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 GDP, the jobs report, banking oversight, mortgage delinquencies, local schools & universities, plus coronavirus relief (stimulus). 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.
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Fed lowers Main Street loan threshold in bid to boost interest – The Federal Reserve is lowering the minimum loan size for its middle-market business rescue program by more than half to make the program more available to smaller businesses. The central bank said Friday that small businesses seeking credit from the Main Street Lending Program can access loans as small as $100,000, down from the previous cutoff of $250,000, and that fees will be adjusted accordingly. The $600 billion program, which is funded by the Fed and the Treasury Department through the Coronavirus Aid, Relief and Economic Security Act, is available to businesses with fewer than 15,000 employees or less than $5 billion in annual revenue. The Fed started purchasing majority stakes in loans in early July, but interest in the program has been slow. To date, the Fed has purchased just 400 loans worth $3.7 billion – a fraction of the program’s size. This is the third time the Fed is lowering the minimum loan size of the program. The original cutoff was $1 million, which was then lowered to $500,000 and then later to $250,000. Fed Chairman Jerome Powell had signaled before that another reduction may be a step too far. “The current facility would not work for much smaller loans,” Powell said at a congressional hearing last month. “We’d have to start a new facility that had much less protection for the taxpayer.” But the Fed has faced criticism from lawmakers, community groups and community bankers that Main Street was ill-suited for smaller businesses. Less than 15% of the Main Street loans that the Fed had purchased as of Oct. 8 were for less than $1 million. Effective Friday, lenders won’t be required to pay a transaction fee for loans meeting the program’s terms that are less than $250,000, which could encourage banks to originate these smaller loans. The Fed, through its special-purpose vehicle, will also pay lenders 50 basis points per year for servicing loans less than $250,000. Borrowers, meanwhile, will pay lenders an origination fee of up to 2% of the value of the loan. Borrowers taking out loans worth more than $250,000 pay lenders an origination fee of up to 1% of the amount of the loan. The Fed also issued an updated frequently-asked-questions document clarifying that loans made through the Small Business Administration’s Paycheck Protection Program worth less than $2 million can be excluded from the calculation of total debt. The amount of a company’s outstanding debt helps determine what loan size it qualifies for in the Main Street program.
Congresswoman Katie Porter Says Fed Is Playing “Kingmaker on Wall Street” and “Appears Corrupt” –Pam Martens –In a letter to the Fed last Wednesday, Porter wrote that “using billions of taxpayer dollars to play kingmaker on Wall Street – effectively awarding billions of dollars to a handful of corporations – using a decision-making process that you have not made public, appears corrupt.”Porter was talking about several distinct issues. First, the Fed had stated that its corporate bond buying program would not include the debt of the Wall Street banks. Nonetheless, wrote Porter, the Fed “is using billions of taxpayer dollars to purchase the debt of banks like JPMorgan Chase.” The Fed is making those purchases by buying debt-based Exchange Traded Funds (ETFs).Porter quotes from a September 21 Yale School of Management study titled “Despite Stated Exclusion, the Fed Is Buying Bank Debt.” The report notes that “a close review of its holdings reveals that by buying exchange traded funds, [the Federal Reserve] has indirectly bought $2 billion of bank bonds – over 15% of its total corporate bond holdings.”Porter is particularly critical of the fact that the Fed is using money from the pandemic stimulus legislation passed in the spring and known as the CARES Act to facilitate these corporate bond purchases. Porter writes: “Your decision to buy corporate debt with taxpayer dollars directly benefited Wall Street and the world’s richest corporate executives.”The CARES Act called for the Treasury Department to hand over $454 billion of taxpayers’ money to backstop any losses experienced by the Fed on its myriad lending facilities. The game plan was that the Fed would leverage up the $454 billion to approximately $4.54 trillion and buy up the sludge on Wall Street. For reasons as yet unexplained, the Treasury has not turned over the bulk of those funds to the Fed. Exactly what happened to the rest of the money is unknown. (See $340 Billion of the $454 Billion that Mnuchin Was to Turn Over to the Fed is Unaccounted For.)According to the H.4.1 data released by the Fed for the week ending Wednesday, October 21, the Fed has received the following amounts from the Treasury: $10 billion for the Commercial Paper Funding Facility; $37.5 billion for the Corporate Credit Facilities; $37.5 billion for the Main Street Lending Facilities; $17.5 billion for the Municipal Liquidity Facility; $10 billion for the Term Asset-Backed Securities Loan Facility; and $1.5 billion for the Money Market Mutual Fund Liquidity Facility – for a total of $114 billion.The CARES Act was signed into law on March 27 of this year. It’s now exactly seven months later and nobody can explain what’s happened to $340 billion that was allocated by Congress.Porter’s letter also expresses outrage that the Fed has appointed a Wall Street investment firm that is one of the largest purveyors of ETFs to manage the corporate bond buying programs. Porter writes that the Fed’s decision to “appoint the CEO of BlackRock to administer the largest corporate bailout in history has resulted in windfall profits for a few hand-selected corporations and eroded public faith in an institution that is foundational to our democracy. To begin to remedy these wrongs, I request that you immediately develop and implement stronger safeguards against conflicts of interest. The profits that BlackRock has made off the exchange-traded funds (ETF) market since your March 23 announcement that the Fed would begin to purchase ETFs that invest in bank debt are clear evidence that any current precautions are wholly insufficient.”
Chicago Fed: “Index suggests slower, but still above-average growth in September” – “Index suggests slower, but still above-average growth in September.” This 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- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.27 in September from +1.11 in August. Three of the four broad categories of indicators used to construct the index made positive contributions in September, but three of the four categories decreased from August. The index’s three-month moving average, CFNAI-MA3, moved down to +1.33 in September from +3.22 in August. [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. For a broad historical context, here is the complete CFNAI historical series dating from March 1967.
Curb your enthusiasm: Rapid third-quarter GDP growth won’t mean the economy has healed – EPI – On Thursday, the Bureau of Economic Analysis (BEA) will release data showing the growth rate of gross domestic product (GDP) in the third quarter of 2020. GDP is the broadest measure of the nation’s economic activity, and this is the last major data release before the presidential election, so it would be a big deal even in normal years.But it’s obviously not a normal year, and the GDP data released on Thursday will be for a quarter following the single fastest contraction of GDP in history, when the economy shrank at an annualized rate of 31.4% in the second quarter of 2020 due to the COVID-19 shock. The third-quarter data will show historically fast GDP growth – it could conceivably even see growth at a 31.4% annualized rate, for example. Some might be tempted to take too much solace in this rapid growth, and if growth in the third quarter looks to match the pace of contraction in the second quarter, some might even be tempted to declare the economic crisis near-over.This post highlights some reasons to temper enthusiasm (some that overlap with points made in this excellent Vox post), even in the face of a very large third-quarter growth number. There are five main reasons that I detail further below:
- The enormous contraction of GDP in the second quarter means any growth in the third quarter is coming off of a significantly smaller base of GDP.
- The COVID-19 shock caused rapid contraction of the economy even in the first quarter of 2020 – so it’s not just the record-setting contraction of the second quarter which needs to be clawed back.
- It’s not just the level of pre-shock GDP that needs restored to make labor markets healthy, it’s the level this GDP would be at if it had continued to grow at its pre-shock rate.
- Because the COVID-19 shock has been so centered in low-wage sectors, any given dollar value of GDP lost translates into far more people who have lost jobs.
- Third-quarter growth was driven by the momentum of economic reopening and occurred with the tailwind of the generous recovery measures included in the CARES Act. Neither of these boosts will help in the future absent radical policy change.
The second – quarter GDP disaster means growth going forward is off of a much smaller base U.S. GDP shrank at a 31.4% annualized rate in the second quarter of 2020 (this means the economy shrank by 9% in that quarter – if that same pace was sustained for an entire year, the economy would be 31.4% smaller than it started). Concretely, 31.4% growth in the third quarter would still leave GDP that was about 2.5% smaller than it was before the second quarter COVID-19 shock hit.
BEA: Real GDP Increased at 33.1% Annualized Rate in Q3 – From the BEA: Gross Domestic Product, Third Quarter 2020 (Advance Estimate) Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent.The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the third quarter, based on more complete data, will be released on November 25, 2020….The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.The increase in PCE reflected increases in services (led by health care as well as food services and accommodations) and goods (led by motor vehicles and parts as well as clothing and footwear). The increase in private inventory investment primarily reflected an increase in retail trade (led by motor vehicle dealers). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods). The increase in nonresidential fixed investment primarily reflected an increase in equipment (led by transportation equipment). The increase in residential fixed investment primarily reflected an increase in brokers’ commissions and other ownership transfer costs. 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 Q3 2020, and real GDP is currently off 3.5% from the previous peak. For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak.The advance Q3 GDP report, at 33.1% annualized, was close to expectations.Personal consumption expenditures (PCE) increased at 40.7% annualized rate in Q3, up from 33.2% decrease in Q2. Residential investment (RI) increased at a 59.3% rate in Q3. Equipment investment increased at a 70.1% annualized rate, and investment in non-residential structures decreased at a 14.6% pace.
Q3 GDP Advance Estimate: Real GDP at 31.4%, Record High – The Advance Estimate for Q3 GDP, to one decimal, came in at 33.1% (33.08% to two decimal places), a record increase from -31.4% (-31.38% to two decimal places) for the Q2 Third Estimate. Investing.com had a consensus of 31.0%.Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release:Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent.The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the third quarter, based on more complete data, will be released on November 25, 2020.Coronavirus (COVID-19) Impact on the Second-Quarter 2020 GDP EstimateThe increase in third quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.17% average (arithmetic mean) and the 10-year moving average, currently at 2.01%.Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 17.7% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.27%. All twelve recessions over this timeframe have begun at a higher level of current real YoY GDP.In summary, the Q3 GDP Advance Estimate of 33.1% was slightly better than expected, and a record gain for GDP.
U.S. economy posts record growth in third-quarter; COVID-19 scarring to last (Reuters) – The U.S. economy grew at a historic pace in the third quarter as the government injected more than $3 trillion worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal. The 33.1% annualized growth rate reported by the Commerce Department on Thursday, the last major economic scorecard before next Tuesday’s presidential election, did not ease the human tragedy inflicted by the coronavirus pandemic, with tens of millions of Americans still unemployed and more than 222,000 dead. The economy remains 3.5% below its level at the end of 2019 and incomes plunged in the third quarter. Nevertheless, with five days remaining to Election Day President Donald Trump, trailing in most national opinion polls, cheered the report. “Biggest and Best in the History of our Country, and not even close,” Trump wrote on Twitter. “So glad this great GDP number came out before November 3rd.” Trump’s Democratic challenger Joe Biden highlighted the lack of full recovery and the rapidly petering growth spurt. “We are in a deep hole and President Trump’s failure to act has meant that third-quarter growth wasn’t nearly enough to get us out of (it),” said Biden. “The recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind.” According to Christopher Way, an associate professor of government at Cornell University, the report “will have absolutely zero effect on the election and it is economic performance in the first half of an election year that matters.” The rebound in gross domestic product followed a 31.4% rate of contraction in the second quarter, the deepest since the government started keeping records in 1947. On a year-on-year basis GDP jumped 7.4% last quarter after sinking 9.0% in the April-June period. The rebound reversed about two-thirds of the 10.1% drop in GDP in the first half. By comparison, the economy contracted 4% peak to trough during the 2007-09 Great Recession. Economists polled by Reuters had forecast GDP expanding at a 31% rate in the July-September quarter. The economy plunged into recession in February. The government’s rescue package provided a lifeline for many businesses and the unemployed, juicing up consumer spending, which on its own contributed 76.3% to the surge in GDP. But government funding has been depleted with no deal in sight for another round of relief. New COVID-19 cases are spiraling across the country, forcing restrictions on businesses like restaurants and bars. “We still don’t have the level of GDP surpassing the pre-COVID level until fourth-quarter 2021 and closing the output gap will take even more time,” said Kevin Cummins, chief U.S. economist at NatWest Markets.
U.S. GDP booms at 33.1% rate in Q3 report, beating expectations – Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday. Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department’s initial estimate for the period. The gain came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones. The previous post-World War II record was the 16.7% burst in the first quarter of 1950. Markets reacted positively to the news, with Wall Street erasing a loss at the open and turning mostly positive. “It’s obviously good news that the economy bounced back in the third quarter,” said Eric Winograd, senior economist at AllianceBernstein. “There’s still a lot of work to do here and the pace of improvement … is going to slow. The stimulus programs that provided much of the economic lift last quarter have expired or are expiring. Fiscal support is diminishing. That is part of the reason that the pace of growth is going to slow from here.” Increased consumption along with sold gains in business and residential investment as well as exports fueled the third-quarter rebound. Decreases in government spending following the expiration of the CARES Act rescue funding subtracted from GDP. The powerful growth pace came after states across the country shut down large swaths of activity in an effort to stem the spread of Covid-19, which the World Health Organization declared a pandemic on March 11. Some 228,000 people have died in the U.S. from the virus, which has infected nearly 9 million in the country. The economy has been in a technical recession since February, as first-quarter growth declined at a 5% pace. While the news on Q3 was good for the $21.2 trillion economy, the U.S. faces a tougher road ahead as coronavirus cases increase and worries grow over the health and economic impacts. Nearly half the 22 million jobs lost in March and April remain unfilled and the unemployment rate remains at 7.9%, more than double its pre-pandemic level as 12.6 million Americans are still out of work. The GDP release came just five days before Election Day, which culminates a heated battle between President Donald Trump and his Democratic challenger, former Vice President Joe Biden. “This is going to be seized upon by both ends of the political spectrum as either evidence of the strength of the post-lockdown economic rebound or a cursory warning that the gains could be short-lived,” said James McCann, senior global economist at Aberdeen Standard Investments. “The reality is that the GDP numbers demonstrate that the U.S. economy did indeed rebound strongly as lockdown measures were lifted.”
