Links 27 March 2020

Global Macro / Markets / Investing:





Leith van Onselen



    (United States) Unemployment benefit claims skyrocket to 3.283 million … Yahoo Finance

    The COVID-19 pandemic is wreaking havoc on the U.S. economy, and data released Thursday morning reflected the severe damage being done to the labor market.

    The number of Americans filing for unemployment benefit skyrocketed to a record-breaking 3.283 million for the week ended March 21. Consensus expectations were for 1.64 million claims. The previous record was 695,000 claims filed the week ended October 2, 1982. Initial jobless claims for the week ended March 14 was revised higher to 282,000 from 281,000 and was the largest single-week increase since the Great Recession. … read more via hyperlink above …
    Stimulus bill offers $600 a week to the unemployed for 4 months … CNN Business

    (CNN)In a historic expansion of unemployment insurance, the federal government would give jobless workers an extra $600 a week on top of their state benefits for four months as part of the $2 trillion stimulus bill the Senate passed unanimously late Wednesday night. … view and read more via hyperkink above …


      More than 1m Californians have filed for unemployment amid coronavirus crisis … The Guardian

      More than a million Californians have filed for unemployment this month due to the coronavirus crisis, the state’s governor announced.

      “We just passed the 1 million mark for the number of claims since March 13,” the Gavin Newsom said at a press conference on Wednesday about the unemployment claims.

      The jump in new unemployment claims is unprecedented. On a typical day, the California department of unemployment sees 2,000 new claims. Last week, on Wednesday, 80,000 new claims were filed in a single day. … read more via hyperlink above …


        Italy’s death toll rises above 7,000 — but the number of new cases declines for the 4th day in a row … CNBC

        KEY POINTS

        • Italy’s death toll from the virus passed the 7,500 mark on Wednesday, the country’s Civil Protection Agency said, however it noted that the rate of new cases of contagion fell for the fourth day running.

        • It said 57,521 people are currently infected with COVID-19 in Italy, 3,491 more than Tuesday. The daily rise on Tuesday had been 3,612 while on Monday it had been 3,780 and on Sunday 3,957.

  2. I cant help but think this corona virus pandemic was an opportunity for US business to cut staff above and beyond what was necessary. Not for a second do I believe unemployment will ever again fall down to these levels. There will be a lot of ‘automation’ substitution going on.

    It is the beginning of a great depression that will make the last one look like a Sunday brunch with the Queen.

    The same goes for Straya.

    End times for capitalism (unemployment at historic highs = futures through the roof)

    • US employers don’t need an excuse to sack people
      it can be done in 5 min without any notice or explanation

  3. So QLD schools will be pupil free from next week. Except kids of “essential” workers. No teaching/learning will be happening, just supervision. So Mr Morrison, it was less about education this whole time and more about daycare?

    • ErmingtonPlumbingMEMBER

      Spoke to one of my kids teachers yesterday about his online learn from home set up and asked her how many kids are still at school today.
      Less than 50 I was told.
      Out of a primaty school of over 400.

      • Yes, class size here has gone from 25 to 8 as parents keep their kids at home. This in itself has lowered the risk teachers are exposed to. Surprisingly there are still kids with temperatures and coughs arriving at school. Where the parents are surprised that the school doesn’t want them there.

    • even under normal circumstances our schools are more daycare than educational institutions

    • Rorke's DriftMEMBER

      Whats wrong with schools as daycare? Community needs to pull together, schools can support essential workers here, keeps teachers in jobs and getting paid.

    • Gungahlin College (ACT) shut for five weeks as of Tuesday this week, still had three to go including exams before holidays. Using the time to take courses online and rework the curriculum to make for the lost three weeks. Junior Peanut very happy about five weeks off.

  4. Remember when shutting down our international borders was going to be too disruptive. Oh those were great memories.

    • lol yeah. If we closed international boarders back in Jan, then flew all citizens back and made htem spend a month in containment (theres a 1000 person camp outside of darwin empty for this) it would still be business as usual.

