lead to a resurgence of virus. In a district email earlier this month Nikolai Vitti, former superintendent of Duval County Public Schools in Jacksonville, Florida, revealed that some 80 percent of parents are opposed to in-person learning. On August 13, there was a three-month high of infections, with 1,138 new cases. As of Wednesday afternoon, there have been at least 103,527 cases and 6,607 deaths in Michigan. Under these conditions, the DFT hopes that the strike vote will allow the union to get ahead of the demands by teachers for a nation-wide strike in order to contain and strangle it. In the meantime, DFT officials are working out plans with district officials to create conditions to fully reopen the schools. In a statement released to union members before the vote, the DFT made it clear that the action it was proposing was “not a strike in the traditional sense.” Instead, it stated “we are ready, willing and able to continue work remotely.” The action, the statement said, was to convince the school board to start the year remotely” and “develop a new reopening plan with the union.” It adds that the school board should “wait to transition back to in-person instruction until it is safe, as demonstrated by various indicators.” The final decision on when schools are safe will be left entirely up to Governor Gretchen Whitmer, who violated her own safety protocols to reopen businesses, including the auto industry.
Viral Videos Show Huge ‘Back To Campus’ College Parties Despite COVID-19 Bans In Effect – Students are returning to their newly re-opened college campuses across the nation this week (though many others have gone online-only for Fall), and already the parties are in full swing, despite administrators warning against violating new strict social distancing guidelines. As we earlier detailed, “no parties, no trips” COVID-19 rules are in effect for a number of universities in order to ensure in-person classes can resume, but also as predicted – there’s simply no way this can ultimately be enforced, as The Hill now reports: Local officials have condemned viral videos of returning students attending parties without masks or physical distancing on university campuses around the country.The videos were taking at such colleges as Oklahoma State and the University of North Georgia. First night back at University of North Georgia in Dahlonega. pic.twitter.com/VAmZ2TLvuz Welcome back to school America: college towns are getting flooded with… restless and ready to let loose college students, as one might fully expect. As videos showing massive parties and packed-out bars go viral, they’re coming under condemnation from mayors and town councils and county health officials amid fears that ‘back to school’ will only exponentially grow and further the pandemic.
Colleges Worried About Covid-19 Cases Tell Students to Stop Partying – WSJ = Leaders of colleges and universities are issuing a couple of simple demands to students to help curtail the spread of the coronavirus on campus: Wear masks, and rein in your back-to-school partying. The messaging comes as outbreaks continue to pop up at schools around the country as students return to campus, leading several this week to halt on-campus instruction. It is being directed to all students, but specifically aimed at fraternities, sororities and upperclassmen throwing off-campus parties that have been traced to the outbreaks. At the University of Notre Dame, where in-person classes were canceled this week because of an increase in positive cases linked to off-campus parties, the number of cases continued to rise – though at a slower pace. On Thursday, the school detected 23 new cases, bringing the total to 336. But the rate of positive tests had declined to less then 10% yesterday from nearly 20% on Monday. The school canceled classes for two weeks, but the president said he would send everyone home for the rest of the year if necessary. “I think people are definitely starting to take it more seriously. No one wants to go home,” said Maddie Tupy, a junior at Notre Dame. The coronavirus has pushed nearly half of U.S. colleges and universities into some degree of remote learning, a change that’s sending shock waves through small college town economies. WSJ’s Carlos Waters explains. Pennsylvania State University suspended the Phi Kappa Psi fraternity on Thursday after videos surfaced on social media showing an indoor gathering on Wednesday of more than 15 people who weren’t wearing masks or staying six feet apart. Then, on Thursday, returning students gathered on campus without masks or physical distancing. The campus scene prompted President Eric Barron to write a note to students chastising them for ignoring the guidelines the school had laid out and to warn them they would be expelled if they didn’t obey the rules. “Last night’s behavior is unacceptable,” Mr. Barron wrote. “I ask students flouting the university’s health and safety expectations a simple question: Do you want to be the person responsible for sending everyone home?” North Carolina State University said Thursday it has canceled all in-person classes following a series of off-campus parties. More than 500 students are now in quarantine or isolation, according to a letter to the school by Chancellor Randy Woodson. “Battling the spread of Covid-19 is a challenging endeavor even when everyone is practicing safety measures,” he wrote. “Unfortunately, the actions of a few are jeopardizing the health and safety of the larger community.”
