Coronavirus: More Wheels Coming Off

This post will be a bit scattered due to competing obligations yesterday, but I wanted to register some indicators that coronavirus-induced economic stresses are becoming more acute. This isn’t surprising since the coronavirus hasn’t peaked in most countries, plus the severity of the shock means that knock-on effects will not only continue but also have the strong likelihood of reinforcing each other.

A big concern is whether social unrest starts. Arab Spring demonstrated that mass uprisings can feed each other. But the need for social distancing would seem to greatly reduce the odds of food riots, which you saw in Indonesia and Thailand in the 1997 Asian crisis.

As it did in the 2008 crisis, the US has expanded food stamps, formally called the Supplemental Nutrition Assistance Program. But the increase is $16 billion, or about 30% more than its 2018 level of $54 billion. Given the GDP collapse predicted for the second quarter, with Goldman expecting a 34% fall, accompanied by 15% unemployment, that boost looks light. Admittedly more bailouts are coming and the powers that be presumably recognize that hungry people with guns are a bad mix. But homeless around the world are in even more dire straits than before (one hates to say it, but thinner dumpster-diving pickings) and cutbacks on food pantry and soup-kitchen type services are also squeezing the poor. From ABC:

By 8 a.m. on Wednesday, the line outside St. Paul and St. Andrew United Methodist Church in New York City stretched around the block.

But this wasn’t any ordinary morning.

Fixed-income residents like 66-year-old Patricia Sylvester faced an agonizing choice — weighing the risk of catching the coronavirus or going hungry in the pandemic that has seized America’s largest city.

Sylvester, a mother of two and a grandmother of three, conceded to being nervous waiting on line for the church’s food pantry and made a valiant attempt at social distancing.

“I’m a senior citizen and I’ve been coming here since before the crisis. I knew a lot of things were closed down, but once I got the call Monday from the church, I was like, ‘Wow, let me go.’ I hate to take the chance of getting sick, but I need some food in the house,” Sylvester told ABC News….

“What happens whenever you have epidemics and pandemics is they expose the already existing inequities in our society, the things we didn’t address before the epidemic,” Rev. William Barber II, co-chair of the nonprofit Poor People’s Campaign, which advocates for economic justice, told ABC News. “What we are seeing around the country is that we’re operating and telling people to do things from the position of wealth. We say, ‘Go home and buy groceries.’ Well, if people weren’t making a living wage how are they going to do that? Most of them don’t have $300 in the bank, if that.”

But another sign of how far we are from the old normal is barter going mainstream. From Bloomberg:

Social networks Facebook and Nextdoor are flooded with posts from neighbors and friends seeking to swap eggs for toilet paper. Small and midsized businesses, whose cash trade has dried up from the economic fallout of shelter-in-place orders, are turning to online barter exchanges.

“When cash is extra tight, it behooves us to buy as much as possible on trade,” said David Yusen, director of business development for Seattle-based Heavy Restaurant Group, which recently bought 56 cases of Malbec wine for $15,000 worth of barter credits. The company’s 10 restaurants have closed, but some locations will start offering pick-up and delivery this week. “It saves us money, it helps cash flow.”

In normal times, the roughly 200 barter exchanges in the U.S. let roofers fix leaks and get paid in restaurant takeouts or accounting services. With tens of millions of Americans under lockdowns, those cash-free trade systems are seeing an influx in participants….

Roger Becker owns home building and remodeling companies in Puyallup, Washington, the state that saw the first outbreak of the epidemic in the U.S. He expects business to drop by at least 30% this year, and signed up to the barter exchange BizX in February.

“A couple of months ago, I never would have thought of it,” Becker said. “It’s going be a game changer, because we are all starting to get pretty fearful about people tightening up their pocketbooks.”

Here’s how it works: Becker recently poured in $260,000 to remodel a 4,000-square-foot home in Leavenworth that was listed for $1.2 million. He is willing to accept a portion of the home’s price in so-called BizX dollars from the barter exchange, and will use these credits to buy services of other exchange members — plumbers, electricians or nurseries — so he can build and remodel other homes.

Erm, so a builder is extracting equity from one of his projects to get the barter equivalent of walking around money to continue building. While this is clever, it isn’t clear his business works any more. But sadly this will prove to be true for quite a few ventures.

On a completely different front, the IMF is already at double the 2008 level of requests for support when we haven’t yet seen the worst:

But the Fund doesn’t have a central bank deep pocket to tap:

Yet the IMF is also warning of banking system collapses. Note the “baseline scenario” seems unduly cheery when compared to the high level of appeals for aid coming in. From Reuters:

Tobias Adrian, the director of the IMF’s monetary and capital markets department, told Reuters in an interview that in a ‘baseline’ scenario that would be a repeat of a 2009-type growth path, banks could withstand the adverse impact. Adrian cautioned, however, that conditions could deteriorate….

Adrian, in a blog post with Aditya Narain, deputy director in the IMF’s Monetary and Capital Markets Department, outlined a number of measures regulators should take to mitigate the effects of the economic crisis on banking systems, including suspending new rulemaking, encouraging loan modifications and urging banks to use their liquidity reserves – measures many regulators are already taking.

“What banks are expected to do now is loan modifications … look through the loans on their books and say: ‘OK, a large fraction of my borrowers are not going to be able to pay interest for some time … but in a year they will,’” said Adrian.

“So (the banks) modify the loan … and forgo the interest payments and that’s a hit to their baseline and that’s why the banks stopped paying dividends and repurchases, so they are better prepared to take those hits.”

Notice how unwilling the IMF is to have banks write down loans in a meaningful manner. A one year interest moratorium isn’t much relief, particularly when the global economy is in free fall. Banks are supposed to serve the real economy, and if the loans are too far under water, they need to be written down or off. Some companies won’t make it in the post-coronavirus world even with their debts written down, but others would. And governments know how to bail out or nationalize banks if they have to eat too many loan losses (although governments are still way too reluctant to turf out management and board members, but that’s a separate conversation). This isn’t the hard part of the equation but the IMF seems to want it to be so.

And no, the Fund not planning to be nicer in the face of a pandemic, even when it has just announced a “global recession”:

Closer to home, Bloomberg warned of an unwinding of leveraged trades, while at the same time saying the magnitude doesn’t look as bad as 2008. However, this time it’s corporations that have gone on a borrowing spree and even ones that weren’t necessarily overleveraged are facing gunshot-wound level damage to their businesses. For instance, Macy’s, which had made improving its balance sheet a big priority in recent years, has had to shut its stores due to coronavirus and has laid off 130,000 workers. Its stock fell by 70% this year, and it was just removed from the S&P 500, which further dented the share price. And despite Macys long looking like yesterday’s retailer, it had had a good fourth quarter and was looking as if it might be on the mend. So what will the next leg look like when even companies that didn’t go crazy on share buybacks can’t service their borrowings due to the red ink in their operations?

Even if the lockdowns were lifted now, a lot of damage has been done, and as the actual and self-imposed constraints on consumption deepen, we’ll see more and more knock-on effects. Brace yourselves.

