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 the prospects for an infrastructure bill, stimulus checks, government funding, the Fed, the latest employment data, housing market reports, mortgage delinquencies & forbearance, layoffs, lockdowns, and schools, as well as GDP. The bulk of the news is from the U.S., with a few more articles from overseas at the end. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) News items about epidemiology and other medical news for the virus are reported in a companion article.
Please share this article – Go to very top of page, right hand side, for social media buttons.
We have the usual scope of topics, with a few articles from around the world at the end:
When Will The Fed Begin Tapering: Here’s What 10 Wall Street Strategists Think – To answer this question, Bloomberg has sifted through and compiled the thoughts of ten of Wall Street’s top rates strategists and economists for their outlooks when the Fed will broach the subject of tapering. Here are the results:
- Bloomberg (Carl Riccadonna) Our view is that the tapering happens in the first quarter of next year. This will give plenty of opportunity to pre-announce/forewarn/hint/etc. starting from the July semi-annual testimony, through Jackson Hole and over the course of the second half.”
- Bank of America (Bruno Braizinha and Mark Cabana, April 23 report) “Recent rate decline does not change our view for higher yields this year” For 10-year, current range of 1.4%-1.7% should move to 1.75%-2.10% as economy improves and Fed signals on taper during second half of year
- Barclays (Anshul Pradhan, others, April 22 report) Recommends trades “for a rangebound environment” Front end is “still being too aggressive in pricing in inflation and hikes,” while long end has “room to push real yields higher” based on “scope for the growth outlook to be revised higher”
- Citi (Jason Williams, April 23 report) Treasury to “take precautionary measures and reduce the size of the 20y auction,” which has experienced “a clear and consistent concession” in contrast to the 30- year “There is a clear demand for long-duration bonds, but the 20y does not appear to be fulfilling that role for investors” Treasury may “foreshadow a reduction in 20s for the August refunding, with a risk that it does a marginal cut this quarter”
- Goldman Sachs (Praveen Korapaty, others, April 23 report) “There appears to be a good case for some asymmetry on the outlook for real rates vis-a-vis inflation,” in which further inflation upside doesn’t move liftoff pricing forward very much “but a softer outlook could see the timeline shift further out” More bullishness on inflation “would likely have a greater impact on the pace of hiking beyond liftoff rather than pulling forward the liftoff date by much”
- JPMorgan (Jay Barry, Phoebe White, Natalie Matejkova, April 23 report) Treasury yields “need a new catalyst” to move higher from current levels, and “tightening labor markets and a Fed tapering could spark such a move, but we do not see this driving Treasuries until the summer”
- Morgan Stanley (Guneet Dhingra, April 23 report) “The complete lack of reaction to the recent upside surprises in economic data shows the high degree of optimism embedded in Treasury yields” Risks of prolonged virus challenges “will be enough to keep the Fed a lot more patient than the optimistic path priced by the Treasury market” Rate-hike expectations are likely to move “deeper into 2023,” and 5- and 10-year yields “could be around 65bp and 140bp if the market prices the first hike in June 2023”
- NatWest (John Briggs, April 24 report) Recommends short positions in Treasuries, especially intermediates, based on rising expectations that Fed will begin to discuss tapering asset purchases in September, following similar moves by Canada and possibly U.K. in the meantime Tapering “will lead to the market pricing in more hikes down the road,” beginning in 2023, “and then as in 2013, just roll that rate hike pricing over time until we actually get there”
- Soc Gen (Subadra Rajappa, others, April 22 report) “With the U.S. economy at an ‘inflection point’ and bond yields at the lower end of the recent range, we see room for yields to rise on strong data” Fed “is set to take baby steps towards preparing the markets for a taper announcement, while the ECB retains a more cautious stance,” which should lead to U.S.-German 10-year spread widening
- TD Securities (Priya Misra, Gennadiy Goldberg, Penglu Zhao, April 23 report) It’s too soon to expect any sign on tapering asset purchases from the FOMC meeting Recent price action “is just a temporary breather in the longer-term trend towards higher rates” driven by economic improvement, increased supply of duration and higher inflation risk premium Expects 10- year yield to reach 2% by year end, 5s30s curve to steepen
Meanwhile, Bloomberg summarizes the result of its survey noting that more than two-thirds of the economists surveyed expect the FOMC will give an early-warning signal of tapering this year, with the largest number – 45% – looking for a nod during the July-September quarter.
El-Erian: Fed Should Start Tapering Now… But It Won’t —I suspect that Federal Reserve officials are not the only ones looking for an uneventful policy meeting this week. The majority of market participants are also expecting an undramatic event that will include an upgrade of the economic outlook, a reiteration of uncertainties and the signaling of nothing new on policies. Unfortunately, it’s an outcome that kicks the policy can further down the road when the central bank should be thinking now about scaling back its extraordinary measures. Although Fed officials raised their growth estimates significantly at their last meeting, they will most likely upgrade their economic outlook for 2021 again after the recent string of strong economic data. This will be accompanied by the usual Covid-related qualifications when accelerating vaccine deployment continues to race against growing infectionsand the threat of new variants of the virus.The further improvement in the economic outlook is unlikely to change the Fed’s policy guidance, however.Rather than follow the lead of the Bank of Canada, which last week began cutting back on bond purchases and signaled a quicker time frame for the next interest rate increase, the Fed will most likely take an approach similar to the one the European Central Bank conveyed last Thursday.It will maintain policy as is, remind markets that it is willing to do even more should downside risks materialize and play down the risk of inflation and other overheating as transitory.Markets have validated this policy attitude over the past month. After spiking to 1.76% in reaction to the improved economic outlook and inflation concerns, the yield on 10-year government bonds has declined, closing 20 basis points lower last week. Despite some small wobbles, risk-taking in the equity markets has remained robust. And all this has come in the context of reassuring statements from top Fed officials – not just playing down the significance of the coming increase in inflation but also indicating that there is no need to worry about risks to financial stability.Such a policy approach does have the attractiveness of repressing financial volatility at a time of economic, policy and institutional transitions. It is also an approach that papers over the growing inconsistency between ultra-loose financial conditions on the one hand and a strongly recovering economy, rising inflationary pressures and yet more evidence of pockets of excessive and, at times, irresponsible risk-taking on the other.The attractiveness of short-term calm comes at the risk of more significant policy challenges down the road.Rather than do what it is most likely to do this week – that is, accompany the ECB in stoking ultra-loose financial conditions even though the U.S. economic outlook is brighter than Europe’s – the Fed should seriously consider following the Bank of Canada’s example by initiating a gradual and careful retreat. The longer it takes to do so, the harder it will be to pull off an eventual normalization without risking both significant market volatility and damaging what should and must be a durable and inclusive economic recovery.
FOMC Statement: No Policy Change, Upgrade to Outlook – Fed Chair Powell press conference video here starting at 2:30 PM ET. FOMC Statement: The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support,indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement.Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
US Fed a “long way” from withdrawing massive financial support for Wall Street The US Federal Reserve this week again emphasised it is a “long way” from withdrawing the massive financial support that has fuelled the rise of Wall Street and asset prices over the past year during the COVID-19 pandemic, transferring hundreds of billions of dollars into the hands of the corporate and financial elites. The Fed’s commitment to continued support – the purchases of Treasury bonds and mortgage-backed securities at the rate of $120 billion per month and the maintenance of the base interest rate at virtually zero – came despite it upgrading the outlook for the US economy and signs that inflation is starting to rise. The Fed’s policy-making committee said that “amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened.” It noted that inflation had risen but said this was largely due to “transitory factors.” This was to allay concerns in some sections of the financial markets that rising inflation numbers would bring a tightening of the Fed’s monetary policy. In his opening remarks to a press conference following the two-day policy meeting, Fed chairman Jerome Powell indicated that recent price rises would not impact on its accommodative measures. “Readings on inflation have increased and are likely to rise somewhat further before moderating,” he said. They were due to one-time effects, such as upward pressure on prices as the economy re-opened. Powell emphasised that the Fed would maintain its present policies until maximum employment was achieved and inflation expectations were “well-anchored” at 2 percent. “We expect to maintain an accommodative stance of monetary policy until these employment and inflation outcomes are achieved,” he said, noting that a “transitory rise in inflation above 2 percent this year would not meet this standard.” In a further reassurance to financial markets that the Fed was not yet even thinking about tapering its support, Powell said: “The economy is a long way from our goals, and it is likely to take some time for substantial further progress to be achieved.” There is nervousness in financial markets and within the Fed itself that Wall Street has become so dependent on the outflow of cheap money that any winding back could bring a repeat of the “taper tantrum” of 2013 that saw significant turbulence in response to indications that the quantitative easing program, initiated after the 2008 financial crisis, could start to be eased. But there are also concerns that if the Fed does not start to prepare markets for some withdrawal of support, then it may have to sharply tighten monetary policy if inflation starts to rise faster than expected.
BEA: Real GDP increased at 6.4% Annualized Rate in Q1 — From the BEA: Gross Domestic Product, First Quarter 2021 (Advance Estimate) Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2020, real GDP increased 4.3 percent. …The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports. Imports, which are a subtraction in the calculation of GDP, increased. The advance Q1 GDP report, with 6.4% annualized growth, was slightly below expectations.
Q1 GDP Advance Estimate: Real GDP at 6.4%, Beats Forecast -The Advance Estimate for Q1 GDP, to one decimal, came in at 6.4% (6.39% to two decimal places), an increase from 4.3% (4.33% to two decimal places) for the Q4 Third Estimate. Investing.com had a consensus of 6.1%.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 6.4 percent in the first quarter of 2021 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2020, real GDP increased 4.3 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 3). The “second” estimate for the first quarter, based on more complete data, will be released on May 27, 2021.The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports. Imports, which are a subtraction in the calculation of GDP, increased (table 2). [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.18% average (arithmetic mean) and the 10-year moving average, currently at 2.26%.
Economy looks strong — James Hamilton – The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 6.4% annual rate in the first quarter, well above the 3.1% average growth that the U.S. experienced over 1947-2019. Real GDP growth at an annual rate, 1947:Q2-2021:Q1, with the 1947-2019 historical average (3.1%) in blue. Calculated as 400 times the difference in the natural log of GDP from the previous quarter. The new data put the Econbrowser recession indicator index at 0.4%, historically a very low value. The number posted today (0.4%) is an assessment of the situation of the economy in the previous quarter (namely 2020:Q4), where we use the additional quarter to allow for data revisions and to gain better precision. This index provides an automatic procedure that we have been implementing for 15 years for assigning dates for the beginning and ending quarters of economic recessions. As we announced on January 28, the COVID recession ended in the second quarter of 2020. GDP-based recession indicator index. The plotted value for each date is based solely on the GDP numbers that were publicly available as of one quarter after the indicated date, with 2020:Q4 the last date shown on the graph. With the exception of the the end of the 2020 recession, shaded regions represent the NBER’s dates for recessions, which dates were not used in any way in constructing the index. The indicated end to the 2020 recession comes from the algorithm described in Chauvet and Hamilton (2005). The NBER Business Cycle Dating Committee has yet to issue an official declaration that the recession has ended. The Dating Committee may be waiting until the levels of variables like GDP return to their values of 2019:Q4 before the COVID recession began. The 2020:Q1 value is still 0.9% below the value of 2019:Q4. 100 times the natural logarithm of the level of real GDP, 1990:Q1 to 2021:Q1, normalized at 2019:Q4 = 100. A movement on the vertical axis of 1 unit corresponds to a 1% change in the level of real GDP. The value for 2020:Q4 of 99.1 indicates that real GDP in 2021:Q1 was 0.9% below the value in 2019:Q4. In terms of the breakdown of the Q1 GDP numbers, consumption spending, spurred by more stimulus money, led the way. Direct spending by the federal government also accounted for 0.9 percentage points of the 6.4% annualized GDP growth rate. Private fixed investment made a positive contribution, though this was smaller than the contribution of fixed investment to the 2020:Q3 and Q4 figures. The Federal Reserve reiterated yesterday its commitment to keep interest rates low. That should provide continuing stimulus to house prices and residential fixed investment in 2021.
Q1 Real GDP Per Capita: 5.8% Versus the 6.4% Headline Real GDP – The Advance Estimate for Q1 GDP came in at 6.4% (6.39% to two decimals), up from 4.3% (4.33% to two decimals) in Q4 2020. With a per-capita adjustment, the headline number is lower at 5.82% to two decimal points.Here is a chart of real GDP per capita growth since 1960. For this analysis, we’ve chained in today’s dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 9.9% below the pre-recession trend (2008). The real per-capita series gives us a better understanding of the depth and duration of GDP contractions. As we can see, since our 1960 starting point, the recession that began in December 2007 is associated with a deeper trough than previous contractions, which perhaps justifies its nickname as the Great Recession. The standard measure of GDP in the US is expressed as the compounded annual rate of change from one quarter to the next. The current real GDP is 6.4%. But with a per-capita adjustment, the data series is lower at 5.8%. The 10-year moving average illustrates that US economic growth has slowed dramatically since the last recession and has dropped significantly during the COVID recession.
Seven High Frequency Indicators for the Economy –These indicators are mostly for travel and entertainment. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red). The dashed line is the percent of 2019 for the seven day average. This data is as of April 25th. The seven day average is down 42.7% from the same day in 2019 (57.3% of 2019). The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. This data is updated through April 24, 2021. Note that this data is for “only the restaurants that have chosen to reopen in a given market”. Since some restaurants have not reopened, the actual year-over-year decline is worse than shown. Dining picked up during the holidays, then slumped with the huge winter surge in cases. Dining was picking up again, but has moved up and down over the last couple of weeks. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). The data is from BoxOfficeMojo through Apr 22nd. Movie ticket sales were at $24 million last week, down about 83% from the median for the week. This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2021, black is 2020, blue is the median, and dashed light blue is for 2009 (the worst year since the Great Depression for hotels – before 2020). Occupancy is now above the horrible 2009 levels. This data is through April 17th. Hotel occupancy is currently down 13% compared to same week in 2019. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. Blue is for 2020. Red is for 2021. As of April 16th, gasoline supplied was off about 3.2% (about 96.8% of the same week in 2019). Gasoline supplied was up year-over-year, since at one point, gasoline supplied was off almost 50% YoY in 2020. 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. However the index is set “relative to its weekday-specific average over January – February”, and is not seasonally adjusted, so we can’t tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer. This data is through April 24th for the United States and several selected cities. The graph is the running 7 day average to remove the impact of weekends. Here is some interesting data on New York subway usage (HT BR). This graph is from Todd W Schneider. This is weekly data since 2015. Schneider has graphs for each borough, and links to all the data sources.
Early Q2 GDP Forecasts: 10% — From Goldman Sachs: We launched our Q2 GDP tracking estimate at +10.5% (qoq ar). [Apr 30 estimate] From the NY Fed Nowcasting Report: The New York Fed Staff Nowcast stands at 5.3% for 2021:Q2. [Apr 30 estimate] And from the Altanta Fed: GDPNow:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in thesecond quarter of 2021 is 10.4 percent on April 30. [Apr 30 estimate]
Manchin floats breaking up Biden’s infrastructure proposal Sen. Joe Manchin (D-W.Va.) said Friday that Congress should focus on “conventional” infrastructure and floated breaking up President Biden’s sweeping plan. Manchin, speaking at a press conference with a bipartisan group of lawmakers and Maryland Gov. Larry Hogan (R), said the administration and Congress should take Biden’s plan “step by step” and focus first on areas that could get bipartisan support like water, roads, bridges and the internet. “What we think the greatest need we have now, that can be done in a bipartisan way, is conventional infrastructure whether it’s the water, sewer, roads, bridges, Internet – things that we know need to be repaired, be fixed,” Manchin said. “Why don’t you take the greatest need that we have and do it on something that we all agree on?” Manchin added. Biden’s $2.3 trillion proposal includes money for roads and bridges, broadband, rail and water systems but also includes funding for in-home care, housing, clean energy, public schools and manufacturing. Manchin, who referred to the proposal as a “conceptual plan,” broke it down between “conventional” and “human” infrastructure, and argued that the former could get bipartisan support. “The other things that are conceptional, we can work on piece by piece, committee by committee,” adding that a bipartisan bill on “conventional” infrastructure was “doable.” Manchin, the most conservative member of the Senate Democratic caucus, is a key vote in the 50-50 Senate. He previously helped sink Neera Tanden’s Office of Management and Budget nomination, is helping lead a bipartisan group of 20 senators looking for potential deals and kept the Democrats’ coronavirus package in limbo for hours as he secured additional changes to the unemployment language.