Texas A&M faculty decry plans to reopen campuses in midst of pandemic – Faculty, professors and students at multiple Texas A&M University affiliated campuses, angered by the University Systems refusal to transition to fully online classes, penned an open letter addressed to the A&M chancellor John Sharp and the Board of Regents which has garnered around 900 signatures as of Friday. The letter cites wide support for social distancing measures in the university system, noting that the Faculty Senates of Texas A&M University (TAMU) San Antonio had passed a resolution to move fully online, while TAMU Corpus Christi passed a resolution that allowed faculty to choose their mode of instruction. It also stated that members of TAMU Corpus Christi, Texas A&M International University, and TAMU-Kingsville “support moving fully online in order to reduce the spread of this lethal pandemic across campuses and the regions we serve, and the communities in which we live.” The letter proceeds to calls on the A&M University System to “grant our universities the leeway to make independent decisions about the course delivery methods that will best serve and protect our students and communities during the COVID-19 crisis.” To put it bluntly, the reopening plans of the A&M University administrations are aggressive and brutal. Texas A&M (College Station) Provost Carol A. Fierke has stated that more than 50 percent of the fall classes (which start Thursday) sections will be offered in-person, with more than half of students having two or more courses in person. Similarly, A&M-Kingsville is planning to hold a mere third of its courses online while the rest are to be taught in a hybrid of online and face-to-face instruction.Texas A&M University President Michael K. Young has even floated the idea that the university might set a threshold for shutting down in-person classes to as high as 100 infections per day, which would be nothing short of a complete disaster.
UNC Chapel Hill, Notre Dame and Michigan State University forced to revert to online learning after COVID-19 outbreaksOnly one week after beginning the fall semester with in-person classes on August 10, the University of North Carolina (UNC) at Chapel Hill became the first major college to pivot to online classes after reopening in person. This shift comes after the university announced at least four clusters of outbreaks of COVID-19 in student living spaces. UNC-Chapel Hill, which enrolls approximately 30,000 students, was one of the first and largest universities in the United States to bring students back to campus for in-person classes at the end of the summer term. It is serving as a test case for other large institutions around the country that plan on resuming face-to-face instruction over the coming months. On Tuesday, two other leading universities, Notre Dame and Michigan State University, announced they would also be reverting to online learning because of outbreaks. At Notre Dame’s campus 12,000 undergraduate and graduate students were tested before they could return to campus on August 3 to start classes a week later. At the time, a few dozen tested positive and were told to stay home. Despite these efforts, by Tuesday the school reported that at least 147 people had tested positive for the virus over the last two weeks. UNC Chapel Hill reported 130 new student cases of COVID-19 during its first week, more than one thousand percent higher than the ten it reported on campus during the week prior to reopening. As of Monday, 177 students had been isolated after testing, and another 349 students are in quarantine because of possible exposure. No doubt influenced by the unfolding disasters they were seeing at other campuses, Michigan State University announced on Tuesday that they would be shifting their reopening plans, telling students not to return for the start of classes in two weeks. It has become quite clear that the experiences a UNC-Chapel Hill and Notre Dame are not the exception, but the rule. The reopening of college campuses is proving to have disastrous health consequences. University administrations that have experienced outbreaks are now working around the clock to do damage control.
