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“Never let a crisis go to waste,” were the famed words of Rahm Emanuel some years back.

And now, it looks like the SEC is abiding by those words. While the rest of the world faces the existential threat of the coronavirus, the Securities and Exchange Commission has spinelessly taken this opportunity to ease audit requirements on smaller companies, according to the Wall Street Journal. 

Those pushing for the change say it could allow smaller firms to cut costs and invest in new products and technology. The rule was approved Thursday and applies to companies with less than $700 million in annual revenue. They will no longer need to have an auditor examine their internal controls, a rule that has been in place since the days of Enron and WorldCom. 

What could go wrong?

Also, to no one’s surprise, it was also discovered that many people pushing for the rule change had “accounting problems”. 

For example, Teligent, Inc.’s CFO wrote that the rule would give it time “to develop high quality and competitive products to treat the nation’s most dire public health concerns.”

But analysis from Joe Schroeder, an accounting professor at Indiana University, found that at least 12 companies supporting the rule change had either restated earnings or had “material weaknesses” flagged by auditors during past audits.

Schroeder found that 11 companies that would benefit from the rule had restated more than $65 million in net income, combined, in 2018 alone. 

“These restatements destroyed more than $294 million in shareholder wealth, a figure that dwarfs the $50.36 million in savings that the SEC estimates the rule would provide.” he said.

Schroeder amounts the rule change to companies saying: “We have accounting issues, and we’re asking to get rid of regulation that tells us to improve our accounting.”

For example, Teligent’s own annual report from last April said it needed to “perform extensive additional work to obtain reasonable assurance regarding the reliability of our financial statements.”

Additionally, Teligent’s stock is down 97% since mid 2017. 

And so, one would think it’s obvious why they support the rule change. 

Except it either isn’t obvious to the SEC or they are being willingly ignorant.

SEC Hester Peirce used the coronavirus as a diversion for what is a rule change that will obviously help fraudulent and money losing companies bilk retail investors, incapable of reading financials, out of their money: 

“With the change, a company trying to develop a vaccine for a fast-spreading virus, something that is now on all of our minds, will be able to pour resources and—importantly—management’s time and attention into that effort rather than into obtaining an internal-controls audit.”

Allison Lee, the lone dissenting commissioner at the SEC, said: “The final rule rests in part on the unsupported hypothesis that relieving companies of modest additional costs will encourage more of them to go public. There just isn’t evidence for this intuition.”

The SEC says about 373 companies could be affected by the rule change.

Authored by Adam Dick via The Ron Paul Institute for Peace & Prosperity,

Fear of coronavirus, or the use of such fear being present among the people to justify expanding control, is driving decisions in much of American local, state, and national governments. Limiting international travel, prohibiting people from eating or drinking in restaurants and bars, imposing curfews, ordering “nonessential” businesses shut, and banning gatherings of more than a certain number of individuals are among the mandates governments have put in place in the name of fighting coronavirus.

This has all happened while extraordinary danger from coronavirus is not established and government actions being imposed, which carry health dangers of their own, tend not to be clearly helpful for countering what danger there may be from coronavirus.

However, not everyone in government is doing the coronavirus Chicken Little dance. United States House of Representatives member Thomas Massie (R-KY), who also is an Advisory Board member for the Ron Paul Institute, has been pretty much saying “hold on there guys” to fellow politicians who are rushing to disrespect the liberty of Americans in the name of countering coronavirus.

In a new video interview with host Duke Pesta at The New American, Massie strongly cautions against efforts to increase government power, and to restrict individuals’ exercise of liberty, in response to the virus du jour. Massie’s position contrasts with that of other politicians in Washington, DC. Among them, Massie declares in the interview, “there are almost no discussions about the limits of state and federal power.”

One may hope that once the coronavirus is dealt with the expanded powers of governments will fade away. Not so quick, counters Massie. Politicians have wished for some of these government power expansions for a long time, notes Massie. Many of such powers can be expected to continue on or to reemerge again and again, such as in successive flu seasons or in response to hurricanes.