The Heroic Congressional Fight to Save the Rich –Matt Taibb –iJosh Gottheimer, Democrat of New Jersey, made an inspired plea recently. The Harvard man and Alpha Epsilon Pi brother is a member of the so-called “SALT caucus,” a group of congressfolk threatening to hold up Joe Biden’s infrastructure bill if it doesn’t include a full repeal of a Donald Trump-imposed $10,000 cap on deductions of state and local taxes. “It is high time that Congress reinstates the state and local tax deduction, so we can get more dollars back into the pockets of so many struggling families,” intoned Gottheimer, one of 32 members of the SALT caucus, which includes 8 Republicans. Pressure on Biden to repeal the SALT cap has been amping up, mainly from tri-state Democrats like Gottheimer, fellow New Jerseyan Bill Pascrell, and Tom Suozzi of New York. “No SALT, no deal!” the trio power-tweeted a few weeks back. Just a few days ago, Gottheimer even came up with a new way to argue the plan, offering to pay for the repeal of the SALT cap by increasing audits. “There is a way to do this by going after what people owe already,” he said. The effort by the “SALT caucus” to hold a $2 trillion relief bill hostage in order to help what they’re calling “struggling families” in the “middle class” is just the latest development in a years-long saga revealing Congress at its phoniest and most shameless. This issue that “means so much to the American people,” according to House Speaker Nancy Pelosi, is really a niche matter concerning a sliver of the most well-off Americans in a handful of blue states, who were made the target of a political prank of sorts by the Trump administration in 2017. There are a lot of people who own homes in blue states, could use the deduction, probably don’t think of themselves as rich, and would balk at the idea that repealing the cap would be a luxury giveaway. The story has been framed in the press as more of an everyman issue, and the fact that most of the money at stake involves people at the very top of the curve has been obscured.
Up to 390,000 federal contractors will see a raise under the Biden-Harris executive order – Today the Biden-Harris administration issued an executive order requiring federal contractors to pay a minimum wage of $15 per hour. This is very welcome news. We estimate that up to 390,000 low-wage federal contractors will see a raise under this policy, with the average annual pay increase for affected year-round workers being up to $3,100. Roughly half of workers who would see a raise will be women and roughly half will be Black or Hispanic workers. To arrive at these estimates, we first estimate the state- and industry-specific shares of federal contract employment using FY2020 federal contract obligations from USA Spending and input-output tables from 2019Bureau of Labor Statistics employment requirements data. We then combined these results with the EPI Minimum Wage Simulation Model, assuming that the state- and industry-specific wage distributions for federal contractors are similar to the state- and industry-specific overall wage distributions. Following this methodology, we project that the policy will raise wages of up to 390,000 federal contractors in 2022. We say “up to” 390,000 to account for the fact that some workers who would otherwise be affected by a $15 minimum wage will already be receiving a higher wage as a result of the Davis-Bacon Act or the Service Contract Act. An extreme lower bound for the number of contract workers affected by this executive order after accounting for these other wage standards is 226,000. (This lower bound is generated by entirely excluding the construction industry and, outside of construction, raising the underlying wage distribution by an industry-specific union wage premium.) We are thrilled that the administration is increasing the minimum wage for workers on federal contracts to $15 per hour and raising wages for hundreds of thousands of workers, and we encourage the administration to go further to help ensure that the estimated two million total jobs held by federal contract workers are good jobs. This would include steps like ending practices that allow low-road contractors to win bids that are so low they are inconsistent with decent pay and working conditions, and banning federal government contractors from requiring contract workers to sign forced arbitration and class action waivers, which limit the ability of these workers to challenge illegal practices.
Here’s what’s in Biden’s $1.8T American Families Plan — — President Biden on Wednesday will outline the American Families Plan, an ambitious package that would call for $1 trillion in new spending and $800 billion in new tax credits and aim to significantly expand access to preschool and community college, as well as child care and health care benefits. Biden will detail the proposal during a speech before a joint session of Congress in which he is expected to lay out his agenda for the coming months. The centerpiece of the speech will be the families plan, which is being rolled out less than a month after Biden unveiled a $2.3 trillion infrastructure proposal. The American Families Plan calls for a $200 billion program offering universal pre-kindergarten for all three- and four-year-olds; $109 billion for tuition-free community college for any American who wants it; $85 billion to increase Pell Grants to benefit low-income and minority students; and more than $4 billion in funding for larger scholarships, certification and support programs for teachers. The plan would build upon provisions of the American Rescue Plan by extending the Affordable Care Act premiums tax credits indefinitely and make the earned income tax credit expansion for childless workers permanent. It would permanently make the child tax credit fully available to the lowest-income families, while extending other aspects of the expansion of the credit, such as the increase in the credit amount, through 2025. The proposal also calls for the creation of a national paid family and medical leave program. The $225 billion investment would provide workers up to $4,000 a month if they require leave to care for a new child, care for a seriously ill loved one, deal with an illness or another serious reason. Other measures Biden will call on Congress to pass include a $45 billion investment in meal programs for children and low-income families; unemployment insurance reform; $225 billion for investments in child care that would include a $15 minimum wage for early childhood staff and expanded child care center accessibility. Officials said the plan would be paid for through tax reforms targeted at wealthy Americans, such as an increased capital gains tax rate, a higher top income tax rate and increased IRS auditing enforcement on high-income individuals and businesses. The plan, which faces an uncertain future in Congress, does not go as far as some Democrats hoped. Some have pressed for a permanent expansion of the child tax credit, and it’s not clear that lawmakers will be satisfied by the proposal to make part of the expansion permanent while extending other parts through 2025. Key Democrats signaled on Tuesday that the House bill would include such a provision despite Biden not putting it in his initial proposal. Biden has also faced pressure from members of his party, including House Speaker Nancy Pelosi (D-Calif.), to include health-related provisions expanding health coverage and lowering drug prices. The ideas had initially been expected to be part of the plan, but Biden did not include them in the final version. Asked why such provisions were not included, a senior administration official said that the permanent ObamaCare premium tax credit represents a “critical investment” and insisted that Biden remains “fully committed to negotiations to reduce the cost of prescription drugs. The White House views the proposal as a companion to Biden’s $2.3 trillion infrastructure and climate plan he announced last month, and officials said that the investments would be made over a 10-year period. The two plans combined total more than $4 trillion in government spending, on top of the $1.9 trillion coronavirus relief bill that Biden signed into law about 50 days into his term. The administration’s two most recent proposals include tax increases that would pay for both plans in full over a 15-year period.
Goldman Is Surprised At How “Narrow” Biden’s $1.8TN American Families Act Is: Full Reaction –Earlier today, we previewed Joe Biden’s American Families Plan (AFP) which provides $1.8 trillion over ten years in new benefit spending and tax credits. Commenting on the proposal, Goldman economist Alec Phillips writes that he was surprised by the focus of the released plan which is “somewhat narrower than we had initially expected several weeks ago, as it omits any housing or Medicare proposals and focuses solely on child care and nutrition,education, paid leave, and extending a number of the tax credits Congress enacted earlier this year.” On the payment side, the White house proposes $1.5 trillion over ten years in additional taxes to cover most of the cost, with a capital gains tax hike contributing to this, but in today’s release the White House has provided few new details on the topic. The $303BN funding balance will come from an increase in the US budget deficit. Biden will present the plan when he addresses a joint session of Congress at 9pm ET tonight. Below we list the main points from the plan as summarized by Goldman:
- 1. The spending would be spread roughly evenly over the next ten years. The White House release provides no details on the timing of spending, but judging by the types of spending President Biden proposes, it appears that the spending will be spread roughly evenly over the next ten years. An exception would be the expanded child tax credit that Congress recently enacted, which Biden proposes to extend only through 2025 (he proposes to make permanent a less expensive aspect of recent expansion). However, in essentially all other cases, the White House appears to propose to make these policies permanent.
- 2. The proposed savings from IRS enforcement are likely to look smaller once they reach Congress. The White House estimates the proposal would produce $1.5 trillion in additional revenue, of which $700bn would come from closing the gap between what taxpayers owe and what they pay. But according to Goldman, Congressional Democrats might have to look elsewhere to gain this much revenue.
- 3. The proposed capital gains tax hike also looks likely to face resistance. President Biden proposes to tax capital gains and dividends at the top marginal rate (39.6%) and to tax gains greater than $1mn at death (under current law, the basis of an asset steps up at death to the transfer value, so the recipient has no taxable gain upon receiving it). The Tax Policy Center has estimated such a policy would raise around $370bn/10yrs. Even with exceptions for active businesses and even with a long payment schedule for any payments due – a recent congressional proposal would allow such taxes to be paid over 15 years – it seems likely that at least a few Democrats will raise concerns about the impact on family businesses and farms. In our view, a capital gains tax increase looks more likely to come in around 28% and to eliminate the step-up in basis at death but to stop short of actually taxing those gains upon death.
- 4. Health care is notably absent from the proposal. The proposal includes an extension of the recent expansion of health insurance subsidies, but it omits the other Biden campaign proposals, like lowering the Medicare eligibility age to 60. . The omission is likely due to expected resistance from a few congressional Democrats whose support would have been necessary to pass the bill, and the fact that some of the proposal also omits the Medicare eligibility change. That said, there is still a chance that Congress will include more incremental savings measures in the upcoming legislation.
- 5. Congress will want to add and subtract. At a minimum, we expect that congressional Democrats will want to add a reinstatement of the deduction for state and local taxes (SALT) that congressional Republicans capped in 2017. The policy would cost on the order of $80bn per year, or $400bn to reinstate it through 2025, after which it is already set to revert to the pre-2017 policy. Since most of the benefit would go to those with very high incomes, it looks unlikely that there will be sufficient support to fully reinstate it. Instead, we expect Congress to raise the cap to something like $50k,or reinstate it for taxpayers under a certain income threshold, which could be done at a fraction of the cost.
- 6. The legislative strategy should be clearer in a few weeks.
- 7. The details will probably remain in flux until Q3.
Private Equity and Hedge Fund Barons Having a Hissy Over Carried Interest Grift Because Biden Isn’t Staying Bought – by Yves Smith -Your humble blogger will endeavor unpack the multi-layered kabuki battle brewing over the indefensible and mislabeled “carried interest” loophole. If you believe the press, Biden is taking aim at it. Since the carried interest abuse had supposedly been an endangered species for at least a decade, yours truly is not about to take the hissing and spitting about its imminent demise seriously until its death really does look, well, imminent. The posturing and whinging about the fate of the carried interest loophole obscures the fact that money mavens would not find it hard to rearrange their affairs to preserve their economics. But it offends their view of their place in the universe to be told what to do. So bear with us as we pull the signal out of considerable noise. What is called carried interest in the US is not actually “carried interest,” which comes about when a participant in a deal borrows money (typically from other principals) to buy his equity stake. Instead, what the press widely calls carried interest is a profits interest that gets preferential tax treatment. To underscore the key point: the carried interest loophole allows private equity and hedge fund honchos to have their labor income taxed at more favorable capital gains rates. That preferential treatment is the reason someone going into asset management is twice as likely as someone going into tech to become a billionaire. The Wall Street Journal story, Private Equity and Hedge Funds, Facing a New Tax Burden, Prepare Their Defense, demonstrates that the fight over the carried interest tax break is following a well-established script, save a plot twist. Biden got far more support from private equity firms and hedge funds. Yet here he is, biting the hands that fed him! From the Journal: Hedge funds and private-equity firms are among those that would be affected by Mr. Biden’s proposal, given his plan would get rid of lower rates on long-term capital gains for high-income households and end what the administration calls the “carried-interest loophole.” The moves would mean investment managers would no longer be allowed to pay a lower rate on a substantial portion of their compensation. Lobbyists for the private-equity industry responded to the proposal by arguing it might do more harm than good. They said private investment has been beneficial to the U.S. economy, including investing in renewable energy and healthcare, providing jobs and supporting pension plans. The proposed taxes would threaten that investment, they said. Understand what these lobbyists are asserting, because it’s a howler. They are trying to say, with a straight face, that investment in private equity might shrink because the pay levels for the top dogs might fall from egregious to merely embarrassingly lucrative. Or to paraphrase supermodel Linda Evangelista, “I never get out of bed for less than half a million a day.” Pray tell, what could these Masters of the Universe possibly do that that would generate anything within hailing distance of what they earn now? Even if lower after-tax pay were a real threat, they’ve got nowhere to go, even before getting to perks like getting to push around investment bankers and top lawyers and fly private class. The fact that men that are unseemly wealthy like Steve Schwarzman and Henry Kravis are still working well into their 70s says it’s not for the money. They really like the job.
Money Alone Can’t Fix Central America – or Stop Migration to US — To stem migration from Central America, the Biden administration has a US$4 billion plan to “build security and prosperity” in Honduras, Guatemala and El Salvador – home to more than85% of all Central American migrants who arrived in the U.S. over the last three years.The U.S. seeks to address the “factors pushing people to leave their countries” – namely, violence, crime, chronic unemployment and lack of basic services – in a region of gross public corruption.The Biden plan, which will be partially funded with money diverted from immigration detention and the border wall, is based on a sound analysis of Central America’s dismal socioeconomic conditions. As a former president of Costa Rica, I can attest to the dire situation facing people in neighboring nations. Guatemala, Honduras and El Salvador comprise Central America’s “Northern Triangle” – a poor region with among the world’s highest murder rates.These countries need education, housing and health systems that work. They need reliable economic structures that can attract foreign investment. And they need inclusive social systems and other crime-prevention strategies that allow people to live without fear.No such transformation can happen without strong public institutions and politicians committed to the rule of law.Biden’s aid to Central America comes with strict conditions, requiring the leaders of Guatemala, Honduras and El Salvador to “undertake significant, concrete and verifiable reforms,” including with their own money.But the U.S. has unsuccessfully tried to make change in Central America for decades. Every American president since the 1960s has launched initiatives there.During the Cold War, the U.S. aimed to counter the spread of communism in the region, sometimes militarily. More recently U.S. aid has focused principally on strengthening democracy, by investing in everything from the judiciary reform and women’s education to agriculture and small businesses.The Obama administration also spent millions on initiatives to fight illegal drugs and weaken the street gangs, called “maras,” whose brutal control over urban neighborhoods is one reason migrants say they flee.Such multibillion-dollar efforts have done little to improve the region’s dysfunctions. If anything, Central America’s problems have gotten worse. COVID-19 is raging across the region. Two Category 5 hurricanes hit Honduras within two weeks in late 2020, leaving more than 250,000 homeless. Some experts have been calling for a “mini-Marshall Plan” to stabilize Central America, like the U.S. program that rebuilt Europe after World War II.
Texas, Stephen Miller sue to force deportation of children, other migrants due to pandemic – The state of Texas, with assistance by former President Trump aide Stephen Miller, filed another suit challenging President Biden’s immigration policies on Thursday, turning to the courts to force the administration to expel all migrants using a law that allows swift deportation in the name of the coronavirus pandemic. The Biden administration has been relying heavily on a Trump-era “Title 42” rule to quickly deport a majority of those who attempt to cross the southern border, but it has made exceptions for unaccompanied children and some families. Texas’s suit argues that the administration’s “abandonment of their authority” under the law means “more Texans will be exposed to Covid-19, more Texans will contract Covid-19, more Texans will die of Covid-19 and Texas will incur significant costs in terms of health care and law enforcement resources.” In March alone, the Biden administration used its Title 42 authorities to expel more than 100,000 of the 172,000 people who crossed the southwest border, many of them single adults. Another 68,000-plus were expelled under Title 8, which allows deportation of those who violated immigration law by entering the country between ports of entry. Still, the Biden administration is dealing with record numbers of children in government custody along with pressure to ensure proper coronavirus protocols in both its facilities and for Department of Homeland Security (DHS) workers. As of Wednesday, the government had more than 21,000 children in custody. The suit, filed in U.S. District Court for the northern district of Texas, argues the Biden administration violated the Administrative Procedures Act, among other laws, and asks for an injunction to force DHS to “return all covered aliens to Mexico” or detain them for at least 14 days before release. DHS did not respond to request for comment. But administration officials have repeatedly said they would not use Title 42 or any other law that would leave children stranded alone on the other side of the border. Critics called the Texas suit an attack on children, given that exceptions to Title 42 have largely gone to minors. “There is no lower order than being one who spends his day finding ways to attack kids who are running for their lives,” said Jorge Loweree, policy director at the American Immigration Council. The suit is one of several from the Lone Star State, which has also challenged the Biden administration’s detainer policy allowing Immigration and Customs Enforcement officials to request local authorities to hold foreign national convicts for up to 48 hours after their jail sentences are scheduled to end. The state also sued President Biden for rescinding Trump’s “remain in Mexico” policy barring people from applying for asylum within the U.S. n But it’s one of the first from America First Legal, a group founded by Miller to aid conservative causes. Miller has been credited with crafting the Trump administration’s child separation policy.
Majority disapproves of Biden’s handling of immigration at border: poll – More than half of U.S. adults questioned said they disapprove of President Biden’s handling of the surge in Central American migrants, particularly young unaccompanied children, at the border with Mexico, according to a survey published early Sunday. In the Washington Post/ABC News poll, 53 percent of respondents said they disapprove at least somewhat of the job Biden has done managing the rising number of immigrants and asylum-seekers arriving at the border, while 37 percent approved. Nearly half– 44 percent — strongly disapproved. Sixty-four percent of Democrats approve of Biden’s handling of the immigration situation at the border, compared to 10 percent of Republicans. The findings follow weeks of pressure on the administration from both GOP critics who say the president’s reversal of former president Trump’s policies, including the so-called “remain in Mexico” policy, are contributing to the rise in migrants, as well as critics on the left who say the Biden administration is going back on campaign promises to help undocumented immigrants and releasing children from detention centers. They also come ahead of the president’s speech to a joint session of Congress later this week marking his first 100 days in office, where he is likely to address the issue as well. The administration has placed Vice President Harris in charge of immigration, last week she announced the rollout of a plan to address various issues in Central America that officials believe are driving the migrant crisis. Biden scored highest in the new poll on his efforts to fight the coronavirus pandemic with 64 percent of respondents approving. Just more than half – 52 percent – approved of his work on the economy. The Washington Post/ABC poll was conducted between April 18-21 with responses from 1,007 U.S. adults. The margin of error is 3.5 percentage points.
