Jim Grant Warns Fed’s ‘All-In’ Actions Are A “Clear-And-Present-Danger” To US Creditors

Jim Grant Warns Fed’s ‘All-In’ Actions Are A “Clear-And-Present-Danger” To US Creditors

In a veritable treatise on all that was wrong with The Fed’s actions, Jim Grant – founder and editor of Grant’s Interest Rate Observer – was somehow allowed nine minutes on CNBC’s Squawk Box to put America straight on what we are facing and the consequences of these unelected and unaccountable officials terrifying experiments.

Grant began by slamming Jay Powell’s seemingly blinkered proclamation that “he sees no prospective consequences with regard the purchasing power of the dollar” as “very concerning” adding more pertinently that he thinks “that wilful ignorance is a clear-and-present-danger for creditors of The United States.

It appears his fears are starting to be warranted as USA Sovereign credit risk is rising…

“I am in favor of life going on,” says Grant when asked by the anchor, “shouldn’t The Fed do something amid this massive global shutdown?”

The alternative, the venerable bond guru exclaims is the direction we are heading – “shutting everything down and putting the government in charge.”

Bernie Sanders may (or may not) be out of the presidential race but, as Grant highlights, “his programs are being implemented in fact daily.”

“One can die of despair as well as disease,” warned Grant, reminding viewers of the consequences of mass self-incarceration.

“There are health consequences to isolation, and health consequences to unemployment.. and life as it must go on is is a precious thing too and we ought to at least consider what we are condemning ourselves to if we choose to shut everything down for another month or two or three.”

“I think it would be a fatal error.”

Once again, the CNBC anchor urged Grant to support massive intervention but exclaiming “desperate times call for desperate measures.”

His retort shut down her argument quickly:

“experts are not expert in a dis-positive way, there is no certainty about this, just as there is no certainty in finance or indeed life,” and Grant adds ominously that “the cure is prospectively worse than the disease.”

“The delegation of political and economic authority to the US government to suppress this crisis is a clear and present danger.”

Finally, Grant, whose wife is a physician, reminded the anchors that the current actions (and consequences) have a direct analogy with the opioid crisis, as “in the early 2000s, the medical profession got it into its head that pain was the vital sign, and that no one ought to be in pain… this led to the deadly over-prescription of opioids.”

By the same token, Grant analogizes, “The Fed has intervened at ever-closer intervals to suppress the symptoms of misallocation of resources and the mis-pricing of credit. These radical interventions have become ever-more drastic and the ‘doctor-feel-goods’ of our central banks have worked to destroy the pricing mechanism in credit.”

Simply put, credit and equity markets “have become administered government-set indicators, rather than sensitive- and information-rich prices… and we are paying the price for that through the misallocation of resources.”

Grant ends on a hanging chad of a rhetorical question “what do corrections correct? Is there no salutary role for recessions and bear markets?”

Of course there is, he answers, “they separate the sound from the unsound, they separate the well-financed from the over-leveraged and if we never have these episodes of economic pain, we will be much the worse for it.”

Watch the full interview below:


Tyler Durden

Mon, 03/30/2020 – 14:05

via ZeroHedge News https://ift.tt/39w6gXU Tyler Durden

Tent Hospital Erected In Central Park As Hospital Ship Arrives In New York City

Tent Hospital Erected In Central Park As Hospital Ship Arrives In New York City

With an unprecedented 66,000 coronavirus cases now reported in New York State, an emergency hospital was erected in tents in Central Park Sunday, as New York City’s staggering toll of coronavirus deaths rose to at least 776, pushing the statewide count past 1,000.

“We’re going to be using every place we need to use to help people,” Mayor Bill de Blasio said. “This is the kind of thing you will see now as this crisis develops and deepens.”

As SCMP reports, the emergency site will open at the park’s East Meadow on Tuesday and house 68 hospital beds for coronavirus patients, according to de Blasio. He said the Mount Sinai Health System, the faith-based charity Samaritan’s Purse – run by Franklin Graham, son of the late televangelist Billy Graham – the Central Park Conservancy and his own office were collaborating on the undertaking.



