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.
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I still struggle with whether the infrastructure bill(s) discussion belongs here or not. So basically, I left out all the purely infrastructure posts, and those articles where one or another pol wanted a specific add-on, but since Biden is now insisting that a reconciliation bill accompany the bill that centrists of both parties negotiated, I included enough articles to get a gist of what that’s all about. Then there’s also the likelihood that no one could even discuss trillions of spending if that barn door hadn’t been busted wide open earlier by the coronavirus relief bills.
The news:
Fed’s Rosengren Says 2022 Rate Hike in Play as Job Market Heals – The Federal Reserve might consider an interest-rate hike from near zero as soon as late 2022 as the labor market reaches full employment and inflation is at the central bank’s goal, Federal Reserve Bank of Boston President Eric Rosengren said. “The criteria is that we have a sustainable inflation rate, that’s 2% or above, and that we’re at full employment,” Rosengren said in a broadcast interview with Yahoo Finance. “I do expect that it’s quite possible that we will see that by the end of next year, but it does depend on whether the economy progresses as strongly as I’m expecting.” Rosengren joined several other Fed presidents — St. Louis Fed’s James Bullard, Dallas’s Robert Kaplan and Atlanta President Raphael Bostic — in laying out a scenario in which the Fed would lift rates next year. He declined, though, to specify what his “dot,” or interest-rate forecast, was in the quarterly projections. Fed officials last week published economic projections showing 13 of 18 favored at least one rate increase by the end of 2023, versus seven in March. Eleven officials saw at least two hikes by the end of that year. In addition, seven of them saw a move as early as 2022, up from four. Rosengren said it was “quite likely” the Federal Open Market Committee will achieve the “substantial further progress” on jobs and inflation required to taper its bond-buying program before the start of next year. The U.S. economy is likely to achieve around 7% economic growth this year, which would provide further support for healing in the job market, he said. The FOMC sees gross domestic product expanding 7% this year, up from a prior projection of 6.5%. The current surge in inflation is largely temporary and reflects the reopening of the economy following the Covid-19 pandemic and supply issues that will pass, Rosengren said, citing the situation in the used-car market. Data released Friday showed the Fed’s preferred gauge of inflation rose 0.4% in May from the prior month and 3.9% over the past year. Previous reports on consumer prices for the months of April and May showed the highest monthly increases since 2009.
Fed officials mobilize to reassure Wall Street -Top officials of the US Federal Reserve, starting with Chairman Jerome Powell, have pulled out all stops to reassure financial markets there will be no immediate tightening of monetary policy, and the flow of money that has sent Wall Street to record highs will continue. Last week there was a significant reaction to the “dot plot” from the meeting of the Fed’s policy-making body, which showed expectations that interest rates could start to rise in 2023, rather than in 2024, and to subsequent comments last Friday by St Louis Fed president James Bullard, that rates may increase as early as 2022. Markets fell sharply following his comments, with the Dow dropping by more than 500 points, and the S&P 500 recording its worst week in four months. By this Wednesday, Wall Street had returned to previous levels. But this was not due to the operation of so-called “market forces.” The World Socialist Web Site has no information as to what discussions were held between Fed officials. But from what followed, it appears a decision was taken over the weekend that concerted action needed to be taken, lest the tremor that went through Wall Street turned into something more significant, and some “heavy hitters” were called in. On Monday, John Williams, the president of the New York Fed, the second most important figure after Powell in the Fed’s governing body, commented that the US economy was not ready for the central bank to start easing its monetary support. Williams said the economy was “getting better all the time” but insisted the Fed would maintain the new policy framework, adopted last August, in which it said it would allow inflation to rise above its target rate of 2 percent, before considering rate increases or pulling back on asset purchases. “It’s clear that the economy is improving at a rapid rate, and the medium-term outlook is very good. But the data and conditions have not progressed enough for the Federal Open Market Committee to shift its monetary policy stance of strong support for the economic recovery,” he said. On Tuesday, in the lead-up to Powell’s testimony to Congress, the president of the San Francisco Fed, Mary Daly, weighed in. “Talking about rate changes now isn’t even on the table,” she told reporters. “The mantra right now is: ‘steady in the boat’.” In his opening statement to Congress, Powell insisted the Fed would “do everything we can to support the economy for as long as it takes to complete the recovery” in order to make clear the Fed was not going to react to warnings of inflation by clamping down on the money supply to Wall Street. Responding to a question from South Carolina House Democrat Representative James Clyburn, Powell said: “We will not raise interest rates pre-emptively because we think employment is too high [or] because we fear the possible onset of inflation. Instead, we will wait for actual evidence of actual inflation or other imbalances.”
Top U.S. Officials Consulted With BlackRock as Markets Melted Down – The New York Times –As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government. Mr. Mnuchin held 60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on Monday, March 23, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mr. Mnuchin spoke to Mr. Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Mr. Fink joined Mr. Mnuchin, Mr. Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mr. Mnuchin’s calendars.The records reveal how often federal officials engaged with a Wall Street executive at a moment of crisis, as they strategized about how to turn around markets that were descending into chaos. Mr. Fink’s firm is a huge player across many stock and debt markets, and its advisory arm helped to execute some of the Fed’s crisis response during the 2008 financial meltdown. That market insight and experience got him a front-row seat at a pivotal moment, one that may have put him in a position to influence a rescue with huge ramifications for households, businesses and the entire U.S. economy.”They’re about as close to a government arm as you can be, without being the Federal Reserve,” said William Birdthistle, a professor at the Chicago-Kent College of Law and the author of abook on funds.
Fed Chair Powell Misleads House Hearing on Wall Street’s Bailout Programs – Pam Martens – Yesterday the House Select Subcommittee on the Coronavirus Crisis convened a hearing at 2 p.m. to receive testimony from Federal Reserve Chairman Jerome Powell. The title of the hearing was “Lessons Learned: The Federal Reserve’s Response to the Coronavirus Pandemic.”During Powell’s opening statement, he said this: “Our emergency lending tools require the approval of the Treasury and are available only in unusual and exigent circumstances, such as those brought on by the crisis. Many of these programs were supported by funding from the CARES Act. Those facilities provided essential support through a very difficult year and are now closed.”It’s factually incorrect for the Fed Chairman to say that it can only make emergency loans with the approval of the Treasury. Months before there was any case of COVID-19 anywhere in the world the Fed was making hundreds of billions of dollars a week in emergency repo loans to Wall Street trading houses. The emergency loans started on September 17, 2019 – four months before the first reported case of COVID-19 in the United States. By January 27, 2020 the Fed’s ongoing cumulative loans to bail out Wall Street’s hubris tallied up to an astounding $6.6 trillion. (See Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash.)The Fed made these loans without any Congressional approval or oversight. Despite Powell’s promises to the Senate Banking Committee that the Fed would provide a full report on what caused the need for these emergency bailouts to Wall Street banks, the public has yet to see any such report from the Fed.In addition, Powell appeared to be giving the impression yesterday that the Fed’s pandemic bailout programs have ended. While the programs funded with CARES Act money have stopped making new loans, the Fed’s weekly H.4.1 balance sheet as of last week shows that it held the following balances in its various emergency bailout programs: Paycheck Protection Program Liquidity Facility, $87.32 billion; Commercial Paper Funding Facility, $8.55 billion; Corporate Credit Facilities, $25.85 billion; Main Street Facilities, $30.56 billion; Municipal Liquidity Facility, $10.73 billion; TALF, $4.76 billion; Central Bank Liquidity Swaps, $500 million. The Commercial Paper Funding Facility, the Corporate Credit Facilities, TALF II and the Central Bank Liquidity Swaps are decidedly programs that help Wall Street far more than Main Street.Another problem is that the Fed continues to show the Primary Dealer Credit Facility (PDCF) as open on its H.4.1 report – albeit with a current zero balance. That same program was used to secretly inject $8.95 trillion in cumulative loans to Wall Street banks before, after and during the financial crash of 2008. Three banks got two-thirds of that $8.9 trillion: Citigroup, $2.02 trillion; Morgan Stanley $1.9 trillion; and Merrill Lynch, $1.77 trillion. While the Fed has released monthly reports showing the names of the recipients of some of its bailout programs, it has refused to make public the names or dollar amounts of the loan recipients under the following four programs: the repo loan bailouts; the Primary Dealer Credit Facility (PDCF); the Commercial Paper Funding Facility (CPFF); and the Money Market Mutual Fund Liquidity Facility (MMLF).
Chicago Fed: “Index points to a pickup in economic growth in May” –“Index points to a pickup in economic growth in May.” This is the headline for this morning’s release of the Chicago Fed’s National Activity Index, and here is the opening paragraph from the report:Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.29 in May from – 0.09 in April. Three of the four broad categories of indicators used to construct the index made positive contributions in May, and three categories improved from April. The index’s three-month moving average, CFNAI-MA3, rose to +0.81 in May from +0.17 in April. [Download report]The Chicago Fed’s National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed’s website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth.The first chart below shows the recent behavior of the index since 2007. The red dots show the indicator itself, which is quite noisy, together with the 3-month moving average (CFNAI-MA3), which is more useful as an indicator of the actual trend for coincident economic activity. For a broad historical context, here is the complete CFNAI historical series dating from March 1967.
Q1 GDP Growth Unchanged at 6.4% Annual Rate –From the BEA: Gross Domestic Product (Third Estimate), GDP by Industry, and Corporate Profits (Revised), 1st Quarter 2021Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, according to the “third” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 4.3 percent.The “third” estimate of GDP released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was also 6.4 percent. Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports, which are a subtraction in the calculation of GDP Here is a Comparison of Third and Second Estimates. PCE growth was revised up slightly to 11.4%. Residential investment was revised up from 12.7% to 13.1%. This was at the consensus forecast.
Q1 GDP Third Estimate: Real GDP Remains At 6.4% – The Third Estimate for Q1 GDP, to one decimal, came in at 6.4% (6.36% 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 6.4%.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 “third” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 4.3 percent.The “third” estimate of GDP released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was also 6.4 percent. Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports, which are a subtraction in the calculation of GDP (see “Updates to GDP”). [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%. Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 16.4% below trend. A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.27%. All twelve recessions over this timeframe have begun at a higher level of current real YoY GDP.
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 June 20th. The seven day average is down 27.0% from the same day in 2019 (73.0% of 2019). (Dashed line) There was a slow increase from the bottom – and TSA data has picked up in 2021. 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 June 19, 2021. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. Dining is picking up again, and was only down 11% in US (7-day average compared to 2019). Florida and Texas are above 2019 levels.– 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 June 17th. Movie ticket sales were at $88 million last week, down about 66 from the median for the week. This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. Occupancy is now above the horrible 2009 levels and weekend occupancy (leisure) has been solid. This data is through June 12th. Hotel occupancy is currently down 10% compared to same week in 2019). Note: Occupancy was up year-over-year, since occupancy declined sharply at the onset of the pandemic. However, the 4-week average occupancy is still down from normal levels. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. As of June 11th, gasoline supplied was down about 5.7% (about 94.3% of the same week in 2019). Three weeks ago was the first week this year with gasoline supplied up compared to the same week in 2019. 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, This data is through June 19th for the United States and several selected cities. The graph is the running 7 day average to remove the impact of weekends. According to the Apple data directions requests, public transit in the 7 day average for the US is at 95% of the January 2020 level and moving up. Here is some interesting data on New York subway usage. 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.
