Category: zerohedge

US futures traded limit up overnight, plunge back to the lows of the day, soared back above overnight highs, dumped again, ripped again, then slumped… 1000s of Dow points in the swings on the back of various political and monetary headlines of ever-increasing bailouts (and warnings)… that is malarkey!

So, some (brief, perhaps) exuberance in stocks.

BUT…

Despite The Fed’s CPFF, banking system liquidity worsened…

Source: Bloomberg

AND…

‘Helicopter Money’ sent the the 10Y Yield soaring back above 1.00% today as yields exploded 30bps higher…

Source: Bloomberg

AND…

All this chatter of helicopter money has sent USA Sovereign risk is spiking…

Source: Bloomberg

Simply put, it appears the bond market is starting to panic about MMT becoming an imminent reality – not a good sign for The Fed, The Treasury, and all Americans. And while this may lead to dollar-weakness in the endgame, for now, liquidity is all that matters and the dollar soared higher again as the financial system’s liquidity crisis showed now signs of abating. The Dollar is up 6 days in a row…

Source: Bloomberg

Today was the dollar’s biggest daily gain since the flight-to-quality after the UK’s Brexit vote in June 2016 (and the biggest 6-day gain since Lehman).

*  *  *

Legendary investor Jim Rogers warned that “the next time we are going to have a financial problem it’s going to be the worst…” and right now it appears we are headed toward “the worst financial crisis of our lifetimes” and “we will know in a few months.” However, Rogers noted, the reason behind such market mayhem is “not just the virus, it is certainly much more” than that.

Rather notably, the US equity market has started each day moving in the opposite direction from the previous day’s late-day move every day for two weeks…

Source: marketear

There have been 3%+ moves in the S&P 500 during 13 of the past 22 trading days, approaching the October 2008 experience.

Goldman’s illiquidity ratio, which measures the price impact of trading volumes, shows that liquidity has evaporated within US equities…

Bid-ask spreads have widened to 8-year highs…

Early in the day, stocks tumbled back into the red but ever-escalating helicopter money headlines and The Fed’s CPFF and extended Repo helped lift the market to a big day, led by Small Caps…(NOTE – the drop around 12ET came after the White House Virus Task Force stated that “we are losing the fight to contain the virus.”

Defensive and Cyclicals rallied today, but cyclicals are dominating the week…

Source: Bloomberg

For some context, this drop in stocks dwarfs the Y2K-post-Fed-liquidity plunge…

Source: Bloomberg

VIX dipped today back below 75, but remains extremely elevated…

 

There was a bloodbath in bondland today with yields exploding higher across the curve – long-end smashed hardest – 30Y spiked 35bps, 2Y +9bps…

Source: Bloomberg

The ETF liquidity crisis is abating as rates soar…

Source: Bloomberg

US yield curve steepened as chatter increased of the helicopter money-drop in the US…

Source: Bloomberg

This is the biggest steepening since the US downgrade in 2011…

Source: Bloomberg

In the past week, junk-bond investors have suffered through two of the worst days since the collapse of Lehman Brothers. The struggle reflects the spike in economic uncertainty and how many high-yield borrowers will have problems with bank lines. However, junk CDS spreads are pricing in a 43% five-year default probability. That’s high, but in 2009 CDS was pricing a more than 60% default probability, so it can go higher.

Source: Bloomberg

IG credit is even worse, with CDS pricing in a 9.9% default probability, which is extremely high…

Source: Bloomberg

And European sovereign credit spreads are blowing out…

Source: Bloomberg

Cryptos extended their gains today with Bitcoin almost back to even on the week…

Source: Bloomberg

Commodities were mixed today with Gold managing gains as crude and copper were crushed…

Source: Bloomberg

Silver’s continued weakness, and gold’s gains today, sent the gold/silver ratio to another new all-time record high…

Source: Bloomberg

WTI puked to a $26 handle!!