Samaritan’s Purse set up the field hospital in Central Park’s East Meadow lawn. Photo: AP

Graham put out a call for help on Twitter Sunday, and posted a video of workers building the tents to house the field hospital.
“If you are a Christian doctor, nurse, paramedic, or other medical professional interested in serving Covid-19 patients in our @SamaritansPurse Emergency Field Hospital in NYC, please visit http://samaritanspurse.org” he wrote. Samaritan’s Purse built a similar temporary facility in Italy to help deal with the crisis there.

As reported previously, US federal officials are also building an emergency 1,000-bed hospital at the Jacob Javits Convention Centre in Manhattan. The Army Corps of Engineers has also identified sites in Westchester County, home to the state’s first large cluster of coronavirus cases, and on Long Island for emergency hospitals.

The number of confirmed coronavirus cases rose 10.8 per cent during the same time span, from 29,158 to 32,308. Between 9:30am and 4:15pm Sunday, another 98 people died and 1,166 more people were diagnosed with Covid-19, bringing the number of dead to 776.

“It’s so painful for everyone that we’re going through this and we have to fight back with everything we’ve got,” de Blasio said. “Every death is painful. I feel a particular sense of loss when it’s one of our public servants.”

It took Spain 18 days to go from its first death to its 1,000th, according to data compiled by Johns Hopkins University. Italy took 21 days. New York state took 16 days.

New Yorkers are hearing a constant wail of sirens as weary ambulance crews respond to a record volume of 911 calls. New York medical staff are struggling with long hours and a dire need for hospital-grade masks and other protective gear.

The city’s ambulances are also responding to about 6,000 calls a day more than 50 per cent more than average. Fire Commissioner Daniel Nigro said Sunday that the last five days have been the busiest stretch in the history of the city’s EMS operation. “This is unprecedented,” de Blasio said. “We have never seen our EMS system get this many calls – ever.”



A new makeshift morgue outside Lenox Health Medical Pavilion in New York City

New York Governor Andrew Cuomo offered a faint glimmer of hope in the crisis, saying the rate at which new cases was doubling slowed to once every six days, down from once every other day earlier this month: “The doubling rate is slowing and that is good news, but the number of cases are still going up,” Cuomo said. “So you’re still going up towards an apex, but the rate of the doubling is slowing.”

Nevertheless, he extended the state’s “pause” order shuttering most businesses and urging New Yorkers to stay at home as much as possible.

New York State’s confirmed number of coronavirus cases reached 66,000 on Monday – roughly 7,000 new cases according to Cuomo’s office. That came as US President Donald Trump extended nationwide guidelines urging residents to stay home and avoid social gatherings to April 30, and as US health officials warned the country’s coronavirus death toll could top 200,000 people.

The USNS Comfort, a US Navy hospital ship with 1,000 beds, 12 operating rooms and a full medical staff, arrived in the city on Monday, much to Rachel Maddow’s dismay. It will be used to treat non-coronavirus patients to free up space in city hospitals.


Tyler Durden

Mon, 03/30/2020 – 14:02

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

Energy Collapse, Earnings Ennui, & Consumer Credit Cracks

Energy Collapse, Earnings Ennui, & Consumer Credit Cracks

Submitted by Peter Garnry, Head of Equity Strategy, Saxo Bank

Summary:

The energy sector has lost extraordinarily $1.15trn in market value this year as oil prices have plunged to almost unimaginable levels.

In this equity update we provide investors with different ways to play the havoc in the energy sector. We also take a look at earnings this week with especially Carnival earnings being the most interesting to watch as the cruise industry is in a severe crisis due to COVID-19.

Lastly, we focus on consumer credit and the apparent weakness observed in China and how that could be a forewarning of what to come in the US and Europe. As a result we recommend investors to add Mastercard and American Express to their watchlists.

The global energy sector has been punched in the gut by first a slowing economy last year and then this year by an oil price war between Russia and Saudi Arabia. Making things worst the sector is now experiencing an abrupt 20% oil demand reduction equivalent to 20mn barrels a day or the entire consumption of the US. The oil futures curve is in steep contango as the active contract in Brent today went below $23/brl and stories have recently surfaced that physical oil is being transacted at $8/brl and oil storage is running out of capacity. As we talked about on our Market Call this morning the constraint on physical storage and ongoing demand destruction could push the front-end of oil futures down even further.

The current oil price creates extreme shareholder destruction with the MSCI World Energy Index losing $1.15trn in market value this year.