Outbreaks at U.S. Colleges Force Sudden Changes and Send Students Scrambling: Covid-19 Live Updates – The New York Times As college students return to U.S. campuses, some schools are already hastily rewriting their plans for the fall. The University of North Carolina at Chapel Hill, Michigan State and Drexel University will now hold most fall classes online, and Notre Dame and the University of Pittsburgh are among several that have abruptly suspended in-person classes for the coming weeks.Some of these schools have already had sizable coronavirus outbreaks. The New York Times has identified more than 17,000 cases at more than 650 American colleges and universities over the months.The last-minute changes left many students scrambling. Some had already moved to campus or signed leases for off-campus housing. Others said they would have rather returned to class when in-person instruction resumed.”I think I probably would have taken a gap year, but just because everything was so last minute, it’s really hard to make plans,” said Karthik Jetty, an incoming freshman at Stanford, where plans to bring freshmen to campus were recently scuttled.Universities have been preparing for this for months, but some factors are out of their control.At Oberlin College, administrators postponed in-person classes because of virus testing delays. At Notre Dame, large outbreaks blamed on student gatherings drove the school to suspend in-person classes and restrict student gatherings. But a newspaper, run by students at Notre Dame, St. Mary’s and Holy Cross, criticized the three institutions in a front-page editorial under the stark headline “Don’t make us write obituaries.”And at Drexel, where coursework was moved online, officials said local school districts’ decisions not to hold classes would have made it difficult for university employees with children to come to campus.”Despite all of our preparation,” said John Fry, Drexel’s president, “we have always understood that our approach would need to be continually assessed, taking into account new data and changing conditions.”
COVID-19 cases surge on college campuses as Yale administrator warns students to prepare for deaths – The University of North Carolina at Chapel Hill, which did not conduct widespread testing prior to reopening last week, announced Monday that all undergraduate instruction would be moving online immediately. This move came after four separate outbreaks occurred on campus during opening week, leaving 130 students infected and several hundred more quarantined. One administrator and professor at Yale University, Laurie Santos, the Head of Silliman College and a psychology professor, sent a chillingly honest email to campus residents this week telling them that they may be killed by COVID-19 while attending school this semester: “We all should be emotionally prepared for widespread infections – and possibly deaths – in our community. You should emotionally prepare for the fact that your residential college life will look more like a hospital unit than a residential college.” Despite overwhelming scientific evidence and the most recent experiences of school like UNC-Chapel Hill and Notre Dame, scores of schools are still pushing forward with reopening plans. According to the College Crisis Initiative, a research project at Davidson College in North Carolina, more than 1,000 four-year colleges and universities in the United States planned to bring students back to campus in some form this fall, with 45 planning to operate “fully in person.” In Arizona, three major universities are beginning face-to-face instruction and filling up residential halls despite the state being considered a hot spot for the virus. While some are being tested for COVID-19 prior to their arrival on campus, others are not getting tested until after they have arrived. At Northern Arizona University, one resident assistant has already tested positive, requiring dozens of residents to be quarantined. The State of Alabama is using its students as guinea pigs to carve out a back-to-school policy that can be used throughout the country to reopen face-to-face learning. UAB (University of Alabama at Birmingham) President Dr. Ray L. Watts bragged to reporters about GuideSafe this week, stating: “It’s this comprehensive plan that gives us confidence. If there’s a flare-up, a small one somewhere, we can find it early and we can quarantine, treat and reduce the exposure to others.” The first UAB students to serve as test subjects for this system were its football players, who began returning to campus in June. Across the country, including at universities such as UNC-Chapel Hill where the semester has already begun with a disaster, student athletes are being required to put their health at higher risk so that big-business sporting events can still be held.
