- Pot Use Reaches All-Time High In March
Pot Use Reaches All-Time High In March
We noted on Thursday, Americans have resorted to “watching porn, drinking beer, smoking pot, and or devouring chocolate” to cope with their fears of a pandemic. In the report, we noted how cannabis sales in California, Colorado, Oregon, and Alaska jumped 50% during the March 16-22 period, but it was hard for us to quantify overall national trends.
Apparently, ripping bongs and eating edibles hit an all-time high in March as lockdowns across the country were only in the beginning stages, according to Bloomberg, citing a consumer report via Cowen & Co.
The survey, conducted in March of 2,500 consumers, found about 33% had tried smoking pot, a record high, and that 12.8% had used cannabis within the past month compared to the 2019 average of 12.5%
Sales spiked in mid-March as people rushed to stock up ahead of potential dispensary closures, Cowen said, using data from cannabis analytics firm Headset Inc. Weekly sales growth peaked at 64% in the week ended March 16, the highest rate of increase since at least the beginning of 2019.
However, sales decelerated during the last two weeks of the month to the mid- to the high-single-digit range. This may be linked to a “more pronounced deterioration in job security for past-month cannabis consumers relative to the general population,” according to analysts led by Vivien Azer.
The survey found that the percentage of cannabis consumers working full time fell by 290 basis points to 42.4% in March from February, a bigger decline than the general population. They also tended to be less comfortable with their financial situation. – Bloomberg
America is getting high, melting in their couches as “Netflix and quarantine” become the hottest trend during the pandemic.
Tyler Durden
Tue, 04/14/2020 – 02:35 - "We Weren't Prepared" For COVID-19: Macron Admits A French Disaster
“We Weren’t Prepared” For COVID-19: Macron Admits A French Disaster
Update (0200ET): France will remain locked down until at least May 11, PM Emmanuel Macron has revealed, calling on citizens to continue to respect the rules his government has imposed to slow the spread of coronavirus.
L’épidémie commence à marquer le pas. Les résultats sont là, plusieurs ont pu être épargnées, depuis quelques jours, les entrées en réanimation diminuent.#Coronavirus
➡️ https://t.co/434srX0csI pic.twitter.com/Pmgok4aptd
— RT France (@RTenfrancais) April 13, 2020
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Admitting the country had not been prepared for the outbreak, the PM nevertheless praised those in front-line occupations for working overtime to save lives and called on the French to continue to stay home and maintain social distancing.
* * *
Authored by Guy Milliere via The Gatestone Institute,
On April 9, in France, one of the three European countries most affected by COVID-19 — the others being Spain and Italy, 1,341 people died from the Chinese Communist Party virus. For Italy, the main European country affected so far, the figure on April 9 was 610 deaths; for Spain 446, and for Germany 266. While the pandemic has been stabilizing in Italy and Spain — and in Germany seems contained — in France it seems still expanding.
Extremely bad decisions taken by the authorities created a situation of contagion more destructive than it should have been.
The first bad decision was that, in contrast to European Union fantasies, borders apparently do matter. France never closed them; instead it allowed large numbers of potential virus-carriers to enter the country. Even when it became clear that in Italy the pandemic was taking on catastrophic proportions, France’s border with Italy remained open. The Italian government, by contrast, on March 10, prohibited French people coming to its territory or Italians going to France, but to date, France has put no controls on its side of the border.
The situation is the same on France’s border with Spain, despite the terrifying situation there. Since March 17, it has been virtually impossible to go from France to Spain, but coming to France from Spain is easy: you just show a police officer your ID. The same goes for France’s border with Germany. On March 16, Germany closed its border with France, but France declined to do the same for its border with Germany. When, on February 26, a soccer match between a French team and an Italian team took place in Lyon, the third-largest city in France, 3,000 Italian supporters attended, even though patients were already flocking to Italy’s hospitals.
France never closed its airports; they are still open to “nationals of EEA Member States, Switzerland, passengers with a British passport, and those with residence permits issued by France” and healthcare professionals. Earlier, until the last days of March, people arriving from China were not even subject to health checks. French people in Wuhan, the city where the pandemic originated, were repatriated by a military plane, and, upon their arrival in France, were placed in quarantine. While Air France interrupted its flights to China on January 30, Chinese and other airlines departing from Shanghai and Beijing continue to land in France.
French President Emmanuel Macron summarized France’s official position on the practice: “Viruses do not have passports,” he said. Members of the French government repeated the same dogma. A few commentators reminded them that viruses travel with infected people, who can be stopped at borders, and that borders are essential to stop or slow the spread of a disease, but the effort was useless. Macron ended up saying that the borders of the Schengen area (26 European states that have officially abolished all passport and border control with one another) could not be shut down and raged at other European leaders for reintroducing border checks between the Schengen area member countries. “What is at stake,” he said, seemingly more concerned with the “European project” than with the lives of millions of people, “is the survival of the European project.”
Other bad decisions the disastrous management of the means of fighting the pandemic.
In early March, when people in large numbers started to arrive ill at hospitals, doctors and caregivers warned that they did not have enough masks and said that working without any protective equipment put them at high risk. Journalists quickly discovered that in 2013, France had possessed a reserve of several million masks, but that the government had decided to destroy them to reduce storage costs. In January 2020, a few hundred thousand masks were still available, but on February 19, President Macron decided to send them to Wuhan, as a “gesture of solidarity with the Chinese people”.
The French government then announced that masks would be available soon, but by the end of March, most doctors and caregivers still had no masks. Several doctors fell ill. As of April 10, eight have died from COVID-19 and several others are in critical condition. On March 20, the government’s spokeswoman, Sibeth N’Diaye, incorrectly said that “masks are essentially useless”.
At the end of February, France had almost no tests available, and no means of manufacturing them. The government decided to buy tests from China, but by March 19, the number of tests was still insufficient. While Germany performed 500,000 screening tests per week, France was only able to only perform 50,000.
Rather than admit that tests were unavailable, or that the government had mismanaged situation, the France’s minister of health, Olivier Veran, announced that large-scale screening was useless, and that France had chosen to “proceed differently”.
Municipal elections, scheduled for March 15, took place despite the virus and despite the fact that many doctors warned that polling stations were places of contagion. Sure enough, in the days that followed, hundreds of people in charge of polling stations flocked to the hospitals. On March 16, President Macron delivered a speech declaring that “France is at war” and that on the following day, March 17, France would be placed on lockdown.
Lockdown is still in place and the French government has decided to extend it indefinitely. The rules are strict. The French can only leave home, within a radius of one kilometer, for one hour a day, to buy food, and must have written authorization to present to the police who patrol the streets. Anyone who is on a street without authorization is fined 135 euros ($145) the first time, 1,500 euros ($1,630) the second time, and after three offenses, can be subject to a sentence of six months in prison. Any meeting with a person not sharing the same place of lockdown is prohibited.
Most of the population has complied, except in the no-go zones. The police have been ordered to turn a blind eye to what happens there. The no-go zone in Seine Saint Denis, for instance, has a fatality rate 63% higher than in the rest of the country.
It was not exactly a secret that before the pandemic that the French economy had also not been doing that well. Growth was barely above zero and unemployment high. Now, the French economy has effectively stopped. It is hard to imagine what the situation will be after the pandemic.
Now, almost all the French hospitals are full; patients wait on beds in the halls. On March 18, France had only 5,000 ventilators, so “triage” procedures began: some patients survived, others, for lack of treatment, did not.
A scandal erupted. Agnes Buzyn — who was Minister of Health until February 16, then a candidate for mayor of Paris; then, on March 15, defeated — said on March 18: “I knew a tsunami [presumably meaning a deadly pandemic] was going to hit France”. She added that she had told everything to President Macron in January. Immediately, Marine Le Pen, President of the National Rally, the main opposition party in France, said that “by staying silent about a worrying situation, Agnes Buzyn behaved in an unconscionable manner”. Le Pen added, “if Agnes Buzyn is speaking the truth, the government and President Macron have seriously failed in their duties, and the case will have to be brought before a Court of Justice”.
Another scandal, however, even more important, had erupted before that. On February 25, a celebrated French epidemiologist, Professor Didier Raoult, President of the Marseille University Hospital Institute for Infectious Diseases (Méditerranée Infection), one of the main European research centers on epidemics and pandemics, published a video, “Coronavirus: Towards a way out of the crisis”. In it, he said that he had found a treatment to infected people quickly: hydroxychloroquine (a drug used against malaria since 1949) and azithromycin (a commonly used antibiotic), that had already cured 24 patients.
Immediately, Olivier Veran, the new French minister of health, said that Professor Raoult’s statements were “unacceptable”. A harsh medical and political battle began. Many doctors close to President Macron agreed with Veran and denounced Raoult. Some even claimed he was a “charlatan”, apparently forgetting that, until then, Professor Raoult had been considered by many France’s most prestigious epidemiologist. Other doctors said that Dr. Raoult was right and supported his findings.
In an attempt to quell the controversy, the French government, by decree, authorized Professor Raoult’s treatment in “military hospitals” for “patients reaching the acute phase of the disease” — but prohibited family doctors from prescribing hydroxychloroquine. Professor Raoult replied that the treatment was only effective if administered “before the disease reaches its acute phase“. [Emphasis added]
A clinical trial was launched by the government but Professor Raoult said that “the trial is not based on the treatment I use and is destined to fail.”
On April 10, Professor Raoult published data showing that he had treated and cured 2,401 patients. A recent international poll of thousands of doctors rated hydroxychloroquine the “most effective therapy” for combating COVID 19. The U.S. Food and Drug Administration (FDA) has authorized widespread “compassionate use” of hydroxychloroquine, while awaiting the results of scientific tests, projects to be complete in “a year or a year and a half”.
Philippe Douste Blazy, Professor in Medicine, former French Minister of Health, said that “the obstructive behavior of Emmanuel Macron and the French government ‘was “criminal'”. He added that “the treatment proposed by Professor Raoult has positive results” and that “France will soon be the last country to refuse the use by doctors of hydroxychloroquine.” He then launched a petition calling on the government to stop obstructing the use of the treatment. The text was signed by thousands of doctors, professors of medicine and other former ministers of health.
The treatment recommended by Professor Raoult still cannot be prescribed by French family doctors. A decree promulgated by President Macron on March 28 authorized doctors to use Rivotril (clonazepam) to “alleviate the suffering of patient in a state of respiratory distress”. Clonazepam slows breathing and can lead to respiratory arrest. Dr. Christian Coulon, a renowned anesthesiologist, tweeted:
“Euthanasia of our elders suffering from respiratory failure. Yes, they decided [to do] it. As a doctor, I suffer deeply”.
Dr. Serge Rader explained on radio on April 3 that many senior citizens living in retirement homes and who get Covid-19 are not sent to a hospital because the hospitals are overwhelmed; instead they receive an injection of Rivotril and die alone in their rooms. Many other doctors expressed their horror on social media, but added that they were powerless.
The result is that anxiety and anger have increased sharply in the population and add to the distress arising from the pandemic and the strict lockdown.
A French lawyer, Regis de Castelnau, wrote in Marianne, a center-left magazine:
“The behavior of our leaders has been marked by unpreparedness, casualness, cynicism, and many of their acts imply the enforcement of the criminal law. Deliberate endangerment of the lives of others and failure to provide assistance to people in danger are obvious… In war, generals who are judged incompetent are sometimes shot. The President and other officials are well aware of this and have to know that they will be held accountable.”
Economists expect the GDP of France in the second quarter of 2020 to be in free fall. One economist, Emmanuel Lechypre, said, “France will experience a very severe recession…. What is happening has never been seen in the past and the country will never be the same.”
A recent survey shows that 70% of French people think that the government is not telling the truth, and 79% think that the government and the President do not know where they are going.
Before the pandemic, France was on the edge of chaos. From the moment President Macron was elected, not a single week in France has passed without demonstrations. The uprising of the “yellow vests” lasted 70 weeks and was accompanied by riots. A strike against a reform of the bankrupt French pension system that began in December 2019 lasted until the appearance of the pandemic.
On March 27, Macron said in a threatening tone that those who criticized his handling of the pandemic were “irresponsible” and that he would remember “those who did not live up to his expectations”.
On April 1, the columnist Ivan Rioufol wrote in Le Figaro:
“The president is not only wrong, but he lied and let others lie. He and his team are guilty. The official speech was unable to assess the seriousness of the situation. It denied, to the point of absurdity, the usefulness of national borders… It is the government that repeated, before claiming the contrary, that masks and tests are useless. It is the State that maintains an incomprehensible confusion around chloroquine… The law of silence that Macron would like to impose is completely untenable.”
Those who hold power in France seem more clueless today than before the pandemic. Sadly, a debacle in France seems increasingly closer.
In the French mainstream media, China is treated extremely politely. No journalist will remind the public that that the pandemic began in Wuhan, China. Reporters say that the United States is in a difficult situation and show New York hospitals, as if showing the suffering of Americans would alleviate the suffering of the French.
France’s mainstream media would do well to fight harder for physicians to be able supply hydroxychloroquine with azithromycin and zinc sulfate. The French media would also do well to be more aware of the dirty game China is playing. On April 5, reports started coming in that in January, before China had let the world know there was a problem, it had begun deliberately lying about it. On January 14, 2020, in a tweet, the World Health Organization repeated China’s lie:
“Investigations conducted by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel #coronavirus (2019-nCoV) identified in #Wuhan, #China”
Meanwhile, Maria Bartiromo disclosed on Fox News, that, before alerting the world about the coronavirus crisis, China had begun cornering the market in medical supplies. It bought $2 billion worth of medical masks — China makes half the world’s supply; why would it buy them? — as well as hundreds of millions of dollars’ worth of other medical gear. Now, reports are stating that China is demanding payment from Italy for donated medical equipment that Italy had donated to China and that China now wants Italy to buy back.
Finally, it would not hurt the French media to show more compassion, to pay more attention to what they say, to watch with more care their own society, and to think about ways to find remedies to the economic and political dysfunction that unleashed such an unimaginable horror.
Tyler Durden
Tue, 04/14/2020 – 02:00 - Cops Arrest Couple For Breaking Quarantine As Hawaii Embraces Mass Surveillance
Cops Arrest Couple For Breaking Quarantine As Hawaii Embraces Mass Surveillance
The exhausting effort required to contain an outbreak of the novel coronavirus – contact tracing, quarantine enforcement etc. – are giving regimes from the US to China to a handful of European nations an unprecedented opportunity to test technologies designed to infringe on human liberty by dramatically increasing law enforcement’s capacity to actively monitor whole communities.
Once a population is policed by drones in the sky and hazmat-wearing cops armed with automatic weapons patrolling the ground looking for lockdown violators, and encouraging neighbors to snitch on each other, can it really be free?