High yield bonds in the energy sector have seen their option adjusted yield spread to Treasuries widen to the highest levels on record and implied default probabilities are rising fast. But how should investors play the energy sector from here? One way is to buy call options on ETFs tracking the US or European oil and gas industry preferably with expiry during the second half. Another option is to get long-term exposure through single stock but here we recommend opting for only the highest quality names (see table below). The most risky strategy is to buy into those names that have the highest bankruptcy risk when the market rebounds, but here we recommend traders to apply some short-term filter (moving average or the like) to get confirmation during the rebound phase.

This week many Chinese companies will report earnings such as Geely Automobile and Air China, but also outside China interesting names such as Dollarama, Carnival, Walgreens Boots Alliance, CarMax, H&M and Constellation Brands will report earnings hopefully providing a picture of the demand situation in the US and Europe as these geographies are impacted by strict lockdowns due to COVID-19. With Carnival shares down 75% from this year’s peak in January and the trouble regarding many cruises during the last two months related to infected passengers with COVID-19 there will be a lot of focus on Carnival’s earnings. The main question is whether the cruise industry can stage a comeback and survive this serious threat to the industry.

In past couple of weeks we have highlighted many times on our Market Call podcast that investors and traders should watch oil, USD and VIX for guidance on market temperature. We have had focus on credit as well but with central banks stepping in the bleeding has stopped for now, but in other parts of the credit market outside corporate bonds there are now cracks happening.

Especially consumer credit in China is weaker as the weaker employment is spilling into repayment ability and is likely an indicator of what is coming for the US and Europe. So we recommend investors to put Mastercard and American Express on their watchlists.

In China loans to households have risen by 22% annualised and our worry is that at some point this credit expansion will lead to an abrupt halt like we saw in 2008 in the developed world.


Tyler Durden

Mon, 03/30/2020 – 13:50

via ZeroHedge News https://ift.tt/2xz8MQ8 Tyler Durden

Fed’s Kashkari Goes Full-On God-Complex, Lectures “This Is Not The Time To Worry About Moral Hazard”

Fed’s Kashkari Goes Full-On God-Complex, Lectures “This Is Not The Time To Worry About Moral Hazard”

Neel Kashkari, famous for coming out several days ago and giving one of the most bizarre 60 Minutes interviews of all time (an interview in which he claimed that the Fed had “infinite” cash) is now out giving life-lessons about when and how the American people should be worrying about moral hazard.

In an op-ed written late last week in the Washington Post, Kashkari made his argument that throwing as much money at the problem as possible, even if we don’t have a complete understanding of where that newly-printed cash is going, is the solution.

In other words, we’ve got the cash and so now, we can be the moral authority as well.

Kashkari stated: “If there is a principle policy makers need to keep in mind going forward, it’s this: Err on the side of helping as many workers and businesses as possible rather than on prudence. This is not the time to worry about moral hazard or whether people are incentivized not to work.”

He continued: “When the Covid-19 crisis is behind us, if our biggest complaint is that some workers and small businesses got help when they didn’t really need it, that would be a wonderful outcome for our country.”

Kashkari seemed to make the argument that since the Fed was already printing unlimited amounts of cash, they might as well use it to shore up as many liabilities that existed prior to the crisis anyway: “Policy makers should use the full authority Congress grants to immediately make sure that states have the health-care resources and equipment they need, that businesses have the wherewithal to preserve their staffs, and that individuals and families can make ends meet until the virus is contained”

“The highest priorities must be to enable the health-care system to catch up and control the spread of the virus — and to maximize the number of jobs saved. It is far better to spend taxpayer money to help small businesses retain their workers than to spend the same money helping workers after they’ve been laid off,” he continued.

Recall, during Kashkari’s 60 Minutes interview a week ago, Kashkari, when asked if the Fed would just “literally print money”, admitted: 

“That’s literally what congress has told us to do. That’s the authority they have given us, to print money and provide liquidity into the financial system. We create it electronically and we can also print it, with the Treasury Department, so you can get money out of your ATMs.”

Kashkari’s God complex continued when he was asked: “Can you characterize everything the Fed has done this past week as essentially flooding the system with money?” 

To which Kashkari responded simply: “Yes. There’s no end to our ability to do that.”


