Category: zerohedge

Authored by Fábio Santos via The Mises Institute,

Despite the more optimistic claims of political pundits and Federal Reserve officials (Jerome Powell, specifically), things are far from being under control.

Notwithstanding archetypal Austrian objections to “loose” monetary and fiscal policies on the grounds that they create production structures that ultimately deplete the pool of real savings, the operational failures of central banks cross-globally are largely nested in faulty axioms. Intellectually corrupt frameworks of analysis also appear to be à la mode, recently inspiring Mark Carney, former governor of the Bank of England, to express his fears about a possible “liquidity trap” rendering monetary policy ineffective.

A well-known calendar low period in liquidity, mid-September of 2019 nonetheless produced exceptional and very public disturbances in the repo markets, with the general collateral rate spiking above 10 percent. Contrary to the “official narrative” of a new paradigm of inflation and growth, this event unveiled vulnerabilities that had begun manifesting as early as 2018.

According to conventional reasoning, this was surely a reflection of a suddenly increased preference for liquidity – preference for actual dollars. The Fed promptly obliged, enacting new emergency measures – permanent overnight operations included – to promptly increase the level of bank reserves and (it is argued) steady interbank private funding arrangements. However, contrary to Fed assumptions, we are not presently facing a problem of liquidity vis-à-vis Great Recession; we are confronted, instead, with a serious shortage of quality collateral.

Before the Great Recession, the repo market treated not just Treasurys, but also mortgage bonds as the best-quality securities for collateralized overnight (or terminal) loans. As the panic progressed, financial institutions steadfastly rejected securities associated with toxic subprime tranches. The European sovereign debt crisis further diminished the pool of valued forms of collateral.

In effect, because no alternative securities have been introduced since the onset of the last financial crisis (that are comparable in size (and treatment) to mortgage bonds), US Treasurys prevail as the only game in town. The endless rounds of quantitative easing (or, for that matter, the myriad of credit and auction facilities and schemes explicitly designed to circumvent the discount window) exacerbates the problem by removing the best possible collateral from the system and replacing it for bank reserves.

In early February, WTI futures turned contango. There are financial factors, such as liquidity risk, that are priced in due to the inherently leveraged process of markets commanding deliveries of (physical) commodities. The oil market was signaling (then) that liquidity was fading.

After the most recent extreme volatility and economic turmoil, popular liquidity and credit risk metrics such as the OIS-FRA and Ted spreads have been soaring, the latter rising to values analogous to those observed during the Great Recession.

Moreover, the Eurodollar futures term structure shows that zero interest rate policy (ZIRP) is expected to endure with recent selling (in the front end of the curve, rather alarmingly), forecasting short-term increases in LIBOR (London inter-bank offered rate).

In summary: short-term liquidity concerns with no pricing of growth for the foreseeable future.

The financial system is broken; the pandemic readily exposed the preexisting frailties that lied immediately underneath.

Recent Fed measures have been largely inefficient, to put it mildly, and those advancing a temporary and transient return to normalcy – the proposed paradigm of growth and inflation – are heavily discounting the cautionary signs that markets have been intimating, particularly for the past year.

It’s appearing as though Wall Street hasn’t quite prepared for what is coming down the pipeline, as companies across the board prepare to blindside analysts with upcoming earnings reports. 

Walgreens, this morning, was a perfect example. Everyone believed they were a company that was coronavirus-proof, yet the stock fell after the company admitted it was still seeing decreasing foot traffic – even after the company beat its earnings estimates.

In the age of the coronavirus, almost all analysts are “flying blind”. And this is likely to lead to some shocks from earnings reports that will be felt across the street. Many companies have already admitted publicly that they have no clue where the pandemic is going to take their business.

Which raises the question of how there’s going to be any price discovery; not just from analysts trying to set estimates, but from the market trying to price companies as a result of their Q1 numbers. 

Yousef Abbasi, global market strategist at INTL FCStone told Bloomberg on Thursday: “Things are changing drastically day by day because no one has ever seen this before. It’s almost like calling out an arbitrary number because the fundamentals are broken.”

It’s not a question of whether or not there will be a drubbing across the board for all corporations. The question is how bad it is going to be. Only about 17% of all earnings estimates across the S&P 500 were revised last week. This compares to an economy where almost 100% of businesses are shut down – and where those that aren’t shut down will definitely be feeling an impact. 

Jonathan Golub, chief U.S. equity strategist at Credit Suisse said:

 “While analysts are updating their numbers much more frequently than normal, their estimates remain stale. This pattern will likely continue until the start of earnings season, and beyond.”

In addition to having no clarity on individual companies’ earnings, analysts have little clarity on how the S&P is priced as a whole right now, namely because the “E” in the index’s P/E ratio is up in the air. 54 names in the S&P 500 have withdrawn guidance since February. 