Maybe ask mainland Chinese how they feel. While they’ve adjusted to living in a world where facial recognition cameras might catch them violating rules and dock their ‘social credit’ score, Americans are only just getting their first glimpse at the dystopian totalitarian future that awaits, except instead of President Xi monitoring them, it’ll be Mark Zuckerberg.
While Americans debate the ethics of snitching on quarantine violators, Hawaiians now have their very own quarantine-themed civil liberties fiasco now that the first couple in the state has been arrested for break its 14-day mandatory quarantine.
Quarantines have been declared in different states at different lengths and with varying levels of enforcement. A few states still haven’t imposed a legally binding lockdown.
But a couple who apparently arrived on the Hawaiian island of Kaua’i recently after traveling from the island of O’ahu was arrested by local police after they were twice informed of their obligation to self-quarantine for 14 days, but decided to stop for food at a supermarket on the way to their hotel anyway, the Star Advertiser reports.
The pair were reportedly arrested by Hawaii police just minutes after walking out of the supermarket.
Both posted bail, but they have an upcoming court date, where they face charges that could lead to a fine of up to $5k and/or up to 1 year in prison.
While it’s tempting to look at this couple with contempt for traveling during this period and also violating a quarantine, most people have probably violated the orders or guidelines at one point or another. Furthermore, most people don’t expect to be monitored that closely by the police. Perhaps they thought the stop at the grocery store was okay, since they’re an “essential” business that are still open. Who knows? But it definitely seems a bit harsh to arrest them – write them an expensive ticket, maybe.
But many libertarian or civil liberty defenders probably find this behavior disturbing. And if you’re among them, then keep in mind, this isn’t all that the state of Hawaii is doing to ratchet up the mass surveillance of its citizens. MauiNow reports that a “community-driven” presumably quasi-public “project” has been launched by the state encouraging all Hawaiians to share a massive trove of personal data with the app, so it can use it to help carry out contact tracing. The method reportedly worked well in South Korea. But building a massive database that can trace the movements and interactions of nearly every single individual in the state seems like something that – if it must be done – should be done so with the most extreme oversight possible, with a widely understood agreement to destroy the data after all this is over.
Tyler Durden
Tue, 04/14/2020 – 01:00 - Whistleblower: COVID-19 Patients Need Oxygen Therapy Not Ventilator
Whistleblower: COVID-19 Patients Need Oxygen Therapy Not Ventilator
Another whistleblower, a doctor treating Coronavirus patients himself has come out with a startling disclosure saying COVID-19 patients need Oxygen therapy not Ventilator and that we may be treating the wrong disease. He says the patients symptoms resemble High Altitude Sickness and not Pneumonia.
Dr. Cameron Kyle-Sidell is a doctor treating COVID-19 patients in New York City’s Maimonides Medical Center. Nine days ago Dr. Cameron opened an Intensive Care Unit to care for COVID-19 patients in New York City. Here is what he learned in his own words:
“I am a physician who has been working at the bedside of COVID+ patients in NYC. I believe we are treating the wrong disease and that we must change what we are doing if we want to save as many lives as possible.”
“In February, South Korean physicians reported that critical Covid-19 patients responded well to oxygen therapy without a ventilator. Patients are getting multiple organ damage from hypoxia. It’s not the pneumonia that’s the killer, it’s the cellular oxygen deprivation. And we are hurting these patients with ventilators.”
The past 48 hours or so have seen a huge revelation: COVID-19 causes prolonged and progressive hypoxia (starving your body of oxygen) by binding to the heme groups in hemoglobin in your red blood cells. People are simply desaturating (losing o2 in their blood), and that’s what eventually leads to organ failures that kill them, not any form of ARDS or pneumonia. All the damage to the lungs you see in CT scans are from the release of oxidative iron from the hemes, this overwhelms the natural defenses against pulmonary oxidative stress and causes that nice, always-bilateral ground glass opacity in the lungs.
Patients returning for re-hospitalization days or weeks after recovery suffering from apparent delayed post-hypoxic leukoencephalopathy strengthen the notion COVID-19 patients are suffering from hypoxia despite no signs of respiratory ‘tire out’ or fatigue.
Earlier, GreatGameIndia reported, a Montana based physician Dr. Annie Bukacek, MD, blowing the whistle on how the Centers for Disease Control and Prevention (CDC) is exaggerating the COVID-19 death toll by manipulating Coronavirus death certificates.
The CDC counts both true COVID-19 cases and speculative guesses of COVID-19 the same. They call it death by COVID-19. They automatically overestimate the real death numbers, by their own admission. Prior to COVID-19, people were more likely to get an accurate cause of death written on their death certificate if they died in the hospital. Why more accurate when a patient dies in the hospital? Because hospital staff has physical examination findings labs, radiologic studies, et cetera, to make a good educated guess. It is estimated that 60 percent of people die in the hospital. But even [with] those in-hospital deaths, the cause of death is not always clear, especially in someone with multiple health conditions, each of which could cause the death.
Do you think an entire nation-wide lockdown can defeat #Coronavirus?
— GreatGameIndia (@GreatGameIndia) April 13, 2020
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Similar claims have also been made by Senator Dr. Scott Jensen from Minnesota who said Hospitals are getting paid more to list patients as COVID-19.
“Right now Medicare is determining that if you have a COVID-19 admission to the hospital you get $13,000. If that COVID-19 patient goes on a ventilator you get $39,000, three times as much. Nobody can tell me after 35 years in the world of medicine that sometimes those kinds of things impact on what we do.”
Dr. Jensen received a 7-page document coaching him to fill out death certificates with a COVID-19 diagnosis without a lab test confirming the diagnosis.
Tyler Durden
Tue, 04/14/2020 – 00:05 - What To Look For In Bank Earnings: All Eyes On Loan Losses
What To Look For In Bank Earnings: All Eyes On Loan Losses
Tomorrow JPMorgan and Wells Fargo will usher in a historic earnings cycle, one which will see S&P500 earnings plunge the most since the (first) financial crisis…
… which in turn is a walk in the park compared to the -30% EPS crash expected in Q2…
… and unlike prior quarters, nobody will care about bank FICC revenues or Net Interest Income. Instead investors will care about only one thing: how much money will U.S. banks lose on loans because of the coronavirus recession.
JPMorgan will kick it off tomorrow morning ahead of the bell, and investors will closely watch comments from CEO Jamie Dimon, especially after his recent ominous investor letter in which he warned that what is coming will “at a minimum include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008”, in his first earnings call since suffering a heart attack. Wells Fargo reports right after and then Bank of America, Goldman Sachs and Citigroup all follow on Wednesday.
And, as noted above, instead of the income statement – where any Q1 gains are expected to be a wash compared to the massive damage suffered across bank balance sheets – investors will seek answers on just how bad the recession will be, include provisions and net charge-offs, the effects of accounting rule shifts known as CECL, or Current Expected Credit Loss, and banks’ capital return plans, particularly regarding dividends as well as when stock buybacks may return.
To be sure, Wall Street estimates have changed dramatically from a month ago, when analysts called for big bank earnings per share to rise in the first quarter from a year earlier by an average of 2%. Now they see declines ranging from 14% to 42%.
That, as Reuters notes, is not just because the impact of the global pandemic is changing and hard to quantify, but also because of a new accounting standard that requires banks to estimate losses for the lifetime of loans and set aside money now to cover them. Those estimates have to be justified to regulators and auditors, and be credible to investors. But they ultimately rely on judgment: a pessimistic management team could decide to take much bigger provisions than optimistic peers at a rival bank, even if they have similar loan books.
To show the difficulty in guessing how that might play out, UBS analysts created a table showing two outcomes for earnings per share: one with usual loss reserves, and another that was about one-third lower, based on their assumptions about the new rule.
“And, the truth is we’re probably going to be very wrong,” lead analyst Saul Martinez said in an interview. “The risk is that it is higher.”
“The first quarter is the history, the second quarter the mystery,” said Bloomberg Intelligence analyst Alison Williams.
Investors may prioritize setting “some kind of level for provisions versus stress-tested losses,” while assessing how much customers have drawn down commercial and industrial loans, and how much of soaring delinquencies may turn into realized losses, she said. Capital markets may be strong, Williams added, but “much of that is fueled by trends through mid-February.” Dimon’s remarks will be important even as his recent annual letter offered a “bit of a preview,” Williams said.
Last week, Goldman analysts cut their estimates for big banks for all of 2020 by 40% this week, all due to additional loan-loss provisions. Other issues affecting earnings essentially cancel each other out, they said.
While the uncertainty about bank results also reflects uncertainty about the coronavirus, the new accounting standard add another layer of mystery for banks. Although they have more insight about the financial stress of their borrowers, and therefore more insight about the economy, they do not have a crystal ball about the coronavirus.
This puts bank executives in a pedestal reserved traditionally for central bankers: they will have to be mindful that they could send shockwaves through markets if investors believe they are predicting a protracted and horrid recession, or alternatively, are being blaze and not taking the risks seriously enough.
“It is going to be a tricky balancing act,” said Martinez.
Analysts will also be eager to ask bank executives about assumptions they used for the new accounting standard, known as CECL, for Current Expected Credit Losses, and pronounced like the name Cecil. It has been in the works for a decade but only recently started being implemented.
Across the board, investors will probably “look through first-quarter earnings and focus on credit quality, the second true-up of the CECL loan loss reserves and net interest margin compression,” RBC analyst Gerard Cassidy said via email. Bank stocks have “certainly discounted the expected decline in earnings in 2020,” Cassidy said. Now, investors want to be reassured that “this downturn for the banks will only be an earnings issue and not a balance sheet issue similar to the 2008-2009 financial crisis.”
Addressing the CECL issue, Morgan Stanley analyst Betsy Graseck writes that she is baking in a 6-31% increase in reserves from “day 2” CECL estimates in 1Q20. As a reminder, CECL (Current Expected Credit Loss) is the new accounting standard for loan loss reserves which requires life of loan reserving estimates. CECL kicked off January 1, 2020, and will require management teams to estimate life of loan losses for their loan books as of March 31.
While Day 1 CECL estimates are known, the biggest question from investors going into the 1Q20 print likely is: how big will Day 2 reserve build be? Given the uncertainty of the virus trajectory and length of “stay-at-home” directives, street estimates for day 2 CECL charges are very wide.
Morgan Stanley bases its CECL Day 2 estimates on a 10% probability of the most severe stress test that the banks have ever done, the 2018 stress test. This drives a 6-31% increase in reserves across the bank’s coverage, takes up reserve / loan ratios by a median 17bps, and takes down 1Q20 EPS by about ~1/3. That said, banks may well opt for a higher charge, especially if they are looking for a slower economic recovery than we are.
At the macro level, analysts will want to know how high bankers expect unemployment to go, how that will affect consumer loan delinquencies, and how much exposure they have to oil companies and sectors that have seen business vanish, like airlines, hotels and restaurants. And they will also inquire about how effective government stimulus programs have been, and why so many banks have been leery of participating in the PPP small business rescue program.
Spending by the Federal Reserve and Treasury Department could keep loan losses from being as high as in prior recessions, said Wells Fargo bank analyst Mike Mayo. He described the first quarter as the most difficult one to predict since the peak of the global financial crisis in late-2008.
“You have the biggest accounting change to impact loan loss reserving coming in the quarter that needs the biggest change in loan loss reserves,” he said.
The three most important things to watch for with bank earnings will be “credit, credit and credit,” Mayo told Bloomberg last week in a phone interview. “Investors want to know about impacts to industries,” including credit draw-downs, losses and provisions. They’ll also want to hear about the degree of relief banks are offering borrowers, particularly regarding small business lending and mortgage forbearance, he said.
“The only line items bank investors will care about this season are the ones pertaining to credit,” with provisions and net charge-offs determining how bank stocks will trade, Vital Knowledge founder Adam Crisafulli wrote in a note. Commentary about capital return will also be key, he said, as “investors assume buybacks will be resumed in the second half (they’ve been voluntarily suspended until the end of June) while dividends continue.”
Comparing results with expectations will be particularly challenging this quarter, Cassidy said, as analysts and investors alike will be “in the dark” on first-quarter and full-year earnings estimates, due to the difficulties in assessing the collapse in the U.S. economy from containing Covid-19 and the impacts from CECL.
“Missing first-quarter EPS estimates by 20%-30% is not likely to be a big deal but posting a meaningful bottom line loss due to a significant increase in the loan loss provision would be a cause for concern,” Cassidy said.
Going back to the banks reporting tomorrow, JPMorgan is likely to “once again weather the storm better than peers given its diversified franchise and risk management prowess,” Barclays analyst Jason Goldberg wrote in a note.
Relative to the prior quarter, Goldberg expects a larger balance sheet, driven by draw-downs and deposit growth; lower net interest rate margin, or NIM; seasonally higher fee income from trading; greater costs and a higher loan loss provision, along with more mortgage volume. In credit cards, he sees continued year-over-year growth, but also reserve build. Other key factors Goldberg will watch include Dimon’s health, the outlook for trading and expenses, and strategies for consumer branches and credit cards.
One final point: heading into earnings, JPMorgan quietly announced it would “temporarily” halt the issuance of new loans and would substantially hike its mortgage lending standards – minimum FICO score of 700, minimum down payment to 20% – for one simple reason: to limit exposure to the coming default wave that will cripple small and medium business and devastate household income for quarters to come. Anything that Dimon says to twist that JPM is hunkering down ahead of what Bloomberg called the “Biggest Wave Of Defaults In History” will be nothing more than self-serving spin.
Tyler Durden
Mon, 04/13/2020 – 23:45 - Wealthy Preppers Are Riding This Out In Multimillion-Dollar Bunkers
Wealthy Preppers Are Riding This Out In Multimillion-Dollar Bunkers
Authored by Sarah Begley via Medium.com,
Cold War backyard bunkers are out. Subterranean communes are in…
In a sense, all of us are preppers right now: stocking up on toilet paper and nonperishable goods, hunkering down, and avoiding social contact. But then, of course, there are the actual preppers living in high-tech, remote, expensive bunkers to ride out Covid-19.
They knew a disaster was coming, even if they didn’t know it would be a viral pandemic. And for the last few years, author Bradley Garrett has been getting to know them while writing his book Bunker: Building for the End Times, coming out this summer.
“The terrible irony is that all of these preppers have been telling me to get ready, talking to me about disasters, and I’ve been incredulous, taking them to task, trying to tease out fact from fiction in their stories,” says Garrett.
“And now, here I am, totally underprepared.”
GEN caught up with Garrett to find out what these bunkers look like, how many people fit inside them (a lot!), and the surprising reason some preppers believe their way of life benefits others.
GEN: Is there a distinction between bunker people and prepper people? Is that a Venn diagram or a circle within a circle?