After some serious ugliness yesterday, precious metals rebounded aggressively today as helicopter money chatter hit, BUT that was quickly slapped down by the powers that be… gold and palladium higher on the day (palladium’s jump was biggest since 2001 at its highs), silver and platinum lower…

Source: Bloomberg

Finally, systemic risk continues to soar in deep, dark corners of the financial markets… Implied Correlation is at Lehman/EU Crisis levels…

Source: Bloomberg

But, we suspect this reracking has a lot further to go…

Source: Bloomberg

Authored by Rabobank US rates strategist Phillip Marey

Today the Fed finally relaunched its Commercial Paper Funding Facility (CPFF). Through this facility the Fed finances a special purpose vehicle that purchases 3 month commercial paper from eligible users. In this way the Fed takes over the role of money market mutual funds and other buyers of commercial paper that stopped purchasing in recent days.

Going forward, with money market mutual funds in need of liquidity we may also see the return of AMLF and MMIFF, while the need for overnight funding by primary dealers could be met by PDCF. An extension of USD liquidity swap line arrangements with a wider set of central banks may also be necessary. And if the stigma attached to the discount window remains a problem, we could also see the return of TAF.

Introduction

Markets were screaming for it, but finally today the Fed relaunched the Commercial Paper Funding Facility (CPFF) in order to deal with the freezing up of the US commercial paper market. At present, the coronavirus outbreak is hitting the cashflow of  businesses, who therefore need to raise cash. At the same time, the money market mutual funds – the regular buyers of commercial paper – are also trying to raise cash in anticipation of outflows from the MMMFs by investors. In other words, the commercial paper market had increasingly become dysfunctional. The reintroduction of the CPFF brings in the Fed as a large buyer of commercial paper and should help stabilize the market.

How does it work?

Through this facility the Fed finances a special purpose vehicle (SPV) that purchases 3 month commercial paper from eligible users. In this way the Fed takes over the role of money market mutual funds and other buyers of commercial paper that stopped purchasing in recent days. This also reduces the pressure on banks providing credit to issuers unable to sell commercial paper anymore. By providing a liquidity backstop for issuers of commercial paper the Fed hopes to stabilize the commercial paper market. Note that through this channel the Fed is also able to provide liquidity to businesses, not only depository institutions which already have access to the Fed’s discount window.

Technicalities

The CPFF2020 will be structured as a credit facility to an SPV authorized under section 13(3) of the Federal Reserve Act, with the approval of the Treasury Secretary. The New York Fed will commit to lend to the SPV on a recourse basis and will be secured by all the assets of the SPV. The US Treasury Department will provide $10bn of credit protection to the New York Fed  in connection with the CPFF, using the Exchange Stabilization Fund.

The SPV will purchase 3 month USD denominated commercial paper (including asset-backed commercial paper) from eligible issuers through the New York Fed’s primary dealers. Eligible users are US issuers of commercial paper, including those with a foreign parent company. The SPV will only purchase paper that is rated at least A-1/P-1/F-1.

There is a limit per issuer to the amount the SPV may own at any time, which is the maximum amount of USD denominated commercial paper the issuer had outstanding on any day between March 16, 2019 and March 16, 2020.

Pricing will be based on the then-current 3 month overnight index swap rate plus 200 bps.

The SPV will cease purchasing commercial paper on March 17, 2021, unless the Board extends the facility.

Why did it take so long?

In recent days markets were screaming for CPFF. Why wasn’t CPFF included in Sunday’s emergency package when the Fed cut rates to zero, launched a new large scale asset purchase program, and set the discount window and USD swap lines  wide open? It looks like post-crisis legislation, in particular the Dodd-Frank Act of 2010, has made it more difficult for the Fed to invoke section 13(3) of the Federal Reserve Act, which is a ‘unusual and exigent circumstances’ clause. In particular, the Fed needs the approval from the US Treasury Secretary. Today, Mnuchin sent a letter to Powell giving him permission to start CPFF2020. It seems that Congress has tied the Fed’s hands and this has not been beneficial to market functioning as we found out in recent days. Perhaps something to reconsider once this crisis is over.

What’s next?

In our FOMC Preview Crash to zero, published last Thursday, we said that the Fed might soon reach for liquidity tools they used during the financial crisis. Three special lending facilities we explicitly mentioned were the Commercial Paper Funding Facility (CPFF), the Money Market Investor Funding Facility (MMIFF) and the Primary Dealer Credit Facility (PDCF). The first was relaunched today.