U.S. Economy Recovered Significant Ground in Record Third-Quarter GDP Rebound – WSJ – The economy grew at a record pace in the third quarter – increasing 7.4% over the prior quarter and at a 33.1% annual rate – recovering about two-thirds of the ground it lost earlier in the coronavirus pandemic. Gross domestic product – the value of all goods and services produced across the economy – jumped as pent-up consumer demand and government support helped power spending after disruptions related to Covid-19 eased. The increase in growth, the biggest jump in records dating to 1947, followed a record decline earlier in the pandemic when the virus disrupted business activity across the country. That puts the economy about 3.5% smaller than at the end of last year, before the pandemic hit.”Record gains aren’t enough to get us out of the hole that Covid left us in,” Diane Swonk, chief economist at Grant Thornton, said. She cited risks from a recent U.S. surge in infections as a potential economic headwind in the current fourth quarter, saying, “It’s hard to reopen an economy unless workers and consumers feel safe and healthy.”The third-quarter GDP increase followed a 9% quarter-to-quarter decline in the second quarter, or a 31.4% annualized drop, adjusted for inflation and seasonal fluctuations. U.S. GDP is normally reported at an annual rate, or as if the quarter’s pace of growth continued for a full year. But the pandemic triggered extreme swings in output – a severe drop followed by a quick rebound – making the annualized numbers misleading because no one expects second- or third-quarter numbers to continue for a full year.The Commerce Department’s GDP report provides the last major quantitative snapshot of the economy before Tuesday’s presidential election, with President Trump and Democratic presidential nominee Joe Biden offering contrasting views on what the growth figures mean.Mr. Trump said the increase was proof that the pandemic-induced economic collapse was turning a corner thanks to his administration. “Next year will be FANTASTIC!!!” Mr. Trump said in a tweet. “So glad this great GDP number came out before November 3rd.”Mr. Biden said many people won’t feel like they are better off following the growth figures. “The recovery is slowing if not stalling; and the recovery that is happening is helping those at the top, but leaving tens of millions of working families and small businesses behind,” he said. Recent data suggest improvement in the economy continued into the fourth quarter, though at a slower pace than the summer’s resurgence.Forecasters predict the economy will expand more slowly through the fourth quarter as the temporary jolt from the economy’s reopening and government stimulus fades, with unemployment expected to remain high this winter. They also project the economy will end 2020 smaller than a year earlier, but grow in 2021.
Record-breaking increase in GDP – James_Hamilton – The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 33.1% annual rate in the third quarter. That’s the largest change ever recorded, even bigger than the -31.4% annual rate now reported for 2020:Q2. What do those numbers tell us?The first thing to note is that “annual rate” refers to what the growth rate would be if growth were to continue for a full year at the pace observed in the third quarter. It’s often helpful to think in terms of those units. But in this case, there is zero possibility that growth will continue at this pace. Real GDP in Q3 was actually 1.074 times as big as real GDP in Q2. The calculation 1.0744 ^ 4 = 1.331 is where the reported 33.1% number comes from.The second thing to note is that even if real GDP had fallen by 31% in Q2 and grown by 33% in Q3 (which they didn’t), that wouldn’t leave us ahead of where we started. Because real GDP was so much lower in Q2 than in Q1, 31% of Q1 GDP (the base used to calculate a growth rate in Q2) is a much bigger number than 33% of Q2 GDP (the base used to calculate a growth rate in Q3). A 30% drop followed by a 30% gain would actually leave us down on net by 9% (0.7 x 1.3 = 0.91). This is one of many reasons why many economists prefer to use logarithms rather than percent changes. The change in the log of real GDP in Q2 was -0.094 and the change in Q3 was 0.071. Adding those two changes together gives -0.023, which is the correct summary of the situation: real GDP was about 2.3% lower in Q3 than it had been in Q1. None of this should distract us from acknowledging just how remarkable both the Q2 and Q3 numbers are. One measure of how unusual they are is based on the standard deviation of quarterly changes in the log of real GDP over 1947:Q2 to 2019:Q4. An observation that is 5 standard deviations from the historical average, or a 5-sigma event, is sometimes called a “black swan” – something that is not at all expected, until you see one. The fall in real GDP in Q2 was an 11-sigma event, and the increase in Q3 was a 7-sigma event. Both extremely remarkable. But combined they leave us 4 sigmas short of where we were in Q1, which itself was already down from normal.These numbers bring the Econbrowser recession indicator index up to 100.0% for Q2. As we’ve done every quarter for the last 15 years, we wait for one quarter of data revisions and updates before calculating the value for the previous quarter. Thus the number posted today (100.0%) is an assessment of the situation of the economy in 2020:Q2. The index had already been up to 97.1 for 2020:Q1. There is no question that we should count 2020:Q1 and Q2 as part of the 12th postwar U.S. recession. We will wait until the Q4 GDP data release before calculating a value for Q3, though it’s quite clear now that unless the numbers get drastically revised, the recession could now be said to be over and we’ve begun the recovery phase. The COVID recession is a remarkable outlier not just in terms of the magnitude of the change in real GDP but also in terms of its composition. In all previous historical recessions, consumer spending on services was quite stable during the downturn. This time consumer services have been the biggest part of the story. By contrast, purchases of consumer durables usually take a bit hit in a recession. The decrease in Q2 was pretty minor, and Q3 saw a big boom that now puts durables way up relative to the start of the year. Money saved from restaurants and travel is showing up in spending on big-ticket items.
Q3 GDP: Investment – Investment has been weak for some time, and slumped in Q1, and fell off a cliff in Q2 along with the overall economy. Investment bounced back in Q3, especially for residential investment and investment in equipment – but not for non-residential structures. The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy. In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern – both into and out of recessions is – red, green, blue. Of course – with the sudden economic stop due to COVID-19 – the usual pattern doesn’t apply. The dashed gray line is the contribution from the change in private inventories. Residential investment (RI) increased at a 59.3% annual rate in Q3. Equipment investment increased at a 70.1% annual rate, and investment in non-residential structures decreased at a 14.6% annual rate. The contribution to Q3 GDP from investment in private inventories was 6.6 percentage points. On a 3 quarter trailing average basis, RI (red) is up solidly, equipment (green) is up, and nonresidential structures (blue) is down sharply. I’ll post more on the components of non-residential investment once the supplemental data is released. The second graph shows residential investment as a percent of GDP. Residential Investment as a percent of GDP increased in Q3. RI as a percent of GDP is still close to previous lows, and I expected RI to continue to increase further in this cycle. Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker’s commissions, and a few minor categories.The third graph shows non-residential investment in structures, equipment and “intellectual property products”. Investment in non-residential structures declined in Q3, and will probably be weak for some time (hotel occupancy is low, office and mall vacancy rates are rising).
Eight 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 dashed line is the percent of last year for the seven day average. This data is as of Oct 25th. The seven day average is down 64% from last year (36% of last year).mThe 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. This data is updated through October 24, 2020. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year.” Note that dining is generally turning down in the northern states – Illinois, Pennsylvania, and New York – but holding up in the southern states. 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 October 22nd. Movie ticket sales have picked up slightly over the last couple of months, and were at $15 million last week (compared to usually around $150 million per week in the 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 October 17th.Hotel occupancy is currently down 30.7% year-over-year. 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 October 16th, gasoline supplied was off about 13.6% YoY (about 86.4% of last year). This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. This data is through October 23rd for the United States and several selected cities. According to the Apple data directions requests, public transit in the 7 day average for the US is still only about 56% of the January level. It is at 46% in Chicago, and 59% in Houston. Here is some interesting data from Kastle Systems on office occupancy. This is just a screen shot. Here is the interactive data. This data is through October 21st. Currently Office Occupancy is 27% of normal, with a low of 15% in San Francisco, and a high of 41% in Dallas.Here is some interesting data on New York subway usage (HT BR). This data is through Friday, October 23rd.
Business Cycle Indicators, October 30th – Menzie Chinn – With the release of personal income and sales figures today, we see the continued deceleration in economic activity continues, according to some key indicators noted by the NBER’s Business Cycle Dating Committee (BCDC). Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for October as of 10/30 (light blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. NFP observation for October is based on Bloomberg consensus as of 10/30. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (10/1 release), NBER, Bloomberg, and author’s calculations. Manufacturing and trade industry sales were essentially flat in August, while personal income ex.-transfers rose. That being said, real disposable personal income is down 8.7% relative to 2020M04 peak. Employment is slated to further decelerate, with the Bloomberg consensus increase at 600K, down from 850K two weeks ago.A lot of the dynamics at the monthly frequency are obscured at the quarterly, which was discussed by Jim yesterday in “Record breaking in GDP”. For instance the partial snapback in Q3 is probably dissipated at M05. Hence, it might be of interest to consider how monthly GDP moves relative to quarterly explicitly. Unfortunately, IHS- Markit hasn’t released its September figure. I use reported July and August figures and actual BEA advance Q3 to infer the September value.Figure 2: Quarterly GDP (blue bars), monthly GDP (black line), imputed September monthly GDP (red square), all in billions Ch.2012$ SAAR. Source: BEA 2020Q3 advance release, IHS Markit October 1 release, and author’s calculations. Monthly GDP decelerates from 19% to 7% in July and August to (implied) 2% (SAAR) in September.All this reinforces my view that – with no fiscal recovery package in sight and Covid-19 infections/hospitalizations surging – we are in for continued deceleration. The V ends here … unless and until a new competent administration is installed.
Mitch McConnell just adjourned the Senate until November 9, ending the prospect of additional coronavirus relief until after the election – Senate Majority Leader Mitch McConnell on Monday motioned for the Senate to adjourn until November 9. Congress hasn’t reached a deal on a new COVID-19 relief package in over five months. Most of the benefits in legislation worth $3 trillion enacted over the spring have been used.The move shuts down the Senate from doing any legislative business, including reaching a deal on additional coronavirus aid, until after voters have cast their ballots, and it comes on the heels of Monday’s 52-48 vote to confirm Judge Amy Coney Barrett to the US Supreme Court.David Popp, a representative for McConnell, told Business Insider there was “nothing to add” to what he described as McConnell’s “extensive remarks on the continued Democrat filibuster on COVID relief in the Senate.” Alex Nguyen, a representative for Senate Minority Leader Chuck Schumer, referred Business Insider to a Saturday statement accusing Republicans of sidelining coronavirus talks while pushing forward with Barrett’s confirmation process ahead of the election.
Pelosi presses Mnuchin for White House response on coronavirus aid – Speaker Nancy Pelosi (D-Calif.) on Thursday pressed the White House for a response to the Democrats’ latest offer on emergency coronavirus relief, warning that Washington’s failure to act quickly on another round of disaster aid will only heighten the health and economic fallout as the pandemic surges around the country. “Your responses are critical for our negotiations to continue,” Pelosi wrote in a letter to Treasury Secretary Steven Mnuchin this week. “The President’s words that ‘after the election, we will get the best stimulus package you have ever seen’ only have meaning if he can get [Senate Majority Leader] Mitch McConnell to take his hand off the pause button and get Senate Republican Chairmen moving toward agreement with their House counterparts.” The letter arrives just five days before Election Day, with both parties seeking to blame the other for the stalemate that has prevented an agreement on another multitrillion-dollar infusion of emergency funding to prop up struggling states, businesses, families and health care providers. A Morning Consult poll eeleased earlier this week found Americans blame Republicans and President Trump slightly more than Pelosi and the Democrats for not being able to strike a deal. Independent voters surveyed blamed the GOP, 43 percent to 34 percent. Pelosi and Mnuchin had been in exhaustive talks through September and much of October in search of an elusive bipartisan deal that could pass through both chambers of Congress and win Trump’s signature. But the sides were in disagreement over both the size of the package – the White House had offered roughly $1.9 trillion, while Democrats sought $2.2 trillion – and specific language dictating how the money would be spent. As the impasse grew longer, Trump, who had initially urged Congress to vote on another aid package before Election Day, shifted tactics, vowing to resume negotiations only in the lame-duck session. “After the election, we’ll get the best stimulus package you’ve ever seen,” the president said Tuesday. But Congress is already facing a Dec. 11 deadline to fund the government and prevent a shutdown, legislation that will consume much of the post-election oxygen on Capitol Hill. And given the uncertainty of the election results, many lawmakers are dubious that the feuding parties will be able to put aside differences and unite behind another massive stimulus bill before 2021.
Dems, Pelosi ‘show no evidence of compromising’ on key issues in coronavirus relief: Kudlow – Democrats “show no evidence of compromising on the very key issues” in the latest coronavirus relief bill, White House economic adviser Larry Kudlow told “America’s Newsroom” on Thursday as he provided an update on stimulus negotiations. Kudlow added that he believes that House Speaker Nancy Pelosi, D-Calif., is “stringing us along.” The negotiations on the next installment of coronavirus relief started back in July, the month where the extra $600 in federal weekly unemployment benefits expired. Pressure mounted in early August. Talks went dark for a while and then intensified in the middle of last month because layoffs loomed in October. The sides believed they had an opportunity to forge a deal before the election. A coalition of Democrats and Republicans pressured Pelosi to cut a smaller deal with the administration. Pelosi spoke nearly every day with Treasury Secretary Steve Mnuchin for weeks. President Trump dithered about what he wanted. He said first no bill. The president attempted to end negotiations – but Mnuchin didn’t listen. Trump then declared he wanted to spend more than even Pelosi. Mnuchin went to Senate Republicans with a $1.8 trillion proposal. They flat-out rejected that.
Mnuchin Says He First Saw Pelosi’s Letter on Coronavirus Stimulus Negotiations ‘In the Press’ – Treasury Secretary Steven Mnuchin on Thursday said that he first learned about a letter House speaker Nancy Pelosi sent to him regarding coronavirus stimulus talks “in the press.” “I woke up this morning and read @SpeakerPelosi ‘s letter to me in the press,” Mnuchin said on Twitter. “Enclosed is my response. Her ALL OR NONE approach is hurting hard-working Americans who need help NOW!” Pelosi aides said they had sent the letter to Mnuchin shortly after midnight, though the treasury secretary said he first saw the letter when Politico’s morning newsletter Playbook published it just after 6 a.m., according to the Washington Post. The letter outlined a number of outstanding issues in the negotiations including state and local aid, school funding, child-care money, tax credits for working families, unemployment insurance aid and liability protections for businesses. Mnuchin’s letter said that because Pelosi had sent the letter “to my office at midnight and simultaneously released it to the press, I can unfortunately only conclude it is a political stunt.” He tweeted his letter one minute after sending it to Pelosi’s office. In the letter he mentioned that the pair had negotiated nearly every day over the past 45 days “in an attempt to reach a serious bipartisan compromise,” as coronavirus cases surged and the economy struggled. Pelosi’s office pushed back against Mnuchin’s response. “It is disappointing that the White House wasted time on this letter instead of meaningful responses to meet the needs of the American people,” Pelosi spokesman Drew Hammill said.