Garrett: I don’t think of it so much as a Venn diagram as a spectrum. On the most basic level, most American households have some sort of emergency kit: a first aid kit, a flashlight, a radio. But the other end of the spectrum are these people who are building these often very elaborate, technically sophisticated, expensive bunker spaces, which are built to weather a long period of time. They might be building for three months, five months, a year. The longest I’ve seen is five years.
It starts to become not a technical problem of how to build the space, but how do you create the social dynamics within that space to be able to weather that amount of time. There’s always going to be a degree of social friction based on what people need. And the inevitable result of that kind of situation is that someone emerges as the tyrant. Somebody says, “We’re not going out. Screw your prescription, you can do without it,” or whatever.
How many people are we talking about? Are these bunkers for individuals, families, communities?
Before doing my research for this book, I imagined prepping being like Cold War preparations, where you’re digging up your backyard and creating a bunker. What I actually found is that that is an old model, because everyone realizes that that’s cramped, it’s uncomfortable, it’s unnecessary, that kind of [family-sized] bunker building.
What people are thinking about now looks much more like a commune. It’s people with similar worldviews coming together to build an intentional community with complementary skills to get each other through a crisis like this. And those communities are not as homogenous as you might expect.
The best way to think about them is as second houses. So instead of buying an investment property or a vacation home, you buy the bunker. Because these people don’t have faith that the way that we’re living is sustainable and that it will continue. And so the bunker acts as an insurance policy, but also kind of a vacation home — like, often they would go there for Fourth of July. It’s a gathering space. But then if things go wrong, it’s also the space that you retreat to and you have the added bonus of showing up and meeting all the people you already know and love hanging out with.
I can’t tell you, it’s been amazing watching it happen. All of this stuff was speculative when I started writing about it in 2016, 2017. I watched each one of these communities that were, essentially, temporary communities, just suddenly wink into life. They all went there and sort of shut up the blast doors, and they’ve got their supplies. And while all of us are stressing out, going around trying to find toilet paper or whatever, they’re all partying out there.
So when you say “out there,” where is that?
They’re all over the place. I spent a lot of time in South Dakota in a community called the xPoint. There are 575 semi-subterranean concrete igloos that were built during World War II — it used to be munition storage. They basically put the weapons in there so that the weapons couldn’t be bombed, which is kind of a weird irony: Bunkers that were built to protect weapons later protect people from viruses.
There was another one in Kansas that’s built in a missile silo that used to have a nuclear weapon in it, and now has a 15-story inverted condominium. I’ve been calling it a geoscraper. I don’t know what else to call it. It’s an inverted skyscraper.
But I’ve also been in communities that are a bit more back-of-the-land in their outlook towards things. There was one in Tennessee where a group of people that called themselves homestead preppers were learning how to craft things, how to grow things, how to can food. Their community was right on the edge of Great Smoky Mountains National Park and they would sneak into the park and plant secret groves of fruit trees and vegetable plots; they can actually just kind of vanish into the park if things get really bad.
Communities in different places had very different ways of thinking about how to handle the crisis, but shared visions on the inevitability of the crisis.
What’s the socioeconomic range of these three communities, for instance? Is it mostly wealthier people?
No, it’s a huge range. The people in Tennessee were running small retail shops, they were working everyday jobs. They were making it work on the budget they had. The condo in Kansas, people were buying in for $1.5 million to $3.5 million.
Do they have children in there with them?
I’m going to say most people are in their forties and fifties because you have to have a disposable income to be able to make the decision to do that. There are younger people who have just sort of checked out of their primary life — their life becomes about prepping. There aren’t many kids there, which speaks to the demographic, but I did have a lot of people tell me that they wanted to hand their bunkers down to their [adult] children. So these aren’t doomsday bunkers, these people don’t think the world is ending. They just see it as a space to retreat to and that’s something that they want to pass onto future generations if they can.
There was one guy in Thailand who is building this amazing ecofortress, this kind of self-sustained giant concrete block just out of Chiang Mai, in the middle of these orchards. He was growing all of his food inside and he had bulletproof windows on the top of the building — the thing was unassailable, and he was super paranoid about social unrest. But he made all of his money working on offshore oil rigs. And when the pandemic hit, he was in Burma on an oil rig, and he’s stuck out there now. His wife and kid, who he basically built this fortress to protect, are waiting for him to come home, inside the fortress, not knowing if he’s going to come home with the virus. As much as you plan, you cannot plan for everything.
How conspiracy-minded are these preppers?
Preppers are listening to [traditional news sources like CNN], but they’re, I think, more willing to incorporate a wider range of ideas about what may be causing it and what the solutions might be.
That being said, I’ve had a lot of people say really crazy shit to me over the past three or four years, and there’s been many times when I’ve ended up in heated arguments with them or just walking away because I’ve realized that we’re pulling from a completely different pool of information and there’s no possible way that we’re ever going to be able to communicate to discuss these things.
In the book, you mention some of your sources feared a virus being deliberately unleashed by a rogue nation. Is that what they’re thinking with Covid-19, that it’s a Chinese conspiracy?
They’re definitely willing to call out its origin, to call it “Chinese virus.” That’s a kind of covert racism. But I haven’t heard anyone suggest that it’s a manufactured virus, in any way, shape, or form.
Different types of disasters call for different features of bunkers. What would make a bunker good for a viral pandemic?
So normally, when you put an air filtration system in a bunker, you want to have what’s called positive pressure. If you’ve got positive air pressure within the bunker that’s pushing out of it, then air can’t come in. And everything, all the air that you’re having pumped in, you want to go through an NBC filter, a nuclear biological chemical filter. The biological part is what we care about in this instance. So hypothetically, a month ago, if you were to have locked yourself in your bunker and flipped on the biological air filtering, and you’ve just been sitting in there eating freeze-dried food and watching the news since then, there is essentially zero chance that you would contract the virus.
I think that’s important for two reasons, one is the confidence that that gives you as an individual, right? You are absolutely not infected, there’s no way. But two, it takes pressure off of state resources. So you don’t have these psychosomatic symptoms, you’re not going to get tested, you’re not going to put a strain on the hospital systems.
This is what preppers argue: That if we take more responsibility for our situation, if we’re more prepared for these sorts of emergencies, then we alleviate pressure on the systems, which allows that system to then help those in greater need.
It’s a weird kind of logic, right? Because it sounds socialist. It sounds like, “Oh, this is for the greater good.” But then, of course, it accepts that social safety nets should be cut and will be cut. They often refer to Hurricane Katrina. They say, “Look, those people were out there by themselves for three, four, five days before any semblance of help from FEMA began to roll in.” But if you’re a prepper, not only are you prepared for the situation, potentially you can also help out your neighbor.
To what extent are preppers afraid of looting or unrest as a result of Covid-19?
There’s this phrase that preppers use, “72 hours to animal.” If the grocery stores were to close down tomorrow, or the trucks stop doing deliveries, then you can imagine how this phrase makes sense because it doesn’t take very long to start thinking, “Okay, I can’t buy food anymore. I know who has food, my neighbors across the street.” The lives that we live are operating on a very fragile consensus and very fragile infrastructure, and once any of that starts breaking down, it doesn’t take long for people to become incredibly selfish.
We would hope that people would reach for community and that people would assist each other in times of disaster, and I think that will be the case, and has been the case, in the early days of this disaster. But as time goes on, things get more difficult, the situation changes.
Those people who are hunkered down in their bunkers right now, how long are they planning to be there?
The date that most people are talking to me about is early summer. But there might be cycles.
I’ve been thinking about the bunker in terms of cyclical time. Since the Enlightenment, we’ve become accustomed to thinking about things in linear terms and, certainly, capitalism has this expectation of exponential growth in perpetuity.
I love the idea that we’re actually going back to something closer to indigenous cosmologies, where we start thinking about the world as a kind of spiral — it just kind of cycles around like a virus. It comes and it goes and we have to start thinking about our lives in terms of renewal and rebirth. We go into hiding for three or four months while it passes through and we do a certain kind of work. And then we emerge and do something else.
This interview has been edited and condensed for clarity.
Tyler Durden
Mon, 04/13/2020 – 23:25 - Success During "Hard" Times: Sex Toy Company Sees Sales Rocket 38% Since COVID-19 Lockdown Started
Success During “Hard” Times: Sex Toy Company Sees Sales Rocket 38% Since COVID-19 Lockdown Started
Today in “capitalism works” news, a British sex toy company is having its best month since 2017 as a result of the coronavirus lockdown.
It’s almost as if demand fluctuates for items based on market conditions. Weird. Don’t tell the Central Banks…
Joe Silver and James Pearson, owners of sex toy company Olivia Ocean, say they’re working harder than ever to deal with increased numbers of deliveries to customers. The company says it continues to keep people safe by social distancing, despite the sales increase, according to The Mirror.
“Sales went through the roof. I’ve had to say lots of products are out of stock, we just weren’t ready for this,” Silver said. “Everybody is at home and they’ve got a lot of spare time on their hands. We’re only human, everyone is just a bit randy – let’s be honest.”
In the first week of the lockdown, sales were up 38%. The duo expects sales to rise by 50% by this weekend. Normally, they would be sending out about 1,500 packages a day. That number is now up to about 5,000.
Silver continued: “Day after day we come in and we’re up on what we were before.”
Among the most popular items since the lockdown is the “Couples Mystery Box”, which the company describes as a “naughty surprise for intense desire” – whatever the hell that means…
The company started when Pearson sent Silver a photo of a sex toy with no explanation. Silver said: “I knew him quite well so I knew he was a bit of a joker, but I didn’t know what angle this was.”
Then, capitalism took over. “When I started looking in to it I realised it was a massive market and there aren’t a lot of people to compete with,” Silver continued. “After some market research, we found people don’t want to spend a lot of cash to buy a sex toy because they might realise it’s not for them, and you can’t return them.”
Godspeed, lads.
Tyler Durden
Mon, 04/13/2020 – 23:05 - "The Illusions Are Exhausted" – What Are You Gonna Do About It?
“The Illusions Are Exhausted” – What Are You Gonna Do About It?
Authored by Mike Krieger via Liberty Blitzkrieg blog,
“Tucked into the recent recovery bill was a provision granting the Federal Reserve the right to set up a $450 billion bailout plan without following key provisions of the federal open meetings law, including announcing its meetings or keeping most records about them, according to a POLITICO review of the legislation.
The provision further calls into question the transparency and oversight for the biggest bailout law ever passed by Congress. President Donald Trump has indicated he does not plan to comply with another part of the new law intended to boost Congress’ oversight powers of the bailout funds. And earlier this week, Trump dismissed the government official chosen as the chief watchdog for the stimulus package.
The changes at the central bank – which appear to have been inserted into the 880-page bill by sympathetic senators during the scramble to get it approved — would address a complaint that the Fed faced during the 2008 financial crisis, when board members couldn’t easily hold group conversations to address the fast-moving economic turmoil.
The provision dispenses with a longstanding accountability rule that the board has to give at least one day’s notice before holding a meeting. Experts say the change could lead to key information about the $450 billion bailout fund, such as which firms might benefit from the program, remaining inaccessible long after the bailout is over.
The new law would absolve the board of the requirement to keep minutes to closed-door meetings as it deliberates on how to set up the $450 billion loan program. That would severely limit the amount of information potentially available to the public on what influenced the board’s decision-making. The board would only have to keep a record of its votes, though they wouldn’t have to be made public during the coronavirus crisis.
A Fed spokesperson did not comment on the changes in the law or whether the Fed would continue keeping records of its meetings.“
– Politico: Recovery Law Allows Fed to Rope off Public as It Spends Billions
“An era can be said to end when its basic illusions are exhausted.”
– Arthur Miller
Before going any further, I want to share a graphic that accurately summarizes my position on the current pandemic affecting the world.
Unfortunately, it’s quite common for many to latch on to one of these conclusions and singularly obsess about it to the detriment of the others, when we need to be thinking about all three simultaneously.
It’s absolutely critical we understand governments throughout the world are rapidly mobilizing to use the crisis as an excuse to extract more wealth from society and condition the public to relinquish more precious civil liberties. The response in my own imperial oligarchy masquerading as a country has been particularly grotesque. A government that told us masks don’t work and couldn’t roll out testing for weeks, is now responding with the worst of both post-9/11 and post-financial crisis responses. The idea of representative government or democracy in America is a complete myth. The interests and desires of the people are irrelevant, and our economic system can be best described as financial feudalism.
We’ve seen this movie before. The U.S. government and Federal Reserve used major crises to consolidate wealth and power twice before this century, and it’s happening again. They got away with it before — and they’re getting away with it now — because the public accepts it. I hate to write that, but it’s true. People will tell me the public has no way to fight back, but that’s not accurate. The public hasn’t even tried historical methods like mass strikes and boycotts, instead they’ve been successfully neutered by phony red/blue team mainstream politics, through bickering about marginal issues like pronouns and bathrooms, and by endless entertainment and debt-based consumption. This is why the oligarchy keeps winning. Americans aren’t a serious people yet.
Witnessing the massive theft and power consolidation during the financial crisis a decade ago shook me to my core. I learned so much about how the world really works I simply couldn’t go on in the same way, so I quit my finance job and moved out of NYC. I was convinced such in your face theft would lead to effective popular movements and that the people would discover their power and take direct action, but I was wrong. Rather than economic populism transcending other differences to become ascendant and potent, most Americans were successfully shoved back into convenient political boxes easily managed by oligarchy. The rest is history.
For the past four decades, Americans have accepted that they’re mere spectators to the world around them. They’ve relinquished all agency and power that can have real impact.
I expect this to change as more people realize voting does nothing, and thus begin to take direct action
— Michael Krieger (@LibertyBlitz) April 7, 2020
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Is the above wishful thinking? It might be. I had similar thoughts a decade ago and nothing truly meaningful happened. That said, I’ve learned some valuable life lessons over the past decade and will share some of them today.
The title of today’s piece is “what are you gonna do about it?”, but let me start by telling you what I’m not going to do. I am not going to vote in the 2020 presidential election. In previous cycles, I went out and voted third party as a protest, but I won’t even do that this time. I refuse to give such a farcical system the satisfaction of even a protest vote. I’m over it. Done.
I think the best outcome for the 2020 presidential election would be the lowest voter turnout ever.
Don’t let anyone who wins think they have a mandate.
— Michael Krieger (@LibertyBlitz) April 13, 2020
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Choosing to refrain from participation in a clearly rigged and sham presidential election process may feel like giving up, but it’s the exact opposite. It’s actually quite liberating to give up on the fantasy that voting for one of two sociopaths will materially improve your life or the direction of the country. Once you stop believing in the lazy fairytale version of politics you can get down to real action. If you accept that voting is largely a charade, you can either sit back and take it while playing video games, or you can get motivated. I see two avenues for action that can actually change things.
The first consists of mass organized movements that unite as many disparate factions as possible to focus on a single issue. This can take the form of a workers strike, a targeted boycott or something similar. The key thing that’s prevented this from happening is Americans have been so successfully divided and conquered. “Activist leaders” often demand those who constitute a movement see eye to eye on virtually everything, yet oligarchy knows to unite whenever their core interests are even slightly threatened. A hopelessly splintered public is one reason the people always lose.
