Coronavirus Economic Weekly News 27September 2020

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 failed stimulus efforts, US employment, mortgage delinquencies, and nonpayment of rent and utility bills, plus articles on schools’ plans for this fall and problems with college campuses reopening. Election politicking has crowded out some other economic news. The bulk of the news is from the U.S., with a few 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.

In Unprecedented Monetary Overhaul, The Fed Is Preparing To Deposit Digital Dollars Directly To Each American – Ever since the Fed launched QE and NIRP, it has been making the situation it has been trying to “fix” even worse while blowing the biggest asset price bubble in history. To be sure, in the aftermath of the covid pandemic shutdowns the Fed has tried to short-circuit this process, and in conjunction with the Treasury it has launched “helicopter money” which has resulted in a direct transfer of funds to US corporations via PPP loans, as well as to end consumers via the emergency $600 weekly unemployment benefits . And yet, the lament is that even as the economy was desperately in need of a massive liquidity tsunami, the funds created by the Fed and Treasury did not make their way to those who need them the most: end consumers. Which is why we read with great interest a Bloomberg interview with two former Fed officials: Simon Potter, who led the Federal Reserve Bank of New York’s markets group i.e., he was the head of the Fed’s Plunge Protection Team for years, and Julia Coronado, who spent eight years as an economist for the Fed’s Board of Governors, who are among the innovators brainstorming solutions to what has emerged as the most crucial and difficult problem facing the Fed: get money swiftly to people who need it most in a crisis. The response was striking: the two propose creating a monetary tool that they call recession insurance bonds, which draw on some of the advances in digital payments, which will be wired instantly to Americans.As Coronado explained the details, Congress would grant the Federal Reserve an additional tool for providing support – say, a percent of GDP [in a lump sum that would be divided equally and distributed] to households in a recession. Recession insurance bonds would be zero-coupon securities, a contingent asset of households that would basically lie in wait. The trigger could be reaching the zero lower bound on interest rates or, as economist Claudia Sahm has proposed, a 0.5 percentage point increase in the unemployment rate. The Fed would then activate the securities and deposit the funds digitally in households’ apps. As Potter added, “it took Congress too long to get money to people, and it’s too clunky. We need a separate infrastructure. The Fed could buy the bonds quickly without going to the private market. On March 15 they could have said interest rates are now at zero, we’re activating X amount of the bonds, and we’ll be tracking the unemployment rate – if it increases above this level, we’ll buy more. The bonds will be on the asset side of the Fed’s balance sheet; the digital dollars in people’s accounts will be on the liability side.” Essentially, the Fed is proposing creating a hybrid digital legal tender unlike reserves which are stuck within the financial system, and which it can deposit directly into US consumer accounts. In short, as we summarized “The Fed Is Planning To Send Money Directly To Americans In The Next Crisis“, something we reminded readers of on Monday:

Fed Chair Powell Testimony: “Coronavirus Aid, Relief, and Economic Security Act” at 10:30 AM ET – Here is Fed Chair Powell’s prepared testimony: Coronavirus Aid, Relief, and Economic Security Act

Powell grilled by Congress over how Fed is helping Main Street -Federal Reserve Chairman Jerome Powell faced questions from U.S. lawmakers Wednesday over the central bank’s help for Americans compared with markets. “Our actions were in no way an attempt to relieve pain on Wall Street,” Powell said in a hearing before the House Select Subcommittee on the Coronavirus Crisis. The Fed chief said that with its Main Street Lending Program, the central bank has “done basically all of the things that we can think of.” “We’re looking to do more,” he added but said the central bank isn’t planning to make other big changes to the Main Street facility. “There’s nothing major that we’re looking at now,” Powell said. “There is nothing major that we see now that would be consistent with opening it up further.” Powell answered multiple, pointed questions about the efficacy of the Main Street program, which has been slow to start and seen little uptake from small-to-midsize businesses. One of the Fed’s emergency measures unleashed during the pandemic, the facility has seen low takeup – just about 0.3% of its $600 billion capacity – and has been criticized by lawmakers and companies alike. That compares with the Fed’s programs set up to keep credit flowing to public companies, which have generally been seen as a success in stabilizing job losses there and bolstering stock and bond markets. Banks have been reluctant to apply more lenient underwriting standards to the Main Street loans, 5% of which will remain on bank balance sheets after they sell the remaining 95% to the Fed. Last week, after the Fed’s September policy meeting, Powell said that the central bank was working on changes to the program, saying they were working to make it available “pretty much to any company that needs it and can service a loan.” The Fed on Friday tweaked guidance to banks, urging them to underwrite loans based on the borrower’s pre-pandemic conditions and its potential post-pandemic prospects. Powell was asked about lowering the minimum loan size in the program, where the smallest possible loan is currently $250,000. He said that credit, via the banking sector, is pretty broadly available for the companies targeted by the Main Street program, so those firms may be able to get lending outside of the Fed’s facilities.”The current facility would not work for much smaller loans,” Powell said. “We’d have to start a new facility that had much less protection for the taxpayer.” He added that the Paycheck Protection Program, which has expired, may be better suited to companies needing smaller loans.

Senator Sinema Tells Mnuchin and Powell She Lived in an Abandoned Gas Station as a Child; Asks What they Plan to Do About Wave of Coming Evictions – Fed Chair Jerome Powell looked genuinely troubled as Senator Kyrsten Sinema of Arizona shared her traumatic childhood during yesterday’s Senate Banking hearing. The witness panel included both Powell and Treasury Secretary Steve Mnuchin. Sinema first asked Mnuchin and Powell if they had ever been evicted from their home. Both said no. She then shared this: “Well, as you may know, I was homeless for a number of years as a child. And I wouldn’t wish it on anyone. I know the challenges that Arizona families are facing right now and it’s an important perspective for people here in Washington to understand. “When I was in elementary school, my Dad lost his job and my parents got divorced. We lost our car and our home and we were homeless for almost three years. We lived in an abandoned gas station without running water or electricity.” The New York Times has suggested that Sinema has embellished this story, but concedes that she and her family did live in an abandoned gas station; that it was a trying time; and that she had the grit to go on to graduate high school at age 16, as valedictorian of her class. Sinema was making the case that dramatically more stimulus from Congress is urgently needed. She said “According to the Census Bureau’s household Pulse Survey, over 300,000 Arizona families missed their July rent payments. Two-thirds of those households are families with children.” Sinema went on to remind Mnuchin and Powell that Arizona’s unemployment insurance, at $240 a week, is the second lowest in the nation and without Congress passing a continuation of the prior unemployment supplement of $600 a week, the eviction crisis is destined to get worse. Another emotional moment in the hearing came when Senator Sherrod Brown of Ohio appeared outraged at Mnuchin and President Trump praising themselves over the great job they’ve done. The exchange went like this:

• Brown: “Secretary Mnuchin, President Trump said with regard to the Coronavirus ‘I think we did a great job.’ Do you agree with that? Do you think the President’s done a great job with the Coronavirus?”
• Mnuchin: “I do. I think we’ve made tremendous progress …
• Brown: “Mr. Secretary, I’m sorry to cut you off. I hope that you and the President don’t dislocate your shoulders by patting yourselves on the back, saying ‘good job.’ We are 4 percent of the world’s population; we are 22 percent of the world’s deaths.”

Brown went on to remind Mnuchin where the U.S. economy stands compared to other countries: [ … ] Later in the exchange, Brown reminded Mnuchin that Republicans offered a “paltry” $500 billion stimulus plan when “economists all over the country wanted 3 and 4 and 5 times that amount.” Brown asked why Mnuchin was so successful in getting Republicans to fall in line and approve the massive $1 trillion-plus tax cut “where 70 percent of it went to the richest people in the country,” but he can’t get those same Republicans to fall in line to pass a larger stimulus bill during this economic crisis. Mnuchin said that he continues to negotiate with House Speaker Nancy Pelosi.The strangest moment in the hearing came when Senator Pat Toomey of Pennsylvania asked Mnuchin and Powell about the current availability of credit for credit-worthy borrowers in light of all of the Fed’s emergency lending operations.Powell gave a bizarre answer, stating, “We haven’t made a single loan to a corporate directly and yet something like a trillion dollars in financing has happened.” You can watch the full exchange at 53 minutes and 59 seconds (53:59) here.

Lawmakers Offer Support for Fed’s New Inflation Strategy – WSJ – The Federal Reserve last month changed the way it will implement its mandate from Congress, and lawmakers have no objection. Over three days of congressional hearings this week that concluded Thursday, Fed Chairman Jerome Powell received some accolades – and not a word of concern – from lawmakers about the central bank’s formal decision to seek periods of higher inflation to compensate for periods of lower inflation. Mr. Powell also said Thursday he didn’t see a need to change the central bank’s mandate to add a new focus on racial equality because the Fed is already doing what a new proposal would require. Congress assigns two broad goals to the Fed – to maintain stable prices and to secure full employment – but it leaves it up to the central bank how to achieve those goals. The Fed’s new strategy represents the biggest change to its operating framework since 2012, when the central bank adopted a 2% inflation target to define the first part of its mandate. The initial inflation target drew significant concerns from lawmakers on both sides of the aisle for years leading up to its adoption. The Fed didn’t seek formal approval from Congress for either the initial target or the latest change. Lawmakers who have in the past raised concerns about allowing higher inflation didn’t press Mr. Powell over the changes or raise any objections this week, while others offered their compliments. “I am not at all exaggerating when I say this new framework is the most important thing that has happened to monetary policy – indeed, in economic policy – in 40 years,” Rep. Denny Heck (D., Wash.) said on Tuesday. The changes are “great news,” said Rep. Trey Hollingsworth (R., Ind.). “I really appreciate you doing that and I think it’s going to be a positive for the Fed and for the American economy going forward.” The new policy highlights a deficiency the Fed’s old one confronted in a world with more frequent or extended episodes in which interest rates can’t be lowered once falling to near zero. If the central bank targets 2% inflation and consistently falls short, expectations of future inflation will slide, making it much harder to achieve the target. The new framework codifies two important changes. First, it effectively raises the Fed’s inflation target by saying the central bank should take past misses of the 2% target into account and seek periods of moderately higher inflation to compensate. Second, officials won’t raise interest rates simply because unemployment rates fall below a level estimated to put pressure on prices. In doing so, they have set aside the consensus that guided central bank policy following the runaway inflation of the 1970s.

Chicago Fed: “Index suggests slower, but still above-average growth in August” – “Index suggests slower, but still above-average growth in August.” That is the headline for this morning’s release of the Chicago Fed’s National Activity Index, and here is the opening paragraph from the report: Led by some further moderation in the growth of production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.79 in August from +2.54 in July. Two of the four broad categories of indicators used to construct the index made positive contributions in August, but all four categories decreased from July. The index’s three-month moving average, CFNAI-MA3, moved down to +3.05 in August from +4.23 in July. [Download report] The Chicago Fed’s National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed’s website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth. The first chart below shows the recent behavior of the index since 2007. The red dots show the indicator itself, which is quite noisy, together with the 3-month moving average (CFNAI-MA3), which is more useful as an indicator of the actual trend for coincident economic activity.

Seven High Frequency Indicators for the Economy –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). The seven day average is down 69% from last year (31% of last year). There has been a slow increase from the bottom. 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. The 7 day average for New York is still off 66% YoY, and down 31% in Texas. There was a surge in restaurant dining around Labor Day – hopefully mostly outdoor dining. 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 September 17th. Movie ticket sales have picked up over the last few weeks, and were at $15 million last week (compared to usually under $200 million per week in the late Summer / early Fall). This graph shows the seasonal pattern for the hotel occupancy rate using the four week average.The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels – prior to 2020). This data is through September 12th. Hotel occupancy is currently down 30% year-over-year (and that is boosted by fires and a hurricane). This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week last year of . At one point, gasoline supplied was off almost 50% YoY. As of September 11th, gasoline supplied was only off about 5.2% YoY (about 94.8% 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.” This is just a general guide – people that regularly commute probably don’t ask for directions. There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. This data is through September 18th for the United States and several selected cities. The graph is the running 7 day average to remove the impact of weekends. According to the Apple data directions requests, public transit in the 7 day average for the US is still only about 56% of the January level. It is at 49% in Chicago, and 59% in Houston. Here is some interesting data on New York subway usage (HT BR). This graph is from Todd W Schneider.This data is through Friday, September 18th. Schneider has graphs for each borough, and links to all the data sources.

Q3 GDP Forecasts — From Merrill Lynch: We expect 2Q GDP to be unrevised at -31.7% qoq saar in the third and final release. We continue to track 27% qoq saar for 3Q GDP. [Sept 25 estimate] From Goldman Sachs: The details of the durable goods report were broadly consistent with our expectations. We left our Q3 GDP tracking estimate unchanged at +35% (qoq ar). [Sept 25 estimate] From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 14.1% for 2020:Q3 and 5.0% for 2020:Q4. [Sept 25 estimate] And from the Altanta Fed: GDPNow: The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2020 is 32.0 percent on September 25, unchanged from September 17 after rounding. [Sept 25 estimate]It is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR). A 30% annualized increase in Q3 GDP, is about 6.8% QoQ, and would leave real GDP down about 4.2% from Q4 2019. The following graph illustrates this decline. This graph shows the percent decline in real GDP from the previous peak (currently the previous peak was in Q4 2019). This graph is through Q2 2020, and real GDP is currently off 10.2% from the previous peak. For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak. The black arrow shows what a 30% annualized increase in real GDP would look like in Q3. Even with a 30% annualized increase (about 6.8% QoQ), real GDP will be down about 4.2% from Q4 2019; a larger decline in real GDP than at the depth of the Great Recession.

CBO on the Macro Impact of Pandemic Recovery Packages Thus Far – Menzie Chinn – On Friday, the CBO released The Effects of Pandemic-Related Legislation on Output. In March and April of 2020, four major federal laws were enacted to address the public health emergency and the economic distress created by the 2020 coronavirus pandemic. That legislation provides financial support to households, businesses, and state and local governments. In this report, the Congressional Budget Office estimates the legislation’s effects on economic output.

• Deficits. The legislation is projected to add $2.3 trillion to the deficit in fiscal year 2020 and $0.6 trillion in 2021.
• Short-Term Effects. CBO estimates that the legislation will increase the level of real (inflation-adjusted) gross domestic product (GDP) by 4.7 percent in 2020 and 3.1 percent in 2021. From fiscal year 2020 through 2023, for every dollar that it adds to the deficit, the legislation is projected to increase GDP by about 59 cents.
• Longer-Term Effects. By increasing debt as a percentage of GDP, the legislation is expected to raise borrowing costs, lower economic output, and reduce national income in the longer term.
• Uncertainty. The estimates in this report are subject to considerable uncertainty, especially because of factors associated with the pandemic.

Here’s a graphical depiction of GDP’s trajectory under the counterfactual of no-Covid-19 recovery legislation: I based Figure 1 on the estimates of macro impact contained in Table 2: Source: CBO, The Effects of Pandemic-Related Legislation on Output (September 18, 2020). These estimated impacts in turn are based on the estimated spending levels associated with the legislation so far enacted. Source: CBO, The Effects of Pandemic-Related Legislation on Output (September 18, 2020). As discussed on many occasions in this blog, the multiplier associated with each of these spending provisions depends on a variety of factors (spending vs. transfers, for instance), and the overall multiplier effect in particular depends on the conduct of monetary policy (well, we know now that the Fed has committed to three years of essentially zero Fed funds rates) and whether there is slack in the economy. As noted in the report (page7): In CBO’s assessment, the effects of changes in spending or revenues on output are larger when the economy is weak or when short-term interest rates are near zero and are expected to remain there for several years, a situation known as being at the effective lower bound.12 At such times, the Federal Reserve would not respond, in CBO’s view, by raising short-term interest rates to restrain the boost in overall demand. In contrast, if the increase in spending or the reduction in revenues occurred when output was at or above its potential level, the Federal Reserve would probably raise the path of short-term interest rates to prevent inflation from rising above its long-term goal, thereby restraining the boost in overall demand and output. CBO expects the economy to operate considerably below its potential level over the next several years. The Federal Reserve is therefore expected to keep interest rates low over that period. As a result, the legislation’s changes to federal spending and revenues – most of which are projected to occur in 2020 and 2021 – will boost overall demand and output more than they would under normal economic conditions, CBO expects.