The second (MMIFF) was designed to provide liquidity for money market mutual funds, stimulating them to extend the term of their money market investments. Instead of scrambling for overnight assets because of liquidity fears, this would help maintain demand for term securities in the money market. Although no loans were made under the MMIFF, the facility could be useful this time. While CPFF helps issuers of commercial paper, money market mutual funds are still in need of liquidity. A related facility, which peaked at $140bn in 2008, was the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF) which provided funding for depository institutions purchasing asset-backed commercial paper from money market mutual funds. The third (PDCF) would provide overnight funding to primary dealers, similar to the way the discount window provides a backup source of funding for depository institutions.

Another facility we would like to mention is the Term Auction Facility (TAF), which is basically a discount window without the stigma. On Sunday, the Fed tried to make the discount window more attractive by slashing the primary credit rate to 0.25% and encouraging banks to use the discount window, but if these incentives would fail to get banks to the discount window – because of the stigma attached to it – then relaunching TAF could help alleviate bank funding strains. In fact, today Loretta Mester (Cleveland Fed) mentioned TAF in addition to CPFF.

We also discussed a special lending facility that never went away: the USD liquidity swap line arrangements with 5 other central banks: the Bank of Canada, the Bank of England, the ECB, the Bank of Japan and the Swiss National Bank. In our view, the Fed could make its dollar liquidity swap lines available to a wider set of central banks if necessary.

And as we have argued before, the sooner the Fed introduces a standing repo facility the better.

For now, the Fed will have to adjust its repo operations on a daily basis. Besides these liquidity tools, the Fed still has room to expand its large scale asset purchase program and it could also hold down longer-term rates by strengthening its forward guidance on the target range for the federal funds rate.

All in all, the Fed is not done yet.

The deputy head of Japan’s Olympics Committee has coronavirus after reportedly experiencing a mild fever on Sunday after returning from a trip to Europe and the United States, according to the Wall Street Journal.

Kozo Tashima, who is also the president of Japan’s Football Association, was in Orlando, Florida on March 5 where he watched the Japanese women’s soccer national team play against Spain. While in the US he lobbied for Japan to host the women’s soccer World Cup during meetings held in New York – before returning to Japan on March 8.

“My symptoms didn’t start until March 14, so I wasn’t a major infection risk to others, but I apologize to those who were in meetings with me, JFA executives, the media and others I may have been in close contact with,” said Tashima in a statement, adding that his condition isn’t serious.

Mr. Tashima is almost certain to be unable to attend the next executive board meeting for the Olympic organizing committee at the end of this month, at which the impact of the coronavirus pandemic is likely to be on the agenda. Mr. Tashima is one of 25 executive board members who attend meetings every few months to review Olympic planning. –Wall Street Journal

While government officials said on Tuesday that they intend to hold the Olympics during the pandemic, with spectators and without changes to the scale of the event scheduled to begin July 24, Prime Minister Shinzo Abe has begun to change his tone, according to TIME.

Abe and his cabinet, as well as the organizers and Tokyo Governor Yuriko Koike, had until days ago been unanimous in insisting the Games would be staged as scheduled. But, following a G-7 leaders’ video conference on the coronavirus Monday, Abe avoided comment on the timing of the event.

“I want to hold the Olympics and Paralympics perfectly, as proof that the human race will conquer the new coronavirus, and I gained support for that from the G-7 leaders,” he told reporters after the event.

…

Asked whether the timing of the event was discussed, Abe repeated the same phrases without answering directly. He also used similar words when asked about the issue in parliament Monday. –TIME

Meanwhile, NHK reports that foreign countries’ national team training camps for the Olympic and Paralympic games have been canceled or postponed in 16 cities across Japan.

Cancellations include the table tennis and gymnastics team from Colombia, which planned on training in the western city of Kitakyushu, as well as Britain’s wheelchair basketball team which had scheduled practice in Urayasu City near Tokyo.