Anti-China legislation on Taiwan introduced in US House of Representatives – A “Taiwan Peace and Stability Act” was tabled in the United States House of Representatives on June 17 in the latest bipartisan effort to intensify pressure on Beijing over the self-ruled island of Taiwan. The purpose is to further challenge the “One China” policy and deepen preparations for war against the mainland. The leading Democrat and Republican on the Asia subcommittee of the House Foreign Affairs Committee, Ami Bera and Steve Chabot, respectively, introduced the legislation, which is of a piece with the anti-China bill that recently passed the Senate with bipartisan backing. The latest bill states: “In order to ensure the longevity of US policy and preserve the ability of the people of Taiwan to determine their future independently, it is necessary to reinforce Taiwan’s diplomatic, economic, and physical space.” Behind this double-speak, Washington intends to strengthen Taiwan in order to maintain its separation from China. Taiwan is considered a crucial aspect of Washington’s future war plans against the mainland. Earlier this year, the Pentagon called for the stationing of offensive missiles on Taiwan and other nearby islands. The legislation accuses Beijing of “coerc[ing] actors into adhering to its ‘One-China Principle.'” It cites countries that have broken off relations with Taipei in favor of Beijing since 2016 as supposed evidence of this “coercion.” Without openly rejecting it, the bill represents a challenge to the legitimacy of the “One China” policy, which has governed cross-strait relations since Washington formally cut ties with Taipei in 1979 and acknowledged Beijing as the government of all of China.
China denounces the U.S. for shipping vaccine doses to Taiwan. – The Chinese government accused the United States on Monday of interfering in its internal affairs after Washington shipped 2.5 million doses of Moderna’s Covid-19 vaccine to Taiwan, saying that any form of vaccine assistance should not be used as a form of “political manipulation.”China regards Taiwan as its own territory and is acutely sensitive to any form of interaction between the United States and the self-governed democracy. The donations, which were more than triple the original amount that the Biden administration had promised, were celebrated in Taiwan.In Beijing, Zhao Lijian, a spokesman for the Chinese Foreign Ministry, criticized the move.”We urge the U.S. not to use vaccine assistance to engage in political manipulation and not to interfere in China’s domestic affairs,” Mr. Zhao said at a regular news briefing.The vaccine donations come at a time when tensions between the United States and China are running high over Taiwan. Chinese officials were annoyed this month when three U.S. senators visited the island to announce the original pledge of 750,000 doses.Mr. Zhao also took aim at Taiwan’s governing Democratic Progressive Party, headed by President Tsai Ing-wen, which has long been considered a thorn in Beijing’s side. Mr. Zhao said that the party had “tried all means to obstruct the shipment of vaccines from the mainland to Taiwan and even lied that the mainland is obstructing its procurement of vaccines.”Taiwan’s leaders had previously blamed “Chinese intervention” for their inability to buy doses from the German company BioNTech, which developed its vaccine with Pfizer.A Chinese company, Fosun Pharmaceutical, claims the exclusive commercial rights to distribute BioNTech’s vaccine in Taiwan, but for many in the self-governing democracy, the idea of buying shots from a mainland Chinese business is unpalatable.
U.S. senators haggle over funding of $1 trillion infrastructure compromise – (Reuters) – A bipartisan infrastructure plan costing a little over $1 trillion, only about a fourth of what President Joe Biden initially proposed, has been gaining support in the U.S. Senate, but disputes continued on Sunday over how it should be funded. Biden told reporters last week that he will have a response to the plan as soon as Monday after reviewing it. Twenty-one of the 100 U.S. senators – including 11 Republicans, nine Democrats and one independent who caucuses with Democrats – are working on the framework to rebuild roads, bridges and other traditional infrastructure that sources said would cost $1.2 trillion over eight years. “President Biden, if you want an infrastructure deal of a trillion dollars, it’s there for the taking. You just need to get involved and lead,” one of the 21 senators, Republican Senator Lindsey Graham, said on Fox News Sunday. Biden, seeking to fuel growth after the pandemic and address income inequality, had initially proposed about $4 trillion be spent on a broader definition of infrastructure, including fighting climate change and providing care for children and the elderly. But the White House trimmed the offer to about $1.7 trillion in talks with senators in a bid to win Republican support which will be needed for any plan to get the 60 votes normally required to advance legislation in the Senate. Senate Budget Committee Chairman Bernie Sanders, who is working up a far more ambitious infrastructure blueprint of $6 trillion, panned as “bad ideas” some of the revenue-raising provisions the bipartisan group discussed, such as indexing the gas tax to inflation. On CNN’s “State of the Union” and NBC’s “Meet the Press” on Sunday, Sanders was unclear about whether he could support the bipartisan plan if those were removed. “If it is regressive taxation, you know, raising the gas tax or a fee on electric vehicles, or the privatization of infrastructure, no I wouldn’t support it. But we don’t have the details right now,” Sanders, an independent who caucuses with Democrats, told NBC. The White House also has resisted indexing the gas tax to inflation, saying it won’t raise taxes on people making less than $400,000 a year. Senator Rob Portman, the lead Republican working on the bipartisan plan, said Sunday that the gas tax indexing provision might not survive, but then the administration will “need to come forward with some other ideas (for raising revenue) without raising taxes.”
Bipartisan group of senators reaches agreement on infrastructure framework – CBS News – A group of bipartisan senators announced an agreement on a framework for an infrastructure proposal on Wednesday evening, even as the White House and congressional Democrats continue to pursue two tracks in passing President Biden’s multi-trillion dollar plan.The group of 21 senators, 10 Democrats and 11 Republicans, previously reached an agreement on an infrastructure proposal costing roughly $1 trillion, with $579 billion in new spending – although the proposal did not include details about funding. Republican Senator Mitt Romney, a lead negotiator, told reporters on Wednesday evening that negotiators have “agreed to a framework” that they would present to the White House.Several of the lead negotiators from both parties traveled to the White House on Thursday morning to discuss the new framework, which includes pay-fors. Funding for the bill had been a sticking point in negotiations.”President Biden is the ultimate person that will have to sign off on this and make sure he’s comfortable. And he wants a bipartisan deal, he said that from day one. His negotiators were with us the whole time that we’ve that we’ve negotiated,” Democratic Senator Joe Manchin told reporters on Thursday.The new framework comes after White House legislative team met with this group of senators twice on Wednesday. Senators faced a time crunch in their negotiations, as the Senate has a two-week recess beginning next week, leaving only a few days for them to reach a deal.Senate Majority Leader Chuck Schumer said on Thursday that the Senate will “concurrently” take up the bipartisan deal and a large budget reconciliation bill, which would only require 50 votes to move forward, to address Mr. Biden’s other infrastructure priorities.
Biden and Senators Reach Broad Infrastructure Deal – The New York Times – President Biden and a bipartisan group of centrist senators reached a deal on Thursday for $1.2 trillion in investments to rebuild the nation’s infrastructure, a victory for the White House but only the first lurch in what promises to be an arduous attempt to reshape the nation’s economic and social programs. The agreement on traditional infrastructure projects – roads, bridges, tunnels, rail and broadband – would be significant on its own, the first major increase of federal public works spending since President Barack Obama’s 2009 economic rescue plan. It would include some existing infrastructure programs, but also provide $579 billion in new money over eight years to patch cracking highways, rebuild crumbling bridges, speed rail traffic and more equitably spread high-speed internet access. The plan would also pour billions of dollars into waterways and coastlines washing away as a warming planet raises sea levels, and $7.5 billion into financing a half-million electric vehicle charging stations, all part of Mr. Biden’s climate pledges. It would be paid for in part with a $40 billion increase in the I.R.S. enforcement budget to bring in $140 billion in unpaid taxes, as well as repurposing unspent coronavirus relief funds, according to an outline provided by the White House. “This agreement signals to the world that we can function, deliver and do significant things,” Mr. Biden said from the White House’s East Room, after meeting with the lawmakers. But almost immediately after reaching the breakthrough, Mr. Biden and Democrats offered a giant caveat that could complicate its chances of passage. Both the president and top Democrats said the compromise, which constitutes only a small fraction of the expansive, $4 trillion economic agenda Mr. Biden has proposed, could advance only together with a far larger bill that would pour trillions more into health care, child care, higher education access and climate change programs. That measure, vehemently opposed by Republicans, would be paid for by remaking the tax code to capture the wealth of the superrich and multinational corporations that shift profits and jobs overseas. “If this is the only thing that comes to me, I’m not signing it,” Mr. Biden said of the infrastructure piece. “It’s in tandem.” Speaker Nancy Pelosi called the changes in their totality “transformative, if not revolutionary.” Senator Chuck Schumer of New York, the majority leader, predicted that the pair of bills would be “the boldest, strongest legislation that this country has seen in decades.” They said they hoped all of it could come together by this fall, an enormous challenge that will involve persuading at least 60 senators to back the traditional infrastructure plan, and keeping Democrats united on the larger bill. The latter measure would have to pass through a budget process called reconciliation, which would allow it to bypass a Republican filibuster, but would require all 50 Democratic and independent votes in the Senate. “There ain’t going to be no bipartisan bill unless we’re going to have reconciliation,” Ms. Pelosi said, a message she repeated privately to Democrats, after liberals warned against acting just on a bipartisan deal that jettisons the provisions progressives want most. Still, the deal struck Thursday fulfills the promise of bipartisanship that Mr. Biden has long sought, and its authors were in a celebratory mood. “I think that this coalition, and now being endorsed by the president, sends a message not just to Congress, not just to the country, but to the world that we can do the big things – we can function,” Senator Kyrsten Sinema, Democrat of Arizona, one of the group’s primary drivers, said in a brief interview. “We continue to be the leader of the world, and this is evidence that we are doing the work.” The framework doles out money in large pots: $312 billion for transportation projects, $65 billion for broadband and $55 billion for water infrastructure. A large sum, $47 billion, is set aside for “resilience” – a down payment on Mr. Biden’s promise to deal with the effects of climate change. But the path forward is complicated and politically freighted, given Democrats’ spare majorities in the House and Senate, which leave them little margin for error.
Biden endorses bipartisan infrastructure plan which guts initial proposal – President Joe Biden announced on Thursday that he was endorsing an infrastructure plan put forward by a bipartisan group of senators that was a fraction of his original $2.25 trillion proposal unveiled last March. Standing outside the White House with a group of five Democrats and five Republicans, Biden said, “We have a deal” and then added “none of us got all that we wanted.” Biden got far less with the bipartisan plan proposing to spend about $579 billion in new investments in roads, broadband internet, electric utilities and other projects, a drop in the bucket in comparison to the funding need to repair and update the country’s crumbling and neglected infrastructure. Attempting the political equivalent of making a silk purse out of a sow’s ear, Biden said, “When we can find common ground, working across party lines, that is what I will seek to do,” adding that the deal was “a true bipartisan effort, breaking the ice that too often has kept us frozen in place.” While the corporate media hailed the endorsement as a “major breakthrough,” the reality is that a commitment by the US government to any infrastructure spending plan is still far from a certainty. As the New York Times wrote, the bipartisan plan may not even “muster the support of at least 60 senators to overcome any filibuster” from Republicans, and the “two track strategy” of the Democrats – pursuing a larger funding bill through the process known as reconciliation at the same time – “promises to be a heavy lift.” The $579 billion in spending above expected federal levels in the bipartisan proposal would bring the investment in infrastructure to $973 billion over five years and $1.2 trillion if it is continued for eight years. According to a White House press statement, if adopted, the eight-year plan contains $109 billion for roads, bridges and major projects; $73 billion for power infrastructure; $66 billion for passenger and freight rail; $65 billion for broadband access; $49 billion for public transit; and $25 billion for airports. Republican opposition to tax increases to pay for the plan won out in the deal, with the cost of the spending covered by repurposing existing federal funds, public-private partnerships and revenue collected from enhanced enforcement at the Internal Revenue Service, sales from the strategic petroleum reserve and wireless-spectrum auction sales, among the other sources of revenue. Biden’s original proposal called for a partial roll back of the corporate tax breaks – raising rates from 21 percent to 28 percent – put in place by the Trump administration in 2017. Democrats such as Senator Richard Blumenthal of Connecticut were reduced to complaining that bipartisan agreement was “way too small – paltry, pathetic. I need a clear, ironclad assurance that there will be a really adequate robust package” that will follow. The president attempted to gloss over his surrender to the Republican Party agenda and right-wing Democrats such as Senators Joe Manchin of West Virginia and Mark Warner of Virginia by claiming there would be more added to the bill as it moved through the legislative process. He said, “If this is the only thing that comes to me, I’m not signing it.”