Plus, comments Massie, “most of my colleagues are just ready to rubber-stamp any spending bill” purported to counter the threats from coronavirus. Continuing, Massie states:

They’re afraid of going back home and being blamed for this virus. You put any number in front of them — a hundred billion, a trillion, three trillion — they’re gonna vote for it.

Yet, Massie says in the interview that he is more worried about “the reckless trampling of constitutional rights” than he is about the reckless spending taking place in the name of reacting to a coronavirus threat. Massie explains that the entire population is being conditioned “to embrace a paternalistic government that can give or take any right away from you depending on if there is a crisis or not.”

“Once you are conditioned to that,” concludes Massie, “you’ll let the government do anything.”

* * *

Watch Massie’s interview here:

For more of Massie’s thoughts concerning the coronavirus and governments’ actions taken in the name of countering it, watch his Thursday interview at the Ron Paul Liberty Report.

The International Olympic Committee has set a deadline of four weeks to make a decision on whether they will postpone the 2020 games in Tokyo due to the Chinese coronavirus pandemic, according to the BBC.

The move comes after most prominent teams across from various countries have demanded a delay – including the US track and field team, the US swim team – which asked for a one-year delay, and the country of Brazil.

pic.twitter.com/VMXaTyRcJN

— USATF (@usatf) March 21, 2020

The U.S. swimming and track and field teams are two of America’s most successful Olympic teams, and their popularity is one of the main reasons Comcast Corp.’s NBC agreed to pay $2.6 billion every four years to broadcast the games, significantly more than any other global media company. At the 2016 Summer Games in Rio, they accounted for more than half of the country’s 121 medals, and 29 of the 46 golds. –National Post

According to Ransquawk, organizers are considering a delay of up to two years, though they are hopeful it will only be a 45-day postponement. Japan has already spent $12 billion (USD) on preparations, while reports have suggested up to $3 billion of sponsorship revenue may be at rosk.

Other plans being considered involve holding the games without spectators, and/or scaling back the games. 
Some organisers are pushing for a decision to be made quickly, warning that cancellation fees could rise the longer the decision is pushed-back. -Ransquawk

IOC president Thomas Bach said on Friday that “different scenarios” are being considered for the first time – including a ‘scaled-down’ event.

UK Athletics chairman Nic Coward recently suggested that the Olympics should be postponed, while Brazil, Norway and Slovenia’s Olympic committees have also urged the IOC to take action and put the Games back to next year. –BBC

“I do think they will be postponed, it’s inevitable. Every day is the Olympic Games,” said four-time Olympics gold medalist on Canada’s ice hockey team, and a member of the IOC. “Every day athletes cannot train, workout, it’s a day they cannot prepare.”

We suspect they won’t need four weeks to make their decision.

Once upon a time, Nasem Taleb famously showed a chart showing phase discontinuity as represented by the well-being of a turkey, which has a delightful life for 1000 days, and then on day 1,001, i.e., Thanksgiving… “surprise.”

The exact same thing just took place in the market.

Two months ago, in mid-January, we lamented the fact that everyone had gone all in – a clear warning that a reversal was imminent- and pointed at Deutsche Bank’s tracker of consolidated equity positioning which had just hit an all time high.

Fast forward to this week when Thanksgiving struck, and as DB’s Parag Thatte writes in his latest Investor Positioning and Flows report, “last week our consolidated equity positioning indicator had fallen to financial crisis lows. It has now fallen further and is the lowest in our data going back to 2003.”

… and a longer-term picture.

In light of last week’s unprecedented market moves, the arrival of the “Taleb turkey moment” will hardly come as a surprise, although when seen in charts, it is nothing short of stunning.

First, some preliminary thoughts from Thatte who notes that “rising volatility and correlations across all asset classes have
seen leverage being cut, with positions moving towards neutral from both the long and short side.”