U.S. to provide urgently needed vaccine components, medical supplies to India (Reuters) – The United States will immediately provide raw materials for COVID-19 vaccines, medical equipment and protective gear to help India respond to a massive surge in COVID-19 infections, a White House spokeswoman said on Sunday. “The United States is working around the clock to deploy available resources and supplies,” National Security Council spokeswoman Emily Horne said in a statement. Horne said the materials would help India manufacture the Covishield vaccine. The United States would also send therapeutics, rapid diagnostic test kits and ventilators. Washington was under mounting pressure to help India, the world’s largest democracy, after Britain, France and Germany pledged aid over the weekend. Indian Prime Minister Narendra Modi urged all citizens to be vaccinated and exercise caution, as the country set a global record for new COVID-19 infections in a single day. (Graphic on global case and deaths) https://tmsnrt.rs/34pvUyi The United States was also pursuing options to provide India with oxygen generation and related supplies. U.S. officials are also considering sending India its unused COVID-19 vaccines doses from AstraZeneca Plc, the top U.S. infectious disease official Dr. Anthony Fauci told ABC News on Sunday. “That’s something that certainly is going to be actively considered,” Fauci said in an interview. AstraZeneca’s vaccine is not yet approved in the United States, which has millions of doses, and top U.S. health officials have said they have enough doses of approved versions by three other drugmakers to inoculate all Americans in coming weeks. The nation’s top business lobbying group has also pushed the administration to send AstraZeneca’s vials to countries with rising cases. The White House had no comment on the possibility of sending AstraZeneca vaccine to India. Senior U.S. officials have expressed concern that new variants of the virus emerging in India could undermine progress made in the United States.
As US Lifts Export Ban to Assist India, Biden Urged to ‘Keep His Word’ by Supporting Vaccine Patent Waiver –In the face of rising public pressure, the Biden administration on Sunday partially lifted export controls on raw materials for coronavirus vaccines in an effort to help India combat a surge that is overwhelming hospitals and threatening to derail nascent inoculation campaigns in developing countries. While welcomed by progressives who have been pushing the Biden administration to shift critical resources to India – which is experiencing the worst Covid-19 wave in the world – the White House is facing calls to take more sweeping action by supporting an international effort to suspend coronavirus vaccine patents, a move advocates say would allow India and other countries to quickly ramp up production. “This is a start. But not nearly enough,” U.S. healthcare activist Ady Barkan said Sunday in response to the Biden administration’s decision to relax an export ban that was preventing India from obtaining key materials for the production of its Covishield vaccine. “President Biden promised that intellectual property law would not block the Global South from producing the vaccine,” Barkan added. “He must keep his word. Millions of lives depend on his choice.” In an interview with Barkan during the 2020 presidential campaign, Biden vowed to not let intellectual property (IP) barriers prevent other countries from mass producing coronavirus vaccines. “It lacks any human dignity, what we’re doing,” Biden said of his predecessor’s refusal to participate in global vaccination initiatives. “So the answer is yes, yes, yes, yes, yes. And it’s not only a good thing to do, it’s overwhelmingly in our interest to do.” However, since taking office in January, the Biden administration has upheld Trump’s opposition to India and South Africa’s proposal to temporarily waive sections of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a step that would allow generic manufacturers to replicate vaccine formulas and bolster global supply. Thus far, the vast majority of vaccine doses have been administered in rich and upper-middle-income countries as production remains largely under the control of a small number of pharmaceutical companies. Several U.S. members of Congress, including Sen. Bernie Sanders (I-Vt.) and Rep. Jan Schakowsky (D-Ill.), echoed that call during a virtual event on Friday as the World Trade Organization prepares to consider the waiver proposal once again next month. “We have the tools to save human lives, and those tools should be readily available to all people,” said Sanders. “Poor people in Africa, Asia, Latin America, and throughout the world have as much a right to be protected from the virus, to live, as people in wealthier nations. To me, this is not a huge debate, this is common human morality.”
Pharmaceutical Industry Dispatches Army of Lobbyists to Block Generic Covid-19 Vaccines – THE PHARMACEUTICAL INDUSTRY is pouring resources into the growing political fight over generic coronavirus vaccines. Newly filed disclosure forms from the first quarter of 2021 show that over 100 lobbyists have been mobilized to contact lawmakers and members of the Biden administration, urging them to oppose a proposed temporary waiver on intellectual property rights by the World Trade Organization that would allow generic vaccines to be produced globally.Pharmaceutical lobbyists working against the proposal include Mike McKay, a key fundraiser for House Democrats, now working on retainerfor Pfizer, as well as several former staff members to the U.S. Office of Trade Representative, which oversees negotiations with the WTO.Several trade groups funded by pharmaceutical firms have also focused closely on defeating the generic proposal, new disclosures show. The U.S. Chamber of Commerce, the Business Roundtable, and the International Intellectual Property Alliance, which all receive drug company money, have dispatched dozens of lobbyists to oppose the initiative.The push has been followed by a number of influential voices taking the side of the drug lobby. Last week, Sen. Thom Tillis, R-N.C., released aletter demanding that the administration “oppose any and all efforts aimed at waiving intellectual property rights.” Howard Dean, the former Democratic National Committee chair, has similarly criticized the proposal, echoing many of the arguments of the drug industry.Currently, only 1 percent of coronavirus vaccines are going to low-income countries, and projections show much of the world’s population may not be vaccinated until 2023 or 2024. In response, a coalition of countries, led by India and South Africa, have petitioned the WTO to temporarily suspend intellectual property rights on coronavirus-related medical products so that generic vaccines can be rapidly manufactured.The waiver requests a suspension of IP enforcement under the Trade-Related Aspects of Intellectual Property Rights, or TRIPS, treaty. If granted, local pharmaceutical plants could be granted compulsory licenses to produce coronavirus vaccines without the threat of being sued by the license holder.The proposal has gained traction globally, with hundreds of members of the European Parliament, dozens of American lawmakers led by Sen. Bernie Sanders, I-Vt., and increasingly vocal voices in the public health community expressing support.But the waiver petition has encountered fierce opposition from leading drug companies, who stand to lose profit and who fear that allowing a waiver would lead to less stringent IP enforcement in the future.
NIH Scientist Who Developed Key Vaccine Technology Says Patent Gives US Leverage Over Big Pharma –A leading National Institutes of Health scientist who helped develop a key technologyused in Pfizer and Moderna’s coronavirus vaccines said this week that the U.S. government’s ownership of the patent for the invention gives the Biden administration significant leverage to compel pharmaceutical companies to help boost global production.Dr. Barney Graham, deputy director of the NIH’s Vaccine Research Center, told theFinancial Times in an interview this week that “virtually everything that comes out of the government’s research labs is a non-exclusive licensing agreement so that it doesn’t get blocked by any particular company.”Part of the team of scientists that in 2016 conceivedthe spike-protein technology being utilized in thehighly effective mRNA vaccines, Graham told FTthat “one of the reasons” he joined NIH was “to be able to use the leverage of the public funding to solve public health issues.”While Pfizer’s partner BioNTech has licensed the technology from the U.S. government and is paying royalties, Moderna has not – and the Biden administration has not attempted to enforce the patent.According to researchers at New York University School of Law, Moderna – whose vaccine was developed with a massive infusion of public funding – could be on the hook for more than a billion dollars in compensation should the U.S. decide to sue the pharmaceutical giant, which has thus far sold most of its doses to rich countries.But the researchers argue in a new report (pdf) that instead of taking Moderna to court for patent infringement, the U.S. government should “use the threat of litigation of the ‘070 patent to bring Moderna back to the negotiation table and convince Moderna to share its own patents, trade secrets, and other intellectual property on [its vaccine] with the U.S. government and with vaccine manufacturers around the world.”Going that route, the researchers say, would help “accelerate scale-up of global mRNA vaccine manufacturing, vaccinate the world, and bring the Covid-19 pandemic to a conclusive end.”
White House knocks Joe Rogan: ‘Did Joe Rogan become a medical doctor while we weren’t looking?’ -White House communications director Kate Bedingfield on Wednesday dissuaded Americans from taking medical advice from Joe Rogan, noting the popular podcaster’s lack of credentials after he suggested that young, healthy people don’t need to get vaccinated against the coronavirus.”I guess my first question would be, did Joe Rogan become a medical doctor while we weren’t looking? I’m not sure that taking scientific and medical advice from Joe Rogan is perhaps the most productive way for people to get their information,” Bedingfield said on CNN’s “New Day” when asked about Rogan’s recent comments.Bedingfield acknowledged that Rogan’s remarks could cause listeners to “question” the need to get a vaccine but she pointed to polls showing that more Americans are willing to get vaccinated.”I think what we’re seeing, and what we have seen in the data and what we’ve seen as people continue to get vaccinated, is the people who are most influential in encouraging people to get vaccinated are their friends, their neighbors, people who have received the shot themselves who they know and they trust. And so, what we see is the number of people who say that they are willing to get vaccinated is rising. It’s now up to, I believe, 67 percent in a recent public poll,” Bedingfield said.Surveys have actually shown a higher percentage of Americans are willing to get a coronavirus vaccine. An Associated Press-NORC Center for Public Affairs Research poll in March found that 75 percent U.S. adults said they are willing to get vaccinated or had received at least one dose, an increase from 67 percent in January. And a Monmouth survey released in April found that 21 percent of Americans said they would not get the vaccine, a decrease from 24 percent in January and March.
US CEO pay soars during pandemic – For the majority of the population, the COVID-19 pandemic has been a catastrophe on a scale not seen since the Second World War. With a death toll over 586,000 in the US alone, millions of families have lost loved ones, as parents, spouses, siblings, and even children fell ill and succumbed to the virus in a matter of days. Millions more have survived an infection only to face debilitating long-term consequences to their health.For those employed in factories, warehouses and countless other workplaces which have remained open, the workday has become a gamble with death. For the millions of others who have been thrown into unemployment and deprived of adequate incomes, the threat of destitution, hunger and homelessness is ever-present.But for a small section of society, the last year has produced a windfall. Pay packages for CEOs at major US companies soared over the course of the pandemic, according to annual corporate filings released in recent weeks. And some executives received much bigger payouts than others, “earning” stratospheric compensation topping the until recently unprecedented amount of $100 million:
- Chad Richison, CEO of Paycom, a software company based in Oklahoma, took in over $211 million in salary and share options.
- Amir Dan Rubin, CEO of 1Life Healthcare, a chain of health clinics in San Francisco, was awarded over $199 million.
- John Legere, CEO of cell provider T-Mobile – which consummated a merger with rival Sprint last year – received over $137 million.
- James Murren, chairman and CEO MGM Resorts, the Las Vegas-based hotel and casino giant, received an exit compensation package of $32 million when he left last year, making him the 14th-highest paid executive in 2020, despite a loss of $1 billion by the company.
- Chris Nassetta, head of the Hilton hotel chain, was awarded $55.9 million, coming in at number five on the list of highest-paid executives. The company reported a loss of $720 million for the year.
- David Calhoun, president and CEO of aerospace manufacturing giant Boeing, received over $21 million in compensation, even though the company reported a colossal loss of $12 billion.
Outrage over OCC bid to levy higher fines on former Wells Fargo execs An industry group representing bank directors is accusing regulators of acting unfairly when they sought to collect millions of additional dollars from three individuals implicated in the fake-account scandal at Wells Fargo. The proposed increases were disclosed last month in legal filings and came more than a year after the Office of the Comptroller of the Currency filed its notice of charges. The increases would at least double and in one case more than triple the amounts initially sought. “As far as we know, this is unprecedented,” the American Association of Bank Directors said Tuesday in an email to its members. “To learn at this late date that the penalties sought are two or three times higher than stated in the notice is extraordinarily unfair.”The OCC has not brought cases in connection with the fake-account scandal against any current or former members of Wells Fargo’s board of directors. But the charges against the three former Wells executives rely on the same legal authorities that regulators often use to seek penalties from bank directors. David Baris, the industry group’s president, expressed concern about the precedent being established. “Will the sudden doubling and tripling of civil money penalties sought mid-stream in the Wells actions make it impossible from a practical level for a target in the future to avail himself or herself of their constitutional and statutory rights to an administrative review process?” he asked. OCC spokesman Bryan Hubbard declined to respond, citing the fact that the litigation is currently pending. The OCC asked for the higher penalties in filings that also sought a ruling by an administrative law judge recommending that the cases be resolved in the agency’s favor. Responses from the three former Wells Fargo executives are expected soon. The OCC is now seeking a $10 million civil money penalty from former community banking executive Claudia Russ Anderson, up from the $5 million it had previously sought. The agency is also seeking a $7 million penalty from former chief auditor David Julian, up from $2 million before, and $1.5 million from former executive auditor Paul McLinko, up from $500,000. The cases against executives implicated in the fake-account scandal represent one of the largest efforts ever by U.S. regulators to punish individual bankers. The OCC has reached settlements with former Wells Fargo CEO John Stumpf, who agreed last year to pay a $17.5 million penalty, and six other individuals whose monetary payments totaled approximately $8.5 million. The three former Wells executives who now face potential penalties totaling $18.5 million are scheduled to go to trial in September in Sioux Falls, S.D. The OCC alleges that they failed to perform their duties and responsibilities adequately, and also misled others about the extent of the bank’s problems. The defendants’ attorneys have called the allegations unfounded.
BankThink OCC ‘true lender’ rule is wrong path to small-dollar lending by banks – Research shows that payday and similar loans damage millions of Americans’ financial health every year. The Pew Charitable Trusts found that the average payday loan borrower has $375 in outstanding borrowings five months of the year – and pays $520 in fees alone for that credit. The Consumer Financial Protection Bureau has jurisdiction over these loans. By all means, the bureau should immediately reinstate its 2017 payday lending rule, which before being rescinded in 2020 provided necessary consumer safeguards for single-payment loans without restricting installment loans or lines of credit. But bank regulators such as the Office of the Comptroller of the Currency make decisions that are just as important as anything the CFPB could do in determining the financial fate of millions of households that have no margin for error. Banks are an obvious source of small-dollar credit. Every one of the 12 million Americans who use payday loans each year has a checking account, which is one of two requirements – along with earning income – for taking out a payday loan. But if banks chose to have a more direct impact by making loans to their checking-account customers, the advantages would be numerous. A bank has an existing relationship with the customer; has no customer acquisition costs; can spread its overhead costs across a full suite of products; can borrow money at a much lower rate than payday lenders do; can use the customer’s cash flow to automate an assessment of the customer’s ability to repay; and can deduct payments only when there is a sufficient balance. Banks faced too much regulatory uncertainty to make small-dollar loans on a large scale until May 2020, when they received clear joint guidance from the OCC, Federal Reserve, Federal Deposit Insurance Corp., and National Credit Union Administration. That guidance was compatible with the CFPB’s 2017 payday lending rule, which encouraged loans to be repayable in installments with terms of more than 45 days. This meant that banks could now offer installment loans and lines of credit to their customers who had previously been using payday and other high-cost loans. Two of the country’s five largest banks – U.S. Bank and Bank of America – are now offering loans consistent with that guidance. Problem solved? Not exactly, because just as banks can offer consumer loans at a much lower cost than payday lenders, they can also help payday lenders evade state laws that protect consumers. In fact, a small number of banks are now originating loans for payday lenders that would otherwise be illegal under the payday lender’s state’s laws. The banks, which under their charters are exempt from such laws, make the loans and sell them to payday lenders that in turn market, service and absorb any losses from the loans. The arrangement allows companies to charge more than the state laws allow. Although these arrangements aren’t widespread, they’ve increased in the past few years. And a new OCC regulation could make this problem much worse by declaring that the bank should always be considered the “true lender” if it originates or funds a loan, even if that loan is quickly sold to a high-cost lender. This regulation does nothing to aid a bank in serving its own customers or enlisting technology providers; instead, it strengthens the hand of high-cost lenders who use bank partners as a rationale for ignoring state laws.
Brown sides with small banks in opposing ILCs, fintech charters – – Senate Banking Committee Chairman Sherrod Brown sharply criticized megabanks and fintech companies as he pitched his FedAccounts proposal to an audience of community bankers. At an Independent Community Bankers of America virtual conference on Tuesday, the Ohio Democrat blasted the biggest banks while praising smaller institutions that he said have helped consumers and small businesses navigate the coronavirus pandemic. He also advocated for legislation supported by community banks to block approvals of financial technology and industrial loan company charters. “People just don’t trust the largest banks in this country,” said Brown. “Americans feel like they don’t have control over their own money, if they put it in the bank. … That’s where community banks come in. We’ve seen small banks step up when the biggest Wall Street banks turn their backs on Main Street. I hear stories of community banks in Ohio, making the small-dollar loans, thousands or tens of thousands, not millions, that aren’t as profitable, but are [a] lifeline to small businesses and farmers.” Brown’s speech comes as community bankers have advocated for a ban on industrial loan company charters. The industry has also criticized national trust charters that have been approved by the Office of the Comptroller of the Currency for fintech firms. These firms are not required to have federal deposit insurance but can still accept deposits. Brown said ILC approvals from the Federal Deposit Insurance Corp. and fintech charters approved by the OCC allow companies to skirt tough regulations. “Nonbanks are using ILC and OCC chartering loopholes to get around banking laws and consumer protections,” Brown said. “These options might seem like a quick fix, but they often trap people in predatory loans with sky-high interest rates.” Brown added that he will work to pass legislation to ban ILC and fintech charters. “We’ll continue to work together to close the ILC and OCC chartering loopholes and ensure a level playing field for all institutions,” Brown said. Brown also attempted to pitch his proposal to offer all consumers free FedAccount digital wallets, made available through U.S. Postal Service locations as well as community banks that would be backed by the Federal Reserve. Brown said the proposal would help community banks attract more customers, though community banks have opposed the proposal. “One way we can get more people through their doors is through my plan for no-fee accounts,” Brown said. “It helps give Americans more power over their own money and build relationships with banks.”
