At-Home Coronavirus Testing Kits Might Be the Key to Ending Our House Arrest

This is the terrible predicament we face as coronavirus cases worldwide top 1 million: In order to avoid getting infected, we have to stay at home in a mass lockdown. But if we don’t go out, we won’t develop the “herd immunity”—the critical mass of recovered and immune people—that can limit the virus’s spread. That means the minute we unlock and venture out, we risk getting attacked again.

So are we doomed to stay locked up—watching our economy go up in smoke—till a vaccine or treatment emerges months, perhaps years, from now? Or is there a way out in the interim?

There may be if mass home testing kits become available soon. That will allow near-universal and repeat testing, point out Sweden-based molecular biologists Jussi Taipale and Sten Linnarsson, which will be a game changer.

At this stage, it’s pretty clear to everyone but denialists that COVID-19 is not a hoax. Rather, it spreads at an exponential rate. In epidemiological parlance that means its spread rate—R0, the number of people an infected person spreads in turn—is greater than one. Without intervention, in coronavirus’s case, each infected person gives it to about two to four more people, each of whom gives it to two to four more till a vast chunk of the population is infected.

This wouldn’t be so bad if every coronavirus victim could just pop analgesics and recover. But that’s not the case. Although most people do get better on their own, about 20 percent of diagnosed cases develop severe respiratory problems—breathing difficulty, pneumonia, and worse—and need hospital stays and even ICUs. No country has enough health care infrastructure or medical professionals to deal with the surge of patients—not even the United States, as the horrific reports from swamped hospitals in New York City suggest.

Worse, the more the disease spreads and overwhelms a country’s treatment capacity, the more lethal it gets. (It’s not a coincidence that coronavirus’s crude case fatality rate—i.e. the percentage of infected people who die—is 1.4 percent for Germany and 1.67 percent for South Korea, both of whom managed to contain it early, compared to 9.3 percent for Spain and a jaw-dropping 12.2 percent for Italy, who didn’t.)

So the only way to avoid mass death is to stop mass infection.

Among the countries that have done the best job of containing the spread are South Korea and Taiwan. They started testing, tracing, and quarantining—TTQing—at the first hint of the disease. When anyone tested positive, they wouldn’t just quarantine that person. They’d go back and trace everyone that patient had come in contact with over the past couple of weeks and quarantine them as well. This labor-intensive strategy becomes a losing game, however, after the disease spreads beyond a certain point because it becomes too hard to trace and isolate all contacts.

At that stage, which is where most countries that ignored the early warning signs, including America, regrettably are, there are two options: mitigation or suppression.

Mitigation involves slowing the spread of coronavirus through some social distancing to around R0 equals one. Why not below one? Because allowing the vast bulk of the population to gradually get exposed means that many people will develop immunity and the virus will be permanently defeated. Mitigation also avoids total economic annihilation. However, Taipale and Linnarsson point out that the trouble with this approach is not only that it is really hard to calibrate perfectly but it also risks increasing the total number of people infected.

Most countries have therefore opted for some version of suppression. China’s authoritarian rulers implemented the most extreme suppression effort locking down 60 million people in the province of Hubei, the epicenter of the disease. America’s approach doesn’t go nearly as far, but with 38 states issuing stay-at-home orders, some till June, and the Trump administration under pressure to issue a national one, it is not exactly dithering either.

The upside of suppression, if implemented effectively, is that it dramatically stops the spread of the disease. That seems to have happened in China if the official figures can be believed—a big if. The downside is that suppression is maximally draconian and massively economically destructive. Even America’s comparatively mild suppression effort has already resulted in 9.9 million Americans filing for unemployment benefits in two weeks. This means that the labor market is contracting at the rate of one Great Recession per 10 days, The Atlantic’s Derek Thompson notes. At this stage, the question isn’t whether America will avoid a prolonged recession but a depression. Worse, shelter-in-place orders that force Americans to stay away from each other thwart herd immunity. According to White House estimates, come June, the vast majority of Americans might still be susceptible.

This means that as soon as America relaxes, coronavirus could come back with a vengeance, especially in the fall when cooler weather might reactivate the virus. Should this happen, we may well end up in what George Mason University economist Tyler Cowen describes as an “epidemic yo-yo”—the worst-of-both-worlds scenario where we oscillate between locking down and opening, repeatedly assaulting the economy but never really conquering the disease.

A possible way out till we have a vaccine or a treatment is through near-universal and repeated testing that allows the U.S. to replace mass lockdown with targeted quarantining of infected individuals while others continue to work. This is not possible right now because the tests available require medical professionals to take a nasal swab and carefully transport it for analysis, a process that takes several days. This test is accurate but expensive and slow. It also strains not only hospital staff but pathology labs that are already running out of chemical agents for analysis.

