Challenge to Harris County’s Face-mask Mandate

Earlier this week, the Harris County Judge (the chief executive) ordered people to wear masks outside their residences, and wash their hands. Here is an excerpt of the text:

2.When outside their residences and in a public place, residents shall continue to maintain social distance of at least six feet.

3.Face coverings shall be worn except when:

a.Exercising outside or engaging in physical activity outside alone;

b.Alone in a separate single space, whether indoors or outdoors;

c.In the presence only of other members of one’s residence, whether inside or outside the residence;

d.When doing so poses a greater mental or physical health risk, including exacerbating a pre-existing medical condition or including, but not limited to, anyone who has trouble breathing, or is unconscious, incapacitated or otherwise unable to remove the cover without assistance;

6.Residents shall wash their hands before leaving the residence and upon return, and shall take the following additional actions after leaving their residences:

  • Stay at least six feet away from others; and
  • Avoid touching the nose or face.

Violator would have to pay a $1,000 fine. In Texas, County Judges are executive officials. Harris County includes Houston, where I reside.

Today, a challenge was filed to the County Judge’s order. The suit was filed by Steven Hotze, a prominent conservative activist in Texas. Here is the background section. The plaintiff seeks a Temporary Restraining Order. He expects a hearing to be set for Friday. An appeal to the Texas Supreme Court will certainly follow.

The Plaintiff raises claims under the state Constitution and local law. In short, the County Judge lacks authority to create new criminal offenses.

We used to argue about the government issuing mandates to buy broccoli. Now, we have mandates to wear masks and wash your hands.

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Challenge to Harris County’s Face-mask Mandate

Earlier this week, the Harris County Judge (the chief executive) ordered people to wear masks outside their residences, and wash their hands. Here is an excerpt of the text:

2.When outside their residences and in a public place, residents shall continue to maintain social distance of at least six feet.

3.Face coverings shall be worn except when:

a.Exercising outside or engaging in physical activity outside alone;

b.Alone in a separate single space, whether indoors or outdoors;

c.In the presence only of other members of one’s residence, whether inside or outside the residence;

d.When doing so poses a greater mental or physical health risk, including exacerbating a pre-existing medical condition or including, but not limited to, anyone who has trouble breathing, or is unconscious, incapacitated or otherwise unable to remove the cover without assistance;

6.Residents shall wash their hands before leaving the residence and upon return, and shall take the following additional actions after leaving their residences:

  • Stay at least six feet away from others; and
  • Avoid touching the nose or face.

Violator would have to pay a $1,000 fine. In Texas, County Judges are executive officials. Harris County includes Houston, where I reside.

Today, a challenge was filed to the County Judge’s order. The suit was filed by Steven Hotze, a prominent conservative activist in Texas. Here is the background section. The plaintiff seeks a Temporary Restraining Order. He expects a hearing to be set for Friday. An appeal to the Texas Supreme Court will certainly follow.

The Plaintiff raises claims under the state Constitution and local law. In short, the County Judge lacks authority to create new criminal offenses.

We used to argue about the government issuing mandates to buy broccoli. Now, we have mandates to wear masks and wash your hands.

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What will happen next in the Sixth Circuit’s “basic minimum education” case?

Today a divided panel of the Sixth Circuit decided Gary et al v. Whitmer et al. My co-blogger, Jon Adler summarized the decision here. In short, the panel majority found that Due Process Clause of the Fourteenth Amendment protects a fundamental right to a “basic minimum education.” I agree with Judge Murphy’s dissent. Judge Clay’s majority opinion, joined by Judge Stranch, is inconsistent with longstanding Supreme Court precedent.

In the normal order, the state Attorney General would seek re-hearing en banc. But this case may be different. Michigan Attorney Dana Nessel has praised this decision! Indeed, she tried to file an amicus brief in support of the plaintiffs. It is doubtful that she would appeal.

What happens next? Perhaps one of the other defendants will appeal. The case was filed against several state officials:

GRETCHEN WHITMER, Governor; TOM MCMILLIN, member of MI Bd of Education; MICHELLE FECTEAU, member of the MI Bd of Education; LUPE RAMOS-MONTIGNY, member of the MI Bd of Education; PAMELA PUGH, member of the MI Bd of Education; JUDITH PRITCHETT, member of the MI Bd of Education; CASANDRA E. ULBRICH, member of the MI Bd of Education; NIKKI SNYDER, member of the MI Bd of Education; TIFFANY TILLEY member of the MI Bd of Education; SHEILA ALLES, Interim Superintendent of Public Instruction for the State of MI; TRICIA L. FOSTER, Director of the MI Dept of Technology; WILLIAM PEARSON, State School Reform/Redesign Officer, in their official capacities,

I do not know if any of these positions have independent litigation authority. Or, perhaps the AG can allow them to retain outside counsel.