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  1. Dave in Austin

    On the Macy’s story… I’d like to see what the S&P looks like with the “removed” companies still included. What I’m getting at is that the S&P- and other indexes- can be played with simply by de listing the losers and replacing them with winners. This helps the S&P look good but the people who owned the stock in the removed companies still lost their investment.

    So are there any Yves readers trapped at home who are up to the task? It might make interesting reading.

    1. Off The Street

      Survivorship bias takes on new meanings daily.

      A variation on the reindexing would be to look at the stock buyback subset and the dividend and compensation payouts. No doubt a thesis for some future enterprising grad student, if one can be found.

      1. a different chris

        >can be played

        *is* played. Fixed it for ya. Remember International Harvester?

        Actually I’m being a little harsh, there should be a re-organizing of the basket under the “nobody needs buggy whips now” types of cases.

        The problem was the stock market became our retirement investment and that warped everything beyond all sanity. Now the point is to make it go up, rather than make it reflect real economic conditions.

    2. Lil’D

      When I ran my hedge fund, we calculated this for many series on a regular basis… takes a moderate amount of work to get the reference data right
      Midcap was the most interesting as members can leave by graduating up to the 500 or failing down to the smallcaps

  2. divadab

    Yes – this is why the Korean and the Swedish approaches look much more sensible. Why the eff shut down the whole economy when you can implement sensible measures to quarantine the most vulnerable, most of whom are retired anyway, and let the rest get on with it with sensible protective measures. Yes there will be faster spread but also quicker herd immunity. And no flipping depression, which is where we are headed with this shitshow.

    1. notabanktoadie

      Otoh, we didn’t respond properly* to Great Depression I and lo and behold, the virus is revealing that via an overly indebted, overly fragile economy STILL held hostage by a government-privileged usury cartel.

      So while I personally may think we are over-reacting:
      1) It may result in genuine reform this time.
      2) The overworked public is long overdue a sabbatical anyway.

      *.E.g. government guarantees of private liabilities (private bank deposits), including privately CREATED liabilities, was instituted in 1933 under FDR, who expressed some misgivings but signed the bill anyway.

      1. Hamford

        * Yes, but the creation of the FDIC was under Glass-Steagall that also separated Commercial and Speculative banking functions. Naturally, this was eroded started in the 80s, culminating in the complete dismantling in 1998 with Graham-Leach-Bliley act. Now we have the FDIC assuming bank speculative risk…. go figure.

        And lo and behold, big banks don’t really do commercial, mom-n-pop lending any more. The 4+ Trillion of QE money wont trickle down to the little guy. Why would the big banks when they can make more off of speculation than lending? The QE will be used to loot the distressed, vulnerable businesses left. The $1200 was the cheese in the trap as Rep. Massie says.

        1. Off The Street

          Phil Gramm, PhD, of Glass-Steagall repeal, CFMA derivative *ery and Enron fame is the poster child for an updated Shakespeare phrase:

          First thing we do, we kill all the economists.

          1. John k

            … politicians.
            … CEO’s
            I’m making a little list… they never would be missed…

          2. Procopius

            I think he should be counted as a banker (bankster?). After all, after he left the Senate he went to work as a vice president at UBS.

      2. The Historian

        I know that FDR is a touchy subject here, but there is one thing you cannot fault him for – FDR was smart enough to see The Big Picture. He was able to step outside his personal bubble and recognize that in order to save capitalism, he had to save the middle class and the workers because it was those people who were the actual engines of the economy – not the elite.

        I don’t think we have one person in our elite who is capable of doing that anymore – they seem only interested in saving their personal fortunes, but they just can’t seem to see that their personal fortunes depend on what happens to the middle class and the workers in this country. They so remind me of the British aristocrats before WWI who should have known that what they were doing was destructive, but just couldn’t see past their class prejudices.

        1. Wukchumni

          The Hoover administration desperately wanted to share their failed approaches to the Great Depression with FDR shortly after he was elected in November of 1932, all the way through to his inauguration on March 4th, 1933, but FDR realized that Hoover-despite being an incredible figure who had done so much in many varied fields, had no idea how to stem the crisis, and was of no value to him.

          FDR came up with new concepts of securing the social stability of the country, and was beloved by the ordinary citizen for it.

          We have to discard the old rules of just a few months ago that bind us into a tizzy of our own making.

          1. Mike_G

            Actually, many of FDR’s programs were much expanded versions of programs Hoover began, he just couldn’t condone the actual scale of government spending that was needed. A lot of other FDR programs were not deeply thought out and strategic, more like just throw the spaghetti on the ceiling and see which sticks.

        2. The Rev Kev

          I think FDR must have been aware of that Tancredi Falconeri quote-

          If we want things to stay as they are, things will have to change.

          1. notabanktoadie

            Otoh: “The least initial deviation from the truth is multiplied later a thousandfold.” Aristotle

            The initial flaw in the US Constitution was to NOT provide an inherently risk-free checking/saving service FOR FREE for all citizens up to reasonable account and transaction rate limits per the inherent right of all citizens to use their Nation’s fiat.

            And now the Nation is held hostage by a government-privileged usury cartel. What a surprise …

            FDR could have rectified the situation by making banks 100% private with 100% voluntary depositors but instead chose to try to regulate an inherently thieving system. Shame on him and especially on MMT advocates who would continue in that tradition and even INCREASE privileges for private depository institutions.

              1. Bsoder

                By 1777 there was, so ordered by the Continental Congress. Prior to 1776 local Banks here and there used fiat. Hard to do if you’re not yet a country.

              2. Carla

                There was fiat:

                “After the American Revolutionary War began in 1775, the Continental Congress began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from $​1⁄6 to $80, including many odd denominations in between. During the Revolution, Congress issued $241,552,780 in Continental currency.”

                There’s much more to the story of course:


                In fact, we might even say the story is still be written…

                1. Wukchumni

                  Continental Currency so soured the country on fiat money that it was about 80 years before it was introduced again in 1861.

                  George Washington set an exchange rate of 1,000 Continental Dollars being equal to 1 of specie in the 1790’s, that’s how bad the whole affair went, money backed by nothing.

                  1. notabanktoadie

                    money backed by nothing

                    Then so were Tally Sticks – for about 800 years. But Tally Sticks were not backed by nothing but by the debts, including taxes, they could extinguish.

                    Moreover, a Tally Stick is impossible to counterfeit – unlike the Continentals which the British MASSIVELY counterfeited during the Revolutionary War.

                    Therefor gold and silver did not back fiat then or ever; they served as anti-counterfeiting measures and are now OBSOLETE for that purpose.

            1. Shiloh1

              After 2009 the only regulation the TBTFs needed from Gov is to post this on all of their offices, letterheads and websites,

              “Abandon all hope ye who enter here. No bailouts.”