But a home testing kit that isn’t prohibitively expensive and gives unambiguous results within minutes like a home pregnancy test would change everything. It could use sputum —spit—or urine or feces (although sputum would probably give more accurate results because coronavirus RNA—genetic material—is more concentrated in it). Any test that can accurately detect 85 percent of coronavirus-positive cases and has an 80 percent compliance rate would be enough to reduce the R0 of coronavirus to under one without benching a vast swath of America’s workforce. Scores of pharmaceutical companies around the world are currently working to develop these tests, Taipale noted in an email exchange, and they might become commercially available within a matter of months if not weeks. (Home coronavirus finger-prick blood tests are already close to being commercially rolled out in England. But their downside is that they aren’t good at detecting early infection—when isolation is crucial—only later immunity.)

The duo suggests that the government could buy boxes of 50 tests and mass mail them to everyone for weekly testing for about a year. The boxes would have serial numbers that patients could use to collect a financial reward when they report their results, something that would ensure both compliance and tracking of the disease spread. Shelter-in-place orders could be restricted to any area showing a developing disease cluster.

This would arguably be a more defensible use of the $2 trillion that Congress used to fund its coronavirus relief package, which indiscriminately showers money on everyone and everything. But employers also have an inherent incentive in maintaining coronavirus-free workplaces and could fund their own home testing programs for employees, so there’s probably a private sector solution as well.

One way or another, once home testing becomes available, it’s likely to be embraced by Americans eager to leave their house arrest and safely get back to work—even as they wait for coronavirus’s permanent defeat.

This piece originally appeared in The Week.

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The CFTC Velociraptor Has Escaped the Fence That Dodd–Frank Built to Contain It

Like the velociraptors testing the perimeter of their enclosure in Jurassic Park, the Commodity Futures Trading Commission (CFTC) has begun probing the weaknesses in the statute that is supposed to fence the agency’s authority. The case of Monex Deposit Company v. CFTC gives the Supreme Court a chance to keep one such fence-testing effort contained. (Louis Carabini, the founder of Monex and a petitioner in this case, is a donor to the Reason Foundation, the nonprofit that publishes this website.)

Commodities are articles sold in commerce, from tulips to timber. The CFTC was created in 1974 to regulate commodity futures, not every commodity transaction in any commodity. In 2010, the Dodd–Frank Act expanded the CFTC’s authority to also regulate some spot contracts that functioned like futures contracts. To prevent the CFTC from regulating all spot contracts, the act defined several limits on what precise authority the commission had. One crucial limit: the CFTC is prohibited from regulating any “contract of sale” that “results in actual delivery within 28 days.”

The CFTC is now testing the strength of the phrase “actual delivery” in a $290 million enforcement action against Monex Deposit Company.

Monex is a family-owned business that has sold precious metals to retail buyers since 1967. Buyers either take physical delivery of metals they purchase from Monex or have them stored in fungible bulk form with an independent depository. In either scenario, Monex transfers title in the metals to the buyer within 28 days of sale. Monex has used this business model for decades, openly and fully complying with state law governing retail commodity transactions. Monex’s contracts of sale, therefore, result in actual delivery within 28 days, which by statute are not “futures” transactions and are thus outside the purview of the CFTC’s authority.

In 2013, three years after Dodd–Frank was enacted, the CFTC issued notice-and-comment regulations specifically stating that the commission does not regulate Monex-type contracts. This rule was consistent with the longstanding state law understanding of what “actual delivery” means. And it was in line with the statutory text that Congress enacted. In other words, even if the metals get deposited with an independent depository, the buyer obtains full ownership of the metals. The buyer can then sell, trade, retrieve, or otherwise exercise all the other rights contained within the bundle of sticks that come with property ownership.

But a year later, the CFTC abruptly changed course and adopted a new interpretation of “actual delivery.” It did so not by notice-and-comment rulemaking but in a motion to amend the agency’s complaint in an unrelated case filed in federal court in Florida. The accused seller in that case was not actually delivering precious metals to the buyer. As alleged, the seller in the Florida case was receiving full purchase price from the buyer and purchasing metal derivatives with it that the seller owned—in place of transferring ownership in the metals to the buyer. Such conduct would be garden-variety misrepresentation and market manipulation. Monex, by contrast, transfers ownership to the buyer outright, a business model that has been prevalent ever since humanity first engaged in barter.

The CFTC’s position is alarming for several reasons.

First: In civil cases, motions to amend complaints are obscure enough that no one other than perhaps the litigants and the judge bother to read them. They are definitely not filings that give adequate notice, and they provide no opportunity for public comment that the notice-and-comment process of issuing regulations does. Litigating positions that agencies take in, say, briefs filed in the Supreme Court, might grab attention, because they are filed in the highest court in the land, where industry groups might notice them and file their own briefs supporting or opposing the positions taken by federal agencies. The CFTC’s litigating position, by contrast, is buried in a motion asking a federal district court in the Florida lowlands for permission to amend a complaint. That’s the sort of thing you do if you’re deliberately trying to fly under the radar.