The Fed Has Misled the Public about the “Strength” of the Wall Street Mega Banks: This Chart Shows the True Picture – Pam Martens -What happened as a result of the tanking share prices of the mega bank stocks in the spring of 2020 is that the Federal Reserve had to quickly reassemble many of the same Wall Street bailout programs that it had created in 2008, for example: the Commercial Paper Funding Facility (CPFF), the Primary Dealer Credit Facility (PDCF), the Term Asset-Backed Securities Loan Facility (TALF), the Money Market Mutual Fund Liquidity Facility (MMLF), and numerous other programs and bailout measures.The concept of taxpayers backstopping federally-insured banks holding the life savings of average Americans is that in times of economic crisis those banks will not have to worry about bank runs and will be able to lend to consumers and businesses in order to get the economy back on a sound course.But as Americans witnessed in horror in 2008, it was the mega banks themselves that actually brought on the greatest economic crisis since the Great Depression through greed, reckless derivative bets and insane packaging and selling of subprime debt that bank insiders knew was doomed to fail.The Dodd-Frank financial reform legislation passed in 2010 was supposed to fix the ugly warts that were exposed in the aftermath of the 2008 financial collapse on Wall Street. But it fixed nothing. All it did was kick the can down the road to the next crisis.What caused the Wall Street bank stocks to tank so much worse than the broader market in March 2020 is the same thing that caused the banks to tank much worse than the broader market in 2008 – interconnectivity via derivatives and leverage.The federal agency created under the Dodd Frank legislation, the Office of Financial Research (OFR), strongly warned about these five banks and their interconnectivity in a report in 2015. According to the OFR study:“The larger the bank, the greater the potential spillover if it defaults; the higher its leverage, the more prone it is to default under stress; and the greater its connectivity index, the greater is the share of the default that cascades onto the banking system. The product of these three factors provides an overall measure of the contagion risk that the bank poses for the financial system. Five of the U.S. banks had particularly high contagion index values – Citigroup, JPMorgan, Morgan Stanley, Bank of America, and Goldman Sachs.”These five banks are highly interconnected via derivatives because they have exposure to the same counterparties (the entities on the other side of their trillions of dollars in derivative trades). Sophisticated traders on Wall Street understand these risks and want to run from these banks in any crisis situation.According to the Office of the Comptroller of the Currency’s most recent report for the quarter ending December 31, 2020, these same five holding companies held the notional (face amount) of $185.61 trillion in derivative contracts – representing a mind-numbing85 percent of all derivatives in the banking system, which consists of more than 5,000 banks. (See Table 2 in the Appendix here.)
The CEO of Emergent, the company that ruined 15 million J&J vaccine doses, sold more than $10 million in stock before prices fell – The CEO of Emergent BioSolutions, the company that ruined 15 million doses of Johnson & Johnson’s COVID-19 vaccine, sold more than $10 million worth of his stock in the company before the price fell, The Washington Post reported. Robert Kramer sold the stocks in January and early February, right before the price fell on February 19 after the company’s published financial report. The price has since dropped from $125 a share to $62, a more than 50% drop, the Post reported. The stocks Kramer sold would now be worth $5.5 million and were his first substantive sales of the company’s stock since 2016. He made his current sale because of the compensation package the company gave him. He was able to buy the stocks for about $2.5 million and then sell them for market price. The sale was a part of a November 13 trading plan, the Post reported. Those plans are made in advance on when stocks are bought and sold and help protect members of the company from being accused of insider trading. On March 31, it was reported that Emergent, which also produced coronavirus vaccines for AstraZeneca, had ruined 15 million Johnson & Johnson vaccines due to human error when employees mixed up ingredients for the two different vaccines. After the news of the ruined doses, shares in the company tumbled by as much as 14.5%. Democrats in the House of Representatives also recently launched an investigation into whether or not the company was granted a federal contract to make the shots because of a connection to a top former Trump administration official, CNBC reported.
Why are complaints about credit bureaus soaring —Something doesn’t add up. Consumer credit has held up remarkably well during the pandemic, and household debt has shrunk. Even among consumers who have lost jobs or sustained other economic harm during the recession, credit card balances have fallen. Yet the number of complaints to the Consumer Financial Protection Bureau about credit reporting issues soared last year. Equifax, Experian and TransUnion were directly named in 246,000 direct complaints last year, more than double in 2019. If one includes more general grievances about credit reporting, the number rises to 283,000 – which was 58% of all CFPB complaints, up from 44% the previous year. The spike is a mystery especially given that the Coronavirus Aid, Relief, and Economic Security Act last year required financial firms to categorize certain accounts as current for consumers affected by COVID-19. Meanwhile, debt collection ground to a halt during the pandemic for various reasons, including temporary moratoriums imposed by states. The trade group that represents the three big credit bureaus, the Consumer Data Industry Association, is denying blame for the increase and pointing the finger at credit repair firms. These firms are filing millions of complaints to deliver on their promises of boosting consumers’ credit scores, the CDIA and some credit experts claim. “They are using the legal structure of filing disputes as a tactic to remove accurate but negative information from credit reports,” said Francis Creighton, the CDIA’s president and CEO. “Banks, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and other regulators have not seen a decline in credit quality or any issues suggesting the credit reporting system is a problem. The problem here is credit repair.” Under the Fair Credit Reporting Act, lenders must investigate every dispute within 30 days or a negative item gets dropped from a credit report. Financial firms also must respond to complaints made to the CFPB within 15 days. Banks, credit card companies, auto lenders and debt collectors that furnish information to the credit bureaus are overwhelmed by disputes to the industry’s automated system, called e-Oscar, and by complaints to the CFPB, Creighton said. The flood of disputes often results in negative but legitimate debts being dropped from credit reports if a financial firms does not respond within the legal time frame, he said. The CFPB acknowledged in a March report that credit repair companies are indeed behind some of the increase in complaints. But a CFPB spokesman said consumer reporting agencies “have provided no credible evidence that the increase is the result of unauthorized submissions by credit repair organizations.” The CFPB, which shares oversight of the credit bureaus with the Federal Trade Commission, has criticized them for failing to respond to many complaints during the pandemic. In 2020 the credit bureaus “stopped providing complete and accurate responses in many of these complaints,” the CFPB said, adding that the credit bureaus frequently mentioned “suspected third-party activity in their responses to these complaints, but did not detail steps taken to authenticate consumers or respond to the subject.”
Banks play key role in push to eliminate food deserts — A small Chicago grocery chain rehabilitates a vacant strip mall in an area lacking food stores. In western Massachusetts, a popular food cooperative plans a second location in a rural town to reduce customer travel time. A twice-expanded Houston food bank gives groceries away to needy families hit hard by this year’s devastating winter storms. What these stores and pantries have in common is that they give their communities a source of fresh, healthy food. The other thing they have in common is that they exist because of a multipronged, decadelong effort by the federal government, community development financial institutions, banks and others to expand healthy food access and reduce the footprint of “food deserts” – areas all over the country where the building blocks of a nutritionally adequate diet are not easily accessible. There is evidence that these efforts are making a durable impact on the dual issues of food insecurity – defined as inability to afford the food one needs – and the prevalence of food deserts. But the pandemic has laid bare how serious these problems are. Feeding America, a national trade group for food banks and pantries, estimated that more than 35 million Americans experienced food insecurity in 2019 – a 20-year low. But in 2020 that number jumped to more than 42 million. The problem was urgent enough for President Biden to sign an executive order on Jan. 22 increasing Supplemental Nutritional Access Program benefits by 15% for families with children, one of his first actions as president. “They are in this situation through no fault of their own,” Biden said at the signing ceremony. “It’s unconscionable.” But in many communities hard hit by the pandemic, there are innumerable barriers to even accessing the kind of varied and healthy diet – fruits, vegetables, fresh meats and grains – that prevent chronic or acute illnesses, such as diabetes, hypertension, stroke, heart disease and even cancer. “You can give people resources to buy fruits and vegetables, but if they can’t get to a grocery store, I think your impact is going to be greatly diminished,” said Brian Lang, director of the Food Trust’s National Campaign for Healthy Food Access, based in Philadelphia. One of the biggest barriers is the physical proximity to a grocery store, and the amount of time and effort required to get to one.
CFPB gives lenders extra 15 months to meet QM standard – The Consumer Financial Protection Bureau on Tuesday officially moved ahead with an earlier proposal to postpone the full adoption of the new qualified-mortgage ability-to-repay rule until October 2022, citing a need to maximize borrower credit access. The term “qualified mortgage” is an indication that a loan satisfies the legal mandates of the ability-to-repay rule, a regulation within the Dodd-Frank Act that requires lenders to assess a borrower’s income, assets, employment status, liabilities, credit history, and the debt-to-income ratio in order to establish that the borrower can repay the loan. For example, the original QM rule requires loans to maintain a debt-to-income ratio of no more than 43% to indicate an ability to repay. But mortgages backed by Fannie Mae and Freddie Mac are exempt from that requirement under a temporary 2014 provision commonly referred to as the “QM patch,” which, after multiple extensions, will expire when the new QM rule takes effect. The new definition, which most notably removes that maximum 43% debt-to-income ratio and certain income requirements, was expanded in part to minimize changes to the government-sponsored enterprises’ underwriting related to the expiration of the QM patch. Instead of imposing the debt-to-income limit and other requirements in the old definition, the new QM rule requires lenders to use standards that include a new one based on the loan’s price. The 15-month delay in mandating use of the new QM rule could make mortgage companies more comfortable selling loans in the QM category to either the GSEs or the private market for a longer period of time. The new QM rule retains a lot of flexibility for the GSEs, but there are some rare exceptions. The small market for short reset adjustable-rate mortgages with a fixed rate period that lasts for five years or less, for example, will not meet the new QM definition. “So many consumers have been hit hard by the pandemic and the economic downturn, and we want to ensure that responsible, affordable mortgages remain available,” Dave Uejio, the CFPB’s acting director, said in a press release.
FHFA adds refi option for low-income borrowers – The Federal Housing Finance Agency is launching a new program to help lower-income homeowners with Fannie Mae- or Freddie Mac-backed mortgages take advantage of rock-bottom rates. The new refinancing option could save qualifying borrowers an average of between $100 and $250 a month, the FHFA said. The program will be available to single-family borrowers who only make 80% of their area’s median income or less. To qualify, borrowers must not have missed a mortgage payment in the last six months or missed more than one payment in the last year. Qualifying homeowners must also have a credit score of at least 620. They cannot have a debt-to-income ratio that is higher than 65% or a loan-to-value ratio that is higher than 97%. “Last year saw a spike in refinances, but more than 2 million low-income families did not take advantage of the record low mortgage rates by refinancing,” FHFA Director Mark Calabria said in a news release. “This new refinance option is designed to help eligible borrowers who have not already refinanced save between $1,200 and $3,000 a year on their mortgage payment.” The refinance program will require lenders to offer at least $50 in savings to borrowers on their monthly mortgage payments and a reduction of at least 0.5% in the loan’s interest rate. Lenders will also be able to provide a $500 credit for an appraisal. Through the new option, lenders can also skip a 50-basis-point fee required by the FHFA that is designed to protect Fannie and Freddie from crisis-related losses. In the program announced Wednesday, that fee is waived for borrowers wanting to refinance if their loan balance is below $300,000. The government-sponsored enterprises began charging the adverse market refinance fee in December in light of the economic uncertainty caused by the coronavirus pandemic. In 2020, the 30-year fixed mortgage rate averaged about 3.1% according to Freddie Mac, a 90-basis-point drop from the previous year. That ignited a wave of refinancing as borrowers looked to lower their monthly mortgage payments. But many borrowers didn’t meet the qualifications to refinance, which include a minimum 720 credit score or at least 20% equity in a home, according to Black Knight, a mortgage and real estate data and analytics firm. Still, mortgage rates are expected to tick up this year, and refi applications are already 20% lower than they were last year, meaning lower-income borrowers may not be able to benefit from the program as much as they could have last year.
Freddie Mac: Mortgage Serious Delinquency Rate decreased in March — Freddie Mac reported that the Single-Family serious delinquency rate in March was 2.34%, down from 2.52% in February. Freddie’s rate is up from 0.60% in March 2020. Freddie’s serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble, and peaked at 3.17% in August 2020 during the pandemic. These are mortgage loans that are “three monthly payments or more past due or in foreclosure”. Mortgages in forbearance are being counted as delinquent in this monthly report, but they will not be reported to the credit bureaus. This is very different from the increase in delinquencies following the housing bubble. Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes – and they will be able to restructure their loans once (if) they are employed. Also – for multifamily – delinquencies were at 0.17%, up from 0.14% in February, and up more than double from 0.08% in March 2020.
Fannie Mae: Mortgage Serious Delinquency Rate Decreased in March – Fannie Mae reported that the Single-Family Serious Delinquency decreased to 2.58% in March, from 2.76% in February. The serious delinquency rate is up from 0.66% in March 2020. These are mortgage loans that are “three monthly payments or more past due or in foreclosure”. The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble, and peaked at 3.32% in August 2020 during the pandemic. By vintage, for loans made in 2004 or earlier (2% of portfolio), 5.66% are seriously delinquent (down from 5.90% in February). For loans made in 2005 through 2008 (2% of portfolio), 9.65% are seriously delinquent (down from 10.01%), For recent loans, originated in 2009 through 2021 (96% of portfolio), 2.13% are seriously delinquent (down from 2.29%). So Fannie is still working through a few poor performing loans from the bubble years. Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus. This is very different from the increase in delinquencies following the housing bubble. Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes – and they will be able to restructure their loans once they are employed.
MBA Survey: “Share of Mortgage Loans in Forbearance Slightly Decreases to 4.49%” — Note: This is as of April 18th. From the MBA: Share of Mortgage Loans in Forbearance Slightly Decreases to 4.49%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 1 basis point from 4.50% of servicers’ portfolio volume in the prior week to 4.49% as of April 18, 2021. According to MBA’s estimate, 2.25 million homeowners are in forbearance plans.The share of Fannie Mae and Freddie Mac loans in forbearance remained the same relative to the prior week at 2.44%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.09%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 8 basis points to 8.42%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers remained the same relative to the prior week at 4.72%, and the percentage of loans in forbearance for depository servicers declined 3 basis points to 4.64%.”After two weeks of large declines, the share of loans in forbearance decreased for the eighth straight week, but by only 1 basis point. New forbearance requests increased, and the rate of exits declined,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 40 percent of borrowers in forbearance extensions have now exceeded the 12-month mark.” 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 trended down since then.The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.05% to 0.06%.”
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 April 27th. From Black Knight: A Jump in Portfolio/Pls Forbearances Breaks Eight-Week Improvement Streak New data from our McDash Flash Forbearance Tracker showed an increase in forbearance volumes for the first time in nine weeks. Mid-month increases have been relatively common in recent months, and despite the 20,000 weekly increase in forbearance plans, plan volumes are still down 228,000 (-8.9%) from the same time last month. We saw continued improvement among GSE (-9,000) and FHA/VA forbearances (-2,000), but these decreases were more than offset by an increase of 31,000 forbearance plans among portfolio-held and privately securitized mortgages. More than 200,000 plans are still set to expire in April. With less than a week remaining in the month, the opportunity still remains for additional improvement in late April/early May. As of April 27, there are 2.33 million (4.4% of) homeowners in COVID-19 related forbearance plans, including 2.6% of GSE, 7.8% of FHA/VA and 5% of portfolio/PLS loans. With the large amount of plans up for review in the next week, it’ll be worth watching these numbers going into May. We’ll have another update here on our blog next Friday, May 7.
‘Mom And Pop’ Landlords Dying On The Vine As Un-Evictable Tenants Enjoy Pandemic Protections -As millions of renters across America continue to benefit from sweeping protections against eviction during the COVID-19 pandemic, their landlords haven’t been so fortunate. According to Bloomberg, nearly $47 billion in rent relief from the Biden Administration has been slow to materialize, forcing “mom-and-pop” landlords into financial hardship – or forced to sell to wealthy investors. Bloomberg, perhaps to invoke sympathy for the landlord class, focused on the impact felt by minority landlords.Like their tenants, these landlords are more likely to be nonwhite or to be immigrants using real estate for their economic foothold. Now, mortgage, maintenance and tax bills are piling up, putting landlords in danger of losing their buildings or being forced to sell to wealthier investors hunting fordistressed deals. The tens of billions of dollars that Congress allocated for rent relief — starting in December and then with a second allotment in March — was supposed to help by covering back rent and unpaid utility bills. But the rollout has been moving at the speed of bureaucracy, which varies from state to state. –BloombergIn one example, airport janitor Joaquin Villanueva has had to take out a home-equity loan to make ends meet while maintaining a three-unit rental house in East Boston. One of his tenants is eight months behind on rent, while another – an unemployed restaurant dish washer, owes him $5,000. “I don’t want to lose my house so I’m doing whatever I have to do,” said Villanueva – an El Salvadorian immigrant who works at Logan International Airport, adding “I’m not rich like a Donald Trump.”