            2. rob

              The constitution DID grant the power to coin money and regulate the value ,thereof…… to the congress./treasury.
              What was a failed experiment is when; in 1913, congress granted that power to the private banking advocates who created the federal reserve system and were given the gift of being the creator of all the money called US dollars. for a fee, of course….ad infinitum… forever owed a debt tomorrow for the money they made yesterday… from nothing.
              Too bad proponents of MMT don’t see the failure in allowing this private banking model to control the money flows that fund wall street speculation, that have created and motivated the perverted national security state that has morphed into the monster that it is today, and has been for the last 100 years. The military industrial complex,the academic industrial complex, the agricultural industrial complex, the prison industrial complex,the healthcare/insurance industrial complex,the fossil fuel industry,nuclear,… where did the money come from to wage endless assault on the poorest 90% of the country… and how are the top 10% making out so well?….
              Could it be the system is rigged?. Why don’t we follow the money from our useless political system. Who can’t see that the establishment is in control… the right wing and the left wing of the same status quo lame duck..republicans,democrats,libertarians,communists,fascists,etc… all the successful ones who oppose each others progress.. are funded from the same pot of money made from nothing…. and they get it first… at the cheapest rate.. and beat everyone else on the fields of competition, thanks to scale and funding…
              MMt seeks to allow this incestuous relationship between banks and everything else… without allowing the thought of disrupting the endless creation of debt for these overlords of humanity.and everything else….

        3. John Wright

          I believe the Great Depression had a profound effect on the USA leadership class as many realized they could not rely on family connections and fealty to the upper class to get by.

          They were made aware that following the “go to school, work hard and you will succeed” advice did not function to put bread on the table in the 1930’s.

          This “Great Depression forged” group of people constituted the executives who led American corporations after WWII, leading to some corporations that treated workers and suppliers well (Eastman Kodak, “Generous Motors”)

          The current crop of US elites has been spared the harrowing Great Depression experience and believe they “earned” their privileged positions (and government preservation when the chips are down).

          1. Discouraged in WI

            Kodak treated workers well because Rochester was a non-union city, and they wanted it to stay that way. My grandmother’s brother was a union organizer and eventually was blackballed all over the city, and had to move (to Cleveland) to work. These elites didn’t really have much concern for the workers, just enough to keep unions out.

            1. Procopius

              I think that was the whole reason for the comparative prosperity of the post-war years. Going back to the 1917 Russian Revolution the elites were terrified that Trotsky was right that “revolution can be exported.” In the Great Depression 1, with 25% unemployment and thousands of families actually scouring garbage dumps for edible waste, they realized they had to give the workers something. Not all of them did. Old Henry Ford, for example. Despite his public relations coup, he never actually paid his workers $5 a day until he was forced to, and his “Service Department” continued busting union heads until the government forced him to deal with Walter Reuther. The aristocracy never surrenders power voluntarily. It must always be wrested away from them.

        4. RBHoughton

          Thank you for that Historian. The chaps who might replicate FDR’s achievement have been scorned and ridiculed by the MSM and the political/senior administrative class. If the people are to recover the balance of capitalism in the way FDR did it, it will be by their own efforts and not some top-down process.

    2. fajensen

      Korea is absolutely not the same as Sweden, which has taken the following approach: ‘We knows the best since we live the furthest away from China and therefore our experts thinking is pure and unpolluted by messy experience’. Korea experienced SARS, while Sweden experienced maybe some outbreaks of food poisoning from dodgy kebab meat or fake liquor!!

      Thus In Sweden there is no testing, little protective equipment for health care staff, just let the kids infect everyone, it’s really just a flu (yup, former head of FHM said that, repeatedly), and for adults please take care to only infect 50 people at once!

      Only an extremist will call a policy of ‘do as little as possible and let ‘er rip’ for ‘sensible’.

      1. Dave

        Death rate globally is around 4.9%, US death rate is at 2% based off the COVID infected/death numbers posted on CNN.

        As our health system becomes more taxed with increasing cases with limited resources I am guessing that the death rate % could increase.

        This is a deadly virus which is problematic to treat in the ICU’s. Normally a virus will effect either upper or lower respiratory systems. This virus attacks both. When you have either upper or lower compromise you can recruit the healthier portion to compensate for the compromised portion. Not so if both are compromised, this is why they decompensated so quickly and go in ARDS. Another issue are some of the modalities we use for non COVID cases are proving to be dangerous and counter productive in this patient population.

        We have seen a tripling of patients in the COVID unit in my hospital over the weekend (a major level 1 trauma/teaching hospital in a large east coast inner city. The COVID unit is there for confirmed and rule out patients alike.

        The no testing/herd immunity/let it ride decisions will prove disastrous.

        1. Bsoder

          God forbid I could get everyone to code CV-19 correctly. But we are a suspicious lot, and do post discharge follow-up. On average our large trauma center is averaging 5.1% deaths, but normatively across all treatment centers, and those discharged to home but die there, it is closer to 5.9%. We know from cell phone tower pinging that about 19% are ignoring social distance rules, which at 6’ are way too close as it is.

          1. Ian Ollmann

            I doubt cell phone GPS or tower triangulation is reporting accurately enough to be able to say with any certainty that 6′ distancing is respected or not. Perhaps a link is in order here. In any case, we expect some people out of the house from time to time to get food, and some fraction of the population will stay at work to make sure that the rest of us can stay at home.

            1. rusti

              I was wondering about this too. You could probably identify clusters of people in open space reasonably precisely with GPS (or U-TDOA, I guess), maybe if they’re having a picnic in the park or hanging out on the beach like in Florida, because there will be strong correlation in error sources of the position calculation for people who are close to each other. Not to the point where you could say reliably that an individual case was 3 feet or 8 feet, but in aggregate you could learn something useful.

              Once they get close to a building and certainly once they’re inside a building the uncertainties will be way too high to draw any conclusions.

              1. rusti

                I suspect GPS (or GNSS, more broadly) location would be accurate enough to infer some results in open sky environments like beaches or some parks, even with a lousy mobile phone antenna/receiver. The systematic errors in the position calculation like satellite clock errors or atmospheric delays are experienced essentially the same by users who are physically close. This is the foundation of “Real-time Kinematics” which is the primary method for centimeter-accurate surveying, which is what they use as the ground truth in the paper you reference.

                The figure of merit in our Bsoder’s statement is not accuracy in global terms, like in the paper where they measure Euclidean distance from surveyed points, but relative location between users, who will tend to be “pushed” in the same direction by physical error sources that they experience similarly.

                Highly localized errors like antenna design/orientation or even support for different GNSS constellations will add noise, but in aggregate those effects would smooth out over a number of users. Although it would be much less in urban environments when the reflections get more complicated and definitely nothing of use indoors.

                Trilateration with mobile phone towers (U-TDOA) can be much more accurate than 88 feet, but the method also suffers from limitations like the geometry of the user being a crapshoot relative to the towers and it’s highly sensitive to the quality of network time synchronization.

                Claiming that “19% of users” don’t respect social distancing rules based on phone geolocation must be a huge overstatement of the confidence, but I think some inferences could be made using phone geolocation.