Democrats, Trump Eye Coronavirus Stimulus Deal in Lame Duck Session – AFTER UNSUCCESSFUL attempts to reach a deal on a coronavirus stimulus package before the election, House Speaker Nancy Pelosi signaled Thursday that she hopes to pass additional aid during the lame-duck session in Congress as cases again surge around the U.S. Pelosi and Treasury Secretary Steven Mnuchin had been locked in a series of negotiations over the past few weeks with both parties expressing optimism and saying they made considerable progress. But prospects for a deal before Nov. 3 dimmed amid ongoing disagreements on several provisions like state and local aid, language surrounding expanded coronavirus testing and liability protections for businesses. cNow with the presidential race five days away, Pelosi said she’s “confident” about Democratic nominee Joe Biden’s chances and would want to give him a “clean slate” if he wins and assumes office in January. She detailed a busy agenda for a potential Biden administration and Democratic House, saying they’d focus on among other things infrastructure, a campaign finance reform bill that previously passed the House but stalled in the GOP-led Senate and lower costs for prescription drugs. But Pelosi emphasized that her caucus wouldn’t accept just any bill in the lame-duck session which runs through the end of the year – even if Biden wins the White House. The California Democrat rebuffed a question about whether she’d accept a smaller, narrower bill before the end of the year with the likelihood of getting additional relief under a President Biden. “We’re not talking size, we’re talking quality. We are not going to take a small bill that has the bulk of reinforcing funds to the richest people in America while questioning the integrity of people on unemployment insurance,” Pelosi said at her Thursday press conference, the last one before Tuesday’s elections. “I want a bill for two reasons: The American people need real help. And second of all, we have plenty of work to do in a Joe Biden administration,” she added. “We want to have as clean a slate as possible going into January.” Discussions about a possible lame-duck deal come as the U.S. nears 9 million confirmed COVID-19 cases and a death toll of more than 228,000. Pelosi isn’t the only one hoping for a deal in the near future. President Donald Trump, who has repeatedly waffled on pursuing another virus relief package, also says he wants to strike a deal following the election, promising that “we’ll get the best stimulus package you’ve ever seen.” But the president has gone back and forth on another coronavirus package – first calling off bipartisan negotiations, then urging negotiators to pass a bill before the election and now saying that a stimulus deal will be reached in the lame-duck session, though it may no longer be one supported by both parties. Trump has recently predicted that Republicans will take back the House, but election prognosticators believe that Democrats are on track to not only keep their majority but also potentially expand it. [ READ: The Status of a Second $1,200 Stimulus Check – And What Americans Would Do With It ] “Once we get past the election, we’re going to get it. It may be bipartisan, it may not have to be. Depending on if we win the House, it won’t have to be. Right after the election, we’ll get it one way or the other,” Trump said in an interview for television host Jon Taffer’s podcast.
Pelosi signals Covid deal possible before January – Speaker Nancy Pelosi said Thursday she’s still hoping to clinch a massive coronavirus relief deal with the White House before the end of the year, despite predicting a sweeping Joe Biden victory next week that could deliver Democrats control of Washington in January. “I feel very confident that Joe Biden will be elected president on Tuesday,” Pelosi told reporters at her last weekly press conference before the Nov. 3 election. “We want to have as clean a slate as possible going into January.” Democrats have been unsuccessfully pushing a trillion-dollar-plus stimulus package for months. And while Pelosi has insisted she is getting closer to a deal with Treasury Secretary Steven Mnuchin, some of her own lawmakers are skeptical that President Donald Trump or the current GOP-controlled Senate would agree to a giant stimulus package in the wake of potentially big Election Day losses. But others have argued that Republicans might be more eager for a deal in the lame duck session if they’re losing the White House and possibly their Senate majority come January. Some Democrats have privately said in that case it would make more sense to wait until the new year, when Republicans have less negotiating power. Trump signaled his desire to sign a stimulus deal in the lame duck during a podcast interview that aired Thursday. But the president also predicted Republicans would win the House, making the path to a deal easier for him – something election forecasters and most in Washington don’t think is remotely likely. “We’re going to do a very big package as soon as the election is over,” Trump told podcast host Jon Taffer. “Right after the election we’re going to get it one way or the other, it will happen.”
White House makes clear, “We’re not going to control the pandemic” – In an interview with CNN’s “State of the Union” talk show, White House Chief of Staff Mark Meadows made clear that the Trump Administration has abandoned any efforts to contain the COVID-19 pandemic. “We’re not going to control the pandemic,” Meadows said, instead claiming, “We are going to control the fact that we get vaccines, therapeutics, and other mitigation areas.” Meadows’ statement is the most explicit declaration to date that the White House is implementing a policy of “herd immunity,” allowing the disease to spread unchecked throughout the population. Last week, two unnamed White House officials told the press on background that the Trump Administration supports the Great Barrington Declaration, which calls for the abandonment of efforts to contain the disease, including the prohibition of large crowds and other “superspreader” events. But Meadows’ statement makes clear what this policy, cynically presented by its apologists as “protecting the elderly,” will be in practice: nothing will be done to stop the spread of the disease. Instead, those who fall severely ill are to rely on therapeutics, which have proven only marginally effective, and vaccines, which do not exist. That is, they will simply be allowed to fall sick, and the elderly will be allowed to die. After Meadows made these statements, CNN moderator Jake Tapper said, “We’re getting the hook from your team over there at the White House,” cutting the interview short. It can be surmised that Meadows, who did not seem to be fully in possession of himself, said too bluntly what the administration is actually doing.These comments come amid a massive resurgence of the pandemic in the United States. On Friday and Saturday, the US recorded a record 81,417 and 79,453 cases respectively. All over the country, hospitals are once again filling up, as epidemiologists warn that hundreds of thousands more people will die this fall and winter. The United States has had 8.89 million cases of COVID-19 and over 230,000 deaths.
U.S. hits 9 million Covid-19 cases less than a week before Election Day – The United States logged 9 million Covid-19 cases on Thursday just hours after reporting a single day record of 80,622 infections, the latest NBC News tally showed.It was the first time the U.S. crossed the 80,000-case threshold since the start of the pandemic and the third time in a week that a daily case record was broken, the data showed.The 996 Covid-19 fatalities reported Wednesday raised the national death toll to near 230,000, which is the most in the world, according to the Johns Hopkins University Covid-19 dashboard.The dire development came with Election Day less than a week away and as President Donald Trump insists repeatedly on the campaign trail that “we are rounding the turn” on the pandemic. Covid-19 infections have been spreading across the U.S. at the fastest rate since the crisis began even before the country hit the dismal benchmark of 9 million coronavirus infections. In other coronavirus news:
- Black Americans have been hit especially hard economically by the crisis. Jared Kushner, the president’s son-in-law and adviser, added insult to injury by claiming falsely that Black Americans were still struggling on Trump’s watch because they simply do not work hard enough.
- The Trump administration, which critics say was slow to respond to the pandemic, has gotten “woefully behind” instockpiling medical gloves as coronavirus cases have been surging again, experts told NBC News.
- Wisconsin, where the pandemic response has been paralyzed at times by political in-fighting, was running out of ICU beds and nurses to help infected patients, The Milwaukee Journal-Sentinelreported. The state has a new infection rate of 27.71 percent, one of the highest in the country.
- Major League Baseball has chastised Los Angeles Dodgers third baseman Justin Turner for breaking isolation and celebrating winning the World Series with his teammates after he tested positive for the coronavirus.
- A Long Island wedding and birthday bash turned into two Covid-19 “superspreader” events that infected more than 50 people and left nearly 300 in quarantine, New York officials said.
- British Prime Minister Boris Johnson, a Covid-19 survivor, was under increasing pressure to impose new restrictions as the U.K. reported 100,000 new infections a day. France and Germany are already on lockdown as Europe has been hit by a second wave of Covid-19 cases.
Overnight the Pennsylvania reported its 200,000th coronavirus case.Minnesota, another state where Biden appears to be leading, also reported a record number of new cases with 2,872, the date showed. At least two Trump-friendly states also set records for Covid-19 cases on Wednesday, the data showed. Kansas recorded 3,369 cases, and South Dakota logged 1,270 cases.Ohio, a pivotal state that polls indicate could go either way, topped 3,000 new coronavirus cases for the first time, The Columbus Dispatch reported. “The virus is raging throughout the state of Ohio,” Gov. Mike DeWine said. “There’s no place to hide.”
Pence’s ‘body man’ among aides who tested positive for coronavirus: report -Vice President Mike Pence’s “body man” was among the aides who tested positive for COVID-19, CNN reported on Sunday.Zach Bauer, who serves as the vice president’s “body man,” was one of the staffers who tested positive earlier this week, two sources familiar with the matter told CNN. The duties of a body man include accompanying Pence throughout the day and night and assisting him with a variety of activities. At least five people in Pence’s circle have tested positive for coronavirus in recent days, sources told CNN, including chief of staff Marc Short, which the vice president’s office confirmed Saturday evening, andadviser Marty Obst, who is not a government employee.”Today, Marc Short, Chief of Staff to the Vice President, tested positive for COVID-19, began quarantine and assisting in the contact tracing process,” Pence’s press secretary Devin O’Malley said in a statement Saturday. “Vice President Pence and Mrs. Pence both tested negative for COVID-19 today, and remain in good health.””While Vice President Pence is considered a close contact with Mr. Short, in consultation with the White House Medical Unit, the Vice President will maintain his schedule in accordance with the CDC guidelines for essential personnel,” O’Malley said.Besides Short, Pence’s office has not identified the other aides who have tested positive in recent days or confirmed the total number of infected individuals in the office. The New York Times first reported the outbreak among Pence’s inner circle on Saturday. The vice president and second lady Karen Pence tested negative for COVID-19 on Sunday, a White House official said, in addition to their negative tests on Saturday after the office reported Short’s infection.
Murphy says US would be ‘better off’ if Trump admin ‘did nothing’ on coronavirus – Sen. Chris Murphy (D-Conn.) said the American people would be better off if President Trump and members of his administration did nothing to try and slow the spread of coronavirus across the country. “At this point, we would be better off if the Trump Administration just did NOTHING on #COVID19,” Murphy said in a tweet Sunday. “The nation would be safer if the whole White House stayed in bed all day.” The Democratic senator was reacting to comments made earlier Sunday by White House chief of staff Mark Meadows defending the president’s handling of the pandemic that has taken more than 200,000 American lives. “So here’s what we have to do. We’re not going to control the pandemic. We are gonna control the fact that we get vaccines, therapeutics and other mitigations,” Meadows said on CNN’s “State of the Union.” He added, “It is a contagious virus just like the flu.” Meadows’ remarks set off a firestorm of criticism on the left, with Democratic presidential nominee Joe Biden pointing to them as evidence that Trump’s team has “given up” on trying to defeat the virus. “White House Chief of Staff Mark Meadows stunningly admitted this morning that the administration has given up on even trying to control this pandemic, that they’ve given up on their basic duty to protect the American people,” Biden said. “This wasn’t a slip by Meadows, it was a candid acknowledgment of what President Trump’s strategy has clearly been from the beginning of this crisis: to wave the white flag of defeat and hope that by ignoring it, the virus would simply go away.” Murphy, a frequent Trump critic, suggested Trump has only made the pandemic worse and exposed more Americans to the deadly coronavirus than needed to be. “The mask shaming, the rallies, the unrealistic promises on vaccines,” Murphy said. “It’s killing people.”
How the coronavirus made it nearly impossible to renounce U.S. citizenship – Aline, 59, a nursing assistant who lives in Bayonne, France, said she was shocked to receive a letter from her bank in February warning that her account would be closed if she could not provide a U.S. Social Security number. She’d had little to do with the United States since leaving California as a baby. When she tried to arrange an appointment to apply for one at the U.S. Embassy in Paris, she found that the service had been suspended during the novel coronavirus pandemic. Months later, after receiving another warning from her bank, she decided to renounce her U.S. citizenship. “I never thought of myself as an American,” she said. But neither the embassy nor other U.S. consulates in France would process her request. The service had ground to a halt worldwide. “It seems to me that the U.S. administration is doing everything to prevent us from renouncing U.S. citizenship,” she said. Aline is not alone. U.S. government data suggests that a record number of Americans are seeking to give up citizenship or permanent residency this year. But disruptions to consular services around the world have made it nearly impossible for some Americans to stop being American. “The hurdles have never been higher,” said Peter Spiro, an expert on dual citizenship at Temple University School of Law. AD The Washington Post spoke to a half-dozen U.S. citizens abroad who said pandemic-related restrictions had delayed their plans to give up their citizenship. The potential consequences: closed bank accounts, canceled loans and disrupted lives. Like Aline, most spoke on the condition that their full name remain private, as they were figuring out compliance with U.S. tax law. Many others did not want to publicize their plight at all. Fabien Lehagre, the leader of the Paris-based Association of Accidental Americans, said he was working with about 100 U.S. citizens who wished to renounce citizenship but were unable to – himself included. A State Department spokesperson, speaking on background because of department rules, said that cutbacks to consular services, which began in March, were meant “to protect our customers, our workforce and public health worldwide,” and that the department had begun a “phased resumption of routine consular services.”
Pelosi slams Trump for pledging to get ‘husbands back to work’: ‘What century is he living in?’ – Speaker Nancy Pelosi (D-Calif.) on Thursday blasted President Trump for pledging to get “husbands back to work” in his attempt to appeal to female voters during a campaign rally earlier this week. “What decade is he living in? What century is he living in? So completely removed from the realities of life. And that has caused death,” Pelosi said during a press conference in the Capitol. Pelosi noted that nearly 1 million women – 865,000, according to government figures – left the workforce in September. That’s four times the number of men, 216,000, who also dropped out of the workforce last month. During a campaign rally in Lansing, Mich., on Tuesday, Trump said he would help women’s husbands get their jobs back as part of the economic recovery from the COVID-19 pandemic. “Your husbands, they want to get back to work,” Trump said. “We’re getting your husbands back to work. And everybody wants it.” .. Polls have shown Democratic nominee Joe Biden leading Trump among female voters by double digits, particularly among college-educated suburban women. During a rally in Johnstown, Pa., earlier this month, Trump asked suburban women to “please like me.” “They talk about the suburban women. And somebody said, ‘I don’t know if the suburban woman likes you.’ I said, ‘Why?’ ” Trump said. “They said, ‘They may not like the way you talk,’ but I’m about law and order. I’m about having you safe. I’m about having your suburban communities. I don’t want to build low-income housing next to your house.” “So can I ask you to do me a favor? Suburban women, will you please like me? I saved your damn neighborhood, OK?”
Trump Tells Supporters He’s Iffy on a Peaceful Transfer of Power if He Loses the Election – President Donald Trump flirted with the possibility of an authoritarian power grab yet again Saturday, suggesting to supporters at a campaign rally that he may not commit to a peaceful transfer of power should he lose the presidential election. Speaking in Circleville, Ohio, the commander in chief pondered why he should ensure a peaceful transition when he said the previous administration treated him so unfairly: “They ask me, ‘If you lose, will there be a friendly transition?’ Well, when I won, did they give me a friendly transition? They spied on my campaign, they did all this stuff. That was not a friendly transition.” Trump has deflected the question before when asked by reporters, saying, “We’ll see what happens.” But he has not made the case for defying a transfer of power directly to supporters before. Vice President Mike Pence has joined the president in refusing to answer the question, dodging it at the vice presidential debate last week. Former President Barack Obama’s administration offered assistance to Trump and his transition team in taking up residence in the White House after the 2016 election, as has been the norm for past presidencies. The two met in January 2017 to discuss the changeover. In the same Ohio speech on Saturday, Trump complained extensively about television coverage, both his own now infamous 60 Minutes interview and what he said was an overemphasis on COVID-19 coverage. Trump walked out of his recent Q&A with correspondent Lesley Stahl but later posted the entire interview to his Facebook page. He also mocked those who take the COVID-19 pandemic seriously and appeared to suggest it was all part of an electoral conspiracy against him, saying, “That’s all I hear about now. Turn on TV, ‘Covid, Covid, Covid Covid Covid.’ A plane goes down, 500 people dead, they don’t talk about it. ‘Covid Covid Covid Covid.’ By the way, on November 4th, you won’t hear about it anymore … ‘Please don’t go and vote, Covid!'”