What happens if none of these officials seeks rehearing en banc? The Michigan House and Senate may seek to intervene. Virginia House of Delegates v. Bethune-Hill held that single houses of state legislatures cannot intervene. I do not know how the bicameral Michigan Legislature would fare. This decision would no doubt affect spending in the state, and restrict the ability to regulate education.

I can see another procedural riddle. Before the legislature can file a motion for rehearing en banc, it would have to seek to intervene. Presumably, that motion would be filed with the same three-judge panel that just ruled. If that panel denies intervention, the state would have to seek rehearing en banc on the denial of the motion to intervene. At that point, the timeframe to seek a petition for rehearing en banc on the original panel decision may lapse. I don’t know the answer to this question.

There is another possible outcome.

Under Federal Rule of Appellate Procedure #35, federal courts of appeal can rehear a case en banc sua sponte. That is, one judge can request a poll. If a majority of judges in active service wish to rehear the case, en banc review is granted. At that point, the panel decision is vacated, and then the case would be set for en banc proceedings.

This case is an excellent candidate for en banc review. It presents “a question of exceptional importance” that would radically alter eduction policy in Michigan, as well as in Ohio, Tennessee, and Kentucky.

What happens if the Sixth Circuit sua sponte grants en banc in this case? The Attorney General would likely argue that she agrees with the panel decision. At that point, there is no live case or controversy, and the appeal would be dismissed for lack of subject matter jurisdiction. I doubt the AG would risk appealing this case to the currently-constituted Supreme Court. And then, the district court’s decision, which rejected a right to “basic minimum eduction,” would stand.

Such an outcome mirrors Hollingsworth v. Perry. The district court found that Prop 8 was unconstitutional. The California AG declined to appeal. Intervenors tried to appeal, but the Supreme Court held that there was no live case or controversy. As a result, the District Court’s judgment remained in effect–at the time it was rendered, there was still a live case or controversy. In short, a sua sponte en banc call in the Sixth Circuit would end this case.

If en banc is denied, then Judge Clay’s decision becomes law of the circuit. Suits would be immediately filed throughout the circuit. District Court judges could then proceed to discovery, and other lengthy proceedings before the Circuit Court has a chance to review a final judgment. And in some cases, local governments will gladly enter into consent decrees to constitutionalize a right to education. At that point, the 6th Circuit could only use mandamus, or other extraordinary writs, to intervene. And if the composition of the Supreme Court changes, this case may actually be upheld.

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“Scan Your Code!”: Dystopian Post-Lockdown ‘Normal’ In Wuhan Enforced By ‘Anti-Virus Patrols’

“Scan Your Code!”: Dystopian Post-Lockdown ‘Normal’ In Wuhan Enforced By ‘Anti-Virus Patrols’

The industrial hub of over eleven million people and ground zero for the global outbreak, Wuhan, has come roaring back to life but more in the way of a dystopian version of itself after the virus peaked there in February and now with almost no new infections occurring according to official numbers.

Under strict lockdown since late January as the virus ripped through the original ‘hot zone’ epicenter of Hubei province, the capital city provides a glimpse of what hard-hit urban centers in the West may look like in a new post-lockdown world.

“So far, Wuhan’s answer has been to create a version of normal that would appear utterly alien to people in London, Milan, or New York — at least for the moment,” Bloomberg writes. It’s a situation that appears ‘normal’ but with a totalitarian twist: “Bolstered by China’s powerful surveillance state, even the simplest interactions are mediated by a vast infrastructure of public and private monitoring intended to ensure that no infection goes undetected for more than a few hours.”

Police in some locations have begun to use AI-powered smart helmets to track citizens’ temperatures. Source: China News/Weibo via Daily Mail.

Just to get a major Lenovo tablet and phone factory on the outskirts of the city up and running again – previously closed for over two months – workers are first greeted by a series of four temperature checks. If flagged for even slightly higher than normal temperature (above 99.1F) they get referred to an in-house “anti-virus task force” to make determinations.

The steps the factory as well as businesses and offices across the city have taken are designed to spot any potential resurgence in infections a mere minutes after symptoms appear. And this is after returning employees have already been exhaustively tested for both the virus and antibodies before being able to go back to their place of work. And yet still, as Bloomberg describes, there’s a detailed regimen involved at every step of the day in the ‘new normal’:

Once cleared, they returned to work to find the capacity of meeting rooms built for six reduced to three and the formerly communal cafeteria tables partitioned off by vertical barriers covered in reminders to avoid conversation. Signs everywhere indicate when areas were last disinfected, and robots are deployed wherever possible to transport supplies, so as to reduce the number of people moving from place to place. Elevators, too, are an artifact of the Before Times; everyone now has to take the stairs, keeping their distance from others all the way.