        2. Yves Smith Post author

          Do not make shit up. Your death rate is bogus. We have no tolerance of coronavirus disinformation. Even the highest case fatality rate, in Iran, is estimated at 5.5%. In Hubei, based on a comprehensive analysis of reported cases, the case fatality rate was 3.4%.

          I appreciate your first hand comments but please stick to what you know. Bsoder’s data point is ~5% of HOSPITALIZED cases, not total cases.

      2. rusti

        I was making a withdrawal at the ATM last week since I’m not terribly confident about the robustness of the IT payment infrastructure in our cash-free utopia. A couple girls were waiting around the ATM, they had forgotten their bank cards but wanted to go have a drink at a bar, so they asked if they could Swish (mobile peer-to-peer payment system) for a few hundred crowns and get the equivalent in cash, about 20 bucks. The level of urgency here sure seems awfully low.

        ‘We knows the best since we live the furthest away from China and therefore our experts thinking is pure and unpolluted by messy experience’

        At the very least it will provide an interesting data point for other countries if our “fegis” lockdown is successful or results in a huge body count.

      3. divadab

        Ah well I thought Sweden was following the Korean model of isolating the most vulnerable, testing testing testing, social contact tracing, and quarantine of the infected. I hope you are overstating the problem!

        My experience of Sweden is limited but I was very surprised when I visited in 1974 how authoritarian the population was (admittedly, in Goteborg). Three of us foreigners crossed the street against the light (not a car in sight so safe), and Swedes hissed and whistled at us for disobeying the law, even when it was obvious there was no risk in jaywalking. In such a authoritarian society it seems to me it is much easier to get people to follow basic social distancing and other precautionary practices. I’m rather surprised at your response as it seems the character of Swedes and Sweden has changed in 45 years?

        1. rusti

          authoritarian the population was (admittedly, in Goteborg)

          Hey!!! What’s all this about, or?!

          Swedes hissed and whistled at us for disobeying the law, even when it was obvious there was no risk in jaywalking

          Must be a product of a different era, this is unthinkable for me today. Even if being indignant about irrelevant things is a national pass-time, I’ve never seen anyone scolded for jaywalking. And if someone was outraged they’d write a letter to the editor instead of asserting their dissatisfaction directly.

          1. divadab

            Ah well times change – tho I understand Goteborg is reputedly right wing – the prosecutor who re-opened the charges against Julian Assange was an operative from Goteborg.

            Anyway thx for the info – we shall see which strategy is more effective. SLow spread or fast it’s basically about managing the death rate.

            1. rusti

              Gothenburg (or Göteborg, if you want to use the Swedish spelling) is historically a worker city and has no particular reputation for right-wing politics.

              I searched for the prosecutor for the re-opening of the Assange case and the name on all the articles was Eva-Marie Persson. I could only find references to her working in the South (Skåne) and a listening to her speak in a Youtube clip indicates that she definitely has a Southern accent and isn’t from here. Though even if she were, it seems like a stretch to assert that the prosecutor’s place of origin is especially representative of his/her politics. I don’t anticipate that people from the Bronx are disproportionately staunch defenders of criminal banks just because Holder was born there :)

        2. L Sewell

          Sounds like paradise, at least when contrasted to the “anything goes” chaos and moral dissolution of present-day America.

    3. rd

      All it needs is supplies like masks, wide-spread rapid effective testing, good safety nets, people following social norms, and we are there.

      It would have been good if the US had been moving forward on at least one of those at a rapid pace.

    4. JTMcPhee

      Assumes there is good information on which parts of the population are “most vulnerable.” Reports noted here and the stories about people in all age cohorts and health status dying and getting seriously ill and carrying major disabilities post-discharge indicate there is no glib way of determining who to “quarantine,” and what mechanisms would enforce such a selection and quarantine? Plus, there’s obviously lots of people who would ignore orders and break quarantine.

      It appears that there’s a genetic predisposition to succumbing to the infection, that’s not currently understood. That’s an unsupported assumption that “most of them are retired.” And in addition, the growing understanding about the way the virus spreads, its persistence and survival outside the body on various surfaces does not give any comfort that the approach you suggest would just let the economy, made up of the collective actions of 350 million humans, most having to interact and be exposed, could or would just lumber on, extracting rents and looting as it goes.

      1. Anon

        Another insightful comment from JT. Is there a citation available for the “It appears that there’s a genetic predisposition to succumbing to the infection, that’s not currently understood.” statement? My understanding is that genetics isn’t necessarily a factor; that’s why it’s a pandemic.

        It seems the deathly impact of the virus is meeted out disproportionately to the old and infirm is the human immune system declines with age (looking at you, JT ;)). And, as indicated by Dave comment, the virus creates a total collapse of the respiratory system. (I’m revising my Will.)

        1. JTMcPhee

          Here’s one link on the genetic component of susceptibility now being studied: “Coronavirus: Worldwide genetics race to uncover who is most susceptible to Covid-19,”

          I do read that the stereotyping that at the beginning of the curve, that Chinese males (a pretty diverse genetic bunch, I believe) were the most susceptible has been pretty well shown to be wrong. Seems likely that there must be some genetic-variability-based component to susceptibility, given anecdotes of young, healthy people dying in the worst way and old farts like me either being symptom-free or only getting a relatively mild case.

          Nobody knows, of course, how this will persist in the population, and what ongoing problems even survivors may have as a result of the infection. I had a bout of shingles a couple of years ago, reactivation of the dormant varicella virus lurking in the nerve cells and other structures of anyone who has ever had chickenpox.

          And syphilis, like gonorrhea currently morphing into an increasingly untreatable form that if the person survives long enough to breed, gets passed along to the offspring. Those Spring Breakers and Mardi Gras revelers have been taking more than T-shirts and plastic bead necklaces home with them. There’s this, too: “Syphilis Rates Up In 2019, But Public Health shifts To Virus,”

          The public health infrastructure traditionally dedicated to fighting sexually transmitted diseases has shifted its focus to fighting the novel coronavirus as a recent report showed an increase in syphilis cases in San Francisco.

          “This is the big story that’s just starting to be told — the remarkable way that STD programs are being affected by the redeployment of workers,” Dr. Christopher Hall, the chair of the clinical advisory committee of the National Coalition of STD Directors, told the Bay Area Reporter in a March 26 phone call. “In some cases there’s an absence of a functioning STD clinic. In others, such as in San Francisco, they’re able to prevent it from getting gutted, but everywhere clients access services are being affected.”

      2. jabbawocky

        I don’t think there is yet any evidence of genetic pre-disposition but of course its a reasonable hypothesis.