Biden says he won’t sign bipartisan bill without reconciliation bill – President Biden on Thursday said he won’t sign the bipartisan infrastructure deal if Congress doesn’t also pass a reconciliation bill, committing to a dual track system to get both bills passed. “I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this bill, the infrastructure bill, as well as voted on the budget resolution. But if only one comes to me, this is the only one that comes to me, I’m not signing it. It’s in tandem,” Biden told reporters at the White House. Speaker Nancy Pelosi (D-Calif.) said Thursday that the House would not vote on a bipartisan infrastructure bill until the Senate passes a larger set of Democratic priorities through budget reconciliation. Biden said he agreed with the Speaker on the sequencing. “The bipartisan bill from the very beginning was understood, there’s going to have to be the second part of it. I’m not just signing the bipartisan bill and forgetting about the rest that I proposed. I proposed a significant piece of legislation in three parts and all three parts are equally important,” the president said. Biden’s remarks are likely to ease concerns among progressive Democrats who are wary of the bipartisan agreement because it does not include other Democratic priorities, like measures to expand access to child care, free education and paid family leave. Still, Democrats will need to convince moderates like Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) to go along with a big reconciliation bill, which could allow Democrats to pass the rest of their agenda without GOP support. Senate progressives had already signaled Thursday that they wouldn’t bless the bipartisan infrastructure deal without a major reconciliation package.
Democrats’ two-step infrastructure plan draws Republican ire (Reuters) -Hours after President Joe Biden declared “We have a deal” to renew the infrastructure of the United States, the Senate’s top Republican lashed out at plans to follow the $1.2 trillion bipartisan bill with another measure funding what Democrats call “human infrastructure.” Biden and top congressional Democrats – House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer – had long signaled their plan to link the bipartisan deal with another bill including spending on home health care and child care. The second measure would be passed through a Senate maneuver called reconciliation here, which would allow it to take effect without Republican votes. Biden told reporters at the White House that he expected quick action on both measures – or neither would survive. “I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this (bipartisan) bill – the infrastructure bill – as well as voted on the budget resolution,” he said. “But if only one comes to me, I’m not signing it. It’s in tandem.” That drew a harsh response from Republican Senate Minority Leader Mitch McConnell. “Less than two hours after publicly commending our colleagues and actually endorsing the bipartisan agreement, the President took the extraordinary step of threatening to veto it,” McConnell said on the Senate floor. “It almost makes your head spin.” McConnell, Pelosi and Schumer have not been directly involved with the bipartisan infrastructure talks. McConnell has not publicly stated if he would back the initiative, though he called it “encouraging” in his floor remarks. Lindsey Graham, one of the 21 senators who had negotiated the bipartisan deal, said in a tweet: “If reports are accurate that President Biden is refusing to sign a bipartisan deal unless reconciliation is also passed, that would be the ultimate deal breaker for me.” Progressive members of Congress – some of whom were pushing for a sweeping $6 trillion bill – had indicated they would not support the smaller bipartisan bill without a companion measure. The $1.2 trillion framework here includes $579 billion in new spending on major investments in the power grid, broadband internet services and passenger and freight rail. The eight-year proposal contains $109 billion for roads, bridges and major projects; $73 billion for power infrastructure; $66 billion for passenger and freight rail; $65 billion for broadband access; $49 billion for public transit; and $25 billion for airports, according to a White House statement. That spending falls far short of Biden’s original ambitions on schools, climate change mitigation, and support for parents and caregivers, and it doesn’t include his bedrock pledge to make the U.S. economy more fair by increasing taxes on the rich and corporations. Biden vowed to move “full steam ahead” on those priorities.
Medicare For All? Start At The Beginning: -It has been two years since I wrote on women’s healthcare and three important topics impacting women; clinical trials done without women participants, a failing birth control device – Essure, and maternal healthcare. The Health Affairs article is suggesting Medicare for all Maternal Care as an improvement to lacking healthcare for all women. Improving the availability of maternal healthcare for women needed. As I wrote in A Woman’s Right to Safe Healthcare Outcomes; there is also a need for improving the care. There are too many issues being missed or ignored for the mother before, during, and after the birthing of a child.Medicare is fee for service care. Medicare determines what will be paid. Those are the good parts. Dr. Donald Berwick claimed 30% of Medicare expenditures for care was waste and doctors knew it. However, Medicare for all Maternity is an important step forward which will level the field of care for “all” women. As the bar graph details, 52% of the deaths from pregnancy occurred after giving birth from day one to 364 days later. While (most) commercial healthcare insurance covers postpartum healthcare up to a year, Medicaid only covers two months of postpartum care. The most impacted by this lack of coverage are minorities who lack the resource for better coverage outside of Medicaid.The emphasis of the bill is to fund Medicaid so as to provide the same care as what is provided by commercial healthcare and up to 1-year after the baby’s birth. Two months of Postpartum Medicaid is provided, The care during and after is supposedly less than what is normally provided. It is a good goal to emphasize. The expansion of Medicaid maternal coverage should include the quality of care before, during, and after delivery for those lacking access to healthcare and the means of getting it through healthcare insurance today. Included in the expansion of the length of coverage is an effort to improve the careA little more than a year ago, I touched upon Maternal Healthcare, A Woman’s Right to Safe Healthcare Outcomes, and the dangers inherent in it. When I wrote on this one topic, I covered a story of a delivery that cost the life of the mother during a successful birthing of the child. All the warning signs were there of a mother in trouble and missed. Unfortunately, this is not an uncommon occurrence in the United States which still has the most expensive healthcare for a civilized nation.
Biden funnels pandemic relief funds into strengthening the police –On Wednesday, President Joe Biden announced new measures to deal with what he called an epidemic of gun violence in America. Speaking of his plan from the White House, Biden said nothing about the social causes of the spike in gun violence being reported in many US cities, nor did he mention the continuing wave of police killings that take more than 1,000 lives every year in the United States. Rather, he sought to establish his law-and-order credentials and dissociate his administration from calls to “defund the police” that emerged during the mass demonstrations last spring and summer against police violence, following the police murder of George Floyd. Saying that now was “not a time to turn our backs on law enforcement,” Biden announced that states and localities could use any portion of the $350 billion in pandemic relief funds allotted them under the $1.9 trillion American Rescue Plan enacted in March to fund their police departments. In a statement released by the Treasury Department, the administration announced that the money could be used to hire additional police officers to reach pre-pandemic staffing levels, and, in communities with high rates of gun violence, increase the size of their department beyond pre-pandemic levels. The money could also be used to establish community violence intervention programs and purchase new policing equipment. Biden and his attorney general, Merrick Garland, explained that the plan also included expanded deployment of the FBI and other federal police agencies to aid local police, as well as enhanced technology for tracking criminal activity, presumably a coded reference to surveillance activities.
Migrant children speak of horrifying conditions in detention centers set up by the Biden administration – Testimonials filed in a California federal court this week reveal the horrific conditions faced by migrant children who are being held in federal detention centers, euphemistically categorized as “emergency shelters,” set up by the Biden administration. The conditions described in the 17 testimonials from children aged nine to 17, largely from Guatemala, Honduras and El Salvador, include being given spoiled food, lack of drinking water and clean clothes, overcrowding, inability to contact family members and severe mental health issues. The testimonials were gathered by attorneys with the Center for Human Rights & Constitutional Law and the National Center for Youth Law, who are representing the children in the long-running Flores settlement, a court agreement setting bedrock standards of care for children in federal custody. Recorded between March and early June, these testimonials make it obvious that the Biden administration’s promises of a more humane approach to immigration remain mere rhetoric. The situation described by the children in their accounts presents a grim picture of what it means to be a detained, unaccompanied minor under the Democratic Party’s watch. A 13-year-old from Honduras, who was separated from her father while crossing into the US, has been held in Fort Bliss, Texas, for over two months. She told attorneys that she had problems sleeping in her overcrowded tent because the bright lights were on all night. But it was the food that was an even bigger issue. Much of it was inedible, the hamburger they had been served the night before had a distinct odor that made it impossible for them to eat, and one of her friends had been served some chicken that still had feathers on it. “I really only eat popsicles and juice because that is the only food I can trust,” she said. A 14-year-old from Guatemala, who is being held in a facility in Houston, spoke of the extreme heat in the tents that caused children to faint, the lack of clean drinking water and being forced to drink rancid milk when they ran out of water. A 17-year-old Guatemalan girl detained at Fort Bliss described sleeping in a large white tent with about three hundred girls, on cots stacked on top of each other. She said it was hard to sleep due to the rattling noise the tent’s metal beams made at night. Many of the testimonies highlighted the impact of the situation on the mental health of the detainees. A teenager, who had been held in the Dallas, Texas, convention center, spoke of feeling “asphyxiated” in the overcrowded facility which held 2,600 children. The testimonial continues in a heartbreaking vein: “There is no one here I can talk to about my case. There’s also no one here I can talk to when I’m feeling sad. There’s no one here; I just talk to God.”
House to take big step on eliminating Trump-era rules –The House is gearing up for votes this week to undo three Trump-era rules, using a special legislative tool to repeal some of the previous administration’s agency actions. Democrats will draw on the Congressional Review Act (CRA) to take aim at rules governing methane regulations, lending practices and employment discrimination cases. The three resolutions, which made it through the Senate on simple majority votes that included Republicans crossing the aisle on two of the measures, all have a good chance of clearing the House. Sending the measures to President Biden’s desk would deal a blow to former President Trump’s legacy and mark the first time Congress has repealed his administration’s policies through the CRA, which allows lawmakers and a new president to get rid of rules established under a previous president if they were completed shortly before the change in administration. “You have lots of different tools that you can use to shift regulatory policy. This tool comes with some interesting sort of expedited procedures,” said Daniel Perez, a senior policy analyst at George Washington University’s Regulatory Studies Center. The CRA is an all-or-nothing tool, he said, that lets you get rid of existing rules, but not revise them. “It’s a sledgehammer, not a scalpel,” Perez said. The CRA was successfully used just once before 2017, but at the start of Trump’s presidency Republicans were able to eliminate more than a dozen Obama-era regulations since they controlled both the House and Senate. And while some on the left may view this week’s vote as a kind of payback, there are other progressives who argue that Democrats should be pushing to eliminate the CRA, not give it legitimacy by using it against Trump. “The Congressional Review Act is quite possibly the worst law Congress has ever enacted,” said James Goodwin, a senior policy analyst with the left-leaning Center for Progressive Reform. He argued that it better serves Republicans than Democrats because the GOP’s agenda is more deregulatory, while Democrats may want to add more regulations, not just take them away. “Very often, using the CRA puts Republicans where they want to be at. Almost never does using the CRA put Democrats where they want to be at,” he said. “Getting rid of Trump stuff is never going to be adequate for President Biden,” Goodwin added, noting that Biden will want to implement regulations instead of just getting rid of deregulatory actions. Still, some observers said they were surprised that Democrats haven’t targeted more Trump-era rules. “Given how much success the Republicans had using it and how little success it had prior to that … and given how [many] differences there are in regulatory policy between the Trump administration and the Biden administration, just as there was such a broad difference between Obama and Trump, I would’ve thought for sure we were going to see more CRA activity,” said Diane Katz, a senior research fellow at the conservative Heritage Foundation.