Tyler Durden

Mon, 03/30/2020 – 13:35

via ZeroHedge News https://ift.tt/2xD7iEA Tyler Durden

Watch Live: Andrew Cuomo Delivers Monday Press Briefing, Confirms Another 7k Cases

Watch Live: Andrew Cuomo Delivers Monday Press Briefing, Confirms Another 7k Cases

Gov. Andrew Cuomo is delivering his latest press briefing…NY’s case count has climbed by 6,894 cases to 66,497…


Tyler Durden

Mon, 03/30/2020 – 13:22

via ZeroHedge News https://ift.tt/2ycp8hJ Tyler Durden

2008 Playbook: Unknown Unknowns

2008 Playbook: Unknown Unknowns

Submitted by Nick Colas of DataTrek Research

While Donald Rumsfeld may not be one’s go-to guy for decision making paradigms, his 2002 mention of “unknown unknowns” is worth considering just now as an investment framework. The idea here is that we all make judgments based on a tripartite spectrum of available information. Specifically:

Known knowns (entirely baked into asset prices):

  • COVID-19 both spreads easily and is sufficiently harmful to require countries to limit economic activity dramatically in order to contain the virus before it overwhelms their health care systems.

  • Policymakers have responded by providing large scale fiscal and monetary stimulus in the hopes of tiding over economies during the worst of the outbreak.

  • Medical researchers are working on improved therapeutic treatments as well as vaccines. Testing is becoming faster and more widespread.

Known unknowns (partially baked into asset prices):

  • The exact duration of national lockdowns around the world and their impact on labor markets.

  • The pace of economic recovery once the immediate danger has passed/possibility of reinfection during a restart.

  • The size and timing of further fiscal/monetary stimulus (NY Governor Cuomo highlighted this in his press briefing today with respect to state budgets, an important source of US fiscal spending).

Unknown unknowns (not in asset prices and near-impossible to assess today):

  • Inflation rates over the next 1-3 years, a push-pull of fiscal/monetary stimulus and uncertain consumer/business confidence.

  • Any change of personal/corporate tax rates to stabilize government deficits (both at national and state levels).

  • The political implications of COVID-19 on the November US general election. Worth noting: President Trump’s latest Gallup approval rating out on March 24th were the highest of his presidency and may have helped boost stock prices last week.

  • The effect of exploding deficit spending around the world on the cost of capital.

  • How emerging market economies with large dollar-denominated debts will handle a slow global economic recovery or how the European banking system will deal with a sharp recession in its most vulnerable countries.

  • Just as the Great Recession did lasting damage to younger job seekers, will the current global downturn affect those finishing/just out of college right now?

You probably have many other “unknown unknowns” you could add to this list, but that’s exactly the point when considering how well US equities have held up; the S&P 500 at 2541 implies:

  • No structural damage to US large cap earnings power. We’re trading at 20x the trailing 10-year average S&P earnings of $122/share, not the 10x we saw in 2009.

  • Confidence that visibility into that $122/share earnings run rate will be there in November 2020 (near term equity prices tend to lever off 6-month forward economic/profit conditions).

  • That the CBOE VIX Index over 60, even on large up days, is only a sign of near-term potential volatility rather than a sign equity prices are fundamentally wrong.

  • That markets will continue to ignore bad economic news or disappointing corporate profit reports because either they are temporary or they will spur further monetary/fiscal stimulus.

As for how this is playing out in our 2008 Playbook construct, once again using September 29th 2008 and March 9th 2020 as starting points (the first +5% “crash day” move in each sequence):

#1: Because policymakers now both “own” the COVID-19 Crisis (unlike Q4 2008 when there was a US election pending) and learned from 2008 to go big/early (both in fiscal and monetary policy), the damage to the S&P 500 has not been as bad in 2020 as it was in 2008:

  • The index is down 7.5% from September 29th, 2020.

  • In 2008, the S&P was 15.0% lower on October 17th from September 29th, the same number of trading days as we’re including in the prior point.

#2: From this point in 2008, for the next 19 trading sessions the S&P 500 was in a very broad band but went essentially nowhere.

  • The index closed at 940 on Friday, October 17th 2008.

  • 19 trading days later, the S&P closed at 911, down 3.1% from that 940 level. In between October 17th and November 13th the index had an +11% day (October 28th) and four +5% decline days (October 22, post-election November 5/6, and November 12).