    5. ShamanicFallout

      I was listening to a podcast yesterday and someone brought up that fact that we are almost totally risk averse with an always ‘safety first’, controlling attitude. Remember when people used to say ‘have a great time’ or ‘bon voyage’? Now what you is ‘stay safe’, even well before the covid scare. We all see other examples everywhere (helicopter parents, kids not being able to anything on their own). We’re ‘sheltering in place’ and in ‘lockdown’.
      So how take the measure of risk in relation to how we respond? It really looks like we are blowing up large parts of the economy. And we know who will have to bear the suffering of this.
      I thought it was an interesting point given that, in general, the media is portraying this as ‘unprecedented’ when it is not unprecedented. How did we respond before? How did other countries respond? We they willing to take a certain amount of ‘risk’ to avoid a complete breakdown of the economic order?

      1. Bsoder

        “Blowing up” you say? In my experience the dead are terrible at any job they are asked to do./s There is a way to “work” and not get sick but is requires knowing who is sick and who isn’t. The problem with testing right now, is the results are not immediate and you could still get infected going forward. If someone test positive, they do need to isolated from all those who aren’t sick, but it has to be more then self isolation. Without a vaccine all self isolation is going to do in the US is slow the spread of the infection, but eventual everyone will get it. An additional problem, I’m worried that the CV-19, might develop into seasonal variants, all deadly and all requiring a yearly updated vaccine. Although, a good anti-viral attacking protein formation thus reproduction might be better. Both are ideal.

      2. JTMcPhee

        Assumes “the economic order” is desirable, let alone viable. Millions eat garbage, impending ecological collapse, billionaire shares selfies from his 590-foot super yacht.

        Seems to me the existing order mostly enshrines looting and upward concentration of wealth and castrating any possible repair mechanisms. $4 or $6 trillion to the looters, IMF “making bond holders whole” while also covering the risk premiums. Not sustainable. But lots of voices calling for return to the “normal” flux that protects their socially toxic accumulations.

      3. Aumua

        How did we respond?

        In the last pandemic of this scale (probably 1918 flu?) there was a lot of suffering and death worldwide. We responded by taking it on the chin I guess, since we didn’t have many options.

      4. Bazarov1

        The untimely deaths of 1-4 million human beings in America, with perhaps millions more debilitated for the rest of their lives, is not a risk I’m willing to take for the “economy.”

        In fact, I do not see this as a result of a “safety” obsessed populace but rather a result of a populace willing to sacrifice for the chance to save the lives of the most vulnerable people in our society.

        For example, it’s not my safety that I’m worried about–that’s not why I’m social distancing. I’m worried about my elderly neighbor, my friends with chronic diseases, and my own aging parents. We should sacrifice economic growth *for them*.

        1. Heidi’s Master

          It seems a respite from the rat race is quite the benefit here. This may give many a perspective on the sort of naked capitalistic lives they’ve been living. One can hope.

  3. jackiebass

    I don’t remember the exact figure but I believe a large percentage of NYC residents depend on food banks for one or more of their meals. I think its over 50% but I could be wrong.

    1. divadab

      No way 50%. I think you are thinking about free school lunch programs – 50% of students being poor enough to qualify.

      If more than 5% of people relied on food banks they would be overwhelmed. SPeaking as a food bank volunteer for many years.

      1. Wukchumni

        I’ve also donated and helped out at our food bank for about a decade.

        It used to be that only families could partake, individuals were shit out of luck, and on the appointed Wednesday, twice a month mostly moms (with kids in tow) would make their way in, and a funny thing, looking out into the parking lot, their cars were often fairly late models, how odd. Maybe a dozen or 2 families relied on free food in the community on a regular basis.

        The line last Wednesday was about 100 yards long, I was told.

        1. JTMcPhee

          Welfare queens, I guess. Would like more anecdotal data on those cars — how late model? Ford Fiestas or Acuras? Prices for the used car market and loan availability?

          Around here, for the last several years at least, if you breathe the used car guys will “find a way” to finance your Hyundai. Does CA still have multiple vehicles for every driver?

          The local Meals on Wheels clients I deliver to either have no cars or beaters. The ones who come in to the sit-down noon meals at the Center arrive on foot, by tricycle, or the MoW bus.

          I guess CA is just different?

          1. a different chris

            1) Cars are essential in CA
            2) Cars have been hard for the layperson to fix, and expensive to take to a shop to be fixed, for a generation now

            So actually it makes sense for a “welfare queen” to both have to get and to try for a car of recent origin.

            Note that post each gas spike crisis we got the middle class driving around in new, smaller cars whereas the poor get their larger but suddenly, heavily deprecated trade ins.

            Would happen again with the SUV craze if gas went to $6/gal.

            1. JTMcPhee

              That was my thought exactly.

              The divide-and-conquer training is strong — and condescension is not curative for coronavirus as far as I have read.

    2. Susan the other

      I have a vague memory of some statistic like that too. Back around 2010 when the GFC had hit everyone way too hard (thanks to the extreme incompetence of Obama), Mitt Romney gave a stump speech to rich guys complaining that they paid almost 50% of the taxes in the USA. At that same time there were stats that indicated that 40+% of the entire US population was on food stamps, and a similar statistic – almost half the population – was hovering just above the poverty line or had fallen into poverty. I think the stats were tweaked to hide the devastation and they kept saying that we had only a 15% poverty rate (out of 130 million people) so that would only indicate 40 million total, not 40% total. I’m always skeptical enough to accept the worst case.

  4. vidimi

    i just want to say, this coronavirus pandemic has really disillusioned me about contrarian journalism. many sources who did good work on Syria or the Maidan, for example, Peter Hitchens and OffGuardian, have converted to making round-the-clock bad arguments about COVID-19. They write things like people are dying with the virus, not because of it, or that the overall death rate in Europe is actually lower than it ought to be this time of year, or that it is no more dangerous than the flu. They are cherry-picking numbers that confirm their view.

    This discredits all their other work, imo. A contrarian is not the same thing as an investigative journalist, who looks at each event on its merits. A contrarian will simply go against consensus and select the data that conform to that view. They can still be right about something, of course, but that is more of a function of mainstream consensus being dreadful.

    I am grateful to the contributors of this site for being in the second category, of looking at the issues taking into consideration all available facts. humanity hasn’t lived through something like this in over a century. we are better prepared than we were then, but this will still have an immense and lasting impact.

    1. Clive

      I wholeheartedly agree. Our collective media, in all its wonderful many and varied forms has — is! — conducting itself with all the deportment and intellectual rigour of a group of valley girls arguing about a pair of shoes. And I apologise to valley girls everywhere for this unfair slur on their good characters as a result of this comparison.

      It amazes and appalls me especially that some of those on left (the contrarian journalism which you cited being flag-bearers for many in this group) are positively jumping for joy at the prospect of leveraging the COVID-19 pandemic to lay out an iteration of a “never let a crisis go to waste” strategy to influence the political stage.

      Aside from the moral paucity of this idea as a matter of principle, for one thing, if they think that anyone aside from the usual rent-a-mob is going to pay any attention to their social media (or even mainstream media for the more house-trained denizens there are in their cohort) parading of their combination of craziness coupled with ranting, they are obviously not in the habit of engaging with anyone in the real world not a member of their particular bubbles.