Implications of a “No Recovery Package” Outcome — Menzie Chinn – From Deutsche Bank on Sunday: In the US, fiscal uncertainty is a major issue. As outlined above, we now assume that significant further support will not be forthcoming until after the election. The resulting drop in income support for households is already beginning to depress activity and we see GDP growth slowing to near zero in Q4 as consumer spending slides. Growth will pick up in Q1 with some post-election fiscal support. This manifests in zero (0) growth in 2020Q4. Figure 1: GDP (black), Deutsche Bank (blue), WSJ September consensus (red), all in billion Ch.2012$, SAAR. Source: BEA 2020Q2 2nd release, DB World Outlook Update (Sep 20, 2020), WSJ September survey, author’s calculations. Today, Bloomberg notes: After four rounds of U.S. aid totaling nearly $3 trillion, fiscal stimulus is running out: Bloomberg Economics’ analysis shows that under a no-stimulus baseline scenario through year-end, total income flowing to households will transition from unprecedentedly strong for a recession, to just so-so. That in itself would be enough to subtract 5 percentage points from fourth-quarter gross domestic product compared with a counterfactual scenario that includes an extension of stimulus measures. Funding problems for states and small businesses are poised to add to the drag. This point is illustrated in the figure depicting personal income around recessions: What do academic economists think? From the latest round of the IGM/FiveThirtyEight Covid-19 panel: The results also bring into focus how the economists are viewing the election results and overall political climate. We’ve written many times that they believe an infusion of additional money from Congress – whether in the form of enhanced federal unemployment insurance or another series of stimulus payments – is paramount to stabilize the economy through the recovery. According to our survey results, the biggest economic risk for 2021 is the possibility that no additional stimulus is passed by November 2020. And the economists see Democrats’ control of Congress as having a significant effect on growth potential in 2021, likely because they have been much more willing to pass government spending bills. “I think that failing to pass fiscal stimulus is the biggest downside risk,” said Jonathan Wright, an economist at Johns Hopkins University who has been consulting with FiveThirtyEight on the survey. “And that’s probably made more likely by the RBG fight.” In other words, no additional fiscal stimulus now is a recipe for flatlining in Q4.

Enhanced Benefits and Outlook: Continuation vs. End — Menzie Chinn – From Wells Fargo Economics today: To simulate a continuation of unemployment benefits (Scenario 1), we held monthly nominal personal disposable income constant at its July level of $1.49 trillion (before the PUC expired) through the end of 2021. To simulate the expiry of benefits (Scenario 2), we subtracted the $75 billion of monthly PUC payments from income levels in August through December, and then we let the $16.8 billion of monthly PUA and PEUC payments expire starting in January. We then held that level of income constant through the end of 2021. Here’s the picture: … That is, instead of an approximately 6% growth (SAAR) in 2020Q4, we get -3.6%. That’s what their model projects, although given employment growth, the actual Q4 number might well be better. The more appropriate interpretation is that that keeping enhanced benefits at the nominal level which they were at July would have added about 9.5 percentage points of growth in 2020Q4 (which is about 2.5 percentage points, not annualized).

Fed Officials Step Up Calls for More Government Spending to Speed Economic Recovery – WSJ -Federal Reserve officials stepped up calls for additional government spending to avoid an uneven and protracted economic recovery from the coronavirus pandemic.The recovery would move along faster “if there is support coming both from Congress and from the Fed,” Chairman Jerome Powell said during the second of three days of congressional testimony Wednesday.Chicago Fed President Charles Evans told reporters that his projection that the unemployment rate would fall below 6% by the end of next year had been premised on around $1 trillion in additional fiscal relief.”If that doesn’t happen, then I think it’s going to be a lot harder, and much more unlikely that we make that much progress,” he said.The Fed committed last week to a much longer interval of low rates than it did initially after the 2008 financial crisis. Officials said they would hold short-term rates near zero until inflation reaches 2% and is likely to stay somewhat above that level, something most officials don’t see happening in the next three years.But Mr. Powell and his colleagues said Congress and the White House, more than the Fed, had the power to hasten a faster recovery. “The power of fiscal policy is really unequaled by anything else,” Mr. Powell told lawmakers on a House panel overseeing the U.S. response to the coronavirus.Bond investors have turned their attention to additional measures the Fed could take to lower borrowing costs, including adjusting the composition of the central bank’s asset purchases to buy more longer-term securities as it did in so-called quantitative easing programs after the 2008 crisis.Boston Fed President Eric Rosengren said it was premature to say whether the Fed needed to take such a step. “The lack of fiscal policy is a much bigger problem than what we’re doing with our balance sheet,” he said in an interview. “It’s not that it won’t help, but I don’t think it is of the economic magnitude of fiscal policy.”In addition to its low-rate pledges, the Fed is buying $120 billion in Treasury and mortgage securities a month to hold down borrowing costs. Unlike in its previous quantitative easing program that lasted from 2012-14, the Fed is buying Treasurys of all maturities rather than concentrating on longer maturities, which can push down long-term yields. Those yields are much lower than they were at any time after the 2008 crisis.

Fed officials push for new corporate stimulus package – Federal Reserve officials have launched what amounts to a full court press aimed at ensuring that Congress provides a further fiscal stimulus to corporations, as the COVID pandemic continues out of control and the limited revival of the US economy stalls. While Fed representatives always couch their remarks in terms of giving assistance to the economy and even to workers, the fall in the stock market since the beginning of the month – the most significant downturn since the plunge in mid-March, when all financial markets froze – is the underlying concern. Chairman of the Federal Reserve Jerome Powell (AP Photo/Susan Walsh) The push began on Tuesday, when Fed Chair Jerome Powell gave testimony before the House of Representatives Committee on Financial Services. Powell repeated earlier calls for fiscal action, on top of the more than $3 trillion made available under the CARES Act. He warned that while many economic indicators had shown an improvement, both employment and overall economic activity “remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.” Powell said the path forward would depend on “keeping the virus under control, and on policy actions taken at all levels of government” – a call for further stimulus measures. Pointing to the measures taken by the Fed, which amount to an injection of around $3 trillion into the financial markets, he said they were designed to support the functioning of private markets, and stressed that the central bank had only lending, not spending, powers. While some borrowers would benefit from its programs, for others a loan that was difficult to repay might not be the answer, and in those cases “direct fiscal support may be needed.” Together with the repetition of the commitment, at the start of his testimony, that the Fed would use all its tools “for as long as it takes,” these remarks temporarily halted the market slide, resulting in a slight upturn after a major fall on Monday. But the downturn resumed on Wednesday, when the Dow fell more than 500 points, or 1.9 percent, the S&P 500 dropped 2.4 percent and the Nasdaq lost 3 percent. The market falls brought forward a series of comments by Fed officials on the need for government action, held up in Congress because of disagreements between Republicans and Democrats over the size and direction of any new measures. In further testimony on Wednesday, Powell said economic recovery would move faster “if there is support coming both from Congress and the Fed. The power of fiscal policy is really unequalled by anything else.”

The House Moves to Avert a Shutdown – – House Democrats reached a deal with the White House yesterday on a stopgap spending measure that seeks to avert a government shutdown just weeks before the November election.The bill now needs to be approved by the Senate before it can be sent to President Trump’s desk. Congress has been unable to agree on the broader spending bills that would keep the government funded when the new fiscal year starts on Oct. 1.There has also been virtually no progress on a new round of coronavirus relief legislation, but a bipartisan group of lawmakers is pressing for the House to remain in session until a bill is passed.In a letter signed by 20 Democrats and 14 Republicans, the lawmakers wrote, “Our constituents do not want us home campaigning while businesses continue to shutter.” The House passed a stimulus package of more than $3 trillion in May, after which Senate Republicans proposed a narrower measure, but negotiations have been stalled since then.

House passes bipartisan stopgap funding bill to avert government shutdown at month’s end (AP) – In a sweeping bipartisan vote that takes a government shutdown off the table, the House passed a temporary government-wide funding bill Tuesday night, shortly after President Donald Trump prevailed in a behind-the-scenes fight over his farm bailout.The stopgap measure, which next heads to the Republican-controlled Senate, will keep federal agencies fully up and running into December, giving lame-duck lawmakers time to digest the election and decide whether to pass the annual government funding bills by then or kick them to the next administration. The budget year ends Sept. 30.Trump announced a new $13 billion allotment of bailout funding at a political rally in Wisconsin last week.The 359-57 vote came after considerable behind-the-scenes battling over proposed add-ons. The final agreement gives the administration continued immediate authority to dole out Agriculture Department subsidies in the run-up to Election Day. House Speaker Nancy Pelosi, D-Calif., retreated from an initial draft that sparked a furor with Republicans and farm-state Democrats.Instead, in talks Tuesday, Pelosi restored a farm aid funding patch sought by the administration, which has sparked the ire of Democrats who said it plays political favorites as it gives out bailout money to farmers and ranchers.In return, Pelosi won COVID-related food aid for the poor, including a higher food benefit for families whose children are unable to receive free or reduced lunches because schools are closed over the coronavirus. Another add-on would permit states to remove hurdles to food stamps and nutrition aid to low-income mothers that are more difficult to clear during the pandemic. The deal permitted the measure to speed through the House after a swift debate that should ensure smooth sailing in the GOP-held Senate before next Wednesday’s deadline. There’s no appetite on either side for a government shutdown.

Democrats Prepare New Coronavirus Aid Proposal – WSJ – House Democrats are readying a new, scaled-down package of coronavirus aid that would include assistance to airlines, restaurants and small businesses, according to people familiar with the matter, but Republicans said the chances of a deal before Election Day remained slim. House Speaker Nancy Pelosi (D., Calif.) is aiming for a price tag of around $2.4 trillion, according to Democratic aides, in the range of what Mrs. Pelosi has said she would be willing to accept in negotiations. The White House has indicated it could support spending as much as $1.5 trillion, though many Senate Republicans have said they wouldn’t back that level of spending. “We want a bill passed and signed so that’s what our focus is, trying to get an agreement before we go home,” said House Majority Leader Steny Hoyer (D., Md.). Mr. Hoyer said Democrats were focused on working to find a deal that both chambers could accept and was noncommittal on whether the House would vote on the legislation without an agreement with the White House. Almost immediately, centrist Democratic lawmakers began circulating a letter that would encourage leadership to hold a vote on the package, according to aides. Treasury Secretary Steven Mnuchin said Thursday that he and Mrs. Pelosi had spoken repeatedly in recent days in a successful, separate effort to reach an agreement on keeping government funded until Dec. 11, and they also plan to keep the door open for coronavirus talks. “We’ve agreed to continue to have discussions” about coronavirus aid, Mr. Mnuchin said in testimony before the Senate Banking Committee. “I think there are areas of support. Let’s pass things that we agree on quickly and we can always come back.” Reports of a new plan got a skeptical reaction from Republican senators. Senate Appropriations Committee Chairman Richard Shelby (R., Ala.) said Thursday there was a “slim chance” that the new proposal could ease the partisan gridlock over a relief package. “I think that’s too big,” Sen. Roy Blunt (R., Mo.) said when asked about a proposal over $2 trillion. Centrist Democrats have been pressuring Mrs. Pelosi to put forward another aid bill, even if it is smaller than the $3.5 trillion bill the House passed in May. That legislation didn’t come up in the GOP-controlled Senate.

The Senate holds a COVID-19 hearing as US tops 200,000 COVID-19 deaths – The number of individuals infected with COVID-19 is now more than 32 million globally, of which almost one million have perished. Since early July, when lockdowns were lifted, and economies were opened, the number of new cases has been steadily growing, and the number of daily deaths has kept abreast with 40 to 50 thousand dying each week. In this regard, the United States has proven incapable of containing and quelling the pandemic by any reputable public health standard. With 7.1 million cases of COVID-19 and over 206,000 deaths, and despite having one of the highest per capita testing with over 300,000 tests per million population, it leads in almost every grim category, which underscores the obvious – the inability of the most powerful imperialist country to use its resources to protect the population. The policy of herd immunity being pursued, as the perspective noted yesterday, is one of “social euthanasia” where the elderly and infirmed, considered unproductive and therefore worthless, are allowed to be culled by the infection, absolving them of supposedly any direct responsibility. The recognition of the 200,000 deaths milestone by every major media outlet also means that damage control measures must be brought to bear on the chance of seeming too smug for “mission accomplished” claims as schools and universities have moved to ensure in-class education inaugurated by the return of 90,000 pre-K and special education students in New York City. This was precisely what was behind the political theater yesterday that saw the Committee on Health, Education, Labor, and Pensions hearing on the US’s response to the coronavirus, first lightly censuring, then offering their confidence, all to assure the population’s flagging trust in US health institutions. This comes on the heels of acknowledgment that the Trump administration had been meddling with the CDC’s weekly scientific reports and publishing of guidance that did not support the president’s outlook. Additionally, recent guidance on testing asymptomatic individuals and retraction of aerosolization of the virus has all but irrevocably tarnished the reputation of the revered US CDC. The fabulous four – Dr. Anthony Fauci, Dr. Robert Redfield, Admiral Brett Giroir, and Dr. Stephen Hahn – testified in support of their tireless and committed response to the pandemic. Dr. Hahn told the panel that “every one of the decisions we have reached has been made by career FDA scientists based on science and data, not politics.” He then ensured the panel that he would “not permit any pressure from anyone to change that.”

Trump on coronavirus pandemic: “Virtually nobody” affected – The United States has now surpassed the horrific milestone of 200,000 official deaths from the coronavirus, more than the total number of Americans who were killed in World War I, Korea and Vietnam combined. The actual toll, measured by “excess deaths” over the average in previous years, has surpassed a quarter of a million. Worldwide, the number killed, based on reported figures, will surpass one million before the end of the month. In the face of this horrifying toll on human life, US President Donald Trump declared on Monday that the virus affects “virtually nobody.” At a campaign rally in Toledo, Ohio he stated, It [the coronavirus] affects elderly people, elderly people with heart problems and other problems. If they have other problems. That’s what it really affects. That’s it. … Below the age of 18, like, nobody. They have a strong immune system, who knows? You look. … Take your hat off to the young, because they have a hell of an immune system. But it affects virtually nobody. It’s an amazing thing. Trump concluded his statement with the demand that schools be reopened, “Open your schools. Everybody, open your schools.” As a factual matter, Trump’s claim that the pandemic affects only “elderly people” is blatantly false. As he himself acknowledged in March, in one of the recordings released by Bob Woodward earlier this month, “Now it’s turning out it’s not just old people” affected by the virus. Twenty percent of those who have been killed in the US, or more than 40,000 people, were under the age of 65. The longterm impact and adverse health consequences for those who contract the virus and live remain unknown. Moreover, with the death toll expected to rise as high as 400,000 by the end of the year, the pandemic will affect “virtually everyone,” in the form of the death or serious illness of a family member, friend, teacher or coworker. Even for Trump, from whom one expects almost anything, there is something chilling in the indifference with which he speaks about the deaths of hundreds of thousands of people. However, to view this in individual terms, an expression of the particular sociopathic personality of the present occupant of the White House, would miss the essential significance. Trump is speaking not just for himself but for a class.

Trump delivers anti-China tirade to United Nations – US President Donald Trump’s recorded speech delivered to the opening session of the United Nations General Assembly Tuesday consisted of a hysterical anti-Chinese rant combined with a lying coverup of the disastrous US response to the COVID-19 pandemic and boasting about the prowess of the American military and its ability to blow up the world. The unprecedented character of the session, which is being held almost entirely virtually, with world heads of state having sent in recorded remarks rather than making speeches from the assembly’s green marble rostrum, is a graphic expression of the impact of the global pandemic, with nearly one million deaths recorded worldwide. The assembly marked the 75th anniversary of the UN, which was formed after the end of the Second World War and its slaughter of more than 70 million human beings with the pledge of saving “succeeding generations from the scourge of war.” The body’s organic incapacity to make good on this promise under the existing capitalist order has been made abundantly clear over the course of its three-quarters-of-a-century existence. It directly participated in the US war that claimed the lives of two million Koreans, was incapable of preventing Washington’s war against Vietnam that killed three million and has facilitated three decades of uninterrupted US wars in the Middle East that have killed millions more, while creating the greatest refugee crisis since World War II. Trump’s speech and US actions in recent days have confirmed once again that the ravages of the coronavirus have done nothing to curb the drive toward imperialist war, but on the contrary have only accelerated it. While the allotted time for speeches from heads of state to the General Assembly is 15 minutes – and most traditionally substantially exceed this limit – Trump’s speech clocked in at barely seven minutes. Nonetheless, he managed to mention China no less than 12 times, beginning in his first few words with the description of the global pandemic as the “China virus.” He went on to demand twice in his brief address that China be “held accountable,” while blaming the country for lying about the coronavirus, subverting the World Health Organization, polluting the environment, over-fishing and destroying “vast swaths of coral reef.”