As a result, Thatte calculates that for CTAs, net exposures are now in the 5th percentile…

… while gross exposures are in the 20th percentile.” In fact, according to DB, CTAs are now very short equities, neutral bonds and Gold, and long the USD, which explains why they have been making money as the market continues to plunge.

At the same time, Risk-parity gross exposure – which got hammered after the biggest ever VaR shock in history – is now “at its lowest since early 2016 and in the 20th percentile looking back to 2005.”

Separately, risk-parity equity and commodity exposures “are now at financial crisis lows, while bond exposure is near the lows of this cycle”, according to DB.

But that is nothing compared to the sheer implosion of vol control-fund equity allocations, which as a result of the record spike in the VIX is now at just 15%…

… the result of an unprecedented surge in observed equity vol vs implied target vol…

… and as such, vol control equity positions are now so low that it would take a -6% equity selloff for them to incrementally sell $1bn in exposure, a far cry from the beginning of the year when such a selloff would have prompted them to sell fifty times more.

In short, for once all those complaining about the “algos”, i.e., systematic funds dumping everything, were right, as the following comparison between discretionary and systematic positioning shows:

Aside from systematic funds, the puke can be seen in plain vanilla retail funds as well, which we highlighted on Friday showing the record redemptions from virtually every asset class, but for those who missed it, here it is again.

As DB notes, amongst several records recently, one that has stood out is the enormous outflow from bond funds at -$109bn this week, bringing outflows over the last 3 weeks to almost -$150bn.

Apart from short-term government bond funds (+$9.2bn) almost every other category of funds saw outflows including intermediate- (-$3.6bn) and long-term government bond funds (-$5.4bn).

Credit funds especially suffered with IG (-$18.4bn) as well as HY (-$11.9bn) seeing record outflows.

HY had also seen large outflows during the 2015-16 slowdown and cumulative flows over this cycle (since 2009) are now net negative (-$29bn).  IG funds, on the other hand, had been the biggest beneficiary of inflows in this cycle, and the recent record outflows have barely scratched the surface with cumulative inflows still at an enormous $312bn.

Not everyone is being redeemed out of existence. Assets in money-market funds – which the Fed backstopped last week – have surged over the last 3 weeks by a record $300bn, including $160bn just this week, also a record. The overall figures hide a wide divergence between money-market funds dedicated to government securities, which have seen almost +$400bn flow in over 3 weeks ($250bn this week), compared to prime funds, which have seen outflows of -$89bn (-$85bn this week).

This divergence is reflected in the extreme stress in commercial paper markets. Overall money-market fund assets at over $3.9 trillion now slightly exceed the level seen at the last peak during the financial crisis in early 2009. However, as a proportion of personal income or GDP, it is well below the highs seen during the last 2 recessions, suggesting that the inflows into MM funds could go further as the panic “run” away from all other asset classes accelerates.

We saved the worst for last: two weeks ago we warned that liquidity and short interest are at all time lows just as buybacks are plunging. Unfortunately, since then, while there has been some covering in marketwide shorts…

… liquidity…

… and stock buybacks…

… have only gotten much worse and until there is a clear reversal in any of these trends, the bottom in the market will be a long way off.

Authored by David Stockman via Contra Corner blog,

The nerve of it is a wonder to behold. The US airline industry has spent a decade shoving itself into harm’s way by strip-mining their balance sheets to fund share buybacks and goose top executive stock options.

For crying out loud – the reckless irresponsibility of it is mind-boggling. That’s because for decades upon decades this has been a highly cyclical industry – vulnerable to global dislocations caused by recessions, storms, wars, terror and more. Accordingly, airline companies absolutely need deep equity balance sheets and ample standby liquidity, even at the expense of short-term earnings.