      And for another, the more screeching about civilisation being on the verge of collapse they proffer, the more there is a tendency in the wider public to veer towards a fondness for political leadership characterised by the notion of “a strongman at the top, a firm hand on the tiller”. A million miles away from the progressive ideal they purport to be championing, in other words.

      1. vlade

        Yup. They seem to still have this idea that “the civilisation can only progress”, and that the world will change the way they wish. I wish they actually read history.

        Much as I despise her, even Tonybee sees it

        I keep telling to all the wannabe revolutionaries – no revolution ended the way the revolutionaries intended.

        1. Clive

          Wow, I’d missed that (thanks for the link). First time in recorded history I’ve ever agreed with Toynbee. Cats sleeping with dogs etc.

          And yes, not only do revolutions (or even more modest “profound societal change”) have a habit of not working out the way armchair revolutionaries hope they might, even on the rare occasion they do end up doing what they say on the tin, they can end up being rolled back pretty pronto (the English civil war, for example — “how’d that republican thing work out for y’all?” as I’d ask, if I had a time machine and could go back and pose the question).

      2. Synoia

        Conducting itself with all the deportment and intellectual rigour of a group of valley girls arguing about a pair of shoes.

        Bit unfair. The valley girls have a productive objective in the behaviors, Attract a Mate and Reproduction.

        The press just wants to increase their advertising revenues, using Murdocitivis.

    2. David

      Agreed. I do hope that one of the positive outcomes of this ghastly business is a permanent weakening and de-credibilisation of the CT-Industrial complex , with its pathological hatred and fear of government. This time, people have largely been listening to what governments and experts have said, and taken seriously the guidance of elderly white heterosexual males, because they show every sign of knowing what they are talking about, and because for once it isn’t a game, it’s deadly serious. There’s a rule of thumb that people turn much more to established experts when problems affect them personally – vaccination is another example.
      That said, much of the damage has been done already. A story this morning suggested that around a quarter of French people believe that the virus was deliberately manufactured in a laboratory somewhere, and stories suggesting this have been shared millions of times on social media. Apparently, there are similar figures in most western countries, and this does, unfortunately, have a measurable and negative impact on how people behave. Yet it’s not obvious that the CT professionals have any other choice. Their sole business and their entire image is based on reflexive dismissal of what governments say, in favor of elaborate, dastardly, but psychologically satisfying conspiracies. To admit that their hypotheses should actually be subject to a bit of rational analysis would undermine their business model completely, since it’s not rationally based.
      One piece of unambiguously good news, though. A poll in Liberation , the trendy PMC newspaper, found that when this is all over, astonishing majorities of French people want to say protectionism, the rebuilding of national manufacturing capabilities and economic and food sovereignty as far as possible. The poll was conducted and written up by people who claimed to be surprised at the result, which suggests that they haven’t been paying attention. Macron’s self-presentation as Chief Purchasing Manager for protective masks has suffered from the fact that a factory capable of making one million a day was recently sold to a US company and closed down, in spite of warnings about the consequences.

      1. a different chris

        > factory capable of making one million a day was recently sold to a US company and closed down

        Wow. Color me unsurprised. Have a link we could share?

      2. Grachguy

        Well, to be fair, there is actually substantial evidence that the virus WAS leaked somehow (intentionally or unintentionally is a different story). We will not be able to reach a full conclusion about this for a while, if ever. However, the story that the American media and some in the scientific community are selling – that the virus had to have spread from the seafood market in Wuhan because it doesn’t look like something that was engineered – is spurious. So, when governments try to spin some BS and aren’t transparent with all of the relevant facts (in this case what exactly was the nature of the research on coronaviruses in the Wuhan BL-4 facility, what exactly is the nature and goal of US gain of function research at Fort Detrick and at affiliated institutions, etc) people tend to react by constructing their own narratives to better fit the existing evidence.

        1. Clive

          While my definition of “suffering” has more than a whiff of middle class COVID-19 whining about it, I would freely admit, not only am I unable to get my hair cut, not only can I not get a cup of coffee that I haven’t made myself and not only do I have to watch daytime TV shows here on BBC telling me how I can banish those social distancing blues by getting creative and make homespun little keepsakes out of pieces of old tat that I’m bound to find if I empty out my kitchen cupboards (I’m supposed to be using our lockdown here to do that, too) but…

          … I also have to wade through latter-day Brothers Grimm fairy tales which are a mix of, apparently, creative fiction, allegory, vaudeville and a dash of international intrigue in the form of conspiracy theories about Coronavirus.

          I’m just waiting for the one which goes like COVID-19 accidentally fell out of Hilary Clinton’s makeup bag while she was on a clandestine mission to Moscow to retrieve a top-secret formula for a truth drug which she was planning to taint Donald Trump’s afternoon glass of Orangina with so he’d ‘fess up that he’d stolen the 2016 election.

          In short: give me a soddin’ break.

        2. Yves Smith Post author

          That is complete and utter bullshit and we’ve discussed the issue at length. For instance, Ignacio, an epidemiologist, explained the markers and how they are absent, and how any frigging bat has ginormously more pathogens in its guts than any lab could ever hope to create.

          The only “evidence” was an Indian paper which was so bad it was retracted.

          If you run this nonsense line again you will be blacklisted.

  5. vlade

    IT’s really really going to depend much on how the govts respond.

    To an extent, if we could collectively agree to basically ignore the three-six months (assuming it’s good enough), we can come on the other side well enough. By “ignore” I mean drop all obligations like rents, taxes etc.. (but not obligations of government to the rest). Some of us would lose something, but most of us would get through quite reasonably, as a lot of the capital investments would be still there, waiting to be picked up and used.

    But if we all insist on those obligations to be honoured, we’re going to ruin ourselves.

    1. templar555510

      Totally agree vlade. I put a flex on all our client’s upcoming obligations ( we’re in the event business ) two weeks ago and have so far been able to reschedule all events at no additional cost to the client. I asked if they were able could they let us have something on account an almost every one of them did . I also emailed our MP ( Tory shire county safe seat ) with the following proposal:

      The government said today it will be sending out letters to 30 million households. With every one of those letters it should enclose a cheque for £2000 ( total £60 billion ) made out to the person to whom the letter is addressed. Nothing could be easier . Let me repeat that . Nothin g could be easier . It doesn’t matter some of the cheques don’t get cashed , or some go to rich people. This crisis is unprecedented in outr lifetimes. You are young . Go and kick the door in while you can. There may not be a door to kick next wee. So says your government not me.

      The next morning I received his reply.

      I agree. I have made the point to them and will continue to do so.

      The point being that £2000 would put an immediate temporary floor under everyone and most would start spending it straightaway so keeping other people’s and businesses’ cashflow going and of course some would
      come back as taxes further down the line.

      Who knows if it will happen ?