    • That is the crux of it. Close early and take the pain.
      Instead we have had the hybrid approach of letting the virus run for a bit before crushing the economy.

  5. Unemployment is gunna be real.

    The record in Australia? 11.2% in December 1992.

    What are people’s thoughts on upcoming Aussie numbers this year?

      • If we used the same definition of unemployment as 1930 we’ll get above 30% this time too.

      • during 30s unemployment reached 32% but that was mostly for male workers, there were also 80-90% of female working population out of job
        maybe it’s better to look into employment rate, in that sense we would need 60% unemployment now to reach great depression levels

        • ErmingtonPlumbingMEMBER

          60% unemployed, without a ubi of decent size, would mean violent revolution.

          • factory worker

            “Violent Revolution”
            Is there any other kind of revolution?
            Genuine question, I think history is probably on my side but I’m still prepared to learn.
            Viva la revolution!

        • Imo that is flawed logic. You cannot compare the role of women then to now and so cannot factor in how many were not working during the 1930’s

          First there was the social barrier: most married women were not allowed to have paid employment and men’s pay rates allowed for that.

          Then there was the educational barrier. Girls were trained to only fill lowly paid jobs so they relied on men – either fathers or husbands – to pay their way. Whether or not the females worked was not make or break for most families.

          Then there was the technological barrier: I can vaguely remember as a kid visiting people’s houses that still used an outside copper to wash their clothes – a family wash would take the best part of the day. People kept wood stoves going all the time and meals took hours to produce, they cut wood, made butter, bought ice from the ice factory, used mesh meat safes, were solely responsible for looking after their kids and getting them to and from school.

          • bolstroodMEMBER

            For most of the volunteers for the 2nd.AIF the army was their first full time employment,
            such was the fallout from the Great Depression.

      • Know IdeaMEMBER

        Just a minor point of order Mr Chairman: the Chinese, unlike the Japanese, have no phonetic filter concerning the pronouncement of the letter “r”. In fact, standard Mandarin (the Beijing dialect) is characterised by an emphasis on the r-sound.

    • I posted this in a Aus doctors group was mostly along the lines of “good on them for forward thinking etc.”

        • Honestly, a lot of doctors confuse their ability to rote learn hard at school and later at life with an actual high degree of intelligence. I think a lot of it is statements trying to look smart.

          Funnily enough a lot are also crying poor about their rental properties and not receiving full rent (no cash reserves) and their business are struggling needing government help (no cashflow reserves)

        • Ronin8317MEMBER

          For the Chinese company it’s the same thing : China first.

          Is our Australian government doing anything to stop this? No, because it is ‘money first’ for our government.

      • Definitely remember reading that reply, but can’t find the post now.

        The other one that made me laugh was a post about not having a 3-6 months income buffer. If you can’t save $$ in medicine, I have no sympathy at all.

        • Are you on the business for doctors page too? A lot of the people there confuse their degree in medicine with being Rhodes scholars.

          • Was recommended it a few years ago, but found the stuff around item number packing/stacking wasn’t relevant for my practice. Some GPs have privately expressed their concerns with the billing model and the rather cavalier attitude to being audited. Have always remained sceptical about the quality of financial advice, keeping in mind that the founder is pro-property, owning multiple IPs and recommending this as the way to retire. That being said, I think the site has been helpful to a lot of doctors on a range of other issues so in my mind this balances it out to a degree.

            What I have known for a long time is that many doctors share a similar mentality regarding debt and property, which has always made me more comfortable with MB, FIRE groups and other selected shutins. A lack of critical thinking and political stubbornness is not removed even within medicine. On BFD one could point out how bad Morrison has been for whatever crisis and some numpty would just say Shorten would have been worse. Someone had pointed out the debt had doubled under the LNP and same numpty would state that it was Labor’s fault from the GFC.

            With covid19 upon us, I believe the founder has already had to close one practice due to the financial hit from going to telehealth. It will be an interesting time as all her courses/workshops have also been cancelled. Come to think of it, that may also mean the death of the property spruiker workshop too.