We cannot fight oligarchy divided. We need to put aside marginal differences and come together as American populists. No strike, boycott, etc can succeed if we are divided. You have to help unite right now, or you’re part of the problem.
— Michael Krieger (@LibertyBlitz) March 25, 2020
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Although I’m confident in the success of such a strategy if implemented by enough people, this doesn’t mean it will materialize. I was hopeful it could happen last decade, but it never did. Americans proved to be as divided, conquered and distracted as ever, and it’s possible things will continue along this path in the years ahead. As such, waiting for mass movements that may never occur to materialize is not a sufficient strategy. You need a primary strategy, and that strategy starts with you.
The only thing you truly have control over is your mindset and your actions. Think about what angers you most about the system as it stands and turn that anger into something productive. What can you do as an individual to protest or reject that system? What can you do to become more resilient? Can you repurpose your skillset or profession in a way where you become more of a solution than part of the problem? Some of us can do more than others, but virtually everyone can take some action. If you can’t think of anything, think harder.
I’m glad Satoshi invented Bitcoin instead of trying to change the world through politics.
— Stephen Cole (@sthenc) April 13, 2020
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Reflecting on the past decade, every moment I spent taking control of my life and improving as an individual was worthwhile and rewarding, while every moment I spent hoping others around me would change was a gigantic disappointment.
This doesn’t mean we should give up on mass movements, it means you cannot rely on other people to get to the point you’re at as quickly as you’d like. Think about what’s actually in your control and go for it. And good luck.
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Tyler Durden
Mon, 04/13/2020 – 22:45 - 'You'll See Bodies In The Streets Of Africa' Warns Melinda Gates; Says Vaccine Is 'Ultimate Solution' To COVID-19
‘You’ll See Bodies In The Streets Of Africa’ Warns Melinda Gates; Says Vaccine Is ‘Ultimate Solution’ To COVID-19
Melinda Gates says that COVID-19 is going to “be horrible in the developing world,” and that we’re going to see ‘bodies in the streets of Africa’ like what’s happening in Ecuador.
“Look at Ecuador,” said Gates, adding “They’re putting bodies out on the street. You’re going to see that in countries in Africa.”
During a Friday interview with CNN‘s Poppy Harlow, Gates said that when she saw how China had to enact mass quarantines in order to combat the virus, “my first thought was Africa,” adding “how in the world are they going to deal with this?“
Earlier in the interview, Gates said that vaccines will be the ‘ultimate solution’ to solving coronavirus – which she and her husband Bill have been heavily invested in for some time.
Of course, not everyone is excited about the Gates’ endeavors.
These people wanted Corona to spread like crazy in Africa and then offer their ‘help’ via vaccine. There’s a growing resentment against them, a lot of Africans don’t want them there.
— DMF aka Sarah (@ForumsMeghan) April 10, 2020
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Melinda Gates says the lack of testing kits in Africa is the reason our numbers are low but soon we’ll have bodies out in the streets. I’m sure Bill and his wife have rituals every night hoping Africa gets affected the most 🙄😶
— Katlee 🍒😋 (@JustKatlee) April 11, 2020
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After reading critical reports how the Bill & Melinda Gates Foundation really operates in India and Africa my blood just boiled watching this interview.
Their vaccines caused epidemics in those communities.
Polio infections rose in India.
Even WHO was loathed to admit this fact. https://t.co/X7hMLuknj9— Hanief Haider (@haniefhaider) April 11, 2020
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Worry about America Melinda!!! Y’all dying more. Africa will be fine, or is there an agenda we are oblivious to?
— Theophilus Kwadwo Anokye Bediako (@mr_anokye11) April 10, 2020
Tyler Durden
Mon, 04/13/2020 – 22:25 - Coronavirus Socialism: Power To 'Some' People
Coronavirus Socialism: Power To ‘Some’ People
Authored by Patrick Watson via MauldinEconomics.com,
When (hopefully soon) we all get out of coronavirus lockdown and try to resume normal life, we will probably find a different “normal.”
The best-case outcome: scientists discover a “magic bullet” treatment that quickly restores the most serious cases to health. We could then ease restrictions and get on with business.
But more likely, any such treatment is months away and a vaccine probably a year away, so many precautions will have to stay in place. We won’t see large gatherings and crowded restaurants anytime soon.
But we’ll see something else: a radically different economic structure.
The US has never been truly “capitalist” but at least it had a free market façade. Thanks to the coronavirus, the façade is now crumbling.
We will come out of this further from capitalism and closer to socialism. We know this because a leading capitalist said so.
Photo: Needpix
Shoved Left
Back in January, about the time Chinese authorities quarantined Wuhan, the world’s billionaires gathered in Davos, Switzerland, as they do each year.
CNBC interviewed JPMorgan Chase (JPM) CEO Jamie Dimon on January 22. Asked about the Democratic presidential candidates, Dimon said he preferred a moderate, not a socialist. He went on:
Capitalism is the greatest thing that ever happened to mankind. I think that people who haven’t read history books about socialism really should… Once you have governments taking control of businesses it ends up in corruption…
If you’re talking about governments controlling corporations that’s socialism. You can do it in a small way or a big way. The small way is to put a commissar on your board remember the old Russian commissars could sit in the room or do it through regulatory or stuff like that the other way is that they actually own the company. Look at all the other countries and they start to take over the oil companies and the steel companies and utility companies.
And the banks. The banks start making loans not to good companies not because they are properly allocating capital to its highest and best use but to keep that factory open. The bridge to nowhere to make sure the mayor doesn’t lose jobs in his town and once you do that you will have an eroding society. (full transcript)
As I wrote at the time (see Socialism Is Coming But Not the Way You Think), Dimon actually loves misallocating capital. His bank routinely makes “bridge to nowhere” loans and does so happily as long as it gets repaid with interest.
So if those activities define socialism, Jamie Dimon is a very confused billionaire. He professes to love capitalism, but his actions say otherwise.
My point back then was that the US-China “Phase 1” trade deal was nudging the US toward some kind of socialism. I didn’t expect the coronavirus would soon shove us that same direction. Yet it is.
Photo: Flickr
Collectivized Production
Two months after Jamie Dimon said socialism doesn’t work because governments can’t properly allocate capital, Congress allocated $2.2 trillion via the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Note, left-leaning Democrats didn’t do this alone. The bill was as bipartisan as it gets.
The CARES Act does some useful things. It will help workers and small businesses who had to close down to stop the virus from spreading.
But that’s not all. The new law gives the Treasury Department $454 billion to invest in a “special purpose vehicle” jointly with the Federal Reserve. The Fed will then allocate (or perhaps misallocate, to use Dimon’s favorite word) that money in loans to private businesses.
But in fact, it’s way more than $454 billion. Here’s how two economists described the arrangement in a Wall Street Journal article (my emphasis in bold).
The expectation is that the central bank will leverage this money 10 to 1, enabling it to lend up to $4.54 trillion to companies.
That sum is more than all U.S. commercial and industrial loans outstanding at the end of 2019 ($2.35 trillion) plus all the new corporate bonds issued during 2019 ($1.41 trillion).
Thus, if this capital is all deployed by the Fed, and at rates that will surely crowd out private capital, all capital allocation in the U.S. in 2020 will be done by the Federal Reserve System, not by the capital market. This is the largest step toward a centrally planned economy the U.S. has ever taken.
Will the Treasury-Fed partnership wisely allocate this money? We don’t know yet, but the plan is exactly what Jamie Dimon says won’t work. Quoting him again:
…The banks start making loans not to good companies not because they are properly allocating capital to its highest and best use but to keep that factory open. The bridge to nowhere to make sure the mayor doesn’t lose jobs in his town.
Keeping factories open and avoiding job losses is the CARES Act’s entire point, and government, not private lenders, will decide how to do it.
Maybe this centrally-planned financing will find the “highest and best use” Dimon thinks it should, but we don’t know that yet. We do know that private companies will get money from taxpayers, and taxpayers will bear the loss if those companies don’t repay it. The government might get equity in those companies, too.
In other words, we are (for now, at least) collectivizing the means of production. Mao Zedong would be pleased.
Photo: Flickr
Power to Some People
If, like Jamie Dimon, you fear socialist misallocation, Bernie Sanders should be the least of your worries. It’s already happening on a massive scale and President Trump, not Sanders, signed the bill.
We were heading that direction anyway; the coronavirus sped up the process. And where it will lead isn’t clear yet. But it won’t be anything you can plausibly call “capitalism.”
More likely, we will get even more state-enforced corporatism, with socialized losses and privatized profits.
Tyler Durden
Mon, 04/13/2020 – 22:16 - Morgan Stanley: "The Bad Actors Of The Last Cycle Are Getting Bailed Out"
Morgan Stanley: “The Bad Actors Of The Last Cycle Are Getting Bailed Out”
There is a certain paradox behind the coronavirus crisis.
On one hand it is a human, social and economic tragedy of unprecedented proportions, with tens of thousands of people dead around the globe, millions infected, tens of millions unemployed, small and medium businesses decimated, countless companies on the verge of bankruptcy and the global economy in a (hopefully brief) depression. On the other hand, it is precisely what all those who benefited from the last round of Fed bailouts – namely Wall Street banks, zombie companies, and overlevered sovereigns so desperately needed. But don’t take our word for it: here is Morgan Stanley’s chief US equity strategist explaining and admitting what so many can only whisper behind closed doors for fear of being branded conspiracy theorists or being suspended from social networks who are now the self-appointed gatekeepers of the First Amendment.
Last Thursday the Fed surprised us yet again by providing up to $2.3T in loan support while moving further down the quality curve with their secondary market purchases pushing into high yield and CMBS. The program goes well beyond secondary market purchases of existing credit and will also help originate new primary issuance both directly and via lending institutions–i.e., the banks–which remain in good shape to assist. While most investors have been expecting more out of the Fed, based on our conversations with many clients on Thursday and over the long weekend, this salvo from the Fed far surpassed expectations in terms of size and scope.
The bottom line for us is that this latest move is very much in line with our prior view that investors should not have any doubts about the Fed’s resolve to do whatever it takes to make sure this recession doesn’t turn into a depression. In fact, they now appear to be trying to limit the healthy damage we typically get from a garden variety recession.
As noted in our prior research, we think the nature of this recession–the unprecedented suddenness and trajectory of the contraction centered on a health crisis–has provided absolute cover for policy makers to go well beyond traditional support. As such, the bad actors of the last cycle are getting bailed out, which could ultimately limit the malaise we typically get in a recession. In short, the worst stocks will likely have the biggest recoveries…
A much more self-serving and less intellectually honest, if similarly apropos take on what is really taking place behind the scenes comes from JPMorgan’s permabullish quant, Marko Kolanovic:
When it comes to market developments, we believe that the Fed’s action last Thursday represents a pivotal moment in this crisis. Powell’s statement included that “we will continue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery” and probably the most important, historic statement, “We should make them whole. They did not cause this.” This crisis is different from any other in recent history in that it was not caused in any way by businesses or investors. Unhindered by moral hazard, the response of fiscal and monetary authorities is and will continue to be unprecedented, with the goal of essentially making everyone ‘whole.’ We believe the significance of this development is underestimated by markets, and this reinforces our view of a full asset price recovery, and equity markets reaching all-time highs next year, likely by H1.
Investors with focus on negative upcoming earnings and economic developments are effectively ‘fighting the Fed,’ which was historically a losing proposition
Got that? Anyone who bothers with such trivial, anachronistic fundamentals as collapsing earnings, economic developments, the terminal disconnect between security prices and underlying cash flow dynamics now that the Fed is buying junk bonds (and soon stocks), or even bothers to look at the yield curve as if it matters anymore now that the Fed is about to unleash Yield Curve COntrol, is fighting the Fed and destined lose. Thanks Marko for not saying that anyone who still dares to think outside of the brrrrox should be arrested.
So to loosely paraphrase Rahm Emanuel, “Never let a pandemic go to waste.” For the sake of humanity, we can only hope that it wasn’t a plandemic.
That said, one does wonder what crisis will spontaneously emerge in 5 years when all the bad actors who were bailed out last cycle, and were just re-bailed out again, will need to be bailed out one more time?
Tyler Durden
Mon, 04/13/2020 – 22:05 - "It's The Perfect Storm" – SoftBank Reports Staggering $25 Billion Q1 Loss
“It’s The Perfect Storm” – SoftBank Reports Staggering $25 Billion Q1 Loss
In an announcement that should surprise absolutely nobody who has been paying attention, SoftBank announced in a corporate filing on Monday that the Japanese telecom conglomerate with a VC arm expected to report the biggest loss in its nearly 40-year history.
For Q1, SoftBank expects to report a ¥1.8 trillion ($16.7 billion) loss from the company’s stake in its $100 billion ‘Vision Fund’, and another ¥800 billion ($7.4 billion) in losses from its own portfolio of investments. Even considering everything that’s been going on in the world, those are massive numbers.
As one analyst told Bloomberg, the dire situation the company has found itself in resembles a “perfect storm,” as millions of investors recalibrate the odds of the Japanese corporate titan’s long-term survival. Of course, SoftBank’s collapse would be such a blow to the Japanese economy, that we would expect the Abe government, or even the BoJ, to immediately swoop in and bail it out, since moral hazard (at least for big corporations) no longer seems to apply.
“This is looking more and more like the perfect storm for SoftBank,” said Justin Tang, head of Asian Research at United First Partners. “The question is whether there is more to come.”
As WSJ explained in its report, SoftBank’s current predicament is a consequence of Chairman Masayoshi Son’s desire to make a name for himself as a discerning investor in early-stage companies. Without the ‘Vision Fund’ and its own portfolio of investments, SoftBank would still be just a boring old telecoms firm.
Instead, with his reputation in tatters, Masa Son has now put up more than $40 billion of his personal fortune to guarantee loans to his company, an arrangement that will leave him personally liable if the situation at SoftBank goes south.
Since the WeWork blow-up, SoftBank has been regularly mocked over the last six months or so amid regular reports of portfolio companies folding, the latest being last week’s “OneWeb”, a startup that aimed to deploy hundreds of satellites and provide global broadband service. But with the coronavirus outbreak driving the global economy into what looks to be a punishing recession, Masa Son is quickly running out of breathing room.
SoftBank invests in startups both for its own portfolio, as well as its ‘Vision Fund’ portfolio. While the Saudis are by far the biggest investors in the Vision Fund, with a stake of ~$45 billion, SoftBank owns a $33 billion stake in the $100 billion fund. Other investors include corporations like Foxconn and Apple, as well as Oracle Founder Larry Ellison.