U.S. university insured Chinese student tuition against virus. Then COVID-19 hit – (Reuters) – After becoming dean of the University of Illinois business school in 2015, Jeffrey Brown worried that politics or a virus would choke off a major source of revenue for his school: Chinese graduate students. So, in 2017, along with the engineering school, Brown bought insurance worth up to $61 million to protect the university against such losses, including $36 million due to a pandemic. His worst fears came true earlier this year when the coronavirus hit. But despite his foresight, things have not gone as planned. A Reuters review of emails between school officials and insurance brokers, and interviews with people familiar with the situation show the university may get a payout to cover lower tuition revenue this year, but it can no longer get pandemic, visa restriction, or sanctions coverage. How the university, which first made headlines for its pioneering insurance coverage in late 2018 as the Trump administration ramped up its anti-China policies, lost the protection just when it needed it the most is detailed here for the first time. While it is known that insurers pulled back from various types of coverage in recent months and raised prices, the account provides new insight into how quickly the market deteriorated. The university opened negotiations to renew its 2017 policy, which was scheduled to expire in May 2020, as early as the fall of last year, according to the emails, which were obtained by Reuters through a Freedom of Information Act request. The policy could have been renewed by Christmas last year, but a bureaucratic misstep necessitated a new broker, delaying the process, according to the emails and two of the sources. That meant the virus hit as brokers at a Marsh & McLennan Co Inc (MMC.N) unit that took over were negotiating the renewal with lead insurer AXA XL through the Lloyds of London insurance marketplace. As weeks passed and the virus progressed, renewal options rapidly narrowed while costs increased. The university is now exploring a possible claim for the current year, according to the emails. “We can hope the insurer/reinsurer outlook would be clearer in a year’s time,”
Student Loan Borrowers Would See a Big Chunk of Debt Disappear Under Biden Plan – WSJ – Joe Biden wants to cancel a substantial portion of Americans’ $1.5 trillion in federal student debt – while maintaining the loose lending standards that contributed to its rapid growth. Mr. Biden would cancel all or some debt for many public-college graduates, public-sector workers and victims of fraudulent practices by some for-profit schools. For any remaining debt, the Democratic presidential nominee would slash monthly payments. Borrowers could have hundreds of billions of dollars of debt canceled. Mr. Biden also proposes tuition-free public college for students from families earning less than $125,000 a year. Mr. Biden’s plans aim to help the poor and middle class while limiting aid for the wealthy, said Stef Feldman, the Biden campaign’s policy director. “They’re carefully tailored policies to make sure that we’re eliminating cost or burdensome debt from being a barrier to people achieving the education they want or pursuing the career goals they have,” she said. Mr. Biden hasn’t called for changes to federal lending standards. Those policies essentially allow households – through a combination of loan programs for undergraduates, parents and graduate students – to borrow whatever is needed to cover tuition, with only a minimal credit check and no consideration of a borrower’s ability to repay. Some studies have linked the government’s lending policies to schools’ tuition increases. One component of Mr. Biden’s plan would forgive $10,000 for every one of America’s 43 million federal student-loan borrowers to help during the pandemic. That would benefit some wealthy borrowers. Preston Cooper, a visiting fellow at the center-right Foundation for Research on Economic Opportunity, said that part of the plan would cost $370 billion, more than what the government spent on stimulus checks as part of the Cares Act. “If you’ve decided you’re willing to spend $370 billion, why have we decided people with student debt deserve it more than other people,” including people in low-paying jobs who never went to college, Mr. Cooper said. Under Mr. Biden’s plan, borrowers earning less than $125,000 would have any debt forgiven that covered undergraduate tuition at public colleges and minority-serving nonprofit colleges. All borrowers would have the option to pay 5% of their discretionary income each month toward their debt, down from the current 10%, with balances forgiven tax-free, after 20 years. Borrowers in public-sector and nonprofit jobs would have $10,000 a year forgiven for five years, on top of an existing Public Service Loan Forgiveness program. And it would be easier for all borrowers to cancel student loans in bankruptcy. Related Video
Half of breast cancer survivors had delays in care due to COVID-19 – The results of an online questionnaire of 609 breast cancer survivors in the U.S. suggest that nearly half of patients experienced delays in care during the early weeks of the COVID-19 pandemic. The study, by researchers at the University of Illinois Chicago, is published in the journal Breast Cancer Research and Treatment. “The motivation for the study came from widespread reports of cancer care being delayed or procedures being canceled in the beginning of the pandemic, and we wanted to get a better handle on what was happening,” said Elizabeth Papautsky, assistant professor of biomedical and health information sciences at the UIC College of Applied Health Sciences. Papautsky and co-author Tamara Hamlish, a research scientist in the cancer survivorship program at the University of Illinois Cancer Center, developed a questionnaire that asked about care delays. They distributed the questionnaire to U.S. breast cancer survivor groups on social media and via email. They used the National Cancer Institute’s definition of a cancer survivor, which includes anyone who has received a diagnosis of cancer. The questionnaire sought to identify what kinds of care was delayed: chemotherapy, radiation, cancer surgery, hormonal treatment or routine follow-up appointments. There also were demographic questions on race and age, as well as stage of cancer. Sixty-three percent of respondents were currently receiving cancer care, and the average age was 47 years old. The respondents were diverse: 78% identified as white, 17% as Black and 3% as Asian. The researchers found that 44% of the respondents reported a delay in care. The most commonly reported delay was for routine follow-up visits. Respondents reported the highest rate of delays in routine follow-up appointments (79%), breast reconstruction surgery (66%), diagnostic imaging (60%) and lab testing (50%). Approximately 30% of respondents reported delays in hospital- or clinic-based cancer therapies, including radiation (30%), infusion therapies (32%) and surgical tumor removal (26%).