Amid a surge in global demand for laptops and tablets given schools around the world have gone to remote learning, the Lenovo factory has added more than 1,000 workers since reopening operations, with over 10,000 employees on-site.

Image via Bloomberg Businessweek: “Don’t chat, finish your food quickly.”

Head of Wuhan’s Lenevo operations Qi Yue told Bloomberg the entire factory would immediately shutter again should even one employee get coronavirus. “In my meetings with my staff I always tell them, ‘No loosening up, no loosening up.’ We can’t allow any accidents,” he said.

Ever worried also about asymptomatic spreaders which could could trigger a second wave, an elaborate electronic surveillance tracking system has also been erected and mandated for anyone wishing to take public transport, such as trains. 

This is where scores of black-clad police officers will meet citizens, checking the app:

Police in black uniforms and medical masks seemed to be everywhere. “Scan your code!” they shouted at travelers approaching the departure gates. The public-private “health code” system that China developed to manage Covid-19, hosted on the Alipay and WeChat apps but deeply linked with the government, assigns one of three viral risk statuses — red, yellow, or green — to every citizen. It’s a powerful tool with clear potential for abuse. A green QR code, which denotes a low risk of having the virus, is the general default, while coming into contact with an infected person can trigger a yellow code and a mandatory quarantine. Red is for a likely or confirmed case.

It should be recalled too that politicians and tech companies in the West have batted around the idea of app-based ‘infection trackers’ and/or ‘immunity certificates’ and ‘special passports’.

Places like banks, restaurants, and coffee shops are opening back up, but with significant alterations, such as outdoor waiting areas, screening areas and temperature checks before going in, and often outdoor seating and dining.

One area the government has controversially maintained strict controls and curtailments on is funerals, out of concern that large family gatherings can reactivate COVID-19 spread, though critics of the policy say Chinese authorities are sensitive to political aspects to how the virus was handled, as Bloomberg describes:

Officially, no patients in Wuhan are still dying from Covid-19, but the treatment of those who did pass away remains an extremely sensitive subject. On Tomb-Sweeping Day in early April, when Chinese families traditionally gather to pay respects to their ancestors, Wuhan’s cemeteries were kept closed. Funerals have been banned until at least the end of the month, and family members of the dead have reported pressure from government officials to mourn quickly and quietly.

…But the restrictions also help Beijing avoid having funerals become a venue for people to vent anger about how the epidemic was handled, or to ask uncomfortable questions about subjects such as China’s true death toll.

The political anger is there beneath the surface, as a new FT piece also documents of “a small but tight-knit group of dissidents based in Wuhan who took it upon themselves to document the earliest days of coronavirus, a period that has become a closely guarded secret by China’s Communist party.”

Lenovo tablet and phone factory, via Bloomberg Businessweek.

They are angry not only over the slow reaction of government authorities in late December, of a lingering aggressive silencing of those who dared and continue to speak up

As far as recovery in the West, and comparing the current crisis to the post-9/11 world, and how American relatively quickly recovered, Bloomberg notes, “It’s reasonable to think this time will be different.”

Taxi with protective shields between passengers and driver, part of a ride-hailing company in Wuhan. Image via FT.

“Different” and with collective trauma on a larger scale because in the current societal crisis “Hardly anyone alive today has endured a pandemic this severe, and the basic problem it’s created — that anyone, whether friend, family, or stranger, might be a vector for lethal infection — is uniquely corrosive to the daily interactions that keep countries and economies going.”


Tyler Durden

Thu, 04/23/2020 – 19:25

via ZeroHedge News https://ift.tt/3bwWk2s Tyler Durden

What will happen next in the Sixth Circuit’s “basic minimum education” case?

Today a divided panel of the Sixth Circuit decided Gary et al v. Whitmer et al. My co-blogger, Jon Adler summarized the decision here. In short, the panel majority found that Due Process Clause of the Fourteenth Amendment protects a fundamental right to a “basic minimum education.” I agree with Judge Murphy’s dissent. Judge Clay’s majority opinion, joined by Judge Stranch, is inconsistent with longstanding Supreme Court precedent.

In the normal order, the state Attorney General would seek re-hearing en banc. But this case may be different. Michigan Attorney Dana Nessel has praised this decision! Indeed, she tried to file an amicus brief in support of the plaintiffs. It is doubtful that she would appeal.