  6. Steve H.

    Time as velocity, not just speed:

    NC has helped Janet and I stay on top of the wave. There was a comment about the virus by Expat2Uruguay on Jan 17, links Jan 18, and a post Jan 24. Dr Eric Feigl-Ding’s tweet on Jan 20 caught people’s attention, but it wasn’t out of the blue for the commentariat.

    For us, the singularity was March 12. Call the Target Date an inflection or decision point; following are major target dates, with the source date following in brackets. The first is “The Limits to Growth” standard model, where population peaked in 2055; the long fallow period includes 1992, when my understanding of pollution included CO2 and global warming:

    : 2055 [1972]; 2019 [2016]; Jan 20 2021 [Jan 1 2019]; Nov 3 2020 [Dec 10 2019]; July 16 2020 [Feb 17 2020]; May 8 [March 6]; April 6 [March 10]; March 12 [March 12].

    The quickening of the singularity/asymptote was discussed by Terence McKenna and Bucky Fuller in the 1970’s. That’s the speed component. But on March 12, the direction changed also. Rather than looking forward to a date for decision purposes, the perspective went to, How long are we prepared for? The locus of control switched from global to local, from external events to internal stability.

    A couple days ago, my other good sources went quiet for about half a day. Exhaustion was cited, but I think this metaphor serves: we’ve been hollering that the water has gone out and people went collecting sea shells. Now the wave is coming in, and we need to gather ourselves and head for higher elevation. Top down failures from China, the UN, WHO, and the US Federal government; PainCity/Happyville variance on a state-by-state basis; PTSD futures from emergency room; UE +3 million; all add up to, you’re on your own and for a long time too. This from John Robb, yesterday:

    > So basically, enough of an ongoing mess that the network (you, me, and most of us) remain in “under siege” mode for the next year.

    This makes a real economic depression almost certain unless the socioeconomic system is “shocked” via something like an #EmergencyUBI

  7. P S BAKER

    Indeed, Hitchens is an unreliable source – he has cherry-picked on climate change, whose effects he has always played down.

    He’s a clever writer but I stopped reading him years ago.

    1. divadab

      Yes. He’s quite right on the Syrian false flag chemical attack propagated by the “WHite Helmets” however and very brave to have publicly written about it. Just for this I hold him in some respect.

      He’s quite wrong on Cannabis, however, as wrong as only an alcoholic can be, just as his late brother was entirely wrong on invading Iraq. On this Peter Hitchens was bravely and publicly right.

      Mixed bag (but who isn’t?) – I think still worth reading from time to time as he is quite good with original turn of phrase.

  8. Thuto

    While the dust continues to be kicked up by covid-19 and is a long way from settling, what’s become clear to many observers through the dust fog is that a western style total lockdown just isn’t going to work in the global south. People living in informal settlements in Rio, Jakarta, Mumbai, Lagos, Johannesburg etc can’t fill up a grocery basket on the best of days, let alone fill it with enough supplies to last 2 – 3 weeks (which seems to be the standard introductory time frame governments use to ease their populations into a lockdown, before the inevitable extensions).

    As I write this I’m listening to a news report from a township in Johannesburg where impoverished people are recounting how impossible it is for them to comply with lockdown regulations because they need to go out daily and hustle for money to buy food. Most of these folks, and the story is the same in other developing countries, work in the informal economy, and all they hear about in the news are relief packages for small and medium enterprises in the formal economy. Very little is being said about what’s going to be done to alleviate their suffering during this time, apart from high pitched platitudes about “the need to care for the most vulnerable members of our society”. Social distancing is nigh impossible when 5 people are sharing a one roomed shack and several members have to go out everyday to forage for food and other basic essentials, risking the very real prospect of catching the virus and bringing it back with them. Meanwhile Moody’s, one part of the soulless trio of global capital’s enforcement cartel, has added salt to the wound by downgrading South Africa’s sovereign credit rating to junk during this most tumultuous of times. Kick a country while it’s down and fighting on all fronts to avert a disaster of Malthusian proportions, have these people no compassion? If developing countries continue to fight this pandemic with meagre resources, millions will be wiped out and covid-19 will continue to stalk humanity as a whole. For a virus that crosses borders with unprecedented speed, when one country has it, we all potentially have it.

    To put this into context, South Africa, the richest country in Africa, has so far only managed to mobilise roughly $500m to fight this pandemic, a paltry sum by any objective measure. This is much less than the interest payments due to foreign creditors who, if the IMF is anything to go by, are tightening their chokeholds on vulnerable countries instead of providing much-needed debt relief to enable a much stronger fiscal response to this crisis. What has become patently obvious is that those holding out hope that the global policy landscape post covid-19 will skew towards social justice are in for a huge disappointment, the world bank chief pretty much dashed any such hopes when he made it very clear during the recent G20 video conference that the status quo will be restored with speed and brutal efficiency once the storm has passed.

    1. divadab

      Evolution is still happening in the global south. They will end up with greater immunity and will recover faster. Consider that there are far fewer sick old people in the global south as they just don;t make it to sick old age they rather expire in the natural course.

  9. ObjectiveFunction

    Banks are supposed to serve the real economy, and if the loans are too far under water, they need to be written down or off. Some companies won’t make it in the post-coronavirus world even with their debts written down, but others would.

    Agreed that this post is actually several different topics, but as always, many thanks for enabling the conversation.

    Regarding the IMF, in this time of stress and outrage I don’t plan to stand like Horatius as the lone defender of usura on this particular board. However, I will borrow a Hudson construct to make a few comments:

    1. To me, any write-downs, refis or forced sales (to state entities) should focus on debts relating to public assets or essential services: infrastructure, health, education and the like. And here I include the entire species of self-licking ice cream cone known as PPPs. Now, I doubt the Chinese who today hold a lot of these debts (and lent to many questionable projects merely for the privilege of building them) will be terribly keen. But they can’t send a gunboat can they now? Not yet, anyway.

    2. Personal debts (barley debts) like mortgages aren’t generally the remit of the IMF, at least not directly. However, they’re certainly the meat and drink of the local banking system in whose viability the IMF *is* deeply interested. And trying to squeeze blood from that particular stone in the interests of the people is very tricky indeed. You’re basically talking about the heart of the establishment in almost every country not run by generals or warlords (and several that are).

    3. For business to business debts (‘silver debts’), I second Wolf Richter’s view that the bankruptcy system renders rough justice: once the money runs out, the shareholders get wiped out. The lenders then become the new owners, with ‘hell or high water’ covenants replaced by dividends paid solely out of what the business actually earns. And if they’re chummy and dumb enough to reappoint the same managers that got them into this fix, more fool them. Lather, rinse, repeat.

    Again, Da Wolf sums it up as well as anyone:

    The IMF is always run by Europeans. The World Bank is run by Americans. That’s how they split the power.

    The primary purpose of the IMF is to bail out holders of foreign-currency bonds that countries issued to get their hands on cheap money, and that they [blew] and now cannot pay it back…. The IMF bails out those bondholders by lending even more cheap money … in exchange for some reforms that are hoped to make the IMF whole.