Chinese President Xi Issues Warning At UN Of “Clash Of Civilizations” – President Xi Jinping defended China’s ambitions Tuesday in a speech to the UN, warning against the danger of a “clash of civilizations.” In a prerecorded address Xi said that the world must “oppose politicization and stigmatization” over the pandemic, urging global leaders to embrace the “concept of a big family … and avoid falling into the trap of a clash of civilizations.” The U.S. and China have seen tensions rise over a plethora of issues: the origins of the coronavirus, trade and tech dominance, security, Hong Kong, and Taiwan as well as the long-disputed South China Sea.The U.S. has also called China out over its ambitions to control the strategically pivotal South China Sea as well as for its bid to crush democracy movements in Hong Kong and Taiwan.Xi reassured world leaders his country had no desire for “hegemony, expansion or sphere of influence,” The Guardian reported. “China has no intention to enter a Cold War with any country,” he said, insisting Beijing is instead a bulwark of international systems such as the World Trade Organization and a willing partner in the face of diplomatic spats. “We insist on dialogue to bridge differences and negotiation to resolve disputes,” Xi added. Xi urged the world to “join hands to uphold the values of peace, development, equity, justice, democracy and freedom shared by all of us.” However, as A new post reported, China’s military has painted a much different picture releasing several frightening videos aimed at the U.S. More recently, the People’s Liberation Army Air Force published a video of nuclear-capable H-6 bombers carrying out a simulated attack on Andersen Air Force Base on the U.S. Pacific island of Guam. That isn’t the first video release that seems aimed at the U.S. either. The Chinese People’s Liberation Army (PLA) has previously published a video on social media showing Hong Kong air defense drills as Anewspost reported.This also follows an incident last month when Chinese military drills were disrupted by the U.S. and China responded firing two medium-range “ship killer” projectiles into the South China Sea as a warning.The PLA has been increasing the number of military drills across East Asia as relations with the U.S continue to deteriorate. This comes after two American aircraft carriers held an unusual exercise in the South China Sea in July. As well as after a mysterious visit to Taiwan by Health and Human Services Secretary Alex Azar.Upon Azar’s visit to Taiwan, Chinese state media angrily threatened to retaliate by holding live-fire missile drills near Taiwan and Guam.China claims Taiwan is its territory and threatens to use military force to bring under its control the island that is a self-governing democracy and close U.S. ally, CBS reported. Trump also made a speech at the UN virtually, the U.S. President stated the UN “must hold China accountable for their actions,” before listing a litany of alleged crimes by Beijing.

The physician accused of performing unwanted hysterectomies in an ICE detention center is not a board-certified OB-GYN – Mahendra Amin, the physician accused of performing unwanted or unnecessary gynecological procedures at an immigrant-detention facility, is not certified by the American Board of Obstetrics and Gynecology, The Daily Beast reported. On Monday, several immigration-advocacy groups representing a whistleblower filed a complaint to the Office of the Inspector General, alleging “jarring medical neglect” and the occurrence of unwanted and unnecessary hysterectomies at the Irwin County Detention Center in Ocilla, Georgia.In the complaint, Dawn Wooten, a licensed practical nurse who was previously employed by the center and is represented by Project South and Government Accountability Project, reported witnessing a large number of hysterectomies performed on immigrant women detained in the facility.”Everybody he sees has a hysterectomy – just about everybody,” Wooten said of one doctor who she described as “the uterus collector.” Three lawyers cited by NBC News later identified the physician as Mahendra Amin.Wooten also said she believed the women in the center did not “really, totally, all the way understand” what was happening to them during the procedures.Tony H. Pham, the Senior Official Performing the Duties of Director for the U.S. Immigration and Customs Enforcement, said in a statement to Insider that the recent allegations by the independently contracted employee “raise some very serious concerns that deserve to be investigated quickly and thoroughly.”

Trump Approves Final Plan to Import Drugs From Canada ‘for a Fraction of the Price’ – President Donald Trump, outlining his “America First Health Plan” on Thursday, announced that his administration will allow the importation of prescription drugs from Canada. The final plan clears the way for Florida and other states to implement a program bringing medications across the border, despite the strong objections of drugmakers and the Canadian government. But it does not allow states to import biologic drugs, including insulin. Florida, the biggest swing state in the presidential election, is one of six states to pass laws seeking federal approval to import drugs. Trump’s announcement came the same day counties in Florida began sending out vote-by-mail ballots. Florida Gov. Ron DeSantis, a close ally of the president’s, is a strong advocate of importing drugs. His administration has already advertised for a contractor to run the state program and is expected to announce Tuesday which companies have bid for the three-year, $30 million state contract. Congress has allowed drug importation since 2003 but only if the secretary of the Department of Health and Human Services certified it is safe. That had never occurred until Secretary Alex Azar did it Wednesday, according to a letter he wrote to congressional leaders. Implementation under the administration’s final rule “poses no additional risk to the public’s health and safety and will result in a significant reduction in the cost of covered products to the American consumer,” Azar said in the letter KHN obtained Thursday. The rule noted, however, that HHS is unable to make any estimates about savings because it doesn’t know which drugs will be imported. Prices are cheaper north of the border because Canada limits how much drugmakers can charge for medicines. The United States lets the free market dictate drug prices. Even though insulin is not included among the drugs covered by the rule, the Trump administration Thursday issued a request for proposals seeking plans from private companies on how insulin could be safely brought in from other countries and made available to consumers at a lower cost than products here. The request specified it would have to be insulin that was once in the United States and sent to other nations before being brought back. The pharmaceutical industry has long fought efforts on drug importation, arguing that it would disrupt the nation’s supply chain and make it easier for unsafe or counterfeit medications to enter the market. “We are reviewing the final rule and guidance that were released; however, we continue to have grave concerns with drug importation that exposes Americans unnecessarily to the dangers of counterfeit or adulterated drugs,” said a spokesperson for the Pharmaceutical Research and Manufacturers of America, an industry trade group. “It is alarming that the administration chose to pursue a policy that threatens public health at the same time that we are fighting a global pandemic.”

Nun criticizes Catholic group for giving Barr award for ‘Christlike behavior’ – A nun criticized the National Catholic Prayer Breakfast (NCPB) for its plans to award Attorney General Bill Barr for “Christlike behavior” on Wednesday morning. Sister Helen Prejean slammed the Catholic organization for announcing the Christifideles Laici Award would be given to Barr, who is Catholic, at the annual breakfast. The award honors the recipient for “Exemplary Selfless and Steadfast Service in the Lord’s Vineyard,” according to the NCPB website. Prejean, an advocate against the death penalty, argued in a tweet Tuesday night that the attorney general has not demonstrated “Christlike behavior” after the Department of Justice (DOJ) resumed federal executions this year. “A.G. Barr has ordered the executions of six men with at least one more on the calendar,” she wrote on the social media platform. “What is ‘Christlike’ about using discretionary power to kill?” Another nun, Sister Simone Campbell, the executive director of the Catholic social justice group Network, told Newsweek she was “horrified” Barr was the recipient of the award. “I am horrified that they are giving an award to Attorney General Barr who had reinstituted executions of people on death row, which is shocking and counter to Catholic social teaching,” she said. “It is abundantly clear, ‘thou shalt not kill’, and he is doing that and he is being given an award.” The NCPB created the award last year “to help highlight these good works and those who serve the Church so well.” The virtual breakfast, which was postponed since March due to the pandemic, started at 11 a.m. “Attorney General William Barr’s work – which includes teargassing peaceful protesters in front of the White House, defending the president’s lawless corruption and attacks on American elections, and reinstating federal executions – has nothing to do with service to the Lord, and cannot be described as fidelity to the Church,” the petition reads. “As fellow Catholics and other Christians, we call on the NCPB to cancel this award for Barr immediately, and avoid any further appearance of endorsing Donald Trump or his Cabinet members so close to an election,” it continues. The NCPB and the Justice Department did not immediately return requests for comment. Faithful America, a progressive Christian group, noted in a release that the award will be given the same week the DOJ will conduct two executions.

Silly Season – The corporate media speaks as one in proclaiming that, as sure as anyone killed in a motorcycle crash is a Covid fatality, if Trump says he likes puppies that’s a threat to refuse to leave the White House after the election which, this media is certain, has already been won by the corporate-technocratic congealment centering on the Democratic Party. Antifa shock troops continue to rampage in the streets amid an orgy of looting and fire. We’re reaching the extreme of that odd reversal which commenced in 2016, where Republicans and Democrats flipped polarity with the former suddenly lacking all conviction while the latter rage with passionate intensity. Trump himself for four years never lifted a finger toward building any kind of movement outside the government and party, nor has anyone else taken up that job. I never would’ve thought it would turn out to be the Democrats that would be fastest with the mostest in fielding a street shock army threatening a coup. This coup attempt will be step two in the technocratic globalist counterattack against rising anti-global revanchist populism. Step one was the pre-planned terrorist propaganda-lockdown assault using Covid-19 as a pretext. Whether SARS-COV-2 was deliberately engineered in a lab and released last autumn, or whether the system waited opportunistically for globalization to roust it out of a cave somewhere (the timing strongly indicates the former), the terror-lockdown campaign was used to smash mass protest everywhere, further atomize all social relations in general and demolish every level of economy from global to local. This “Great Reset” is by far the most extreme exercise in disaster capitalism ever undertaken. There are many proofs that the entire Covid-based assault has been history’s biggest lie ever. One of the best is the fact that all the same government and media operatives that were shrieking loudest about the alleged need to liquidate all small and locally-based economic structures, superstition trinkets and hex distancing for individuals, groups to cease to exist at all, suddenly dropped all that and began cheering as one with the advent of the BLM/Antifa street action. That’s because this launched step two of the US’s very own color revolution whose ultimate goal is to topple Trump, preferably by “winning” through election fraud, by main force if necessary. Even though there’s practically no substantive difference between what Trump wants and what globalist technocracy wants (Trump has been less warlike than technocracy prefers), he’s undisciplined and mercurial and embarrasses the carefully constructed propaganda facade of neoliberalism. His Kaiser-like idiot bluster, strategic and tactical boneheadedness and lack of any propaganda filter threaten to disenchant friends, alienate reluctant allies and embolden opponents and enemies all toward the effect of speeding the inevitable collapse of the empire.

Jamie Dimon Says He Supports Taxing The Rich, But Opposes Dems’ Wealth Tax – With the specter of socialism looming over the Democratic primary, JP Morgan CEO Jamie Dimon decided to take a stand. Although he seemed to have no problem with socialism when he took oodles of government money during the financial crisis, Dimon penned a shareholder letter, and made several media appearances where he defended American capitalism as a peerless wealth-creation machine. Now, with two months to go until the election, and California and New York battling to enact the first state-level “wealth tax” in the nation, “St. Jamie” Dimon is back. And as Capital Economics Chairman Roger Bootle warns that COVID-19 could usher in a wave of (confiscatory) wealth taxes around the world, Dimon is warning that while he fully supports raising taxes on “people like me”, a wealth tax that targets savings and/or assets simply isn’t the way to do it. “A wealth tax is almost impossible to do,” Dimon said during an interview with CNBC at the JP Morgan India summit after being asked about the Democratic proposals. Asked to elaborate, Dimon said that wealthy people typically hide most of their wealth in places called ‘tax shelters’, a behavior that a ‘wealth tax’ would almost certainly aggravate. “I’m not against having higher tax on the wealthy. But I think that you do that through their income as opposed to, you know, calculate wealth which becomes extremely complicated, legalistic, bureaucratic, regulatory, and people find a million ways around it. I would just tax income,” Dimon said. He argued that it’s far more difficult for rich people to cheat on their income, since it’s inevitably “given” to them by another source, who is also reporting it. .

Banks report record spike in fraud as U.S. business aid flows – U.S. banks and credit unions reported skyrocketing levels of suspected business-loan fraud last month, a period that coincided with growing awareness of scams involving government small-business aid programs. Financial institutions filed 1,922 suspicious activity reports involving business-loan fraud in August, data from the Treasury Department’s Financial Crimes Enforcement Network show. That’s about 14 times the monthly average for the six years beginning in 2014, the earliest date for which data is available. It’s the fourth consecutive monthly record. The statistical data don’t show what’s causing the spike in reports. Neither Fincen nor the Small Business Administration’s inspector general said they could comment on a potential link. But the reports coincide with a wave of applications for the SBA’s Economic Injury Disaster Loan program, which has distributed more than $200 billion and which the agency’s inspector general, Hannibal Ware, warned in July is plagued by “pervasive fraudulent activity.” They also coincide with the last days of another SBA program, the $525 billion Paycheck Protection Program, which concluded on Aug. 8. The Project on Government Oversight, a Washington-based nonprofit, published an article earlier this month noting the spike in business-loan fraud reports through July and their potential connection to SBA programs. The August figures weren’t available at that time. In his July 28 report, Ware cited thousands of reports of potential fraud from financial institutions, including banks and credit unions. In many cases, the institutions were noticing that individuals with no apparent connection to a small business were receiving disaster-loan aid proceeds in their personal bank accounts. The Fincen suspicious-activity statistics show that most of the suspected fraud was thought to involve bank customers, that it was linked to deposit accounts and that it involved government payments. Last month, Bloomberg News reported that it identified 52 congressional districts where the SBA sent more $10,000 disaster-loan grants than the number of eligible small businesses. In all, there were about 128,000 excess grants worth almost $1.3 billion. About half of the total was in the Chicago area.

JPMorgan Traders Complain Bank Didn’t Warn Them About Recent COVID-19 Outbreak – While the world’s biggest tech firms have come out in favor of working from home in perpetuity (or at least until next summer), JPMorgan and Goldman Sachs were among the earliest major American companies to start pushing employees to get back to the office. And already, both have endured trading floor outbreaks (albeit smaller than outbreaks they experienced back in March). But while JP Morgan’s ‘research’ showing young employees lose ‘creative intelligence’ when confined to their homes – denied the collaborative experience of working from a cubicle in Midtown – is certainly compelling, it looks like the bank’s employees have some trepidation about the push back to the office. Specifically, they’re concerned about the bank’s policy of only informing employees who came into close, direct contact with anybody who tests positive of the virus. According to CNBC, an employee asked Troy Rohrbaugh, JPM’s global markets head, about the policy during a recent virtual town hall. The executive explained the bank’s policy is to inform only those who had been working on the same floor, or who may have had contact with the sick individual. But JPM isn’t alone in that: Goldman only discloses infection to workers who had meetings, or worked on the same floor, as somebody who got sick. Traders are reportedly angry that when there was a trading floor outbreak earlier this month, they only learned about it when they saw the story on their Bloomberg terminals. “Why did I have to read about this in Bloomberg?” said one trader who declined to be identified criticizing his or her employer, referring to an article on the matter. Looking to the CDC guidelines, the source of the conflict is clear. Guidelines clearly state that “employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act.

Record Numbers Of Companies Drown In Debt To Pay Dividends To Their Private Equity Owners — One week ago we used Bloomberg data to report that in the latest Fed-fuelled bubble to sweep the market, now with Powell buying corporate bonds and ETFs, private equity firms were instructing their junk-rated portfolio companies to get even deeper in debt and issue secured loans, using the proceeds to pay dividends to owners: the same private equity companies. Specifically, we focused on five deals marketed at the start of the month to fund shareholder dividends, which accounting for half of the week’s volume, and the most in a week since 2017, according to Bloomberg. Now, a little over a week late, the FT is also looking at these dividend recap deals which have become all the rage in the loan market in recent weeks, among other reasons because they are “ringing alarm bells since they come on top of already high leverage and weak investor protections and against a backdrop of economic uncertainty.”Having updated our calculation, the FT finds that in September a quarter (24% to be exact) of all new money raised in the US loan market has been used to fund dividends to private equity owners, up from an average of less than 4% over the past two years: that would be the highest proportion since the beginning of 2015, according to S&P Global Market Intelligence. As we wrote a little over a week ago, while the loan market – where PE firms fund the companies they own by selling secured first, second, third and so on lien debt – had until recently not seen the same volume of issuance as other parts of the financial markets. That changed after the Fed stepped into the corporate bond market sending yields crashing to record lows, and forcing US investors into the last corner of the fixed income world to still offer some modest yields: leveraged loans. And since this is the domain of PE firms which desperately need to extract as much cash as they can from their melting ice cubes (another names for single-B and lower rated portfolio companies which will likely all be broke in the next 3-5 years), everyone is rushing to market with dividend recaps to pay as much to their equity sponsor as they can before the window is shut again.

CRE concerns intensify as stimulus programs expire – Uncertainty about exposure to commercial real estate continues to dog banks. While many lenders have reported a steady decline in loan deferrals, industry observers are concerned about future demand for retail and office space and what would happen if legislators fail to approve more stimulus for existing tenants. And a number of CRE borrowers are barred from participating in federal pandemic-relief initiatives like the Main Street Lending Program. The overall CRE delinquency rate for banks increased to 0.92% on June 30 from 0.83% a quarter earlier and 0.68% at the end of last year, according to Federal Reserve data. While much lower than levels seen during the financial crisis, it is the highest rate since early 2016, and some industry observers fear it will continue to climb in coming quarters. As stimulus programs expire, more tenants will likely miss rent payments, putting more pressure on commercial landlords trying to pay their mortgages. “What happens when all this stimulus goes away, when these deferral periods end?” said Jon Winick, CEO of Clark Street Capital. “I think we’re going to see many more challenges. The credit picture right now is a mirage.” “It is sobering to think about what things could look like for banks without any more stimulus,” said Matthew Anderson, a managing director at Trepp. And there are signs some borrowers are purposefully defaulting after realizing they would be unable to extend or refinance their loans – a development that could hasten a wave of foreclosures later this year. Loans set to mature over the next five quarters have delinquency rates that are materially higher than other loans, Trepp researchers said in a recent report. Within that group, delinquency rates for loans with balances greater than $25 million are significantly higher than those for smaller loans. “Larger borrowers are typically more sophisticated and less likely to be encumbered by recourse or guarantees, making strategic default a more rational decision,” Trepp’s researchers said.