        • Couldn’t reply to your other message
          A friend has met the founder – apparently well versed in business practice and stacking medicare numbers, but horrbile doctor, alleged multiple inappropriate and botched ceasers in regional areas and now no longer allowed to do these.
          You’re right re: debt/income/assets. They all must remove every possible $$ (or are over leveraged and it goes there) from their businesses and investments with no reserves. I’ve tried to suggest otherwise in discussions but I don’t drink the cool aid.

          While I’m no expert, I do try mentor my juniors about finances and direct them towards FIRE based information, as well as avoiding ‘medical specific’ accountants etc.

    • Hey, it’s just markets! Nothing to be upset about.
      And just think about the export dollars – that should help cheer you up.

      • Arthur Schopenhauer

        I appreciate your cynicism, and your posts have changed the way I think about property and Australian politics.
        The pandemic is about to roll through like a freight train, and there is nothing the country can do to stop it. It will stop when it’s exhausted hosts.
        Our northern neighbor won’t waste the crisis. Our leaders think planning lunch is strategic.
        We have lost the first battle. The following battle is to stop us truly being taken over.

        • Well, my response was actually meant for your other post (about developers). But it works equally well for the FIRB one, too.

          Makes sense. It’s all markets.

          I guess that’s the Power of the Peachy Pontification Post…

  6. Arthur Schopenhauer

    Could Hastie roll Morrison if parliament is not sitting? Or is just too hard when the members are geographically dispersed?

    • MountainGuinMEMBER

      The threshold to spill a coalition PM was increased to two thirds of members after Turnbull was rolled. This is pretty hard to reach when the sitting PM has the power of the office.
      I think, but I’m not sure, rolling can only occur in party room meetings which are held when parliament is sitting and everyone is in canberra. Parliament is not due to sit again until 11 August.

      • billygoatMEMBER

        Why would you think replacing the limp membered politician that stands before the populace each evening hand wringing and whining for folk to do their bit, reminding them to the tune of Ben folds track “we’re all in this together la la la la”
        Why would a replacement be better? There’s plenty more act whores in the wings anticipating 5 minutes of fame reading pathetically scripted lines on the political ‘stage’. Look at Old Nana T rump for how bad the inside joke can get.
        It’s just a role they either shrug off each evening or at the end of their pre determined term. You can see the mirth shining in their eyes when the mask slips…t rump sci mo & Boris alike. Don’t take this s sandwich too seriously! Behind the scenes they’re not:)

      • ErmingtonPlumbingMEMBER

        Maybe some patriot will shoot him.
        I reckon Kater would have a good cache of firearms.

    • From what little we see, I much prefer Hastie

      But what do you base this on? Hope , more than anything?

        • Hastie SAS > Morrison Jibber Jabbering in Tongues and Vibble Vobbling man boobs and fat gut

          That’d be enough for most, even if he is another strong religious person (immaterial to me as long as it doesn’t guide their decision making and I don’t have to watch endless footage of him in Church).

      • I like Hatstie would take him over Morrison any day but
        Morrison has been delivering for the powerful interests that control the libs and without parliament sitting he isn’t going anywhere.

        • Who else has been as forthright as Hastie on CCP

          Unless it’s some deep state scraps to the masses to make it seem like they’re doing something

          Can we picture this crisis under Malcolm or even Boob Scooten? I’m thinking Malcolm would been positively magisterial.


    The Coming Age of Dispersion … Joel Kotkin … Quillette

    As of this writing, the long-term effects of the coronavirus pandemic remain uncertain. But one possible consequence is an acceleration of the end of the megacity era. In its place, we may now be witnessing the outlines of a new, and necessary, dispersion of population, not only in the wide open spaces of North America and Australia, but even in the megacities of the developing world. Much of this has been driven by high housing prices and growing social disorder in our core cities, as well as the steady rise of online commerce and remote working, now the fastest growing means of “commuting” in the United States. … read more via hyperlink above …

    • That 2 trillion $ package is a doozy.
      It is the definition of throwing the kitchen sink at the problem.
      Free money for everyone!!!!!