Home Ownership Rate: 65.6% in Q1 2021 — The Census Bureau has now released its latest quarterly report with data through Q4 2020. The seasonally adjusted rate for Q4 is 65.6 percent, down from Q3. The nonseasonally adjusted Q4 number is 65.8 percent, also down from the Q3 2020 67.4 percent figure. Over the last decade, the general trend has been consistent: The rate of homeownership continued to struggle. The recent recession as a result of the COVID-19 global pandemic has caused a massive, but brief, jump in homeownership due to grossly reduced spending. Here’s an excerpt from the press release: Announcement: Due to the coronavirus pandemic (COVID-19), data collection operations for the CPS/HVS were affected during the first quarter of 2021, though to a much lesser extent than previous quarters, as in-person interviews were allowed for 98 percent of the country. 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. See the FAQ for more information.National vacancy rates in the first quarter 2021 were 6.8 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate of 6.8 percent was not statistically different from the rate in the first quarter 2020 (6.6 percent) and 0.3 percentage points higher than the rate in the fourth quarter 2020 (6.5 percent). The homeowner vacancy rate of 0.9 percent was 0.2 percentage points lower than the rate in the first quarter 2020 (1.1 percent) and 0.1 percentage points lower than the rate in the fourth quarter 2020 (1.0 percent).The homeownership rate of 65.6 percent was not statistically different from the rate in the first quarter 2020 (65.3 percent) and not statistically different from the rate in the fourth quarter 2020 (65.8 percent).The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend.
HVS: Q1 2021 Homeownership and Vacancy Rates –The Census Bureau released the Residential Vacancies and Homeownership report for Q1 2021. It is likely the results of this survey were significantly distorted by the pandemic. This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates. However, there are serious questions about the accuracy of this survey. This survey might show the trend, but I wouldn’t rely on the absolute numbers. “National vacancy rates in the first quarter 2021 were 6.8 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate of 6.8 percent was not statistically different from the rate in the first quarter 2020 (6.6 percent) and 0.3 percentage points higher than the rate in the fourth quarter 2020 (6.5 percent). The homeowner vacancy rate of 0.9 percent was 0.2 percentage points lower than the rate in the first quarter 2020 (1.1 percent) and 0.1 percentage points lower than the rate in the fourth quarter 2020 (1.0 percent) The homeownership rate of 65.6 percent was not statistically different from the rate in the first quarter 2020 (65.3 percent) and not statistically different from the rate in the fourth quarter 2020 (65.8 percent). ” The HVS homeownership rate decreased to 65.6% in Q1, from 65.8% in Q4The HVS homeowner vacancy increased to 0.9% from 1.0% in Q4. The rental vacancy rate increased to 6.8% in Q1 from 6.5% in Q4. The quarterly HVS is the most timely survey on households, but there are many questions about the accuracy of this survey.
FHFA House Price Index: Up 0.9% in February -The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for February. Here is the opening of the press release – House prices rose nationwide in February, up 0.9 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI). House prices rose 12.2 percent from February 2020 to February 2021. The previously reported 1.0 percent price change for January 2021 remained unchanged.For the nine census divisions, seasonally adjusted monthly house price changes from January 2021 to February 2021 ranged from +0.3 percent in the Middle Atlantic division to +1.6 percent in the Mountain division. The 12-month changes ranged from +10.5 percent in the West North Central division to +15.4 percent in the Mountain division.”Annual house price growth acheived a new record high in February” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “The 12.2 percent gain represents an increase of $35,000 for a median-priced home that sold a year ago at $290,000 in the Enterprises’ data.” The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
Case-Shiller: National House Price Index increased 12.0% year-over-year in February –S&P/Case-Shiller released the monthly Home Price Indices for February (“February” is a 3 month average of December, January and February prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: S&P Corelogic Case-Shiller Index Reports 12.0% Annual Home Price Gain in February 2021: The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 12.0% annual gain in February, up from 11.2% in the previous month. The 10-City Composite annual increase came in at 11.7%, up from 10.9% in the previous month. The 20-City Composite posted an 11.9% year-over-year gain, up from 11.1% in the previous month. Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in February. Phoenix led the way with a 17.4% year-over-year price increase, followed by San Diego with a 17.0% increase and Seattle with a 15.4% increase. Nineteen of the 20 cities reported higher price increases in the year ending February 2021 versus the year ending January 2021…. Before seasonal adjustment, the U.S. National Index posted an 1.1% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 1.1% and 1.2% respectively in February. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.1%, and the 10-City and 20-City Composites both posted increases of 1.1% and 1.2% respectively as well. In February, all 20 cities reported increases before and after seasonal adjustments.”Strong home price gains continued in February 2021,” The National Composite Index marked its ninth month of accelerating prices with a 12.0% gain from year-ago levels, up from 11.2% in January. This acceleration is also reflected in the 10- and 20-City Composites (up 11.7% and 11.9%, respectively). The market’s strength continues to be broadly-based: all 20 cities rose, and 19 cities gained more in the 12 months ended in February than they had gained in the 12 months ended in January. The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The second graph shows the year-over-year change in all three indices. The Composite 10 SA is up 11.7% compared to February 2020. The Composite 20 SA is up 11.9% year-over-year. The National index SA is up 12.0% year-over-year.
Zillow Case-Shiller House Price Forecast: “Red Hot”, 12.8% YoY in March – The Case-Shiller house price indexes for February were released today. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Matthew Speakman at Zillow: February 2021 Case-Shiller Results & Forecast: Red Hot: Already rising at a blistering pace, home price appreciation pressed higher in February as competition for housing remained red hot. As more signs emerge that the economy’s recovery is gathering steam, a wave of eager buyers – many of them seeking their first home purchase – remain determined to find their next home. But with relatively few for-sale homes on the market, bidding wars have become increasingly common, pushing sale prices higher and leading homes to sell at a record pace. In the near-term, it appears unlikely that these upward price pressures will relent meaningfully, particularly as recent retreats in mortgage rates offer many home shoppers increased buying power. However, after pausing in February, home listing activity has shown a meaningful improvement in recent weeks and some recent signs suggest that the historically tight inventory pressures may finally be starting to ease. Should those signs materialize, the meteoric rise in home prices may finally have a reason to come back down to earth. For now, red hot home price appreciation shows few signs of cooling. Monthly growth in March as reported by Case-Shiller is expected to slow slightly from February in both of the smaller 10- and 20-city composite indices, and accelerate slightly in the national index. Annual growth is expected to accelerate across the board. S&P Dow Jones Indices is expected to release data for the March S&P CoreLogic Case-Shiller Indices on Tuesday, May 25. The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be at 12.8% in March, up from 12.0% in February. The Zillow forecast is for the 20-City index to be up 12.7% YoY in March from 11.9% in February, and for the 10-City index to increase to be up 12.3% YoY compared to 11.7% YoY in February.
NAR: Pending Home Sales Increased 1.9% in March – From the NAR: Pending Home Sales Grow 1.9% in March: Pending home sales increased in March, snapping two consecutive months of declines, according to the National Association of Realtors. All but one of the four major U.S. regions experienced month-over-month gains in March, while each area recorded year-over-year growth. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 1.9% to 111.3 in March. Year-over-year, contract signings jumped 23.3%, with the difference due in large part to the pandemic-induced lockdown in March 2020. An index of 100 is equal to the level of contract activity in 2001. … The Northeast PHSI rose 6.1% to 97.9 in March, a 16.7% increase from a year ago. In the Midwest, the index fell 3.7% to 98.6 last month, up 14.1% from March 2020. Pending home sales transactions in the South jumped 2.9% to an index of 137.2 in March, up 27.9% from March 2020. The index in the West grew 2.9% in March to 94.5, up 29.8% from a year prior. 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 April and May.
New Home Prices —released last week, the Census Bureau reported the number of homes sold by price and the average and median prices. – From the Census Bureau: “The median sales price of new houses sold in March 2021 was $330,800. The average sales price was $397,800.” The following graph shows the median and average new home prices. During the housing bust, the builders had to build smaller and less expensive homes to compete with all the distressed sales. When housing started to recovery – with limited finished lots in recovering areas – builders moved to higher price points to maximize profits. Then the average and median house prices have mostly moved sideways since 2017 due to home builders offering more lower priced homes. Prices picked up again during the pandemic.The average price in March 2021 was $397,800, up 6% year-over-year. The median price was $330,800, up just 1% year-over-year. Builders are reporting same home prices are up sharply, so the mix has changed. The second graph shows the percent of new homes sold by price. Very few new homes sold were under $150K in March 2021 (“Less than 500 units” in March 2021, rounded down to zero). This is down from 30% in 2002. In general, the under $150K and under $200K brackets are going away. The $400K+ bracket increased significantly after the housing recovery started, but has been holding steady recently. A majority of new homes (about 68%) in the U.S., are in the $200K to $400K range.
No bubble in housing market, Fed’s Powell says – Federal Reserve Chairman Jerome Powell said that concerns of a housing bubble are overblown, but that the central bank is closely monitoring surging home prices that could make it more difficult for entry-level borrowers to obtain mortgage loans. The Fed has drawn some criticism for loose monetary policy, which some critics say has fueled the boom in the housing market as more borrowers compete for fewer available homes. But Powell said Wednesday at a press conference following a meeting of the Federal Open Market Committee that he doesn’t have any financial stability concerns about such a competitive real estate market. “It’s part of a strong economy with people having money to spend and wanting to invest in housing, so in that sense it’s good,” he said. “It’s clearly the strongest housing market that we’ve seen since the global financial crisis. My hope would be that over time, housing builders can react to this demand and come up with more supply and workers will come back to work in that industry.” Beginning in March 2020, the Fed started purchasing mortgage-backed securities and Treasury securities to keep borrowing costs down. The central bank is currently buying $40 billion worth of agency MBS each month with no sign of slowing. However, Powell said that he doesn’t believe those purchases are fueling any kind of housing bubble. “It’s not meant to provide direct assistance to the housing market. That was never the intent,” Powell said. “It’s a situation where we will taper asset purchases when the time comes to do that and those purchases will come to zero over time, and that time is not yet.” Unlike the 2008 financial crisis, Powell added, borrowers looking to buy homes are “in very good shape financially.” “We don’t have that kind of thing where we have a housing bubble where people are over-levered and owning a lot of houses,” he said. “There’s no question though that housing prices are going up and so we’re watching that carefully.” Powell also reiterated separately that he wants the Fed to carefully explore the idea of a central bank digital currency in the U.S. without worrying about the pace at which other countries are adopting digital currencies. China, for one, has moved quickly on its “digital yuan,” raising concern from some officials that the country is looking to oust the dollar as the world’s reserve currency. Yet that potential is overstated, Powell said.
U.S. Personal Incomes Soar by Most on Record on Fiscal Stimulus U.S. personal incomes soared in March by the most in monthly records back to 1946, powered by a third round of pandemic-relief checks that also sparked a sharp gain in spending. The 21.1% surge in incomes followed a 7% decline in February, Commerce Department figures showed Friday. Purchases of goods and services, meanwhile, increased 4.2% last month, the most since June. U.S. government stimulus sparks huge gain, bolstering consumer spending The increase in personal spending and incomes provides the economy a solid hand off heading into the second quarter after a robust pace of growth at the start of the year. Economists projected a 20.3% jump in incomes and a 4.1% gain in personal outlays, according to the Bloomberg survey medians. The March data showed transfer receipts that include stimulus checks and unemployment aid nearly doubled from a month earlier to nearly $8.2 trillion. Wages, meanwhile, rose modestly in March. Inflation-adjusted personal spending increased 3.6% in March after a 1.2% drop a month earlier. Goods outlays climbed 7.3%, while spending on services rose 1.7%. The personal savings rate jumped to 27.6% from 13.9% in February. Disposable income, which exclude taxes and are adjusted for inflation surged 23% in March. A separate report on Thursday showed that gross domestic product expanded at a 6.4% annualized rate in the first quarter, driven by the second-fastest pace of personal consumption since the 1960s. With spending on the rise, more cash in people’s bank accounts and vaccinations driving reopenings, economic growth is poised to further accelerate in the coming months. The agency’s key measure of consumer prices, known as the personal consumption expenditure price index, that the Federal Reserve officially uses for its target rose 2.3% in March from a year earlier, the biggest gain since 2018. The so-called core PCE price index, which excludes volatile food and energy costs, climbed 1.8% after a 1.4% gain in February. Inflation metrics are being temporarily impacted by so-called “base effects.” Year-over-year increases in the price metrics appear large because they are being compared to the very weak inflation prints seen at the start of the pandemic.
Real Disposable Income Per Capita in March, All-Time High – With the release of this morning’s report on March’s Personal Incomes and Outlays, we can now take a closer look at “Real” Disposable Personal Income Per Capita. At two decimal places, the nominal 23.57% month-over-month change in disposable income is cut to 22.94% when we adjust for inflation and an all-time high. This is an increase from last month’s -7.91% nominal and -8.13% real increases last month. The year-over-year metrics are 31.77% nominal and 28.78% real.Post-recession, the trend was one of steady growth, but generally flattened out in late 2015 with increases in 2012 and 2013. As a result of the CARES Act and the COVID pandemic, a major spike is seen in April 2020 and January 2021.The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013 and more recently, by the CARES Act stimulus.The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let’s compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 108.6% since then. But the real purchasing power of those dollars is up 43.1%.
PCE Price Index: March Core at 1.37% YoY -The BEA’s Personal Income and Outlays for March was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.52% month-over-month (MoM) and is up 2.32% year-over-year (YoY). Core PCE is now at 1.83%, below the Fed’s 2% target rate.The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. The first string of red data points highlights the 12 consecutive months when Core PCE hovered in a narrow range around its interim low. The second string highlights the lower range from late 2014 through 2015. Core PCE shifted higher in 2016 with a decline in 2017, 2019, and 2020.The first chart below shows the monthly year-over-year change in the personal consumption expenditures (PCE) price index since 2000. Also included is an overlay of the Core PCE (less Food and Energy) price index, which is Fed’s preferred indicator for gauging inflation. The two percent benchmark is the Fed’s conventional target for core inflation. Most recently, the Fed reviewed their monetary policy strategy and longer-term goals and released a statement, mentioning its federal mandate to promote “maximum employment, stable prices, and moderate long-term interest rates”. They also confirmed their commitment to using the two percent benchmark as a lower limit: “The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee reaffirms its judgment that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve’s statutory mandate. The Committee judges that longer-term inflation expectations that are well anchored at 2 percent foster price stability and moderate long-term interest rates and enhance the Committee’s ability to promote maximum employment in the face of significant economic disturbances. In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” Read the August 2020 statement here
Consumer Confidence Highest Since February 2020 — The headline number of 121.7 was an increase of 12.7 from the final reading of 109.0 for April. This was above theInvesting.com consensus of 113.0. “Consumer confidence has rebounded sharply over the last two months and is now at its highest level since February 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved significantly in April, suggesting the economic recovery strengthened further in early Q2. Consumers’ optimism about the short-term outlook held steady this month. Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks. Short-term inflation expectations held steady in April, but remain elevated. Vacation intentions posted a healthy increase, likely boosted by the accelerating vaccine rollout and further loosening of pandemic restrictions.” 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.
