Realist3 hrsTesting and tracing is a tried and true strategy that works great when implemented properly in areas where an infection is in its early stages. This strategy has been implemented very successfully by many Asian countries, who have managed to keep the spread of the virus to very low levels.
In addition, if you also implement several other protocols: mask wearing, social distancing , no large gatherings, rigorous cleaning and sanitizing, then it is highly likely that you will contain the virus and not destroy your economy.
However, if you let the virus spread out-of-control, like in some countries, then it becomes impossible to test and trace.
Then you have to lock down parts of your economy in order to contain the spread.
Since countries like Brazil, Mexico and the US have done

Inquiring minds ponder the discrepancy between the jobs report and Department of labor Unemployment Claims.Jobs Rebound Earlier today I commented by Jobs Rebound by 4.8 Million But Huge Headwinds RemainI question both the strength of the rise in jobs and the decline in the unemployment rate based on claims data and the reference week.Reference Week The household survey week which sets the unemployment rate is the week that contains the 13th of the month. Some claims data released today is for the week ending June 13 but first let’s discuss the lead chart. Continued State Unemployment Claims in 2020 Continued claims have shown little improvement for five week. On May 16, continued claims were 20.841 million. There were 19.290 for the week ending June 20 and were 19.231 million on June

Herkie9 hrsSo big uptick in jobs? And they are downplaying that new unemployment claims were also significantly higher… The Labor Department said initial jobless claims rose by 1.427 million last week.
This marked the 15th straight week in which initial claims remained above 1 million.
Also the most recent week for data on continuing claims is June 20 and that total is 19.3 million.
So, I do expect next week we will see a higher revised set of numbers, naturally, and we will see new and continued claims skyrocket as reopenings are RECLOSINGS now that we are clearly in a second wave.
That and I can barely keep up with the news on all the new BK filings, NPC International, the operator of 1,200 Pizza Hut and nearly 400 Wendy’s restaurants in the United States, has filed for bankruptcy.

Please consider the Minutes of the Federal Open Market Committee for June 9-10, lead image from Powell Wants to Talk Policy, but all Fed block quotes are from the FOMC Minutes.Discussion of Forward Guidance, Asset Purchases, and Yield Curve Caps Participants discussed tools for conducting monetary policy when the federal funds rate is at its effective lower bound (ELB). The discussion addressed two topics: (1) the roles of forward guidance and large-scale asset purchase programs in supporting the attainment of the Committee’s maximum-employment and price-stability goals and (2) in light of the foreign and historical experience with approaches that cap or target interest rates along the yield curve, whether such approaches could be used to support forward guidance and complement asset

Despite Deals and Covid-19 Stimulus sar sales plunged a record amount. But due to factory shutdowns and stimulus offers, dealer inventories are lower than normal. Second-Quarter Sales Drop  Auto sales in the second-quarter are down by about a third according to the Wall Street Journal.General Motors Co.reported a 34% drop in second-quarter sales compared with a year ago, with demand picking up in May and June. Toyota Motor Corp.’s sales fell by about a third while Fiat Chrysler Automobiles reported a 39% decline. The drop wasn’t as steep as feared, and sales have improved steadily since late March. Heavy sales promotions and federal stimulus checks that went out to millions of Americans this spring spurred car demand despite spiking unemployment and stay-home orders across many states,

No Support for a V-Shaped RecoveryPlease consider a FiveThirtyEight report on the shape of the recovery. In partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business, FiveThirtyEight asked 34 quantitative macroeconomic economists what they thought about a variety of subjects around the coronavirus recession and recovery efforts. The most recent survey, which was conducted from June 19 through 22, echoed many of the predictions from the last round — though there were also a few new wrinkles in their forecasts. When we first asked about the shape of the recovery, 58 percent of respondents thought the trajectory of future U.S. gross domestic product looked like a Nike “swoosh” — a sharp downturn followed by a long, slow recovery. This time

FiveThirtyEight discusses how politics shapes how people perceive the economy. The U.S. economy is objectively awful right now. The unemployment rate is at levels not seen since the Great Depression and this quarter’s decline in gross domestic product is expected to be the worst on record. Most economists believe it will take years to recover from this recession.In the most recent Quinnipiac University national survey, 69 percent of Republicans described the U.S. economy as “excellent” or “good.” Similarly, nearly two-thirds of Republicans in both Civiqs’s daily tracking polls and in a June 11-15 Associated Press/NORC Poll said that the nation’s current economy is at least leaning toward good. By contrast, only around 10 percent of Democrats thought that the national economy was doing

A battle looms over ‘business interruption’ coverage, which insurers say doesn’t apply unless there is physical damage, like from a fire, unless there is specific coverage for pandemics.One of the biggest legal fights in the history of insurance has begun.A cavalcade of restaurateurs, retailers and others hurt by pandemic shutdowns have sued to force their insurers to cover billions in business losses. A video berating the industry ran for most of June on a giant screen in New York’s Times Square, four times each hour around the clock.“Insurance companies: Do the right thing,” was the chorus at the end of the video. Repeating the words were a musician, a dancer, a chef, a rabbi, comedian Whoopi Goldberg—and a New Orleans plaintiffs’ lawyer, John Houghtaling II, who paid for the video.