NHK also reports that events or projects to promote exchanges between foreign athletes and local residents have been canceled or postponed in approximately 60 municipalities throughout Japan – including a project by Matsukawa Town in Nagano Prefecture which planned to send high school students to Costa Rica.

Via SchiffGold.com,

The Federal Reserve cut rates to zero and expanded quantitative easing on Sunday. How did the markets reward this latest monetary stimulus?

They crashed.

In his podcast, Peter said he thinks we’ve passed the point of no return.

The Dow Jones plunged another 2,997 points, a 12.9% selloff. It was the second-biggest percentage drop in history. The S&P 500 dropped by nearly 12%. The NASDAQ shed 12.3%.

On Monday afternoon, the Fed announced another $500 billion program on top of the $700 billion in Treasury and mortgage-backed security purchases it rolled out Sunday evening. In his podcast, Peter Schiff said they’re just throwing out numbers at this point.

Five hundred billion here, five hundred billion there. You know, pretty soon you’re talking about real money.”

Federal Reserve chair Jerome Powell still refuses to call it quantitative easing. Peter said he never liked that term anyway. Let’s call it what it is – monetizing the debt.

Peter has been predicting this move to zero for months. In fact, he specifically talked about it during an interview with Liz Claman on Fox Business back in June.  And at the time, he said it wasn’t going to work.

People are taking the money to the supermarket, not the stock market. The only reason that people think QE worked the last time they did it was one, they were able to reflate the asset bubbles. But that wasn’t success, that was failure…

The other factor, and I can’t stress this enough… is that what convinced everybody that it worked and that we dodged the hyperinflation bullet was that everybody believed it was temporary. That the Fed was going to be able to normalize interest rates and shrink its balance sheet. Well, nobody is going to believe that this time. Once this balance sheet blows through 10 trillion, once interest rates are back to zero and they’ve been there for who knows how long the Fed is going to keep them there. And who knows where the national debt is going to go, I mean, we know it’s going to go into the stratosphere, but nobody is going to believe that normalization is even close to possible, that any balance sheet reduction will ever happen, so nothing is going to stop the bottom from falling out of the dollar. And now, hyperinflation is probably not just the worst-case scenario, it’s probably the most likely scenario.”

As Peter said, the laws of economics apply here just like they did in the Weimar Republic Germany, or Zimbabwe, or in Venezuela.

If we pursue the same monetary and fiscal policy they did, we’re going to receive the same monetary outcome they did.”

The Fed also reduced the reserve requirements for banks to zero. In other words, no matter how much they lend out, they don’t have to have any money to back up those loans. Practically speaking, if any of these big banks start to fail, it will cost even more taxpayer money to bail them out.

The dollar index fell slightly, but other central banks are also engaging in extraordinary monetary policy. Peter said at some point, they’ll have to give it up. They will have to fight the inflation monster that will be unleashed. Eventually, the dollar is going to go through the floor.

Peter also made some interesting comparisons between this crisis and World War II. Significantly, the government keeps telling us everybody needs to be bailed out. Nobody should suffer any pain. Who is going to pay for all of this? We are, of course.

It’s the people who support the government. The government can never support the people, because the government gets its money from the people.”

Peter said this is the crash he’s been predicting and writing about.

This is the beginning of the end. This is how it starts. And believe me, when you see how this finishes, this is going to be unlike anything we have experienced.  I think we have passed that point of no return. It’s like we’ve already jumped off the top of the building, off the top of the Empire State Building. There’s no way to change our minds now. We’re going to hit that pavement. I can’t see any way we can avoid that. All we can do is brace for impact ourselves.”

Peter also talks about why gold is falling. Keep in mind, gold is only down about 2% on the year. Stocks are down over 30%. Gold is also strong compared to many other commodities.

Gold is shining. Just a lot of people can’t see that because they don’t really know how to look.”

Peter said he thinks the people selling right now and pushing the price down just need the money. Everything is collapsing. People need to raise cash. The mainstream analysts have said the same thing. This is a “sell everything” event.