Federal Reserve gives U.S. banks a thumbs-up as all 23 lenders easily pass 2021 stress test –The Federal Reserve announced Thursday that the biggest U.S. banks could easily withstand a severe recession, a milestone for the once-beleaguered industry. The Fed, in releasing the results of its annual stress test, said all 23 institutions in the 2021 exam remained “well above” minimum required capital levels during a hypothetical economic downturn. Bank shares popped after the release; the KBW Bank Index rose 1.5% at 5 p.m. That scenario included a “severe global recession” that hits commercial real estate and corporate debt holders and peaks at 10.8% unemployment and a 55% drop in the stock market, the central bank said. While the industry would post $474 billion in losses, loss-cushioning capital would still be more than double the minimum required levels, the Fed said. If there was an anticlimactic note to this year’s stress test, it’s because the industry underwent a real-life version in the past year when the coronavirus pandemic struck, leading to widespread economic disruption. Thanks to help from lawmakers and the Fed itself, banks fared extremely well during the crisis, stockpiling capital for expected loan losses that mostly didn’t materialize. VIDEO04:19 Former FDIC Chair Sheila Bair on Fed stress test results Nevertheless, during the pandemic, banks had to undergo extra rounds of stress tests and had restrictions imposed on their ability to return capital to shareholders in the form of dividends and buybacks. Those will now be lifted, as the Fed has previously stated. “Over the past year, the Federal Reserve has run three stress tests with several different hypothetical recessions and all have confirmed that the banking system is strongly positioned to support the ongoing recovery,” Vice Chair for Supervision Randal K. Quarles said in a statement. Following the passage of this latest exam, the industry will regain a measure of autonomy it lost since the last crisis. After playing a key role in the 2008 financial crisis, banks were forced to undergo the industry exam, and had to ask regulators for permission to boost dividends and repurchase shares. Now, under something called the stress capital buffer framework, banks will gain flexibility in how they want to dole out dividends and buybacks. The stress capital buffer is a measure of capital each firm needs to carry based on the riskiness of their operations. The new regime was supposed to start last year, but the pandemic intervened. “So long as they stay above that stress capital buffer requirement and all their other requirements every quarter, a bank can technically do whatever it chooses to do with regards to buybacks and dividends,” Jefferies bank analyst Ken Usdin told CNBC this week. During a background call with reporters, senior Fed officials pushed back against the idea that the new regime resulted in a free-for-all. Banks are still subject to restrictions, and the Fed is confident that the stress capital buffer framework will protect their ability to support the economy during a downturn, they said.
Banks get green light to resume payouts after acing stress tests – – The nation’s largest banks weathered the worst of the coronavirus pandemic with plenty of capital, the Federal Reserve said Thursday upon release of stress-test results that demonstrated for the first time how balance sheets were affected by COVID-19.All 23 of the banks tested are cleared after June 30 to resume full dividend payments and share repurchases for the first time in a year. The Fed said each of the firms has sufficient capital levels to “continue lending to households and businesses during a severe recession.””Over the past year, the Federal Reserve has run three stress tests with several different hypothetical recessions and all have confirmed that the banking system is strongly positioned to support the ongoing recovery,” Fed Vice Chair for Supervision Randal Quarles said in a statement.
JPMorgan leads banks set to return $142 billion to shareholders – The biggest U.S. banks, led by JPMorgan Chase and Bank of America, are expected to pay out $142 billion in capital to shareholders after clearing this year’s stress tests. One year after the Federal Reserve capped stock buybacks and dividends, the central bank is poised to lift remaining COVID-19 restrictions for lenders that perform well on this year’s exams when results are announced Thursday.All six of the biggest U.S. banks – a group that also includes Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs Group – are expected to pass, paving the way for them to double total shareholder payouts in the next four quarters, according to data compiled by Bloomberg based on estimates provided by analysts at Barclays.
Morgan Stanley says no vaccine, no entry. – Morgan Stanley will require employees and visitors to be vaccinated against the coronavirus when they enter its New York offices next month.Starting July 12, employees, contingent workers, clients and visitors at Morgan Stanley’s buildings in New York City and Westchester County must attest that they are fully vaccinated, a person familiar with the matter said, citing a memo from Mandell Crawley, the bank’s chief human resources officer. Staff members who don’t will be required to work remotely, added the person, who was granted anonymity to discuss personnel-related matters.Although the requirement relies on an honor system for now rather than proof of vaccination, it will allow the bank to lift other pandemic protocols, such as face coverings and physical distancing. Some office spaces for Morgan Stanley’s institutional securities, investment and wealth management divisions already allow only those who have gotten their shots to work from their desks.Companies across America are grappling with the question of whether to ask employees about their vaccination status, or to require those returning to offices to be vaccinated. The Equal Employment Opportunity Commission said last month that both actions were legal. Still, some senior executives have worried about pushback from employees. This month, Goldman Sachs said its employees in the United States would have to report their vaccination status. Other big Wall Street banks, including JPMorgan Chase and Bank of America, are encouraging workers to disclose their vaccination status voluntarily. BlackRock, the asset manager, will allow only vaccinated staff to return to the office beginning next month,Bloomberg reported. Those firms, however, stopped short of also asking clients and visitors to attest to being vaccinated.The Financial Times reported earlier on Morgan Stanley’s vaccine requirements.
Mortgage execs begin lobbying FHFA to lift lender sales cap –The Community Home Lenders Association has called for suspension of federal limits on the loan volumes that Fannie Mae and Freddie Mac can purchase from individual lenders. The demand came on the same day that the Biden administration fired FHFA Director Mark Calabria and started the process of nominating his successor.
Biden is considering a one-month extension of the federal eviction freeze –The White House is considering extending by one month a federal moratorium on evictions scheduled to expire on June 30, in a bid to buy more time to distribute emergency housing aid, according to three people with knowledge of the situation.The freeze, instituted by the Centers for Disease Control and Prevention last fall to stave off an anticipated wave of evictions spurred by the economic downturn during the pandemic, hassignificantly limited the economic damage to low-income and working-class renters, according to local officials and tenants’ rights groups.But the moratorium was never considered more than a stopgap, and landlords have prevailed in several recent federal court caseschallenging the legal justification for the C.D.C.’s order – the public health risk posed by the dislocation of tenants during the pandemic.Local officials have been bracing for a rise in evictions as the federal moratorium and similar state and city orders expire this summer. In some cases, that scramble to assist tenants has dovetailed with the broader goal of improving affordability that is now a core part of the Democratic Party’s agenda.On Monday, Gov. Gavin Newsom of California announced that the state had set aside $5.2 billion from federal aid packages to pay off the back rent of any tenant who fell behind during the pandemic, an extraordinary move intended to wipe the slate clean for millions of renters in a state dealing with acute homelessness and a housing affordability crisis.President Biden’s team has been seeking ways to speed up the sluggish distribution of $21.5 billion in emergency rental assistance allocated in the American Recovery Act this spring.The group met throughout the weekend to discuss potential moves, including the idea of pushing back the deadline until the end of July, which has been under consideration for weeks, the officials said.But they have yet to sign off on an extension, in part, over concerns in the White House Counsel’s Office that leaving the freeze in place, even for a month, could expose the order to a ruling that could affect executive actions during future crises, one of the officials said.Administration lawyers are particularly concerned that the Supreme Court will strike down a stay in a lower court decision that ruled the moratorium unconstitutional.
The Biden administration plans to extend the federal moratorium on evictions for another month. – The Biden administration plans to extend the national moratorium on evictions, scheduled to expire on June 30, by one month to buy more time to distribute billions of dollars in federal pandemic housing aid, according to two officials with knowledge of the situation.The moratorium, instituted by the Centers for Disease Control and Prevention last September to prevent a wave of evictions spurred by the economic downturn associated with the coronavirus pandemic, has significantly limited the economic damage to renters and sharply reduced eviction filings.Congressional Democrats, local officials and tenant groups have been warning that the expiration of the moratorium at the end of the month, and the lapsing of similar state and local measures, might touch off a new – if somewhat less severe – eviction crisis.President Biden’s team decided to extend the moratorium by a month after an internal debate at the White House over the weekend. The step is one of a series of actions that the administration plans to take in the next several weeks, involving several federal agencies, the officials said.Other initiatives include a summit on housing affordability and evictions, to be held at the White House later this month; stepped-up coordination with local officials and legal aid organizations to minimize evictions after July 31; and new guidance from the Treasury Department meant to streamline the sluggish disbursement of the $21.5 billion in emergency aid included in the pandemic relief bill in the spring.White House officials, requesting anonymity because they were not authorized to discuss the issue publicly, said that the one-month extension, while influenced by concerns over a new wave of evictions, was prompted by the lag in vaccination rates in some parts of the country and by other factors that have extended the coronavirus crisis. Forty-four House Democrats wrote to Mr. Biden and the C.D.C. director, Dr. Rochelle P. Walensky, on Tuesday, urging them to put off allowing evictions to resume. “By extending the moratorium and incorporating these critical improvements to protect vulnerable renters, we can work to curtail the eviction crisis disproportionately impacting our communities of color,” the lawmakers wrote.
Ginnie Mae creates 40-year mortgage securitizations – Ginnie Mae is allowing lenders to securitize modified home loans with terms of up to 40 years as the Biden administration works to make more housing options available for struggling borrowers.The new pool type will allow Ginnie issuers to offer loan modifications that carry a lower monthly payment than a 30-year mortgage, while retaining the ability to securitize the loans for sale into the secondary market.Ginnie expects the new pools will be ready for use by October but their extended term modifications would still have to be authorized by the Federal Housing Administration and other agencies whose programs are the basis for the loans in Ginnie Mae pools.
Freddie Mac: Mortgage Serious Delinquency Rate decreased in May –Freddie Mac reported that the Single-Family serious delinquency rate in May was 2.01%, down from 2.15% in April. Freddie’s rate is up year-over-year from 0.81% in May 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 0.19%, down from 0.20% in April, and up more than double from 0.09% in May 2020.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases to 3.93%” –Note: This is as of June 13th. From the MBA: Share of Mortgage Loans in Forbearance Decreases to 3.93%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 11 basis points from 4.04% of servicers’ portfolio volume in the prior week to 3.93% as of June 13, 2021. According to MBA’s estimate, 2 million homeowners are in forbearance plans.The share of Fannie Mae and Freddie Mac loans in forbearance decreased 4 basis points to 2.05%. Ginnie Mae loans in forbearance decreased 7 basis points to 5.15%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 35 basis points to 7.98%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 16 basis points to 4.05%, and the percentage of loans in forbearance for depository servicers declined 3 basis points to 4.16%.”The share of loans in forbearance declined for the 16th straight week, with declines across almost every loan category,” “New forbearance requests, at 4 basis points, remained at an extremely low level.More than 44 percent of borrowers who exited this week used a deferral plan, highlighting the importance of this option.” The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.04%.” Note: These deferral plans are very popular. Basically when the homeowner exits forbearance, they just go back to making their regular monthly payments, they are not charged interest on the missed payments, and the unpaid balanced is deferred until the end of the mortgage.
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 June 22nd. From Andy Walden at Black Knight: Common, Marginal, Mid-Month Increase of Number of Forbearance Plans This Week In what’s become a common trend of marginal mid-month increases, the number of active forbearance plans ticked up slightly from last week.According to the weekly snapshot of Black Knight’s McDash Flash daily loan-level performance dataset, 2.06 million homeowners – representing 3.9% of mortgaged properties – remain in COVID-19 related forbearance plans.While the total number of plans rose by 1,000 since last Tuesday, the population is still down 6% from the same time last month. That’s as compared to last week’s 5.4% monthly rate of improvement.A 10,000 decline in the number of active GSE forbearance plans and a 7,000 drop in FHA/VA plans were both more than offset by a rise of 18,000 among portfolio and privately held mortgages.Meanwhile, starts edged lower this week and were 7% below their previous 4-week average. Likewise, removals hit their lowest level in five weeks and extension activity was down as well.That said, more than 300K plans are still scheduled for quarterly reviews between now and next Wednesday, which could lead to more exits. We should all be expecting more activity one way or another as we near the 4th of July.