Second: The federal court rejected the CFTC’s motion and the arguments the agency advanced. The commission had sought to amend its complaint to allege that the seller in the Florida case did not “actually deliver” the metals to the buyer. The judge concluded that this argument made no sense and did not give the CFTC permission to amend its complaint. The CFTC eventually settled that case with the seller.

The commission then brought a $290 million enforcement action against Monex, claiming it was well-established back in 2014 (because of the failed litigating position the agency took in the Florida case) that Monex’s business model was illegal, and it asked a California federal judge to punish Monex with a hefty fine. The California federal judge again rejected the CFTC’s argument that Monex was not actually delivering precious metals to the buyers. Delivering the commodity to a third-party depository for safekeeping, which then follows the buyer’s further instructions (because the buyer owns the commodity), is “actual delivery” in every sense of the word.

After all, all types of commodities are routinely shipped to warehouses to be held while awaiting the buyer’s instructions. Grain elevators, shipyards, bulk and retail ground or air shipping, and pipelines all follow Monex’s business model. Even flower delivery services allow the buyer to direct tulips to a helpful neighbor for later pick up. The neighbor’s favor is presumably free, but more expensive items could be shipped to your local post office or UPS store for pickup there. Tirerack.com sells tires online directly to consumers who have them shipped to their local mechanic for installation. Congress did not give the CFTC the authority to regulate such third-party intermediary business models where actual delivery occurs within 28 days.

Third: In Monex’s case, CFTC has gone a step further. Not only does it claim the authority to regulate Monex’s business model, but it deems that business model illegal. The implications are astounding. The agency is attacking the very foundations for commercial transactions where commodities are delivered to someone other than the buyer. “Commodities law is complicated, but the basic issue here is simple,” says William Jay, Monex’s attorney. “Can an independent federal agency that is supposed to regulate commodity futures assert power over every single purchase or sale of a commodity?”

The CFTC’s fence-testing in the Monex case is disquieting, to say the least. The California district judge refused to allow the commission’s lawsuit against Monex to proceed. But then the Ninth Circuit Court of Appeals deferred to the CFTC’s strained interpretation of “actual delivery” and allowed the enforcement action to move forward. The case is yet another example of how the so-called deference doctrines have allowed the administrative state to dismantle the Constitution’s protections for the people’s civil liberties. The Supreme Court should take the Monex case and cage the commission’s rapacious power grab.

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Let’s Make This Simple: Zoom Is Malware

Let’s Make This Simple: Zoom Is Malware

Submitted by Mark Jeftovic, founder of EasyDNS

We’ve covered Zoom in these pages before.  Back in #AxisOfEasy 104 it turned out that the Zoom installer was installing mini-web servers on your computer, and it wasn’t even taking them off when you uninstalled Zoom, leaving your device open to all manner of vulnerability.  It took Apple acting on its own to push out an unscheduled update to fix Zoom’s problem before they got to it.

Last week we outlined how Zoom was sending telemetry data about you to Facebook, even if you don’t have a Facebook account.

In the intervening week, all sorts of data points and news items came out about the (lack of) privacy issues with Zoom:

  • On April 1st, a (former NSA) hacker released two new Zoom 0-days that enable a hacker with local access to a Zoom session to take over the software to install malware.

  • The next day Krebs on Security reported on the fast spreading “Zoom Bombing” phenomenon where pranksters and miscreants were war dialing Zoom rooms, looking for ones without password protections and crashing the meetings, hurling insults and profanities at the participants.

  • It gets worse, turns out Zoom Bombing is a thing now, so the perpetrators are recording videos of their antics and releasing them on Tik Tok and who knows where else.

  • On the very next day (the cat came back….) it emerged that because of the naming scheme Zoom uses to create the files of video recordings participants make of their sessions, those records were easy to find and access on the web.  

  • Toronto’s Citizen Lab reverse engineered the Zoom client and found that they had “rolled their own encryption scheme” and that it’s pretty lousy encryption. Their report is here.

  • Arvind Narayanan, a professor of Computer Science at Princeton distilled it down thusly, “Let’s make this simple: Zoom is Malware”

All of which has culminated in at least two US states Attorney Generals (so far) launching investigations into Zoom’s privacy protections (or lack thereof).

Read: https://www.theverge.com/2020/4/3/21207134/zoom-recordings-exposed-thousands-identical-naming-search

Here at easyDNS we are working to facilitate video conferencing and remote collaboration tools for you and your teams and families.  We’re relying on open source tools like Matrix and Jitsi that use peer reviewed, publicly accepted encryption techniques and will seek to put the data under your control and nobody else’s.  Watch this space.


Tyler Durden

Wed, 04/08/2020 – 10:10

via ZeroHedge News https://ift.tt/34kgycV Tyler Durden

US Consumer Comfort Crashes By Most Ever

US Consumer Comfort Crashes By Most Ever

The Bloomberg Consumer Comfort Index plunged 6.4 points in the week ended April 4 to 49.9, the lowest since October 2017.

Source: Bloomberg

This is the biggest weekly drop in history – worse than during the great financial crisis – and mimics (though considerably faster) the collapse in confidence after the dotcom crash.