When the rally [in gold] really starts, it’s going to go ballistic. You are going to see a rush of money into gold, and we are going to see $100, $200, a $500 up day. It’s coming. Because what are you going to do? There is only so much food you can stock up on. There’s only so much toilet paper you can store in your house. So, if you’re not buying food, you’re not buying toilet paper, what are you going to buy? You’ve got to buy gold. Becuase if you want to buy food and toilet paper in the future, you’d better have gold. Because the problem is people are going to get wiped out when the dollar collapses.”

As Americans hold their collective breath awaiting a potential ‘breaking point’ where hospitals and local clinics begin getting overwhelmed with Covid-19 patients — precisely what happened in China, Iran and especially ongoing in Italy — major urban hospitals across the country have already begun cancelling and postponing all elective surgeries in order to free up resources. 

“We are preparing for the long run and looking at this as a challenge that will be one of the biggest national challenges most of us have seen,” said Dr. Jonathan Lewin, CEO of Emory Healthcare – which runs 10 hospitals and many clinics across metro Atlanta.

This includes postponement of other procedures as well, such as colonoscopies, also in order to free up staff for a potential deluge of coronavirus-related cases. Emergency screening tents are going up at local hospitals, and doctors are reportedly being called out of retirement or out of teaching positions at universities to ensure staffing needs.

As local Atlanta media reports further, other major health networks are dramatically shifting their priorities and rearranging their operations:

Piedmont Healthcare on Monday announced it is also cancelling elective procedures to conserve resources and limit potential exposure for staff and patients. Kaiser Permanente, which operates 25 medical clinics across metro Atlanta and one in Athens, has temporarily shuttered nearly half of its clinics to consolidate operations and allow it to adequately isolate patients, when needed.

This has included hospitals in Georgia and some other metropolitan areas staff setting up emergency tents outside the campus facilities. And further putting in place stricter and more efficient quarantine procedures for suspected cases.

The Associated Press reported this week that hospitals across the globe and in the US are increasingly “testing patients in circus-like triage tents, having them wait in their cars or creating separate entrances.”

New military grade medical tent went up at Loma Linda Hospital parking lot. The tent utilizes a negative air pressure system. It was brought in to deal with the potential higher number of patients arriving at the hospital. Media was not allowed to film inside the tent. pic.twitter.com/p7WJTegVGY

— Alexvnews (@alexvnews) March 16, 2020

Visitors to current patients have further been greatly restricted or banned altogether in most hospitals in large cities. This also as nurses and doctors take on long hours and extra shifts. 

There are other reports of supplies running short, as especially the numbers of ventilators nationwide is a focus of top CDC and White House officials. 

The Atlanta Journal-Constitution reports for example: 

Phoebe Putney Health System may be the canary in the coal mine. Its flagship hospital in Albany, a city anchoring southwest Georgia, has exploded with possible COVID-19 patients in the last five days.

The hospital now houses 65 patients who’ve either been diagnosed with the disease or are waiting for tests to confirm the diagnosis. That’s just the inpatients; 115 more with less severe symptoms are at home, waiting for test results. The hospital released the numbers along with a plea to speed up testing. Phoebe Putney’s other hospitals have more cases.

The Atlanta area hospitals are likely a sign of things to come in other urban areas across the states. 

US hospitals now setting up tents, and calling doctors out of retirement, to prepare for the expected surge in patients. pic.twitter.com/9uINlYl8Kw

— Mike Sington (@MikeSington) March 17, 2020

One New York physician, Dr. Christopher M. Tedeschi, a longtime emergency physician and assistant professor at the Columbia University Medical Center told The New York Times the situation is looking dire in New York City, which is expected to see confirmed cases hit 1000 at least by week’s end, and with 644 cases in the city as of Tuesday.

“We are not prepared to deal with a rapid and severe surge of patients — we’re just not,” Dr. Tedeschi said. “We’re sort of planning for what’s going on right now, and we’re trying to make up for lost time, but I’m not sure we’re planning for a month from now, or even two weeks from now.”

Authored by Mac Slavo via SHTFplan.com,

If ever there was evidence that the media is overreacting and causing unnecessary mass panic amongst the public, it can be seen in Georgia.  The state’s governor has called in 2,000 national guard troops to “assist” with 99 confirmed cases of COVID-19.