What happens next? Perhaps one of the other defendants will appeal. The case was filed against several state officials:

GRETCHEN WHITMER, Governor; TOM MCMILLIN, member of MI Bd of Education; MICHELLE FECTEAU, member of the MI Bd of Education; LUPE RAMOS-MONTIGNY, member of the MI Bd of Education; PAMELA PUGH, member of the MI Bd of Education; JUDITH PRITCHETT, member of the MI Bd of Education; CASANDRA E. ULBRICH, member of the MI Bd of Education; NIKKI SNYDER, member of the MI Bd of Education; TIFFANY TILLEY member of the MI Bd of Education; SHEILA ALLES, Interim Superintendent of Public Instruction for the State of MI; TRICIA L. FOSTER, Director of the MI Dept of Technology; WILLIAM PEARSON, State School Reform/Redesign Officer, in their official capacities,

I do not know if any of these positions have independent litigation authority. Or, perhaps the AG can allow them to retain outside counsel.

What happens if none of these officials seeks rehearing en banc? The Michigan House and Senate may seek to intervene. Virginia House of Delegates v. Bethune-Hill held that single houses of state legislatures cannot intervene. I do not know how the bicameral Michigan Legislature would fare. This decision would no doubt affect spending in the state, and restrict the ability to regulate education.

I can see another procedural riddle. Before the legislature can file a motion for rehearing en banc, it would have to seek to intervene. Presumably, that motion would be filed with the same three-judge panel that just ruled. If that panel denies intervention, the state would have to seek rehearing en banc on the denial of the motion to intervene. At that point, the timeframe to seek a petition for rehearing en banc on the original panel decision may lapse. I don’t know the answer to this question.

There is another possible outcome.

Under Federal Rule of Appellate Procedure #35, federal courts of appeal can rehear a case en banc sua sponte. That is, one judge can request a poll. If a majority of judges in active service wish to rehear the case, en banc review is granted. At that point, the panel decision is vacated, and then the case would be set for en banc proceedings.

This case is an excellent candidate for en banc review. It presents “a question of exceptional importance” that would radically alter eduction policy in Michigan, as well as in Ohio, Tennessee, and Kentucky.

What happens if the Sixth Circuit sua sponte grants en banc in this case? The Attorney General would likely argue that she agrees with the panel decision. At that point, there is no live case or controversy, and the appeal would be dismissed for lack of subject matter jurisdiction. I doubt the AG would risk appealing this case to the currently-constituted Supreme Court. And then, the district court’s decision, which rejected a right to “basic minimum eduction,” would stand.

Such an outcome mirrors Hollingsworth v. Perry. The district court found that Prop 8 was unconstitutional. The California AG declined to appeal. Intervenors tried to appeal, but the Supreme Court held that there was no live case or controversy. As a result, the District Court’s judgment remained in effect–at the time it was rendered, there was still a live case or controversy. In short, a sua sponte en banc call in the Sixth Circuit would end this case.

If en banc is denied, then Judge Clay’s decision becomes law of the circuit. Suits would be immediately filed throughout the circuit. District Court judges could then proceed to discovery, and other lengthy proceedings before the Circuit Court has a chance to review a final judgment. And in some cases, local governments will gladly enter into consent decrees to constitutionalize a right to education. At that point, the 6th Circuit could only use mandamus, or other extraordinary writs, to intervene. And if the composition of the Supreme Court changes, this case may actually be upheld.

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Mechanisms In The ETF Market, And How They Could Break

Mechanisms In The ETF Market, And How They Could Break

Submitted by Peter Garnry of Saxo Bank

Summary: Many market participants with exposure in exchange traded funds (ETFs) tracking oil futures have been surprised by recent events – with yesterday’s temporary trading halt in a major ETF tracking US oil futures as the latest. For traders with interest in ETFs it is important to understand the underlying mechanisms – especially for ETFs tracking derivatives.

An ETF is an investment fund traded on stock exchange or other trading facility much like a common stock. In general ETFs offer diversified exposure to financial markets at lower costs than traditional alternatives such as mutual funds. ETFs are issued by an ETF provider to an authorized participant (AP) which then facilitates trading as market makers to the public. The original ETFs, and also the largest today, track an underlying benchmark index such as the S&P 500 Index holding a basket of securities closely matching the underlying benchmark weights. Many of these ETFs are using physical replication which means that the ETF provider owns the underlying physical assets. Newer ETFs track derivative products such as VIX index derivatives or futures contracts, and some ETFs even apply leveraging and inverse payoffs of the underlying benchmark.