Banks Are Flying BlindBusinesses are not allowed to report to the credit agencies who is in mortgage, credit card, or auto loan forbearance plans. So how do banks decide who is a good credit risk when they are Flying Blind?“Without accurate information, their only option is to pull back on credit,” said Michael Abbott, head of banking for North America at consulting firm Accenture PLC. “Banks don’t know who is going to pay and who isn’t. It’s like flying blind into a credit storm.”
Banks started tightening their underwriting standards in March, when the first wave of coronavirus layoffs began. By early April, 33% of banks that responded to the Federal Reserve’s senior loan officer survey said they had increased their minimum credit-score requirements for credit cards over the previous

Stuki22 hrsYou don’t need all, nor even strictly any, of those for your currency to become a reserve currency.
All you need is to be the indispensable supplier of what the rest of the world needs. Like the US was at the end of WW2: If you wanted oil, you couldn’t get around the dollar. And everyone needed that. Ditto Marshall funds in Europe, and similar in Japan. Recovering economies needing aircraft… Again, they’re priced in dollars. Arms to defend against the commies popping up everywhere with Soviet help and encouragement? Again, dollars….
Even after the Aramco and other nationalizations, Middle Eastern producers remained dependent on US arms. Which were, again, priced in dollars.
If Zimbabwe suddenly became the sole supplier of oxygen and water, others simply would have no choice

No Company is Too Small to Fail Pending Mortgage Applications Might Not Be What They SeemAbout Half the US Population is JoblessSilent Minority Accumulating Physical GoldSimple Reason There Will Not Be a V-Shaped RecoveryThe Fed CARESFed Especially Likes Automakers and TechnologyReflections on Fed LeverageMuni Buying – Illinois is SpecialStarbucks Bails on Facebook AdsIt Takes a While for Deaths to Show Up in StatsNo Escape for Gold Shorts For discussion of gold shorts, please see More Gold Hype: No Escape for Shorts12 Ideas From 7 People Danielle DiMartino BoothJim BiancoLance RobertsJohn HussmanGold TelegraphLisa Abramowicz
MeMoral Hazard on Steroids DiMartino Booth get the idea of the day award: No Company is Too Small to Fail. In context, she means, No Company is Too Small for the Fed

Reopening Dilemma How do corporations get people to the 100th floor or even the 10th floor of a crowded building?Texas tried reopening offices early. Now there is a surge and corporations don’t know how to deal with it.Some companies brought back office workers in May or early June only to face coronavirus outbreaks within days or weeks. Others still can’t figure out how to send people up a 50-story skyscraper. Chevron says limiting riders on some elevators would create dangerous crowding in lobbies, so the company is telling its masked workers to refrain from speaking on the ride up. Refilling Chevron Corp.’s two high-rise office towers in downtown Houston is a daunting task. Of 7,000 workers, roughly 350 are back, says Dave Payne, the company’s vice president of health, environment and

Pro and Anti-Trump Seniors Clash in FloridaWarning: this is a profanity-laced video start to finish. White PowerAt the 8 second mark, a man in a golf cart shouts "White Power" twice in response to a parade bystander asking "where is your white hood?"NPR has additional details.In the video, apparently taken at The Villages, a retirement community in Florida, people wearing Trump shirts and with Trump signs on their golf carts drive by protesters yelling insults at them and about the president.Trump retweeted the video, which was shared by an unknown Twitter user, and said, "Thank you to the great people of The Villages. The Radical Left Do Nothing Democrats will Fall in the Fall. Corrupt Joe [Biden] is shot. See you soon!!!"In a statement, Judd Deere, the White House deputy press secretary,

Massive Gold Short Squeeze!?Via King World News, there is a "massive gold short squeeze" and  No Escape For The Gold Shorts according to Alasdair Macleod.The way to tie it in is to think of what the quarter end means. The quarter end for bullion banks means accounting — it’s the date they will value their positions in the market. Now obviously it suits these guys to keep the price as low as possible for that quarter end date (next Tuesday). And if you have a suppressed gold price, you are going to have a higher gold price afterwards. I think that’s why your reader’s observation makes an awful lot of sense.
And in this current context I think it is also appropriate. They (bullion banks/swaps dealers) have tried to keep the price down. The swaps are now more short than they have ever