Needless to say, the Big Four US airlines – Delta, United, American, and Southwest – were having none of financial rationality, prudence and common sense. As Wolf Richter properly pointed out:

“These stocks are now getting crushed because they may run out of cash in a few months, yet they would be the primary recipients of that $50 billion bailout, well, after they wasted, blew, and incinerated willfully and recklessly together $43.7 billion in cash on share buybacks since 2012 for the sole purpose of enriching the very shareholders that will now be bailed out by the taxpayer.”

We say nothing doing!

If the Big Four Airlines can’t raise enough cash in the high cost long term debt markets or by issuing highly dilutive preferred stock or equity, there is only one solution – and that is chapter 11. Holy moly, that’s why we have this legal protection procedure.

The airlines will have precious little business for the duration of the great COVID spring break anyway. So let the court-appointed trustees operate with the same skeleton crews that the airlines will be running even if they get the bailout. The level of customer service and employment will be essentially the same in either case.

More importantly, let the gamblers and so-called investors who piled into these stocks get their just deserts. That is, a 100% loss on their gambling stakes because that’s all it ever was when the Big Four’s combined market cap hit $130 billion compared to just $43 billion now.

Even more importantly, let these bankrupt shareholders file class action suits against the idiots and clowns in the C-suites and on the boards of directors who made such foolish decisions in the first place. Hopefully, these cats would be legally stalked and harassed to the ends of the earth as an object lesson in the personal cost of imperiling corporate balance sheets to feather their own stock options nest.

Of course, the airlines are only the poster boy for this long overdue moment of truth. The problem is universal because today’s rotten regime of Keynesian central banking has caused the entire financial system and main street economy to become riddled with rank speculation and reckless disregard for financial discipline and prudence.

And the crime starts right in the Eccles Building where over the last several decades an inbred posse of PhDs and Washington apparatchiks have taken it upon themselves to destroy honest price discovery in the money and capital markets in the name of levitating financial asset prices and thereby fostering more growth, jobs, incomes and spending than the main street economy would allegedly produce on its own.

Self-evidently, main street didn’t need no stinkin’ help from a wanna be 12-member monetary politburo. They have created serial bubbles that have gotten more inflated with each cycle, leaving the main street economy exposed to increasingly brutal episodes of correction when the proverbial Black Swan, or Black Bat, as the case may be, makes its grim appearance.

Still, the very idea that agents of the state could have enough information and wisdom to best the work of millions of traders, investors, speculators and dealers was ridiculous from the start; and the further idea that financial assets prices falsified by the FOMC to the second decimal point could cause main street to produce more output, jobs, efficiency and real living standard gains than would be the case under market determined financial asset prices was even more ludicrous.

Self-evidently, the only thing Keynesian central bankers have accomplished has been to fuel egregious speculations in the canyons of Wall Street; drain main street businesses of real productive investment; and leave businesses and households living hand-to-mouth and therefore vulnerable to even short-run interruptions of cash flow.

So we will say it again: Hand-to-mouth economics is not the natural modality on the free market; it is a malignant product of bad money and the debt-fueled speculative manias that are the consequence of Keynesian central banking.

Left to their own devices on the free market, households save and provide for rainy days, regardless of income level or social status.

Likewise, in a world not poisoned by cheap debt and falsified costs of capital, businesses nurture their balance sheets and provide for cash flow interruptions either by buying insurance or setting aside liquid reserves and equity capital based shock absorbers.

That’s the real message of this – the second great financial heart attack of the last decade. But rather than allowing the rot to be purged, the central bankers are now out pouring kerosene on the fires.

That is, insisting upon even greater central bank intrusion in the financial markets and even more egregious falsification of the prices of money, debt and every manner of risk assets. In effect, they are advocating the complete euthanasia of market prices in the financial system in favor of their own administered price folly.

At some point the very chutzpah of it gets downright maddening. We are referring to this morning’s missive in the FT from the Boobsie Twins, Ben Bernanke, and Janet Yellen, who were major architects of the disaster now underway.