Structure of the ETF market

The ETF market is split into a primary and a secondary market, as illustrated in the figure below:

  • The secondary market consists of the natural ETF trading between buyers and sellers either on an exchange or in the OTC market (often a request-for-quote market). Typically an ETF is traded on multiple exchanges as with stocks.
  • The primary market is the most important part of the ETF ecosystem and is the primary source for determining the ETF liquidity. This is regulated through the creation of new ETF units or the redemption of existing ETF units, depending on the supply/demand in the secondary market.

If demand increases for an ETF above the available supply in the secondary market the Authorized Participant/Liquidity Provider (AP) will buy the basket of the securities underlying the index in the primary market. The AP delivers the shares to the ETF provider and receives in exchange newly created ETF units which are then sold to investors in the secondary market. The opposite takes place if selling exceeds demand from investors by the redeem mechanism. Every time an AP uses the create/redeem mechanism it earns an arbitrage profit. Competition between APs ensures tight bid/ask spreads, and the spread is often the best indicator of the liquidity of an ETF. The create/redeem mechanism ensures the price of an ETF is in line with its underlying net asset value (NAV). Creation and redemption of ETF shares takes place overnight with the ETF provider.

“Surprises” in recent ETF markets

As stated by one of the major ETF providers in one of their ETF descriptions, their ETF “aims to track the performance of the xxx index”, with no guarantee that the ETF will yield the same return as the underlying assets. This difference between the ETF and the underlying index is denoted the “tracking error”, and many investors are not aware that ETFs are not a direct 1:1 replicate of the returns in the underlying benchmark.

In the volatile markets in March, where liquidity disappeared in many European ETFs, market makers spreads widened dramatically. As an example, the average bid-ask spread in percentage terms peaked during the month at 3.1% for an ETF tracking inflation-linked government bonds. The tracking error during this period increased significantly, and the ETF traded with a 4 % discount to the actual value of the underlying assets. In some cases with ETFs tracking corporate bonds the ETF price may go well below the fund’s net asset value because the underlying prices on the corporate bonds are uncertain or maybe rarely updated.

These tracking errors may become even worse for ETFs tracking derivatives. The rapid decrease of the oil price – even into negative territory – caused a temporary trading halt in the United States Oil Fund LP ETF. The ETF (which cannot trade at negative prices) were suddenly tracking a derivative asset negative, which forced a change in the tracking rules of the ETF. The creation mechanism was suspended for the ETF, keeping only the redemption possibility. As the synergy between the creation-redemption mechanisms were removed, the authorized participant could no longer benefit from the arbitrage, and this resulted in major tracking errors between the ETF and the underlying assets. At the time of writing, the ETF trades at a premium of more than 36 % from their “fair value”! Investors with interest in buying these new lows should keep these mechanisms in mind before investing.

The examples above show that the price of an ETF does not always reflect the value of the actual underlying assets – especially not for leveraged ETFs. With this being said, ETFs still provide a good opportunity to diversify your portfolio at low costs, keeping in mind the risks associated with trading ETFs. And for ETFs which do not track derivative products, these tracking errors are less pronounced.

The ETF industry was launched in the US in 1993 and initially created for institutional investors demanding an alternative to equity futures which exhibit rolling costs. In the beginning the demand was low, but over the following 10 years the AUM of equity ETFs grew AUM as retail investors also discovered that this new financial instrument offered broad-based access to financial markets at low costs compared to active mutual funds. Especially since the financial crisis ETFs have enjoyed rapid growth in AUM by more than 200 % since 2009 to USD 2.9 trillion in the US with around 80 % tracking equity indices [BlackRock Global ETP Landscape – Industry Highlights (May 2017), BlackRock


Tyler Durden

Thu, 04/23/2020 – 19:05

via ZeroHedge News https://ift.tt/3axp8GJ Tyler Durden

Texas Mayor Caught Defying Her Own Stay-At-Home Order At Local Nail Salon

Texas Mayor Caught Defying Her Own Stay-At-Home Order At Local Nail Salon

When a photo of Beaumont, Texas Mayor Becky Ames at a local nail salon surfaced, all hell broke loose.

That’s because Beaumont has been on lockdown for almost a month.

The mayor left last week’s council meeting to “find her phone flooded with text messages and angry social media criticism” after the picture went viral among the town after appearing on a local blog, according to Chron.

Ames signed a stay-at-home order on March 27 that included nails and hair salons as businesses that were ordered to close around the region. Ames said the photo “could make people think she was getting a manicure” but then defended herself, saying: “I did not do anything wrong. I would not be upset with anyone who I found out did this.”

Instead, she says she had stopped at the salon to soak off artificial “dip” nails after they had grown out and become painful. 