The complete loss of freedom and the decimation of the economy are the real problems here, not the actual virus.  While it’s true that this virus spreads rapidly, and it is new, so little is known about it, the sheer panic is astronomical and that’s a much bigger concern right now. Governor Brian Kemp hasn’t helped calm his constituents either. He has issued an executive order to call up as many as 2,000 Georgia National Guard troops to State Active Duty to address coronavirus concerns.  But it’s only going to panic people further and cause more economic disruptions.

The Georgia National Guard is already assisting with the transfer of thirty-one Georgians – formerly passengers on the Grand Princess cruise ship – from Dobbins Air Reserve Base to their homes today for isolation and monitoring by the Department of Public Health officials.

So far, 99 Georgians have tested positive for the virus.

“Through extensive emergency preparedness training, the brave men and women in the Georgia National Guard stand ready to serve above and beyond their traditional military duties. In states of emergency, they are equipped to take necessary action to protect the health and safety of Georgia families in every region,” said Governor Kemp in a press release.

“To assist with COVID-19 mitigation and critical services, including the transfer of Georgians currently at Dobbins Air Reserve Base to their homes, the Georgia National Guard will now be available to communities to ensure the steady supply of medical equipment, food, shelter, or related materials to keep Georgians safe in the weeks ahead.”

– CBS 46 local affilate

Health officials have not answered questions about the number of people who have been tested in the state, and medical experts expect the actual number of cases is far greater than has been reported. Even so, AJC, a Georgia media site reported:

For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. The vast majority of people recover in a matter of weeks. –AJC

If you are older, over the age of 60, please be cautious of the virus.  It has been having a greater impact on those who are older. Doctors suggest that people remain calm.  Panicking only causing the stress hormone cortisol to rise which will impact your immune system negatively. The most important thing to do is realize that a strong immune system is the best defense against any viral infection, including the coronavirus, the flu, or the common cold.

We want all readers to be prepared, but panicking isn’t doing individuals or humanity any good.  It’s crashing our economy and even now, it is going to be difficult to recover from such an overreaction.

Toilet paper is selling out, and as we find some, we’ll link it for you.  Understandably, this will affect people who didn’t panic buy all the toilet paper at their local dollar store, and you may need some. Also, consider a bidet.  They are better for septic systems and our planet anyway, and you won’t need much toilet paper.  You can grab one for under $40 that attaches to the toilet. It’s simply another way to beat the mass panicked public.

Baby wipes and paper towels are still available in bulk too if you need another alternative to toilet paper.  Remember, don’t flush baby wipes (even if they say flushable) or paper towels.  The last thing you need a clogged toilet during this mass panicked public. The S could literally hit the fan in your house!

With the US – and global – economy now officially in recession as even Goldman capitulates, as tens of thousands of New Yorkers suddenly find they are unable to log into the state’s unemployment benefits website, as Elizabeth Warren renews her call for an unprecedented student debt jubilee, and as millions of Americans working from home await with quiet desperation as their pink slips arrive in the mail as their employers have no choice but to downsize, in some cases to zero, moments ago gov Andrew Cuomo announced New York would halt the collection of debt owed to the state for one month, from March 16 to April 15.

“The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program.”

In a statement, the Attorney General’s office said it will reassess the needs of state residents after 30 day for a possible extension

Separately, New Yorkers with non-medical or non-student debt can also apply for a temporarily halt of state debt collection.

Full statement below:

Governor Cuomo and Attorney General James Temporarily Suspend State Debt Collection in Response to Coronavirus

New Yorkers with Student, Medical, and Other State-Referred Debt Will Have Payments Frozen for At Least 30 Days

Governor Andrew M. Cuomo and Attorney General Letitia James today announced that — effective immediately — the state will temporarily halt the collection of medical and student debt owed to the State of New York and referred to the Office of the Attorney General for collection, for at least a 30-day period, in response to growing financial impairments resulting from the spread of 2019 novel coronavirus, or COVID-19. Countless New Yorkers have been impacted — directly or indirectly — by the spread of COVID-19, forcing them to forgo income and business. In an effort to support these workers and families and ease their financial burdens, the OAG will halt the collection of medical and student debt owed to the State of New York and referred to the OAG for collection from March 16, 2020 through April 15, 2020. After this 30-day period, the OAG will reassess the needs of state residents for a possible extension. Additionally, the OAG will accept applications for suspension of all other types of debt owed to the State of New York and referred to the OAG for collection.