#3: The real crack for US stocks in 2008 came right after this waiting period, happened very suddenly, but bounced back relatively quickly:

  • After holding the 900 level, the S&P went to 752 in just 5 trading sessions (November 14th to November 20th), a 17.5% decline. The headlines at the time centered on which financial institutions/auto makers would receive TARP funding, and how much.

  • The S&P then came roaring back over the last 27 trading days of 2008 and closed at 903 with just one +5% crash day (-8.9% on December 1st).

This experience is emblematic of how markets behave when “unknown unknowns” shove their way into asset prices, and it continues to serve as our template for what to expect now. Specifically:

  • Markets think they have a solid handle on the known knowns and the known unknowns. That should make for a period of notionally stability, even if the day-to-day price action feels otherwise.

  • When economic events outrun policymaker’s responses, however, there is a sharp (18% in 2008) decline that doesn’t last long but creates an investable crisis low.

  • Yes, the S&P did not really bottom until March 9th 2009 but you would not have wanted to sell at that 752 low on November 20th given the sharp bounce back through year end.

Bottom line: the 2008 playbook says we should see volatile but generally sideways US equity price action this week and next. Should there be a sudden shock from an unknown unknown that creates a +15% decline (2100 on the S&P, in round numbers), that would also fit with the 2008 playbook. Buying that new low would feel awful, but it would also be a signal to policymakers that they will need to take further steps. In the end, that’s why we lean on the 2008 playbook so much: in periods of crisis capital markets drive policy response.


Tyler Durden

Mon, 03/30/2020 – 13:20

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

North Korea Confirms New Test Of ‘Super-Large Multiple Rocket Launcher’ 

North Korea Confirms New Test Of ‘Super-Large Multiple Rocket Launcher’ 

Perhaps the only major non-coronavirus story to briefly grab international headlines over the weekend was North Korea’s firing off of two short-range ballistic missiles into the Sea of Japan. “The missiles were fired from the port city of Wonsan, flying about 140 miles to the northeast before landing in waters between North Korea and Japan,” The New York Times reported of the Saturday launch.

It came a mere week after Kim Jong-Un received a letter from President Trump offering to assist in the fight against the coronavirus pandemic.

Pyongyang officials confirmed the launches Monday, described as a test of a new “super-large multiple rocket launcher” which state media reported as going off without a hitch.



North Korean released this photo set of missile testing over the weekend, KCNA via Reuters.

Official state news agency KCNA said the test was overseen by governing party vice chairman Ri Pyong Chol, suggesting that Kim did not personally attend the launch.

“The operational deployment of the weapon system of super-large multiple rocket launchers is a crucial work of very great significance in realising the party’s new strategic intention for national defence,” Ri was quoted as saying during the test. “The test-fire was conducted successfully,” KCNA said.

It’s the sixth such short- and mid-range missile test within the past month, after a three-month respite from testing which went from late November to early March.

The resumption of testing has provoked anger from South Korea, which slammed the drills as “deeply inappropriate” given the world is currently battling coronavirus pandemic. Leaders in Seoul said they had “urged the North to stop such acts immediately.”

South Korea’s government-funded Yonhap News Agency notes military officials are analyzing photographs of the launch:

The military is scrutinizing photos North Korean state media released earlier in the day of the super-large multiple rocket launcher tested Sunday as the system looks different from the North’s existing weapon of the same name, a JCS official said.

It looks more like the large-caliber multiple launch guided rocket system unveiled in August, he said.

One of the photos showed a projectile being fired from a system with six tubes, different from the four-tube system North has disclosed in its previous super-large multiple rocket launcher system test-firings.

“According to the photos released by North Korea this morning, (the rocket system tested Sunday) has similar characteristics with the one unveiled on Aug. 3 last year,” Joint Chiefs of Staff of the Republic of Korea spokesman Kim Joon-rak told a press briefing.

Pyongyang ramped up missile launches and testing this year after stalled de-nuclearization talks with Washington at the end of last year, after Washington insisted Kim must dismantle his nuclear capabilities before sanctions relief is on the table.


Tyler Durden

Mon, 03/30/2020 – 13:05

via ZeroHedge News https://ift.tt/39pb1CI Tyler Durden

In Late February, Nancy Pelosi Encouraged Large Groups To Congregate In Chinatown

In Late February, Nancy Pelosi Encouraged Large Groups To Congregate In Chinatown

Authored by Paul Joseph Watson via Summit News,

A video clip from late February shows Nancy Pelosi encouraging large groups of people to congregate in San Francisco’s Chinatown before she would later go on to blame President Trump’s early “denial” for the spread of coronavirus.