Ames continued to dig her hole deeper, telling a local news outlet: “Six weeks ago or more, I went to get a manicure and ended up getting the powder nails for the first time. I loved it and it looked great, but as they grew out I started looking like a witch. I tried to take them off and texted the lady that did them, who is the owner of the salon, to ask what to do.”

She said the salon wasn’t open but the owner said she would mix some solution to be picked up. A photo was taken while she was “soaking her nails to learn how to take them off,” Ames says. 

The mayor says she was at the salon for just 10 minutes before going to the Beaumont City Council meeting. She said she was able to remove half the dip nails in that time. 

Ames said she didn’t realize someone was taking her photo. The salon owner backed up the mayor’s story and told the employee, who snapped the photo, not to return to work. Ames and the owner both said she did not pay for the solution that was used.

“The owner said she has a lot of ladies that need to get their nails off, so she’s set this out for them. A lot of hairdressers have left color out for someone to come pick up. There’s nothing wrong with that as long as you’re social distancing,” Ames concluded.


Tyler Durden

Thu, 04/23/2020 – 18:45

via ZeroHedge News https://ift.tt/3cDBSgc Tyler Durden

What Explains the Difference Between Estimated COVID-19 Fatality Rates in New York and California?

One of the points raised by critics of two recent California studies that estimated a surprisingly low fatality rate for COVID-19 can be summarized in four words: What about New York? If just 0.1 percent of people infected by the COVID-19 virus can be expected to die from the disease, as the low end of the range indicated by antibody tests in Santa Clara County and Los Angeles County suggests, the current death toll in New York City would imply that more than 100 percent of the population has been infected.

We probably can rule out that possibility, even without taking into account the test results that New York Gov. Andrew Cuomo announced today, which suggest that a fifth of the city’s residents have antibodies to the virus. By comparison, the Santa Clara County and Los Angeles County studies estimated that the share of residents infected by the virus as of early April was around 3 percent and 4 percent, respectively. Given New York City’s population density, it makes sense that a substantially larger share of residents would be infected there than in most other areas of the country. But population density alone does not account for the remarkably severe impact of COVID-19 in New York, and other possible explanations have been floated, including demographic factors, social distancing policies, overburdened hospitals, and multiple sources of infection from international travelers.

The current crude case fatality rate (CFR) in New York City—confirmed deaths as a share of confirmed cases—is more than 7 percent. If you include “probable deaths”—cases where infection was not confirmed by virus tests but suspected based on symptoms and circumstances—the crude CFR rises to nearly 11 percent. By comparison, the national average is currently 5.7 percent.

That average disguises wide geographic variation. In Texas, where I live, the current crude CFR is 2.6 percent. It is 1.3 percent in Wyoming, 3.2 percent in Florida, 3.8 percent in California, 5.3 percent in New Jersey, and 6.2 percent in Louisiana.

New York state accounts for nearly a third of COVID-19 deaths in the United States, and New York City by itself accounts for a fifth (including just confirmed fatalities). The city has recorded more than 100 deaths per 100,000 residents, compared to about 15 nationwide, two in Texas, four in California, and 60 in New Jersey.

So what’s going on in New York? Even judging from confirmed cases, it’s clear that a relatively large share of the population is infected. And we know that confirmed cases underestimate total infections, since testing has been skewed toward people with severe symptoms, which are not typical. The size of that gap—the issue at the heart of the controversy over the California studies—is crucial in estimating the overall fatality rate among people infected by the virus.

Cuomo said about 14 percent of 3,000 people randomly selected from shoppers across the state tested positive for antibodies to the COVID-19 virus. That sample may not be representative of the general population, since people who are sick or think they may have been exposed to the virus are probably less likely to be out in public. But assuming the sample is representative, the results suggest that something like 2.7 million New Yorkers have been infected, which in turn implies a statewide infection fatality rate (IFR) in the neighborhood of 0.6 percent—three times the upper estimate from the California studies.

Cuomo said the antibody tests suggest that 21 percent of New York City’s population has been infected, which implies about the same IFR. It makes sense that the virus would be especially prevalent in New York City. With 27,000 people per square mile, the city has by far the highest population density of any jurisdiction in the United States. With so many people living in close proximity to each other, jostling each other on sidewalks, and crowding together in subways, stores, bars, and restaurants, it would be surprising if New York City did not have an unusually high infection rate.

But population density is not the whole story. When George Rutherford, an epidemiologist and biostatistician at the University of California, San Francisco, looked at COVID-19 cases and deaths across boroughs and counties within New York City, he found they were not correlated with population density. Staten Island, for example, had a lot more cases per 100,000 residents than Manhattan did.