Yet they now want the Fed to have expanded powers to buy corporate debt and who knows what else:

The Fed could ask Congress for the authority to buy limited amounts of investment-grade corporate debt. Most central banks already have this power, and the European Central Bank and the Bank of England regularly use it. The Fed’s intervention could help restart that part of the corporate debt market, which is under significant stress. Such a programme would have to be carefully calibrated to minimise the credit risk taken by the Fed while still providing needed liquidity to an essential market.

The bolded part is a risible lie. There is absolutely nothing wrong with the corporate debt market that even a modicum of honest interest rates could not handle.

That’s evident from the price chart of the largest corporate bond ETF shown below. It is trading no lower than in previous risk-off periods including November-December 2018, January 2016, late 2013 and during the US debt ceiling crisis of August 2011.

Yes, it has plunged from the absurd levels reached during the stock markets blow-off top a few weeks ago.

But so what? At the February extreme, the implied yield on corporate debt was hardly 2.6%, and even after the price plunge of recent days the implied yield is just 3.7%.

So what in the world are the Boobsie Twins talking about? Do they really think we are stupid enough to believe that a 3.7% investment grade yield is an end of the world crisis that requires the Fed to put its Big Fat Thumb on this sector of the rates market, too, after it has already reduced sovereign debt to yield-free status?

Indeed, when you look at the real corporate debt yield after inflation it is downright minuscule at 1.35%. So these Keynesian morons want the Fed to buy massive amounts of investment grade corporate debt with fiat credits snatched from thin air because they think, apparently, that the US economy will collapse at a real yield to just 1.35% after the current running level of inflation.

So what we have here is a far more insidious reality. Namely, the reaction function of Keynesian central bankers past and present has degenerated into an Atlas Syndrome.

These cats think they have the entire $85 trillion world economy on their shoulders and that any time there is an abrupt re-pricing of the hideous financial bubbles they have inflated, they propose to throw financial sanity to the winds lest the whole financial system and economy splatter against the wall.

It won’t, of course, because re-pricing of financial assets back to quasi-sane levels is actually what is desperately needed to stop the violent boom and bust cycles that have been gaining momentum under their tutelage for three decades now.

Stated differently, if Keynesian central banks fear a 3.7% investment grade bond yield, what they actually fear is the price mechanism itself.

That’s the heart of the matter: All of the emergency facilities and new legislative authority proposals emanating from the central bankers and their Wall Street acolytes and shills are designed to eviscerate and override the price mechanism in the financial markets.

The very absurdity and danger of that idea, however, is dramatized in spades by the juxtaposition of what happened yesterday. Presumably, the Boobsie Twins were emailing their draft FT op ed back and forth during market daylight hours.

Alas, the corporate bond market was so badly “broken” as they penned up their SOS proposal that, well, the largest amount of corporate debt deals of the year was brought to market!

That’s right. About $28 billion of new deals were priced yesterday, of which $10 billion were was 20+ years.

Duh. If that’s “broken”, we truly do not understand what financial planet these Keynesian central bankers actually inhabit.

On the other hand, we know full well where drastic and sustained repression of bond yields have already led.

To wit, to a massive scramble for yield among money managers, which in turn has fueled the outbreak of epic-scale financial engineering in the C-suites. That’s because they could sell ultra-cheap debt for any cockamamie purpose that pleased Wall Street, including idiotic empire-building through M&A and the depletion of corporate cash reserves and debt capacity in order to fund massive stock buybacks and other balance sheet impairments.

Indeed, from the point of view of the central banker Atlas Syndrome, financial price repression is the gift that keeps on giving. Having dissipated their balance sheet liquidity on financial engineering, corporations now allegedly are facing a liquidity squeeze owing to the COVID-19 supply-side shocks.

So without missing a beat, the Fed was out with a resurrection of the emergency commercial paper funding facility that was used during the 2008 crisis to rescue con men like General Electric’s Jeff Immelt, who had loaded his $600 billion balance sheet with upwards of $200 million of cheap commercial paper.