In the past three weeks, the measure has plummeted more than 13 points, also the steepest drop in records back to 1985.

Under the hood, it’s just as ugly:

  • The comfort report’s gauge of confidence in the economy lost a whopping 10.6 points last week to 44.4, the lowest reading since July 2017.

  • A measure of attitudes toward the buying climate slumped 5.9 points to the weakest level since the end of 2017.

  • The CCI’s third gauge, views of personal finances, hit a four-month low.

Source: Bloomberg

But as the chart shows, levels remain above Trump election levels (for now).

Source: Bloomberg

While the weakening in sentiment was broad-based among demographics, ratings for Americans with household incomes of at least $100,000 – a cohort that may have more stock-market exposure – slid 8.4 points to the lowest level since July 2015.


Tyler Durden

Wed, 04/08/2020 – 09:57

via ZeroHedge News https://ift.tt/3e74Bfd Tyler Durden

The CFTC Velociraptor Has Escaped the Fence That Dodd–Frank Built to Contain It

Like the velociraptors testing the perimeter of their enclosure in Jurassic Park, the Commodity Futures Trading Commission (CFTC) has begun probing the weaknesses in the statute that is supposed to fence the agency’s authority. The case of Monex Deposit Company v. CFTC gives the Supreme Court a chance to keep one such fence-testing effort contained. (Louis Carabini, the founder of Monex and a petitioner in this case, is a donor to the Reason Foundation, the nonprofit that publishes this website.)

Commodities are articles sold in commerce, from tulips to timber. The CFTC was created in 1974 to regulate commodity futures, not every commodity transaction in any commodity. In 2010, the Dodd–Frank Act expanded the CFTC’s authority to also regulate some spot contracts that functioned like futures contracts. To prevent the CFTC from regulating all spot contracts, the act defined several limits on what precise authority the commission had. One crucial limit: the CFTC is prohibited from regulating any “contract of sale” that “results in actual delivery within 28 days.”

The CFTC is now testing the strength of the phrase “actual delivery” in a $290 million enforcement action against Monex Deposit Company.

Monex is a family-owned business that has sold precious metals to retail buyers since 1967. Buyers either take physical delivery of metals they purchase from Monex or have them stored in fungible bulk form with an independent depository. In either scenario, Monex transfers title in the metals to the buyer within 28 days of sale. Monex has used this business model for decades, openly and fully complying with state law governing retail commodity transactions. Monex’s contracts of sale, therefore, result in actual delivery within 28 days, which by statute are not “futures” transactions and are thus outside the purview of the CFTC’s authority.

In 2013, three years after Dodd–Frank was enacted, the CFTC issued notice-and-comment regulations specifically stating that the commission does not regulate Monex-type contracts. This rule was consistent with the longstanding state law understanding of what “actual delivery” means. And it was in line with the statutory text that Congress enacted. In other words, even if the metals get deposited with an independent depository, the buyer obtains full ownership of the metals. The buyer can then sell, trade, retrieve, or otherwise exercise all the other rights contained within the bundle of sticks that come with property ownership.

But a year later, the CFTC abruptly changed course and adopted a new interpretation of “actual delivery.” It did so not by notice-and-comment rulemaking but in a motion to amend the agency’s complaint in an unrelated case filed in federal court in Florida. The accused seller in that case was not actually delivering precious metals to the buyer. As alleged, the seller in the Florida case was receiving full purchase price from the buyer and purchasing metal derivatives with it that the seller owned—in place of transferring ownership in the metals to the buyer. Such conduct would be garden-variety misrepresentation and market manipulation. Monex, by contrast, transfers ownership to the buyer outright, a business model that has been prevalent ever since humanity first engaged in barter.

The CFTC’s position is alarming for several reasons.

First: In civil cases, motions to amend complaints are obscure enough that no one other than perhaps the litigants and the judge bother to read them. They are definitely not filings that give adequate notice, and they provide no opportunity for public comment that the notice-and-comment process of issuing regulations does. Litigating positions that agencies take in, say, briefs filed in the Supreme Court, might grab attention, because they are filed in the highest court in the land, where industry groups might notice them and file their own briefs supporting or opposing the positions taken by federal agencies. The CFTC’s litigating position, by contrast, is buried in a motion asking a federal district court in the Florida lowlands for permission to amend a complaint. That’s the sort of thing you do if you’re deliberately trying to fly under the radar.

Second: The federal court rejected the CFTC’s motion and the arguments the agency advanced. The commission had sought to amend its complaint to allege that the seller in the Florida case did not “actually deliver” the metals to the buyer. The judge concluded that this argument made no sense and did not give the CFTC permission to amend its complaint. The CFTC eventually settled that case with the seller.