A week before the US Presidential election, USPS management pushes forward unprecedented attacks on mail-in balloting With the US presidential election one week away, the United States Postal Service (USPS), led by GOP mega-donor Louis DeJoy, has ramped up the drive to privatization and to place a cloud over mail-in balloting. A day after Postmaster Louis DeJoy testified before Congress in August, promising that he would suspend sweeping changes until after the election, the USPS ordered its uniformed officers to halt their patrol duties, according to the Wall Street Journal. The USPS employs around 455 uniformed officers who conduct patrols meant to safeguard mail collection boxes, delivery vehicles and buildings against theft, as well as another 1,300 plainclothes detectives who collectively work to ensure the security of the mail. The order effectively makes the job of a postal worker more dangerous, lessening their security against theft and violence from petty criminals while reducing the integrity of the mail-in ballot, the primary means of voting in the 2020 election. Moreover, given President Donald Trump’s constant attacks on mail-in balloting as a supposed vehicle for massive fraud, his open appeals to right-wing militias, including connections to fascistic conspiracies to kidnap and murder state governors deemed too reluctant to lift lockdown measures, it is entirely possible that the purpose of such measures is to render mail-in balloting vulnerable to attacks by right-wing groups. The order comes after the centralization of USPS management around DeJoy on July 10th, which created a new Logistics and Operations organization led by DeJoy appointees which is responsible for mail processing and independent from existing area and district reporting structures. According to USPS officials, the Postal Service has already handled over 100 million ballots, a 162 percent increase from the 2016 election. USPS management is deliberately reducing the transparency of the ballot processing, putting into question the outcome of the election. At least five lawmakers have been denied visits to USPS facilities. Rep. Bill Pascrell, a New Jersey Democrat, visited a mail processing center in Kearny, New Jersey, after being refused entry last month, according to his staff. However, Pascrell alongside two other members of the New Jersey congressional delegation never got beyond the lobby. Postmaster DeJoy has donated over $1.2 million dollars to the Trump victory fund and millions more to the Republican Party. When he was president of New Breed Logistics, a private USPS contractor, he encouraged his employees to write fundraising checks to the GOP and gave bonuses to offset the costs. Trump’s continuous attacks on mail-in voting are made possible through the complicity of the Democratic Party. Louis DeJoy was elected unanimously through bipartisan consensus, by a Board of Governors composed of both Democrats and Republicans. The most recent three members were elected unanimously via the Senate, which is now composed of 43 Democrats. In the face of Trump’s unprecedented attacks on the constitutional right to vote, the Democrats remain impotent, offering nothing more than mere rhetoric.
DeJoy’s 57 Varieties of Cost Cutting: What’s in the new OIG report – and what’s not? – In response to several inquiries from members of Congress, the Office of Inspector General has issued a report on “Operational Changes to Mail Delivery.” The report discusses the Postal Service’s plan to eliminate 64 million work hours – the equivalent of 33,000 jobs – by implementing 57 cost-cutting initiatives. As discussed in this previous post, the plan represents one of the largest downsizing efforts in the 50-year history of the Postal Service. These 57 “Do It Now FY Strategies” include restrictions on overtime, late and extra trips from processing centers, and all the other cost-cutting measures that have caused the delivery delays we’ve seen since July. They also include numerous other changes to postal operations that have not received much, if any, attention. The report criticizes postal leadership on several counts. First, the Postal Service “did not complete a study or analysis of the impact the changes would make on mail service prior to implementation.” Second, “documentation and guidance to the field for these strategies was very limited and almost exclusively oral.” That caused “confusion and inconsistency” and “compounded the significant negative service impacts across the country.” The IG also criticizes management for a third major failing: The Postal Service did not “fully respond” to questions and document requests from Congress and did not share information about the plan beyond what the Postmaster General was specifically asked in his testimony before the House and Senate. As a result, Congress was not informed of the existence of the Work Hour Reduction Plan and the “Do It Now FY Strategies” before or during the Postmaster General’s testimony to Congress. The plan is not mentioned at all in Senator Gary Peters “Failure to Deliver” report or his update report. It’s very likely that Congress has yet to receive a full accounting of the plan.
Agenda is full for ABA’s new chairman, but it all starts with COVID – James Edwards Jr. would prefer to spend his one-year appointment as chairman of the American Bankers Association pushing for regulatory reform or innovation – hallmarks of his recent predecessors’ terms. Instead, the third-generation Georgia banker steps into the high-profile role amid the throes of a pandemic that has reshaped society, whipsawed the U.S. economy and tested the banking industry’s mettle on numerous fronts. The last time a new ABA chairman faced a massive challenge was 2008, when Arthur Connelly, CEO of South Shore Bancorp in Massachusetts, began his term at the height of the financial crisis. Coronavirus “is the No. 1 thing affecting all of our lives,” Edwards said in an interview. “We’ve all adjusted to a very new reality.” Bankers’ reponse to the coronavirus and its continued spread throughout the country topped Edwards’ list of priorities when he formally accepted his title last week during the ABA’s convention. The association’s flagship gathering, originally set to take place for Boston, was instead conducted virtually for the first time because of the virus.Edwards, CEO of United Bank Corp. and its $1.8 billion-asset United Bank unit in Griffin, Ga., said the ABA has not lost sight of industry challenges – anti-money-laundering reform, clarity on cannabis banking, rules and regulations for fintech and credit unions – but helping banks lead customers through the depths of the pandemic-induced tumult rises above all else. “Banks large and small stepped up in big ways” when virus outbreaks arrived last spring, Edwards said. “We really became economic first responders. That was incredibly helpful at a very scary time … and we need to continue to lead and get people through this.” The best example, he noted, was banks’ collective effort to handle the Paycheck Protection Program – the $659 billion emergency Small Business Administration lending response to the initial commercial shocks of the pandemic. United Bank, which covers rural areas of central Georgia and Atlanta’s outer suburbs, closed more than $150 million in PPP loans in a matter of weeks. In doing so, Edwards said, the bank drew from all corners of the its expertise and digital capabilities. Both, he said, have only accelerated in importance. “The PPP reminded or informed so many of our customers that, in this age, digital channels are so efficient,” and it reinforced that relationships with bankers “are vital,” Edwards said.
The Battle to Protect Airline Investors From Economic Reality Enters a New Phase — The third quarter US airline financial results released in the past week further confirmed what this series first argued five months ago – the industry cannot prevent ruinous cash drains because, in the absence of bankruptcy filings, there is no way to shrink their cost structures enough to match the catastrophic coronavirus -driven revenue collapse. [1] In the third quarter (historically the industry’s most profitable quarter), the Big 4 US airlines reported a GAAP net loss of $10.8 billion (versus $10.6 bn in the second quarter) and a GAAP operating loss of $12.3 bn (versus $10.5 bn in the second quarter.) As the table below shows, these carriers are still $17.5 billion below operating breakeven and $10 billion below cash breakeven. After second quarter results were released, Southwest CEO Gary Kelly said that revenues would need to double in order for Southwest (the financially strongest carrier in the industry) to reach cash breakeven. Kelly illustrated the industry’s lack of improvement in the third quarter by saying Southwest still needed revenue to double in order to reach cash breakeven. [2]Although basic operating economics did not improve at all, these carriers did manage to reduce their cash burn from an atrocious $15 billion in the second quarter, to a somewhat less atrocious $10 billion in the third quarter, mostly due to one-off agreements with unions and suppliers to delay or discount current contractual obligations.Carrier cash drain measures should be taken with a sizeable grain of salt, since each carrier uses different components in their cash drain calculations, with some excluding debt repayments. One Wall Street analyst who constructed a more appropriate “apples-to-apples” measure found that United had understated cash drain by 56% ($1.2 bn in the 3Q) and Delta had an understatement of 144% ($3.4 bn in the 3Q). [3] Between taxpayer subsidies (out of the $50 billion CARES Act funding) and new debt instruments, these four carriers have raised $73 billion since the beginning of the crisis, accounting for all (or nearly all) of their claimed September 30thliquidity. Thus current operations would not be possible without this magnitude of new funding. There is no evidence of anything that could drive $10-20 billion dollar revenue increases or cost savings anytime soon, and no one in the industry has even attempted to lay out a concrete program for achieving breakeven.
Banks, PPP recipients caught in bind between two SBA rescue programs – Banks are urging Congress to address more confusion about the Paycheck Protection Program, this time as it relates to the impact of another coronavirus relief initiative. As lenders process PPP forgiveness applications, they are being hit with the surprise that a certain amount of PPP loans cannot be forgiven if a borrower also sought aid from the Small Business Administration’s preexisting Economic Injury Disaster Loans program. In addition to establishing the PPP, the Coronavirus Aid, Relief, and Economic Security Act allowed the SBA to provide up to $10,000 of a borrower’s EIDL financing upfront as a grant. However, borrowers receiving the advance must have it deducted from their PPP forgiveness and converted to a loan payable to the PPP lender. While SBA says this policy was clearly communicated through guidance, banks say they had no clue if a PPP borrower also had an EIDL advance. The SBA clarified the restrictions in an interim rule in June and updated guidelines in August, but that was well after banks started receiving a flood of PPP applications. The CARES Act was enacted in March. “What’s happening is the amount of forgiveness on PPP is reduced and basically the SBA is putting the amount of the EIDL [advance] that they originated directly with the borrower onto my balance sheet,” said Noah Wilcox, chairman of the Independent Community Bankers of America and CEO of the $278 million-asset Grand Rapids State Bank in Grand Rapids, Minn. “It doesn’t make any sense.” Sen. Ben Cardin, D-Md., the ranking member of the Senate Small Business Committee, has drafted legislation to repeal the requirement that SBA deduct the amount of any EIDL advance from a borrower’s PPP forgiveness amount. Banks are also urging the SBA to halt implementing the requirement to avoid the financial shock for small businesses already reeling from the pandemic. The EIDL program was originally authorized under the Small Business Act. The CARES Act expanded eligibility to allow EIDL loans for businesses with up to 500 employees, and established the EIDL advances that totaled $20 billion. Borrowers could seek an advance totaling $1,000 per employee, up to $10,000. “The advance is where people got confused, because if you applied for the EIDL program, you will get an emergency advance and anybody who applied under the CARES Act, regardless of whether you get approved or not, you get this emergency advance and it was up to $10,000,” said Margaret Rosenfeld, a partner at K&L Gates. “That advance never has to be paid back … except if you also got a PPP. If you got a PPP, that advance gets rolled into the calculation for forgiveness under that.” Because the PPP program was administered through banks and the EIDL program was administered by the SBA, banks say they weren’t able to alert their borrowers that the EIDL advances would be deducted from the amount of the PPP loan that could be forgiven because they didn’t know whether businesses were participating in both programs. “The PPP lenders had no idea if the borrower had an EIDL loan or would get an EIDL loan in the future. They are operating kind of blind, independently of each other,”
Small businesses need more aid to keep employees, SBA chief says – Small businesses need a new round of loans and aid from the government to keep employees working as the pandemic continues to spread, the head of the Small Business Administration said Tuesday. SBA Administrator Jovita Carranza said business owners have told her they need a renewal of the Paycheck Protection Program that was part of the last stimulus passed by Congress, but with changes that would help them expand. “They’ve told me that another round of PPP would be helpful, but with different dynamics,” Carranza said on Bloomberg Radio’s “Balance of Power.” They say they need loans that could specifically be used for business growth they had planned before the pandemic. “They want to make sure they don’t lose ground or momentum in that particular area,” she said, adding that the funding would ideally support investment in things like square footage and machinery to keep growing. Democrats and the White House have been unable to reach a deal on another stimulus package for the U.S. economy, despite agreement on individual provisions like renewing the PPP. The program ended Aug. 8 with almost $134 billion in funds left over. President Trump and his aides suggested Tuesday that any virus relief legislation likely would have to wait until after the Nov. 3 U.S. election. Carranza recently visited small businesses and parts of the lending community in Colorado, Florida, Massachusetts and Pennsylvania. She said many businesses have been able to keep employees and add extra necessities, thanks to the PPP, which distributed 5.2 million loans worth $525 billion. “They’ve been adaptable. They’ve been able to pivot some of their business plans and incorporate some of the PPP,” she said. Many restaurants have been able to retain employees and regular business hours while still abiding to guidelines with outdoor dining and curbside pickup, Carranza said. But she said she’s still particularly worried about them. “When the winter hits, I don’t know how many more curbside meals you can have,” she said.
Can credit unions keep up with COVID’s evolving phishing threats? –With more credit union employees working from home than ever before, hackers are on the lookout for security weaknesses on home networks – often through email phishing schemes – that could compromise those institutions’ data. The National Credit Union Administration cautioned the industry early on in the pandemic about ongoing security risks, and the issue has taken on new relevance recently in the wake of more data breaches at retailers and October’s designation as Cybersecurity Awareness Month. The annual True Cost of Fraud report from Lexis Nexis also indicates fraud – and its impact on the financial services sector – has increased since the pandemic began. The monthly number of fraud attempts each month for the financial services sector has risen by 14% since last year, but the number of attempts that succeeded is up by 42%, according to the study, released earlier this month. The company’s research found that financial firms spend $3.64 for every dollar lost to fraud, a 12% increase from 2019. The 2020 Phishing Trends Report from Keepnet Labs found that 90% of all successful cyber attacks begin via email. That’s backed up by Specops Software, a Sweden-based provider of password managment and authentication solutoins that works with many U.S. credit unions, which said more than half of all businesses have seen a rise in cybercrime since working from home became the norm. Specops cybersecurity expert Darren James said the finance sector, in particular, is reporting an increase in the number of phishing attacks since the pandemic began. Hackers are creating elaborate and convincing emails to fool employees, and concerned staffers sometimes let down their guard and click malicious links or download attachments. “When we were all in the same office, we could consult a colleague when we received a suspicious email, but working from home prevents people from asking for a second opinion or double-checking a strange request from the CEO,” James said. Passwords are often the weak link in cybersecurity because they are used everywhere, James said. Studies have shown that employees of financial companies need to remember an average of 69 passwords, so people often reuse them across multiple platforms. Credit unions should secure their Windows passwords by preventing employees from choosing weak and leaked passwords. Password-vulnerability scans from vendors can help a credit union understand internal weaknesses surrounding passwords, James said. They should also enable multi-factor authentication where possible and invest in security training and guidance for staff members on how to securely use their IT systems, James said.