Japan’s economy shrinks at record pace amid pandemic – Japan’s economy contracted at a record pace in the second quarter amid the coronavirus pandemic, according to government data released Monday. The nation’s economy shrank at annual rate 27.8 percent in April-June, which marks the worst contraction on record, The Associated Press reported, citing information released by the Cabinet Office. The government data reported Japan’s preliminary seasonally adjusted real gross domestic product, or GDP, fell 7.88 percent quarter on quarter, according to the newswire. The Cabinet Office said comparable records of drops began in 1980, according to the AP. The previous worst contraction in Japan was during the global financial crisis more than 10 years ago, the newswire noted. Japan slipped into recession in the first quarter of this year, after the economy shrank 0.6 percent in the January-March period and contacted 1.8 percent in the October-November period last year, according to the AP.
Japan’s Economy in Deep Hole After Second-Quarter Plunge – WSJ – Japan’s economy shrank slightly less in the April-June quarter than that of the U.S., but economists said it still had a long way to go before recovering from the coronavirus pandemic and a tax increase.Gross domestic product in Japan fell 7.8% in the second quarter of 2020 compared with the previous quarter, the worst drop on record in the period since 1980, when comparable data began to be available. The contraction was sharper than the previous record of minus 4.8% in January-March 2009 after the global financial crisis”We will continue to take all possible policy measures to bring the economy – which likely bottomed out in April and May – back to a growth path led by domestic demand,” Economy Minister Yasutoshi Nishimura said Monday.The new coronavirus forced many retailers and other businesses to close during a state of emergency in April and May and blocked virtually all foreign tourists from visiting Japan. As a result, private consumption, which accounts for about half of gross domestic product, fell 8.2% from the previous quarter. Exports, a figure that includes spending by foreign tourists in Japan, fell 18.5%.Japan, the world’s third largest economy after the U.S. and China, fared better than Western peers, which imposed stricter lockdowns. TheU.S. economy shrank 9.5% in the quarter, whilemajor European economies generally shrank more than 10%, including a 20% drop in the U.K.Asia has picked up more quickly. In China, where the virus was largely quelled by March, GDP in the second quarter rose 11.5% compared with the previous quarter, while South Korea’s GDP fell 3.3% in the quarter. Although it did slightly better than Western peers, economists said Japan has still dug itself a deep hole that won’t be easy to get out of. Unlike the U.S., it was already headed for a recession early this year because of an increase last October in the national sales tax to 10% from 8%. The latest decline was the third straight quarter of contraction.