What’s Happening?A Fox News story and poll provides a set of answers that Trump supporters do not want to hear: Biden Leads in Florida as Trump Lags Among Seniors.Voters think Democratic presidential candidate Joe Biden is better suited to handle the issues of the day, expanding his lead over President Donald Trump in the battleground state of Florida.Key PointsBiden tops Trump by 9 points, 49-40 percent, in a Fox News survey of Florida registered voters. That’s up from a 3-point edge in April (46-43 percent).Among those “extremely” motivated to vote, Biden’s lead grows to 11 points (53-42 percent).The former vice president owes his advantage to the backing of Hispanics (+17 points), women (+18 points), and Millennials born between 1981 and 1996 (+30).Some groups that are key to a Trump

Here’s a lesson regardaing premature bragging.Not Easy to Say What’s HappeningPeople oversimplify what’s going on. There is no nice, neat package.The recent outbreaks in Texas and Florida are different than California. New York and New Jersey were unlike anything else. But the virus did not go away in the summer as man, if not most thought. Air Conditioning ConnectionAir conditioning and the need to stay inside in the South likely had something to do with that.I took a look at A/C on June 24 in Covid-19 Hotspot Update: Why the Surge in the South?

Death Lag Times Death lag times vary widely state-to-state as noted in When Will the Exploding Number of Cases Lead to More Deaths?Some suggested that it’s all demographics. Rising hospitalizations suggest otherwise.Changing Demographics and

I addressed the question of death lags yesterday in When Will the Exploding Number of Cases Lead to More Deaths?My analysis shows that states have vastly different lag times. Many people averaged these lags to suggest we are out of the woods.On top of that mistake, others believe that more testing is behind most of the rise. That has been widely disproved, please see but people will believe what they want. It’s Not Just TestingFor discussion, please see It’s Not Just TestingThe starkest example, Florida, has actually slowed testing almost 10 percent, week over week, while seeing a 65 percent jump in the cases in the same time span. Florida’s rising cases, we can conclude, have nothing to do with expanded testing. South Carolina and Kentucky have followed the same pattern as Florida, with

The 7-day average in cases peaked on April 9 at 34,756. The number of deaths per day peaked at 2,590 eight days later. To suggest a lag of about a week is wrong. Key Reasons the Lag isn’t a WeekStates did not peak at the same time. Averaging the states together smoothed out the curve. States had different reporting methods. Some states lumped probable deaths in with known deaths. Some states purposely downplayed deaths. If is highly likely Florida artificially and purposely undercounted Covid deaths. The Tampa Bay Times reports Florida medical examiners were releasing coronavirus death data. The state made them stop.When the medical examiners’ list was available, it showed more deaths than the state’s count.The Palm Beach Post editorial says Gov. DeSantis still hiding crucial data on

We’ll try that again–a series of tweets on the hospital situation in Arizona…
[email protected]
·
-hospitals are already voluntarily canceling elective procedures again to keep the few beds they still have open
-hospitals already using their “surge” capacity that Ducey keeps using to placate us
-beds in hallways
-hospitals understaffed; travel nurses not willing to come to AZ
(Sis personally knows of two travel nurses who left the state intentionally last week to take less dangerous assignments in other states. They aren’t the only ones who have already or will soon do the same.)
Here is the actual compilation:
Banner Desert:
3 COVID telemetry units full (Red heart patients)
1 medsurg (regular floor) COVID unit full
2/3 ICU dedicated to COVID only, 3 patients to 1 RN ratio

In Florida, cases surge nearly 80% as the US hits daily high of nearly 40,000 new cases.Texas Governor Greg Abbott has had enough of his reopening plans and has shuttered bars at noon. Florida reported 8,933 new cases of coronavirus on Friday, an almost 80% increase from the day before. Florida, Texas, California and Arizona accounted for nearly half of a record-breaking 39,972 confirmed Covid-19 cases reported on Thursday, according to data from Johns Hopkins University.Amid the rising number of cases, Mr. Abbott on Friday limited restaurants to 50% capacity and required bars to close at noon except for delivery and takeout. “At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” Mr. Abbott said. He also

Black Knight reports forbearances rise following three weeks of declines.Key DetailsOverall, the number of active forbearance plans is up 79K from last week – erasing roughly half of the improvement seen since the peak of May 22 – with rises seen over each of the past five business days. As of June 23, 4.68 million homeowners are in forbearance plans, representing 8.8% of all active mortgages, up from 8.7% last week. Together, they represent just over $1 trillion in unpaid principal ($1,025B).
Some 6.9% of all GSE-backed loans and 12.5% of all FHA/VA loans are currently in forbearance plans. Another 9.6% of loans in private label securities or banks’ portfolios are also in forbearance.
Volumes were up across the board from the week prior with the largest increase among FHA/VA loans