Lawmakers urge Fed, Treasury to let CRE borrowers tap Main Street loans – Pressure is growing on the Federal Reserve and Treasury Department to enable commercial real estate borrowers to access government relief tools such as the Main Street Lending Program. At a hearing of the House Financial Services Committee, members pressed Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin on the need to help small hotels and other indebted companies that pledge real estate and other collateral to obtain financing. Such borrowers are typically barred from taking on new debt, and therefore have been unable to use the government’s pandemic relief programs. “As a result of COVID-19 and subsequent travel shutdowns and through no fault of their own, family-owned and operated hotels in Texas and across the country are facing an unimaginable economic crisis, with no ability to access a lifeline to the Main Street Lending Program,” Rep. Vicente Gonzalez, D-Texas, said at the hearing Tuesday. Rep. Ted Budd, R-N.C., said his office has been hearing from business-owner constituents who were unable to secure short-term financing from the private sector and were instead using working capital to fund their operations. “They were too large to take advantage of the PPP, and they don’t have access to the capital markets,” he said. “So how could the Fed use its 13(3) authority to provide assistance to these companies [that] provide services and supplies all up and down the supply chain are critical to our nation’s economy?” Restrictions on lending to CRE borrowers also led to frustration over their inability to access the Paycheck Protection Program. The Coronavirus Aid, Relief and Economic Security Act provided $500 billion to the Treasury’s Exchange Stabilization Fund to provide loans to distressed sectors of the economy, including the hospitality industry. But in order to quality, a business had to have between 500-1,000 employees The Fed and Treasury on Sept. 18 released updated guidance on the Main Street Lending Program in which they said that they had considered expanding it to allow loans for companies pledging real estate or other collateral – known as asset-based borrowers – but determined that “conditions do not warrant such changes at this time.”

AIA: “Architectural billings in August still show little sign of improvement” – Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Architectural billings in August still show little sign of improvement Business conditions remained stalled at architecture firms during August as demand for design services continued to decline, according to a new report from the American Institute of Architects (AIA). The pace of decline during August remained at about the same level as in July and June, posting an Architecture Billings Index (ABI) score of 40.0 (any score below 50 indicates a decline in firm billings). Inquiries into new projects during August grew for the first time since February, and the value of new design contracts increased to a score of 46.0. As a result, fewer firms reported a decline in August, despite the fact that they remained negative overall. “Unfortunately, since the start of the COVID-19 pandemic, many architecture firms are finding fewer inquiries that convert to billable projects,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “While fewer firms reported declining billings in August than during the early months of the COVID-19 pandemic, the fact that the score has been unchanged for the last three months shows that the recovery from this downturn is not progressing at the pace we had hoped to see.”

Regional averages: Midwest (41.7); South (41.6); West (41.3); Northeast (33.9)

Sector index breakdown: multi-family residential (49.4); mixed practice (41.9); institutional (40.2); commercial/industrial (35.5)

OCC reports surge in ‘seriously delinquent’ mortgages – An Office of the Comptroller of the Currency report suggested notable stress on credit quality in the mortgage portfolios of the nation’s largest banks resulting from the COVID-19 pandemic. The agency’s second-quarter Mortgage Metrics said the performance of residential loans at seven banks with significant servicing portfolios had declined last quarter. Overall, 91.1% of first-lien mortgages were current and performing, which was down from 96.1% during the same period last year. The decline was driven by a sharp jump in mortgages that banks reported as “seriously delinquent,” defined as more than 60 days overdue. The percentage of seriously delinquent mortgages jumped to 6.8% in the second quarter from 1.4% in the first quarter. In the report, the OCC said that “seriously delinquent loans have increased as a result of the pandemic.” At the same time, foreclosures remain unusually low as a result of the national moratorium in place since the early months of the COVID-19 pandemic. The OCC reported that its surveyed banks initiated foreclosures only 249 times in the second quarter of 2020, compared with nearly 20,000 in the first quarter – a drop of 98.7%. The OCC estimates that the mortgage portfolios of national banks in its study represent $2.97 trillion in unpaid principal balances, or 28% of the nation’s outstanding residential mortgage debt.

Freddie Mac: Mortgage Serious Delinquency Rate increased in August, Highest Since January 2013 Freddie Mac reported that the Single-Family serious delinquency rate in August was 3.17%, up from 3.12% in July. Freddie’s rate is up from 0.61% in August 2019. This is the highest serious delinquency rate since January 2013. Freddie’s serious delinquency rate peaked in February 2010 at 4.20%. These are mortgage loans that are “three monthly payments or more past due or in foreclosure”. Mortgages in forbearance are being counted as delinquent in this monthly report, but they will not be reported to the credit bureaus. This is very different from the increase in delinquencies following the housing bubble. Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes – and they will be able to restructure their loans once (if) they are employed.

Black Knight: National Mortgage Delinquency Rate Decreased in August, Serious Delinquencies Rise — Note: Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus. From Black Knight: Early-Stage Delinquencies Improve Further, While Seriously Past-Due Loans Rise; Rate of Improvement Slows

The divergence between early-stage delinquencies and seriously past-due mortgages continues to widen as fewer delinquent loans cured to current status in August

Overall, the national delinquency rate fell just 0.03 basis points from July after declining a combined 0.85 basis points over the prior two months, a noticeable slowing in the rate of improvement

The share of borrowers with a single missed payment had already fallen below pre-pandemic levels; in August, the sum of all early-stage delinquencies (those 30 and 60 days past due) fell 9%, dropping below that benchmark as well

However, the improvement in early-stage delinquencies was offset by a 5% increase in serious delinquencies – those 90 or more days past due – which have now risen in each of the past five months

August’s rise in serious delinquencies was the mildest of those five months, suggesting that they may be nearing their peak

While there are nearly 2 million more seriously delinquent homeowners than at pre-pandemic levels, foreclosure activity remains muted due to active forbearance plans and foreclosure moratoriums

According to Black Knight’s First Look report, the percent of loans delinquent decreased 0.5% in August compared to July, and increased 99% year-over-year.

The percent of loans in the foreclosure process decreased 1.4% in August and were down 27% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 6.88% in August, down from 6.81% in July. The percent of loans in the foreclosure process decreased slightly in August to 0.35% from 0.36% in July. The number of delinquent properties, but not in foreclosure, is up 1,866,000 properties year-over-year, and the number of properties in the foreclosure process is down 66,000 properties year-over-year.

Lawler: Serious Delinquency Rate on FHA-Insured SF Loans Up Again in August – From housing economist Tom Lawler: Serious Delinquency Rate on FHA-Insured SF Loans Up Again in August While the FHA’s “official” monthly loan performance report for August is not yet available on its website, data from the FHA’s Early Warning System indicates that FHA’s Early Warning System indicate that the serious delinquency rate on FHA-insured single-family loans increased to above 11% in August, an all-time monthly high.Delinquency rates in the EWS do not match those in the official report, but the two delinquency rates tend to move together over time. The official Loan Performance Trends Report includes delinquency data for various subcategories, including (Fiscal) Year “Cohorts. Here are some SDQ data by Fiscal Year endorsement. What is striking about these data is that the years with both the largest increases in SDQ’s and the highest SDQ levels were the 2018 and 2019 “cohorts.” These two years were relatively risky books of business, with lower average credit scores compared to the previous 10 years and substantially higher (and never before seen) average debt-to-income ratios than in the previous 10 years. The surging FHA serious delinquency rate obviously reflects the huge increase in the number of FHA borrowers adversely impacted by the pandemic’s effect on the economy, and most of these seriously delinquent borrowers are in a FHA loan forbearance program. Given this program, combined with the current moratorium on foreclosures, the surging SDQ does not augur any imminent increase in foreclosures. It does, however, highlight that a sizable number of homeowners (and, presumably, potential homeowners) have been adversely impacted financially by enough to be unable to make their mortgage payments. This observation, of course, leads one to ask: why have SF family home sales surged by so much this summer? Obviously, record low mortgage rates have been a catalyst, but it appears as if there has also been a sizeable, pandemic-related shift in the demand for existing householders who have not been materially impacted financially from the pandemic (1) away from urban areas and into suburban (or even more remote) areas, and (2) away from renting in multifamily units and into single-family detached units There has also apparently been a huge increase in demand for second homes, especially but not solely in beach, mountain, and country “resort” areas. This “discrete” shift in relative demand, combined with limited supply as fewer than normal households already in single-family homes have been moving and listing their property for sale, has already started to put major upward pressure on prices of single-family detached homes, and in some areas of the country have created almost “bubble-like” conditions. And this discrete shift in demand has played a massively larger role in the surge in SF home sales than “demographics.”

MBA Survey: “Share of Mortgage Loans in Forbearance Declines to 6.93%” Note: This is as of September 13th. From the MBA: Share of Mortgage Loans in Forbearance Declines to 6.93%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 8 basis points from 7.01% of servicers’ portfolio volume in the prior week to 6.93% as of September 13, 2020. According to MBA’s estimate, 3.5 million homeowners are in forbearance plans….”The share of loans in forbearance has dropped to its lowest level in five months, driven by a consistent decline in the GSE share in forbearance,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “However, not only the did the share of Ginnie Mae loans in forbearance increase, new requests for forbearance for these loans have increased for two consecutive weeks. While housing market data continue to show a quite strong recovery, the job market recovery appears to have slowed, and we are seeing the impact of this slowdown on FHA and VA borrowers in the Ginnie Mae portfolio.” By stage, 31.65% of total loans in forbearance are in the initial forbearance plan stage, while 67.01% are in a forbearance extension. The remaining 1.34% 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 few months. The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.10%.”There hasn’t been a pickup in forbearance activity related to the end of the extra unemployment benefits.

Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased – Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance. This data is as of September 22nd. From Forbearances Down 24% from Peak The pace of improvement in the number of mortgages in active forbearance increased this week, as the number of plans fell 95K over the past seven days (-2.6%). This marks five consecutive weeks of improvement and puts us 24% off the peak in late May – a decline of 1.17M plans since that point. As of September 22, 3.6M homeowers remain in COVID-19-related forbearance plans, or 6.8% of all active mortgages, down from 7% last week. Together, they represent $751 billion in unpaid principal.Servicers continue to proactively assess September-scheduled forbearance expirations for extensions and removals. As of the 22nd, 1.1M forbearance plans are still set to expire this month, down from 1.7M just last week….Over the past month, active forbearance volumes are now down by 9%, with 357k fewer active COVID-19 forbearance plans than at the same time in August. Of the 3.6M loans still in active forbearance, some 78% have had their terms extended at some point since March.The ongoing COVID-19 pandemic continues to represent significant uncertainty for the weeks ahead. Black Knight will continue to monitor the situation and report our findings on this blog.

CoreLogic: 1.7 Million Homes with Negative Equity in Q2 2020 – From CoreLogic: Home Equity Rises Despite the Pandemic: CoreLogic Reports Homeowners Gained Over $620 Billion in Equity in Q2 2020 – CoreLogic … today released the Home Equity Report for the second quarter of 2020. The report shows U.S. homeowners with mortgages (which account for roughly 63% of all properties) have seen their equity increase by 6.6% year over year. This represents a collective equity gain of $620 billion, and an average gain of $9,800 per homeowner, since the second quarter of 2019. Despite a cool off in April, home-purchase activity remained strong in the second quarter of 2020 as prospective buyers took advantage of record-low mortgage rates. This, coupled with constricted for-sale inventory, helped drive home prices up and add to borrower equity through June. However, with unemployment expected to remain elevated throughout the remainder of the year, CoreLogic predicts home price growth will slow over the next 12 months and mortgage delinquencies will continue to rise. These factors combined could lead to an increase of distressed-sale inventory, which could put downward pressure on home prices and negatively impact home equity. … Negative equity, also referred to as underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. As of the second quarter of 2020, negative equity share, and the quarter-over-quarter and year-over-year changes, were as follows:

Quarterly change: From the first quarter of 2020 to the second quarter of 2020, the total number of mortgaged homes in negative equity decreased by 5.4% to 1.7 million homes or 3.2% of all mortgaged properties.

Annual change: In the second quarter of 2019, 2.1 million homes, or 3.8% of all mortgaged properties, were in negative equity. This number decreased by 15% in the second quarter of 2020 to 1.7 million mortgaged properties in negative equity.

National aggregate value: The national aggregate value of negative equity was approximately $284 billion at the end of the second quarter of 2020. This is down quarter over quarter by approximately $0.7 billion, or 0.2%, from $285 billion in the first quarter of 2020, and down year over year by approximately $20 billion, or 6.6%, from $304 billion in the second quarter of 2019.

This graph from CoreLogic compares Q2 to Q1 2020 equity distribution by LTV. There are still quite a few properties with LTV over 125%. But most homeowners have a significant amount of equity. This is a very different picture than at the start of the housing bust when many homeowners had little equity. On a year-over-year basis, the number of homeowners with negative equity has declined from 2.1 million to 1.7 million.

NMHC: Rent Payment Tracker Shows Decline in Households Paying Rent in September – From the NMHC: NMHC Rent Payment Tracker Finds 90.1 Percent of Apartment Households Paid Rent as of September 20: The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 90.1 percent of apartment households made a full or partial rent payment by September 20 in its survey of 11.4 million units of professionally managed apartment units across the country. This is a 1.7-percentage point, or 192,936-household decrease from the share who paid rent through September 20, 2019 and compares to 90.0 percent that had paid by August 20, 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. “This morning’s results show the real-world impact of lawmakers failing in their responsibilities to their constituents,” said Doug Bibby, NMHC President. “Almost 200,000 households have been unable to pay their September rent. Congress and the Trump administration have a proven model in the CARES Act that supported apartment residents through the early months of the pandemic. Now is the time for them to show leadership by once again supporting the millions of Americans who call an apartment home by enacting meaningful rental assistance and mitigating, to some degree, the negative consequences of the nationwide eviction moratorium which jeopardizes the stability of the nation’s housing finance system.” This graph from the NMHC Rent Payment Tracker shows the percent of household making full or partial rent payments by the 20th of the month. This is mostly for large, professionally managed properties. It appears fewer people are paying their rent this year compared to last year – down 1.7 percentage points from a year ago. Declining, but not falling off a cliff.

L.A. Mayor Unveils Push To End Homelessness By Sending Around Some Pretty Reasonable Zillow Listings – – In an effort to help alleviate the city’s worsening crisis, Mayor Eric Garcetti unveiled a new initiative Monday to assist homeless individuals by sending around some Zillow listings that looked pretty reasonable. “We need to act decisively to help our unhoused brothers and sisters, which is why I’ve linked to some nice, modest starter homes that are going for less than market price,” said the mayor in a social media post, urging individuals experiencing homelessness to visit some open houses and put down a deposit immediately to avoid getting into a full-out bidding war with other prospective buyers. “I am calling on all those in our city without a roof over their heads to check out this two-bedroom in Glendale – it’s right by the freeway so it’ll be easy to commute to your job, and the website says it has a resort-style pool, which would be a great way to keep cool during a deadly heatwave. Even if this place isn’t exactly to your taste, you could just buy it now and flip it in a couple years to make quite a tidy profit.” At press time, Garcetti announced that he had further slashed public services since few homeless people had been taking advantage of this generous new program.

NAR: Existing-Home Sales Increased to 6.00 million in August – From the NAR: Existing-Home Sales Hit Highest Level Since December 2006 – Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.4% from July to a seasonally-adjusted annual rate of 6.00 million in August. Sales as a whole rose year-over-year, up 10.5% from a year ago (5.43 million in August 2019)…. Total housing inventory at the end of August totaled 1.49 million units, down 0.7% from July and down 18.6% from one year ago (1.83 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in July and down from the 4.0-month figure recorded in August 2019.This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in August (6.00 million SAAR) were up 2.4% from last month, and were 10.5% above the August 2019 sales rate. This was the highest sales rate since 2006. The second graph shows nationwide inventory for existing homes. Existing Home InventoryAccording to the NAR, inventory decreased to 1.49 million in August from 1.50 million in July. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Year-over-year Inventory Inventory was down 18.6% year-over-year in August compared to August 2019. Months of supply decreased to 3.0 months in August. This was at the consensus forecast. I’ll have more later.