Michigan Consumer Sentiment: Continued Gains –The April Final came in at 88.3, up 3.4 from the March Final. Investing.com had forecast 87.4. Since its beginning in 1978, consumer sentiment is 2.5 percent above the average reading (arithmetic mean) and 3.6 percent above the geometric mean. Surveys of Consumers chief economist, Richard Curtin, makes the following comments: The April survey recorded continued gains in consumer confidence due to a growing sense that the upward momentum in jobs and incomes will persist. The renewed confidence is due to record federal stimulus spending, both recently passed and proposed, as well as the positive impact from a growing share of the population who are vaccinated. The largest and most important change in April was that an all-time record number of consumers expected declines in the unemployment rate during the year ahead. Even if a booming economy resulted in higher inflation, consumer optimism would not diminish since consumers have already anticipated a temporary increase. Overall, the data indicate an exceptional outlook for consumer spending through mid-2022. The size and persistence of the spending gains depend on continued job growth as well as wages that effectively draw people back into the labor force. While temporary price hikes are anticipated, the robust increases in consumer demand will act to lengthen and heighten inflation above the modest increases now anticipated. It will be a challenge to fine-tune fiscal and monetary policies that allow inflation to modestly exceed the 2% target for a limited time without contributing to an underlying upward momentum in inflation. Home buying conditions slipped only modestly in April in spite of an all-time record number of complaints about high home prices (38%-see the chart). The natural tendency of higher prices is to lessen demand, but this reaction will be overwhelmed by strong growth in jobs and incomes. Rising home prices and rising incomes create the most fertile soil for the growth of inflationary psychology. While it is critical to first secure robust and equitable economic growth, contingency plans are urgently needed to avoid declining inflation-adjusted incomes and surging interest costs. [More…] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
Shhhh, They’re Listening – Inside the Coming Voice-Profiling Revolution – You decide to call a store that sells some hiking boots you’re thinking of buying. As you dial in, the computer of an artificial intelligence company hired by the store is activated. It retrieves its analysis of the speaking style you used when you phoned other companies the software firm services. The computer has concluded you are “friendly and talkative.” Using predictive routing, it connects you to a customer service agent who company research has identified as being especially good at getting friendly and talkative customers to buy more expensive versions of the goods they’re considering.This hypothetical situation may sound as if it’s from some distant future. But automated voice-guided marketing activities like this are happening all the time.If you hear “This call is being recorded for training and quality control,” it isn’t just the customer service representative they’re monitoring.It can be you, too.When conducting research for my forthcoming book, “The Voice Catchers: How Marketers Listen In to Exploit Your Feelings, Your Privacy, and Your Wallet,” I went through over 1,000 trade magazine and news articles on the companies connected to various forms of voice profiling. I examined hundreds of pages of U.S. and EU laws applying to biometric surveillance. I analyzed dozens of patents. And because so much about this industry is evolving, I spoke to 43 people who are working to shape it. It soon became clear to me that we’re in the early stages of a voice-profiling revolution that companies see as integral to the future of marketing.
Even Credentialed Young People Pessimistic About Their Futures –Although it probably comes as no surprise, the degree of rentierism around the world has apparently hit the point that young people even in what most would see as good positions, by virtue of being educated and working in white-collar jobs, are downbeat about their futures. Admittedly, this Financial Times survey is hugely flawed from an analytical standpoint. It’s an Internet poll, so there’s no control over sampling and no assurance that the respondents were truthful about their own demographics. But the flip side is the participants would have no particular reason to lie either, and if anything, survey participants tend to exaggerate how well they are doing. So for 1700 Financial Times readers, meaningly literate, presumably well to very well educated, and in a professional position, to report so much concern about their futures, is if nothing else awfully striking, large-scale anecdotal evidence. Consider its headline, ‘We are drowning in insecurity’: young people and life after the pandemic, and this table:Notice how on the various measures, the US comes out poorly, with only the Netherlands, Singapore, and South Africa tallying a bit worse.No one is saying that these individuals are facing hardship … at least now. It’s that the inability of even those who did everything they were supposed to do in our pretend meritocratic system to attain a comfortable lifestyle and support a family is eating away at its last veneer of legitimacy.From the pink paper:Many describe feeling as if there is nothing solid under their feet. “Most people my age are paddling so hard just to stay still,” says Tom, an architect. “It’s exhausting – nobody is asking for an easy ride, but all my friends have worked so hard all their lives, and many are losing faith in the system.”For Killian Mangan, who graduated during the pandemic last year and struggled to find a job, it feels as if “we are drowning in insecurity with no help in sight”. A twenty-something who works for a central bank says: “I sometimes have this feeling that we are edging towards a precipice, or falling in it already.”And they also wonder how they can afford a dignified old age. As one participant said, “My retirement plan is to die in the climate wars.” And as we’ll see, this isn’t the whinge of pampered New Yorkers (pre Covid) that you can’t get by on $500,000 a year, between taxes, housing, private school and extras, summer rentals and nanny costs. These young people are falling sort of more modest financial goals, like being able to raise children in something other than cramped quarters. They are all finding that not being able to get meaningful monetary support from their parents puts them on a vastly different track than their peers that do.
The Price of the Stuff That Makes Everything Is Surging – The prices of raw materials used to make almost everything are skyrocketing, and the upward trajectory looks set to continue as the world economy roars back to life. From steel and copper to corn and lumber, commodities started 2021 with a bang, surging to levels not seen for years. The rally threatens to raise the cost of goods from the lunchtime sandwich to gleaming skyscrapers. It’s also lit the fuse on the massive reflation trade that’s gripped markets this year and pushed up inflation expectations. With the U.S. economy pumped up on fiscal stimulus, and Europe’s economy starting to reopen as its vaccination rollout gets into gear, there’s little reason to expect a change in direction. One Direction Commodities from food to metal are soaring Source: Bloomberg JPMorgan Chase & Co. said this week it sees a continued rally in commodities and that the “reflation and reopening trade will continue.” On top of that, the Federal Reserve and other central banks seem calm about inflation, meaning economies could be left to run hot, which will rev up demand even more. “The most important drivers supporting commodity prices are the global economic recovery and acceleration in the reopening phase,” said Giovanni Staunovo, commodity analyst at UBS Group AG. The bank expects commodities as a whole to rise about 10% in the next year. China, a crucial source of supply and demand for raw materials, is playing a big role, particularly as the government tries to reduce production of key metals like steel and aluminum. It’s also buying up massive amounts of grains. Food prices are also being affected as poor weather in key growing nations like Brazil and France hits harvests.
Surging U.S. crop prices reverse fortunes in rural Iowa – A surge to eight-year highs in U.S. corn and soybean prices is boosting farmers’ incomes and their demand for land, tractors and tools. It is a turnaround for the agricultural sector after farmers struggled for years with a series of challenges: an oversupply of grain, former President Donald Trump’s trade war with China and then the pandemic. In western Iowa, where Arkfeld lives, the rise in farm income is helping to revitalize the rural economy, after a deadly flood in 2019 submerged fields and drove some growers out of business. Farm families are spending more at stores that sell clothing, grooming products and home improvement supplies, local businesses said. Iowa’s economy is particularly tied to agriculture as the state is the No. 1 U.S. producer of hogs and corn, as well as home to many seed and agricultural equipment dealerships. “When farmers make money, they spend money, which is good for the economy all the way around,” said Bret Hays, a farmer in Malvern, Iowa, in Mills County. Hays is sowing crops this spring with his first new planter in about a dozen years, a hulking Deere & Co machine that costs nearly $350,000. It is a stark contrast to 2019 when he cleared sand and debris left in his fields from floods and crop prices slumped during the U.S.-China trade war. Now, soaring grain prices make it easier to swallow the price tag of the planter he ordered last year and to pay off debt. The uptick in the agricultural economy began last year when commodity prices started climbing as China accelerated imports of U.S. crops. China increased purchases after the Phase 1 trade deal signed with Washington in January 2020, following two years of acrimony and a steep drop in imports. Although China’s 2020 imports fell short of the trade pact’s goals, the purchases tightened U.S. grain supplies and rallied prices. Values for good-quality Midwest farmland rose 4% in last year’s fourth quarter from the third quarter, while repayment rates for non-real-estate farm loans notched their first year-on-year increase in seven years, according to the Federal Reserve Bank of Chicago. Low interest rates, a lack of farmland for sale and record-large aid payments to farmers from the Trump administration are helping push up farmland values.
‘Sticker Shock” At The Grocery Store Imminent As Ag Futures Surge Most In 8 Years – Mish – The Bloomberg Agriculture Spot Index surged the most in nearly nine years, driven by a rally in crop futures. With futures surging, Grocery Price Shock Is Coming to a Store Near You. With global food prices already at the highest since mid-2014, this latest jump is being closely watched because staple crops are a ubiquitous influence on grocery shelves – from bread and pizza dough to meat and even soda.“The relentless rise in prices acts as a misery multiplier, driving millions deeper into hunger and desperation,” Chris Nikoi, the World Food Programme’s regional director for West Africa, said earlier this month.It’s “pushing a basic meal beyond the reach of millions of poor families who were already struggling to get by.”And commodities aren’t the only component in driving up the price of food. Higher freight costs and other supply-chain headaches as well as packaging can all add up. Food and beverage giants are already signaling they’re watching margins. Coca-Cola Co. has flagged higher costs in plastic and aluminum, as well as coffee and high-fructose corn syrup, the key ingredient in soda. Nestle SA, the world’s biggest food company, warned it won’t be able to hedge all of its commodity costs and it’s raising prices where appropriate.
U.S. Durable Goods Orders Rise 0.5% In March, Much Less Than Expected – – A report released by the Commerce Department on Monday showed new orders for U.S. manufactured durable goods increased by much less than expected in the month of March. The Commerce Department said durable goods orders rose by 0.5 percent in March after falling by a revised 0.9 percent in February. Economists had expected durable goods orders to spike by 2.5 percent compared to the 1.2 percent slump that had been reported for the previous month. The much weaker than expected durable goods orders growth was partly due to a continued decrease in orders for transportation equipment. Largely reflecting a sharp pullback in orders for non-defense aircraft and parts, orders for transportation equipment tumbled by 1.7 percent in March after plunging by 2.0 percent in February. Excluding the drop in orders for transportation equipment, durable goods orders jumped by 1.6 percent in March after dipping by 0.3 percent in February. The increase matched economist estimates. The rebound in ex-transportation orders reflected notable increases in orders for fabricated metal products, primary metals and machinery. The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, increased by 0.9 percent in March after falling by 0.8 percent in February. Shipments in the same category, which is the source data for equipment investment in GDP, jumped by 1.3 percent in March after slumping by 1.1 percent in the previous month. “Taken together, the data confirm that business investment momentum re-accelerated at the end of Q1 and is likely to provide positive support to GDP growth,”
April Dallas Fed Manufacturing –This morning the Dallas Fed released its Texas Manufacturing Outlook Survey for April. The latest general business activity index came in at 37.3, up 8.4 from 28.9 in March. All figures are seasonally adjusted.Here is an excerpt from the latest report:Texas factory activity expanded at solid clip in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 14 points to 34.0, a reading still well above average and indicative of robust output growth. Other measures of manufacturing activity also pointed to strong growth this month, with demand, labor, price and wage indexes reaching all-time highs.Expectations regarding future manufacturing activity pushed further positive in April. The future production index moved up to 47.2, and the future general business activity index inched up to 36.6. Most other measures of future manufacturing activity also rose, and all remained solidly in positive territory. Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator. The Dallas Fed on the TMOS importance:Texas produced $159 billion in manufactured goods in 2008, roughly 9.5 percent of the country’s manufacturing output. Texas ranks second behind California in factory production and first as an exporter of manufactured goods.
Richmond Fed Manufacturing: Improvement in April – Fifth District manufacturing activity showed continued growth in April, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index remained at 17 and indicates expansion.The complete data series behind today’s Richmond Fed manufacturing report, which dates from November 1993, is available here.Here is a snapshot of the complete Richmond Fed Manufacturing Composite series. Here is an excerpt from the latest Richmond Fed manufacturing overview: Fifth District manufacturing activity improved in April, according to the most recent survey from the Richmond Fed. The composite index held steady at 17, indicating continued growth, as all three component indexes – shipments, new orders, and employment – remained positive. Survey responses indicated supply constraints, with the backlog of orders and vendor lead time indexes registering historic highs. Meanwhile, inventories shrank as the indexes for inventories of finished goods and raw materials reached their lowest values on record. Manufacturers were optimistic that conditions would continue to improve in the coming months. Link to ReportHere is a somewhat closer look at the index since the turn of the century.
April Regional Fed Manufacturing Overview — Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country’s GDP. The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, “The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated.” Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for April is 17, unchanged from the previous month. Here is the same chart including the average of the five. Readers will notice the range in expansion and contraction between all regions.
Weekly Initial Unemployment Claims at 553,000 – The DOL reported: In the week ending April 24, the advance figure for seasonally adjusted initial claims was 553,000, a decrease of 13,000 from the previous week’s revised level. The previous week’s level was revised up by 19,000 from 547,000 to 566,000. The 4-week moving average was 611,750, a decrease of 44,000 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 4,750 from 651,000 to 655,750. This does not include the 121,749 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 133,358 the previous week. The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 651,000. The previous week was revised up. Regular state continued claims decreased to 3,813,109 (SA) from 3,886,198 (SA) the previous week. Note: There are an additional 6,974,068 receiving Pandemic Unemployment Assistance (PUA) that decreased from 7,309,604 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. And an additional 5,192,711 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 5,605,935. Weekly claims were higher than the consensus forecast.
Shortage of delivery drivers means some gas station pumps could run dry – More than a year after the U.S. was forced into lockdown by the pandemic, Americans are taking to the road again, whether returning to work or taking long-delayed vacations – but travel plans could be disrupted in the months ahead due to the possibility of gasoline shortages. Unlike the twin oil shocks of the 1970s, petroleum today is in abundant supply. What has become scarce are the drivers needed to get fuel from refineries to service stations. According to one trade group, almost one-quarter of the country’s tanker trucks are currently idled because there’s no one to put behind the wheel. “Trucking’s driver shortage already exceeds 50,000 drivers,” wrote National Tank Truck Carriers, an industry trade group, in a recent report. That’s only part of the problem, the NTTC adds. “The trucking industry’s workforce shortage is not confined to drivers alone,” the group said. “Trucking companies also require dispatchers and back office staff. Trained mechanics are also in short supply. Tank truck operations face further critical shortages of registered inspectors and design-certified engineers who can inspect and repair cargo tank truck trailers.” When the pandemic hit, America went into lockdown. Millions lost their jobs and many more started working from home. The travel industry took a big hit while traffic in major markets like Los Angeles, Chicago and New York fell by as much as 80 percent through the spring, according to tracking service TomTom. For those who were still on the road, the good news was that fuel prices dropped to as little as $1 a gallon in some parts of the country. But prices have been on the rise as more and more Americans have begun driving again. More Americans traveled by car over the Easter and Passover holidays than during any holiday since the pandemic began. On Wednesday, AAA reported that the average motorist is now paying $2.88 for a gallon of unleaded regular. And experts forecast the upward trend will continue. There have already been spot shortages in Florida, Arizona and Missouri due to a lack of tank truck drivers – and what is more concerning is that it could become harder to find fuel, especially over the upcoming summer holidays. Truck drivers, in general, have been in increasingly short supply in recent years. Older drivers are retiring and, facing long hours and relatively low pay, it has been difficult to recruit new ones, said the American Trucking Associations, an industry trade group. The ATA has warned of a “significant tightening of the driver market” that shows sign of only growing worse. Turnover is a rising challenge for the industry, the ATA said. It rose to 94 percent for large truck carriers during the first quarter of this year, up 20 percentage points from the first quarter of 2017. The rate varies from one company to another and depending upon the type of cargo drivers handle, but data shows that about 70 percent of tanker drivers quit the business or changed jobs during the pandemic. Complicating matters is the fact that not everyone licensed to haul an 18-wheeler can operate a tank truck. Beyond the basic commercial license, a driver needs to get additional certification considering the dangerous loads they’ll be hauling.
Working from home means longer hours, fewer sick days, and fewer bonuses, according to a major report. We break down 4 of its key findings. – The COVID-19 pandemic has prompted bold predictions that the future of work will be from home, after millions were forced out of offices for more than a year but able to do their jobs remotely.But this week, the UK’s Office for National Statistics (ONS) published a major report on the phenomenon – based on surveys of hundreds of thousands of people over nearly a decade from the country’s Annual Population Survey – and made some startling findings. Homeworkers were working longer hours for less reward compared with their peers going into offices, the research found. Here are the report’s four main takeaways.
- 1. Those who mostly worked from home were less likely to get bonuses. The ONS study found that, based on analysis of survey respondents between 2013 to 2020, people who mainly worked from home were on average 38% less likely to receive a bonus in salary compared with those who never worked from home in the same period.The ONS suggested two possible reasons for the discrepancy. It may “reflect biases in the labor market with people who worked mainly from home being overlooked for promotions and bonuses due to a lack of visibility at work.”
- 2. Remote workers were less than half as likely to call in sick. The sickness absence rate for employees working from home in 2020 was 0.9% on average, compared with 2.2% for those who worked from offices in their main job, the ONS report found. Though it is possible remote workers were less exposed to illness, the report suggested that many people were simply just working through periods of illness or injury. “When sick, homeworkers may not have travelled to a workplace to work but still felt well enough to work from home,” the ONS said.
- 3. And they did more hours of unpaid overtime. In 2020, people who “mainly,” “occasionally” or “recently” worked from home all did an average of around six hours of unpaid overtime a week. This was almost double the 3.6 hours by those who never worked remotely.
- 4. They were also more likely to work in the evenings. The pandemic appears to have caused a shift in the working day. In September 2020, homeworkers were more likely to work between the hours of 6 p.m. and 11 p.m. compared with those never working at home, according to the ONS report.This contrasted with an earlier sample in April, at the start of the pandemic, when homeworkers “tended to keep hours close to typical office hours, because homeworking was new to many.”