Biden Now Leads in Six States Key to Trump’s 2016 Victory, most by significant margins. Biden’s improved polling in battleground states comes from a cross-section of demographic groups, but the Times poll shows the most significant movement comes among White voters — especially college-educated ones — and young people. He’s also flipped voters age 65 and older to his column, which helps to explain his standing in Florida and Arizona.Only 31% of battleground voters approve of Trump’s response to the Floyd protests, and 63% say they would rather that the president address the causes of discriminatory policing than cracking down on protesters.The roots of Trump’s troubles in Michigan may be deeper. There, 37% of voters say Trump treated the state more unfairly than most in responding to

The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. approved changes to the Volcker Rule Thursday that let banks increase their dealings with certain funds by providing more clarity on what’s allowed. The regulators also scrapped a requirement that lenders hold margin when trading derivatives with their affiliates.Thursday’s separate reversal of the interaffiliate margin requirement for swaps trades could free up an estimated $40 billion for Wall Street banks, though regulators added a new threshold that limits the scale of margin that can be forgiven. The FDIC’s Gruenberg opposed the change to swaps rules, arguing that it removes a critical protection for banks. Fed Governor Lael Brainard reiterated that concern, saying in a statement that

Mary Trump’s book Too Much and Never Enough will go on sale July 28.Mary Trump is President Trump’s niece. She discloses "How My Family Created the World’s Most Dangerous Man.Amazon DescriptionIn this revelatory, authoritative portrait of Donald J. Trump and the toxic family that made him, Mary L. Trump, a trained clinical psychologist and Donald’s only niece, shines a bright light on the dark history of their family in order to explain how her uncle became the man who now threatens the world’s health, economic security, and social fabric.The President claims the book violates a nondisclosure agreement but he lost that case in court today.Judge Tosses LawsuitTrump Files Claim in Wrong CourtThe Surrogate Court strictly handles the wills and assets of the deceased. Queens County Surrogate

…Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis.
Even a meaningful rebound in economic activity over the coming months won’t stop it, said Mr. Altman, the Max L. Heine professor of finance, emeritus, at New York University’s Stern School of Business. “The really hurting companies are too far gone to be saved,” he said….
….Mr. Altman expects at least 66 cases with more than $1 billion in debt this year, eclipsing 2009’s mark of 49. He also predicted

Reopening in ReverseYesterday, Covid-19 cases in Texas soared to a record high 6,177. In response, Texas Stopped Reopening Plans."The State of Texas will pause any further phases to open Texas as the state responds to the recent increase in positive COVID-19 cases and hospitalizations," Governor Greg Abbott’s office announced in a statement.
"The last thing we want to do as a state is go backwards and close down businesses. This temporary pause will help our state corral the spread," Abbott said, asking residents to wear masks and respect social distancing guidelines. Trump’s Fake News of the DayYesterday, Trump complained of too much testing. Today he repeated his own fake news in a Tweet.Trump says Texas and 4 other states are doing too much Covid testing and he seeks to stop it.Trump

Tony Bennett7 hrs"After two record declines, the Advance Durable Goods report shows a 15.8% jump in May."
…
First thing first. April and March revised lower.
The 15.8% jump in context:
seasonally adjusted total durable orders
May 2018 …. $246.483 billion
May 2019 …. $236.720 billion
May 2020 …. $194.419 billion

All eyes are on the lobster trade.Need to Maintain AppearancesThat Trump is worried if China is buying a few containers of lobsters so he can keep up appearances for the market, instead of solving for a crisis at home that will be soon killing thousands a day again, speaks volumes.Maine’s Lobster Exports to China plunge 84%Flashback May 16, 2019: Maine’s lobster exports to China plunge 84 percent due to trade war.The tariffs, implemented in July 2018, had an immediate affect on the state’s lobster industry. Prior to the tariffs, Maine had been on track to have a record-setting year, with USD 87 million (EUR 77.8 million) worth of lobster exported through June 2018, over double the USD 42 million (EUR 37.5 million) shipped through the same period in 2017.
Soon after tariffs were

Uncertain but Diminishing RecoveryIn April, the IMF projected global GDP to be -3.0% and the US at -5.9%. Today, the IMF announces an Uncertain Recovery and a Crisis Like No Other. Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme

Harris County – HoustonTexas Medical Center 97% Occupied At the Texas Medical Center in Houston, 97 percent of ICU Beds are Occupied.As the number of patients hospitalized with the coronavirus has reached record highs 12 days in a row, there are warning signs that Houston hospitals are nearing a tipping point.
At the Texas Medical Center in Houston, 97 percent of ICU beds were occupied on Tuesday. Twenty-seven percent of those ICU patients have COVID-19.Planned vs UnplannedThe Naysayers will be quick to comment that "only" 27% of the bed usage is due to Covid-19. But Covid is precisely the problem. Last year 0% of the bed usage was due to Covid-19.Not Just the Texas Medical CenterHospital officials in other parts of Houston are also reporting that intensive care units — for seriously ill