The footage, which was taken on February 24th, is introduced by a reporter noting how Pelosi wanted residents to understand how it’s “perfectly safe to be here” in Chinatown.

“We do want to say to people, come to Chinatown, here we are…come join us,” said Pelosi.

The reporter then explains how the stunt was a response to San Francisco’s Chinatown experiencing a drop in business since the outbreak of coronavirus in Wuhan, China.

San Francisco has since recorded 340 confirmed cases of coronavirus and 5 people have died.

The video is particularly eye opening since yesterday on CNN, Pelosi blamed President Trump’s “denial at the beginning” for the spread of coronavirus throughout the United States.

The video underscores how many officials flouted the very social distancing measures they now amplify because at the time stopping bigotry towards Chinese people was seen as being of greater importance than preventing the spread of coronavirus.

As we previously highlighted, health officials in New York gave identical advice, urging residents to gather in crowds to celebrate the Chinese Lunar New Year.

“Today our city is celebrating the #LunarNewYear parade in Chinatown, a beautiful cultural tradition with a rich history in our city,” wrote New York City Health Commissioner Oxiris Barbot. “I want to remind everyone to enjoy the parade and not change any plans due to misinformation spreading about #coronavirus.”

Her message was echoed by Mark D. Levine, Chair of New York City Council health committee, who lauded how “huge crowds gathering in NYC’s Chinatown” was a “powerful show of defiance of #coronavirus scare,” tweeting four images of large groups of people gathered to celebrate the occasion.

Mayor Bill de Blasio also urged New Yorkers to “get out on the town despite coronavirus” and visit the cinema as late as March 2nd.

As we highlight in the video below, back in February, leftist officials in Italy were also urging citizens to go outside and hug Chinese people in order to fight racism.

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Tyler Durden

Mon, 03/30/2020 – 12:50

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

Gov. Abbot Orders Texas State Troopers To Enforce Quarantine At Louisiana Border

Gov. Abbot Orders Texas State Troopers To Enforce Quarantine At Louisiana Border

Texans are used to hearing talk of securing the southern border with Mexico, but the idea of checkpoints at the border with Louisiana is something no one ever imagined

After late last week Louisiana and specifically New Orleans have emerged as the southern epicenter for the coronavirus outbreak in the US, with the Bayou State on Sunday reporting more than 3,500 positive cases – a number expected to grow rapidly following a busy Mardi Gras season, Texas Governor Greg Abbott on Sunday ordered all travelers entering Texas from Louisiana to enter a 14-day quarantine, now enforceable by state troopers.



File image of a border patrol checkpoint along US Route 70 in New Mexico, via NPR.

Crucially, for the first time police have been told to enforce the quarantine order at checkpoints along the state border.

Few details have been given, but it’s expected that law enforcement will for the first time in living memory establish and beef up checkpoints along all major roadways that cross into Louisiana.

According to some of the few known details in The Houston Chronicle

Those in quarantine will be asked to provide an address for where they plan to hole up in Texas, either for two weeks or until their return to Louisiana, whichever comes first.

A provision in the order allows DPS special agents to check on those under quarantine to ensure they’re complying. Violators could be subject to either a $1,000 fine or 180 days in jail, according to the four-page document. Another provision states that if a driver is showing symptoms associated with COVID-19, such as fever, coughing or shortness of breath, a trooper will follow them to their destination.

It’s similar to current inter-state travel advisories and restrictions in place in Flordia, New York and New Jersey.

The order takes effect Monday at noon and will involve unprecedented border control checks along the busy Texas-Louisiana border. 

Health officials have recently warned that the skyrocketing Covid-19 cases in Louisiana could threaten the entire southern region of the United States, which thus far has generally seen lower numbers than either the Northwest or East coast cities.


Tyler Durden

Mon, 03/30/2020 – 12:35

via ZeroHedge News https://ift.tt/39Ag1ok Tyler Durden

Kunstler: When Americans Wake From The Corona-Coma, This Will Be A Different Country

Kunstler: When Americans Wake From The Corona-Coma, This Will Be A Different Country

Authored by James Howard Kunstler via Kunstler.com,

People, Get Ready!