The commission then brought a $290 million enforcement action against Monex, claiming it was well-established back in 2014 (because of the failed litigating position the agency took in the Florida case) that Monex’s business model was illegal, and it asked a California federal judge to punish Monex with a hefty fine. The California federal judge again rejected the CFTC’s argument that Monex was not actually delivering precious metals to the buyers. Delivering the commodity to a third-party depository for safekeeping, which then follows the buyer’s further instructions (because the buyer owns the commodity), is “actual delivery” in every sense of the word.

After all, all types of commodities are routinely shipped to warehouses to be held while awaiting the buyer’s instructions. Grain elevators, shipyards, bulk and retail ground or air shipping, and pipelines all follow Monex’s business model. Even flower delivery services allow the buyer to direct tulips to a helpful neighbor for later pick up. The neighbor’s favor is presumably free, but more expensive items could be shipped to your local post office or UPS store for pickup there. Tirerack.com sells tires online directly to consumers who have them shipped to their local mechanic for installation. Congress did not give the CFTC the authority to regulate such third-party intermediary business models where actual delivery occurs within 28 days.

Third: In Monex’s case, CFTC has gone a step further. Not only does it claim the authority to regulate Monex’s business model, but it deems that business model illegal. The implications are astounding. The agency is attacking the very foundations for commercial transactions where commodities are delivered to someone other than the buyer. “Commodities law is complicated, but the basic issue here is simple,” says William Jay, Monex’s attorney. “Can an independent federal agency that is supposed to regulate commodity futures assert power over every single purchase or sale of a commodity?”

The CFTC’s fence-testing in the Monex case is disquieting, to say the least. The California district judge refused to allow the commission’s lawsuit against Monex to proceed. But then the Ninth Circuit Court of Appeals deferred to the CFTC’s strained interpretation of “actual delivery” and allowed the enforcement action to move forward. The case is yet another example of how the so-called deference doctrines have allowed the administrative state to dismantle the Constitution’s protections for the people’s civil liberties. The Supreme Court should take the Monex case and cage the commission’s rapacious power grab.

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Zoom Is Keeping Pandemic-Stricken America Connected. Cue Congress’s Tech Panic.

Videoconferencing technology has been helping to keep people connected, employed, and semi-sane in these unprecedented times. Zoom has emerged as a crowd favorite since the COVID-19 pandemic’s start, quickly gaining ground on old-school competitors like Skype, Google Hangouts, and Apple’s FaceTime.

So, of course, tech-panicky politicians want to interfere. This time, the theatrics are coming courtesy of congressional Democrats and state attorneys generaltwo groups skilled at taking social ills and science problems and turning them into self-promotional opportunities.

“Virtual conferencing platform Zoom is facing the prospect of mounting legal threats in Washington after a slew of prominent Democratic lawmakers urged federal regulators Tuesday to investigate its privacy and security lapses,” reports Politico‘s Cristiano Lima.

Those calling for the Federal Trade Commission (FTC) to investigate Zoom include Democratic Sens. Amy Klobuchar (Minn.), Michael Bennet (Colo.), Sherrod Brown (Ohio), Richard Blumenthal (Conn.), Frank Pallone (N.J.), and Jan Schakowsky (Ill.).

In statements to Politico, spokespeople for Bennet and Klobuchar expressed vague concerns about Zoom user “privacy and security.” Brown put his thoughts in a letter last week.

Stories about lax data privacy practices, leaked videos, and hacked meetings have made the news recently, and these are certainly worth keeping a media and privacy watchdog spotlight on. But the political impulse we’re witnessing—broadly accuse first, find evidence later (maybe)is a dangerous one.

In Washington, independent and supposedly neutral investigations by federal regulators have a way of turning into congressional witch hunts when bureaucrats bring back results legislators don’t like.

An FTC spokesperson told Politico the agency shares “concerns about the need to ensure the privacy and security of videoconferencing systems in light of their central importance during this crisis” but could not comment on specifics with regard to Zoom.

Attorneys general in Connecticut, Florida, and New York are also part of a group effort seeking information and company data from Zoom.

For its part, Zoom notes that it “was built primarily for enterprise customers—large institutions with full IT support,” and that “usage of Zoom has ballooned overnight,” from a maximum of 10 million daily meeting participants in December 2019 to more than 200 million per day in March. In the shift, “we recognize that we have fallen short of the community’s—and our own—privacy and security expectations,” wrote CEO Eric S. Yuan in a post laying out steps the company is taking to fix that.

Certainly, government officials and anyone conducting sensitive business should avoid free Zoom calls and other insecure communications platforms (which includes, of course, Skype, FaceTime, Google Hangouts, and their ilk, too). And if Zoom proves incapable of keeping its promises to do better, consumers can, should, and will move on.

But scaring up too much fear about Zoom privacy issues at the moment is silly. Those of us using the service for cross-country family hangouts, idle chats with old friends, exercise classes, virtual happy hours, and other mundane purposes face little significant threat, and certainly no more than we do on other mass-use social media and communications services.

The bottom line: Calls to investigate Zoom right now are being driven by a need for politicians to seem like they’re “doing something” (anything) in response to the COVID-19 outbreak. But while officials are right to be wary of using Zoom for government business, they’re probably just being melodramatic busybodies about the rest.