For the last few years, SoftBank has been a practically price-insensitive investor, dropping billions of dollars in Silicon Valley darlings like Uber (SoftBank has lost money on its Uber investment) as well as dozens of other startups. SoftBank and the Vision Fund have been blamed for almost single-handedly inspiring the massive bubble in startup valuations, a bubble that exploded last year after a string of disappointing IPOs – Uber, Lyft, Peloton Etc. – followed by WeWork, a company in which SoftBank had invested at a valuation of nearly $50 billion, deciding to scrap its IPO after a dramatic drop in valuations.
WeWork’s board decided to sue SoftBank earlier this month after the company renegged on a $3 billion payoff to company insiders, including CEO Adam Neumann and several VC funds that backed WeWork citing clauses in an agreement that gave it a legal ‘out’.
Unfortunately for SoftBank’s workers, the Japanese government might be left up to the task of chastising a major national champion in the middle of an unprecedented pandemic, when everything about the investing environment seems dangerously uncertain. With the pressure from Paul Singer and Elliott Management, plus the downgrade from Moody’s deep into speculative grade for its debt (though Japanese ratings firms still see SoftBank as a low-risk bet), Masa Son apparently sees only one way forward in the near term: Buy back more stock.
Tyler Durden
Mon, 04/13/2020 – 21:45 - Caitlin Johnstone Rages "This Absolute Bullshit Would Not Be Possible Without Propaganda"
Caitlin Johnstone Rages “This Absolute Bullshit Would Not Be Possible Without Propaganda”
Authored by Caitlin Johnstone via Medium.com,
So as of right now it’s Trump versus Biden. An incompetent plutocrat president selling himself as an anti-establishment people’s champion while simultaneously advancing garden variety Republican sociopathy, versus a warmongering authoritarian who is too demented to string a coherent sentence together and who is looking more and more credibly to be a rapist.
Needless to say, this is absolute bullshit.
How did we get here? How did we get to the point where the electoral contest to run the most powerful government on the planet is between a racist demented right-wing authoritarian warmongering rapist and another racist demented right-wing authoritarian warmongering rapist? How in the hell did this bullshit happen?
There are a number of factors, including anonymous and unsubstantiated “leaks” from the US intelligence community regarding Russian support for the Bernie Sanders campaign and a shockingly coordinated maneuver by Democratic Party leadership (including former president Obama) to sabotage Sanders in the late hours before Super Tuesday.
But the primary factor by far was domestic mass media propaganda. Propaganda during the primary season of course, with the billionaire press showing a very clear and undeniable bias against Bernie Sanders from the very beginning of the race. Had the Sanders campaign received a normal quality and quantity of mass media coverage for a candidate of his stature, he would doubtless have received far more support than he did. To deny that biased media messaging has an effect would be the same as denying that advertising, a trillion-dollar industry, has an effect.
CNN’s Coverage of Sanders Was 3X More Negative Than Biden Following Their Big Primary Wins – In These Times: https://t.co/cqdOn1Yjc0
— Ana Kasparian (@AnaKasparian) March 11, 2020
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But it goes so very much deeper than that. The influence of mass media propaganda upon the Democratic primary race was not limited to the propaganda that was employed during the actual contest; it’s been setting the foundation for it since long before that.
Without having been raised in a media environment that is saturated with establishment propaganda, it would never occur to anyone in a million years to describe a violent authoritarian extremist like Joe Biden as a “moderate”. It would never occur to anyone to think of this crazy wingnut as “electable”. It would certainly never occur to anyone that he should be running on the platform of what passes for America’s political left wing.
Joe Biden has been a horrible, evil politician since long before his rape allegations went mainstream and his brain started turning to porridge. If people could gaze with fresh, unmanipulated eyes upon someone who’s dedicated his entire political career to neoliberal exploitation at home and neoconservative mass murder abroad, someone who openly boasts about authoring the foundational documents of the USA PATRIOT Act, someone who promises rich donors that “nothing fundamentally will change” if he’s elected and who they know from experience can be taken at his word, it would never occur to them that this is someone who should be running for any elected office anywhere, let along within spitting distance of the most powerful one in the world.
It is only by the ability of the mass media to manufacture the illusion of normality that this bullshit has been made possible. The way the plutocratic class controls the mass media has given them the ability to persuade people to believe that freakish extremism is normal and healthy objections to oligarchic malfeasance is freakish extremism.
Manufacturing Normality
“By ‘manufacturing normality’ I mean the way the plutocrat-owned political/media class pour massive amounts of energy day in and day out into making the ridiculous, horrific status quo seem normal.”https://t.co/ebZ9QjWQJS
— Caitlin Johnstone ⏳ (@caitoz) August 15, 2019
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This is the case not just with this bullshit US presidential race, but with all bullshit everywhere. A world where powerful governments attack, destroy, starve and undermine weaker governments which refuse to bow to their interests, a world where the wealthy continue to steal more and more wealth from an increasingly impoverished working class and use the leverage that wealth gets them to steal more, a world where governments demand more and more opacity for themselves and more and more transparency from ordinary people, a world where police are becoming increasingly militarized and speech is becoming increasingly restricted, a world where the response to a global pandemic is not to rally together and overcome but to advance pre-existing authoritarian agendas and manufacture support for new cold war escalations against China.
None of this bullshit would have been possible without all of us having been raised in an atmosphere of mass-scale obfuscation and manipulation. None of us would ever accept such a world without having been manipulated into it, which is why they have done exactly that.
We will not collectively use the power of our numbers to force a change to this oppressive status quo until we can find some way to break free of our psychic bondage to the establishment propaganda machine, and we will not find a way to do that until we change something deep within ourselves about our relationship as a species to mental narrative. But as things get increasingly weird and unpredictable, gaps will open up in our preexisting patterns. When patterns degrade to the point of unpredictability, anything becomes possible.
We are at an adapt-or-die point as a species, and we’ll need to break free of the bullshit to make the jump. Hell, we just might make it.
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Tyler Durden
Mon, 04/13/2020 – 21:25 - Baltimore Streets Flooded With Methadone And Suboxone During Pandemic
Baltimore Streets Flooded With Methadone And Suboxone During Pandemic
Methadone clinics across Baltimore City are flooding neighborhoods with “a lot” of addiction-treatment medicines after federal regulators relaxed take-home restrictions amid the COVID-19 pandemic, reported The Baltimore Sun.
In pre-corona times, addiction treatment medicines, such as methadone or Suboxone, were limited by clinics to avoid abuse or resold on the streets. Now because of relaxed federal rules, addicts can receive up to a month’s supply in one visit.
The Rev. Milton Emanuel Williams Jr., the pastor of New Life Evangelical Baptist Church, also the operator of Turning Point Clinic, said his facility usually doses out a day’s worth of methadone or Suboxone from his East Baltimore clinic to addicts. Now he’s sending them home with a massive 28-day supply.
Rev. Milton Emanuel Williams Jr. “We’re putting a lot of methadone and Suboxone on the street right now, which is a huge concern to me,” said Williams. “There are folks who can’t handle all this medication.”
Williams said a month’s supply of medicine would keep addicts out of the clinic to limit his medical staff’s exposure to a patient that could be a COVID-19 carrier.
The Sun notes that the federal government relaxed take-home rules for clinics to decrease the spread of the virus.
Williams’ clinic regularly treats 2,000 addicts per day. Now his staff is dressed head to toe in protective gear while “It’s almost impossible, in giving compassionate care, to not get close to people,” he said.
Turning Point Clinic Baltimore, Maryland Nonprofit Charm City Care Connection, located in East Baltimore and is a clean needle site, said it had reduced hours as well as the city’s health department’s needle-exchange program.
“People are having a much harder time getting clean syringes,” said Natanya Robinowitz, director of Charm City Care Connection. “People are just having to reuse multiple times or they’re having to share needles.”
Robinowitz believes the city limiting hours of specific health programs, such as needle-exchange, could lead to an outbreak of hepatitis C or HIV.
More than 20,000 opioid addicts live in Baltimore. The virus outbreak has not slowed the drug trade, but with tens of thousands of newly unemployed people in the region, drug usage could surge.
Col. Richard Worley, the city’s chief of patrol, told The Sun that drug dealers are now wearing masks and gloves on street corners.
Dr. Yngvild Olsen, medical director for the Institutes for Behavior Resources Inc., which runs an addiction treatment center in the city, said heroin pills that generally cost $6 on the streets are going for “$2 to $3 a pill,” she said. “One of the big questions is, what is happening with the drug supply?”
The main reason for price declines is that subgrade heroin is being pumped into the streets.
Olsen said social distancing measures had taken away from group sessions and counseling for addicts. Many drug therapy sessions have now gone online.
Williams said a 28-day supply of addiction treatment medicine has a street value of $2,000. Methadone is dangerous and can still cause overdoses. He said some patients are likely to sell their pills.
Nora Volkow, the director of the National Institute on Drug Abuse, recently told Politico that the pandemic could derail President Trump’s progress in countering the opioid crisis.
“I think we’re going to see deaths climb again,” Volkow said. “We can’t afford to focus solely on Covid. We need to multitask.”
Since the rule to relax take-home medicine was on a federal level, that now means clinics across the country are flooding methadone or Suboxone into communities at a very high degree.
And in California, officials are putting the homeless and addicts in hotels, ignoring social distancing rules.
Tyler Durden
Mon, 04/13/2020 – 21:05 - Army's Seattle Field Hospital Closed After 3 Days, Without Seeing A Single Patient
Army’s Seattle Field Hospital Closed After 3 Days, Without Seeing A Single Patient
Authored by Mac Slavo via SHTFplan.com,
The panic and fear among the people who cannot be bothered to read the actual statistics about this pandemic is what should concern most preppers. In fact, this virus has been so overhyped that the Army’s field hospital in Seattle, an “epicenter” of the pandemic has closed after three days without seeing one single COVID-19 patient.
The empty field hospital in Seattle.
According to a report by Military.com, the hastily built field hospital set up by the Army in Seattle’s pro football stadium is shutting down without ever seeing a patient.
This is being done “so the service can shift resources where they’re more urgently needed”, Washington state Governor Jay Inslee said.
Medical equipment at the CenturyLink Field Event Center is being returned to the Federal Emergency Management Agency (FEMA) for use elsewhere, but the governor cautioned against reading too much into the move. Governor Inslee wants people to remain in a panicked state of emergency and dependent on the government’s salvation.
“Don’t let this decision give you the impression that we are out of the woods,” Inslee said in a statement intended to push the official narrative of fear on Wednesday.
“We have to keep our guard up and continue to stay home unless conducting essential activities to keep everyone healthy.”
Washington state saw the first coronavirus death in the U.S. on February 29. Stay panicked and remain in fear, Inslee says.
“But we haven’t beat this virus yet and, until we do, it has the potential to spread rapidly if we don’t continue the measures we’ve put in place,“ he said.
The state asked FEMA and the Army Corps of Engineers to convert the football stadium “before our physical distancing strategies were fully implemented and we had considerable concerns that our hospitals would be overloaded with COVID-19 cases,” Inslee said.
Even though the hospitals have the capacity to handle patients getting sick with the virus.
The decision to close the Seattle field hospital comes amid early signs that the number of new cases could be hitting a plateau in New York, the epicenter of the coronavirus epidemic in the U.S., and other states.
At a news conference Friday, New York Governor Andrew Cuomo said, “Overall, New York is flattening the curve.”
We were never dealing with a pandemic in the general sense. We were always dealing with a tyrannical power grab by every governor in this country and at the head of that, was Dr. Anthony Fauci. Fauci was so wrong about this virus he should be permanently discredited. Yet Americans continue to fall in line and obey his orders to their own personal economic detriment.
The unprecedented government response and mass panic will have lasting negative effects for all Americans. Many more will be destroyed financially and all will lose most of what’s left of our basic human rights.
The good news is that you can find toilet paper on some online retailers again. I’ll continue to do my best to link items that were bought in a panic over the past month to help those who may need them. Toilet paper still seems to be the hottest commodity of 2020.
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Tyler Durden
Mon, 04/13/2020 – 20:45 - Here's What The Reopening Of The US Economy Could Look Like
Here’s What The Reopening Of The US Economy Could Look Like
With US health data suggesting that the spread of the coronavirus may be nearing a plateau in the U.S., public officials are under growing pressure to chart a path back to normality, something Morgan Stanley did over the weekend when it laid out a projected timeline and milestones for a return to work in the US.
The latest data show that conditions are beginning to improve. New York hospitalizations continued to flatten, with total admissions virtually stable at 18,000 and with ICU patients and intubations declining since Sunday.
So far, those numbers have been far below the level officials initially braced for, sparking speculation that projection models were tampered with to paint a worst case scenario in pursuit of a total economic shutdown, one which would enable the Fed and Treasury to unleash an unprecedented bailout package targeting mostly Wall Street, America’s corporations and “top 1%”, with a fraction of the overall fiscal stimulus left over for Main Street America.
That said, Americans at this point will take any good news, and the NY governor provided some today: “We’ve been talking today about the fact that New York believes we have reached a plateau in the increase in the number of cases,” Cuomo said. “They’re not going down, but they’re not going up at the same rate and we believe it’s a ‘plateau.’ That is relatively good news in a world of bad options. We should start looking to ‘reopening.’”
The dilemma facing decision-makers is a familiar one: the longer the state-by-state lockdowns last, the more economic hardship there will be. But dropping stay-at-home restrictions too soon might risk a second wave of infections.
How Will A Reopening Happen?
There is also a potential political clash emerging, with some of the nation’s most powerful governors saying they would form regional alliances to coordinate reopening schools and businesses after the coronavirus outbreak subsides, setting up a potential showdown with the president, who earlier today that he alone has that authority.
That tension was on display Monday as two sets of governors – one on each coast – said they would coordinate how and when they might gradually ease their restrictions on travel and business. Shortly before both initiatives were announced, President Donald Trump tweeted that he alone had the authority to decide when states would return to normal.
….It is the decision of the President, and for many good reasons. With that being said, the Administration and I are working closely with the Governors, and this will continue. A decision by me, in conjunction with the Governors and input from others, will be made shortly!
— Donald J. Trump (@realDonaldTrump) April 13, 2020
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“We will be driven by facts, we will be driven by evidence, we will be driven by science, we will be driven by our public health advisers, we will be driven by the collaborative spirit that defines the best of us at this important moment,” California Governor Gavin Newsom countered as he announced a partnership with Washington state and Oregon.
“The optimum is a geographically coordinated plan,” added New York Governor Andrew Cuomo. “This virus doesn’t understand governmental boundaries.” Coordination is critical, Cuomo explained, to avoid unintended consequences – such as having thirsty residents of a state where bars are closed driving to another where they’ve been reopened.