Richard Florida, an urban studies scholar at the University of Toronto, argues that economic class also plays an important role in the epidemic. “Covid-19 is hitting hardest not in uber-dense Manhattan but in the less-dense outer boroughs, like the Bronx, Queens, and even far less dense Staten Island,” he writes in a CityLab essay. “The density that transmits the virus is when people are crammed together in multifamily, multi-generational households or in factories or frontline service work in close physical proximity to one another or the public….There is a huge difference between rich dense places, where people can shelter in place, work remotely, and have all of their food and other needs delivered to them, and poor dense places, which push people out onto the streets, into stores, and onto crowded transit with one another.”

The spread of COVID-19 in New York City also was hastened by the introduction of the virus via many travelers from other countries. “Studies of the viral genome have shown that whereas California had about eight initial introductions, mainly from Asia, dozens of people (up to 100) brought the virus into New York, mainly from Europe,” Jeanna Bryner notes on Live Science. “Each of those introductions creates its own ‘chain of transmission,’ passing the virus to individuals who then, in turn, pass it to others.” According to modeling by researchers at Northeastern University, New York City may have had more than 10,000 infections by March 1, when its first confirmed case was reported.

Another possible factor is the timing of mandatory social distancing policies. Cuomo issued a business closure and stay-at-home order on March 20, the day after California Gov. Gavin Newsom imposed similar restrictions and four days after six counties in the San Francisco Bay Area ordered lockdowns. Assuming three weeks from infection to death, Rutherford, the epidemiologist, told Bryner earlier this month, the first case in the Bay Area happened about two weeks before the local lockdown. In New York City, he said, about four weeks elapsed between the estimated introduction of the virus and the stay-at-home order.

In light of the newly documented COVID-19 death in Santa Clara County on February 6, that comparison seems dubious. That case involved a woman who apparently was infected through transmission in the local community, which suggests the virus was already spreading in the Bay Area by mid-January, a month before the lockdowns there.

It may turn out that New York City not only has more infections per capita than other jurisdictions but also has a higher infection fatality rate, as Cuomo’s numbers suggest. Rutherford thinks a stressed health care system may help explain that difference. “As the hospital systems get overwhelmed, the mortality rate goes up proportionately,” he told Brynner, citing data from China.

Epidemic-related hospital use peaked in New York state on April 8, according to data from the University of Washington’s Institute for Health Metrics and Evaluation (IHME). At that point, the IHME says, the number of available ICU beds fell about 5,500 short of what was needed.

New York City’s experience with COVID-19 could mean that the IFR estimates from the California studies are wildly off. It also could mean that a much larger share of the population is infected in New York City, as Cuomo’s numbers suggest, and that people with the disease tend to do worse there for reasons that may include an overburdened health care system. Or all three of those things could be true to some extent. We won’t have a clearer answer until additional research sheds light on the actual prevalence of the virus in different parts of the country.

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Houses Passes New $484 Billion Coronavirus Stimulus Bill

Houses Passes New $484 Billion Coronavirus Stimulus Bill

After some initial delays, the House overwhelmingly passed and sent to President Trump a $484 billion coronavirus relief package, even as some members were already at odds over the next phase of rescue legislation. Once he receives the bill, Trump will swiftly sign off on the fourth coronavirus-related spending measure since early March. This bill would replenish funding to the Paycheck Protection Program for small businesses and provide other spending for hospitals and virus testing.

The bipartisan 388-5 vote – four Republicans Massie, Hice, Buck and Biggs voted against it; one Democrat, Ocasio-Cortez voted no and independent Justin Amash voted present – was delivered by passed wearing masks and entering the House chamber under strict health precautions. Several members lamented people who’ve died from or are critically ill with the virus, including one lawmaker’s sister.

“This is really a very, very sad day,” said Speaker Nancy Pelosi, giving a less-than-triumphant sendoff to the bill on a day when about 4.4 million additional workers were reported to have applied for unemployment benefits last week. “Our nation faces a deadly virus, a battered economy,” and hundreds of thousands of ill people. “Some died, and millions out of work,” said Pelosi.

When asked by CNN if Dems should have held out longer, AOC who voted against the bill, said “I truly hope I’m wrong, my concern is we are giving Republicans what they want. McConnell is already talking about the deficit the moment we talk about getting people relief… That to me is a signal that Republicans are done.”

According to Bloomberg, the House – which had not convened as a group since March 27 – also adopted a measure creating a special subcommittee to oversee the spending of coronavirus funds. The floor action was carried out with carefully choreographed movement and spacing of lawmakers to guard against spreading any infection. Groups of 60 members entered the chamber in alphabetical order to vote, then exited on the opposite side.