“As the financial impact of this emerging crisis grows, we are doing everything we can to support the thousands of New Yorkers that are suffering due to disruptions caused by the COVID-19 pandemic,” Governor Cuomo said. “This new action to temporarily suspend the collection of debt owed to the state will help mitigate the adverse financial impact of the outbreak on individuals, families, communities and businesses in New York State, as we continue to do everything we can to slow the spread of the virus.” 

“In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden,” said Attorney General James. “New Yorkers need to focus on keeping themselves safe and healthy from the coronavirus, and therefore can rest assured that state medical and student debt referred to my office will not be collected against them for at least 30 days. This is the time when New Yorkers need to rally around each other and pick each other up, which is why I am committed to doing everything in my power to support our state’s residents.”

The OAG collects certain debts owed to the State of New York via settlements and lawsuits brought on behalf of the State of New York and state agencies. A total of more than 165,000 matters currently fit the criteria for a suspension of state debt collection, including, but not limited to:

• Patients that owe medical debt due to the five state hospitals and the five state veterans’ home;
• Students that owe student debt due to State University of New York campuses; and
• Individual debtors, sole-proprietors, small business owners, and certain homeowners that owe debt relating to oil spill cleanup and removal costs, property damage, and breach of contract, as well as other fees owed to state agencies.

The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program.

New Yorkers with non-medical or non-student debt owed to the State of New York and referred to the OAG, may also apply to temporarily halt the collection of state debt. Individuals seeking to apply for this temporary relief can fill out an application online or visit the OAG’s coronavirus website to learn more about the suspension of payments. If an individual is unable to fill out the online form, they can also call the OAG hotline at 1-800-771-7755 to learn more. 

Over the weekend, the Port of Los Angeles has published its latest data about monthly container statistics. Surprising exactly nobody, it was very ugly.

As Saxobank’s Christopher Dembik writes, the drop in container volumes at Port of Los Angeles was -22.87% in February, which is the worst monthly performance since February 2009. As the Saxo analyst notes, traffic at America’s largest port in terms of volume and value “is of strong significance for the U.S. economy” as it is a leading indicator for overall commerce and trade. The data presents a clear confirmation that supply chains disruptions due to the COVID-19 outbreak are becoming more visible and, based on preliminary data, are likely to get worse.

Looking ahead, statistics for the month of March, which should be released around April 15, should confirm the Port of Los Angeles is going through a terrible time this month.

Adding to that severe disruptions on the consumer side that are likely to get stronger, especially regarding discretionary consumption which represents nearly 40% of GDP, and you get a perfect storm for a recession.

The only pending question at this stage is the size of the drop.

Authored by Jake Johnson via CommonDreams.org,

An alarming scientific report compiled by British researchers and shared with the Trump White House warns that, in the absence of drastic and coordinated government action, the novel coronavirus could kill as many as 2.2 million people in the United States alone.

The new research (pdf), led by epidemiologist Dr. Neil Ferguson and published Monday by the Imperial College of London, shows that merely acting to slow rather than completely stop the spread of COVID-19 would “still likely result in hundreds of thousands of deaths and health systems (most notably intensive care units) being overwhelmed many times over.”

“For countries able to achieve it, this leaves suppression as the preferred policy option,” the researchers wrote. “In the U.K. and U.S. context, suppression will minimally require a combination of social distancing of the entire population, home isolation of cases, and household quarantine of their family members. This may need to be supplemented by school and university closures.”

Successful suppression of the virus could take a significant amount of time, the researchers noted — “potentially 18 months or more.”

 

The New York Times reported late Monday that the researchers’ “terrifying” projection of as many as 2.2 million possible deaths in the U.S. was shared with the White House’s coronavirus task force last week, when President Donald Trump was still downplaying the threat posed by the COVID-19 outbreak.