Airline bans Alaska state senator for violating mask rules (AP) – Alaska Airlines has banned an Alaska state senator for refusing to follow mask requirements. “We have notified Senator Lora Reinbold that she is not permitted to fly with us for her continued refusal to comply with employee instruction regarding the current mask policy,” spokesman Tim Thompson told theAnchorage Daily News on Saturday, adding that the suspension was effective immediately. Reinbold, a Republican of Eagle River, said she had not been notified of a ban and that she hoped to be on an Alaska Airlines flight in the near future. Last week, Reinbold was recorded in Juneau International Airport arguing with Alaska Airlines staff about mask policies. A video posted to social media appears to show airline staff telling Reinbold her mask must cover her nose and mouth. Reinbold told the newspaper that had been inquiring about a “mask exemption with uptight employees at the counter.””I was reasonable with all Alaska Airlines employees,” she said, adding that she was able to board the flight to Anchorage.Reinbold has been a vocal opponent to COVID-19 mitigation measures and has repeatedly objected to Alaska Airlines’ mask policy, which was enacted before the federal government’s mandate this year. Last year, she referred to Alaska Airlines staff as “mask bullies” after being asked by flight attendants to wear a mask aboard a flight, the newspaper reported. After the incident, she reportedly sent a cake to some flight attendants bearing the inscription: “I’m sorry if I offended you.”
Federal judge orders Los Angeles to remove all homeless people from Skid Row — Federal Judge David O. Carter issued a ruling on Tuesday ordering the city and county of Los Angeles to carry out the removal of all homeless people from downtown’s Skid Row neighborhood by October. Skid Row, infamous for hosting one of the largest concentrations of homeless people in the United States, is plagued by all the attendant miseries that come with living on the streets. Those in the area report rampant drug abuse, and sanitation has been so poor as to see the reemergence of diseases like Typhus. Official surveys have largely been suspended since the outbreak of the coronavirus pandemic last year, but it is certain that under such conditions the virus has ripped through the homeless population. There are just short of 5,000 homeless people living in Skid Row, with about half of them unable to find any form of shelter and sleeping outdoors on any given night. The order comes on the heels of the forced eviction of the homeless encampment in Los Angeles’ Echo Park at the end of March. Echo Park, previously home to several hundred people was cleared out overnight. When enforcing the eviction, the Los Angeles Police Department arrested journalists and National Lawyers Guild observers and beat protesters, breaking several people’s bones. As for the homeless themselves, the city’s answer has been to place them in temporary shelters, taking advantage of some programs made available during the pandemic. However, such relocations are always temporary. The experience of all efforts to alleviate the homeless crisis in the last decade has followed roughly the same formula.The homeless population concentrated in a given area – usually a wealthy one or one that could otherwise be prime real estate – are rounded up and taken to remote shelters. In the process, any sort of community that would have been built up is torn apart as people are taken to different centers. Then, after a time, when whatever funds were made available dry up, or voucher programs expire, a portion of them find themselves on the streets again, only in a new area, typically a much poorer one, where they will be less of a burden on property values. This was the case with the removal of the homeless encampment in Anaheim several years ago, and more or less the same could be expected today.
Biden administration expanding summer food program to feed over 30M schoolchildren — The U.S. Department of Agriculture has announced the launch of a program to feed over 30 million low-income students during the summer months. The new effort, funded by the American Rescue Plan, will provide roughly $375 to families of low-income children to buy food for the summer months when they are out of school. Low-income families are typically provided $6.82 per weekday during the school months. The department’s announcement expands the Pandemic Electronic Benefits Transfer (P-EBT), which was established in March 2020 to feed students when schools were closed due to COVID-19. The administration found that summer feeding programs reach less than 20 percent of students who are fed during the school year. “Help is here for financially stressed families trying to put food on the table,” said Stacy Dean, deputy undersecretary for the Agriculture Department’s Food, Nutrition, and Consumer Services. “Our nutrition assistance programs are powerful tools that are critical to America reaching a full and equitable recovery from the pandemic.” The American Rescue Plan provided $12 billion in new nutrition assistance. It extended SNAP benefits by $1 billion per month to 25 million people and funded meals for young adults experiencing homelessness through Child and Adult Care Food Program emergency shelters, among other provisions.
Michigan teachers conduct wildcat sickout against in-person learning, cuts to pandemic safety measures -Teachers in Grosse Pointe, Michigan, a suburb of Detroit, conducted a job action this week to fight against deadly school reopenings. One-hundred sixteen teachers called in sick across the school district on Wednesday, April 28, including 47 at Grosse Pointe North High School (GPN), in a coordinated “sickout.” Administrators at GPN were forced to gather students in the gym while they scrambled to find substitutes. Michigan leads the US by far in the rate of daily new COVID-19 cases. The state’s rate of 47 new cases per 100,000 people per day is 60 percent higher than the next worst state, Minnesota. K-12 schools are the source of more outbreaks than any other settings, according to data from the Michigan Department of Health and Human Services (MDHHS). However, schools remain open for face-to-face learning across the state on a district-by-district basis. The sickout came two days after a school board meeting during which teachers asked to switch from full in-person learning to a hybrid model due to the ongoing statewide surge. Instead, the board voted 6 – 1 to not only continue full in-person instruction, but to also reduce the definition of “close contact” from six to three feet for the explicit purpose of keeping more students in the classrooms as the pandemic continues to spread. The Grosse Pointe rule change, effective immediately, means that now when students or teachers test positive for COVID-19, only those who came within three feet of them are to quarantine or participate in contact tracing. This defies both the MDHHS and the Centers for Disease Control and Prevention (CDC), which call for contact tracing and quarantining after exposure at six feet. Also at Monday’s board meeting, GPN teacher Sean McCarroll delivered a powerful resignation speech, which has been viewed more than 63,000 times in three days on YouTube. “You’ve done more damage to our students, our district, and our profession in the last 12 months than we’ve seen in the last decade,” he said to board members.The actions of these teachers to stop in-person learning to save lives have taken place outside of the trade unions, which have not lifted a finger to protect teachers or shut schools to slow the spread of the deadly disease. Grosse Pointe Educators Association (GPEA) union president Christopher Pratt confirmed to Fox 2 news that the sickout was not a union-sponsored activity.
UC and Cal State systems plan to require coronavirus vaccinations in the fall —The University of California and California State University systems announced Thursday that they plan to require that all students, faculty and staff be vaccinated before returning to campuses in the fall. The announcements are the largest vaccine requirement directives that U.S. higher education has yet seen, according to the Los Angeles Times, impacting more than 1 million members of the two public university systems. The requirements, however, are not yet final. Both universities are waiting for a vaccine to receive full approval from the Food and Drug Administration (FDA) before putting the directives into effect. The Pfizer-BioNTech and Moderna COVID-19 vaccines are both being administered under an emergency-use authorization from the FDA. According to the Los Angeles Times, health experts expect that at least one will receive formal approval by the fall. The University of California added that the requirement is contingent on “adequate availability of the fully approved vaccines.” In a press release announcing the proposed policy, University of California President Michael V. Drake said receiving a vaccine is a “key step” in helping the campus bring an end to the pandemic. “Receiving a vaccine for the virus that causes COVID-19 is a key step people can take to protect themselves, their friends and family, and our campus communities while helping bring the pandemic to an end,” Drake said. California State University Chancellor Joseph I. Castro said the school system is sharing this information now to give students, their families and employees “ample time to make plans to be vaccinated prior to the start of the fall term.” The two university systems join more than 60 colleges nationwide that will require all students to be vaccinated in the fall, according to The Chronicle of Higher Education.
Fire at COVID-19 hospital in Baghdad kills at least 82 people – After an accident caused an oxygen tank to explode, eyewitness accounts and video clips of the terrible scenes of the fire at the hospital treating COVID-19 patients have provoked shock and anger throughout Iraq. A hashtag demanding Health Minister Hassan al-Tamimi be sacked was soon trending on Twitter. Saturday’s fire at the Ibn Khatib hospital, an intensive care facility dedicated to COVID-19 patients in the Diyala Bridge neighbourhood, one of Baghdad’s poorer districts in the southeast of the city, has killed at least 82 people and injured 110. At least 28 patients with severe symptoms of the virus who were on ventilators were among the dead. This tragedy is but the latest horrific example of the devastating impact of decades of sanctions, illegal invasions, occupations and the deliberate stoking of a sectarian civil war orchestrated and led by successive US administrations that have reduced a once prosperous country, with one of the most advanced health and social infrastructures in the Arab world, to utter poverty and degradation. To this day, Iraq suffers from political violence, kidnappings and extortion at the hands of numerous militias, while accidents resulting from neglect and decrepit infrastructure have compounded the plight of the Iraqi people. In 2019, to cite but one example, at least 90 people drowned when an overloaded ferry carrying families on an outing sank in the Tigris River in the northern city of Mosul. The World Socialist Web Site has described the consequences of Washington’s onslaught on the Iraqi people as “sociocide,” the deliberate destruction of the entire infrastructure of a modern civilization (See: “The US war and occupation of Iraq – the murder of a society”). The blaze spread rapidly because without smoke detectors, sprinkler system or fire hoses, “the hospital had no fire protection system, and false ceilings allowed the flames to spread to highly flammable products,” said Maj. Gen. Khadim Bohan, the head of Iraq’s civil defence forces. He told the state-run Iraqiya TV, Officials said that some of the victims were older patients on ventilators who could not move from their beds when the fire started. Reuters news agency quoted an eyewitness as saying that patients and medical workers had jumped out of second-story windows to escape the flames.
Israel stampede: Religious festival crush kills 45: Live updates — A stampede at a religious festival is Israel this morning killed at least 45 people and left some 150 others injured.Israeli investigators are examining exactly how the crush happened at Israel’s Mount Meron. In the meantime, here’s what we know so far:
- What happened: A stampede broke out at Israel’s Mount Meron, killing at least 45 people. Worshipers had gathered at the mountain to mark the Lag B’Omer holiday, an annual event where participants sing, dance and light fires in homage to second-century sage Rabbi Shimon Bar Yochai at his burial site.
- Americans among the dead and injured: A State Department spokesperson said “multiple” US citizens were among those killed and injured in the stampede. Secretary of State Tony Blinken spoke with his Israeli counterpart on Friday to offer his condolences on the deadly incident.
- Event allowed during Covid-19 pandemic: Israel’s health ministry had urged people not to attend the festival, warning of the risk of another coronavirus outbreak. However, case numbers have been low, and Israel has already fully vaccinated more than 58% of its population, so the event was allowed to proceed. Dov Maisel, vice president of operations at the volunteer-based emergency organization United Hatzalah, told CNN that around 100,000 people were in attendance.
Multiple US citizens were among those killed and injured at a religious festival in Israel overnight, a State Department spokesperson said Friday.”We can confirm that multiple U.S. citizens were among the casualties,” the spokesperson said, but did not provide details on numbers of wounded or how many were killed. “The U.S. Embassy is working with local authorities to verify whether any additional U.S. citizens were affected, and is providing all possible consular support to affected U.S. citizens and their loved ones,” the spokesperson added.“Out of respect for the families at this difficult time, we have no further comment,” the spokesperson said.”We offer our sincerest condolences to the families and loved ones of those injured and who perished in the tragedy at Mt. Meron during the Lag Ba’omer commemorations,” they said.
New Front in Digital Divide Exposed by India’s COVID-19 Meltdown -As India’s daily coronavirus cases set global records, people desperately searching for hospital beds and oxygen cylinders are finding help on social media. But for others like Ruby Yadav, who has never heard of Twitter, time and hope is running out.Travelling by rickshaw, Yadav and her mother – who is seriously ill with COVID – 19 – have been turned away by nearly a dozen public hospitals in the northern city of Lucknow this week as the country’s health system crumbles.”I’m losing hope. We know what will happen next, but I can’t bear to watch my mother collapse like this,” Yadav, 21, told the Thomson Reuters Foundation by phone on Thursday.India reported more than 300,000 coronavirus cases within 24 hours on Thursday, marking the world’s highest daily tally and taking the country’s total cases to nearly 16 million.Shortages of ambulances, hospital beds, drugs and oxygen supplies are crippling healthcare in much of the country of 1.3 billion, prompting people to post appeals on Twitter in a desperate bid to get help for seriously ill loved ones.People in need and those with information or resources are sharing telephone numbers of volunteers, vendors who have oxygen cylinders or drugs, and details of which medical facility can take patients using hashtags like #COVIDSOS.Many people are creating Twitter accounts to seek help from those in positions of power, officials manning helpline numbers said, but hundreds of millions of mainly poorer Indians do not have access to a smartphone or use social media. “We’ve tried every helpline provided by the government and the only reply we’re getting is there are no beds available. I don’t know what Twitter is and didn’t think of asking for help on social media,” said Yadav, holding back tears.Twitter, which lawmakers, charities and political party helplines are using to share information and answer pleas for help, has only 17.5 million users in India, data shows.For the vast majority of Indians struggling to get help, repeatedly calling inundated phone lines or carrying patients to emergency wards in person is the only option – highlighting the impact of the country’s digital divide.
Indians on Twitter Are Desperate for COVID Help. They’re Getting Censored. Vice Social media has become a crucial lifeline for many in India.In the absence of an effective government response, hundreds of thousands of Indians have turned to Twitter, Facebook and Instagram to find hospital beds, oxygen, and COVID-19 drugs for their loved ones. As COVID-19 numbers escalated – reflected in record-breaking daily new cases and unprecedented, but undercounted, COVID-19 deaths – so did criticism on social media. And then social media platforms started receiving takedown requests from the Indian government.Twitter admits it complied with these requests.As a matter of policy, Twitter discloses its takedown actions. In the first six months of 2020, Twitter complied with only 1% of the Indian government’s 2,600 takedown requests.However, some censored tweets relate to the shortage of medicine and beds in India and some censored tweets blame Indian Prime Minister Narendra Modi for the COVID-19 healthcare crisis, calling for his resignation. Other censored tweets were by prominent Indians with a significant following. The tech news site Medianama reportedthat Twitter blocked 52 tweets that criticised the government’s handling of the COVID-19 surge, upon government orders. Medianama cited public Twitter disclosures, tracked by the Lumen database, a transparency project run by Harvard University’s Berkman Klein Center for Internet and Society.A Twitter representative also reportedly told Indian news channel NDTV that “action has been taken in response to a legal request from the Government of India” and that they’re “battling COVID-19 misinformation.” On April 25, the Indian government also confirmed that it ordered Facebook, Instagram and Twitter to block close to 100 posts about COVID-19 calling them “misinformation”, “inflammatory” or aimed to “create panic.” It is unclear whether Facebook and Instagram complied.
‘Not a Surprise, But Terrifying’: At India’s Request, Twitter Blocks Posts Critical of Modi Covid Response –“Not a surprise. But terrifying nonetheless.” That’s how Canadian author and activist Naomi Klein responded Sunday to news that India had requested – and Twitter had agreed – to have numerous tweets critical of the Modi government’s response to the Covid-19 pandemic blocked from the popular social media platform. The Indian news outlet Medianama was the first to report the situation on Saturday, followed by Buzzfeed in U.S. press. According to Medianama’s reporting by Aroon Deep and Aditya Chunduru: Twitter has complied with government requests to censor 52 tweets that mostly criticised India’s handling of the second surge of the COVID-19 pandemic. These tweets, which are now inaccessible to Indian users of the social media website, include posts by Revanth Reddy, a sitting Member of Parliament; Moloy Ghatak, a West Bengal state minister; actor Vineet Kumar Singh; and two filmmakers, Vinod Kapri and Avinash Das. Deep and Chunduru confirmed that several people who had their postings blocked were informed by Twitter what was coming ahead of the move and that the decision was based on a request made by the Indian government of Prime Minister Narendra Modi. In response to request, a Twitter spokesperson sent Medianama the following statement: When we receive a valid legal request, we review it under both the Twitter Rules and local law. If the content violates Twitter’s Rules, the content will be removed from the service. If it is determined to be illegal in a particular jurisdiction, but not in violation of the Twitter Rules, we may withhold access to the content in India only. In all cases, we notify the account holder directly so they’re aware that we’ve received a legal order pertaining to the account. We notify the user(s) by sending a message to the email address associated with the account(s), if available. Modi’s Hindu nationalist government, reported Buzzfeed on Saturday, also restricted dozens of tweets that criticized Modi or shared pictures of India’s overflowing crematoriums and hospitals, in addition to a tweet from the Indian American Muslim Council, a Washington D.C-based advocacy organization of Indian American Muslims. That group shared a Vice storyabout the Kumbh Mela, a Hindu pilgrimage attended by hundreds of thousands of Indians earlier this month, and which turned into a super spreader event.
Pakistan’s Tech Exports Exceed $1.5 Billion in First 9 Months of Fiscal Year 2020-21 **Pakistan’s technology exports are continuing their growth trajectory, soaring 44% in the first 9 months (July-March) of the current fiscal year 2020-21 to reach $1.512 billion. Tech exports accelerated 55% in the month of March 2021 to reach monthly record $213 million ,according to data released by the State Bank of Pakistan. Information technology development depends mostly on available talent. Pakistan has seen significant increase in technology manpower since the massive expansion of higher education initiated by Dr. Ata-ur-Rehman and backed by huge increase in funding provided by President Pervez Musharraf’s government. Higher education in Pakistan has come a long way since its independence in 1947 when there was only one university, the University of Punjab. By 1997, the number of universities had risen to 35, of which 3 were federally administered and 22 were under the provincial governments, with a combined enrollment of 71,819 students. A big spending boost by President Pervez Musharraf helped establish 51 new universities and awarding institutions during 2002-2008. This helped triple university enrollment from 135,000 in 2003 to about 400,000 in 2008, according to Dr. Ata ur Rehman who led the charge for expanding higher education during Musharraf years. There are 161 universities with 1.5 million students enrolled in Pakistan as of 2014. Pakistan now boasts 220 universities with 40,000 faculty members and 1.5 million students, according to Dr. Javaid Laghari, former chairman of Higher Education Commission of Pakistan. Pakistan is now producing over 20,000 information technology graduates annually, according to the Punjab ITminister Mian Aslam Iqbal. He says Pakistan has more than 2,000 IT companies and call centers, and 300,000 English speaking IT professionals. Pakistan’s digital gig economy has surged 69% during the COVID19 pandemic, putting the country among the world’s top 4 hottest online freelancer markets, reports Payoneer, a global payments platform company based in Silicon Valley, in its latest report. Payoneer attributes it to government programs such as Punjab government’s e Rozgaar program that has been offering free online courses in digital freelancing. The sudden rush to learn skills online boosted the demand for instructors. The Pakistan government filled this demand by hiring alumni of programs like e Rozgaar who were successfully participating in the gig economy.