What debt collectors can and can’t do under CFPB rule – The Consumer Financial Protection Bureau released a final debt collection rule on Friday that restricts how often collectors can call borrowers to seven calls per week but for the first time allows communications by voice mail, email and text messages. The CFPB established rules to allow the use of technologies developed after the Fair Debt Collection Practices Act passed in 1977. Consumers can opt out of such modern communications. “With the vast changes in communications since the FDCPA was passed more than four decades ago, it is important to provide clear rules of the road,” CFPB Director Kathy Kraninger said in a press release. “Our debt collection rulemaking provides limits on debt collectors and provides clear rights for consumers. With this modernized debt collection rule, consumers will have greater control when communicating with debt collectors.” Debt collectors are required to offer consumers “a reasonable and simple method” to opt out of communications sent to a specific email address or phone number, the CFPB said. If a debt collector uses electronic communications to reach a consumer, the consumer can use the same technology to submit a “cease communication” request or notify the debt collector that they refuse to pay the debt, the CFPB said. Consumer advocates have criticized the rule for opening the floodgates for collectors to bombard consumers with texts and emails. The 653-page final rule included significant changes from the CFPB’s May proposal, which received 14,000 public comments.The rule provides a safe harbor to debt collectors that call consumers seven times a week or less by phone. But violating that limit may not automatically result in a penalty. The CFPB said other factors must be considered when a debt collector exceeds the seven-call cap, such as whether the calls “had the intent to annoy, abuse, or harass the person at the called number.” Still, when a collector exceeds the seven-call cap, it is grounds for a consumer to sue. Also notable is that the CFPB did not provide clarity to the industry about validation notices, which debt collectors are required to send to consumers notifying them of an outstanding debt. The notices are a critical piece of the debt collection process that can have an impact on a consumer’s right to dispute the debt. The bureau said it is still doing qualitative testing on validation notices. “Much of the litigation in debt collection revolves around validation notices so for industry that is a big punt because it harms all stakeholders,” said Joann Needleman, an attorney at the law firm Clark Hill. In another win for collectors, the bureau dropped its so-called “meaningful involvement” requirement, under which an attorney who sends a letter using letterhead must actually be involved in the collection process.
Two consumer groups sue CFPB over payday rule – Public Citizen and the Center for Responsible Lending sued the Consumer Financial Protection Bureau on Thursday to overturn its 2020 payday lending rule, alleging the bureau violated the Administrative Procedure Act and the Dodd-Frank Act. The two consumer groups alleged in a lawsuit filed in U.S. District Court for the District of Columbia that the rule – which itself repealed most of the bureau’s 2017 payday rule – was not supported by evidence. The groups sued on behalf of the National Association for Latino Community Asset Builders, a nonprofit group of community and economic development organizations, saying the rule was based on “an invented evidentiary standard,” and failed to consider consumer protections mandated by Dodd-Frank. “This rule is a slap in the face to consumers and is particularly ill-timed when so many people are facing financial distress due to the pandemic,” said Rebecca Smullin, the Public Citizen attorney serving as lead counsel on the case. “The CFPB’s rule appears to be crafted solely to boost lenders’ profits, contrary to the consumer financial protection mission of the agency.” In July, CFPB Director Kathy Kraninger rescinded tough ability-to-repay underwriting standards in the 2017 payday rule but left intact payment provisions that have not yet gone into effect. Under the rule, lenders are prohibited from withdrawing funds from a consumer’s bank account after two consecutive failed attempts unless the consumer consents to further withdrawals. Consumer groups were expected to sue to repeal the payday rule arguing that the bureau spent five years developing consumer safeguards that were reversed by the Trump administration. The Administrative Procedure Act requires rigorous research and analysis, not just a policy disagreement, to change existing rules. “Reversing course, without any rational basis for doing so, as the COVID-19 pandemic continues to ravage the economy, will only push struggling families closer to the brink,” said Will Corbett, litigation director at the Center for Responsible Lending.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases Slightly to 5.90%” –Note: This is as of October 18th. From the MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 5.90%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 5.92% of servicers’ portfolio volume in the prior week to 5.90% as of October 18, 2020. According to MBA’s estimate, 3.0 million homeowners are in forbearance plans….”The share of loans in forbearance declined only slightly in the prior week, after two weeks of a flurry of borrowers exiting as they reached the six-month mark,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “There continues to be a steady improvement for Fannie Mae and Freddie Mac loans, but the forbearance share for Ginnie Mae, portfolio, and PLS loans all increased. This is further evidence of the unevenness in the current economic recovery. The housing market is booming, as shown by the extremely strong pace of home sales last week. However, many homeowners continue to struggle, as the pace of the job market’s improvement has waned.”…By stage, 25.02% of total loans in forbearance are in the initial forbearance plan stage, while 73.14% are in a forbearance extension. The remaining 1.84% 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 (#) increased relative to the prior week: from 0.10% to 0.11%.”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 Increased Slightly – Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance. This data is as of October 27th. From Forbearance Numbers Rise Above 3 Million Once AgainIn the past week, we saw the number of mortgages in active forbearance rise by 31,000 (a 1% increase). This increase was driven by limited extension and removal activity, along with an increase in forbearance starts. There were 50,000 forbearance removals this week, the lowest of any week during the recovery, while the 89,000 extensions were the fewest we’ve seen in nine weeks. We also saw about 33,000 new forbearance plans begin.In total, forbearance plan starts are up 15% in October compared to the month prior, with the rise driven by borrowers reactivating previously expired plans. New forbearance activations are down 7% from September, while re-activations are up 50%. This is most likely in reaction to the large volume of plans than were removed early in the month.As of Oct. 27, the number of active forbearances has ticked back up over 3 million again for the first time since early October, representing approximately 5.7% of all active mortgages, up from 5.6% from last week. Together, they represent $619 billion in unpaid principal. Of the just over 3 million loans still in active forbearance, more than 80% have had their terms extended at some point since March. With 365,000 forbearance plans still set to expire in October, we could see increased levels of extension and removal activity in the coming weeks, so be sure to continue to monitor this blog for future findings.
Residential Evictions Bearing Down on Many Tenants – Yves Smith –As we’ve been saying on several fronts, winter is coming, and that includes the January 1 expiration of the Presidential order barring residential evictions. If Trump loses next week’s election, he presumably wont’ extend it even the few weeks to the end of his term, and Biden has not made any noise about taking measures to keep people who’ve suffered income hits under Covid housed. And if Team Dem’s fallback is a stimulus bill under Biden, good luck with that. It’s unlikely that citizens would get cash before early March, and even that charitably assumes the relief would be large enough to make up for months of no or inadequate income. Nolo provides a summary of each state’s eviction laws; you can see they are all short-trigger. And that’s before getting to the fact that the CDC eviction moratorium wasn’t comprehensive (for instance, it didn’t address month-to-month rentals) and that it calls on tenants to make attestations, which some landlords are challenging. From MarketWatch last week: The moratorium’s protections were not granted automatically to all tenants. Instead, renters essentially have to opt in by notifying their landlord with a signed affidavit that they cannot afford their full monthly rental payments … .. Because renters need to be proactive to receive protection under the moratorium, those who don’t do so can still face eviction. Since the moratorium was first announced in early September, the country has seen nearly 9,500 eviction filings by private-equity firms and other corporate landlords, according to data from the Private Equity Stakeholder Project. These represent filings in just five states: Arizona, Texas, Tennessee, Georgia and Florida.And the number has trended up recently – in the week ending Oct. 16 there were nearly 2,000 eviction cases filed, which was nearly double the number from the previous two weeks. Even so, it appears that most renters in arrears are getting a stay of execution until January, where the prospects for landlords giving relief don’t look great. As the Wall Street Journal reports, a lot of tenants are already borrowing on their credit cards to try to keep from falling too far behind. Yet given the way Covid-19 has hit broad swathes of middle and lower income workers, such as restaurant and hotel employees, trainers, beauty salon operators and owners, it’s not clear how evicting landlords expect to find creditworthy replacements, even at lower rental levels. From the Journal: A large number of renters have been unable to pay some or even all of their rent since March, when the pandemic temporarily shut down most businesses. Many businesses remain closed or only partially open, pushing renters into unemployment and draining their savings … . A study of unemployed workers released last week by the Federal Reserve Bank of Philadelphia calculated outstanding rent debt would reach $7.2 billion before the close of 2020. Moody’s Analytics estimates that it could reach nearly $70 billion by year-end if there is no additional stimulus spending. The economic-research firm calculated that 12.8 million Americans would then owe an average of $5,400 from missed payments. Even the larger figure would be far less than what was lost when the $1.3 trillion subprime-mortgage bubble burst, leading to a national wave of defaults and foreclosures. But the tens of millions of people potentially caught in a web of home-rental debt and eviction would far exceed the 3.8 million homeowners who were foreclosed on in 2007-2010.
New Home Sales decreased to 959,000 Annual Rate in September–The Census Bureau reports New Home Sales in September were at a seasonally adjusted annual rate (SAAR) of 959 thousand. The previous three months were revised down, combined.Sales of new single-family houses in September 2020 were at a seasonally adjusted annual rate of 959,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.5 percent below the revised August rate of 994,000, but is 32.1 percent above the September 2019 estimate of 726,000. The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. This is the second highest sales rate since 2006 (just below last month). The second graph shows New Home Months of Supply. The months of supply increased in September to 3.6 months from 3.4 months in August. The all time record high was 12.1 months of supply in January 2009. The all time record low was 3.4 months in August 2020. 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 September was 284,000. This represents a supply of 3.6 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 September 2020 (red column), 75 thousand new homes were sold (NSA). Last year, 56 thousand homes were sold in September. The all time high for September was 99 thousand in 2005, and the all time low for September was 24 thousand in 2011. This was below expectations of 1,025 thousand sales SAAR, and sales in the three previous months were revised down, combined..
A few Comments on September New Home Sales — New home sales for September were reported at 959,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down, combined. This was below consensus expectations, but was still the third highest sales rate since 2006 (behind July and August). 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 decreased to 959,000 Annual Rate in September.This graph shows new home sales for 2019 and 2020 by month (Seasonally Adjusted Annual Rate). New home sales were up 32.1% year-over-year (YoY) in August. Year-to-date (YTD) sales are up 16.9%. 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 (except if no lots are available). 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). Usually New Home Sales is a great leading indicator for the economy, however, 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.
NAR: Pending Home Sales Decrease 2.2% in September – From the NAR: Pending Home Sales Falter 2.2% in September The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 2.2% to 130.0 in September. Year-over-year, contract signings rose 20.5%. An index of 100 is equal to the level of contract activity in 2001….The Northeast PHSI grew 2.0% to 119.4 in September, a 27.7% increase from a year ago. In the Midwest, the index slid 3.2% to 120.5 last month, up 18.5% from September 2019.Pending home sales in the South decreased 3.0% to an index of 150.1 in September, up 19.6% from September 2019. The index in the West fell 2.6% in September to 116.8, up 19.3% from a year ago. This was below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in October and November.
HVS: Q3 2020 Homeownership and Vacancy Rates –The Census Bureau released the Residential Vacancies and Homeownership report for Q3 2020. It is likely the results of this survey were significantly distorted by the pandemic. See note from Census below. This survey might show the trend, but I wouldn’t rely on the absolute numbers. he Census Bureau is investigating the differences between the HVS, ACS and decennial Census, and analysts probably shouldn’t use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend. National vacancy rates in the third quarter 2020 were 6.4 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate of 6.4 percent was 0.4 percentage points lower than the rate in the third quarter 2019 (6.8 percent) and 0.7 percentage points higher than the rate in the second quarter 2020 (5.7 percent). The homeowner vacancy rate of 0.9 percent was 0.5 percentage points lower than the rate in the third quarter 2019 (1.4 percent) and virtually unchanged from the rate in the second quarter 2020 (0.9 percent). The homeownership rate of 67.4 percent was 2.6 percentage points higher than the rate in the third quarter 2019 (64.8 percent) and not statistically different from the rate in the second quarter 2020 (67.9 percent). ” The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate decreased to 67.4% in Q3, from 67.9% in Q2.. It is likely the results in Q2 and Q3 were distorted by the pandemic.The HVS homeowner vacancy was unchanged at 0.9%. Once again – this probably shows the general trend, but I wouldn’t rely on the absolute numbers. I’d put more weight on the decennial Census numbers.From Census:Due to the coronavirus pandemic (COVID-19), data collection operations for the CPS/HVS were affected during the third quarter of 2020, as in-person interviews were only allowed for portions of the sample in July (41 percent), August (53 percent), and September (100 percent). The remaining interviews were conducted over the telephone. If the Field Representative was unable to get contact information on the sample unit, the unit was made a Type A noninterview (no one home, refusal, etc). We are unable to determine the extent to which this data collection change affected our estimates.The rental vacancy rate increased to 6.4% in Q3.
Q3 2020 GDP Details on Residential and Commercial Real Estate –The BEA has released the underlying details for the Q3 advance GDP report this morning. The BEA reported that investment in non-residential structures decreased at a 14.6% annual pace in Q3. This is the fourth consecutive quarterly decline (weakness started before the pandemic).Investment in petroleum and natural gas exploration decreased sharply in Q3 compared to Q2, and was down 60% year-over-year. The first graph shows investment in offices, malls and lodging as a percent of GDP. Investment in offices decreased in Q3, but was only down 5.9% year-over-year. Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 24% year-over-year in Q3 – and at a record low as a percent of GDP. The vacancy rate for malls is still very high, so investment will probably stay low for some time.Lodging investment decreased in Q3, and lodging investment was down 14% year-over-year. All three sectors – offices, malls, and hotels – are being hurt significantly by the pandemic. The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).Even though investment in single family structures has increased from the bottom, single family investment is still low, and still below the bottom for previous recessions as a percent of GDP. I expect some further increases in single family investment. Investment in single family structures was $285 billion (SAAR) (about 1.3% of GDP).. Investment in multi-family structures increased in Q3. Investment in home improvement was at a $296 billion Seasonally Adjusted Annual Rate (SAAR) in Q3 (about 1.4% of GDP). Home improvement spending has been solid and might hold up during the pandemic. Note that Brokers’ commissions increased sharply as existing home sales picked up in Q3.
Hotels: Occupancy Rate Declined 30.7% Year-over-year From HotelNewsNow.com: STR: US hotel results for week ending 17 October: U.S. hotel occupancy was virtually flat from the previous week at 50.1%, according to the latest data from STR through 17 October.