India faces protracted slowdown as virus clouds rural revival – (Reuters) – India is staring at a protracted slowdown as coronavirus cases reach its countryside, with signs of recovery in the rural economy hailed by Prime Minister Narendra Modi “at best a mitigating factor”, government officials and analysts said. The world’s No.5 economy reports first-quarter GDP data on Aug. 31 and, according to a Reuters poll, it is likely to have contracted 20% over April-June. It is forecast to shrink 5.1% in the year to March 2021, the weakest since 1979. Nearly half of India’s 1.38 billion population rely on agriculture to survive, with the sector accounting for 15% of its economic output. Modi has been citing higher fertiliser demand and sowing of monsoon crops, both key signs of rural activity, to show there are “green shoots” in the economy. But four government officials said the uptick in activity may not be as large as believed given a spike in virus cases in rural areas that were initially isolated from the pandemic. “The economic situation has in fact worsened since April and May, and we are likely moving towards a longer economic slowdown than earlier expected,” a finance ministry official said. The official pointed to sluggish consumer demand and a slowdown in rural lending as causes for concern.
Man dies in Carrefour Brasil store, left covered with umbrellas as store stays open – (Reuters) – A man died at a Carrefour Brasil store in Brazil’s northeastern state of Recife, but his body was left on the shop floor covered with umbrellas and surrounded by cardboard boxes while the store remained open for business, causing outrage as images went viral on social media. The incident occurred on Aug. 14 but only came to light this week, amid a deluge of criticism on social media that the body was not removed and that the store did not close. Carrefour Brasil apologized on Wednesday, telling Reuters in a statement that its handling of the incident was inappropriate. “The company erred in not closing the store immediately after what happened to await the funeral service, as well as in not finding the correct way to look after the body,” it said. According to Carrefour, the man was a sales manager who fell ill inside the store. First aid was given and an ambulance was called. After the man died, Carrefour said it “followed guidelines to not remove the body from its place.” The local subsidiary of France’s Carrefour SA, one of the largest retail chains in Brazil, said it has now changed its guidelines to include the mandatory closure of the store in future.
STUDY: Women-led countries handled the coronavirus pandemic ‘systematically and significantly better’ than those run by men – Countries with female leaders have handled the coronavirus pandemic “systematically and significantly better” than those run by men, according to a new research paper.A study of 194 countries by Supriya Garikipati, of the University of Liverpool, and Uma Kambhampati, of the University of Reading, found that “being female-led has provided countries with an advantage in the current crisis.”A preprint of the paper, which has not been peer reviewed, wasposted on SSRN in early June. The authors also wrote about their research in a blog post for the World Economic Forum in late July. On the face of it, male-led countries like the US, Spain, Italy, Brazil, and UK have fared extremely badly in the pandemic, recording some of the highest death tolls in the world.Meanwhile, women-led countries like Germany, Denmark, New Zealand, Taiwan, Iceland, and Finland have recorded far fewer deaths and lower death tolls. The authors studied death and case tolls, whether leaders took decisive action to lock down, and whether “clear communication styles” were deployed. They concluded that women-led countries are measurably better off.”Our findings show that COVID-outcomes are systematically and significantly better in countries led by women and, to some extent, this may be explained by the proactive policy responses they adopted,” they wrote in their World Economic Forum blog post.
Canadian authorities to reopen schools, facilitating COVID-19 spread – The Canadian ruling elite has responded to the COVID-19 pandemic by adopting ever more explicitly the homicidal principle of “herd immunity.” With the full support of Justin Trudeau’s federal Liberal government in Ottawa, provincial governments have unveiled back-to-school plans in recent weeks that will accelerate the COVID-19 pandemic across Canada and endanger the lives of teachers, students and their families. Despite the minor differences over details, the provincial reopening plans have met with widespread opposition from parents and teachers. Some governments have had to announce last minute changes in an effort to dissipate opposition in order to impose their reckless policies on a reluctant population. In general, the essential content of these plans can be summarized as follows: classrooms at elementary school and the first three years of secondary school will reopen full-time and remain as crowded as before the pandemic, without any real protective measures being put in place. For the last two years of secondary school, the situation varies depending on the region of the country. While most provinces will require all students to attend school in person, Ontario has identified some school boards in urban areas that will allow half of the student body to attend school in person and the other half to do online learning. No province will seriously increase the education budget for the smaller class sizes required to ensure social distancing, or even support the so-called hybrid model, where some students are in the classroom and others take courses online. Ontario has indicated that parents worried about the pandemic will have the option of keeping their children at home to receive online instruction. To the extent that this is put in place, it will lead to greater social inequality since not all families can to provide their children with the space and equipment for distance learning or afford taking time off from work. The province has not even considered subsidizing parents who take time off, let alone protect them from being fired.In the province of Quebec, which was the hardest hit by the pandemic, there will be no social distancing between students in classrooms, and barely any in common areas. Other provinces, such as Ontario and British Columbia, will create “study groups” of about 60 students in which contact will be allowed on the playgrounds and in some common areas.