See Also: Eugene Volokh on “Zoombombing and the Law.”


FOLLOWUP

A federal court has upheld Texas’ temporary ban on surgical abortion:


FREE MINDS

Eight in 10 Americans support stay-at-home orders. From a HuffPost/YouGov survey conducted last weekend:

An 81% majority of the public says it’s currently the right decision for states to tell residents to stay at home unless they have an essential reason for going out. Just 8% say it’s the wrong decision. An even broader 89% say they are personally trying to stay home as much as possible, with only 6% saying they’re not making any such effort.

More here.


FREE MARKETS

Doctors, not politicians, should decide whether hydroxychloroquine is appropriate for COVID-19 patients, writes Jeffrey A. Singer, who has been a practicing clinical physician for more than 35 years. Adds Singer:

What I’ve seen about hydroxychloroquine makes me cautiously optimistic. Doctors should not be prohibited from using their best clinical judgment and recommending it to patientsespecially considering the fact that these drugs have been around for a long time, which means we are familiar with their risks and complications. The government should stay out of this and let clinicians practice medicine, provided they get their patients’ informed consent. Patients have a fundamental right to try drugs they think may save their lives. Doctors they consult must be free to give patients their best advice, unencumbered by government overseers.

Read the whole thing here.


QUICK HITS

  • In New York, “the state budget that leaders are now finalizing would allow judges to ban individuals convicted of some sex crimes in mass transit from using the system for up to three years,” Politico reports.
  • An update from Sen. Rand Paul (R–Ky.), who was diagnosed with COVID-19 last month:

  • Hillbilly Elegy author J.D. Vance tackles common-on-the-right coronavirus myths here:

  • LOL/sigh:

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McDonalds Withdraws Outlook, March Sales Plummet After “Unprecedented” Disruption In Business

McDonalds Withdraws Outlook, March Sales Plummet After “Unprecedented” Disruption In Business

While it is hardly a secret that traditional brick and mortar retailers, already in pain after years of Amazon market share theft, were on death’s door as a result of the coronavirus economic coma, until now quick serve restaurants were seen as doing relatively well as a result of the surge in delivery and drive-thru sales. Alas, for McDonalds it wasn’t enough, and on Wednesday the world’s biggest hamburger chain announced that the outbreak of coronavirus has reversed what had been strong sales growth, prompting the world’s largest fast-food chain to withdraw its guidance for the year as a result.

McDonalds comp store sales declined 3.4% in the first quarter, McDonald’s said blaming the “unprecedented situation” as the coronavirus outbreak “has significantly disrupted the McDonald’s business”, with the entire drop due to a measure plunging a whopping 7.2% in March after rising the prior two months, even though the company said 99% of its U.S. restaurants remain open, mostly via drive-thru, delivery and carryout.

Following our strong performance in 2019 through execution of the Velocity Growth Plan, we began 2020 with positive global momentum. More recently, the global outbreak of COVID-19 has significantly disrupted the McDonald’s business. While we are faced with new challenges as a result, we are drawing on the strengths of our global System to manage through the crisis and position us for long-term growth.

This unprecedented situation is changing the world we live in, and we will need to adapt to a new reality in its aftermath. One thing that has not changed, however, is McDonald’s focus on protecting the health and safety of our people and our customers. We are implementing measures across markets to keep customers and crew safe, such as contactless Drive-thru and Delivery, social distancing guidelines, protective equipment for crew and enhanced hygiene and cleaning procedures.

The company shelved the outlook it provided on Feb. 26 “due to the uncertainty related to Covid-19 and its impact on the global economic conditions and the company’s business operations.” The Company said it would provide an update on its business and financial results on its first quarter earnings call planned for April 30, 2020.

With measures to limit the pandemic severely curtailing restaurant operations, consumer behavior has shifted drastically practically overnight, sparking upheaval in the restaurant industry. McDonald’s said it is working with its franchisees “to support financial liquidity during this time of uncertainty.” It’s deferring payment of some rent and royalty payments and working with suppliers and lenders to extend franchisee payment terms “when possible.”

Despite the unexpected and sharp drop in sales, McDonald’s shares fell less than 1% in early trading after the announcement, and have since recovered most losses.


Tyler Durden

Wed, 04/08/2020 – 09:41

via ZeroHedge News https://ift.tt/2RmdoAe Tyler Durden

Ray Dalio Still Thinks “Cash Is Trash”, But…

Ray Dalio Still Thinks “Cash Is Trash”, But…

A brief history of the world’s largest hedge fund manager’s worst…call…ever…

On a cold January day in Davos in 2020,  billionaire hedge fund manager Ray Dalio made the now infamous three word statement that “cash is trash.”

Six weeks later, the stock market had suffered the fastest loss of market-capitalization in its history, “cash” was the best-performing asset in the world (as gold had suffered some forced liquidation selling pressure) and cash inflows exploded at their fastest pace ever.