Comments on August Existing Home Sales – 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 August report was mostly for contracts signed in June and July – when the economy was much more open than in March and April. Some of the increase over the last three months was probably related to pent up demand from the shutdowns in March and April. However, with the high unemployment rate and the high rate of COVID infections, housing might be under some pressure later this year or in 2021. That is difficult to predict and depends on the course of the pandemic.

2) Inventory is very low, and was down 18.6% year-over-year (YoY) in August. This is the lowest level of inventory for August since at least the early 1990s. .. 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 3.2% 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 August (561,000) were 5.5% above sales last year in August (532,000).

New Home Sales increased to 1,011,000 Annual Rate in August – The Census Bureau reports New Home Sales in August were at a seasonally adjusted annual rate (SAAR) of 1.011 million.The previous three months were revised up significantly.Sales of new single-family houses in August 2020 were at a seasonally adjusted annual rate of 1,011,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.8 percent above the revised July rate of 965,000 and is 43.2 percent above the August 2019 estimate of 706,000.The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. This is the highest sales rate since 2006. The second graph shows New Home Months of Supply. The months of supply decreased in August to 3.3 months from 3.6 months in July. This is the all time record low months of supply.The all time record high was 12.1 months of supply in January 2009. This is below the normal range (about 4 to 6 months supply is normal).“The seasonally-adjusted estimate of new houses for sale at the end of August was 282,000. This represents a supply of 3.3 months at the current sales rate. ” Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed.The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is low, and the combined total of completed and under construction is lower than normal. The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).In August 2020 (red column), 83 thousand new homes were sold (NSA). Last year, 57 thousand homes were sold in August. The all time high for August was 110 thousand in 2005, and the all time low for August was 23 thousand in 2010. This was well above expectations of 900 thousand sales SAAR, and sales in the three previous months were revised up significantly.

A few Comments on August New Home Sales – New home sales for August were reported at 1,011,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised up significantly. This was well above consensus expectations, and this was the highest sales rate since 2006. Clearly low mortgages rates, low existing home supply, and low sales in March and April (due to the pandemic) have led to a strong increase in sales. Favorable demographics (something I wrote about many times over the last decade) and a surging stock market have probably helped new home sales too. Earlier: New Home Sales increased to 1,011,000 Annual Rate in August. This graph shows new home sales for 2019 and 2020 by month (Seasonally Adjusted Annual Rate).New home sales were up 43.2% year-over-year (YoY) in August. Year-to-date (YTD) sales are up 14.9%. And on inventory: since new home sales are reported when the contract is signed – even if the home hasn’t been started – new home sales are not limited by inventory. Inventory for new home sales is important in that it means there will be more housing starts if inventory is low (like right now) – and fewer starts if inventory is too high (not now). No one should get too excited about new home sales as a leading indicator for the economy. Many years ago, I wrote several articles about how new home sales and housing starts (especially single family starts) were some of the best leading indicators, however, I’ve also noted that there are times when this isn’t true. NOW is one of those times. Currently the course of the economy will be determined by the course of the virus, and New Home Sales tell us nothing about the future of the pandemic. Without the pandemic, I’d obviously be very positive about this report.

Fed’s Flow of Funds: Household Net Worth Increased $6.2 Trillion in Q2 –The Federal Reserve released the Q2 2020 Flow of Funds report today: Flow of Funds.The net worth of households and nonprofits rose to $119.0 trillion during the second quarter of 2020. The value of directly and indirectly held corporate equities increased $5.7 trillion and the value of real estate increased $0.5 trillion. Household debt increased 0.5 percent at an annual rate in the second quarter of 2020. Consumer credit shrank at an annual rate of 6.6 percent, while mortgage debt (excluding charge-offs) grew at an annual rate of 3 percent. The first graph shows Households and Nonprofit net worth as a percent of GDP. With the sharp decline in GDP in Q2, net worth as a percent of GDP increased sharply. This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations. This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices fell sharply in 2007 and 2008. In Q2 2020, household percent equity (of household real estate) was at 65.6% – up from Q1. Note: about 30.3% of owner occupied households had no mortgage debt as of April 2010. So the approximately 50+ million households with mortgages have less than 56.6% equity – and about 1.7 million homeowners still have negative equity. The third graph shows household real estate assets and mortgage debt as a percent of GDP. Note this graph was impacted by the sharp decline in Q2 GDP. Mortgage debt increased by $81 billion in Q2. Mortgage debt is still down from the peak during the housing bubble, and, as a percent of GDP is at 54.4% – up from Q2 due to the decline in GDP – but down from a peak of 73.5% of GDP during the housing bubble. The value of real estate, as a percent of GDP, increased in Q2, and is above the average of the last 30 years.

Mortgage Equity Withdrawal Increased in Q2 – The following data is calculated from the Fed’s Flow of Funds data (released today) and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity – hence the name “MEW” – and normal principal payments and debt cancellation (modifications, short sales, and foreclosures). For Q2 2020, the Net Equity Extraction was $28 billion, or a 0.60% of Disposable Personal Income (DPI) . This graph shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method. Note: This data is impacted by debt cancellation and foreclosures, but much less than a few years ago. MEW has been mostly positive for the last four years. The Fed’s Flow of Funds report showed that the amount of mortgage debt outstanding increased by $81 billion in Q2.

Q2 2020 Household Net Worth: The “Real” Story – With the September release of the Federal Reserve’s Z.1. Financial Accounts of the United States for Q2 2020, we have updated this commentary to incorporate the latest data. Let’s take a long-term view of household net worth from the latest Z.1 release. A quick glance at the complete data series shows a distinct bubble in net worth that peaked in Q4 2007 with a trough in Q1 2009, the same quarter the stock market bottomed. The latest Fed balance sheet shows a total net worth that is 97% above the 2009 trough. The nominal Q2 net worth is up 6.8% from the previous quarter and up 4.4% year-over-year. The COVID-19 pandemic has had a clear impact on household net worth – notably the immediate decline due to income losses and the Federal government’s reaction via the CARES Act. But there are problems with this analysis. Over the six decades of this data series, total net worth has grown about 10,920%. A linear vertical scale on the chart above is misleading because it fails to provide an accurate visual illustration of growth over time. It also gives an exaggerated dimension to the bubble that began in 2002. But there is another more serious problem, one that has to do with the data itself rather than the method of display. Over the same time frame that net worth grew more than 10,000%, the value of the 1950 dollar shrank to about $0.09. The Federal Reserve gives us the nominal value of total net worth, which is significantly skewed by money illusion. Here is a log scale chart adjusted for inflation using the Consumer Price Index. Here is the same chart with an exponential regression through the data. The regression helps us see the twin wealth bubbles peaking in Q1 2000 and Q1 2007, the Tech and Real Estate bubbles. The trough in real household net worth was in Q1 2009. This indicator is now 5.3% above trend. The annualized growth rate over this time frame is 3.15%.

Hotels: Occupancy Rate Declined 30% Year-over-year – From HotelNewsNow.com: STR: US hotel results for week ending 12 September U.S. hotel occupancy decreased slightly from the previous week, according to the latest data from STR.

6-12 September 2020 (percentage change from comparable week in 2019):

Occupancy: 48.5% (-30.2%)

Average daily rate (ADR): US$98.99 (-25.5%)

Revenue per available room (RevPAR): US$47.96 (-48.1%)

The highest occupancy markets were those housing displaced residents from Hurricane Laura and western wildfires, with Louisiana North (77.2%) and Louisiana South (76.8%) showing the highest levels in the metric. The Oregon Area (73.7%) and California North (73.3%) markets were also among the top 5 highest occupancy levels for the week.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year since the Great Depression for hotels – before 2020). There was some boost by Hurricane Laura and the western fires, but it seems unlikely business travel will pickup significantly in the Fall.

Hotels: Occupancy Rate Declined 32% Year-over-year — From HotelNewsNow.com: STR: US hotel results for week ending 19 September: U.S. hotel occupancy was nearly flat from the previous week, according to the latest data from STR. 13-19 September 2020 (percentage change from comparable week in 2019):

Occupancy: 48.6% (-31.9%)

Average daily rate (ADR): US$95.84 (-28.9%)

Revenue per available room (RevPAR): US$46.54 (-51.6%)

Demand rose slightly (+0.3%), and the highest occupancy markets were once again those housing displaced residents from Hurricane Laura and western wildfires, with California South/Central showing the highest level in the metric (74.7%). The Louisiana South (72.8%) and Louisiana North (72.3%) markets were also among the top five highest occupancy levels for the week. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

NYT Report: 9 of Every 10 Restaurants and Bars in N.Y.C. Can’t Pay Full Rent –This is just another respect in which the COVID-19 pandemic has hit the city hard and despite dropping COVID-19 numbers, there’s no end for the restaurant industry in sight According to the New York Times, 9 of Every 10 Restaurants and Bars in N.Y.C. Can’t Pay Full Rent: The ongoing travails of the industry were underscored by a survey released this week by the New York City Hospitality Alliance, which found that nearly nine out of every 10 dining establishments had not paid full rent in August and that about a third had not paid any rent. Outdoor dining alone has not replaced any meaningful proportion of lost revenues. Yet nor will the much touted return of indoor dining at reduced capacity begin to solve the problem either. According to the NYT:Even as the city prepares to allow indoor dining at 25 percent capacity on Sept. 30, that may not be enough to reverse the steep economic slide of one of the city’s key industries. With the lack of tourists and office workers, many restaurants, particularly in Manhattan, are on the brink of collapse, posing a big obstacle to New York’s recovery.The 87 percent of restaurants that said they had not paid their entire August rent was an increase from the 80 percent that reported not paying all of their June rent. The survey was based on responses from 450 of the 2,500 businesses that make up the alliance’s membership. The resumption of indoor dining at reduced capacity will allow restaurants to welcome more diners, but some owners said that would not be enough to offset the loss of outdoor dining because of cold weather or the end of the city-permitted program on Oct. 31. We seem to have lost our way policy-wise. At the same time as the UK government has provided funds to encourage customers to dine out, New York dithers about incremental changes that would encourage continued outdoor dining: The city should allow restaurants to use portable propane heaters, which are currently banned, said Andrew Rigie, the executive director of the hospitality alliance. He said heaters hooked up to natural gas lines were permitted but were expensive to install and required special permits. With policymakers focusing on such small ball strategies, is it any winder NY restaurants are in such a state? To be sure, the major blow comes from the disease itself, but NYC seems to be doing its best to make things worse and drive the maximum number of bars and restaurants out of business. But the evictions crisis is not an easy problem to solve. And on solving that problem turns the question of the survival of so any bars and restaurants. Over again to the NYT: Socially distanced outdoor dining brings in only a fraction of what a restaurant’s typical income might be, and many establishments were already having a hard time making a profit. Many restaurants are still trying to pay rent owed from the months when they were shut down, making it even harder to cover rent in more recent months Federal aid through the Paycheck Protection Program, which was meant to help preserve workers’ jobs, offset some costs, but that has mostly run out. The inability of restaurants to pay rent has also dealt a severe blow to many smaller landlords, who have their own bills to pay. Whether a restaurant is able to pay rent often hinges on whether landlords and tenants can make deals. About 60 percent of the businesses that responded to the alliance’s survey said that their landlords had not waived any portion of their rent. Landlords are struggling to pay mortgages and property taxes, and their income is dependent on rents’ being paid in full. “We’re at margins that are very thin,” he said.

Father, Son Used-Car Sellers Get $5 Billion Richer in a Day –Carvana Co. has yet to post a quarterly profit since going public in 2017, but it’s made Ernie Garcia II and his son Ernest Garcia III two of the richest people in America. The elder Garcia is the largest shareholder of Phoenix-based Carvana, the online retailer that sells cars out of massive vending machines. His son, Garcia III, is the company’s chief executive officer. Together they’re worth $21.4 billion, according to the Bloomberg Billionaires Index. Shares of the company surged 31% in New York on Tuesday after it projected record revenue and profit margins. “Covid-19 is prompting consumers to seek out used cars, and CVNA is a key beneficiary of this trend,” Carvana lets customers choose from more than 19,000 cars and complete purchases in as little as 10 minutes, according to its website. Buyers have the option of picking up their car at more than a dozen vending machines located around the country, using a giant coin. Its revenue doubled to $3.9 billion last year as it sold about 200,000 cars. It now sees a path to 2 million sales a year. Garcia II is worth more than $15 billion and his son $6.4 billion, according to Bloomberg’s Index, which tracks the daily fortunes of the world’s richest 500 people.

Rivian Faces Ban From Michigan Car Dealers in Direct-Sales Fight – Michigan auto dealers are trying to block startup electric carmakers including Rivian Automotive Inc. and Lucid Motors Inc. from following inTesla Inc.’s footsteps by selling vehicles directly to consumers and servicing them in the state.A bill introduced in the Michigan legislature last week would block any manufacturer other than Tesla from selling cars to customers without a dealer as an intermediary and from owning and operating service and repair facilities. It could come up for a vote as soon as Tuesday, according to a Rivian official.The 11-year-old company has raised about $6 billion from backers includingFord Motor Co. and Amazon.com Inc. It expects to begin production of its first two vehicles — a battery-powered pickup and a sport-utility vehicle — by mid-2021.The Michigan bill is an attempt to shut the door behind Tesla, whichprevailed in a years-long legal battle with Michigan auto dealers in January when the Michigan attorney general granted a workaround that allows the electric carmaker to deliver its vehicles to buyers without requiring them to leave the state. The attorney general’s stipulation also allows Tesla to indirectly own service centers in Michigan through a subsidiary. This sets Tesla apart from Ford, General Motors Co., Fiat Chrysler Automobiles NV and other auto companies, which operate under franchise laws that have been on the books for decades and were originally put in place to prevent manufacturers from opening stores that competed with dealers.”This is a bullseye on Rivian and Lucid and any EV manufacturer that would come in after Tesla does,” said James Chen, Rivian’s vice president of public policy. Auto dealers are “protecting a monopoly through legislation.”The Michigan Automobile Dealers Association, which represents about 600 new-car dealerships in the state, says the agreement with Tesla didn’t change state law banning direct sales, and the bill is intended to clear up any ambiguity.

Wolf Richter: Nikola Hype Collapses, Shares Plunge Further, Founder/CEO Pushed Out. GM Swoons — Shares of the electric truck maker Nikola that hasn’t made a single truck – not even a working prototype that uses its own technology – started trading on June 4, 2020, through a reverse merger with special-purpose acquisition company (SPAC) VectoIQ Holdings – the boom in SPACs being another phenomenon that shows how nuts this market has gotten. By June 9, Nikola’s market capitalization had vaulted to $29 billion as day-trader fans were going nuts over it, trying to get rich quick on this supernatural phenomenon. Then the collapse began, the collapse in every aspect, including the collapse of hype. This morning, the company announced in an astounding SEC filing that CEO and founder Trevor Milton, who is immersed in fraud allegations, was out, and the way it was done, namely effective yesterday, September 20, suggests that this was an orchestrated firing over the weekend, dressed up as “voluntary.” Some excerpts from the SEC filing: The Executive hereby voluntarily hands over and otherwise relinquishes, and the Company accepts his relinquishment of, his position as Executive Chairman of the Company and all positions as an employee and officer of the Company and its subsidiaries (the “Company Group”), and his position as a Director on the Board and a director of any of the Company’s subsidiaries, including all committees thereof effective as of the Effective Date and without the need for any other action.On September 10, Nikola got hammered by detailed allegations of short-seller Hindenburg Research that the company was “an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career.” In explaining its short position on the stock, Hindenburg Research summarized: “We have never seen this level of deception at a public company, especially of this size.”Then Monday last week, Bloomberg, citing sources, reported that the SEC was examining Nikola “to assess the merits” of the fraud allegations of Hindenburg Research. Milton had responded to the allegations with some tweets, that made things only worse. The company, still on Monday, came out with a rebuttal, that didn’t help matters either.The deal with GM, announced on September 8 – though the media and Wall Street analysts oohed and aahed over it and caused the shares of both companies to soar briefly – raised red flags about the Nikola’s so-called industry-leading core technology upon which all the hype had been built, namely its battery and fuel cell technology that were supposed to power its trucks.In the deal with GM, however, it was revealed that GM’s own Hydrotec fuel cell technology and Ultium battery systems would power Nikola’s Badger pickup trucks, not Nikola’s technology, which raised further doubts about the validity of Nikola’s technology breakthrough claims. Not only would GM provide the core technology for those trucks, Nikola also disclosed that GM would “engineer, validate, homologate and build the Nikola Badger for both the battery electric vehicle and fuel cell electric vehicle variants as part of the in-kind services.”