While the bill was destined to pass, much of Thursday’s debate centered on GOP claims that Pelosi and Democrats needlessly delayed agreement on the bill, and Democratic arguments that Senate Republicans under Majority Leader Mitch McConnell refused for too long to add items that were needed, only to agree at the end.

The final bill includes $320 billion to make new loans under the Paycheck Protection Program, which provides forgivable loans to small business that keep employees on the payroll for eight weeks. It sets aside $30 billion of the loans for banks and credit unions with $10 billion to $50 billion in assets, and another $30 billion for even smaller institutions.

The measure includes $60 billion in loans and grants under a separate Economic Injury Disaster Loan program, and makes farms and ranches eligible for the loans. Also, there is $75 billion for hospitals, with a significant portion aimed at those in rural areas, and $25 billion for virus testing.

The testing funds include $18 billion for states, localities, territories, and tribes to conduct Covid-19 tests, $1 billion for the Centers for Disease Control and Prevention, and $1.8 billion for the National Institutes of Health. As much as $1 billion would cover costs of testing for the uninsured.

According to some estimates, the additional PPP funds may be allocated – this time to those who truly need them instead of major public companies – in as little as a day, which means that the entire circus will repeat again in a week or so. According to BofA estimates, a total of just under $1 trillion in PPP funding will have to be provided which means that at least one more package will have to be signed into law.


Tyler Durden

Thu, 04/23/2020 – 18:35

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Can Oil Prices Get Back To $100?

Can Oil Prices Get Back To $100?

Authored by Haley Zaremba via OilPrice.com,

“We’re in a deflationary moment that surpasses anything seen in most people’s lifetimes,” proclaimed a New York Times byline on Tuesday, the morning after oil prices went negative. The West Texas Crude Intermediate benchmark plummeted to previously unimaginable depths, closing the day at negative $37.63 per barrel.  The novel coronavirus has wreaked unprecedented havoc on the global economy, shutting down entire industrial sectors and bringing countries across the world to a halt as the global community shelters in place to slow the spread of the COVID-19 pandemic. Economists have warned that the fallout is going to be the largest economic downturn that we have seen in our lifetimes, but few could have foreseen the absurdity of negative oil prices. 

Few, but not none. Three weeks ago, on April 1, CNBC published a report titled “Oil prices could soon turn negative as the world runs out of places to store crude, analysts warn,“ which predicted exactly what is happening now.

“Global oil storage could reach maximum capacity within weeks, energy analysts have told CNBC, as the coronavirus crisis dramatically reduces consumption and some of the world’s most powerful crude producers start to ramp up their output.”

While the situation is totally unprecedented it’s impossible to say what will happen next for oil markets, some experts think that oil is poised for a major comeback.

Even though oil prices are lower than they have ever been, “one energy fund thinks $100 a barrel is achievable,” reported the Midland Reporter-Telegram earlier this week.

At the time of the report, oil was only at an 18-year low rather than an all-time low. The article intro continued: 

“But first, prices need to fall even further.”

Well, they got their wish. 

As oil prices have tanked over the past two months, “Westbeck Capital Management’s Energy Opportunity Fund climbed 20.2 percent in March after declines in the first two months of the year, according to an investor letter. That puts the commodities-focused fund up 3.7 percent in the first quarter after U.S. oil futures cratered 66 percent — their worst quarter ever,” reports the Midland Reporter Telegram.

“The fund, which gained 40 percent last year shorting U.S. shale companies, has turned its attention to oil tanks filling up at various points around the world, particularly at the biggest U.S. hub in Cushing, Oklahoma. With too much oil and not enough places to put it, Cushing may reach storage limits by mid-May, a market dislocation that could portend the next leg of a price rout.”

This all points to a huge comeback for oil prices. As the world rushes to scale back oil production, they are setting up a bull market for the future.

“When we are on the other side of the pandemic, we think oil demand will normalize very quickly. And next year, we could even see unprecedented inventory draws and the world quickly running out of spare capacity,” Westbeck Chief Executive Officer Jean-Louis Le Mee told MRT in an interview.

“That rout will mean more U.S. shale producers will have to throttle back output, some of which could be permanent, […].

The shut-ins, coupled with a recent deal by OPEC and allied members to curb production, could set the stage for a price rebound in coming years.

U.S. shale had already been in serious decline as West Texas wells aged and the gush of the shale revolution. Now, with the oil price crash, the Permian Basin has been burdened with bankruptcies and tens of thousands of fired and furloughed employees. So when we are able to return to business as usual, there will likely be a shortage of spare capacity. Low supply, high demand. That’s how these things work. Keep an eye out for $100 barrels coming down the pike.


Tyler Durden

Thu, 04/23/2020 – 18:25

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