That was not the first time Dalio used Davos as a platform to accuse cash of being a terrible asset: back in 2018, he said that “if you’re holding cash, you’re going to feel pretty stupid.”

On Dec 31 of that year, cash would end up being the best-performing asset of the year.

By mid-March of 2020, Dalio had flip-flopped back to fearmongery, estimating that the virus will cost the economy and US corporations up to $4 trillion, or roughly 5% of the US $21 trillion GDP. Worldwide, Dalio estimates $12 trillion in corporate losses due to the pandemic. The hardest hit industries are taking catastrophic losses, with the business travel sector expected to lose an astonishing $820 billion and the restaurant industry slated to lose $225 billion.

And now, as Bloomberg reports, Dalio is back to his “cash is trash” theme again, clarifying this time that there are better assets to hold as central banks go all-in on printing money in response to the COVID-19 pandemic.

During a Reddit Ask Me Anything event on Tuesday, Dalio was asked, rather pointedly, “A few months ago, you said ‘cash is trash’; but now’ cash is king’ – what gives?”

Dalio responded “I still think that cash is trash” but this time added some more “clarification” to his call…

“I’m glad you asked so that I can clarify...

Back then, and still now, I believe that central banks will print a lot of money and keep cash interest rates at such low levels that they will have negative real returns and negative returns relative to assets that behave well in times of reflation.

When the virus hit and it had its negative impact on earnings and balance sheets, asset values plummeted which made cash look comparatively attractive.

However, what did the central banks do? They created a ton more cash to buy debt and push interest rates lower which is having the effect of pushing those assets that will be better suited for the new environment up.

When you think about what assets are safe to own, and you think of cash, please remember that while it doesn’t move around in value as much as other assets, there is a costly negative return to it in relation to goods and services and other financial assets that amounts to about a couple of percent a year, which adds up.

So I still think that cash is trash relative to other alternatives, particularly those that will retain their value or increase their value during reflationary periods (e.g., some gold and some stocks).

While much of what Dalio’s “clarification” says makes sense, the responses to the headlines summed things up rather well, epitomized best by the following…


Tyler Durden

Wed, 04/08/2020 – 09:40

via ZeroHedge News https://ift.tt/39WMPYC Tyler Durden

Global Economies Suffer “Largest Drop On Record”: OECD

Global Economies Suffer “Largest Drop On Record”: OECD

In case anyone needed more proof that the entire world is sliding into recession, if not outright depression, on Wednesday morning the Organisation for Economic Cooperation and Development said that major economies are seeing the biggest monthly slump in activity ever amid the coronavirus crisis and no end is in sight without clarity about how long lockdowns will last.

The OECD said its leading indicators, which are designed to flag turning points in economic activity, suggested all major economies had plunged into a “sharp slowdown” with only India registering as being in a mere “slowdown”.

The indicators were flagging “the largest drop on record in most major economies”, the Paris-based OECD said in statement, adding that huge uncertainty over how long lockdowns would last severely muted their predictive value.

As a result, the OECD said the indicators “are not yet able to anticipate the end of the slowdown, especially as it is not yet clear how long, nor indeed severe, lockdown measures are likely to be”. Last month, the OECD estimated that each month major economies spend in lockdown knocked 2% off their annual growth.

Yet while the OECD has no idea what will happen, traders appears to be convinced that the worst is now behind us. As Rabobank wrote this morning, the stock market rallies of the past two days are despite the fact that neither economic nor earnings data have really begun to unveil the enormity of the economic crisis that the world has been plunging into in the past few weeks.

Even though investors have been appeased by the massive policy responses of governments and central banks around the world, this will not be cost free. The weakness at the long end of the US curve yesterday is likely related to the Treasury’s plans to resume sales of 20 year notes. The deteriorating position of public finances of governments can be expected to bring a reaction from credit rating agencies in various countries. S&P marked out Australia this morning with a reduction in its AAA credit rating outlook to negative.  Unsurprisingly, the decision was based on the anticipated sharp rise in public debt and the fact that the country is facing its first recession in almost 30 years. On Tuesday, Fitch had already downgrading the credit ratings of the country’s big banks from AA+ to A- on the expected rise in bad debts as business fail. The news threw cold water on yesterday’s sharp recovery in AUD/USD.

In other words, just to get back to even the world will have to incur tens of trillions in more debt which will make future growth even more scarce. Even before the global corona crisis, the IIF calculated that global debt rose by more than $10 trillion in 2019 when the global economy was humming, topping $255tn. At over 322% of GDP, global debt is now 40% or $87tn higher than at the onset of 2008 financial crisis, with the bulk of the increase in government debt (+$4.3tn) & non-financial corp sectors (+$2.8tn).

This ensuring that even the tiniest hint of inflation and jump in long rates will result in a global debt crisis, forcing even more central banks intervention, until eventually the Fed owns every risk asset to delay complete, systemic collapse.