Black Knight: National Mortgage Delinquency Rate Increased in May – Note: At the beginning of the pandemic, the delinquency rate increased sharply (see table below). Loans in forbearance are counted as delinquent in this survey, but those loans are not reported as delinquent to the credit bureaus. From Black Knight: Black Knight’s First Look at May 2021 Mortgage Data
The national delinquency rate rose to 4.73% from 4.66% in April, driven largely by the three-day Memorial Day weekend foreshortening available payment windows
Similar occurrences are rare; the last time was in May 2004, at which time mortgage delinquencies jumped by more than 15% in a single month; this month saw a 1.5% increase
Early-stage delinquencies (those 30 or 60 days past due) rose by 110,200 in May, while serious delinquencies (90 or more days but not yet in foreclosure) improved for the ninth consecutive month
Despite this improvement, nearly 1.7 million first-lien mortgages remain seriously delinquent, 1.26 million more than there were prior to the pandemic
Foreclosure inventory hit yet another new record low as both moratoriums and borrower forbearance plan participation continue to limit activity, keeping foreclosure starts near record lows as well
Mortgage prepayments fell to their lowest level in more than a year, driven by falling refinance activity as well as purchase-related headwinds
According to Black Knight’s First Look report, the percent of loans delinquent increased 1.5% in May compared to April, and decreased 39% year-over-year. The percent of loans in the foreclosure process decreased 2.5% in May and were down 26% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.73% in May, up from 4.66% in April. The percent of loans in the foreclosure process decreased in May to 0.28%, from 0.29% in April. The number of delinquent properties, but not in foreclosure, is down 1,612,000 properties year-over-year, and the number of properties in the foreclosure process is down 52,000 properties year-over-year.
NAR: Existing-Home Sales Decreased to 5.80 million in May –From the NAR: Existing-Home Sales Experience Slight Skid of 0.9% in May: Existing-home sales decreased for a fourth straight month in May, according to the National Association of Realtors. Only one major U.S. region recorded a month-over-month increase, while the other three regions saw sales decline. However, each of the four areas again registered double-digit year-over-year gains.Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020)….Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.Sales in May (5.80 million SAAR) were down 0.9% from last month, and were 44.6% above the May 2020 sales rate.The second graph shows nationwide inventory for existing homes.According to the NAR, inventory increased to 1.23 million in May from 1.15 million in April. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.Inventory was down 20.6% year-over-year in May compared to May 2020.Months of supply increased to 2.5 months in May from 2.4 months in April.This was slightly above the consensus forecast. .
Existing-Home Sales: Properties Typically Sold in 17 Days – This morning’s release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.8 million units from the previous month’s 5.85 million. The Investing.com consensus was for 5.72 million. The latest number represents a 0.9% decrease from the previous month and its fourth in a row.Here is an excerpt from today’s report from the National Association of Realtors. Existing-home sales decreased for a fourth straight month in May, according to the National Association of Realtors. Only one major U.S. region recorded a month-over-month increase, while the other three regions saw sales decline. However, each of the four areas again registered double-digit year-over-year gains.Total existing-home sales,1 https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020).“Home sales fell moderately in May and are now approaching pre-pandemic activity,” said Lawrence Yun, NAR’s chief economist. “Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.“The market’s outlook, however, is encouraging,” Yun continued. “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.” [Full Report]For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed’s FRED repository and is now only available for the last twelve months. Now let’s examine the data with a simple population adjustment. The Census Bureau’s mid-month population estimates show a 19.2% increase in the US population since the turn of the century. The snapshot below is an overlay of the NAR’s annualized estimates with a population-adjusted version.
Comments on May Existing Home Sales – McBride – Earlier: NAR: Existing-Home Sales Decreased to 5.80 million in May A few key points: 1) Existing home sales are getting close to pre-pandemic levels. Although seasonally adjusted (SA) sales for May were the highest since 2006, sales Not Seasonally Adjusted (NSA) in May 2021 were below the sales for May in 2017, 2018 and 2019. Some of the increase over the previous ten months was probably related to record low mortgage rates, a move away from multi-family rentals, strong second home buying (to escape the high-density cities), a strong stock market and favorable demographics. Also, the delay in the 2020 buying season pushed the seasonally adjusted number to very high levels over the winter. This means there are going to be some difficult comparisons in the second half of 2021! 2) Inventory is very low, and was down 20.6% year-over-year (YoY) in May. Also, as housing economist Tom Lawler has noted, the local MLS data shows even a larger decline in active inventory (the NAR appears to include some pending sales in inventory). It seems likely that active inventory is down close to 50% year-over-year.Months-of-supply at 2.5 months is still very low, but above the record low of 1.9 months set in December 2020 and January 2021. Inventory will be important to watch in 2021, see: Some thoughts on Housing Inventory3) As usual, housing economist Tom Lawler’s forecast was closer to the NAR report than the Consensus. The NAR reported 5.80 million SAAR, Lawler estimated the NAR would report 5.78 million SAAR, and the consensus was 5.72 million SAAR.This graph shows existing home sales by month for 2020 and 2021.The year-over-year comparison will be easy in June, and then difficult in the second half of the year. The second graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), since 2005.Sales NSA in May (528,000) were 41.9% above sales in May 2020 (372,000).Although sales were up sharply from May 2020, this was below the sales NSA for May in 2017, 2018 and 2019.
New Home Sales Decrease to 769,000 Annual Rate in May –The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 769 thousand. The previous three months were revised down sharply, combined. Sales of new singleâ€family houses in May 2021 were at a seasonally adjusted annual rate of 769,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.9 percent below the revised April rate of 817,000, but is 9.2 percent above the May 2020 estimate of 704,000.The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.This was the highest sales rate for May since 2007.The second graph shows New Home Months of Supply.The months of supply increased in May to 5.1 months from 4.6 months in April.The all time record high was 12.1 months of supply in January 2009. The all time record low was 3.5 months, most recently in October 2020.This is in the normal range (about 4 to 6 months supply is normal). “The seasonallyâ€adjusted estimate of new houses for sale at the end of May was 330,000. This represents a supply of 5.1 months at the current sales rate.” Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed.The third graph shows the three categories of inventory starting in 1973.The inventory of completed homes for sale is just above the record low, but the combined total of completed and under construction is close to normal.The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).In May 2021 (red column), 69 thousand new homes were sold (NSA). Last year, 64 thousand homes were sold in May.The all time high for May was 120 thousand in 2005, and the all time low for May was 26 thousand in 2010.This was well below expectations, and sales in the three previous months were revised down sharply, combined.
US New Home Sales Unexpectedly Plunged In May To Lowest In A Year –Following yesterday’s slightly better than expected existing home sales (which was still a 4th straight monthly decline), analysts expected May new home sales to rebound very modestly from the 5.9% plunge in April… they were wildly wrong! New home sales plunged 5.9% MoM in May and April’s crash was revised even lower (-7.8% MoM)… Graphics Source: Bloomberg This unexpected drop pushed the SAAR sales print to 769k (against expectations of 865k) – the lowest since May 2020 The median new home price is up 18.1% YoY to $374,400 (average selling price at $430,600) and is being blamed for the drop in sales as affordability collapses.None of this should come as a surprise given the total collapse in homebuyer sentiment (and when did homebuilder sentiment actually count for anything?)…With The Fed ‘talking about, talking about’ tapering and raising rates (at some point in the future), mortgage rates are already starting to rise…
A few Comments on May New Home Sales – McBride- New home sales for May were reported at 769,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down significantly. This was well below consensus expectations for May, but still the highest sales rate for May since 2007. However, sales were in line with home builder about “limiting sales” in April and May mostly due to high material costs.Still, sales have been strong for the last year. Clearly low mortgages rates, low existing home supply, and favorable demographics have boosted sales. A surging stock market has probably helped new home sales too. Earlier: New Home Sales Decrease to 769,000 Annual Rate in May.This graph shows new home sales for 2020 and 2021 by month (Seasonally Adjusted Annual Rate).The year-over-year comparisons were easy in the first half of 2021 – especially in March and April. However, sales will likely be down year-over-year in the 2nd half of 2021 (maybe June) – since the selling season was delayed in 2020.And on inventory: note that completed inventory (3rd graph in previous post) is near record lows, but inventory under construction is closer to normal.This graph shows the months of supply by stage of construction.The inventory of completed homes for sale was at 36 thousand in May, just above the record low of 33 thousand in April 2021. That is about 0.6 months of completed supply (just above the record low).The inventory of new homes under construction, and not started, is at 4.6 months – a normal level.
New home sales edition: the remedy for high prices is . . . high prices –New home sales confirmed this morning what we learned from existing home sales yesterday, and from housing permits and starts earlier in the month: in terms of new construction and sales, the housing market has peaked.To the numbers…. New single family home sales declined -48,000 on a seasonally adjusted basis to 769,000 annually, the lowest level in 11 months (blue in the graph below):New home sales have declined by nearly 1/4 (-22.6% to be more precise) off their January peak. They thus confirm the decline shown in the much less noisy single family permits series (red).Median sales prices, however, continue to boom, up 18.1% YoY (blue) vs. 23.6% for existing homes (red):Comparing sales with inventory (gold in the graph below), we can see that sales peak and bottom first (shown YoY in the graph below, but the same is true of the absolute values):Inventory of new homes for sale bottomed last August and is now up 7.1% YoY. As I said yesterday, the remedy for high prices is . . . high prices. I expect sales to continue to decline until the price situation is addressed.
Homebuilder Comments in Mid-June: “Interest lists are shrinking slightly, Traffic down” –Some twitter comments from Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting:
Here’s a housing Thread to chew on over weekend. Mid-June update from 100+home builders across country. 1) rumblings of price ceiling. 2) slightly shrinking pool of qualified buyers. 3) some home releases not selling out immediately. 4) normal summer slowing as vacations take priority.
#Austin builder: “Some interest lists are shrinking & others are not. Seeing buyers who are no longer able or willing to afford the monthly payment. Definitely seeing attrition here. Frustration that prices continued going up without an opportunity to purchase.”
#Houston builder: “Interest lists are shrinking slightly. Likely just too much price pressure. It’s out of hand. Some buyers are unable or unwilling to afford the monthly payments now, but only what we see from the slight decrease in contracts. Price shock is certainly a factor.”
#WestPalmBeach builder: “Traffic slowed. Not sure yet if market slowing or fact that we don’t have anything to sell. Probably bit of both. Takes more than a day or two to sell a unit. It was selling same day as release before, now pricing high enough that some people saying no.”
#Chicago builder: “Traffic slowed, ~50% of where it was in Q1 and beginning of Q2. Feels like seasonality, not sure. Last raised prices 1st week of June after 3 increases in May. Plan is to try & maintain from here. Felt some pushback & hesitancy.”
#Cleveland builder: “Traffic has slowed. Many people now taking vacations for first time in a long time. People pushing back from massive price increases we’ve had.”
#Indianapolis builder: “Traffic down somewhat from May, which was already down from prior months. Quality still good. Seeing some resistance overall to higher prices. Sales in June lightest we’ve seen in almost a year. Part of that is having no spec inventory available.”
#Phoenix builder: “Traffic down. Could be due to seasonality, locations opening up, & people getting early starts to summer. Sales paces could be higher if we let them & continuing to push prices. Last week we received price increases from 6 different trades.”