As Bloomberg reported, the East Coast initiative is in its early stages. Officials from those states – New York, New Jersey, Connecticut, Pennsylvania, Delaware and Rhode Island – provided few details about what criteria they might use to restart a semblance of normal life. A panel will consist of the governors’ chiefs of staff and health and economic officials from each state. Most residents in those states are nearing the one-month mark of having been told to stay home and keep their distance from others.
After the announcement, Massachusetts said it would join the alliance.
For what it’s worth, Cuomo, in his daily briefing, seemed to agree with Trump that the federal government has the authority to overrule the states. But he questioned why Washington would get to direct the reopening after it delegated closures to the states.
“Let’s see what the federal government’s plan is,” Cuomo said. Trump “left it to the states to close down, and that was a state-by-state decision, without any guidance really,” he said.
Meanwhile, California’s governor said he would unveil a framework on Tuesday for lifting the state’s stay-home order, including the metrics that would guide that process. Last week, the state’s secretary of Health and Human Services said easing the state’s restrictions would require putting in place a system to test more people for the virus, track new cases as they appear and trace person-to-person contacts that could trigger new outbreaks.
Further details about how to restart California’s economy will come later in the week, Newsom said, along with preliminary figures about how the virus would affect the state’s budget. Oregon and Washington, he said, will craft their own plans, although the basic principles guiding all three states would similar.
Asked whether Trump or the nation’s governors have final say on reopening the economy, Newsom would say only that California still had a strong collaborative relationship with the federal government on the virus fight.
“I have all the confidence in the world, moving forward, that we’ll maintain that collaborative spirit,” he said.
Trump, for his part, said in a Twitter post Monday that he has the power to overrule governors, “open up” states and relax social-distancing practices. The declaration came after economic advisers pressed concerns within the White House about the economic fallout from the shutdown, and as Trump’s patience appeared to fray after earlier ceding to health advisers’ insistence that his initial target date of Easter was too early.
He said he would make a decision “soon” on reopening, “in conjunction with the governors and input from others.” But he added that “it is the decision of the president, and for many good reasons.” He didn’t list any.
What Would A Reopening Look Like?
On Monday, governor Cuomo was joined on a conference call by the other Northeast governors. The recovery must be careful, incremental and guided by experts rather than politics, Cuomo said, and the pandemic won’t be truly “over” until a vaccine is available, which could take as long as 18 months. Ideally, a plan would also involve widespread testing, he said, to allow those without the virus – and those who have recovered and may now be resistant to it – to return to work first.
“You only get an economic recovery if it comes on the back of a health recovery,” New Jersey Governor Phil Murphy said. “As painful as the economic reality is right now, it’s not remotely as painful as it would be if we get the sequencing wrong and we get the timing wrong.”
As Bloomberg adds, the continued spread of the virus, while slowing, raises questions about what kind of infection rate would be considered acceptable under normal conditions — and whether the goal should be to prevent infections entirely or merely contain it enough so that the hospital system can handle the workload.
Cuomo said the restart has to be carried out slowly while keeping an eye on the virus rates: “You’ll start to open that valve on the economic activity, and you’ll turn that valve very slowly reopening the economy, more essential workers, do it carefully do it slowly and do it intelligently,” he said.
Meanwhile, financial markets have started to take a more positive view of the outlook. The initial improvement was mostly policy-driven, but the greater optimism of the past week seems to be at least partly related to the virus itself according to Goldman. To be clear, the health situation remains very bad in absolute terms, especially in the US which is now ahead of Italy and Spain in terms of coronavirus-related fatalities (though still much lower on a per-capita basis). However, the number of new active cases looks to be peaking globally, projections of cumulative fatalities and peak healthcare usage are coming down, and even actual new hospitalizations in hard-hit New York City have fallen sharply.
In a nutshell, optimists think this will allow us to reopen the economy soon. Pessimists counter that the main reason for the improvement is social distancing, which directly corresponds to reduced economic activity; if so, any economic rebound could result in a large second wave of infections, as well as renewed deterioration in the outlook for the death toll and healthcare overloads. Who is right?
According to Goldman, much of the improvement is probably a direct consequence of social distancing and the plunge in economic activity, and could reverse quickly if people just went back to work. But even if this means that a return to “business as usual” is off the table until we have a vaccine, it might be possible to bring back at least part of the lost output with a sharp increase in testing as well as more limited changes to business practices that lower the risk of infection. In particular, the manufacturing and construction sectors—which by our estimates account for about half of the total hit to GDP in April—might well be able to increase production from the depressed current levels quite soon. For example, the US auto industry is currently planning to go from production at just 25% of capacity in April to 70% in May, following a thorough cleaning of the plants.
One key date for global economy watchers is April 17, when China releases Q1 GDP as well as March retail sales and industrial production. Goldman’s economists expect China Q1 GDP to decline 9% year-on-year and 42% annualized. However, they see strong sequential gains in retail sales and especially industrial production, based on the partial normalization in the high-frequency indicators constructed by our Asia micro and macro teams. Although this would still leave the monthly indicators 8-10% below levels seen a year earlier, it would not only set China up for very strong sequential GDP growth in Q2 but would also increase confidence that the West may start to recover before too long.
That said, to set the stage for recovery, global economic policymakers still have work to do. At the most basic level, they need to keep the unavoidable “first-round” hit to aggregate supply from triggering a large “second-round” decline in aggregate demand that could make the ultimate downturn much worse than what’s necessary to control the virus. Some stylized numbers may be useful for illustration. Assume that the direct impact of the virus is to reduce global nominal GDP in 2020 by 5%, or about $5 trillion, because significant parts of the private sector have to be shut down for a few months. Without policy support and abstracting from real-world complications such as automatic stabilizers, this $5trn GDP hit shows up as a $5trn reduction in private-sector income, borne by businesses and workers whose firms have been shuttered. Assuming a marginal propensity to spend out of income of 60%, this $5trn income hit might result in a further $3trn reduction in aggregate demand and therefore GDP, according to Goldman calculations. In turn, this new $3trn GDP hit might show up as another $3trn reduction in private sector income. And so on, until global GDP has contracted by a multiple of the original virus-related impact.
What should policymakers do to short-circuit this downward spiral? At the broadest level, they will focus on providing all-out support, especially in countries with significant amounts of fiscal and monetary space. Governments need to replace as much as possible of the private-sector income hit, in order to limit the downward pressure on after-tax income and therefore on spending. Meanwhile, central banks will keep credit flowing, on highly attractive terms, so that households and businesses can borrow their way through whatever temporary income hit remains without cutting their spending sharply. (Eventually, concerns about inflation and fiscal deficits will come roaring back.)
So far, the policy effort has been impressive, and Goldman now estimates that global fiscal policy will deliver a discretionary easing of nearly 5% of GDP in 2020—close to the bank’s stylized estimate of the first-round hit in the example above—plus substantial loan guarantees and automatic stabilizers. Moreover, central banks have been aggressive in countering threats to the flow of credit – and generally bailing out everyone, especially those who took on undue risk and leverage to spend billions on buybacks instead creating a “rainy day” fund – via rate cuts, large amounts of additional QE, and a variety of support programs for the debt of private borrowers or lower levels of government (i.e. state and local governments in the US and periphery member states in the Euro area). That said, the response in Europe needs to be scaled up, via greater fiscal easing. At the same time, emerging economies will need a lot more help from the rich world—via bilateral loans, IMF and World Bank financing, access to dollar and SDR liquidity, and outright aid—to get through this severe crisis or else suffer catastrophic consequences as Guggenheim’s Scott Minerd wrote today.
Next steps
If policymakers can fill in the remaining holes on macro policy and manage to thread the needle between continued virus control and a gradual reopening of the economy, the level of GDP should begin to move higher in May/June, according to Goldman’s chief economist Jan Hatzius. Will the recovery look V-shaped or U-shaped? According to Bank of America, there is no chance of a V-shaped recovery. For Goldman, its forecast for US growth shows -11% in Q2, -8% in Q3, and -5% in Q4, which qualifies as U-shaped. On a quarter-on-quarter annualized basis, however, this same forecast shows -34% in Q2, +19% in Q3, and +12% in Q4, which looks rather V-shaped. Thus, Goldman’s forecast is one in which the economy recovers only gradually from the virus but nevertheless shows sequential growth rates in H2 that are unprecedented in postwar history: this will allow the bank to cover all bases, and to tell its clients it is bearish one day, as it was for much of the past months, and then to U-turn unexpectedly, and declare – as it did today – that it is now bullish and that the bottom of the market is in (even as Goldman itself had a bit of fun at its own absurd report).
Tyler Durden
Mon, 04/13/2020 – 20:25 - Veteran CIA Analyst: What if Ignored COVID-19 Warnings Had Been Leaked To WikiLeaks?
Veteran CIA Analyst: What if Ignored COVID-19 Warnings Had Been Leaked To WikiLeaks?
Authored by Ray McGovern via ConsortiumNews.com,
The British court system continues to mock the Magna Carta. Bowing vassal-like to U.S. pressure it persists with Star Chamber proceedings against WikiLeaks publisher Julian Assange until he is either extradited to the US or winds up dead.
The judicial pantomime under way in London, under the guise of an extradition hearing, would make the English nobles who wrested precious civil rights from King John eight centuries ago sob in anger and shame. But nary a whimper is heard from the heirs to those rights. One searches in vain for English nobles today.
Julian Assange on balcony of Ecuadorian Embassy, file image, Getty. Yet the process stumbles along, as awkward as it is inexorable, toward extradition and life in prison for Assange, if he lasts that long.
The banal barristers bashing Assange now seem to harbor hope that, unlike the case of Henry II and Thomas More, the swords of royal knights will be unneeded to “deliver the Crown from this troublesome priest” – or publisher.
Those barristers may be spared the embarrassment of losing what residual self-respect they may still claim. In short, they may not need to bow and scrape much longer to surrender Assange to life in a US prison. He may die first.
Puppeteers
For the UK and US barristers and their puppeteers in Washington, salivating to seize the Australian publisher, a deus ex machina has descended backstage. It is called Covid-19 and London’s Belmarsh prison is accurately described as a petri dish for such disease. We already know of one prisoner death there from the virus. God knows how many more there already are – or will be.
In refusing to allow nonviolent prisoner Julian Assange to leave that crowded prison (with his immunocompromised condition, weakened lungs, and clinical depression), presiding Judge Vanessa Baraitser leaves an open door to deliver Kings Boris and Donald this “troublesome” publisher by “natural” means. The swords of royal knights are not needed for this kind of faux-judicial, royal screw. And, happily for Lady Baraitser, she may not have to keep washing blood off her hands as Lady Macbeth was compelled to do.
King John of England accepts Magna Carta at Runnymede, near Windsor, on 15 June 1215. (Flickr) Meanwhile, as all await Assange’s demise – one way or the other – his lawyers have had no contact with him for three weeks. They cannot visit him in prison; nor can they even talk to him by video chat, according to WikiLeaks editor-in-chief Kristinn Hrafnnson.
Empire Drives Home an Old Lesson
However Assange is eventually dispatched – dead or alive – from Star Chamber and prison, the Empire remains hell-bent on demonstrating that it will give no quarter to those endangering it by WikiLeaks-type disclosures.
The lesson is now abundantly clear to all “troublesome” publishers tempted to follow Assange’s example of publishing documentary truth (a function of what used to be called journalism). They will be cut down – whether by “natural” means, or by endless faux-judicial proceedings resulting in lengthy imprisonment, financial ruin, or both.
On Tuesday Judge Baraitser announced that the Assange extradition hearing will resume on May 18, as previously scheduled and that it may drag on into July — Covid-19 notwithstanding. The big question is whether Assange, if he is kept confined in Belmarsh prison, will live that long. Meanwhile, thousands of other nonviolent prisoners are being released from other UK prisons in a humane step to reduce the chances of infection.
As I think of my good friend Julian, what comes to mind are the desperate words of Willy Loman’s wife Linda in “Death of a Salesman”:
“He’s a human being, and a terrible thing is happening to him. So attention must be paid. He’s not to be allowed to fall in his grave like an old dog. Attention, attention must finally be paid to such a person.”
(On the chance you are wondering, The New York Times, Washington Post, and Wall Street Journal – as well as National Public Radio – have paid zero attention to the extradition hearing in recent weeks – much less to Judge Baraitser’s Queen of Hearts-style, “off-with-his-head” behavior.)
Aping Caiaphas
The pitiable Baraitser, of course, is simply a cog in the imperial machinery, a self-impressed, self-interested, rigid functionary aping the role of Caiaphas, the high priest beholden to an earlier Empire. “It’s better that one man die,” he is said to have explained, when another nonviolent truth-teller dared to expose the cruelties of Empire to the downtrodden of his day – including the despicable accessory role played by the high priests.
Here is how theologian Eugene Peterson’s renders Caiaphas’s words in John 11: “Can’t you see that it’s to our advantage that one man die… rather than the whole nation be destroyed.” (“Nation” in that context meant the system of privilege enjoyed by collaborators with Rome – like the high priests and the lawyers of the time.)
Assange being arrested a year ago on April 11. 2019. The lesson meant to be taken away from Assange’s punishment are as clear – if less bloody – as the crucifixion that followed quickly after Caiaphas explained the rationale. The behavior of today’s empire pretends to be more “civilized” as it manufactures stories of rape, leans on ratty satraps in Sweden, England, and Ecuador, and ostentatiously thumbs its nose at official UN condemnations of “arbitrary detention.” And, if that were not enough, it also practices leave-no-marks torture.
Cutting Off Nose to Spite Face
Meanwhile, those who in an ideal world should be natural allies of WikiLeaks, the media, are cowed, and are as pitiable as Baraitser. Many loudly betray Assange outright.
There is no need now, two millennia later, to erect crosses along the roadside as graphic reminders to intimidate those who would expose Empire’s oppression. Civil rights wrested from King John 800 years ago – habeas corpus, for one – have become “quaint” and “obsolete”, adjectives applied by that distinguished American jurist, and George W. Bush “lawyer,” Alberto Gonzales to the Geneva Convention protections against torture. The successors to the English “nobles” of Runnymede seem to have gone the way of Gonzales.
This is not only a case of “killing the messenger”, lamentable as that is. It amounts to cutting off our collective nose to spite our face.
Because most Americans are so impoverished on accurate information, and so misled by the corporate media regarding WikiLeaks – and Assange, in particular – they are blissfully unaware of WikiLeaks’ capability to expose crucial information that can head off disaster.
What If?
Several Veteran Intelligence Professionals for Sanity (VIPS) have written retrospectives, sharing acute personal frustration at our inability to get important warnings through calcified bureaucracies before calamity struck – real calamities like 9/11 and the unprovoked attack on Iraq that has brought chaos and widespread death.
We have asked ourselves, “What if?” What if WikiLeaks had been up and running before those catastrophes? Would those of us privy to critical – but unheeded – information have turned to WikiLeaks to get the word out? Could those liminal events have been prevented?
The answer is consistently Yes, those events could have been exposed and prevented.