A risky game with health and lives as schools reopen throughout Germany – Millions of children and hundreds of thousands of teachers are beginning to return to schools. Full attendance is mandatory, with everything that goes with it – overcrowded classrooms, cancelled lessons, run-down sanitary facilities and crowded public transport and school buses on the way to school. At the same time, the number of new COVID-19 infections in Germany is at its highest level since the introduction of protective measures. In the last two days alone, 1,226 and 1,445 people were infected with the deadly coronavirus. In the USA, where a patient dies every one and a half minutes of the virus, parents or students now have to sign a statement exempting the school management from any liability if a child at school falls ill with COVID-19 and dies. Against this background, German government spokesman Steffen Seibert outlined two goals in dealing with the pandemic at a press conference in Berlin on Wednesday. “One is to keep the economy running as well as possible and the other is to get schools and the entire educational system back on track.” Seibert did not explain how many deaths this policy will cause – and the journalists present did not ask him. Seibert was summing up the attitude of the entire ruling class. On Saturday, in a joint statement, four major business associations declared with remarkable frankness, “It is high time that the regular operation of Berlin schools starts again.” It is “in the interest of employers and their employees” to send children back to school as soon as possible. The return of children to school so that parents are available for work sets the course for a further devastating spread of the pandemic, which will cause countless new deaths and unspeakable suffering. More and more studies show how dangerous it is to resume attendance at school. The claim that children are not infected or do not pass on the virus has been clearly refuted
Scotland’s schools reopen as COVID-19 infects students – Scotland’s 700,000 students were sent back to class at almost 2,500 primary and secondary schools last week by the Scottish National Party (SNP) government. SNP First Minister Nicola Sturgeon and Education Secretary John Swinney ordered the return of more than 50,000 teachers. The move is a trial run for the Johnson government’s homicidal back-to-school drive across the UK. Schools were reopened despite a resurgence in coronavirus infections. On Friday, 65 new COVID-19 cases were reported across Scotland, while 253 people are in hospital with the virus, three of them in intensive care. More cases have been identified in the first two weeks of August than in the whole of June and July. Fifty two cases were reported on Tuesday alone, although no deaths have been reported for 29 days. On August 13, however, Sturgeon reported the “R” number, which charts the number of new infections arising from any single case, stood at around 1.3. In Aberdeen, an outbreak led to a partial lockdown, with almost 200 cases. Pubs, cafes, and restaurants have been closed and some professional football matches have been cancelled. The Aberdeen outbreak led to cases in nearby North Angus. Five cases were also reported in Orkney. Most concerning are reports of outbreaks among school students. Eight pupils at Bannerman High School in Glasgow have tested positive for COVID-19, although none had yet returned to school. Despite the cluster, the school reopened last week. On Saturday, the Herald reported that Bannerman High’s cluster was related to an outbreak among senior management at a McVities biscuit factory in Glasgow, with four managers sent home. Workers at the Tollcross factory have repeatedly raised concerns over unsafe working conditions. One worker tested positive in April. Two pupils at St Ambrose High and one at St Andrews High, both in Coatbridge, tested positive. Two had returned to school for what was described as a “relatively short period of time.” Two staff at Peterhead Central primary school in Aberdeenshire tested positive prior to the reopening. The school will remain closed for one week.