As explained below, that particular facility ended up so malodorous even in the eyes of the fools who populate Capitol Hill that they forbade the Fed from using it in the future without the permission of the Secretary of the Treasury.

Little did they anticipate, of course, that during the next financial meltdown the office would be occupied by the greatest flunky to ever hold the post, and that his real job as the Donald’s campaign finance chairman would be to tap the public till for whatever it would take to insure his re-election.

So now that Secy Mnuchin has green-flagged this abomination, just recall briefly what happened last time around.

Back then the alleged titan of corporate America didn’t cotton to the idea of paying 5% or 7% or even 10% to rollover his short-term funding, least the hit to earnings would have monkey-hammered his 2008 bonus and the value of his massive stock options.

So Immelt went running to his Goldman Sachs benefactor, Hank Paulson, who soon persuaded Bernanke to open up a window at the Fed under its emergency section 13-3 authority.

That action guaranteed virtually unlimited commercial paper funding at the Fed window’s ultra-cheap rates so as not to disturb the year end bonuses of Immelt or hundreds of other CEOs who had put their companies in harm’s way be over-reliance on cheap short-term funding.

As it happened, the commercial paper bailout didn’t help GE anyway, as perhaps indicated by the shrinkage of its market cap from $500 billion at the peak to $55 billion a present.

But more importantly, there was absolutely no shortage of cash available to GE when Immelt pulled his crony capitalist raid 12 years ago. What it needed to do was fill the approximate $30 billion hole in its balance sheet by raising long-term debt, preferred stock or even common stock.

Yet, the mere statement of the obvious underscores the entire scam behind the Fed’s intrusions into the money and capital markets with these so-called emergency facilities. To wit, they have nothing to do with insuring the companies have the cash to meet their payrolls or pay other bills as is so mendaciously claimed by Wall Street and the Eccles Building.

No, it’s about keeping the cost of capital ultra low and minimizing the hit to earnings that might result from tapping higher cost capital markets, which are still wide-open at a higher yield per yesterday’s massive pricing of new corporate debt issues.

In more unvarnished terms, the only real function of this massive new commercial paper facility, which the Fed has stood up practically overnight, is protection of corporate earnings, CEO bonuses and stock options and the remaining winnings of Wall Street gamblers.

The chart below highlights the massive lie behind this new facility. The ostensible reason was that commercial paper yields spiked in the last few days from practically nothing to hardly much more.

In the case of AA rated three-month nonfinancial commercial paper, the yield rose from 0.86% on March 10 to 1.80% Friday afternoon.

But so f*cking what!

Back on February 27 when the stock market was just off its all-time highs, and when Powell was claiming the US economy was in a “good place “and the Donald was ballyhooing the Greatest Economy Ever the yield on this prime 90 day paper was actually higher at 1.56%!

Think about that one. In less than three weeks the Fed has panicked into resurrecting the Jeff Immelt Memorial Scam with commercial paper rates so low as to make a mockery of the notion of a shock or a malfunction in the plumbing.

[ZH: But it’s the spread that counts.]

Still, the dutiful shills of the Wall Street Journal cut and pasted the Fed’s press release to this effect:

To ease escalating strains in credit markets. Turmoil escalated in commercial paper in recent days, sending the cost of borrowing for companies sharply higher, in some cases above the cost of selling 30-year bonds. Investors including money-market funds have sold commercial paper, saddling dealers such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. with more inventory at a time when they could least accommodate it….

Oh, pulease!

Here is the 20 year history of the AA rated three month nonfinancial commercial paper yield. Self-evidently, a 1.34% interest rate is not going to break the American economy, nor would 2.00% or 4.00% or even 6.00%.

Indeed, if the market were allowed to clear at those levels the only “shock” which would trouble Wall Street would be the plunging stock prices which might result from companies having to pay a market rate of interest or issue dilutive amounts of common stock or long-term debt.

As we said, SO WHAT!