#LasVegas builder: “Traffic still busy, no real drop. Sales still super healthy, although it seems going deeper into priority lists to sell on the higher end (some people have either taken themselves out of the market or have purchased elsewhere). Prices still rising.” END
Lumber Prices – Menzie Chinn – A wild ride for futures means … Source: barchart.com, accessed 22 June 21. Do lumber prices (as measured by the PPI) move as predicted by the nearby month futures? Here’s a plot. Figure 1: PPI for lumber and softwood (blue, left scale), and nearby month futures, lagged one month (brown, right scale). Source: BLS via FRED, and ino.com.A one percent futures basis does not necessarily imply a one percent decline in lumber prices (as would be implied in a risk-neutral efficient markets setting). Mehrotra and Carter (2017) find that over the 1995-2013 period, at two months horizon, a one percentage point basis implies a 0.55 percentage point decline. If spot and futures prices move in tandem, this implies about a 7% decline in the June PPI, and around 20% decline in the July, bringing the lumber PPI back to around where it was in April. At least, that’s what the futures are signalling.
Household Debt And Credit Report: Up $85B in Q1 2021 –Household debt increased by $85B (0.6%) to $14.64 trillion in Q1 2021. There were increases in mortgage balances, auto, and student loans, while credit card balances declined. The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit . The report shows that total household debt increased by $85 billion (0.6%) to $14.64 trillion in the first quarter of 2021. The total debt balance is now $344 billion higher than the year prior. While mortgage, auto loan, and student loan balances have continued to increase, credit card balances have substantially decreased. The Report is based on data from the New York Fed’s Consumer Credit Panel, a nationally representative random sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data.Read more As a result of the housing and mortgage crisis of the Great Recession, economists have been paying more attention to the liabilities portion of household balance sheets. Among the New York Federal Reserve Board’s many economic reports is the Household Debt and Credit report, which is released quarterly with data going back to 2003. Data is collected through the NY Fed’s Consumer Credit Panel which is constructed from a nationally representative random sample of Equifax credit report data resulting in a sample size of over 40 million individuals quarterly. Here is some background on the report from the NY Fed: The large increases in consumer debt and defaults – of mortgage debt in particular – during the Great Recession highlighted the importance of understanding the liabilities reflected on household balance sheets. To that end, one of the CMD’s large data collection projects is the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample of Equifax credit report data. Analysis of this data set is regularly reported in the CMD’s Quarterly Report on Household Debt and Credit. The data set can be used to calculate national and regional aggregate measures of individual- and household-level credit balances, and delinquencies by product type. The Consumer Credit Panel also provides new insights into the extent and nature of heterogeneity of debt and delinquencies across individuals and households. The chart below shows the total debt balance nationwide by composition in trillions of dollars. The current total is $14.64T, well exceeding the 2008 peak.
AIA: “Architecture billings continue historic rebound” in May – Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Architecture billings continue historic rebound: Demand for design services from U.S. architecture firms continues to grow at a vigorous pace, according to a new report today from The American Institute of Architects (AIA).AIA’s Architecture Billings Index (ABI) score for May rose to 58.5 compared to 57.9 in April (any score above 50 indicates an increase in billings). May’s ABI score is one of the highest in the index’s 25-year history. During May, the new design contracts score reached its second consecutive record high with a score of 63.2, while new project inquiries also recorded a near-record high score at 69.2.”Despite ballooning costs for construction materials and delivery delays, design activity is roaring back as more and more places reopen,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “However, concern over rising inflation and ongoing supply chain disruptions, as well as emerging labor shortages, could dampen the emerging construction recovery.”…
Regional averages: Midwest (63.4); South (59.0); West (57.4); Northeast (54.2)
Sector index breakdown: commercial/industrial (60.6); multi-family residential (59.5); mixed practice (57.9); institutional (57.1)
This graph shows the Architecture Billings Index since 1996. The index was at 58.5 in May, up from 57.9 in April. Anything above 50 indicates expansion in demand for architects’ services.Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.This index had been below 50 for eleven consecutive months, but has been solidly positive for the last foure months. The eleven months of decline represented a significant decrease in design services, and suggests a decline in CRE investment through most of 2021 (This usually leads CRE investment by 9 to 12 months), however we might see a pickup in CRE investment towards the end of the 2021 and into 2022.
Hotels: Occupancy Rate Down 10% Compared to Same Week in 2019 – Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic. So STR is comparing to the same week in 2019. The occupancy rate is down 9.9% compared to the same week in 2019. Leisure (weekend) occupancy has recovered, but weekday (more business) is still down double digits. From CoStar: STR: US Hotel Occupancy Reaches Highest Level in More Than 19 Weeks: U.S. weekly hotel occupancy hit its highest level in 85 weeks, according to STR’s latest data through June 19. June 13-19, 2021 (percentage change from comparable week in 2019*):
Occupancy: 68.0% (-9.9%)
Average daily rate (ADR): US$128.90 (-4.4%)
Revenue per available room (RevPAR): US$87.62 (-13.8%)
In addition to occupancy reaching its highest point since the week ending November 9, 2019, ADR and RevPAR were pandemic-era highs.
The following 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, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020). Occupancy is now above the horrible 2009 levels and weekend occupancy (leisure) has been solid. With solid leisure travel, the next two months should have decent occupancy – but it is uncertain what will happen in the Fall with business travel.
Personal Income decreased 2.0% in May, Spending increased Slightly –The BEA released the Personal Income and Outlays report for May: Personal income decreased $414.3 billion (2.0 percent) in May according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $436.3 billion (2.3 percent) and personal consumption expenditures (PCE) increased $2.9 billion (less than 0.1 percent). Real DPI decreased 2.8 percent in May and Real PCE decreased 0.4 percent; goods decreased 2.0 percent and services increased 0.4 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.5 percent.The May PCE price index increased 3.9 percent year-over-year and the May PCE price index, excluding food and energy, increased 3.4 percent year-over-year.The following graph shows real Personal Consumption Expenditures (PCE) through May 2021 (2012 dollars). The dashed red lines are the quarterly levels for real PCE.Personal income was above expectations, and the increase in PCE was below expectations.Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 16.2% annual rate in Q2 2021. (using the mid-month method, PCE was increasing at 18.2%). However, this reflects the impact of the American Rescue Plan in April and May, and overall Q2 growth will be lower than those estimates.
Real Personal Income less Transfer Payments Above Previous Peak — Government transfer payments decreased in May compared to April, but were still almost $1.0 trillion (on SAAR basis) above the February 2020 level (pre-pandemic) Note: Seasonal adjustment doesn’t make sense with one time payments, but that is how the data is presented. Most of the increase in transfer payments – compared to the levels prior to the crisis – is from unemployment insurance and “other” (includes direct payments). This table shows the amount of unemployment insurance and “Other” transfer payments since February 2020 (pre-crisis level). The increase in “Other” was mostly due to parts of the relief acts including direct payments. There was a large increase in “Other” in March due to the American Rescue Plan Act.Note: Not in the table below, but Social Security payments haven’t increased significantly since the pre-recession levels (from $1,065 billion SAAR in Jan 2020 to $1,111 billion SAAR in May 2021).A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments. This graph shows real personal income less transfer payments since 1990.This measure of economic activity increased 0.4% in May, compared to April, and was up 0.8% compared to February 2020 (previous peak).This is the first of the key NBER measures – GDP, Employment, Industrial Production, Real Personal Income less Transfer Payments – that is above pre-recession levels. GDP will be above pre-recession levels in Q2.
Real Disposable Income Per Capita in May Down 2.3% MoM – With the release of this morning’s report on May’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 -2.34% month-over-month change in disposable income is cut to -2.77% when we adjust for inflation. This is an increase from last month’s -14.62% nominal and -15.16% real increases. The year-over-year metrics are 1.10% nominal and -2.72% 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 COVID pandemic stimulus measures, major spikes can be seen in April 2020, January 2021 (a December 2020 payment), and March 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 COVID 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. Do you recall what you were doing on New Year’s Eve at the turn of the millennium? Nominal disposable income is up 117% since then. But the real purchasing power of those dollars is up 46.5%.
Weekly Gasoline Prices: WTIC Up 54% Since January –As of June 21, the price of Regular and Premium was down a penny and unchanged, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $4.23 and Louisiana has the cheapest at $2.70. The WTIC end-of-day spot price closed at 73.12, up 3.2% from last week and up 54% from the beginning of the year. How far are we from the interim high prices of 2011 and the all-time highs of 2008? Here’s a visual answer. The next chart is a monthly chart overlay of West Texas Light Crude, Brent Crude, and unleaded gasoline end-of-day spot prices (GASO) through June 21. In this monthly chart, the WTIC end-of-day spot price closed at 73.12, up 3.2% from last week and up 54% from the beginning of the year.
June Vehicle Sales Forecast: Supply Issues Pull Down Sales Again – From WardsAuto: Withering Supply Dragging Down U.S. Light-Vehicle Sales Second Straight Month in June(pay content) This graph shows actual sales from the BEA (Blue), and Wards forecast for June (Red). The Wards forecast of 15.8 million SAAR, would be down 7% from last month, and up 21% from a year ago (sales collapsed at beginning of pandemic).
1 month, 1 million-plus containers at Port of LA – a record — The Port of Los Angeles announced Tuesday that it had earned the distinction as the first port in the Western Hemisphere to handle more than 1 million twenty-foot equivalent units (TEUs) in a single month.May was the busiest month in the 114-year history of the United States’ busiest port. The Port of LA moved a total of 1,012,248 TEUs, up 74% from May 2020, when COVID-19 had stalled global trade. The Port of Long Beach and South Carolina Ports Authority last week also reported record Mays. And the Georgia Ports Authority announced it had had 10 consecutive months of growth and turned in its second-busiest month ever. One “most” figure that sticks out in the Port of LA’s May numbers: “Empty containers climbed to 366,448 TEUs, a jump of 114% compared to last year due to the heavy demand in Asia. It was the most empties ever processed in a month at the port,” Tuesday’s announcement said. At the neighboring Port of Long Beach, the volume of empty containers in May was up 80.7% year-over-year to 327,135 TEUs.The Port of LA also handled the most imports ever in a single month in May. Loaded imports, up 75% year-over-year, totaled 535,714 TEUs, surpassing the August 2020 record of 516,286 TEUs. May loaded exports, which have been running flat, were up 5.3% year-over-year to 109,886 TEUs.
U.S. durable goods orders rise 2.3% in May – – Orders to U.S. factories for big-ticket manufactured goods rose for the 12th time in the last 13 months in May, pulled up by surgin demand for civilian aircraft.The Commerce Department said Thursday that orders for durable goods – meant to last at least three years – climbed 2.3% in May, reversing a 0.8% drop in April and coming despite a backlogged supply chain and a shortage of workers. Orders for aircraft shot up 27.4% last month after climbing 31.5% in April. Excluding transportation orders – which can bounce wildly from month to month – durable goods orders rose 0.3% last month, down from a 1.7% gain in April.A category that tracks business investment – orders for nondefense capital goods excluding aircraft – dipped 0.1% in May after rising 2.7% in April.American industry is thriving despite problems with backlogged supply chains and a shortage of workers. The Federal Reserve reported earlier this month that factory production climbed 0.9% on surging output of cars, trucks and auto parts. The Institute for Supply Management, an association of purchasing managers, said that its manufacturing index signalled that factories were growing in May for the 12th straight month.
Richmond Fed Manufacturing: Strength in May – Fifth District manufacturing activity showed continued growth in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose to 18 from 17 in April 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 strengthened in May, according to the most recent survey from the Richmond Fed. The composite index inched up from 17 in April to 18 in May, as all three component indexes – shipments, new orders, and employment – reflected growth. A majority of firms reported lengthening vendor lead times, as this index reached a record high, along with the backlog of orders index. Meanwhile, the index for raw materials inventories reached a record low. Overall, manufacturers reported improved business conditions. Link to Report Here is a somewhat closer look at the index since the turn of the century.