  8. With the jobseeker payment as it stands, you are ineligible if your partner earn 48K per year.
    That means two people on benefits get more to sit on their ass, than a couple that has one partner working/being exposed to virus.
    Apparently its being “looked at”

    • Give me a break, everyone needs to be able to scrap through over the next 6 months not whinge about someone getting more than another. Where the f k do you think this money is coming from, and how do you think the Gov will repay it?
      Land tax now a certainty. plUS A 5% SPECIAL TAX LEVY TO PAY FOR SUPPORTING YOU

      • It’s entirely reasonable to point out the ludicrous situation where people are being paid more to sit home than to work.

        • fair call, my point is all this free money needs to be paid back at some stage, hence needs to be reasonable on all parties, ie those receiving and those most likely to be called to pay it back.

          • bolstroodMEMBER

            Does the money have to be repaid ?
            Already the global debts are so large they won’t / can’t be repaid.
            It is only imaginery money created by tapping the keys of a computer.
            Credit = Credo, I believe.
            Keep the faith, brother.

        • It’s entirely reasonable to point out the ludicrous situation where people are being paid more to sit home than to work.

          It would be more reasonable to highlight that this is a side-effect of decades of pro-active Coalition policymaking to suppress wages and punish the unemployed, rather than making an unsubtle implication the payment is too generous and people are out of work because they’re lazy.

    • That means two people on benefits get more to sit on their ass, than a couple that has one partner working/being exposed to virus.

      You’re right. Obviously the problem here is that the Jobseeker payment is too generous, not that the partner threshold or wages are too low.

      Also, in this country it’s spelt “arse”.


    Up to 50m Americans could lose their jobs after record rise in unemployment claims … UK Telegraph
    … behind paywall …

    3.3 million Americans file for unemployment benefits in a week as world’s biggest economy enters recession

    US unemployment will hit a post-war record high as the world’s biggest economy is ravaged by the coronavirus pandemic, economists warned after millions of Americans filed for unemployment in the space of one week.

    A record 3.3 million people signed up for unemployment benefits last week, four times higher than the previous record-high in October 1982 and 12 times the 282,000 in the previous week, the US Labor Department said.

    The spike in claims puts an end to a jobs boom that has fuelled American growth for a decade siunce the financial crisis.

    It suggests US unemployment has already surpassed 5pc, after sitting at a 50-year low of 3.5pc as recently as February.

    Economists warned this only represents the start of weeks of layoffs that could see the jobless rate approach 13pc by May – higher than the 10pc seen during the financial crisis of 2009,… read more via hyperlink above …

    Westpac forecasts unemployment will climb by 200,000 … Tom Pullar-Strecker … Stuff NZ

  10. And for some good news
    AirBnB owner/rental scum are a struggling financially and haivng to resort to actually providing their property for long term housing at a reasonable rate! The horror!

    • Aww yeah.
      If there is one silver lining out of this it is the implosion the AirBnB.
      I’m starting to see AirBnB places listing on the rental market in my area just at the same time as rents are really starting to drop.

      This is going to be awesome.

  11. 186 new cases in NSW. Overall numbers are down for the second consecutive day. That’s good.

    145 of those cases have no known epidemiological source. That’s bad.

    The testing criteria has in NSW has expanded. That’s good.

    The criteria for testing cases with no known epidemiological background is only if you’re in hospital with clinically consistent symptoms. That’s bad.

  12. “Romania’s health minister resigned as the country struggled to contain the spread of the coronavirus with hundreds of doctors and nurses testing positive amid a lack of equipment.

    Victor Costache will be replaced by his deputy Nelu Tataru, Prime Minister Ludovic Orban said Thursday. The country is witnessing an accelerated increase in COVID-19 cases after thousands of citizens returned from abroad, mainly from Italy and Spain, in recent weeks.”