I keep sayin’ it. The curve is not flat, it is steepening. Via Imperial College: Our estimates of the probability that Rt is less than one (epidemic control) for each state. Rt, or the reproduction number, is the average number of secondary infections caused by a single infected person. Green states are those with probability that
Via the excellent Damien Boey at Credit Suisse: Fed minutes reveal preference for yield curve control. Minutes from the Fed’s late April meeting reveal that officials were concerned about slow recovery, permanent scars on the economy from the crisis, and a potential second wave of the outbreak. There was no mention of negative interest rates
Via the excellent Damien Boey at Credit Suisse: Fed Chair Powell guides negatively. In an ad hoc speech, Fed Chair Powell said that the economy faces unprecedented risks from COVID-19 if fiscal and monetary policy makers do not step up to the challenge. He suggested that the recovery could take time to gather momentum, and that the present liquidity
This has been bothering me a lot too. Via Alan Kohler: A number of things flow directly from the collapse in employment in the US. Inequality is set to widen dramatically because the worst affected are the poorest, most marginalised; there is now a health time bomb ticking because most Americans’ health insurance comes from
Via the excellent Damien Boey at Credit Suisse: US money markets pricing in negative rates for the first time. 2020 has been a year of firsts for the US economy. First negative oil prices. Then negative rate pricing. Overnight, the Fed fund futures curve priced in forecasts for negative interest rates by January 2021. The
Do you think that the US economy has locked down, flattened the virus, and is about re-open? Think again: Most places where the virus curve is under control still have lockdowns. The major exception is the south east, perhaps aided by warmth. Vast areas are reopening with the virus still out of control: Let’s refer
The US virus lockdown and fiscal package has neither stopped the virus nor prevented mass unemployment. The fallout for SMEs and households is vast: A failed lockdown means a very weak recovery because the dance to contain the virus will go on endlessly, leaving states and the private sector in a state of partial paralysis.
A few days old but worth the time: This is what bothers us: a second round of financial crisis in the banks as the bad loans come due.
Let’s make no bones about it, they’re nuts (though on occasion I do admire their ‘freedom at all costs’ credo), via Domain: The governors of several US states – including close allies of President Donald Trump – are moving to rapidly reopen businesses and churches as protests against government-mandated lockdowns spread throughout the country. The
In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States! — Donald J. Trump (@realDonaldTrump) April 21, 2020 The invisible enemy, eh.
Via Goldman on the US economy but useful for Australia too: What Will Reopening Look Like? Absent a vaccine or scalable treatment breakthrough, reopening will have to remain gradual. There has been some enthusiasm recently about the possibility that far more people than initially believed have been infected but have remained asymptomatic or uncounted for
Funny stuff:
Yes: Some more: But the main reason for it is falling testing: I won’t go to the point that less testing equals higher stock prices, putting El Trumpo incentives in question. The percentage infection rate per test is roughly flat so if testing were rising, as it should be, so too would the daily
Via Calculated Risk: Important Notes: 1. The BLS reference week includes the 12th of the month. Massive COVID-19 layoffs started after the reference week (although there was a pickup in layoffs during the reference week). 2. Watch for Special Notes in the release. There could be some important announcements on how the BLS will be handling unemployment
Via Bloomie: Mortgage lenders are preparing for the biggest wave of delinquencies in history. If the plan to buy time works, they may avert an even worse crisis: Mass foreclosures and mortgage market mayhem. Borrowers who lost income from the coronavirus — already a skyrocketing number, with a record 10 million new jobless claims —
Congratulations to the Fake Left which has put forward the only candidate incapable of beating a mass murdering Donald Trump at the next US election: I do not care what you think of me when I say this. This video of @JoeBiden struggling to answer a simple question about his response to the coronavirus, where
It’s everywhere: USA State Total Cases New Cases Total Deaths New Deaths Active Cases Source New York 75,795 +8,470 1,550 +208 69,270 [1] [2] [3] [4] [5] [6] [7] [8] New Jersey 18,696 +2,060 267 +69 18,429 [1] Michigan 7,615 +1,117 259 +75 7,351 [1] [2] California 7,453 +205 149 +4 7,244 [1] Massachusetts 6,620 +868 89 +33 6,521 [1] [2] Florida 6,338 +634
Via Morgan Stanley comes confirmation of what we’ve been saying for weeks: Importantly, this new forecast continues to assume more social distancing and a continued rapid increase in testing. We would highlight that the biggest risk to this forecast is that while we have reasonable confidence the East and West coasts will reach peak cases
Via Domain: US President Donald Trump has extended his administration’s social distancing guidelines until the end of April, abandoning his goal to have the country running normally by Easter. Trump’s announcement came as the federal government’s top infectious disease expert, Anthony Fauci, predicted that up to 200,000 Americans could die of the coronavirus and millions
There’s this one: And there’s this one: That looks awfully like an unsustainable divergence.
Via the NYT: In several hours on Tuesday, Dr. Ashley Bray performed chest compressions at Elmhurst Hospital Center on a woman in her 80s, a man in his 60s and a 38-year-old who reminded the doctor of her fiancé. All had tested positive for the coronavirus and had gone into cardiac arrest. All eventually died.
Did you ever wonder what it’s like to be Donald Trump gambling billions of debt even as you skirt bankruptcy? Well..now you know. Gottiboff writes today along similar lines to me this morning. It is worth reiterating: The huge rise on Wall Street — the biggest since 1933 — was no accident. US President Donald
Cohn, a Goldman Sachs executive and former National Economic Council director in the Trump administration, says the US economy is already in a recession as a result of the coronavirus outbreak, and that unemployment numbers are set to soar. He also says fixing the recession will cost trillions of dollars and that the government bailout
Via Goldman: We now forecast S&P 500 EPS of $110 in 2020, a decline of 33% from 2019. On a quarterly basis, this reflects year/year growth of -15%, -123%, -21% and +27% (Exhibit 1). We have cut our 2020 earnings forecast three times in 30 days (-37% in total) as the magnitude of the economic
Via FT: As the number of coronavirus cases has exploded across the US, the idea of a direct cash transfer to Americans has emerged as the primary feature of the Trump administration’s $1.3tn response to the crisis. The idea of a direct cash transfer to limit the economic damage from the spreading disease had been
The media fixation with equities has completely blinded it to what matters. The global economy is about to take an immense loss. Equites are going down with it, as they should. Nothing can stop that now. But all that matters in terms of systemic risk is credit. That’s the Fed’s target. To unwind the dislocation
Cross-posted from Zero Hedge on some seriously fucked global financial plumbing. As Bank of America’s rates expert, Mark Cabana – formerly of the NY Fed – writes on Saturday, “the Fed has been on fire” lately, which in light of the Fed’s activities in the past two trading days of the week, may be an
Finally awake! BREAKING: Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing programhttps://t.co/gBz5ggLNmV — CNBC Now (@CNBCnow) March 15, 2020 Meanwhile, at Martin Place. ZZZZzzzzzzzzzzzzzzzzz…. AUD skyrockets….
Meanwhile, Downunder, kiss a fast and loose Italian and shop ’til your dead!
Via Calculated Risk: Special Note: The 2020 Decennial Census will increase hiring in early 2020. In reporting the employment report, the headline number should be reduced (or increased) by the change in Census temporary employment to show the underlying trend. Based on previous Census hiring, I expect the Census hired 10 to 20 thousand temporary workers in February.