Kansas City Fed Survey: Activity Remained Strong in June – The latest index came in at 27, up 1 from last month’s 26, indicating expansion in June. The future outlook increased to 37 this month from 33. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.Quarterly data for this indicator dates back to 1995, but monthly data is only available from 2001.Here is an excerpt from the latest report:Tenth District manufacturing activity remained strong, and expectations for future activity increased to a survey record high (Chart 1, Tables 1 & 2). The index of prices paid for raw materials and prices received for finished goods compared with a month ago remained very high. Price indexes vs. a year ago posted record highs again in June. Moving forward, district firms expected materials prices and finished goods prices to continue to increase over the next six months. [Full report here] Here is a snapshot of the complete Kansas City Fed Manufacturing Survey. The next chart is an overlay of the general and future outlook indexes – the outlook six months ahead. Future factory indexes increased to 37.
US Services Sector Unexpectedly Plunges In June As Manufacturing Survey Hits Record HighDespite the serial disappointment in hard economic data, ‘soft’ survey data has continued to soar in 2021 but analysts expected today’s Markit PMIs to retrace some of those gains. However, reality was notably different with Manufacturing jumping more than expected as Services plunged…
- Markit US Manufacturing rose to 62.6 (from 62.1) beating expectations of 61.5.
- Markit US Services plunged to 64.8 (from 70.4) hugely missing expectations of 70.0
That is the lowest reading since March for Services and highest reading ever for Manufacturing.Employment issues remained prevalent during June, as numerous panellists mentioned difficulties finding suitably trained candidates for current vacancies.Price pressures also remained elevated in June. The rate of input price inflation softened slightly but was the second-fastest on record. Manufacturers continued to note rapid increases in raw material and fuel costs, whilst service providers highlighted higher wage bills to attract workers plus greater transportation fees and fuel costs.US continues to be the world’s “strongest” economy based on these soft surveys, even as the US Composite PMI dropped to 63.9…
Weekly Initial Unemployment Claims decrease to 411,000 –The DOL reported: In the week ending June 19, the advance figure for seasonally adjusted initial claims was 411,000, a decrease of 7,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 412,000 to 418,000. The 4-week moving average was 397,750, an increase of 1,500 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 395,000 to 396,250. This does not include the 104,682 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 97,762 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 increased to 397,750 The previous week was revised up.Regular state continued claims decreased to 3,390,000 (SA) from 3,534,000 (SA) the previous week.Note: There are an additional 5,950,167 receiving Pandemic Unemployment Assistance (PUA) that decreased from 6,125,524 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 5,273,180 receiving Pandemic Emergency Unemployment Compensation (PEUC) up from 5,165,249.Weekly claims were higher than the consensus forecast.
“I’m Not Going Back To Work”: Indiana Residents Sue After Governor Nixes Unemployment Benefits – A group of Indiana residents have filed a lawsuit against state officials, challenging the state’s decision to end federal unemployment benefits by the end of the week.The lawsuit, filed last Monday, seeks to preserve what was supposed to be temporary pandemic safety net of $300 per week on top of other state or federal benefits, after indiana Gov. Eric Holcomb announced last month that the state would pull out of the federal program before it’s official September end date in order to motivate unemployed people to help fill the state’s more than 116,000 open jobs.Holcomb is joined by around two dozen mostly red states.”It’s not black and white,” said Sharon Singer-Mann in a statement to IndyStar. “Everybody’s story is not the same. I’m not going back to work, not at the risk of my son’s life.””We’ll have to decide which utility bill to pay, which household items to let go of,” she added (despite the 116,000 open jobs), “… We’ll have to change what kind of shampoo we use, what kind of toilet paper we use.”Without the federal pandemic unemployment benefits, many Indiana residents, like Singer-Mann, say they would have had to choose between finding a job and taking care of their children, face evictions, forgo medical care and grapple with devastating financial setbacks that could derail their lives. Those stories from residents are outlined in a lawsuit filed against Indiana state officials Monday in Marion County Superior Court challenging the state’s decision to end federal benefits by the end of this week. -IndyStar
The pandemic affected mental health and college plans for U.S. high schoolers. Nearly 80 percent of American high school juniors and seniors say the coronavirus pandemic has affected their plans after graduation, and 72 percent of 13- to 19-year-olds have struggled with their mental health, a new survey shows.The survey, conducted by America’s Promise Alliance, a nonprofit group, found that 58 percent of teenagers reported learning entirely or mostly online in the 2020-21 school year, and 22 percent said that they had learned about half online and half in person. Nineteen percent said they had learned mostly through in-person instruction.The results are from a nationally representative survey of 2,400 high school students conducted in March and April.Among those who said the pandemic had affected their plans after high school, one-third said they would attend college closer to home; one-quarter said they would attend a two-year college instead of a four-year institution; 17 percent said they would attend college remotely rather than in person; and 16 percent said they would put off attending college. Seven percent said they were no longer planning to attend college.Nearly half the respondents who changed their plans said they were doing so because of financial pressure, suggesting that the pandemic will probably widen educational inequalities among young adults.Given the extraordinary swell of racial-justice activism over the past year, the survey also asked students about how their schools had handled race issues. Two-thirds reported that “the history of racism” had been taught at their schools. But A sian, Black, Latino and multiracial students were less likely than white students to say that the curriculum represented their own “racial and ethnic background.”
Medicaid enrollment jumped during the pandemic, a new report says. – Medicaid enrollment rose sharply during the coronavirus pandemic, with nearly 10 million Americans joining the public health coverage program for the poor through January, agovernment report released Monday shows.Eighty million people – more than ever before in the program’s history – now carry Medicaid coverage, for which states and the federal government share the cost. The new figures demonstrate the program’s increasingly important role not just as a safety net, but as a pillar of American health coverage, with fully a quarter of the population covered under it.”The purpose of Medicaid is for times like this, when there is an economic downturn” said Peggah Khorrami, a researcher with Harvard Chan T.H. School of Public Health, who has studied the program’s enrollment increases during the pandemic. “As people are losing jobs, that’s where Medicaid comes in and we get people insured that way.”The Affordable Care Act transformed Medicaid from a targeted health care benefit meant to help certain groups of people – expectant mothers, for example, and those with disabilities – to a much wider program that provides largely free coverage to most people below a certain income threshold. The exception is in 12 states, mostly in the South, that have resisted expanding Medicaid under the health law to cover all adults with income up to 138 percent of the poverty level, which would be $17,774 for an individual this year.The expansion of Medicaid in most states since the bulk of the A.C.A. took effect in 2014, though, has proved important during the pandemic, creating a public source of coverage for the newly unemployed that did not exist a decade ago. Adult enrollment in Medicaid grew twice as quickly as child enrollment last year, suggesting widespread job loss related to the pandemic created a huge group of newly eligible adults.
Chinese port difficulties amid a Covid outbreak further snarl global trade. – Dozens of huge container ships have been forced to drop anchor and wait. Freight rates have surged. Stores in the United States and Europe find themselves with understocked shelves, higher prices or both.The blockage of the Suez Canal in March? No, there is another disruption in global shipping. This time, the problem lies in Shenzhen, a metropolis adjacent to Hong Kong in southeastern China.Global shipping has been disrupted by the pandemic for months, as Western demand for goods made in Asia has outstripped the ability of exporters to get their containers onto outbound vessels. But the latest problem in Shenzhen, the world’s third-largest container port after Shanghai and Singapore, is making the difficulties even worse.The shipping delays are related to the Chinese government’s stringent response to a recent outbreak of the virus. Shenzhen, with a population of more than 12 million, has had fewer than two dozen locally transmitted coronavirus cases; city health officials have linked them to the Alpha variant, which was first identified in Britain.Shenzhen has responded by ordering five rounds of coronavirus testing of all 230,000 people who live anywhere near the Yantian container port, where the first case was detected on May 21. All further contact between port employees and sailors has been banned. The city has required port employees to live in 216 hastily erected, prefabricated buildings at the docks instead of going home to their families every day.The port’s capacity to handle containers plummeted early this month. It was still running at 30 percent below capacity last week, the port announced, and state-controlled media said on Monday that full recovery might require the rest of June.”A few weeks into a very substantial port congestion in Yantian caused by a Covid-19 outbreak, supply chain disruptions continue to be very present in global trade,” Maersk, the world’s largest container shipping line, said in a statement on Thursday.Long lines of container ships awaiting cargo bound for North America, Europe and elsewhere have had to anchor off Shenzhen and Hong Kong as captains now wait as long as 16 days to dock at Yantian. Small vessels mounted with their own cranes have been ferrying many containers straight from riverfront factory docks in the Pearl River Delta to container ships near Hong Kong, as exporters try to bypass delays at Yantian. Tim Huxley, the chairman of Mandarin Shipping, predicted that sorting out all of the shipping delays at Yantian and elsewhere could take the rest of this year.
Alcohol will be banned at the Tokyo Olympics. – Organizers of the Tokyo Olympics said on Wednesday that they would ban alcohol at the Games, bowing to an outcry from a Japanese public that is deeply skeptical of hosting the event andweary of months of pandemic restrictions. Two days earlier, the organizing committee said that it was considering sales of alcohol during the Games, which are scheduled to begin in Tokyo on July 23. That prompted outrage from many Japanese, with Tokyo and several other areas just emerging from a prolonged state of emergency during which restaurants were prohibited from selling alcohol as a virus control measure. On Wednesday, the president of Tokyo 2020, Seiko Hashimoto, said that the committee had consulted with experts and decided to ban the sale and consumption of alcohol at Olympic venues “to prevent expansion of infection.” Asahi Breweries, an official partner and one of the largest beer and spirits producers in Japan, endorsed the ban. “We totally understand the decision by the committee,” said Takayuki Tanaka, a company spokesman. “We will keep supporting the Games’ success.” The alcohol ban is the latest sign that the Tokyo Games, postponed from 2020 because of the pandemic, will be unlike any other. This week, organizers said that crowds would be limited to 50 percent of a venue’s capacity, up to 10,000 people. Only spectators who live in Japan will be permitted to attend, with the organizers having decided back in March not to allow fans to travel to the Games from overseas. Organizers are still determining what the crowd guidelines will be for some outdoor events such as marathons and whether viewing events that could attract large groups should be allowed in certain parts of the country. After a sharp spike in May, coronavirus cases in Japan are receding, with daily totals of new cases nationwide having fallen by 38 percent over the past two weeks. A sluggish vaccination drive is starting to pick up pace, but with only 8 percent of the country fully vaccinated, according to New York Times data, the Olympic events are set to take place in front of crowds that are mostly not immunized.
An outbreak in Sydney prompts a travel ban and a return to mask rules. -A new Covid cluster in Sydney has grown to 49 cases, prompting a travel ban for the five million residents of Australia’s largest city and a return to mandatory mask-wearing, and infecting at least one state government minister.Health officials in the state of New South Wales have been scrambling for more than a week to contain the outbreak, which began when a Sydney airport limousine driver tested positive for the highly contagious Delta variant. He was not vaccinated, in violation of public health guidelines, and is believed to have become infected while transporting a foreign airline crew.As the police continue to investigate whether the driver and his employer should face criminal penalties or fines for not complying with Covid rules, Sydney has been forced to hunker down. Residents are being asked to work from home, where gatherings are now limited to five people.The travel restrictions began late on Wednesday. Compounded by state border closures banning entry for anyone from Sydney, the stay-at-home orders have arrived at the start of winter break for schools, forcing tens of thousands of families to cancel travel plans.Australia has all but eliminated community transmission of the coronavirus thanks to border closures, extensive contact-tracing and a practice of swiftly imposing local lockdowns for even small numbers of cases. The current outbreak in Sydney follows several months of near-zero Covid community transmission.A stricter lockdown in the city has been avoided so far, officials said, because contact tracers have identified the source of nearly every case. Only three infections are still being investigated.But with some of the cases being linked back to fleeting contact, with just a few seconds of shared air in a store or cafe, officials said they expect more cases and challenges to arise.