11-17 October 2020 (percentage change from comparable week in 2019):
Occupancy: 50.1% (-30.7%)
Average daily rate (ADR): US$97.69 (-28.3%)
Revenue per available room (RevPAR): US$48.91 (-50.3%)
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).So far there has been little business travel pickup that usually happens in the Fall. Note: Y-axis doesn’t start at zero to better show the seasonal change.
Hotels: Occupancy Rate Declined 31.7% Year-over-year From HotelNewsNow.com: STR: US hotel results for week ending 24 October:U.S. weekly hotel occupancy fell back below the 50% mark, according to the latest data from STR through 24 October.
18-24 October 2020 (percentage change from comparable week in 2019):
Occupancy: 48.0% (-31.7%)
Average daily rate (ADR): US$95.49 (-29.4%)
Revenue per available room (RevPAR): US$45.83 (-51.8%)
Since there is a seasonal pattern to the occupancy rate, we can track the year-over-year change in occupancy to look for any improvement. This table shows the year-over-year change since the week ending Sept 19, 2020:This suggests no improvement over the last 6 weeks.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). Seasonally we’d expect the occupancy rate to start declining. Note that there was little pickup in business travel that usually happens in the Fall.
Restaurants face a new wave of restrictions as U.S. cases hit record high –Restaurants are facing a new wave of restrictions, posing yet another obstacle in their attempts to stay afloat and recover from the coronavirus pandemic. New daily Covid-19 cases in the United States hit a record high of 88,521 on Thursday, according a CNBC analysis of data from Johns Hopkins University. “We’re starting to find ourselves on a steep slope of the epidemic curve, so I think you’re going to see cases accelerate,” former Food and Drug Administration Commissioner Dr. Scott Gottlieb said Friday on CNBC’s “Squawk Box.” “There’s about 15 states where the positivity rate’s above 10%, the reproduction number is greater than 1 in all 50 states right now.” The positivity rate shows the percentage of tests for the coronavirus that come back positive, while the reproduction number is a way of gauging Covid-19’s ability to spread. Both of these numbers suggest a rapid increase ahead. The surge in cases has led some areas of the country to reimpose tighter restrictions on dining. Indoor dining is once again banned at Chicago restaurants, starting Friday. In Denver, restaurant capacity has been slashed from 50% to 25% and last call for alcoholic drinks is now 10 p.m. In Europe, which is facing a second peak of infections, countrywide dining mandates are happening once again. France is reentering lockdown, which includes temporarily shuttering businesses considered nonessential, like bars and restaurants. Germany’s eateries and bars will close for one month, starting Nov. 2, in a partial lockdown. While the pandemic has stretched on, restaurants and their out-of-work employees have been left waiting for another stimulus package from the federal government. Loans given to eateries through the Paycheck Protection Program have since run out, and September’s unemployment rate of 7.9% means many consumers don’t have the cash to spare on dining out. Chain restaurants are bouncing back more quickly than independent establishments, but the uncertainty around the surge of Covid-19 cases makes forecasting their recovery even more difficult. Starbucks, for example, said Thursday that 63% of its U.S. cafes have limited seating. The coffee chain expects to return to same-store sales growth by the end of its fiscal second quarter in March, but that forecast assumes that cafe seating and operating hours will near full capacity by that time. Some full-service restaurant companies, like Texas Roadhouse and Darden Restaurants, have tied their sales recovery directly to loosened dining restrictions. And cold weather means that many restaurants that have relied on patio dining will take a hit.
Consumer Confidence Decreases in October – The headline number of 100.9 was a decrease from the final reading of 101.3 for August. Today’s number was above theInvesting.com consensus of 102.0.“Consumer confidence declined slightly in October, following a sharp improvement in September,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.” Read more The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
Personal Income increased 0.9% in September, Spending increased 1.4% — The BEA released the Personal Income and Outlays report for September: Personal income increased $170.3 billion (0.9 percent) in September according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $150.3 billion (0.9 percent) and personal consumption expenditures (PCE) increased $201.4 billion (1.4 percent). Real DPI increased 0.7 percent in September and Real PCE increased 1.2 percent. The PCE price index increased 0.2 percent (table 9). Excluding food and energy, the PCE price index increased 0.2 percent. The September PCE price index increased 1.4 percent year-over-year and the September PCE price index, excluding food and energy, increased 1.5 percent year-over-year. The following graph shows real Personal Consumption Expenditures (PCE) through September 2020 (2012 dollars). The dashed red lines are the quarterly levels for real PCE. Personal income was higher than expected, and the increase in PCE was above expectations. Note the red line for Q3 (the quarterly level of PCE). This is still 3.3% below the Q4 2019 level for PCE.
Personal income and spending both surprisingly continued to increase in September, plus a note on GDP – Yesterday the first estimate of Q3 GDP was reported. Since this report includes 2 long leading indicators, it gives us insight into what the economy might be like in the 2nd half of next year. This morning personal income and spending for September was reported. Both real income and spending increased, which is positive – and surprising. On the spending side, below I show real personal spending (blue) in comparison with real retail sales (red), both scaled to 100 as of January of this year: Both show similar trajectories, collapsing in April and rebounding since, including a further monthly increase from August to September. While real retail sales have exceeded their precession peak, the broader measure of real personal spending has still only recovered about 85% of its decline. .On the income side, here is a long term view of real personal income minus transfer payments (like unemployment insurance)(red, right scale) vs. real disposable personal income (blue, left scale): The former is one of the coincident economic series focused on by the NBER in declaring the beginning and end dates for recessions. Similarly to real personal income less transfer payments discussed above, it has rebounded by about 70% from its April bottom. Disposable income, however, increased sharply with the emergency Congressional stimulus, and remains elevated several percent above where it was just before the pandemic hit, as shown better in the close-up of the last two years shown below: The continuing improvement in spending, and the fact that income remains elevated, despite the failure of Congress (due almost 100% to the Senate) to extend any further stimulus, is the biggest surprise in the economic data over the past several months.
“A Lot Of Hoarding” – Americans Race To Supermarkets As Second Wave Arrives – The outlook for the virus pandemic is worsening across the country, with more than twenty states reporting case numbers at or near record levels. As cases rise, so do anxieties among consumers who have already started panic hoarding for the second time this year as the COVID winter approaches.As the panic hoarding begins, food makers are prepared this time, unlike the first round that started in March, which resulted in widespread shortages of food products. Bloomberg notes General Mills, Campbel Soup, Conagra Brands, and Stonyfield Farm have expanded internal and external product lines this summer to prepare for another panic wave of buying. “America’s food-makers are determined not to get caught flatfooted again. Many companies left sales on the table this spring when they couldn’t ramp up production fast enough for the dried pasta and canned soups that skittish consumers were stockpiling. Food producers used a calmer summer to assess the new grocery landscape and rework their strategies. Now, with Covid-19 cases climbing again and big holiday meals getting closer, investors are waiting to see whether it will be enough,” Bloomberg said. According to Centricity Inc., a firm that tracks online search activity, panic hoarding for the second time this year is underway. They said demand for baking goods in the three weeks through Oct. 13 spiked 3,400% from a year earlier. “That’s less than the 6,000% jump that preceded the first wave of pantry loading,” said Centricity’s chief executive officer Mike Brackett, adding that he expects this round will include other products besides canned goods and other staples. “In the last three to four weeks, we’ve seen very drastic increases, similar to how we did with the first wave of the pandemic,” Brackett said. The second round of panic hoarding comes as new COVID-19 daily cases have been steadily increasing since September. Even though food companies are prepared, shortages will likely be seen at US supermarkets, and or buying limitations will be placed on items.
October Vehicle Sales Forecast: Unchanged Year-over-year – From Wards: U.S. Light Vehicle Sales & Inventory Forecast, October 2020 (pay content) This graph shows actual sales from the BEA (Blue), and Wards forecast for October (Red). Sales have bounced back from the April low, and will likely be unchanged year-over-year in October. The Wards forecast of 16.8 million SAAR, would be up about 3% from September. This would put sales in 2020, through October, down about 17% compared to the same period in 2019.
Orders for Durable Goods Rose 1.9% in September – New orders for manufactured durable goods in September increased $4.3 billion or 1.9% to $237.1 billion, the U.S. Census Bureau announced. This increase, up five consecutive months, followed a 0.4% August increase. Excluding transportation, new orders increased 0.8%. Excluding defense, new orders increased 3.4%. Transportation equipment, up four of the last five months, led the increase, $3.0 billion or 4.1% to $76.8 billion.Shipments of manufactured durable goods in September, up four of the last five months, increased $0.7 billion or 0.3% to $245.0 billion. This followed a 0.3% August decrease. Transportation equipment, also up four of the last five months, led the increase, $0.4 billion or 0.5% to $82.0 billion. Unfilled orders for manufactured durable goods in September, down six of the last seven months, decreased $2.6 billion or 0.2% to $1,075.7 billion. This followed a 0.6% August decrease. Transportation equipment, down seven consecutive months, drove the decrease, $5.2 billion or 0.7% to $722.0 billion.
Headline Durable Goods Orders Up 1.9% in September – The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau’s summary on new orders:New orders for manufactured durable goods in August increased $1.0 billion or 0.4 percent to $232.8 billion, the U.S. Census Bureau announced today. This increase, up four consecutive months, followed an 11.7 percent July increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 0.7 percent. Machinery, also up four consecutive months, led the increase, $0.5 billion or 1.5 percent to $31.2 billion. Download full PDFThe latest new orders number at 1.9% month-over-month (MoM) was better than the Investing.com 0.5% estimate. The series is down 1.9% year-over-year (YoY). Ifwe exclude transportation, “core” durable goods was up 0.8% MoM, which was better than the Investing.com consensus of 0.4%. The core measure is up 1.7% YoY.If we exclude both transportation and defense for an even more fundamental “core”, the latest number is up 3.0% MoM and up 5.4% YoY. Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is up 1.0% MoM and up 4.5% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We’ve also included a dotted line to show the relative size of Core Capex.
Delta adds hundreds of passengers to no-fly list over mask policy violations | TheHill -The CEO of Delta Airlines reportedly revealed in a memo to employees that the carrier has added 460 people to its no-fly list for not wearing masks during flights.”Throughout the pandemic, we have focused our efforts on protecting our people, our customers and our communities,” Ed Bastian said in the memo, according to ABC News.”Wearing a mask is among the simplest and most effective actions we can take to reduce transmission, which is why Delta has long required them for our customers and our people,” he added. “As of this week, we’ve added 460 people to our no-fly list for refusing to comply with our mask requirement.”Bastian reportedly alluded to rising COVID-19 cases across the country as further justification for the move. In August, a Delta plane returned to its gate when two passengers refused to wear masks. The passengers were removed from the plane. ABC News notes other recent incidents related to mask usage have resulted in flight delays and flight attendants being assaulted when requesting passengers comply with company policies. The airline industry has been hit particularly hard by the coronavirus pandemic. United Airlines CEO Scott Kirby predicted earlier this month that airlines would not fully return to pre-pandemic levels of activity until 2024. In early October, Speaker Nancy Pelosi (D-Calif.) called on airlines to hold off on furloughs, saying a relief bill would soon come with provisions made for airline workers.
San Francisco pauses planned reopenings after increase in cases, hospitalizations – San Francisco will pause its planned reopenings, which included greater capacity for indoor dining at restaurants and movie theaters, as Covid-19 cases continue to surge across the U.S., Mayor London Breed said. “We’re beginning to see an increase in cases [and] hospitalizations. While this is not cause to move backward, we are going to pause some of the reopening scheduled for Nov 3,” Breed said in a tweet. The city will not reopen its indoor pools, bowling alleys, and locker rooms and showers at gyms as originally planned, Breed said. Instead of reopening at increased capacity, indoor restaurants, movie theaters, museums, zoos, aquariums and places of worship will stay at 25%, she said.
Despite COVID-19 spike, few individual behaviors are changing | Ipsos – Against the backdrop of a new daily high for COVID-19 cases in the U.S., the latest Axios-Ipsos Coronavirus Index finds that most behaviors around mask usage, dining in at restaurants, and visiting family and friends have held remarkably constant. There are signs that some may adapt their holiday plans, though, as traveling for the holidays is seen by a majority as risky behavior.
1. As concerns over the coronavirus remain high, there are few signs of individual behaviors changing.
- The number of Americans that have visited friends or relatives (49%), gone out to eat (42%), and self-quarantined (14%) is stable compared to the past few weeks.
- The same is true for Americans wearing masks (66%) or gloves (4%) at all times when leaving the home.
- With cases on the rise, slightly fewer say they are maintaining a distance of at least 6 feet from all people (47%, at all times) or have socially distanced (69%), compared to last week. However, these numbers are still in line with the overall trend and have not moved significantly week-to-week.
- A majority of Americans remain extremely or very concerned about the coronavirus, and about the possibility of cases rising in their area this fall and winter. However, there continues to be a significant difference in levels of concern by party affiliation.
2. Concerns are emerging about the holiday season, with some making adaptations to how they celebrate.
- Two-thirds say traveling for the upcoming holidays poses a large or moderate risk.
- More than half of Americans (54%) have begun to make plans about how they will celebrate the holiday season. More say they plan to celebrate at home with immediate family (30%) compared to those who plan to see family and friends like they normally do (18%).
3. A majority believe the federal government is making the country’s recovery from the pandemic worse, and a plurality say the government has gotten worse over time at handling the pandemic.
- Sixty-two percent believe the government is making America’s recovery worse, including more than one in three (35%) who say the government is making things much worse. This is similar to views held at the end of August, when 60% said the federal government was making things worse.
- When asked whether the federal government has gotten better or worse at handling the pandemic, compared to March or April, a plurality (46%) say worse. Just a quarter (26%) say the federal government has gotten better at handling things.
- Compared to all other entities, the federal government is the only one where Americans think they are worse at handling the pandemic now than in March or April. More say their local government, the CDC, their employer, and businesses in their area have all gotten better at handling the pandemic over time. Americans are evenly split when it comes to their state government (35% better, 32% worse).