Battered Eurozone Could See More Economic Stimulus in the Fall – WSJ – European Central Bank officials signaled that they could roll out new monetary stimulus in the fall to shore up economic growth, as the region wrestles with rising unemployment and a possible wave of corporate bankruptcies. While ECB officials signaled relief that the 19-nation currency union had avoided an even deeper downturn, they warned of possible turbulence ahead as governments start to wind down policies aimed at supporting businesses and workers through the coronavirus pandemic, according to the minutes, published Thursday. Infections are surging again across much of Europe, and governments are racing to prevent a full-fledged second wave of the pandemic. “Uncertainty about the economic outlook and the pandemic is keeping the central bank on high alert,” said Carsten Brzeski, an economist with ING Bank in Frankfurt. The ECB left its policy mix unchanged at its July 15-16 policy meeting after unveiling around $3 trillion of stimulus since March, measures that put the bank’s response to the Covid-19 pandemic on a par with the Federal Reserve’s. Recent economic data suggest that the eurozone economy is recovering after contracting by 12.1% in the three months through June from the previous quarter, exceeding the 9.5% drop in the U.S. over the same period. The officials will next meet to determine ECB policy on Sept. 9-10, when they will have fresh staff forecasts for growth and inflation that could help to steer their policy decisions. Analysts said the ECB was unlikely to unveil a new monetary stimulus in September, but could do so later this year if the economy fails to perk up. But the outlook is cloudy. The euro has risen strongly against the dollar in recent weeks, hurting the region’s large exporters in international markets. Tens of millions of European workers are still tapping job-furlough schemes, under which governments replace part of the income they have lost from working fewer hours. Some of these state-funded schemes are set to expire over the coming months, after which unemployment could rise. ECB officials warned there was “no room for complacency,” and stressed that the bank “had the tools and policy space to take further action if needed,” according to the minutes. The officials debated whether they would need to use up all of the bank’s euro 1.35 trillion ($1.6 trillion) program, known as the Pandemic Emergency Purchase Program, unveiled in separate decisions since March. Under the program, the ECB plans to buy eurozone government and corporate debt through June 2021. The minutes showed officials agreed to increase the size of the program and to tweak other policy tools if necessary. They pointed to the risk that Europe’s unemployment rate could rise in a lasting way, and that European businesses could soon face solvency issues as government support schemes are withdrawn.
Johnson government forced to retreat on A-level exam results – UK Prime Minister Boris Johnson’s government executed a dramatic U-turn yesterday, retreating on its social class-based downgrading of A-level results. The retreat comes less than three weeks before the Conservatives intend to force schools to reopen, and just over a month before universities resume. With final year exams cancelled by the COVID-19 pandemic, the government had teachers submit estimated grades for their students, most of which were then centrally moderated by an algorithm. Almost a quarter of Scottish results and around 40 percent of English, Welsh, and Northern Irish were originally lowered by at least a grade – over 3 percent in England were docked by two grades or more. Yesterday afternoon, however, Education Secretary Gavin Williamson announced with an apology that A-levels results for students in England will now be based solely on teacher-awarded grades, as will GCSE results, awarded later this week. The same retreat had earlier been carried out by the Scottish, Northern Irish, and Welsh governments. Last-ditch attempts by the Tories to offer a few unfeasible token concessions – including allowing students to use some mock exam grades in an unspecified process – fell to pieces. The precise impact of the government’s reversal will take time to come out – some students are already reporting that university courses they have now qualified for have since become full. For the initial assigning of grades, the defining influence on the government’s results “moderation” algorithm was social class. In Scotland, the most deprived areas saw the proportion of students receiving A-C grades reduced by 15.2 percent, while the percentage for the most affluent areas was only 6.9 percent. The same pattern played out in England. More than 10 percent of students in the lowest third for socioeconomic status had a teacher-awarded C grade lowered, compared to 8 percent in the highest third.This obscured more fine-grained inequalities. Research by social mobility charity UpReach found that subjects taken overwhelmingly by private school students were significantly more highly graded as a result of this process than those taken by the working-class majority. The number of students receiving an A* in Latin increased 10.4 percent, and the number receiving an A*/A in Classics by 10.4 percent.
include(“/home/aleta/public_html/files/ad_openx.htm”); ?>