Former FBI Special Agent Coleen Rowley, whose 9/11 warnings were ignored. (Flickr) “WikiLeaks and 9/11: What If?” is the title The Los Angeles Times gave an Oct. 15, 2010 op-ed by former FBI Special Agent/Minneapolis Division Counsel Coleen Rowley and former Air Marshal Bogdan Dzakovic, who led an elite “Red Team” for the Federal Aviation Administration to probe vulnerabilities of airports and aircraft during the years before 9/11.
After arresting would-be hijacker Zacarias Moussaoui on August 16, 2001, Rowley’s colleagues in Minneapolis ran into unconscionable foot-dragging by FBI headquarters functionaries, who would not permit a search of Moussaoui’s laptop computer or his personal effects.
In late August, the same Washington functionaries stonewalled an FBI Minneapolis Division supervisor, who emphasized that he was just “trying to keep someone from taking a plane and crashing it into the World Trade Center.” (Yes, those were his exact words.) Special Agent Harry Samit, who helped arrest Moussaoui, later testified that the actions of his FBI superiors in Washington constituted “criminal negligence.”
This was before WikiLeaks was up and running. Would Samit’s sense of duty and his frustration have prompted him to contact WikiLeaks, were it to have been available then and as technically easy to approach (via anonymous drop box) as it continues to be now? Someone should find Samit and ask that question. (Thus far, we have had no success contacting him.)
Hijacking Planes? Child’s Play
No one has to ask Federal Air Marshal Dzakovic whether he would have gone to WikiLeaks in desperation over the foot-dragging he encountered at senior levels of the FAA. His story is as painful to hear as Special Agent Samit’s, in terms of being ignored and stymied in the period leading up to 9/11.
Dzakovic’s “Red Team” included two Vietnam veterans: Steve Elson, a retired Navy Seal lieutenant commander, and Brian Sullivan, a retired Army lieutenant colonel with experience in intelligence and law enforcement. They both join Dzakovic in a loud “Hell Yes,” when I asked if they would have gone to WikiLeaks before 9/11, if it were in operation at the time.
That elite Red Team had found weaknesses in airport and airline security nine out of ten times, vulnerabilities that made it possible to smuggle weapons aboard and seize control of airplanes.
Starting in 1997-98, the Team worked feverishly through its chain of command, and got nowhere with its urgent warnings. It then went to the FAA inspector general and, later, the Government Accountability Office; and got nowhere.
Team members then contacted and briefed members of Congress in person; and got nowhere. As a last resort, about a year before the 9/11 attacks, Team members desperately tried to get the media interested in the calamity they could see brewing. This resulted in only two small stories, easily ignored in other mainstream media.
Testifying before the 9/11 Commission, Dzakovic summed up the Team’s experience:
“In the simulated attacks, the Red Team was extraordinarily successful in killing large numbers of innocent people … [and yet] we were ordered not to write up our reports and not to retest airports where we found particularly egregious vulnerabilities… Finally, the FAA started providing advance notification of when we would be conducting our ‘undercover’ tests and what we would be checking.”
Dzakovic has expressed “contempt… for the bureaucrats and politicians who could have prevented 9/11 but didn’t.” Adding further bureaucratic insult to injury, the 9/11 Commission did not see fit to include any of his testimony in its report.
The Unprovoked US/UK Attack on Iraq
Many – probably hundreds – of US intelligence analysts knew in 2002-03 that there was no reliable evidence that Iraq had weapons of mass destruction or – still less – had significant ties to al-Qaeda.
They did not have to wait for the conclusions of the five-year Senate Intelligence Committee’s study. Announcing the committee’s bipartisan findings on June 5, 2008, then Chairman Jay Rockefeller (D-WVA) was unusually direct:
“In making the case for war, the Administration repeatedly presented intelligence as fact when in reality it was unsubstantiated, contradicted, or even nonexistent. As a result, the American people were led to believe that the threat from Iraq was much greater than actually existed.”
What does “nonexistent” intelligence look like? And who created it out of nothing? We know the names. No one has been held accountable. One of the miscreants, former Acting CIA Director John McLaughlin, unabashedly regaled a large audience at the National Press Club last October with, “Thank God for the Deep State.”
The question, again: surely there was at least one intelligence officer with courage enough to go to WikiLeaks – had it been operating at the time – to out the lies and liars, “undeceive” the American people, and, not incidentally, possibly head off the war on Iraq. Lt. Col. Karen Kwiatkowski, USAF (ret.), a VIPS member, says she would probably have done so.
“Analysts concluded it could be a cataclysmic event,” a source says. https://t.co/ZmrEksUnzC
— ABC News (@ABC) April 8, 2020
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As it was, Kwiatkowski, the 2018 recipient of the Sam Adams Award for Integrity in Intelligence, exhibited unusual courage in doing what she could to get the truth out before the attack on Iraq. In a recent posting Karen explains:
“Almost two decades ago, I challenged the status quo in my workplace, the politicized Pentagon, for creating urgency when there was none, publicizing lies when the truth did not support the political agenda. I spoke directly to investigative reporters with Knight Ridder (as portrayed in the [Rob Reiner] film Shock and Awe).
Films and popular media coverage of the truth took a decade to percolate. Had WikiLeaks been available in 2001 and 2002, global awareness of government and corporate lies relating to the Iraq war alone would have saved lives, protected the environment, and slowed or stopped the … wars that still invigorate Western foreign policy. The truth is owned by all of us; those willing to step up and risk careers, reputations, and even their own lives to speak truth to power are a small, and sadly, expendable number. Julian Assange and his vision of simple transparency, for the people, with technical protection for witnesses to evil, has saved lives … and elevated the concept of honesty everywhere. …”
So you say you have not seen the film (in which an actress plays Karen), and you had been wondering how it was that Knight Ridder journalists Warren Strobel and Jonathan Landay were virtually the only newspapermen to see through and report accurately on the widespread lies before the attack on Iraq? Now you know.
The problem, of course, is that – however enterprising, dogged, and professional the behavior of Strobel and Landay, they were largely marginalized as outliers in the mainstream media and were not given much play before the war. Exposure of the lies through WikiLeaks surely would have been more effective.
Early Warning on COVID-19
In terms of fatalities in the U.S., the number of those succumbing to the Covid-19 pandemic already dwarf the total killed on 9/11. True, preparations, going back years, to prevent and/or deal with such a tragedy were inadequate, to say the least. Accountability for that, as usual, is zero, and there is abundant crow for recent administrations to eat. Even though this is not the time for a blame game, one is going full speed ahead. Consequently, it is doubly difficult to separate the fake-news chaff from the wheat.
On Wednesday, ABC News put out a breathless story titled “Intelligence report warned of coronavirus crisis as early as November; analysts concluded it could be a cataclysmic event.” The alleged report was said to have been prepared by the US military’s National Center for Medical Intelligence (NCMI).
It was alleged to include information from satellite imagery and intercepts, and to have been briefed “multiple times” at the Pentagon and White House, with detailed warnings about the spread of what has become known as Covid-19.
Colonel Dr. R. Shane Day, director of the Center, wasted no time pouring ice water on the ABC report later on Wednesday. Col. Day stated:
“… in the interest of transparency during this current public health crisis, we can confirm that media reporting about the existence/release of a National Center for Medical Intelligence Coronavirus-related product/assessment in November of 2019 is not correct. No such NCMI product exists.”
A hint as to the probable motivation behind the original ABC report rests in its pointed suggestion that the “government could have ramped up mitigation and containment efforts far earlier to prepare for a crisis poised to come home.” The neuralgic question of how much time it took the Trump administration to take the pandemic seriously is, of course, a legitimate line of inquiry – assuming one stays alert for agenda-laden “breaking news.”
There have, however, been other accurate reports of studies done about preparation for a pandemic that the Trump administration ignored.
As for WikiLeaks, even US intelligence officials have begrudgingly acknowledged, in backhanded but unmistakable ways, that WikiLeaks’ enjoys an unusually high reputation for accuracy. Documents, including emails and the like, are its stock in trade and considerable pain is taken to verify their authenticity and then let them speak for themselves. So, were WikiLeaks to be given an authentic document with significant information on the reaction of senior officials’ anywhere to Covid-19, it would almost certainly be posted.
The name of the game is documents. Daniel Ellsberg’s most insistent advice to leakers is: “Always bring documents.” With the help of clever, committed friends and the courageous stand taken by a highly principled senior lawyer at The New York Times, Ellsberg made it virtually impossible for the Times to turn down The Pentagon Papers. (One often overlooked, key factor was that the Times knew Ellsberg had also given the documents to the Times’ competitors.)
Chelsea Manning and Edward Snowden followed Ellsberg’s advice on documents and, in their case, did not need to spend countless hours at a Xerox machine. It’s far easier now. Any questions as to why Assange is hated by those who have a lot to hide?
In the coming weeks and months there will be a high premium on the kind of transparency WikiLeaks can provide in publishing information otherwise hidden from the public.
This is particularly the case on the Covid-19 issue, inasmuch as government deliberations and decisions are being “classified,” thereby thwarting the transparency an educated populace should be able to expect.
Tyler Durden
Mon, 04/13/2020 – 20:05 - Wyoming Reports 1st Coronavirus Death As Global COVID-19 Cases Near 2 Million: Live Updates
Wyoming Reports 1st Coronavirus Death As Global COVID-19 Cases Near 2 Million: Live Updates
Summary:
- Smithfield foods closes world’s largest pork plant
- US, Europe see decline in new cases
- China, Russia report concerning increases in new cases
- China ends Gilead drug trial hailed as ‘highly successful’ a few days ago
- Italian death toll passes 20k
- South America, Africa see acceleration in new cases
- Cali Gov. says he’ll release plan to reopen economy tomorrow
- Cuomo sees vaccine in 12-18 months
- George Stephanopoulos tests positive for COVID-19
- WHO says it will release new guidelines for countries restarting economies
- New York deaths pass 10k
- Cuomo reports another drop in hospitalizations
- Florida case total passes 20k
- Macron extends French lockdown until May 11
- 6 governors detail plan to work together to reopen states
- Singapore reports record jump in new cases
- Saudi Arabia reports record jump in daily cases
- All 9 SCOTUS justices will hear arguments via videolink for first time in history
- UK’s top scientific advisor warned against lifting lockdown
- Global cases top 1.9M, deaths near 120k
- 2 NYPD detectives die from COVID-19
- Senior Israeli rabbi succumbs to virus
- EU competition regulator warns about risk of corporate takeovers from China
- In Ecuador, police move to collect 800 bodies from a hard hit village
- Trump likely to cut money for WHO
- Iran reports 1,600+ new cases, 100+ deaths
- Putin warns outbreak getting worse
- Australia, New Zealand keep restrictions in place despite drop in new cases
* * *
Update (2000ET): For anybody else who felt that 2 million number hit just a little too early, BNO News reports that Johns Hopkins is miscounting the total case number for Florida by more than 100k.
This is not accurate. John Hopkins made a mistake. They’re showing 123,019 confirmed cases in Florida when the real number is 21,019 https://t.co/ow3pEBW2BJ
— BNO Newsroom (@BNODesk) April 14, 2020
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Update (1950ET): Bloomberg just confirmed that by at least one measure, the global total of confirmed coronavirus cases has passed 2 million, more than doubling since April 3.
What’s more; the state of Wyoming reported its first death linked to COVID-19, making it the 50th state to report a COVID-19-related death. The sparsely populated Wyoming has a population of fewer than 600k people, making it the 2nd most sparsely populated state in the country.
Meanwhile, Treasury Secretary Steven Mnuchin promised at tonight’s White House press briefing 80 million taxpayers should receive their “stim checks” by Wednesday, and assured small businesses still waiting for a lifeline that the government is definitely working on it. Meanwhile, President Trump said he hoped to reopen the country “ahead of schedule,” despite that whole back-and-forth with the states.
* * *
Update (1720ET): In another discouraging sign of just how entrenched the virus has become in the Middle East, Saudi Arabia reported its largest jump in new cases on Monday, confirming 472 new cases in the last 24 hours, bringing its total to 4,934 cases.
The Supreme Court said on Monday that for the first time in history, all nine judges will hear cases argued via teleconference rather than in the courtroom due to the coronavirus pandemic.
* * *
Update (1550ET): Chicago Mayor Lori Lightfoot said Monday afternoon that she expects her city to remain closed past the end of April.
* * *
Update (1520ET): Not content to let Cuomo and his fellow governors on the East Coast have all the fun, California Gov. Gavin Newsom said he’d release a plan on Tuesday outlining how he’ll reopen his state. He said Oregon, Washington and California have developed a cooperative “framework” to get their local economies back on line. Reporters can expect the plan around lunchtime, he added.
Governors around country (including Texas Gov. Greg Abbott, who expressed impatience in delaying the reopening much longer over the weekend) have now committed to releasing plans for reopening their economies. If a few days pass, and those plans aren’t out, that’s not going to be great for the market’s confidence.
* * *
Update (1455ET): Cuomo said that the state has acquired roughly 3k ventilators from private companies, many of them in China, before complaining about FEMA’s refusal to buy ventilators and PPE and masks for the states, forcing them to source the items on their own.
He also complained about other federal rules, and insisted that if the Feds imposed guidelines on the states insisting on mass testing before reopening, he wouldn’t be able to comply because “I can’t purchase enough diagnostic tests.”
* * *
Update (1415ET): A hastily organized press conference involving the governors from six northeastern states – NY, NJ, CT, RI, DE, RI, PA – is underway, as the group explain to the public how they will work together to cut costs and pool resources to battle the epidemic, and coordinate the difficult decision of reopening the regional economy.
Earlier, several governors insisted that they and they alone would decide when to reopen their states, and the briefing was apparently called after President Trump insisted he had the sole power to reopen the states – which many immediately rebuffed.
At the briefing, the governors’ response was delivered by New Hampshire’s Tom Wolfe.
“Since we had the responsibility of closing the state down…we have the responsibilioty for opening it up…you’ve got to get people healthy first before reopening the economy, or it’s not going to work…we’re almost ready to start moving on to the next sense which is moving back to some semblance of a new normal,” said New Hampshire Gov. Tom Wolfe. “It was our responsibility to steer our way through these uncharted waters and it’s our responsibility to steer our way back.”
Watch the briefing live below:
HAPPENING NOW: Governors of Northeast states make announcement amid COVID-19 battle. https://t.co/CWn2EHKs1Y
— ABC News (@ABC) April 13, 2020
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RI Gov. Gina Raimondo said the governors are the ones who have “shown great leadership” in navigating this crisis, while the federal government procrastinated and failed to come up with a consistent, coherent plan.
All six governors pledged to form a regional task force designed to planning the reopening, each to include a public health official, an economic development official and each governors’ chief of staff.
As far as when the guidelines would be ready, Gov. Cuomo said it would “have to be within weeks.”