Credit Suisse report reveals vast increase in global wealth inequality amid pandemic in 2020 – The Research Institute of Credit Suisse published its “Global Wealth Report 2021” on Tuesday, showing a substantial worldwide increase in wealth inequality during 2020. The report states, “The repercussions of the COVID-19 pandemic led to widespread rises in wealth inequality in 2020.” The report admits that this growth in the wealth gap – amid the devastating impact of the public health and economic crisis of 2020 – is rooted in the “nature of the policy response” by governments and central banks to the coronavirus pandemic. Summarizing the impact of these polices, the report states, “Wealth creation in 2020 was largely immune to the challenges facing the world due to the actions taken by governments and central banks to mitigate the economic impact of COVID-19.” The report goes on to state that the initial widespread negative impact on GDP and share prices in February and March 2020 was overcome with central bank interest rate reductions and “prompt action” by governments to help financial markets regain confidence and equity markets to reverse their losses by June. Credit Suisse is a global investment bank and financial services firm based in Zurich, which has offices in every major financial center around the world. The organization specializes in “wealth management” services and caters to the needs of the capitalist elite and this, its twelfth annual report, is written to provide strategic advice to its customers. While the writers and editors do their best not to point directly to the class struggle implications of the data contained in their report, an element of concern is evident about stating too bluntly what has really been going on over the past year. On the one hand, they state that “the aggregate wealth of those at the top of the wealth pyramid and the resulting rise in the numbers of millionaires and UHNW [ultra-high net worth] individuals … would be expected to raise wealth inequality.” Meanwhile, they hint at the difference between the vast increase in the wealth of the rich and the experiences of the working class – the economic depression that destroyed tens of millions of jobs and forced millions into poverty, homelessness and hunger – by writing, “The contrast between what has happened to household wealth and what is happening in the wider economy can never have been more stark.” Significantly, the report claims that the rise of the stock market and inflation of asset values of the rich “in the second half of 2020 was unforeseen.” The report goes, “These asset price increases have led to major gains in household wealth throughout the world. The net result was that USD 28.7 trillion was added to global household wealth during the year.” Thus, the Credit Suisse Research Institute reporters do not mention that the central banks have been flooding the financial markets with cash that has funneled enormous sums in one form or another into the “household wealth” of the richest people on the planet. In the US, the Federal Reserve bank has been buying assets at a rate of $120 billion per month.
Child malnutrition and hunger skyrocket in Haiti as COVID-19 infections spike — At least 86,000 children are at risk of developing “severe acute” child malnutrition this year in Haiti, according to sources connected to the United Nations Children’s Fund. The number of children projected to suffer from starvation this year has doubled as the impoverished nation continues to grapple with extraordinary political and social crises exacerbated by the pandemic. According to a UN survey, there are now 217,000 children currently suffering from acute malnutrition. Acute malnutrition had been steadily rising in the child population for several years before the pandemic triggered a massive food crisis that raised the total by 61percent in 2020. In an interview with the Miami Herald, Bruno Maes, Haiti’s UNICEF representative, said that nearly 5 million Haitians are affected by malnutrition and struggle to obtain daily nourishment. In the first three months of this year alone, the number of admissions of severely acute malnourished children in health facilities has increased by more than 26 percent compared to a year ago. Jean Gough, the UNICEF Regional Director for Latin America and the Caribbean, pointed to the significant danger facing a large portion of small children if the crisis continues unabated. “We can’t look the other way and ignore one of the least funded humanitarian crises in the region,” declared Gough in a UNICEF press release. Gough warned that without “urgent funding in the next weeks,” treatment against malnutrition “will be discounted and some children will be at risk of dying.” Meanwhile, Haiti has been left dangerously unprepared for the onslaught of COVID-19. Despite being noticeably unaffected at the onset of the pandemic in 2020, Haiti has witnessed in recent weeks an alarming acceleration of infections and deaths, with its dilapidated medical infrastructure completely unequipped to handle a significant outbreak. On May 6, the Ministry of Health reported 13,245 COVID-19 infections and 268 deaths. Exactly one month later on June 6, the number of infections had ballooned to more than 16,079, while confirmed deaths rose to 346. These numbers, however, are surely gross undercounts, as the healthcare infrastructure needed to perform contact-tracing and identify all coronavirus-related deaths is all but absent. New cases are already starting to stretch hospital capacity and the country’s oxygen supply. Antiviral treatments and other crucial supplies remain, for most of the population, out of reach. Reports are emerging every week of at least one hospital in the country’s capital and most populous city, Port-au-Prince, running out of beds and denying admission to COVID patients.
The 2021 Corporate Bamboozle On World Food Systems – (video & transcript) – I’m Lynn Fries producer of Global Political Economy or GPEnewsdocs. Today’s guest is Pat Mooney. At the end of this year 2021 a meeting is being held to rubber stamp a corporate strategic maneuver to takeover global governance of the entire world food system; effectively food production, research and finance. Pat Mooney will be talking about all this in the context of The Long Food Movement and its reportTransforming Food Systems by 2045. The report shows the stakes are high because food systems are being rapidly transformed as food and agriculture go digital. This is the last chance to change course. Pat Mooney is lead author of that report produced by IPES-Food in collaboration with ETC Group. Pat Mooney is leading IPES-Food’s ‘Long Food Movement’ project. He is the co-founder and executive director of ETC Group that has monitored corporate power in commercial food, farming and health for over four decades. He is an expert on agricultural diversity, biotechnology, corporate concentration and global governance. Pat Mooney was awarded the Pearson Peace Prize in Canada and received the Alternative Nobel Prize, The Right Livelihood Award. Welcome Pat. Thank you for joining us.
‘Bolsonaro Out!’: Massive Protests as Brazil’s Covid-19 Death Toll Tops 500,000 – As Brazil’s Covid-19 death toll surpassed 500,000 on Saturday, at least hundreds of thousands of protesters took to the streets of more than 400 cities across the nation and around the world to blame President Jair Bolsonaro for the grim pandemic milestone and demand his ouster.Chanting and holding signs with slogans including “Bolsonaro Out,” “500,000 Deaths, It’s His Fault,” and “Vaccines Now,” protesters called for the resignation or impeachment of the far-right president. Demonstrators also implored the government to ramp up vaccination efforts.On Sao Paulo’s famed Avenida Paulista, protester Dona Neuza held a sign reading: “Bolsonaro Killed My Brother.””He took every precaution, but he died of Covid because he wasn’t vaccinated,” Neuza told Rede Brasil Atual. “Last August Bolsonaro rejected batches of immunizations that could have already been applied to millions of Brazilians.”According to Folha de Sao Paulo, only 15% of Brazilians are fully vaccinatedagainst the coronavirus, a sore point in a nation that prides itself on itshistorically successful vaccination drives.At a massive protest in Rio de Janeiro, federal lawmaker Benedita da Silva of the left-wing Workers’ Party (PT) told Brasil de Fato that “there are half a million people dead due to the negligence and denial of Bolsonaro.””Thousands of people are no longer getting a plate of food, thousands are unemployed, without oxygen in hospitals, without assistance,” said da Silva. “We are on the street to defend our country, our people, our lives, our culture, our education, our economy. We can no longer die of Covid or starvation.”In addition to #ForaBolsonaro protests across Brazil, solidarity demonstrations were also held Saturday in cities around the world, includingBarcelona, Berlin, Helsinki, London, Los Angeles, New York, Tokyo, and Vienna.Dubbed “Trump of the Tropics” by some of his opponents, Bolsonaro hasdismissed Covid-19 as a “little flu” while refusing to follow or promote mask-wearing, quarantines, and social distancing, despite having contracted the virus last year. Bolsonaro has also encouraged large gatherings and disparaged vaccines.
Is Another Military Coup Brewing in Peru, After Historic Electoral Victory for Leftist Candidate? – Five days ago, a group of retired military officers in Peru dispatched a letter to the high command of the country’s armed forces. In it they call upon the army to rise up against the leftist leader Pedro Castillo if he is pronounced president. The letter also raised questions about the recent work of Peru’s National Office of Electoral Processes (JNE) and urged the institution to fulfil “its constitutional mandate in a reliable and transparent manner” – i.e. by ensuring that Castillo, a former schoolteacher and farmer who ran largely on a socialist platform, does not become the next president. If it fails in this task, the institution will “bear the consequences.” The threat should not be taken lightly, especially given Peru’s long history of coups d’etats. Since the country won its independence from Spain in 1821 there have been no fewer than 18, 14 of which were successful. Seven of them have occurred since the 1940s. Another source of concern is the long list of former high-ranking officers among the letter’s signatories. They include 23 retired Army generals, 22 retired Navy vice admirals and 18 retired Air Force lieutenant generals. Some have gone on to hold high positions within Peru’s political establishment, including former president Francisco Morales Bermudez, former Prime Minister Walter Martos and elected congressmen Jorge Montoya, Jose Cueto, Jose Williams and Roberto Chiabra. Peru’s interim president, Francisco Sagasti, described the letter as “unacceptable”. In a nationally televised message broadcast on Friday, Sagasti, standing alongside Peru’s Prime Minister Violeta Bermudez and Minister of Defense Nuria Esparch, said the letter had been sent to the Prosecutor’s Office. The requisite investigations will be launched. For her part Esparch lamented the “political use of the armed forces” because it generates alarm, anxiety and division at a time when the country needs unity and calm.” The prospect of a Castillo victory has fuelled panic among Peru’s political and business elite, who have monopolised political power for decades. It has also raised concerns in Washington that it could be about to lose one of its most important client states in the region. Peru’s political institutions – like those of Colombia and Chile – have long been tethered to US policy interests. Together with Chile, it’s the only country in South America that was invited to join the Trans-Pacific Partnership, which was later renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after Donald Trump withdrew US participation. It’s also the only country in the region whose constitution grants equal rights to foreign investors as domestic ones. That could come to an end if Castillo is confirmed as president. Given as much, the rumours of another coup in Peru should hardly come as a surprise. Nor should the Biden administration’s recent appointment of a CIA veteran as US ambassador to Peru, as recently reported by Vijay Prashad and Jose Carlos Llerena Robles:
Borderlands: Mexico exports of commercial trucks jump 277% – – Truck makers in Mexico exported 12,892 units during May, an increase of 277% compared to the same period in 2020, according to Mexico’sNational Association of Bus, Truck and Tractor Producers (ANPACT). Truck makers in Mexico exported 12,892 units during May, an increase of 277% compared to the same period in 2020, according to Mexico’sNational Association of Bus, Truck and Tractor Producers (ANPACT).Miguel Elizalde, president of ANPACT, said the major jump in exports can be attributed to the pandemic closing down most vehicle factories in April, May and part of June last year.”We see that the figures show a growth, a rebound after a year of pandemic, mainly in May, because we had a very big drop because practically all the plants were closed,” Elizalde said Wednesday during ANPACT’s monthly report on the trucking industry. “We had plants closed because the government didn’t consider our industry essential at first.”The biggest producer/exporter of trucks was Daimler/Freightliner, which exported 7,981 units in May.Other top heavy-duty truck producers/exporters in Mexico during May were International Trucks Inc., which shipped 4,265 units, and Kenworth, which exported 646. The U.S. was the main export market for Mexican-made trucks, with 94% of total exports in May. Canada (2.2%) and Colombia (1.7%) were second and third.Domestically, Mexico sold 2,673 trucks and buses wholesale in May, an increase of 270% compared to the same time last year. At retail, truck makers sold 2,763 units in May, a 109% increase compared to May 2020.Despite the surge in truck exports in May, Elizalde expects slower truck sales domestically the rest of the year due to a government regulation known as NOM-044 that mandates trucks use ultra-low-sulfur diesel (ULSD).The regulation requires companies to manufacture, import or sell heavy trucks or buses that exclusively use ULSD beginning in January 2022.Elizalde said ULSD is not available everywhere in Mexico, and truck makers and trucking companies have not had enough time to adjust to the regulation.
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