Richmond Fed: “Manufacturing Activity Improved in September” — Earlier from the Richmond Fed: Manufacturing Activity Improved in September – Manufacturing activity in the Fifth District improved in September, according to the most recent survey from the Richmond Fed. The composite index climbed from 18 in August to 21 in September, buoyed by increases in the indicators for new orders and employment. The third component index – shipments – decreased but remained positive, suggesting continued expansion. Survey results also reflected improvement in local business conditions and increased capital spending. Overall, respondents were optimistic that conditions would continue to improve in the next six months. Results reflected higher employment among many survey participants in September and suggested several manufacturers raised wages over the month. This was above consensus expectations.

Kansas City Fed: “Tenth District Manufacturing Activity Increased at a Slower Pace” in September -From the Kansas City Fed: Tenth District Manufacturing Activity Increased at a Slower Pace The Federal Reserve Bank of Kansas City released the September Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity increased at a slower pace in September and remained lower than a year ago, while expectations for future activity were positive.”Regional factory activity expanded again in September but was still below year-ago levels for the majority of firms,” said Wilkerson. “Firms’ expectations for future activity continued to be relatively optimistic, although they anticipated slightly lower wage and salary growth in the year ahead.”The month-over-month composite index was 11 in September, slightly lower than 14 in August but higher than 3 in July …The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Activity at non-durable and durable goods factories expanded at a similar pace. The increase in activity at food and beverage manufacturers was slower in September than in previous months, when activity bounced back more sharply. Most month-over-month indexes remained positive, indicating continued expansion. Production, shipments, new orders, and employment rose at a slower pace, while order backlog and supplier delivery time increased. The indexes for employee workweek and new orders for exports dipped slightly, and inventory indexes for materials and finished goods were negative.This suggests activity has bottomed, but activity is still below a year ago.

Weekly Initial Unemployment Claims increased to 870,000 — The DOL reported: In the week ending September 19, the advance figure for seasonally adjusted initial claims was 870,000, an increase of 4,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 860,000 to 866,000. The 4-week moving average was 878,250, a decrease of 35,250 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 912,000 to 913,500. This does not include the 630,080 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 675,154 the previous week. (There are some questions on PUA numbers). The following graph shows the 4-week moving average of weekly claims since 1971.

Initial jobless claims rise slightly, while continuing claims decline – both at still awful levels – This morning’s jobless claims report indicated that the trend of “less worse” news is at best continuing at a snail’s pace, and at levels worse than the worst weekly levels of the Great Recession. On a non-seasonally adjusted basis, new jobless claims rose by 28,527 to 824,542. After seasonal adjustment (which is far less important than usual at this time), claims rose by 4,000 to 870,000, slightly above their revised “best” reading of 866,000. The 4 week moving average, however, declined by 35,250 to a new pandemic low of 913,500: Continuing claims declined both on a non-adjusted basis (by 176,510 to 12,264,351, and on a seasonally adjusted basis by 167,000 to 12,580,000, both new pandemic lows: This remains almost exactly half of their worst levels at the beginning of May, and more than 4 million higher than the worst level of continuing claims during the Great Recession. There has been only very slow downward movement in new jobless claims over the past seven weeks. As a result, the pandemic shock recession is gradually turning into something much more chronic at very depressed levels.

Nonfarm Payroll Employment vs. Trend, Pre-Covid-19 – Figure 1: Nonfarm payroll employment (blue), deterministic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations. Figure 2: Nonfarm payroll employment (blue), stochastic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations. The above graphs are useful if you thought everything was hunky-dory employment-wise, even before the pandemic hit.

September Employment Report Will Show a Decrease of 41,403 Temporary Census Workers – The Census Bureau released an update today on 2020 Census Paid Temporary Workers. The release today was for the BLS reference week for the September employment report. As of the August reference week, there were 288,204 decennial Census temporary workers. As of the September reference week, there were 246,801 temporary Census workers. This means the September employment report will show a decrease of 41,403 temporary Census workers. This will decrease the headline number. In August, the employment report showed a gain of 238,000 temporary 2020 Census workers, boosting the headline number.

Study finds 90 percent of Americans would make 67 percent more without last four decades of increasing income inequality – A new study from the RAND Corporation, “Trends in Income From 1975 to 2018,” written by Carter Price and Kathryn Edwards, provides new documentation of the profound restructuring of class relations in America over the last 40 years.The study, which looks at changes in pre-tax family income from 1947 to 2018, divided into quintiles of the American population, concludes that the bottom 90 percent of the population would, on average, make 67 percent more in income – every year (!) – had shifts in income inequality not occurred the last four decades. In other words, any family that made less than $184,292 (the 90th percentile income bracket) in 2018 would be, on average, making 67 percent more. This amounts to a total sum of $2.5 trillion of collective lost income for the bottom 90 percent, just in 2018. Furthermore, the study concludes, that had more equitable growth continued after 1975 (a date they use as a shifting point), the bottom 90 percent of American households would have earned a total of $47 trillion more in income.Given that there were about 115 million households in the bottom 90 percent of the US in 2018 population (out of a total of 127.59 million in 2018), that would mean that each of these households would, on average, be $408,696 richer today with this lost income.To reach these conclusions, the authors break down historical real, pre-tax, income into different quintiles of the population (bottom fifth, second fifth, third fifth, fourth fifth, highest fifth). Looking at the period between 1947 and 2018, they divide the years based on business cycles (booms and busts of the economy). As the data shows, while the bottom 40 percent of American households made significant percentile increases to their income, relative to the top 5 percent, for the 20 years between 1947 and 1968, in the 40 years from 1980 to the present, this trend was reversed. In 1980-2000, the bottom 40 percent of the population experienced a net income gain significantly below that of the top 5 percent. It must be noted that because these are percentile increases, the absolute differences between the gains of the rich versus the poor is far larger.

Many workers have exhausted their state’s regular unemployment benefits: The CARES Act provided important UI benefits and Congress must act to extend them Another 1.5 million people applied for unemployment insurance (UI) benefits last week. That includes 870,000 people who applied for regular state UI and 630,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. It provides up to 39 weeks of benefits, but it is set to expire at the end of this year.Last week was the 27th week in a row – more than six months – that total initial claims were far greater than the worst week of the Great Recession. If you restrict to regular state claims (because we didn’t have PUA in the Great Recession), claims are still greater than the 3rd-worst week of the Great Recession. We’ve hit a grim milestone. Most states provide 26 weeks of regular benefits. That means last week was the first week many workers had exhausted their regular state UI. However, data on continuing claims for regular state UI is delayed a week, so we can’t see the drop yet. The good news is that unless there are administrative glitches, total claims should not fall as a result of individuals exhausting regular state UI, because unemployed workers can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI (and is only available to people who were on regular state UI). Note: PEUC was part of the CARES Act. It is different from Pandemic Unemployment Compensation, or PUC, the now-expired $600 additional weekly benefit, which anyone on any UI program had been eligible for. With people moving from regular state benefits onto PEUC, I expect PEUC began to spike up dramatically last week. However, because of reporting delays for PEUC, we won’t get PEUC data from last week until October 8th. Department of Labor (DOL) data suggest that right now, 28.4 million workers are either on unemployment benefits or have applied recently and are waiting to get approved (see Figure A). But importantly, that number is a substantial overestimate for at least two reasons: (1) Initial claims for regular state UI and PUA should be non-overlapping – that is how DOL has directed state agencies to report them – but some individuals are erroneously being counted as being in both programs; (2) Some states are including retroactive payments in their continuing PUA claims, which would also lead to double counting (this story does a great job of explaining this). The bottom line is that, astoundingly, nobody knows exactly how many people are receiving unemployment insurance benefits right now. This is a grim reminder that we need to invest heavily in our data infrastructure and technology.

Coronavirus Economic Distress Hitting Indebted Professionals – Yves Smith – The Wall Street Journal describes tonight how the line between two tiers of the Covid economy isn’t as tidy as many might think. It isn’t just hourly workers in service businesses like restaurants and hotels who are seeing smaller or even no paycheck. High income professionals are also in distress due to having relatively high level of borrowings which makes them vulnerable to declines in income.We warned early on, as did a Bloomberg story in June, that layoffs would increase higher up the job ladder as it became more evident that Covid-19 damage was not just severe but long-lived.From the Bloomberg account (note the chart is interactive, so go to the original story if you’d like to play with it): The pandemic isn’t finished with the U.S. labor market, threatening a second wave of job cuts – this time among white-collar workers.Close to 6 million jobs are potentially on the line, according to Bloomberg Economics. That includes higher-paid supervisors in sectors where frontline workers were hit first, such as restaurants and hotels. It also includes the knock on-effects to connected industries such as professional services, finance and real estateAnd the Bloomberg analysis found that these “second wave” losses would have a disproportionate impact: While not as high in number as the initial wave of layoffs, the second round will still pack a sizable economic punch, as it will include middle-class Americans who drive discretionary spending, a major growth engine. An additional issue, which this article does not address directly, is that work both at the high end and the low end has become specialized. When manufacturing was much more important to the economy, employers expected to train new hires, although they would often require a basic level of mathematical and reading skills. Today, even fast food outlets prefer to hire front line and managerial personnel with industry experience. In The Predator State, Jamie Galbraith argued that having a society invest heavily in conferring advanced degrees was not a plus. The cost of that education, in terms of the resources involves as well as the student foregoing wages in order to earn the degree, is high. Yet by investing in that training, those students have chosen to limit their career opportunities, which may not be a good bet in the long haul. If employment contracts in your field and you are one of the ones who winds up earning less or losing a job entirely, the immediately available replacement is usually at a much much lower skill level, where to add insult to injury, employers will worry that the displaced professional is overqualified and won’t stick around long. And getting established in a new field takes time and often involves spending on new training … .and that self-reinvention process may not work.

Derision, Disbelief After Iowa Meatpacking Plant Where Hundreds Caught Coronavirus Fined Just $957 – Iowa regulators on Thursday levied their first coronavirus-related fine against a meatpacking plant – a $957 citation for a minor record-keeping violation by a subsidiary of one of the nation’s biggest beef processing companies.The Associated Press reports the Iowa Occupational Safety and Health Administration issued the citation to the Iowa Premium Beef Plant in Tama, where 338 of the facility’s 850 employees tested positive for Covid-19 during an April outbreak that produced one of the state’s first “hot spots.” That’s 80 more workers than the state previously acknowledged, according to inspection records.Iowa OSHA announced on June 1 that it would investigate the Tama plant and four other meat processing facilities in the state where thousands of workers had tested positive for coronavirus. Records reviewed by the AP showed that none of the other plants were fined, despite at least nine Covid-19 deaths among them.The other facilities that were investigated by the agency are Tyson Foods plants in Waterloo, Columbus Junction, and Perry, and the JBS plant in Marshalltown.Iowa OSHA cited two “other-than-serious” violations committed by the Tama plant: failure to keep a required log of workplace-related injuries and illnesses, and failure to provide the document within four hours after inspectors requested it.The fine was originally meant to be twice as high. However, Iowa OSHA Administrator Russell Perry approved a settlement with the company cutting the amount in half. Iowa Premium Beef – which last year was purchased by National Beef, the nation’s fourth-largest beef processor – also agreed to correct the violations. Observers reacted to the fine with disbelief and derision: [embedded tweets] The first Iowa fine comes less than two weeks after the U.S. Labor Department fined JBS Foods, the U.S. subsidiary of Brazilian giant JBS SA – which, with over $50 billion in annual sales, is the world’s largest meat processing company – a paltry $15,615 for failing to adequately protect workers against coronavirus.

‘I cry before work’: US essential workers burned out amid pandemic – Terri Prunty Kay has worked as a cashier at Walmart in Sonoma county, California since 2011. She had never cried at work because of treatment from customers before the pandemic.”It’s been a nightmare,” she said. “The first three months there were item limits. Everyone was angry and combative. Now it’s the masks.” Prunty Kay has asthma and wears a mask at work, but not all customers follow the mask policy. The heat in the store and through the summer has made it unbearable to work and she said her store is understaffed with long lines at the registers.”It’s exhausting, mentally, emotionally and physically,” she added.Punty Kay is just one of the millions of essential jobs around the US reporting burnout, fatigue, stress and anxiety while continuing to work through Covid-19.A national poll conducted in August 2020 by Eagle Hill Consulting found 58% of US workers reported burnout, compared to 45% polled in the beginning of the coronavirus pandemic in April 2020. More workers also attributed their burnout to Covid-19 circumstances, at 35% compared to 25% in the previous poll. A July 2020 poll conducted by the Kaiser Family Foundation on adults in the US found 53% reported their mental health was negatively affected by coronavirus related worry and stress, compared to 32% reported in March.In interviews with the Guardian, essential workers reported burnout caused by increased workloads, understaffing, stress associated with fears over coronavirus and struggles in enforcing social distancing and safety protocols. Jennifer Sims, an advocate and housing coordinator for a domestic violence nonprofit in Pendleton, Oregon, has been dealing with a 30% increase in calls during the pandemic. At the same time coronavirus safety protocols have halted transportation of clients and the ability to respond to sexual assault victims at local hospitals. The pandemic has also made it increasingly difficult to help victims find housing and its attendant recession has left many concerned with how they will afford rent. “It makes it incredibly difficult to assist someone who has been through such a gut-wrenching trauma when the phone is the only option,” said Sims. “We have helped a lot of individuals during this pandemic. I really do love my job. But it doesn’t come without burnout and adding a pandemic to it makes the stress level through the roof.” Grocery store and food service workers have faced enormous stress throughout the pandemic. Most grocery and food chains began ending hazard pay for essential workers in June 2020.Elizabeth Rung works in the front end as a grocery store cashier in Seattle, Washington. “More and more people are calling out [sick], we’re short staffed all the time,” Rung said. “Customers are becoming crazy, sometimes violent when asked to wear a mask and we aren’t allowed to give out free masks due to the drama and hostility. I haven’t slept well in months.”

39 States Don’t Have Enough Money To Pay Their Bills … It’s not just the federal government running massive deficits and piling up enormous levels of debt. Thirty-nine US states don’t have enough money to pay all of their bills. That was the grim conclusion of Truth in Accounting’s annual Financial State of the States report.The report summarizes a comprehensive analysis surveying the fiscal health of the 50 states prior to the coronavirus pandemic.Total debt for all states combined totaled $1.4 trillion at the end of fiscal 2019. This does not include debt related to capital assets. “Most of the states were ill-prepared for any crisis, much less one as serious as what we are currently facing.”Ironically, 49 states require balanced budgets by law. As the report explains, “This means that to balance the budget … elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.”The vast majority of state debt comes from unfunded retirement benefit obligations. This includes pension plans and retiree healthcare liabilities. Pension debt accounts for $855 billion and other post-employment benefits (OPEB) totaled $617 billion at the end of FY 2019.The coronavirus pandemic and the accompanying government-imposed economic shutdowns have only exacerbated financial problems at the state level. The report estimates the 50 states could lose $397 billion in revenue.These numbers pale compared to the debt being piled up by the federal government. But Uncle Sam has access to the Federal Reserve’s printing press and can create money out of thin air to backstop its borrowing and spending. States don’t have that option. They have to rely on accounting tricks and ultimately federal bailouts to fill their gaping budget holes. The surging levels of state debt will probably end up piled on top of the national debt.

Nearly 20 percent of Americans don’t have enough to eat – More than 18 percent of U.S. adults do not know whether they will have enough to eat from day to day, and the numbers are worse for Hispanics, Blacks, people with obesity, and women, a new report shows.”The percentage of adults with food insecurity – – the lack of access to adequate food – more than doubled between 1999 and 2016,” said Candice Myers, PhD, assistant professor at Pennington Biomedical Research Center and lead author of the article published in JAMA. “The COVID-19 pandemic has undoubtedly worsened the situation. The country may face long-term economic and health consequences unless we solve this public health crisis.” The study looked at national trends in food insecurity among U.S. adults from 1999 to 2016 using data from the National Health and Nutrition Examination Survey. The study found that food insecurity rates jumped to:

• 35 percent among Hispanic adults, from 19.5 percent
• 1 percent among Blacks, from 12.4 percent.
• 6 percent among people with obesity, from 10.4 percent.
• 2 percent among women, from 8.7 percent.

Dr. Myers said the study further solidifies the link between food insecurity and unhealthy body weight.Food insecurity has a range of health consequences, all of them negative, she said. Obesity is key among them. “Food insecurity and obesity are not mutually exclusive,” Dr. Myers said. “Rather, these health issues are linked in such a way that a solution will require public policy that addresses both at the same time.”