Here’s the @nytimes article about the new coronavirus model, noting it suggests that 2.2 million Americans could die if there is no action: https://t.co/Oj9BLN1q1I The study apparently shook the White House partly out of its passivity.

— Nicholas Kristof (@NickKristof) March 17, 2020

“We don’t have a clear exit strategy,” Ferguson told the Times. “We’re going to have to suppress this virus — frankly, indefinitely — until we have a vaccine. It’s a difficult position for the world to be in.”

Ferguson likened the possible health impacts of the COVID-19 pandemic to those caused by the 1918 influenza outbreak, which killed an estimated 675,000 people in the United States and tens of millions more worldwide.

The team of researchers “also shared its fatality estimates with the CDC,” according to the Times, “including that eight to nine percent of people in the most vulnerable age group, 80 and older, could die if infected.”

Trump: “We have a problem that a month ago nobody ever thought about.”

False. Both with regard to pandemics generally, coronavirus pandemics in particular, and this specific coronavirus.

And the US had its first confirmed case in January. https://t.co/GipI01oUBg

— Daniel Dale (@ddale8) March 16, 2020

During a press conference on Monday, Trump falsely claimed that “nobody ever thought about” the coronavirus threat a month ago. “This is a bad one,” said Trump, who on Sunday recommended that people in the U.S. avoid gathering with more than 10 people. “This is a very bad one. This is bad in the sense that it’s so contagious. It’s just so contagious. Sort of, record-setting-type contagion.”

In an interview with CNN Sunday, Harvard University epidemiology professor Marc Lipsitch said the coronavirus crisis “was foreseeable, and foreseen, weeks and months ago.”

“Only now is the White House coming out of denial,” said Lipsitch, “and heading straight into saying it could not have been foreseen.”

In news that will delight millions of Americans – at least those who end up owing Uncle Sam a tax bill instead of getting a refund – the US government will postpone the April 15 tax-payment deadline for tens of millions of taxpayers by 90 days, giving Americans roughly 3 months pay their 2019 income-tax bills in an unprecedented move.

The IRS, under the authority of President Trump’s national-emergency declaration, will waive interest and penalties as well, Treasury Secretary Steven Mnuchin said at the White House Tuesday. The delay will be available to people who owe $1 million or less and corporations that owe $10 million or less.

The extension was granted to give taxpayers a financial cushion as households and businesses cope with the sudden crash in economic activity caused by the coronavirus outbreak which has brought the US economy to a halt. The move could provide households with hundreds of billions of dollars in temporary liquidity, Mnuchin said last week in previewing the government’s actions.

“We are going to use all the tools we have,” Mr. Mnuchin said on Tuesday. “And what tools we don’t have, we’re going to go to Congress.”

Meanwhile, those who are owed money from Uncle Sam will get it as the IRS will continue to process tax refunds, and Mnuchin urged people who can file their tax returns to do so. Many taxpayers who expect refunds file soon after the IRS opens filing in late January. That is particularly true for low-income households that benefit from the earned-income tax credit, which gives them cash.

About three-quarters of households typically receive refunds, and the IRS will still process returns and send out cash. However, people who file closer to the deadline typically owe money and are waiting to pay. They will benefit the most from Tuesday’s announcement, as will businesses that are worried about their cash flow.

While Mnuchin said last week that the tax deadline would be delayed for all but the superrich, his Tuesday announcement was the first explanation of the length of the delay and how it might work. The tax agency hasn’t yet released full details about how the delay will work.

According to official IRS data, as of March 6, the IRS had received 68 million individual income-tax returns, and since this is less than half of the returns that the IRS normally gets, it means that tens of millions of people can benefit from the relaxed deadlines.

Even if the IRS wanted to process all the tax filings it wouldn’t be able to do so: the tax agency adjusted its own operations during the outbreak, shifting many employees to remote work, according to a message that Commissioner Charles Rettig sent to workers late Friday. In addition, Rettig limited travel, gave employees the option of avoiding face-to-face contacts with taxpayers and stopped those in-person contacts in heavily affected areas such as New York and Seattle.