The cable news announced the other day that Covid-19 patients placed in critical care may have to be on ventilators for 21 days. Only a few years ago, I went in for an ordinary hip replacement. A month or so later, I got the hospital billing statement. One of the line-items went like this: Room and board: 36 hours…$23,482.79. I am not jiving you. That was just for the hospital bed and maybe four lousy hospital meals, not the surgery or the meds or anything else. All that was billed extra. Say, what…?

Now imagine you have the stupendous good fortune to survive a Covid-19 infection after 21 days on a ventilator and go home. What is that billing statement going to look like? Will the survivors wish they’d never made out of the hospital alive?

Right now, we’re in the heroic phase of the battle against a modern age plague. The doctors, nurses, and their helpers are like the trembling soldiers in an amphibious landing craft churning toward the Normandy beach where the enemy is dug in and waiting for them, with sweaty fingers on their machine guns and a stink in the pillbox. Some of the doctors and nurses will go down in the battle. The fabled fog-of-war will conceal what is happening to the health care system itself, while the battle rages. After that, what?

One thing will be pretty clear: That the folks in charge of things gave trillions of dollars to Wall Street while tens or perhaps hundreds of thousands of Covid-19 survivors got wiped out financially with gargantuan medical bills. Do you think the Chargemaster part of the hospital routine will just stop doing its thing during this emergency? The billings will continue – just as the proverbial beatings will continue until morale improves! In the aftermath, I can’t even imagine the ‘splainin’ that will entail. The rage may be too intense to even get to that. For some, it may be time to lubricate the guillotines?

Meantime, of course, the global economy has shut down which suggests to me, anyway, that any prior frame of reference you may have had about money and business and social normality goes out the window.

The world is still here. We’re just going to have to learn to live in differently. The American portion of the world is in need of a severe retrofit and reprogramming. We waited too long to face this in a spell of tragic complacency and the virus has forced the issue.

Here are the main things we have to attend to:

  • Reconsider how we inhabit the landscape. Do you think $20-a-barrel oil is a boon to the Happy Motoring way-of-life? It’s going to at least bankrupt most of the companies producing shale oil, and that’s where way-more than half of our production came from in recent years. How many ordinary Americans will be able to finance car payments now? To say suburbia will not be functioning too well mere months from now is a merciful way to put it.

  • The big cities will not recover from the trauma and stigma of the virus, but that is only the beginning their problems. What, exactly, will the suffering poor of the ghettos do, under orders to remain cooped-up until the end of April? These are people who are unlikely to have laid in supplies ahead of time, and a month from now they are sure to be very hungry. How will the big cities be able to manage their infrastructures with municipal bonds massively failing? How will they provide social services when tax revenues are down to a trickle? The answer is, they won’t manage any of this. They grew too big and too complex. Now they have to get smaller, and the process will not be pretty.

  • What will the business of America be after Covid-19? If we’re lucky, it will be growing food and working at many of the activities that support it: moving it, storing it, selling it, making an order of smaller-scaled farm machinery, including machines that can be used with horses and oxen, breeding the animals. I’m not kidding. Growing food happens in the countryside, where the fields and pastures are. There are towns there, too, associated with the farming, where much of the business of farming and the activities that support it transact. I believe we’ll see impressive demographic movements of people to these places. There are opportunities in all that, a plausible future. The scale of agriculture will have to change downward, too. AgriBiz, with its giant “inputs” of chemicals and borrowed money, is not going to make it. Farms have to get smaller too, and more people will have to work on them. Farewell to the age of the taco chip!

  • If we want to get around this big country of ours, and move food from one place to another, we better think about fixing the railroads. Try to imagine what six trillion dollars might have done for that crucial venture. And I’m not talking about high-speed and high-tech; I mean the railroads that were already here. Where I live, the tracks are still in place, rusting in the rain. How did we let that happen?

  • Then there is the question of how do we behave? You may not think that matters so much, but we’ve become so profoundly dishonest that it’s impeding our relationship with reality. On top of that we’re surly, impolite, clownish, blustering, greedy, and improvident. Believe me, that is going to change. Hardship is a great attitude-adjuster.

When Americans awake from the corona coma like millions of Rip Van Winkles, it will matter again to be upright and to act in good faith. This will be a different country.


Tyler Durden

Mon, 03/30/2020 – 12:20

via ZeroHedge News https://ift.tt/2UM9FN3 Tyler Durden