More than a billion school meals not served during pandemic: – School closures due to the COVID-19 pandemic disrupted access to low or no-cost school breakfast and lunch programs for millions of low-income children. States and school districts developed innovative solutions to meet the nutritional needs of children and respond to the rapidly growing food insecurity crisis, yet the number of replacement meals is likely far short of what they provided prior to the pandemic, according to a study led by a researcher at Columbia University Mailman School of Public Health. The findings are published in the American Journal of Public These shortfalls came despite significant efforts at all levels. The USDA issued waivers that allowed states and localities to find new ways to provide meals to students who need them. Due to increased community need, some districts offered grab-and-go meals in outdoor locations and expanded meal distribution to seven days per week. Home delivery has been another common approach, especially in rural districts, and in many districts, school meal access was expanded to include to any child age up to age 18 years and students with disabilities up to age 26.

Los Angeles educators form rank-and-file safety committee to oppose unsafe school reopening – The drive to reopen schools in Los Angeles – with 734,000 students and nearly 60,000 teachers and support staff – poses serious issues of life and death. In light of this, teachers and education workers have formed the Los Angeles Educators Rank-and-File Safety Committee, which advances the following demands to unite the enormous opposition to the profit-driven school reopening:

• 1. No to in-person and hybrid learning across all K-12 schools, colleges and universities! Any and all decisions on the viability of in-person instruction must be determined democratically by rank-and-file educators, parents and workers, based on the scientifically grounded guidance of trusted health authorities. The “hybrid” model seeks to establish an “acceptable” level of risk. In reality, it exposes students and teachers to the virus on a part-time basis and is therefore not acceptable.
• 2. All teachers and students must be provided with the means and technology necessary to carry out fully remote instruction, including high-quality computer hardware and software, webcams, microphones and utilities as well as rent and mortgage protection! An estimated 20 percent of California students, numbering about 1.2 million, do not have internet access in their homes. This is a basic necessity in the 21st century. High-speed internet access must be provided to all families free of charge.
• 3. Educators who choose to teach from home must be guaranteed full income, unlimited sick leave, full medical coverage, and must be allowed to return to their jobs once safe conditions have been reestablished. Teachers should not have to choose between their health and their jobs. Those who have been forced to resign or retire, such as those with high seniority or who may be immuno-compromised, must be given the option of returning to their positions if they desire.
• 4. We demand full income protection, an indefinite rent and mortgage moratorium, and medical care for all parents who need to remain at home to facilitate their children’s education and for all those who have been cast into the ranks of the unemployed. The vast wealth of the financial oligarchy must be heavily taxed to pay for the health and safety of all workers and the education of the younger generation.
• 5. Wherever schools have been reopened, we demand the provision of rapid-response, on-site daily testing for all students, staff, and faculty. Every site must be fully staffed with registered nurses working with administrators to ensure safety protocols are followed and enforced. Contact tracers must be stationed at every school in every district to provide the public with up-to-date information about the locality and severity of the virus.
• 6. Schools cannot be reopened until they ha ve undergone air purification and ventilation retrofitting and are sanitized daily with the most advanced cleaning technology. Decades of defunding public education have resulted in the layoff of thousands of custodial staff and decaying infrastructure. Before the pandemic, Los Angeles schools were already severely understaffed with custodians and maintenance workers, restrooms ran out of soap and paper towels, and classrooms were habitually unsanitary. In Long Beach Unified, a rat and insect infestation caused teachers and students to contract scabies.
• 7. We demand daily reporting to the community on COVID-19 testing results and the full disclosure of where positive cases happen. We uphold the right to free speech and the protection of whistleblowers, including teachers, students and staff. California, like the majority of states, is not releasing data on school outbreaks. No one can return to a school building without a negative test.

Hundreds of Kenosha, Wisconsin teachers call in sick to force schools to close – Starting Monday, 276 teachers in Kenosha Unified School District (KUSD) in Wisconsin engaged in a sickout strike in opposition to increasing COVID-19 outbreaks and deadly conditions in the school district. The majority of teachers who called in sick did so on Sunday evening, forcing the district to close seven schools and switch to remote learning for this entire week. With 104,170 COVID-19 cases and 1,251 deaths since the onset of the pandemic, Wisconsin has had a major surge in cases in recent weeks. In the past week alone, there have been a reported 4,200 new positive cases and 34 deaths. Among those who died last week was Heidi Hussli, a 47-year-old Bay Port, Wisconsin, German teacher who had been teaching in person under a hybrid model just prior to contracting the virus. KUSD is the only large public school district in Wisconsin offering in-person education to start the academic year. The state is now averaging 1,792 new cases a day, with a 16.7 percent test positivity rate for the past week, among the highest in the US. In addition to K-12 schools reporting outbreaks, college campuses, including the University of Wisconsin-Madison, have become major hot spots adding to the surge in cases throughout the state. As of Sunday, KUSD had seven confirmed cases of students and three staff members across multiple school sites. With at least three positive cases reported at Indian Trail High School and Academy, at least 16 staff members and 100 students are in quarantine through September 30. There are also reports of positive cases at Tremper High School, Lakeview Technology Academy, Prairie Lane Elementary and Bullen Middle School. Each of these schools, except Prairie Lane Elementary and Bullen Middle School, has been closed for the week by the sickout. In addition, Bradford High School, Harborside Academy, Lincoln Middle School, and Reuther Central High School were also closed due to the sickout. The new school year began on September 14, with parents and students given a choice of either in-person or remote learning. Roughly 58 percent of students returned to schools for in-person instruction, and within days confirmed cases began cropping up within the schools.

Teachers across the US engage in sickout strikes to close schools – Protests and strikes continue to erupt across the United States by educators opposed to the homicidal push to return students to classrooms, which has resulted in at least 24,358 new COVID-19 infections tied to K-12 school reopenings. Since the end of July, when schools began to reopen en masse across the country, at least 30 educators have died from COVID-19. This week, educators in South Carolina, Florida, Louisiana, and Wisconsin have responded to the unfolding crisis with sickouts, in some cases compelling entire school districts to suspend in-person instruction. In South Carolina, the Facebook group “SC for Ed” organized a statewide sickout strike on Wednesday to protest unsafe conditions and low pay. While the total number of teachers that participated has not been reported, hundreds of teachers planned to take part in the protest. One teacher commented in the Facebook group, “I hate it when people say we’re abandoning our students. We’re fighting FOR our students! We’re fighting to keep top talented teachers in SC instead of losing them to GA & NC where they’re better paid and treated!” Like their counterparts across the country and internationally, teachers in South Carolina are overwhelmingly hostile to the unsafe reopening of schools. A survey of more than 4,000 teachers and school staff across the state found that 71 percent disapproved or strongly disapproved of the state’s handling of the pandemic and the reopening of schools. An astounding 27 percent are considering leaving their jobs over concerns about health and safety. Adding insult to injury, the annual pay increase that teachers receive has been frozen until Junuary. Already, at least 622 cases of coronavirus among students and staff have been tied to the reopening of K-12 schools in the state. On September 7, just three days after being diagnosed with the virus, third grade teacher Demetria “Demi” Bannister, only 28 years old, died of COVID-19 complications. According to the Associated Press, there were 293 new cases per 100,000 people in South Carolina over the past two weeks, putting the state in the top 10 for new cases per capita. There are over 141,000 reported cases in the state and 3,243 deaths. On Wednesday, the reported seven-day average positivity rate was 11.1, indicating a high degree of community transmission

Asthmatic Mother Tased, Cuffed And Arrested For Not Wearing Mask At Son’s Football Game – An asthmatic mother was tased cuffed and arrested for not wearing a face mask in Marietta, Ohio at a mostly empty stadium football game for her son’s eighth-grade sport. In a video from Wednesday, Alecia Kitts was arrested at her son’s middle school football game for not wearing a mask. She was sitting with, who appear to be her young children when she was approached by a police officer. Around 300 people attended a Marietta City Schools football game where Kitts was arrested. It’s unclear what was initially said, but Kitts repeatedly resists arrest as the officer struggles to handcuff her. The Ohio mother identified as Alecia Kitts by The Marietta Times, which was first to report footage of the incident circulating online, can be heard in the video asking the officer “what the f**k is wrong with you?” “You’re not arresting me for nothing, I ain’t doing nothing wrong,” she yells during the struggle with police. Kitts can be seen in the video screaming and falling to the ground after the police officer strikes her in the back with the taser. After the two struggled for a a few minutes, the officer takes out his taser and deploys it on Kitts. “Tasing this lady over not wearing a damn mask” a witness later identified as Tiffany Kennedy can be heard saying. Kitt’s mother can also be heard saying “it’s just a mask” before police restrained her daughter and walked her away into custody. Alecia Kitts was tased, cuffed, and arrested by the police officer during the game for not adhering to something that could cause her to have breathing problems.

Pity the Poor College Frosh: “Definitely Weird” – Jerri-Lynn Scofield – The Wall Street Journal ran an article today on the travails afflicting college frosh, The College Freshman’s Life This Fall: ‘Definitely Weird’. Roughly 1,300 colleges and universities are operating primarily or fully online this fall, while about 800 are primarily or fully in person, according to College Crisis Initiative, a tally of schools by Davidson College. Another 650 or so set out to offer hybrid instruction. As they’re no doubt largely driven by the tremendous economic pressures on colleges. How can they continue to justify their high fees – and accrue revenue from overpriced ancillary services such as dorm rooms and mandatory meal plans – unless students meet in person? And as we’ve discussed at length before, the pandemic is straining revenues throughout he collegiate system, from the elite to the bottom-end. For anyone who might choose to look closely, it’s shameful that pressure for revenues is leading college administrators to put so many young people at risk of infection – not to mention their communities – by allowing in-person classes.Ofeven when these have web cancelled, students continue to live in dorms and other central living facilities. In fact, the best way to quell the pandemic is not to allow students to meet at state u – short-term pain would be reduced relative to long-term gain and we’d have the greatest chance that “normal” would emerge again. The Washington Post has also run a piece on colleges reopening, The fall opening of colleges: Upheaval, pandemic weirdness and a fragile stability. From the WaPo: “We’re operating under the assumption that covid is a permanent partner to the human ecosystem that we have to manage for the foreseeable future,” The reopening of colleges amid a deadly pandemic has brought upheaval and uncertainty to campuses from coast to coast, with a staggering academic and emotional toll for students. But the chaos is not uniform. Variations in testing protocols, campus locations and student housing patterns from school to school can play a huge role in success or failure. So do school culture, state politics and luck. Pauses and delays of in-person teaching can shape the outcome. Geography is critical: The pandemic waxes in some regions as it wanes in others. A degree of stability, perhaps tenuous, has taken hold at many schools that brought students to campus. It is a remarkable turn after the spring crisis that forced students nationwide to evacuate and professors to pivot practically overnight from classrooms to remote instruction. Leaders of these schools say they are gaining confidence they can keep campuses on track with research, teaching and learning. Students are settling into the strangeness. Differences in approach reflect the contrasting political approaches towards the virus that is playing out across the country: Schools in the South and Midwest, he said, tend to be opening more fully in person than those in the Northeast and on the West Coast. “It pretty much mirrors what you’re seeing in the politics of the country,” he said. I realize that asking college students to do zoom study while remaining under the roof of Mom & Dad is a bit of a hard sell. What 18 years old, eager for the limited emancipation going away to college provides, wishes to surrender their newfound freedom to practice social distancing at home?:

Opposition mounts at the University of Michigan as COVID-19 outbreaks emerge on campus – The University of Michigan reported on Thursday that a cluster of COVID-19 cases had been confirmed in South Quad Residence Hall, primarily on the sixth and eighth floors. The outbreaks were reported just one day after a nearly two-week-long strike by the University of Michigan’s Graduate Employee Organization (GEO), a subsidiary of the American Federation of Teachers (AFT), was shut down with the ramming through of a sell-out contract that did not seriously address any of the student demands. The graduate student instructors were striking against the reckless reopening policies of the administration that many students felt would almost certainly lead to an outbreak on the campus. Their COVID-19-related demands included a universal right to work remotely, improved testing and contact tracing, care subsidies for parents and caregivers, a $2,500 unconditional emergency grant and rent freezes. The possibility that the university administration delayed the public announcement of the cases until after the strike was officially smothered cannot be discounted. An article published Thursday by the Michigan Daily, the student-run campus newspaper, shared a memo written by the Environment, Health & Safety (EHS) department on the outbreak. The letter was addressed only to the sixth- and eighth-floor residents of the South Quadrangle dormitory and reported that as of September 17, there had been 19 confirmed positive COVID-19 cases in South Quad. The memo went on to note that the majority of the cases were found to be “connected,” meaning that their origin was known and the outbreak presumably isolated, but that three cases on the sixth floor had not yet been “associated” and “have no known source of exposure.” The memo declared that students should “only leave when necessary to obtain food or to attend in-person classes if no remote option is available while wearing a face covering.” The memo also stated that “due to increased testing for athletes, they can also leave to attend their athletic events.” The university has taken every measure necessary to ensure that resumption of sports. In fact, last week as the university was preparing the shutdown of the GEO strike, it announced that the campus was bringing back the football program, which generated $122 million in profits in 2019.

Strike by 4,000 service workers at University of Illinois at Chicago enters its second week – The strike by 4,000 University of Illinois at Chicago (UIC) service workers is entering into its second week. Workers’ main demands include personal protective equipment (PPE) and more protection from the COVID-19 pandemic. At least 300 UIC workers have been infected with COVID-19 and two have died. Workers are also demanding a substantial wage increase. Many UIC workers are classified as workers of the state of Illinois, a loophole that allows them to be paid substantially less than Chicago’s minimum wage. The fight is bringing workers into direct conflict with major figures in the Democratic party and the Illinois financial elite, who dominate the University’s board. The unions are working lockstep with management, the political establishment and the media, which has subjected the strike to a news blackout, to isolate the strike and pave the way for a sellout. The strike continues after the Illinois Nurses Association ended a seven day strike by 800 UIC Hospital nurses without a new contract, forcing them to cross the picket lines against hospital staffers. Meanwhile, SEIU Local 73 is keeping its 25,000 other members on the job. To oppose the sellout which is being prepared behind their backs, striking hospital workers must follow the examples of auto workers and educators and organize themselves independently by forming rank-and-file committees. These committees would break the isolation of the strike, seeking the broadest possible mobilization of workers throughout Chicago and healthcare workers around the world in support the strike. They must also demand adequate time to study any contract proposal and that the voting process be monitored by representatives from the rank-and-file.

A twenty-year-old student dies from COVID-19 at California University of Pennsylvania – The Coronavirus continues to spread throughout the public colleges and universities in Pennsylvania. Pennsylvania State University has seen a spike in cases and at least one student has died of complications from COVID-19 at California University of Pennsylvania. This past week another 306 students tested positive for COVID-19 at the main campus of Pennsylvania State University. This brings the total number of confirmed cases to over 1,371 since the school reopened late last month. Centre County, where the school is located, now has one of the fastest-growing number of new cases in Pennsylvania. California University of Pennsylvania student Jamain Stephens Jr. died September 9 from a blood clot in his heart after he contracted COVID-19. He was 20 years old. About a week before his death, Jamain told friends that he tested positive for COVID-19. He played football for California University as a defensive lineman. The Pennsylvania State Athletic Conference voted in July to suspend all fall sports in 2020. His mother, Kelly Allen, told CBS News that she was worried about football players and other athletes who were playing sports this fall in the midst of the coronavirus pandemic. “I’m very, very nervous for these young men and women … These kids, their lives are priceless. And it’s just not worth it. It’s not worth it,” she said. Stephens was the son of Pittsburgh Steelers Jamain Stephens who also was a defensive lineman. The death of Stephens marks another tragic example that the premature reopening of schools and universities is having a deadly impact on students, faculty, and staff.

San Diego County seeks to exclude university outbreaks to undercount coronavirus cases – As California reaches new record levels of infection, officials in San Diego County are attempting to artificially lower the COVID-19 case numbers by demanding the state exclude the recent outbreak at San Diego State University (SDSU) from the county’s case count. There are now over 851 cases reported among SDSU students, growing from 648 just days ago. The reckless reopening of the campus has created a community health disaster that will undoubtedly lead to more hospitalizations and more deaths throughout the region. While SDSU was recently forced to end on-campus classes in the face of immense public pressure, the residence halls remain open. The majority of students in the residence halls are living with roommates and remain in close contact with other groups of students. This week will see the start of the university’s ham-fisted “mandatory” testing system for on-campus residents being implemented in an attempt to save face after garnering a mountain of negative attention in national headlines. In response to the outbreak, SDSU administration has continually blamed students for becoming ill. SDSU President Adela de la Torre recently complained about a “plague of parties“ for their record-breaking infection rate, according to the San Diego Tribune. This past week, SDSU Vice President J. Luke Wood ominously threatened students with suspensions and unstated “consequences” if they refuse to “submit to testing” or are found in violation of campus policies. In reality, the outbreak of cases at SDSU is a direct product of the administration’s own reckless policy to reopen for in-person learning. Every bit of credible science that has emerged since the onset of the pandemic indicated that the reopening of schools would act as a dangerous spreader of the virus. Now, as cases skyrocket, putting the whole region at risk, San Diego County Supervisors is lobbying to artificially lower the COVID-19 case numbers by excluding the recent outbreak at SDSU from the official county case count. The main motivation for the exemption is to allow the county to remain within a particular range of cases, in line with Governor Gavin Newsom’s “tiered“reopening plan, in order to keep the economy from shutting down.