Don’t Look Down! Estimating the Depth of State Covid Budget Holes – Yves Smith – Today, the Journal probes another looming disaster stemming from the reluctance of either party to step up and spend enough, in this case, to salvage state and municipal budgets. Finger-pointing at the Republicans for their refusal, in the recent failed rescue talks, to include funding for state and local governments doesn’t properly apportion blame. A stimulus package, even if it denied additional funding to these bodies, would have still given them some help by boosting the incomes of citizens and businesses. That would have meant higher sales and income tax revenues than in the “no stimulus till at best March” mess we are in now. Remember that state and local governments have already cut headcounts. That’s only going to continue as the budget black holes get larger. Lower employment doesn’t just mean reduced services; it’s another part of the deflationary downdraft, since the lost incomes and spending of those government workers intensifies the funding stress. The ugly overview, from the Journal:Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion, according to data from Moody’s Analytics, the economic analysis arm of Moody’s Corp. The estimates assume no additional fiscal stimulus from Washington, further coronavirus-fueled restrictions on business and travel, and extra costs for Medicaid amid high unemployment.That’s greater than the 2019 K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure, according to the National Association of State Budget Officers. States have established “rainy day” funds so they can ride out revenue shortfalls, since most are not allowed to borrow for general budget needs. However, these reserves were never envisages as needing to contend with a Covid-level deluge. And on top of that, some states hadn’t fully replenished them after dipping into them after the financial crisis. Again from the Journal:States are dependent on taxes for revenue – sales and income taxes make up more than 60% of the revenue states collect for general operating funds, according to the Urban Institute. Both types of taxes have been crushed by historic job losses and the steepest decline in consumer spending in six decades … .States that earn big chunks of their revenue from hard-hit industries are hurting. Americans are commuting and traveling far less, and oil prices have tumbled, hitting energy industries in Texas, Oklahoma and Alaska. Tourism has dropped in Florida, Nevada and Hawaii, and casino closures hurt Rhode Island, New York and Illinois.Hawaii, for example, is expecting fewer than half the visitors it took in last year in 2020, and state officials forecast its general fund revenues won’t recover to pre-pandemic levels until its 2025 fiscal year … .A nationwide decline in combined state revenue has happened after only two events in 90 years: following the Sept. 11, 2001, attacks and in the aftermath of the 2008 financial crisis.Annual state revenue fell following the Sept. 11 attacks and the bursting of the dot-com bubble around that time, but recovered within a year. During the recession that followed the 2008 crisis, state government revenue fell 9% over two years, according to Census Bureau data.This time the shortfall could reach 13% over two years, according to Moody’s Analytics projections. You can see how many states are in bad shape even after applying their full reserves to try to achieve 2019 revenue levels: The Journal doesn’t say what Moody’s assumptions about Covid are, but an aside about “the recent uptick in Covid cases” suggests that the rating agency built in a winter increase but not much more. So lockdowns and/or Covid restrictions extending well into 2021 do not seem to be part of the baseline scenario. That means the downside could be considerably worse than Moody’s anticipates now.
Activist with ties to Ohio Republican legislators plotted to kidnap and kill Governor Mike DeWine – Local newspapers in Ohio have exposed a plot led by Republican activist Renea Turner to build a “posse” to kidnap and murder the state’s governor, Mike DeWine. Though DeWine is a Republican and a Trump supporter, he was evidently targeted for implementing mild restrictions to deal with the coronavirus pandemic, which has killed over 5,100 Ohioans. Turner confirmed in a Friday interview with Cleveland.com that she was trying to recruit people to place the governor under “house arrest.” The plan was revealed when an individual she attempted to recruit filed a police report last week. State police then visited Turner but did not make an arrest. As of this writing, not a single national news publication had reported the Ohio developments. Though it is not known how far advanced this particular plot was or how many people were involved, it comes just over two weeks after federal officials arrested over a dozen fascists who planned to kidnap and kill Michigan Governor Gretchen Whitmer and also discussed targeting Virginia Governor Ralph Northam. Trump has made no secret of his plans to mobilize far-right supporters to invalidate the popular vote and attempt to remain in office. This strategy is focused particularly on battleground states like Ohio and Michigan. Turner is a Trump supporter who has connections to a group of Republican state legislators who have been calling for DeWine to be arrested for the damage to business interests caused by statewide lockdown measures. State Representative John Becker, one of this group, told the Dayton Daily News on Friday that he personally met with Turner two weeks ago. In a short video responding to the revelations, Becker said Turner was building a “posse” whose plan was to “arrest the governor at his home, put him on trial for tyranny and with the potential for that being either execution or exile.”
Hunger and social misery soar in Washington D.C. during the pandemic -As the COVID-19 pandemic continues to cut a path of sickness through the population, numerous studies and investigations have revealed the growth of a far more pervasive and silent killer stalking the United States: hunger.According to a report published last month by the Food Research and Action Center (FRAC), the number of people in the US experiencing a persistent lack of food sometimes or often climbed above 29 million people in July. This number represents nearly 11 percent of the US population. This is a near quadrupling of the number of such people in 2018, when 8 million adults were in this category.The report states that in 38 states and the District of Columbia, 1 in 10 adults with child dependants find themselves without enough food to feed themselves and their family on a regular basis.”Food need is being driven by unemployment, particularly in service industries, e.g., Uber drivers, childcare workers, hospitality industry, including hotels and restaurants, home health care and school services,” a representative of the Falls Church Community Services Council in Northern Virginia told the World Socialist Web Site in an email. “Our recent clients now include people who were managing before the pandemic, but now can no longer afford rent, utilities and food.”Falls Church, located in the near-suburbs of Washington D.C., was named the wealthiest county in the United States, with a median income of $113,000 per household, its wealth largely attributable to the number of federal contractors stationed nearby. Last month, a report in the local ABC News affiliate WJLA noted that the Capital Area Food Bank, a supplier to over 450 charity organizations and groups in the area, found a nearly 300 percent surge in demand for its services. When contacted, Amanda Rogers, Communications Director for the Fairfax County Neighborhood and Community Services office, reported a surge of “residents who have never called or had a case open with CSP [Coordinated Services Planning] before.” This was nearly four times more than the average monthly new caller rate in fiscal year 2019. While the need is dire, the pandemic has restricted the ability of local charities to respond. According to the WJLA report, out of nearly 150 food banks in the D.C. area that partner with the Capital Area Food Bank, “only 45 are operational.”The Falls Church Community Services Council reported “a lack of volunteers willing to risk illness while making sure people get food.” This is especially noticeable as “the core of many food pantries’ volunteer bases are in the most vulnerable age group” for COVID-19. In addition to this, “Many stores [in spring] had placed limits on purchases of food as well as paper goods and cleaning supplies which some pantries provide.”In other words, a complete breakdown has occurred throughout charitable networks, affecting everything from personnel to supplies.
12-year-old boy threatened with arrest after missing 90 minutes of Zoom class, Bay Area dad says – (KGO) — A parent in the East Bay city says a letter he received from his son’s middle school, threatening the boy’s arrest for missing less than two hours of Zoom class, is total overkill. The school principal told ABC7 News, her administration had no choice but to send the letter, given new state guidelines around keeping better track of attendance as California public schools continue with mostly virtual learning. “This is our fourth child going through this middle school and out of the blue, we got a letter,” explained Lafayette parent Mark Mastrov. Mastrov received the letter after his seventh-grader missed exactly three 30-minute Zoom sessions, one day last month.”He can become a truant of the state and he could be arrested,” explained Mastrov, who said he immediately called an administrator at Stanley Middle School. “I said, ‘Are you going to come and try to arrest my son at my home, or fine me for not getting him to his Zoom class perfectly, on time everyday?'”Like his classmates at Stanley, Merek Mastrov spends up to seven hours a day attending virtual school via Zoom. It’s been more than a month since public school districts in the Bay Area opted to return to online classes and educators and parents are starting to recognize the negative consequences of distance learning.The letter from a Stanley administrator lists the three periods Merek missed and says, “When a student is absent without a valid excuse, the student is considered truant according to California law.”And down below, the letter lists six possible consequences, including:”The pupil may be subject to arrest under Education Code Section 48264.”The principal at Stanley Middle School told us the letter is the result of new state guidelines passed this past summer, CA Senate Bill 98, which requires districts to keep a closer eye on student attendance.Reached by phone, Principal Betsy Balmat told us, “The letter is part of our responsibility to the state for our student attendance review boards. As always, the schools have a responsibility to ensure students are engaged and learning.”
Most Parents Worry Students Will Fall Behind Due to Coronavirus, Survey Finds | Education News — MORE THAN TWO-THIRDS OF parents of students who receive at least some online instruction are concerned about their children falling behind in school.A Pew Research Center survey found that 32% of parents are very concerned and 36% of parents are somewhat concerned that their children will fall behind in school as a result of any disruptions caused by the COVID-19 pandemic.While parents of children learning at least partially online are concerned, so are parents of children learning in-person only. About one-third, 34%, are somewhat concerned, compared to 21% who are very concerned about their children falling behind in school because of the pandemic.While schools across the country continue to decide the best way to educate students and whether to open schools in person, a majority of parents of students are satisfied with the way their children’s school has handled instruction so far this school year, whether in person or a mix of both.Fifty-four percent of parents of children receiving in-person only instruction are very satisfied and 36% are somewhat satisfied with the way schools have handled the situation. For parents of children receiving a combination of in-person and online education, 29% are very satisfied and 47% are somewhat satisfied.Despite the possibility of exposure to coronavirus in-person education poses, most parents of children receiving it are satisfied with steps schools have taken to prevent the spread of COVID-19, with 86% either very or somewhat satisfied.However, some parents are still worried about their children being exposed to the virus at school, with 20% saying they are very concerned and 42% saying they are somewhat concerned.
Twenty-nine outbreaks reported in K-12 schools as COVID-19 rips through Michigan – The spread of COVID-19 through Michigan’s K-12 schools is rapidly accelerating, with the number of new outbreaks rising for the third week in a row, according to data released by the state yesterday. Last week, there were 29 separate outbreaks affecting 107 students, teachers and school workers, making it the most infectious week in Michigan since the school year began. The 29 new outbreaks last week are in addition to 70 other “ongoing” outbreaks, defined as outbreaks that have been reported more than a week ago, but which have at least one new associated case in the last 28 days. Altogether, the 99 total ongoing outbreaks have led to 482 reported cases of COVID-19 among students, teachers and staff. Family members and other community members not employed by schools are not counted. It must also be pointed out that Michigan defines an “outbreak” at school as “two (2) or more COVID-19 cases who may have shared exposure on school grounds and are from different households.” When only one case is discovered, the state does not report it as an outbreak or include it in school totals, thereby undercounting the spread of the pandemic and withholding vital knowledge of COVID-19 cases from parents, students and teachers. For example, one student at Woodhaven High School in Brownstown, Michigan, was reported by the school district last week to have COVID-19, sending at least 30 teachers, students and staff into quarantine. The figures are published on the district’s website, but no outbreak will be recorded by the State of Michigan. The 107 people infected in outbreaks at Michigan’s K-12 schools last week include 18 at preschools and elementary schools, another 18 at middle schools, and 71 at high schools. In their reporting of cases, the state does not say whether those infected are staff, students or teachers. The reported outbreaks took place in schools throughout the state, indicating the entrenched character of the pandemic, which has now spread to more rural areas. The largest outbreak last week has infected 10 people at Breitung Township Schools in Dickinson County, located in Michigan’s rural Upper Peninsula. The UP overall has been hit hard, with further outbreaks at schools in Gogebic, Houghton, and Marquette counties. The state’s Western counties were badly hit, especially Ottawa, with three separate outbreaks, as were Kent, Van Buren, and Allegan, with two outbreaks each. The county with the highest number of outbreaks in schools last week was Macomb County, in Metro Detroit, with four schools reporting outbreaks. Since reporting began in mid-September, 132 separate outbreaks have been reported at K-12 schools in Michigan, and the rate of spread is accelerating. Since the beginning of October, the weekly rate of outbreaks in the state’s schools has risen steadily from 18 per week to 29 per week at present.
New York City workers and students reject school reopenings through mass absenteeism The massive opposition of New York City parents and students to Democratic Mayor Bill de Blasio’s school reopening plan has found expression in high rates of absenteeism throughout the largest school district in the United States. According to newly released attendance data, only 26 percent of the city’s 1.1 million public school students are attending in-person classes. This figure represents a significant drop from the estimated 500,000 families the city Department of Education (DOE) officially counts as participating in its so-called “blended learning” models. These models bring students into school buildings between one and three days a week and are highly unsafe, exposing hundreds of thousands to possible infection from COVID-19. This mass absenteeism does not represent an organized movement. Rather, it reflects the spontaneous repudiation by the vast majority of working class families with school-aged children of the fraudulent claim advanced by city Democrats, and supported by the United Federation of Teachers (UFT), that schools can safely reopen with in-person classes in the midst of a pandemic. Even if one were to solely consider the 26 percent of students that are actually attending in-person classes along with the teaching staff currently reporting to school buildings, the 16,000 people currently receiving weekly tests in schools would only account for five percent of the in-person school population, well below the 10-20 percent to which the city committed. Additionally, the low positivity rate data within city schools recently touted by the Mayor omits nearly 400 DOE staff and students that tested positive before limited weekly testing began on October 9. Noemi Pena, a parent of a public school student, told the New York Times, “Parents in NYC voted and spoke with their feet.” This assessment coincides with descriptions by city educators of school buildings as “ghost towns,” particularly at middle and high schools. Despite confronting mass opposition from educators, parents and students, de Blasio has doubled down on his efforts to cast New York City as a model for other large urban districts throughout the country to reopen with in-person classes. Commenting Monday on the low numbers of students showing up to school buildings, de Blasio stated, “A lot more kids could be attending in person and we want to make sure that their families know.”
18-year-old freshman at University of Dayton apparently dies from Covid-19 – An 18-year-old freshman at the University of Dayton in Ohio died Thursday “apparently due to complications from” coronavirus, school officials said. Michael Lang, a first-year student in the College of Arts and Sciences, died in LaGrange, Illinois, after a long hospitalization, the university said. It was not clear how long Lang had been hospitalized or whether he contracted the virus on or off campus. Lang was living on-campus before returning to his hometown and switching to remote learning on Sep. 13, the university said. Since students returned to campus on Aug. 8, the University of Dayton has seen spikes and declines in Covid-19 cases, forcing students to move between classroom and online instruction, the Chronicle of Higher Education reported. According to the University of Dayton’s Covid-19 dashboard, which has tracked Covid-19 cases since Aug. 10, the school reported 34 active people with the virus and a total of 1,417 cases, as of Monday morning. Lang isn’t the first college student to die from Covid-19 or related complications. Earlier in September, 20-year-old football player Jamain Stephens Jr. at California University of Pennsylvania passed away from Covid-19 complications, NBC Washington reported. And late last month, NBC News reported that Chad Dorill, a “healthy” sophomore at Appalachian State University died from coronavirus at age 19.