We reported on Friday that the Maryland National Guard has become more visible across the Baltimore Metropolitan Area as the COVID-19 crisis could lead to a statewide Martial Law-style lockdown. 

The Baltimore Patch is reporting that National Guard troops have been spotted not just in Baltimore City, but also across Baltimore County, and Montgomery and Prince George’s counties. 

Here are some pictures of armored vehicles spotted in Baltimore City on Friday. 

Same dynamics in #NYC. Appears to be troops moving into the area in a support role (note the lack of firearms). #COVID19 pic.twitter.com/kDpkQ1hGjv

— KMC – WASH YOUR HANDS (@KevinCullen67) March 20, 2020

Maryland Gov. Larry Hogan deployed 2,000 National Guard troops across the state on March 16 after confirmed virus cases surged, now at 244 with three deaths (as of March 22). The soldiers are expected to help with state-level emergencies. 

Here’s what the Maryland National Guard said in a press release to residents: 

“To our friends and neighbors — there is not a threat of martial law. When you see a Maryland National Guard Humvee on your street or service members setting up tents, know we are providing services to someone in need!” Whether it’s providing transportation support, delivering much-needed supplies, or setting up health screening stations — we are working for you!”

The Baltimore Patch kept tabs on National Guard movements: 

• TUESDAY: National Guard members escorted nine quarantined passengers arriving from the Grand Princess cruise ship at BWI to various locations across Maryland. They brought food and supplies so the people could self-quarantine for at least two weeks.
• THURSDAY: Maryland National Guard members helped conduct health screenings at the state house in Annapolis. Airmen from the 175th Wing ensured critical medical equipment was getting to local health departments and hospitals. It was shipped from the federal government to a warehouse in Anne Arundel County, where guardsmen prepared it for delivery to the field.
• FRIDAY: Members of the guard pitched tents in Landover, where WTOP reports health officials from Prince George’s County and Maryland are hoping to create a closed testing site for the new coronavirus at FedEx Field. Guardsmen from the Maryland Army National Guard’s 224th Medical Company Area Support, which is headquartered in Olney, set up a tent in Silver Spring, where officials said up to 30 medical soldiers would be able to support hospital workers in an emergency triage situation. Members of the National Guard were called to Baltimore City to help serve vulnerable populations, according to the mayor, who said their role was to help with food distribution to children and medical logistics planning.

“Our singular purpose is to meet the needs of the people of Maryland and do our part to help keep our communities safe,” Maj. Gen. Timothy E. Gowen, Adjutant General for Maryland, said in a statement. “The Maryland National Guard is focused and prepared to bring every appropriate capability to bear to confront this crisis.”

With the National Guard deployed across the metro area, Gov. Hogan has closed down malls and entertainment centers. He said last week that the state is trying to avoid more drastic measures including curfews, travel bans, and shelter in place orders.

“We’re not at that point yet,” said Gov. Hogan, adding, “We’re trying to avoid locking down society, and we’re trying to keep things as normal as possible.”

Despite Gov. Hogan attempting to avoid ‘draconian measures’ to enforce social distancing to combat the virus, there are some signs the local economy is grinding to a halt. 

Baltimore realtor R.J. Breeden, the owner of The Breeden Group of RE/MAX Sails, said: “residents in Baltimore saw National Guard troops across the Inner Harbor district last week.” He said it reminded him of “the 2015 Baltimore Riots.” 

Breeden said the service economy of the Inner Harbor has ground to a halt because of new social distancing rules, which he added, that “would severely pressure the local economy.” 

He warned, “coronavirus has already created a lot of uncertainty for small businesses and will spillover and hit the incomes of residents, that could force many to delay home buying.” 

Breeden said he is “seriously considering telepresence robots with large iPads” that would allow his real estate team to practice social distancing rules while continuing to run open houses during the virus crisis. 

Baltimore is the only region in the country that has experienced a form of Martial Law in the last five or so years. Is round two next?