    Those reforms are a bitter pill to swallow…. A country like Argentina that destroys and debauches its own currency cannot borrow cheaply in its own currency….
    The IMF offers bondholders and that country an exit. No country is forced to accept that help.

    Argentina blew off the IMF after the currency collapse and default in 2002. Turkey blew off the IMF recently. No problem. They just have a financial crisis on their hands now.

    1. Thuto

      Da Wolf perhaps couches the role of the IMF in too benevolent a language. As i’ve stated here before, Zambia was “forced” to sell off the entirety of its state copper mining assets to Swiss company Glencore for a firesale price to make the IMF whole. The pressure on the government to sell was relentless, never mind that the country was defaulting because copper prices had collapsed during that time and a suitable arrangement could have been made to factor this in. The machinery of the IMF was engaged to take over state assets for pennies on the dollar and Glencore has had its greasy hands around the Zambian government’s neck ever since, (mis)using transfer pricing to avoid paying taxes and threatening job losses and shutdowns should its gorging at this juicy trough be interrupted.

      1. ObjectiveFunction

        I am shocked! shocked! that the IMF would be a cats paw for Glencore, the heirs to Clinton BFF Marc Rich!

        I deleted a couple of paragraphs before posting so that actually made the Wolf quote a little disjointed. But I figured I’d leave it in for those who aren’t as close to this.

        Finance is a tricky thing, as you know; burning the entire mofo to the ground isn’t actionable, even for the most hardened Bolshevik.

        1. Wukchumni

          burning the entire mofo to the ground isn’t actionable, even for the most hardened Bolshevik.

          There are probably 100 cows within 1/2 a mile of me, and part of me thinks, wow, what a food resource to have when things go bad, but another part thinks, all it would take is a few yahoos with guns, buck knives and a hankering for a Porterhouse, to fuck everything up for a pound of flesh, whereas if done right, a slaughtered cow can supply nearly 500 pounds of meat.

          1. Susan the other

            At this point I can’t help but believe that we will have some sort of martial law – some “mobilization” which rations food and distribution; supplies sufficient food stamps, etc.
            And I really don’t think it can be stop and go. If we want the economy to operate at partial capacity we have to make sure everyone has a place to live and food to eat.

      2. OpenThePodBayDoorsHAL

        I am sure the IMF phone lines are buzzing right about now with discussions on how they can re-liquify the system with a basket of irredeemable air-based debt currencies issued by bankrupt entities SDRs.

        With all looking with envy at the country that has finally wrested the power of the national purse away from the people passed the CARES Act.

        1. Pym of Nantucket

          Amazed you are the first mention of SDR in this thread. There are huge things afoot and I totally agree some folks are just itchin’ to roll those babies out to lubricate the right places.

  10. Ignacio

    So far, up to 3rd week of march US weekly oil production is fairly stable at 13.000 thousand barrels per week according to the EiA.

      1. periol

        They are renting tankers for potentially long periods of time and filling them with fuel before parking them at sea.

          1. PlutoniumKun

            I had a look at yesterday – you can adjust the settings just to look at oil tankers worldwide. Most are still at sea (presumably transporting oil), with relative few moored. When the proportionof moored tankers starts to match those at sea, we will know that storage is at its maximum. I suspect we’ll see that in a couple of months.

  11. Frank Little

    From Reuters this morning about the plight of the homeless in India:

    Most of the estimated 4 million plus homeless people in India have had no way of earning a living since the lockdown began on March 25. With streets deserted, even begging is not an option.

    Many wander aimlessly, some find refuge at homeless shelters where ranks of people sleep beside each other.

    As Rev. Barber II says, this crisis is just revealing existing problems long swept under the rug by those in charge.

  12. skk

    Its jarring and food for thought – this difference between “then” and “now” strikes me:
    US Breadlines 1930s style:

    That’s a line of people standing.

    Video footage shown on CBS-affiliate KDKA shows the line of cars, spread across two lanes, snarling up the road leading to the Greater Pittsburgh Community Food Bank in Duquesne before it opened at midday on Monday.

  13. K teh

    From the bank perspective, the virus was convenient, to do what they were going to do anyway. Electronic money, the bailout, is more inflation.

    If the renters strike, the Land Lords are going to get a taste of their own medicine.

    Absent Fed inflation, real estate prices would fall by more than 50%.

    At that point, something real would have to be done.

    Until then…

  14. kiers

    Who here believes Trump admin when they say US expects 100k-240k deaths? Anyone with a sense of numeracy care to comment on that number, even as an optimistic number? Why are they playing it that way? Is it meant to be a strategic fail, to unload the next set of measures? This is democracy? This is free press?

    1. sd

      If you looked closely at the chart showing 100 – 240 thousand deaths, the more extreme curve said 1.5 – 2.2 million “without intervention.” What is still unclear to me is just how much “intervention” (or flattening of the curve) has been successful. Are we closer to 100,000 or are we already over 240,000 and heading for a much higher number?

  15. kareninca

    One tiny bit of good news. My 74 year old friend here in Silicon Valley was about to be kicked out of the place where she and I volunteer and onto the streets; she had been hunkering down in a back room but the organization couldn’t handle her sleeping there anymore. But then a spot opened up in a short-term nearby women’s shelter. So we got her there and she was set until March 22nd. But then what??

    The shelter is a church, of course, since it is the churches that shelter people around here. But now since they can’t hold services, the shelter is going to be extended indefinitely. It is a 24/7 shelter now of course, so the ladies are stuck inside (except for walks) like many people are.

    For my friend, this is great. Since she doesn’t have a phone I can’t check to be sure that she is still there, but I have every reason to think so. I drive past when I go out for an errand but the odds are against my seeing her in their yard.

    I suppose that when the church goes broke, this will end. That may not take all that long, but for now things are good.

  16. ewmayer

    “another sign of how far we are from the old normal is barter going mainstream” — And the IRS deems every such exchange to be a taxable transaction, so I hope all of you cup-of-flour-for-2-eggs-from-the-neighbor-ers are keeping detailed records.

  17. cripes

    ‘Go home and buy groceries.’ (above)
    is a poor recipe for workers without work.

    And the people still flush to order their daily meals “no-contact” from Grubhub and Dominos don’t tip at all when they don’t see the delivery person.

    The teeming poor from Sao Paulo to Johannesburg will only “stay in place” by eating 0 meals a day.

    Aaaand a big, gaping, bleeding hole in USA’s food logistic system is the inexplicable, insurmountable difficulty that prevents old, disabled and food-desert residents without cars from shopping online for groceries with their SNAP (food stamp cards) unlike the able-bodied well-to-do lousy tippers kept safe and provisioned in their condos.

    Nevermind that Granma could use some help getting 50 lbs of groceries up 5 flights of stairs on Second Ave or E 12th St.

    Really there is no one-size-fits solution, between countries, within countries, or cities. It’s mostly age and class and culture and geography.

    And the essential workers everywhere that invariably work with their hands, feet and backs.
    Who misses the CEO’s?

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