Hospitals brace for more cyberattacks as coronavirus cases rise – Hospitals brace for more cyberattacks as coronavirus cases rise The Hill illustration/Madeline Monroe Hospitals and health care institutions preparing for a fall wave of coronavirus cases are bracing for more cyberattacks after hackers seeking to take advantage of the pandemic launched several successful attacks this year that severely disrupted patient services. The attacks have been widespread around the world, hitting health care groups during the worst public health crisis in a century. Experts say the attacks have involved both cyber criminal groups and nation states looking to target COVID-19 research and sow chaos. “I’ve been describing this as a cyber gold rush, the bad guys of all shapes and sizes recognize that there is an opportunity here,” said Marc Rogers, executive director of cybersecurity at software group Okta who also helps lead the COVID-19 CTI League that tracks cyberattacks against health groups. The organization is made up of around 1,500 professionals in more than 80 countries from sectors including information technology, telecommunications and law enforcement who have volunteered their time to fight cyberattacks and track threats against health care groups and other critical sectors. “We see everything from emails that have no payload at all, through to complex new malware that has been specifically compiled to go after that target at that time,” Rogers said. Hackers have targeted governmental organizations such as the World Health Organization and the Department of Health and Human Services (HHS), as well as specific hospital chains. Other state-sponsored attacks backed by Russia, China and Iran have gone after groups involved in COVID-19 research. A recent attack on Pennsylvania-based hospital chain Universal Health Services (UHS) temporarily disabled systems in hundreds of hospitals in the U.S., potentially delaying treatment and possibly exposing the data of millions of customers. Some of the cyber incidents during the pandemic have been deadly, with a ransomware attack on a German hospital in September being linked to a woman’s death after the hospital was forced to turn away emergency patients due to its servers crashing. “There are hundreds of cases we have now seen where we can draw a direct line between the cyberattack and deaths,” said Andre Pienaar, whose firm helped form the Cyber Alliance to Defend Our Healthcare, a group of nearly 40 major cybersecurity companies that defend health organizations. Rogers, who helps lead the CTI League, told The Hill that around 51 percent of cyberattacks targeting health groups and other critical sectors during the pandemic have originated in the U.S. or Europe, but many are part of global campaigns that have infrastructure worldwide, making them difficult to track.
Foreign Investment Plummets During Pandemic, Except in China – WSJ – Foreign direct investment in China largely held steady during the first half of this year, even as investment inflows into the U.S. and European Union plummeted, in a fresh sign that the world’s second-largest economy has suffered less damage from the pandemic. Globally, the monthly average for new investments for the first half of the year was down almost half on the monthly average for the whole of 2019, the largest decline on record, the United Nations’s Conference on Trade and Development said Tuesday. But while foreign investment in the U.S. and European Union fell by 61% and 29% respectively, inflows to China were down by just 4%. China attracted foreign investment totaling $76 billion during the period, while the U.S. attracted $51 billion. The U.S. has long been the top global destination for businesses investing overseas, while China has long ranked second. Unctad said the modest nature of the decline in foreign investment to China was surprising. Back in March, when China was the epicenter of the pandemic with significant parts of its economy in lockdown, Unctad forecast that it would be the big loser, and expected global flows of investment to fall by 15% across 2020. However, China’s economy reopened in April just as the U.S. and Europe were in lockdown, and the country has since contained the virus with only localized and short-lived restrictions. By contrast, the U.S. and Europe have seen resurgences in infections that have slowed their recoveries. In the three months through September, China’s economy had already exceeded the levels of output recorded in the last quarter of 2019, according to data out last week. The resilience of foreign investment in China appears to confound earlier expectations that businesses would seek to reduce their reliance on the country as a key part of their supply chains. But James Zhan, Unctad’s director of investment and enterprise, said it was too early to reach that conclusion. “One of the main reasons for reconfiguration of global supply chains is to increase resilience, which requires backup plans and redundant capacities,” he said. “A more practical approach companies can take would be building additional production bases outside of China, which means new investment to other countries instead of divestment from China or moving production out of China.” Across all developed economies, inflows of foreign investment were down 75% in the first half from the 2019 monthly average to total just $98 billion, a level last seen in 1994. In some cases – such as the Netherlands and the U.K. – that decline took the form of a reduction in loans from the parent company to its overseas subsidiaries, which are counted as foreign investment.
Pakistan’s Exports Surging At The Fastest Rate in South Asia –With several major brands moving production to Pakistan amid the COVID19 pandemic, the country’s exports have grown at a faster pace than those of Bangladesh and India, according to Bloomberg News. Pakistan’s total textile shipments rose 7% in September, compared with New Delhi’s 6% and Dhaka’s 3.5%. “Pakistan has seen orders shifting from multiple nations including China, India and Bangladesh,” said Shahid Sattar, secretary general at the All Pakistan Textile Mills Association, in an interview with Bloomberg’s Faseeh Mangi. “Garment manufacturers are operating near maximum capacity and many can’t take any orders for the next six months.” Bloomberg attributed Pakistan’s export surge to Prime Minister Imran Khan’s administration to be the first in South Asia to ease the COVID19 lockdown after controlling the spread of the disease. It helped draw companies like Guess Inc., Hugo Boss AG, Target Corp. and Hanesbrands Inc. Pakistan’s benchmark stock index KSE-100 has soared 52% since March, beating runners-up Vietnam and India, and gaining twice as much as China, according to Bloomberg News. In spite of the rapid rise, the valuation of the KSE-100 listed companies is among the world’s lowest with forward price-earnings multiple of just 7.4 times. Pakistan is heading for an IPO spree, with as many as 10 companies lining up to go public. With coronavirus spread contained, Pakistan economy is rebounding with V-shaped economic recovery. Pakistanis have once again defied all foreign and domestic doomsayers, including media, activists and think tanks of all varieties. The nation’s monthly Quantum Index of Manufacturing (QIM) for July 2020 has returned to where it was a year ago in July 2019, according to data released by Pakistan Bureau of Statistics. Meanwhile, the number of daily new cases has declined from over 6,000 a day in June to around 500 a day now. There has also been dramatic reduction in hospital admissions and the need for intensive care. The LSMI output increased by 5.02% for July, 2020 compared to July, 2019 and 9.54% in June, 2020. The recovery in manufacturing is quite broad, extending from cement production to fuel sales and growing demand for automobiles to home appliances, according to Bloomberg News.
How Different Flights Around the World Look During a Pandemic – WSJ video — As airports and airlines around the world continue to operate in the midst of a global pandemic, not every flight and region has the same Covid-19 protocols. Three WSJ reporters flew to different regions around the world to look at how air travel has changed.
Apartment Prices Are Crashing In Major Cities Worldwide – Covid’s effect on cities is starting to hit the price of rentals – and it’s not just in the United States. Apartment prices in some of the richest cities in the world are starting to show the effects of an exodus out of crowded city areas in order to move to more spacious suburbs. A slowing ebb and flow of international students, combined with a younger generation growing disinterested in paying city-price premiums, are both helping the demand side of the rental equation dry up. Tim Lawless, Asia Pacific head of research for data provider CoreLogic Inc., told Bloomberg: “You’re daft if you aren’t negotiating lower rent right now. Supply is high and occupancy has fallen off a cliff.”‘ Renters across the country and renegotiating with their landlords. For example, Christine Chung just negotiated a 9% reduction in rent for the house she lives in in Sydney, Australia. In New York, Manhattan apartments are the “cheapest they’ve been since 2013”. The number of listings in the city have tripled from a year ago and the city’s median rent has fallen 11%. Studio rents have plunged even further, disproportionately. In San Francisco, the median monthly rent for a studio fell 31% in September from a year prior, to $2,285. This far outpaced the national average of a 0.5% drop. Rents have also plunged in Toronto, down 14.5% in Q3 compared to the year prior. Properties are staying on the market longer, as well. The average time for a property to stay on the market has risen to 26 days in August versus 14 days a year prior. Toronto also has a significant amount of new property supply hitting the market, as Airbnb operators move to longer term leases and new apartment projects are completed. Some sellers are “dumping units below market value” in anticipation of prices falling further, Bloomberg notes. London is a city feeling the brunt of slowing international students and executives traveling. Rents in the city’s priciest areas are down 8.1% year-to-date through September. 7 out of 10 respondents to a recent survey in London say they expect prices to continue to fall over the next three months. London West End appraiser Mark Wilson said: “Applicants are noticeably fewer. Rents are still a one-way bet in our view, and it’s south.” Singapore has also seen a drop in rental volumes as a result of a drop in expats in Asia. Rental volumes of private units were down 8% from a year prior and rents are 17% below their 2013 peak. Despite the country being in the midst of a recession, home sales (indicating a desire to move out of the city) are at the highest level in more than 2 years. As mentioned above, Sydney is experiencing record high vacancy rates, which spiked to 16% in May. These rates have stabilized to about 13% now, as compared to the 5% pre-pandemic. Sydney also suffers from a lack of international student travel.
A Global Rebound Could Be Determined by How Freely Households Spend – WSJ – Households around the world responded to the coronavirus pandemic and its related effects by sharply boosting their savings. What they do with that cash could help shape the global economic recovery. Saving rates in many countries soared last spring as governments pumped stimulus money into people’s pockets and consumers trimmed their spending because of business closures, infection fears or lower expenses while working from home. That left many consumers – particularly the middle-income and affluent – with less debt and more cash to burn as restrictions on activities are eased. If they open their wallets readily, that could unleash a wave of pent-up demand that spurs strong growth in the short term. But if they hold back, they would restrain the economic recovery initially but have fuel for more spending in the longer term. Data from some countries suggest the rapid rebound is partly happening: In the U.S., the personal saving rate – seasonally adjusted and annualized – rose to a record 33.6% in April when restrictions peaked, but fell to 14.1% in August. That is still well above the 8.3% rate in February, before the pandemic hit, suggesting that while households were spending more by late summer than in the spring, they hadn’t fully resumed their old habits. A look at some other saving rates around the world illustrates the challenge policy makers face in prodding consumers to loosen their purse strings. Japan’s government earlier this year handed out the equivalent of $950 to every resident. In an NLI Research Institute survey, half said they would put it aside for everyday household expenses – which could include saving – and a quarter said outright they would save it, according to a July report from the institute’s Naoko Kuga. “The fact is that it has been difficult to actually spend a lot of money,”. “Confidence is also fragile, and nobody knows how long it will be before we get a vaccine and learn to live with the virus, so saving a good amount of the income flow makes a lot of sense.” Household savings as a proportion of income in Australia jumped to 19.8% in the second quarter versus 3.6% in the final three months of last year, while in Canada the saving rate climbed to 28.2% in the second quarter, compared with 3.6% at the end of December. “Policy makers can try and encourage spending, but you can’t force spending,”
Melbourne Parties As 112-Day COVID-19 Lockdown Comes To An End -After 112 days and countless arrests, fines and protests, Australia’s second-most-populous state is finally free from lockdown.The city of Melbourne, the capital and largest metro center of Australia’s coronavirus-hammered Victoria state, exited lockdown on Wednesday, leaving businesses and residents to cope with the aftermath of months of forced closures for an virus that has so far killed fewer than 1,000 people in the entire country. One resident told the SCMP about going to “an end of lockdown party” at a popular bar in the city to ring in the end of lockdown. She said the vibe at the event was “electric” and everybody was “giddy” about the restrictions finally coming to an end.What began as a six-week stretch in lockdown ultimately left Melbourne’s 5 million residents shut up inside for months, depriving them of the cultural attractions like bars, cafes and live music.Victoria premier Daniel Andrews said more than 16,000 shops, 5,800 cafes and 1,000 beauty salons reopened on Wednesday, though he acknowledged that the restrictions had taken their toll on the city and its economy.The lockdown comes to an end more than 2 months after Melbourne’s ‘peak’ of more than 700 new daily cases in a day. Some restrictions remain in place: Gyms in the city won’t be able to reopen until Nov. 8. Melbourne residents must also continue to comply with restrictions on movement that bar them from visiting towns outside the city, a measure that had led many to complain that Melbourne and Victoria had been “cut off” from the rest of Australia.
Watch- Furious Welshman Tears Down Sheeting Off Non-Essential Goods In COVID-Lockdown Protest – A video out of Wales shows a furious shopper in a branch of Tesco tearing away plastic sheeting used to cover “non-essential” goods while decrying a COVID lockdown that is robbing people of “basic human needs.” As we highlighted yesterday, photos began emerging of bedding and other supermarket items deemed “non-essential” being covered with plastic sheeting to prevent people in Wales from buying them.Now a new video has emerged of an irate Welshman tearing down similar sheeting in a branch of Tesco in Bangor last night.”Since when have clothes been exempt?, rip the f***ers off … kids’ f***ing clothes, it is a disgrace,” said 28-year-old Gwilym Owen as he tore away the sheeting.”All you need to do is don’t comply and take them off,” he added as he continued to remove the protective covering. After a member of security approached Owen, he responded, “‘Since when has clothing not been essential?” At the end of the clip, other members of staff appear to try to take the cameraman’s phone away from him while he is recording. Owen subsequently explained his actions on Facebook, noting that he didn’t care about the backlash because he had “had enough” of the restrictions. ‘I heard supermarkets have put covers over ‘non essential’ things such as clothes. We’re heading into winter now and who would have thought clothes for children weren’t essential?”I’m sure there are people out there who can barely afford heating in their houses and now they want to stop people buying clothes in supermarkets.‘I don’t expect everyone to do what I’ve done here but I do expect everyone to know that denying the public clothing is nothing but immoral and inhuman.
Mother-of-two, 29, is threatened with prison and a Pound Sterling2,500 fine for refusing to send her children to school over fears she’ll ‘die from coronavirus’– A clinically vulnerable mother has been threatened with a three-month prison sentence and a Pound Sterling2,500 fine because she refused to send her children back to school amid coronavirus. Katy Simpson, 29, chose to keep her son Damien and daughter Alisha, both six, at their home in Redcar when schools returned last month. She told teachers at Galileo Academy Trust in North Yorkshire: ‘If I get that virus I will die’. Ms Simpson has Type 1 diabetes, asthma and an under-active thyroid – which classes her as clinically vulnerable under NHS guidelines. She has barely left the house since lockdown was first introduced in March, and only to shop for food once a week. But unemployed Ms Simpson said she has no plans to return her son and daughter to school – despite the written warning. Ms Simpson said: ‘There’s no two ways about it, if I get that virus I will die. ‘I’m a single mum and don’t have my family around to help out with the kids. I can’t take that risk. When there’s cold or a flu about I always get it and I’m knocked for six. ‘The virus has killed thousands of people and we’re all getting locked down again and it looks like it’s going to get worse.’ She said staff at her children’s school were not listening to her, adding that she was asked to go to meetings to explain why her children had not been sent in. But unemployed Ms Simpson said she has no plans to return her son and daughter to school – despite the written warning. Ms Simpson said: ‘There’s no two ways about it, if I get that virus I will die. ‘I’m a single mum and don’t have my family around to help out with the kids. I can’t take that risk. When there’s cold or a flu about I always get it and I’m knocked for six. ‘The virus has killed thousands of people and we’re all getting locked down again and it looks like it’s going to get worse.’ She said staff at her children’s school were not listening to her, adding that she was asked to go to meetings to explain why her children had not been sent in.
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