And, in what sounded like a direct rebuke to Mayor de Blasio, who tried to cancel NYC school until the end of the year, only for Cuomo to push back and reverse the order, Cuomo said re-starting business would be impossible without re-starting schools.
“We have one state…all areas need to reopen at the same time,” Cuomo said.
French President Macron, meanwhile, said Monday night that he would extend the country’s lockdown until May 11 as new cases and deaths continue to slide.
Portugal reported 349 new cases of coronavirus and 31 new deaths, for a total of 16,934 cases and 535 deaths. France reported 574 more coronavirus deaths over past 24 hours, raising its toll to 14,967. In Indonesia, which has already admitted to lying about confirmed cases, officials reported 316 new cases, bringing the total to 4,557.
Below, we noted comments from a WHO press briefing earlier where Dr. Tedros insisted that the organization remained on good terms with the US, even as President Trump prepares to pull funding.
The number of confirmed COVID-19 cases around the world has just passed 1.9 million, while the global death toll approaches 120k.
* * *
Update (1255ET): According to the New York Post, the head of the NYPD’s detective union described the virus as an “invisible bullet” as two more detectives succumbed to the virus. Roughly one-fifth of NYPD officers have called out sick as many have been exposed to the virus, and many have gone on to develop symptoms and test positive.
The NYPD has lost 22 total employees so far. As of Sunday evening, 2,344 uniformed officers and 489 civilian members of the department had contracted the disease. Civilian employees have taken it the hardest, with 17 dying.
* * *
Update (1240ET): In keeping with the theme of East Asia experiencing the ‘second wave’ of the novel coronavirus outbreak already, Singapore’s Health Ministry reported 386 new cases on Monday, the city’s biggest daily jump, taking its total confirmed cases to 2,918. The city-state, which is under a partial lockdown, also reported its 9th death.
Many of the new cases have been linked to dormitory-style housing where migrant workers often stay, giving Singapore cause to follow China’s lead and blame the rebound on foreigners, despite Singapore tightening travel restrictions 2 weeks ago on non-residents.
Meanwhile, Sky News reports that the UK’s chief scientific adviser said that although the first signs of “flattening” in the UK, lifting lockdown too early would risk a 2nd wave and would be a “complete waste of everything everyone’s done until now.”
* * *
Update (1153ET): With much of the country on holiday, Italy’s Civil Protection Service reported 566 new deaths on Monday, bringing its total to 20,465. Additionally, it reported another 3,153 cases, bringing its total to 159,516. Though Italy’s death toll has finally passed 20k, the numbers released on Monday suggest that a slight jump in new deaths over the weekend was, in fact, a blip, and that Italy remains right around the peak.
However, on Tuesday, Italy will follow Spain by starting to reopen its economy, as the fact finally sets in that governments simply can’t afford to put off reopening longer than absolutely necessary. It’s been almost a month, infections are slowing – it’s time to get back to work.
Italy will tomorrow start to lift its lockdown after experiencing the lowest number of #COVID19 deaths for three weeks. Baby clothes shops, book shops and launderettes will be the first to be allowed to open.
Read more here: https://t.co/ViJ1qEbPpQ pic.twitter.com/w8i2QAGkKX
— SkyNews (@SkyNews) April 13, 2020
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But while the economic imperative is an unfortunate reality that, for many, represents a hobbsian choice between risking infection vs. risking everything else, the world will be watching closely as Italy, Spain – and now even Iran – start opening ‘non-essential’ businesses again.
* * *
Update (1153ET): Gov. Cuomo said later in his press conference that he sees a vaccine arriving for distribution among human patients in 12-18 months, a projection that hasn’t changed in 2 months.
* * *
Update (1140ET): Following reports that President Trump was planning to yank US funding for the WHO, the organization announced on Monday that it would announce a new list of guidelines for the handful of countries – including China – that are beginning the process of reopening their economies.
The WHO also proposed that it buy goods in demand to fight against price gouging. One WHO doctor added that he expects things to remain things to stay like this for a while until a cure arrives. Dr. Tedros at one pointed added that he hoped US support for the organization would continue (because otherwise, he will become even more beholden to China, never a comfortable place to be in).
In an update on global research, the organization said that it is tracking more than 70 vaccines in development, with 3 already progressing to human trials.
Maenwhile, as Cuomo insisted New York was hitting a ‘plateau’, the situation in Florida has continued to worsen, with 1,045 new cases reported over the last 24 hours, bringing the state’s total to 20,601.
* * *
Update (1120ET): As Andrew Cuomo begins his Monday briefing, New York State reported another slowdown in hospitalizations linked to COVID-19. As expected, he revealed that coronavirus deaths in the state had passed 10k, the highest in the US, and more deaths than many countries in Europe, including tripling Germany’s just over 3k deaths.
Watch the rest of his press conference here:
Holding a briefing with updates on #Coronavirus. Watch Live: https://t.co/XX0lC3jtqk
— Andrew Cuomo (@NYGovCuomo) April 13, 2020
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Cuomo insisted that the curve continued to flatten over the last 24 hours.
“Here’s the good news, the curve continues to flatten…it appears that we have a plateau…it’s flattening, the flattening of the curve. The increases slow down, and flatten out, over a period of time. If you look at the number of total admissions, that’s definitely a flattening. Still going up a little bit…”
He also released new data for new patients, as well as patients moved into the ICU.
Cuomo added that the concept of dying on Easter – a “high holy day” for Catholics (and, indeed, Christians of all stripes) – made the number from yesterday, which was lower than the day before, bringing the 3-day average to the lowest since NY started publishing data.
After 585 crewmen aboard the USS Theodore Roosevelt were infected with the virus, one of them died Monday of complications related to the disease, according to a statement from the Navy, released just weeks after the ship’s commander was fired for trying to keep his people safe by begging his superiors to take more definitive action in a letter that eventually leaked.The name and other details about the sailor’s identity haven’t been released. He had tested positive on March 30 and was taken off the ship to “isolation housing” along with four other sailors. On April 9 – Thursday – he was found unresponsive during a medical check, and moved to ICU. He died Monday, per the NYT
* * *
Update (0940ET): ABC News’ George Stephanopoulos revealed during Monday’s episode of “Good Morning America” that he had tested positive for COVID-19 after his wife, Ali Wentworth, contracted the infection.
He said he is asymptomatic.
“I actually feel great,” he said. “I’ve never had a fever, never had cough, never had shortness of breath, never had chills, any of the classic symptoms you’ve been reading about.”
Stephanopoulos is an anchor at ABC News, and a former press secretary for the Clinton Administration.
* * *
Update (0940ET): Britain’s Department of Health and Social Care has just released the latest round of figures, showing a slight drop in deaths after UK for two days in a row reported the most deaths for any country outside the US. 717 new deaths and 88,621 new positive tests emerged.
As of 9am 13 April, 367,667 tests have concluded, with 14,506 tests on 12 April.
290,720 people have been tested of which 88,621 tested positive.
As of 5pm on 12 April, of those hospitalised in the UK who tested positive for coronavirus, 11,329 have sadly died. pic.twitter.com/AijH4hfOV1
— Department of Health and Social Care (@DHSCgovuk) April 13, 2020
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* * *
Update (0830ET): Iran reported 1,617 new COVID-19 cases and 111 new deaths, for a total of 73,303 cases and 4,585 deaths.
* * *
After reporting another promising slowdown in the rate of COVID-19-linked deaths yesterday, Spain reported only 517 deaths on Sunday, the lowest number since the country’s lockdown began. Now, with much of Western Europe observing a holiday on Monday, the Spanish government is beginning the process of reopening in the economy, despite still being roughly around the ‘peak of the curve’.
Spain wasn’t the only embattled European country to report some encouraging progress on Sunday: Italy reported its lowest number of new deaths since March 19, as the number of people in intensive care continues to decline.
Yesterday was the first day in weeks that Spaniards were allowed to leave their homes and travel to see family for the Easter holiday. Now, on Monday, construction workers in Spain are returning to work after a two-week pause on their activities, though the government has warned that it could reimpose the lockdown if the spread starts to accelerate once again.
Globally, the number of confirmed infections rose by 72,523 on Sunday, the lowest number of additional cases in seven days. According to Johns Hopkins, roughly 1,859,011 have been confirmed worldwide as of Monday morning. Additionally, the daily death toll on Sunday also dropped to 5,417, as the rate of growth slowed to just 5%, its slowest rate since March 9. The US also saw a significant slowdown in deaths on Sunday, with just 1,528 Americans losing their lives. This is down sharply from a peak of more than 2,000 just two days earlier, and represents a daily growth rate of just 7%, the slowest since March.
The FT
But more concerning, as the lockdown drags on in the US, are situations like the closure of the world’s largest pork producing plant, which is owned by Smithfield Foods, and is situation in Sioux Falls, South Dakota. Slaughterhouse shutdowns are disrupting the supply of US food, and harshly undermine governors’ assurances that the food supply is safe and consumers shouldn’t hoard supplies. The plant was closed for a few days last week for a deep clean after several employees tested positive for the virus. But worries about the outbreak have prompted management to close the plant ‘indefinitely’. That one plant supplies roughly 5% of America’s pork.
Europe and the US weren’t the only places to report slowdowns in new cases and deaths. Australia and New Zealand plan to keep coronavirus-inspired restrictions on movement in place despite the two countries reporting roughly 50 new cases combined over the weekend.
However, outbreaks in certain regions are only just beginning to accelerate.
As China abruptly ends a Gilead drug trial that had been hailed as ‘extremely promising’ just days ago, the Indian Council for Medical Research is stepping its own race for a cure after announcing plans for a clinical trial using plasma from recovered coronavirus patients to treat those who are still critically ill, as the country’s caseload continues to rise steadily.
Last night, we reported that China reported its largest number of new cases in weeks, as Beijing’s claimed that practically all of the 108 new cases involve foreigners or traveling Chinese nationals returning home ring particularly hollow when one considers that China has reduced the number of people crossing its borders by 90% as part of its efforts to contain the virus. According to Al Jazeera, Liu Haitao, an official with the National Immigration Administration, said the number of cases was still on the rise in the countries along China’s borders, per Al Jazeera.
The world’s wariness of China has continued to intensify, as EU competition regulator Margrethe Vestager urged EU member-states to prevent China from taking advantage of low valuations to launch takeovers of critical companies during an interview with the FT.
The BBC’s Robin Brant had some more thoughts on China’s ‘imported’ case problem.
Imported cases have been China’s focus for several weeks now. It believes the main threat now to be people bringing the virus back to the country.
Most of these people are Chinese returning home. The arc of China’s efforts to tackle, contain and end the outbreak went like this: local officials knew about an emerging outbreak but didn’t act; the national government imposed a draconian lockdown of Wuhan; China imposed domestic travel restrictions but insisted that international travel to and from China should not be cut; the virus spread abroad; China believed it had successfully contained the outbreak then switched its focus to people bringing it back here from abroad.
Something like a cat and mouse chase has emerged – despite drastically reducing international flights into China, barring any direct arrivals into Beijing and insisting that passengers now undergo strict quarantine, people found a weak point.
The usually obscure land crossing between Russia and China in the northern province of Heilongjiang has seen a persistent cluster of travellers bringing the virus with them. New ‘imported’ cases there are almost all Chinese coming home. And they appear to be spreading it. The latest official figures reveal 10 new domestic cases, seven of which are in Heilongjiang, home to that land crossing.
After the total number of confirmed coronavirus cases in Russia doubled last week, Russia reported 2,558 new cases of the novel coronavirus on Monday, representing a 16% acceleration over the previous day, a record daily rise, bringing its overall nationwide tally to 18,328. 18 new deaths brought the death toll to 148. In a rare move, Vladimir Putin warned Monday that the outbreak is getting worse.
A former chief rabbi of Israel has died of COVID-19 – the highest profile death from the disease in Israel. The rabbi, Eliyahu Bakshi-Doron, 79, was chief rabbi of the Sephardi community, which includes Jews or their descendants from the Iberian Peninsula, North Africa and the Middle East, from 1993 to 2003.
In Ecuador, one of the worst-hit countries in South America, police removed almost 800 bodies in recent weeks from homes in Guayaquil, the epicenter of the country’s coronavirus outbreak, which has completely overwhelmed its meager health system, per Al Jazeera.
And finally, the Washington Post reports that President Trump is likely to announce restrictions on US funding for the WHO later this week over its handling of the coronavirus pandemic and its persistent kowtowing to Beijing, which Trump argued has jeopardized global health.
Tyler Durden
Mon, 04/13/2020 – 19:56 - Everything That Is Wrong With America, In One Chart
Everything That Is Wrong With America, In One Chart
Mixing metaphors magnificently, if this ‘picture’ was worth a thousand words, the following chart is worth six trillion dollars as it exposes the ugly reality of America today that CNBC proclaimed so proudly on Thursday.
If you had any doubt about what (or who) is important to the unelected officials in The Eccles Building (and arguably the elected officials demanding strings be pulled behind the scenes) as they pump asset values ever higher, this chart makes it clear… it’s not you America.
In a succinct note from Nordea Capital Markets, entitled rather cleverly “The Flipside Of Oprahnomics” Andreas Steno Larsen and Joachim Bernhardsen use the entertainer’s infamous “You get a car, you get a car, everybody gets a car” line as a jumping off point to highlight just how ‘unequal’ The Fed’s “you get a bailout, you get a bailout, everybody gets a bailout” plan really is…
It looks like the bail-out and QE schemes have provided a better windshield for capital owners than for the hourly paid employees, if we judge it by the most recent trends. Equities are UP again, while initial claims keep skyrocketing.
If capital owners grow more comfortable with the outlook, it may also end the job market menace. It is essentially impossible to bail out Main Street without also bailing out Wall Street, even if the Fed’s PR department will keep trying to convince you otherwise.
The Fed is now both the lender and buyer of last resort… Oprahnomics it is!
It is a pretty common conclusion that the COVID-19 virus will forever alter the world (Good old Kissinger joined the choir this weekend), why the Fed/US Treasury may risk bail-outing companies or even sectors that are ill-equipped to survive in the post-COVID-19 world.
For how long can public credit lines remain in place, should a company or a whole sector continuously struggle to restart demand?
Take the example of the retail sector. If consumption is hypothetically lastingly moved to online platforms, the Fed and the Treasury will probably keep bailing out a sector that will inevitably have to decrease in size.
It is perhaps politically impossible not to bail out everything, but we simply struggle to fully grasp the potential scope for moral hazard issues growing on the balance sheet of the Fed; that is probably a question for another quarter, though. Right now, capital owners seem happy with the strategy. We have our doubts whether they will be as happy in 2-3 years from now.
As we previously concluded, it would appear the score is simple: American Middle Class 0 – Federal Reserve 6,083,131,000,000.
Tyler Durden
Mon, 04/13/2020 – 19:45
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