Four Texas universities report over 1,000 COVID-19 cases each – Universities and schools around Texas made absurd claims leading up to the start of the fall semester boasting that they could reopen safely, citing various plans for testing, contact tracing, and requirements for students including social distancing and the use of masks. These claims have been proven false by reality. University towns have, unsurprisingly though tragically, become COVID-19 hotspots. According to an analysis by the Texas Tribune, in the counties where four-year college students make up at least 10 percent of the population, including Lubbock, Hays and Brazos, cases have grown 34 percent since August 19 compared with a 23 percent case increase in counties with proportionally less four-year college students such as Houston and Dallas that also have universities. A surge in COVID-19 cases in Lubbock and Brazos counties coincided with the start of fall semester at Texas Tech University and Texas A&M University which are located in those respective counties. Travis County, which includes the city of Austin, also saw the largest increase in cases within the past four weeks in ZIP codes containing the University of Texas at Austin. Stephen Kissler, an infectious disease researcher at Harvard T.H. Chan School of Public Health, recently told the Hill that colleges are “places where we’re starting to see a lot of spread” and that the virus has the potential to jump to the general population from college campuses, stating, “diseases don’t stay isolated in the populations where they start.” Four universities in Texas now total over a thousand confirmed cases each, with a fifth university just under one thousand. The case totals, taken from their respective university coronavirus dashboards, are made even worse once the lack of adequate testing is considered. This means that the real numbers are likely far higher. University of Texas at Austin has recorded 1,173 cases, with 974 students and 199 staff cases; Texas A&M has 1,447 cases with a 10.3 percent test positivity rate; 1,553 cases have been identified at Texas Tech; Texas Christian University has confirmed 1,129 cases; and Baylor has 967 cases. These are all universities that have resumed in-person classes for most students. Universities that have stayed online for most students have recorded fewer cases.

Brown University study used to downplay spread of coronavirus in US schools – A new database announced by Brown University and software company Qualtrics is being used to claim that the danger from the coronavirus pandemic in reopened schools is minimal, and that in-person learning should be resumed more fully across the United States. One of the first articles commenting on the database, known as the National COVID-19 School Response Dashboard, was in the Washington Post. In an article titled “Scant evidence that the pathogen is spreading inside buildings,” it uses the data presented to claim that there are “low levels of infection among students and teachers.” The article continues, asserting that “health experts” suggest that “opening the schools may not have been as risky as many have feared.” Drawing from the database, it notes that “0.23 percent of students” and “0.49 percent” of teachers nationwide had a confirmed or suspected coronavirus case. Similar arguments were made by the Hill, as well as the authors of the Brown study themselves. Emily Oster, an economics professor who helped create the database, noted, “These numbers will be, for some people, reassuring and suggest that school reopenings may be less risky than they expected.” Translated into actual numbers and extrapolated to the teacher and student population across the country, the infection rate reported by the database corresponds to about 18,620 teachers and an estimated 115,000 students infected with the coronavirus. These cases and any subsequent deaths are the direct result of the reopening of schools amidst a raging pandemic, which has resulted in more than 7.1 million cases in the United States and killed more than 207,000 people. It is worth pointing out that the total case numbers suggested by the Brown study are four to five times higher than other estimates of COVID-19 in schools. A different database, the COVID Monitor, counts as of this writing only 24,358 cases of the coronavirus among both staff and students. If anything, the data presented in the Brown study is an alarming indication that the data collected so far on school reopenings is inadequate for accurately tracking the virus and keeping it from infecting and killing more teachers and students. It should not be forgotten that the number of students and teachers infected should ultimately be zero. The fact that a pandemic has so far killed at least 30 educators and is poised to kill many more should not be taken as an unavoidable loss of life. Yet both the Post and Hill articles, as well as the Brown study itself, treat the spread of the pandemic as a fact of life, and not a deadly threat that must be fought against at every turn.

A self-inflicted crisis in biomedical research could delay discoveries and cures for years – American medical research, a crown jewel of the world scientific community, faces a profound crisis in the age of COVID-19. Without policy changes by the federal government, the academic biomedical research sector could be hobbled for years to come and could lose its competitive edge to other nations. Over the past six months, medical researchers have been battered by a triple blow. First, most clinical trials in the United States came to a halt to protect participants and staff from COVID-19 infection. Then, academic hospitals and medical centers, financially crippled by the pandemic, dramatically cut back on research funding. Finally, the Trump Administration stopped issuing visas to foreign scientists, cutting off a wellspring of talent on which American research teams depend. “It is the most turbulent time for academic biomedical and clinical research you can possibly imagine,” said Paul Glimcher, Julius Silver Professor of Neural Science at New York University’s Grossman School of Medicine. “We have seen a freeze in cutting edge research on everything from cancer to depression to Alzheimer’s disease. In the longer term, funding cutbacks for exploratory research and restrictions on immigration could put limits on our ability to create new cures and new jobs and to compete on the world stage.” The United States has long been considered the world’s leading center of medical research and innovation. The industry supports hundreds of thousands of jobs at universities, academic medical centers, and companies across the country. It provides trillions of dollars of value in everything from foreign exports to increased longevity. With the onset of the pandemic, thousands of clinical trials, totaling 80 percent of non-COVID trials, were stopped or interrupted. And many researchers turned their attention solely to the development of COVID-related treatments and vaccines. In the private medical research sector alone, nearly 100 companies and 240 trials have experienced disruptions. Pharmaceutical manufacturers like Eli Lilly, Merck, and Pfizer all announced delays in enrollment for ongoing studies and initiation of future studies. At hospitals and health systems, the American Hospital Association estimates a total financial impact of $202.6 billion in losses between March and June of this year from a drop in elective procedures and an array of increased costs for staff support, emergency equipment, and treating COVID-19 patients. One result has been a dramatic drop in funding for academic research from hospitals and health systems. “Laboratories have been closed,” Michael Lauer, the deputy director for extramural research at the National Institutes of Health recently said toThe Lancet. “Communications have been shut down, conferences have been canceled, supply chains for equipment have been lost, resources have been lost. There have been widespread financial losses within academic medical centers that have spilled over onto their research operations.” Altogether, the impact could last for years.

Melbourne Police Surround & Arrest 2 Elderly Women Resting On Park Bench For ‘COVID Violation’ –“Victoria Police have lost all commonsense,” one Australian eyewitness quipped upon posting a video showing police telling a 38-week pregnant woman she can’t sit down due to coronavirus and social distancing enforcement measures. It’s one of many recent viral videos to come out of Australia’s southeast state of Victoria, home to Melbourne, showing absurd “crackdowns” by police for alleged coronavirus policy violators. “As a pregnant woman I can’t sit in the park?” the incredulous woman whose story was covered widely in local media asked the couple of officers who harassed her. Apparently not… because COVID. “You can only be out of your house for one of four reasons,” the officer responded. “One of those would be exercise. Sitting in a park is not one of the four reasons.” The woman reasoned, “So, I’m pregnant and obviously my exercise is limited because I have to walk I’m now puffed out because I’m 38 weeks pregnant. So, even I can’t sit in a park, is that right?” “You can only be out for one of the four reasons,” the officer asserted, explaining that her designated one-hour of exercise outdoors still includes certain restrictions (as if free citizens are under a prison regimen!).But the above scene which unfolded earlier this month is nothing compared to another recent moment caught on video of police surrounding two old ladies resting on a park bench in Melbourne. This one made national media in Australia and is still going viral across the world after it happened during the first week of September: How many cops for two little old ladies? https://t.co/yb9R6nEIsd pic.twitter.com/wHqzT5HdG4 Here’s how national news source news.com.au described the scene unfold: Dramatic footage has captured a bizarre stand-off between five police officers and two elderly women sitting on a Melbourne park bench.

GM’s sale of India plant faces delays amid China tensions – Delays to General Motors’ sale of its Indian plant to Great Wall Motor due to tensions between India and China are likely to result in hefty unplanned costs for the U.S. automaker. Gaining Indian government approval for China-related deals is now expected to take quite some time and although the sale should still happen at some point, GM has not changed its plan to begin winding down the plant’s operations next month. “By next year, it will either be a closed GM site or it will be an operating site with Great Wall,” said one source. GM had planned to use the expected sale proceeds of $250 million-$300 million to pay off liabilities incurred with its exit from manufacturing in India in what a second source said would have been a “no gain-no loss” situation. Although money will come through once the deal is done, it will now have to pay out of pocket for severance pay, some of which would never have occurred had the deal proceeded smoothly, as well as other costs — which could amount to a couple hundred million dollars. Sources also said severance pay costs could be much higher than usual due to lack of clarity about the deal’s prospects and workers’ demands for greater relief given the low chances of finding new jobs amid the coronavirus pandemic.

Students occupy schools across Greece to protest unsafe return to classrooms –High school students in several cities on the Greek mainland and islands began occupying schools last week to protest the unsafe return to classrooms. Among the earliest schools occupied were in the cities of Karditsa and Agrinio. According to the director of secondary education in Karditsa, last Wednesday four of the five General Lyceums in the city, were occupied. The two Vocational Lyceum (EPAL) schools in Karditsa are also occupied by students. On Monday, dozens more schools nationally joined the protests; by Tuesday, more than 100 schools were being occupied nationally. Despite the resurgence of the virus in Greece this summer – fueled by the homicidal decision to let the tourist season proceed – Prime Minister Kyriakos Mitsotakis’ right-wing New Democracy government sent teachers and pupils back to classrooms on September 14. Over 557,516 high school students and 64,000 permanent secondary school teachers, a large part of Greece’s 10 million population, are in danger. The return to school has proceeded unopposed by the trade unions and the main opposition party, Syriza-Progressive Alliance. A banner on a school fence with some of the demands of the occupying students. It reads: “No more than 15 students per class, Give money to education, We are not expendable! (Credit: Pantelis Paspals/Facebook) Within one week, this disastrous policy has let COVID-19 rip through the school system, leading to the closure of at least 59 schools. To suspend the operation of a school, at least three cases of coronavirus – of people not directly related to each other – must be identified. This is contributing to a surge in coronavirus cases nationally, with 453 new coronavirus cases announced Monday and six deaths. On Tuesday, 346 new cases were recorded (210 of them in the most populated region, Attica) and 8 deaths. Seventy-seven patients are intubated. This brought total cases to 15,928 and deaths to 352. The demands of students occupying high schools include limiting classroom groups to at most 15 students; for immediately hiring more teachers to fill the gaps; that permanent cleaning staff be hired; and that cameras not be installed in schools for e-learning, as proposed by the government. At one school a banner put up by students read: “No more than 15 students per class, Give money to education, We are not expendable!” The government is letting teaching proceed based on maximum class sizes of 25 for primary schools and the last class of secondary school. For other secondary school classes, the maximum size is 27. These numbers are routinely breached.

Student protests against herd immunity policy spread across Greece – Greek high school students marched Thursday in protests against the government’s herd immunity policy as occupations of high schools and strikes by doctors and transport workers spread across the country. This upsurge of social opposition comes as Athens hospitals, devastated by decades of European Union austerity, find themselves swamped with 580 COVID-19 victims as young as 17, including 70 intubated patients. Amid a total blackout in the international media, students at hundreds of high schools and broad layers of workers are joining the struggle against the EU’s back-to-school campaign, led by Prime Minister Kyriakos Mitsotakis’ right-wing New Democracy (ND) government. The return to school has proceeded without opposition from the trade unions or the main bourgeois opposition party, the pro-austerity Syriza (“Coalition of the Radical Left”). Doctors take part in a rally during a 24-hour nationwide strike by state hospital workers outside the health ministry in Athens, Thursday, Sept. 24, 2020. (AP Photo/Thanassis Stavrakis) Protests by high school students against the ND government’s guidelines for the return to school continue to accelerate. While on Monday dozens of high schools joined a movement to occupy the schools that began last week, by Tuesday 100 schools were occupied. Yesterday, Kathimerini reported that over 200 schools were occupied across Greece, mainly in the Attica region around Athens, Thessaloniki, Crete, Achaea and Magnesia. Anger is mounting among workers and youth over the lack of social distancing and conditions, such as large class sizes in poorly ventilated classrooms, which ensure that the virus will spread. The main demands of the protesting students include limiting class sizes to 15 and hiring on the basis of permanent contracts the number of teachers necessary to reduce class sizes, along with additional cleaning staff. Sections of workers are taking strike action in solidarity, while also demanding wage increases and contract revisions. On Thursday, a strike at the port of Piraeus, near Athens, shut down all traffic, including both merchant shipping and ferries, for 24 hours. From Monday to Wednesday, Olympic Air was forced by strike action to cancel 58 domestic flights between Athens and various Greek islands. On Thursday, students, joined by teachers and parents, marched in Athens and Thessaloniki, Greece’s two largest cities, criticizing both herd immunity policies and the military buildup against Turkey being carried out by the Mitsotakis government, in alliance with France.

National Education Union letter to Boris Johnson: A total surrender to herd immunity – The National Education Union (NEU) has offered continued collaboration and support for the Johnson government’s herd immunity programme. Millions of teachers and students have been forced to confront the devastating consequences of the full reopening of schools from September 1. There has been a massive surge in coronavirus outbreaks, with 1,700 schools recording infections. Many have been forced to close, fully or partially. Teachers have already begun to be hospitalised and teachers’ mental health is now recorded as the most compromised of any profession. Warnings have been issued by Chris Whitty, Chief Medical Officer, that the virus is “spiralling out of control” with 50,000 daily infections predicted in the next four weeks and Prime Minister Boris Johnson has announced a raft of ineffectual measures to suppress the pandemic. The death rate could rise to 200 a day by November. How has the “largest teaching union in all of Europe” responded? Despite growing opposition by its members, it has not raised a single demand on the government to protect its members. Instead it insists that the Tories must “act now” and fondly “hopes” that this hated government “will be able to get this situation under control quickly.” The NEU letter sent on September 20 to Johnson, which was made public in a break with the union’s normal practice of behind the scenes discussions, takes a solemn tone. “The issues raised in this letter are so serious and pressing that we are making its contents public,” the NEU writes. The “serious situation” does not reference any concerns regarding the impact of schools in accelerating the circulation of the virus, or on the risks that are posed for the health of staff or children. The union’s concerns focus on the catastrophic failure of the “test, track and trace” system in undermining its support for the full reopening of schools, which the NEU has desperately tried to sell to its membership. The letter states, “As the testing regime buckles under the strain of demand, staff and pupils cannot get tested, or get results, and schools cannot deal with outbreaks or sustain full opening if people are unnecessarily isolating.” The NEU fully accepts the government’s insistence that schools must not close under any circumstances and explains, in introducing the letter, “With lockdowns likely but further school closure ruled out by the Government, today’s letter calls for the testing regime to be significantly and urgently increased for schools.”

Report demolishes government claims that reopening UK schools reflects concern for disadvantaged children – Since the reckless reopening of the UK economy from the beginning of July and all schools at the beginning of September, the number of coronavirus cases has escalated out of control. Weekly figures show a doubling of new infections, directly related to the premature lifting of lockdown before the virus was sufficiently suppressed and adequate public health measures put in place. As early as May, Boris Johnson’s Conservative government – backed by the Labour Party and the unions – insisted schools be reopened so parents could return to work. Health Secretary Gavin Williamson dismissed the safety concerns and opposition of parents, educators and doctors as “scaremongering,” claiming the government had the best interests of children at heart. Such nonsense is belied by a damning report by the Social Mobility Commission (SMC), “The Long Shadow of Deprivation: Differences in Opportunity across England.” The SMC is an advisory public body sponsored by the Department of Education. Its remit is to monitor and encourage ways to achieve social mobility in the UK. Published as schools began reopening their gates, its findings confirm what has long been known – that inequality in educational outcomes is directly related to economic deprivation, over which successive governments have presided. The inequality persists and widens post-education, with children from poorer backgrounds in general earning less than their peers with the same educational qualifications. Williamson said, “We recognise that children from the most disadvantaged backgrounds are the ones that are going to suffer the most if we do not bring schools back when we are able to do so.” The recent A-level assessment scandal, which forced the government into a U-turn with an apology, exposed this hogwash. The exams were cancelled due to the pandemic, and rather than base this year’s grades on teacher assessments, an algorithm was used which favoured children from better off areas. Almost 40 percent of pupils’ grades were downgraded, revealing that the awards were based on social class, not merit. Pupils attending private schools saw their grades rise. The education of poorer children is of as little concern for the Johnson government as the health of the working class.

.

include(“/home/aleta/public_html/files/ad_openx.htm”); ?>