Tyler Durden

Wed, 04/08/2020 – 09:25

via ZeroHedge News https://ift.tt/2xYP9Bf Tyler Durden

Zoom Is Keeping Pandemic-Stricken America Connected. Cue Congress’s Tech Panic.

Videoconferencing technology has been helping to keep people connected, employed, and semi-sane in these unprecedented times. Zoom has emerged as a crowd favorite since the COVID-19 pandemic’s start, quickly gaining ground on old-school competitors like Skype, Google Hangouts, and Apple’s FaceTime.

So, of course, tech-panicky politicians want to interfere. This time, the theatrics are coming courtesy of congressional Democrats and state attorneys generaltwo groups skilled at taking social ills and science problems and turning them into self-promotional opportunities.

“Virtual conferencing platform Zoom is facing the prospect of mounting legal threats in Washington after a slew of prominent Democratic lawmakers urged federal regulators Tuesday to investigate its privacy and security lapses,” reports Politico‘s Cristiano Lima.

Those calling for the Federal Trade Commission (FTC) to investigate Zoom include Democratic Sens. Amy Klobuchar (Minn.), Michael Bennet (Colo.), Sherrod Brown (Ohio), Richard Blumenthal (Conn.), Frank Pallone (N.J.), and Jan Schakowsky (Ill.).

In statements to Politico, spokespeople for Bennet and Klobuchar expressed vague concerns about Zoom user “privacy and security.” Brown put his thoughts in a letter last week.

Stories about lax data privacy practices, leaked videos, and hacked meetings have made the news recently, and these are certainly worth keeping a media and privacy watchdog spotlight on. But the political impulse we’re witnessing—broadly accuse first, find evidence later (maybe)is a dangerous one.

In Washington, independent and supposedly neutral investigations by federal regulators have a way of turning into congressional witch hunts when bureaucrats bring back results legislators don’t like.

An FTC spokesperson told Politico the agency shares “concerns about the need to ensure the privacy and security of videoconferencing systems in light of their central importance during this crisis” but could not comment on specifics with regard to Zoom.

Attorneys general in Connecticut, Florida, and New York are also part of a group effort seeking information and company data from Zoom.

For its part, Zoom notes that it “was built primarily for enterprise customers—large institutions with full IT support,” and that “usage of Zoom has ballooned overnight,” from a maximum of 10 million daily meeting participants in December 2019 to more than 200 million per day in March. In the shift, “we recognize that we have fallen short of the community’s—and our own—privacy and security expectations,” wrote CEO Eric S. Yuan in a post laying out steps the company is taking to fix that.

Certainly, government officials and anyone conducting sensitive business should avoid free Zoom calls and other insecure communications platforms (which includes, of course, Skype, FaceTime, Google Hangouts, and their ilk, too). And if Zoom proves incapable of keeping its promises to do better, consumers can, should, and will move on.

But scaring up too much fear about Zoom privacy issues at the moment is silly. Those of us using the service for cross-country family hangouts, idle chats with old friends, exercise classes, virtual happy hours, and other mundane purposes face little significant threat, and certainly no more than we do on other mass-use social media and communications services.

The bottom line: Calls to investigate Zoom right now are being driven by a need for politicians to seem like they’re “doing something” (anything) in response to the COVID-19 outbreak. But while officials are right to be wary of using Zoom for government business, they’re probably just being melodramatic busybodies about the rest.

See Also: Eugene Volokh on “Zoombombing and the Law.”


FOLLOWUP

A federal court has upheld Texas’ temporary ban on surgical abortion:


FREE MINDS

Eight in 10 Americans support stay-at-home orders. From a HuffPost/YouGov survey conducted last weekend:

An 81% majority of the public says it’s currently the right decision for states to tell residents to stay at home unless they have an essential reason for going out. Just 8% say it’s the wrong decision. An even broader 89% say they are personally trying to stay home as much as possible, with only 6% saying they’re not making any such effort.

More here.


FREE MARKETS

Doctors, not politicians, should decide whether hydroxychloroquine is appropriate for COVID-19 patients, writes Jeffrey A. Singer, who has been a practicing clinical physician for more than 35 years. Adds Singer:

What I’ve seen about hydroxychloroquine makes me cautiously optimistic. Doctors should not be prohibited from using their best clinical judgment and recommending it to patientsespecially considering the fact that these drugs have been around for a long time, which means we are familiar with their risks and complications. The government should stay out of this and let clinicians practice medicine, provided they get their patients’ informed consent. Patients have a fundamental right to try drugs they think may save their lives. Doctors they consult must be free to give patients their best advice, unencumbered by government overseers.

Read the whole thing here.


QUICK HITS

  • In New York, “the state budget that leaders are now finalizing would allow judges to ban individuals convicted of some sex crimes in mass transit from using the system for up to three years,” Politico reports.
  • An update from Sen. Rand Paul (R–Ky.), who was diagnosed with COVID-19 last month:

  • Hillbilly Elegy author J.D. Vance tackles common-on-the-right coronavirus myths here:

  • LOL/sigh:

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