Nigerian women take action as rape, assault cases surge during pandemic – When Kehinde Osakede’s university closed due to COVID-19 last year, the visual arts student returned home to Lagos. A visit to a family friend nearby turned into a horrific ordeal. The friend began touching her, she said, and became violent when she asked him to stop. He then raped her, she said. “The last notion I had was to commit suicide.” Osakede is one of hundreds of women across Nigeria who have reported being raped or sexually assaulted in a surge since the pandemic began, according to police and officials. Some experts say this represents only a fraction of cases. Around the world, police and prosecutors, victim support teams and women’s movements, as well as the United Nations, have reported rising domestic violence during coronavirus-related lockdowns. Lagos state, where Osakede lives, saw a nearly 40% increase in rape and domestic and sexual violence in 2020, official data showed. After a string of high-profile attacks, including the gang rape of a 12-year-old girl in northern Jigawa state, President Muhammadu Buhari declared a nationwide state of emergency in June last year to tackle the crisis. Police did not respond to requests for comment for this article, but in June last year they said reports of rape had risen during the pandemic and introduced measures to improve police response to gender-based violence. Some Nigerian women are now acting to address the problem of sexual violence, saying that cases have ended in few prosecutions, widespread stigmatization and a tendency to blame victims. The National Agency for Prohibition of Trafficking in Persons and the police did respond when asked how many prosecutions of rape cases in Nigeria there had been. Activists have launched centers to support women, an app to report attacks and a push to protect girl victims from being traumatized again in the legal system. They face a difficult path. Polling group NOIPolls found that 47% of Nigerians blamed rape on indecent dressing, and fewer than half thought offenders should be punished. The 2018 official Nigeria Demographic and Health Survey found that 30% of girls and women aged between 15 and 49 reported suffering sexual abuse. The government has declared a state of national emergency over rape and gender-based violence and says it has directed the police and the states to do everything they can to tackle it. Some activists and lawyers have described child rape cases settled for just 10,000 naira ($26), and courts where cases languish for years.
Global Military Spending Grew to Nearly $2 Trillion in 2020 Despite Pandemic – Despite the coronavirus pandemic, worldwide military spending rose to nearly $2 trillion in 2020, according to an analysis published Monday by the Stockholm International Peace Research Institute.Global military expenditure in 2020 – estimated to have reached $1.98 trillion – was 2.6% higher than in 2019 and 9.3% higher than in 2011, according to SIPRI’s new report (pdf). A 2020 bump in military budgets was observed in Africa (5.1%), Europe (4.0%), the Americas (3.9%), and Asia and Oceania (2.5%). The Middle East was the only regional exception, where there was a 6.5% decrease in military spending in the 11 countries for which data is available.SIPRI researcher Diego Lopes da Silva told AFP that last year’s growth in world military expenditure, which coincided with a 4.4% decline in global gross domestic product, was unexpected.”Because of the pandemic, one would think military spending would decrease,” he said. “But it’s possible to conclude with some certainty that Covid-19 did not have a significant impact on global military spending, in 2020 at least.”Given that military spending continued to escalate during an economic downturn, SIPRI found that the “global military burden,” or military expenditure as a share of GDP, grew from 2.2% to 2.4% – the largest annual increase since the 2009 financial crisis.A substantial percentage of global military spending in 2020 was driven by a handful of countries. According to SIPRI’s analysis of the data, 62% of the world’s military expenditure was attributable to just five countries – the United States, China, India, Russia, and the United Kingdom. With a military budget of $778 billion in 2020, the U.S. alone was responsible for 39% of the world’s total military expenditure last year. When the military budgets of Saudi Arabia, Germany, France, Japan, and South Korea are added to the tally, these 10 countries accounted for $1.48 trillion, or 75%, of the world’s total military expenditure last year.
Governments spend trillions on weapons, claim there is no money for health care — As governments around the world last year rejected measures to contain COVID-19 on the grounds that there was no money to pay for them, the world spent unprecedented sums on nuclear weapons, tanks and missiles. The United States, which spends more on its military than the next 10 countries combined, increased its military spending by 4.4 percent compared to the year before. The country outlaid some $778 billion on its military last year alone. The data comes from an annual report by the Stockholm International Peace Research Institute (SIPRI), which has tracked global military spending going back over 30 years. Total global military spending rose to nearly $2 trillion last year, up 2.6 percent from a year ago, after adjusting for inflation. Amazingly, this growth took place even as world economic output shrank by 4.4 percent. As a result, military spending as a share of the global economy surged by the highest level in a decade. The SIPRI noted that the massive surge in US military spending is attributed to the policy – now spanning three presidents – of massively building up its military and conventional forces in preparation for “great power conflicts” with Russia and China. However, the surge in spending has extended to all of the imperialist powers. “Nearly all members of the North Atlantic Treaty Organization (NATO) saw their military burden rise in 2020. As a result, 12 NATO members spent 2 percent or more of their GDP on their militaries, the Alliance’s guideline spending target, compared with 9 members in 2019.” The report noted that France, whose President Emmanuel Macron declared the population must “learn to live with” COVID-19, “passed the 2 percent [military spending] threshold for the first time since 2009.” The country’s military spending surged by 2.9 percent in 2020. In the UK, where Prime Minister Boris Johnson last November declared, “No more f***ing lockdowns, let the bodies pile high in their thousands!” military spending likewise rose by 2.9 percent, putting the country on the list of the top five biggest spenders. Germany, which is rapidly rearming as it declares that it must once again become a “great power,” had its military spending expand by 5.2 percent, putting the figure 28 percent higher than in 2011. After the United States left the Intermediate Range Nuclear forces treaty last year, the world has been locked in a global arms race, with Russia and China, the targets of the US-NATO military buildup. They responded by increasing their own military spending, albeit at a slower pace than the global average. And India, which has shown itself totally unprepared for the COVID-19 pandemic as thousands die in the streets without access to medical care, increased its military spending by two percent. The fact that the same governments, who claimed there was “no money” to pay for lockdowns to save lives in the COVID-19 pandemic, found trillions to shell out to arms manufacturers makes clear what the real priorities of the capitalist system are.
Share Vaccine Recipes With Poor During Pandemic? One of World’s Richest Men Bill Gates Says ‘No’ —Bill Gates, one of the world’s richest men and most powerful philanthropists, was the target of criticism from social justice campaigners on Sunday after arguing that lifting patent protections on Covid-19 vaccine technology and sharing recipes with the world to foster a massive ramp up in manufacturing and distribution – despite a growing international call to do exactly that – is a bad idea. “[Bill Gates] acts like an optimist but has a truly dismal vision of the world.” – writer Stephen Buryani Directly asked during an interview with Sky News if he thought it “would be helpful” to have vaccine recipes be shared, Gates quickly answered: “No.” Asked to explain why not, Gates – whose massive fortune as founder of Microsoft relies largely on intellectual property laws that turned his software innovations into tens of billions of dollars in personal wealth – said that: “Well, there’s only so many vaccine factories in the world and people are very serious about the safety of vaccines. And so moving something that had never been done – moving a vaccine, say, from a [Johnson & Johnson] factory into a factory in India – it’s novel – it’s only because of our grants and expertise that that can happen at all.” The reference is to the Serum factory in India, the largest such institute in the country, which has contracts with AstraZeneca to manufacture their Covid-19 vaccine, known internationally as Covishield. The thing that’s holding “things back” in terms of the global vaccine rollout, continued Gates, “is not intellectual property. It’s not like there’s some idle vaccine factory, with regulatory approval, that makes magically safe vaccines. You know, you’ve got to do the trial on these things. Every manufacturing process needs to be looked at in a very careful way.”
When It Comes to a Travel Restart All Vaccines Are Not Equal — With the resumption of global travel on the horizon, some people are discovering that their choice of vaccine could determine where they’re allowed to go. Already, the European Union is planning to allow Americans vaccinated with shots approved by their drug agency to enter over the summer, European Commission president Ursula von der Leyen suggested in a New York Times interview Sunday. This means that those who have shots by Chinese makers like Sinovac Biotech Ltd. and Sinopharm Group Co. Ltd. are likely to be barred from entry for the foreseeable future, with stark consequences for global business activity and the revival of international tourism. As inoculation efforts ramp up around the world, a patchwork of approvals across countries and regions is laying the groundwork for a global vaccine bifurcation, where the shot you get could determine which countries you can enter and work in. For Chinese citizens who venture abroad regularly, and western nationals wanting to pursue business opportunities in the world’s second-largest economy, a dilemma is emerging about which shot to opt for. China so far recognizes only Chinese-made shots, and its vaccines are not approved in the U.S. or Western Europe. Hong Kong citizen Marie Cheung travels to mainland China regularly for her work with an electric vehicle company, a routine that’s been interrupted by lengthy mandated quarantine stays since the pandemic began. Of the two vaccine options available in the city — one from Sinovac and another developed by Pfizer Inc. and BioNTech SE — Cheung plans to sign up for Sinovac for easier movement in and out of the mainland. Meanwhile, her British husband will go for the Pfizer-BioNTech shot, she says to boost his chances of visiting family in the U.K. “For people who need to work in or return to mainland, the Chinese vaccine is the only option for them,” Cheung said. “Westerners will only choose the vaccine recognized by their home country.”
Fake Covid-19 Certificates Hit Airlines, Which Now Have to Police Them – Airlines are battling a scourge of passengers traveling with falsified Covid-19 health certificates.The documents are often the Covid-19 test results required by many countries on arrival. The International Air Transport Association industry body says it has tracked fake certificates in multiple countries, from France to Brazil, Bangladesh and Afghanistan. Border control authorities and police forces have also reported arrests of people selling documents in the U.K., Spain, Indonesia and Zimbabwe, among others.The problem is hitting international flights more than domestic ones, which typically don’t require certification at the moment. Airlines that are more dependent on cross-border travel, particularly those operating in Europe, are growing increasingly alarmed as they look to the summer, when they still hope demand will start to return.The proliferation of fake health certificates is exposing a logistical blind spot, as airlines rush to navigate post-pandemic travel standards and retool their systems to ease compliance – and spur demand. Airlines say their staff aren’t equipped to handle and police all the new health certifications needed and worry the problem will be exacerbated when some countries also start to ask for vaccination certificates. At Brussels Airlines, staff have shared fake certificates that they have come across – including one from an incident last week – to stay abreast of the techniques fraudsters are using.
Thousands of migrant workers labouring on Canada’s farms in unsafe conditions amid deadly COVID-19 third wave – With the spring planting season well underway, tens of thousands of migrant workers have arrived on Canadian farms amid the coronavirus pandemic’s raging third wave. Last year, some 2,000 farmworkers caught COVID-19 and at least three died. The situation was so alarming that Mexico had to temporarily suspend travel for migrant workers to Canada. One year later, nothing has fundamentally changed in terms of protection for migrant workers. The meagre investment of $59 million announced last July by Justin Trudeau’s federal Liberal government served primarily to modestly increase inspections. In most cases, these result in no action against unscrupulous employers, and in a slap on the wrist for a handful of particularly egregious bad apples. Meanwhile, thousands of workers will still be crammed into overcrowded bunkhouses, and with the additional risk of catching new, more contagious and deadlier variants of the virus, which are striking down workers in the prime of their life. Over 760 migrant workers have already been infected with COVID-19 in Ontario this year. On Tuesday, a report prepared by Ontario’s deputy chief coroner into last year’s COVID-19 deaths of Mexican migrant farmworkers Bonifacio Romero, Rogelio Santos, and Juan Chapparo was released. It stated the obvious – migrant farmworkers are at a higher risk of catching COVID-19 and other infectious diseases than the general population – and made a few timid recommendations aimed at perpetuating Canada’s highly exploitative migrant farmworker system. Showing that the federal and provincial governments have no real intention of improving safety for workers, Ottawa announced last month a new system that authorizes workers arriving from abroad to make the federally mandated three-day quarantine at their employer’s farm instead of in designated hotels. This measure is entirely in the interests of farm owners, who won’t have to pay the hotel costs. In addition, it will facilitate the spread of the virus as potentially asymptomatic workers will quarantine in crowded dormitories.
Job cuts mount in German clinics and nursing homes despite the pandemic – In many parts of Germany, nursing staff have been working at their limits for over a year now. But now, in the middle of the country’s third wave of the pandemic, doctors, nurses and caregivers are faced with a new threat: clinics are laying off personnel to boost profits. This is a slap in the face of caregivers and nursing staff, for whom this will mean increased workload and even greater stress. For days now there has been a steady stream of news in the German media about planned layoffs and clinic closures. In Bremen, the municipal clinic association “Gesundheit Nord” (Geno) is in the process of cutting 440 full-time position. In order to get “in the black,” the Bremen senate coalition of Social Democrats, Left Party and Greens wants to cut more than one in five jobs in the clinic association by 2024. Striking nursing staff at the Berlin Charite hospital Bremen’s health senator Claudia Bernhard (Left Party) is also chairwoman of Geno’s supervisory board. She has defended the decision and glossed over the job cuts by claiming that nursing staff are not affected by layoffs. In reality, among those laid off are many nurses currently on temporary and contract work, nurses in their probation period as well as nursing assistants. In Cologne, the municipal hospitals are to be merged with the university hospital forming a “Charite of the West” in order to save 40 million euro. Several hundred jobs will be eliminated through “synergy effects.” Here, too, it can be assumed that the service sector union Verdi, which claims to be “against compulsory redundancies,” will support the reduction of non-permanent employees, just like the Left Party does in Bremen. In the city of Bernkastel-Kues on the Moselle river, the Median Group is in the process of closing one of four rehabilitation clinics, initially for two months. Together, the four clinics’ 630 employees care for more than 800 patients. In the last eight years, Median has already cut one in ten jobs in the Kueser Plateau region and closed one of its original five clinics. For weeks, nursing staff in Bernkastel-Kues have been fighting this exploitation and the reduction in wages. Every Thursday they march through the parks with banners and posters pointing out that they have not received a pay raise in seven years. Not even a promised one-time special pandemic payment of 1500 euro has been disbursed by the Median Group. Many nursing staff now assume that the closure of the rehabilitation clinic is a deliberate lockout and an act of intimidation to forestall a strike in May.
UK Prime Minister Johnson demanded “no more f***ing lockdowns, let the bodies pile high in their thousands!” – In the run up to the four week limited lockdown reluctantly implemented by the Conservative government last November, Prime Minister Boris Johnson blurted out bitterly, “No more f***ing lockdowns, let the bodies pile high in their thousands!” The Daily Mail reported, “He [Johnson] agreed to fresh restrictions but his frustration is said to have boiled over after the crucial meeting at No 10 in October.” The meeting was held on October 30, 2020. The revelation is one of a series of leaks during ongoing factional warfare within the Tory Party. . The Tory advocates of herd immunity, with Johnson in the forefront, never wanted the first lockdown, let alone a second. But with cases and deaths shooting up following the end of the first lockdown in July/August – fuelled by sending millions of pupils back to school in September – there were fears that not doing so would provoke social and political unrest. Cabinet Office Minister Michael Gove was identified by the Daily Mail as playing a key role in shifting Johnson to backing a lockdown at the meeting. As told the newspaper by a “source close to Mr Gove”: “Michael said that if he [Johnson] didn’t impose a second lockdown there would be a catastrophe … Hospitals would be over-run, people would be turned away from [accident & emergency] and people would be dying in hospital corridors and hospital car parks … Was that the image of his post-Brexit Britain he wanted the world to see? It was devastating. The PM had no answer.” On Monday, Johnson denied making the attributed comments, but the BBC cited “sources familiar with the conversation” confirming that he had. ITV’s political editor, Robert Peston, wrote that he had been told by two witnesses who said they did not brief the Mail that they had also heard Johnson say it. Moreover, while Johnson agreed to the November lockdown the perspective he blurted out, “no f***ing lockdowns, let the bodies pile high in their thousands” is now being implemented as official government policy. The November lockdown ended on December 3. Following a surge of COVID-19 cases, due to the relaxation of rules to allow a pre-Christmas shopping spree, on January 5, Johnson was forced to implement a third significantly less restrictive lockdown. But from then on, he and his government have insisted this would be the “last lockdown”. In February, despite the spread of new variants of Covid, including the more infectious and more deadly Kent variant that has become the dominant strain globally, Johnson announced that restrictions would be loosened from March, with the entire economy to be reopened by June 21.
.
include(“/home/aleta/public_html/files/ad_openx.htm”); ?>