Keith Gangl, a portfolio manager for Gradient Investments said:

 “Any name’s got five to 30 analysts setting the consensus – we can know whether companies are underperforming relative to estimates. But now, everybody is taking a stab in the dark.”

Gangl said that he is instead going to be listening to the tone of executives on each company’s respective conference call. Again, to look back at our Walgreen’s example this morning, it was this commentary that moved the stock – not the numbers.

Bryce Doty, senior portfolio manager at Sit Investment Associates Inc. said: “The earnings coming up are probably going to be the most unpredictable or worst estimates we’ve ever seen in the history of this country. It’s a completely different world. Anyone who lived through the financial crisis can’t think the way they did then. It’s a whole new ballgame now.”

And despite the appearance of a haircut in the S&P 500’s P/E multiple, the broad range of outcomes going forward almost assures significantly more volatility in months ahead.

Aaron Clark, portfolio manager at GW&K Investment Management, has looked deeply at the worst affected industries, including travel & leisure. 

“It’s more balance sheet analysis than income statement analysis. Have they tapped their credit line, how much liquidity do they have, what’s their interest coverage, when is their debt coming due?” he said.

Paul Markham, global equity portfolio manager at Newton Investment Management agreed: “What you really do in this environment is disregard the first quarter of 2020 and then normalize the earnings.”

He concluded:

“What would be more appropriate is to take the final three quarters and annualize those for the year or to replace the first quarter with something which is very significantly haircut, but not a negative or low earnings number because it’s not necessarily going to be repeated.”

To which we reply “Sure, Paul, but what kind of alchemy do you employ when Q2 and Q3 turn out to be worse than Q1?”

Authored by Sophie Quinton of the Pew Trust,

Economists who advise the Colorado legislature told lawmakers in mid-March to expect a roughly $800 million revenue decline for the next fiscal year as people travel and dine out less during the coronavirus pandemic. That estimate already looks far too optimistic.

“The forecast that we released in March — we weren’t imagining the world that we’re living in right now,” said Kate Watkins, chief economist for the Legislative Council Staff, the nonpartisan research arm of the Colorado General Assembly.

Governors nationwide have ordered businesses to close and people to stay home in order to slow the spread of the novel coronavirus. But the public health measures have created an economic crisis that will, in turn, hit state and city budgets.

Now policymakers are scrambling to figure out how much spending power they’re losing at a moment when they need money to fight the pandemic and help laid-off workers and struggling businesses.

Few state economists and budget analysts have calculated the fiscal impact of the pandemic so far, and it’s hard at this early stage to say how big the drop off in tax collections will be, said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers, a Washington, D.C.-based membership organization.

But the early estimates don’t look good, he said. “It looks like the drop-off that states could be facing this time could be more severe than the Great Recession.”

State officials all over the country are planning for revenue declines. Hawaii officials have estimated a $225 million decline; in New York, it’s a whopping $15 billion. West Virginia is losing $9 million a week from its closed casinos alone.

The governors of New Jersey, Ohio and Pennsylvania already have announced limited spending and hiring freezes. California Gov. Gavin Newsom, a Democrat, and Ohio Gov. Mike DeWine, a Republican, have warned state agencies to expect budget cuts. 

New York Gov. Andrew Cuomo, a Democrat, said in a radio interview last week that lawmakers may need to cut education funding in order to address the state’s budget hole. 

“I said kiddingly to a legislator before, I said, ‘This is the easiest budget we’ve done. There’s no option. The number is zero,’” Cuomo said.

“We have no money.”

The members of Colorado’s Joint Budget Committee haven’t been able to meet in person to discuss the changing revenue picture yet, said Rep. Daneya Esgar, a Democrat who chairs the committee.

But Esgar said she’s already asking lawmakers to review what their measures will cost. “I think it’s optimistic to think that any new program be funded at this point,” she said. 

The $150 billion the federal government has approved in coronavirus relief for states and cities could help stabilize their budgets, Sigritz said, although its impact remains to be seen. “It’s less than some governors had hoped for, but it will help states address some of the increased spending demands.”

The budget outlook has worsened for states as it’s become clear that social distancing restrictions will need to be in place for months, not weeks, to prevent hospitals from becoming overwhelmed with coronavirus patients. 

After initially saying he’d like to lift social distancing guidelines by Easter, President Donald Trump has extended them to April 30. Virginia Gov. Ralph Northam, a Democrat, this week issued a stay-at-home order that will be in effect until June 10. 

Twenty-three states have passed budgets for fiscal 2021, which for most states starts July 1, according to the National Conference of State Legislatures, a Denver-based organization that represents legislatures. Twenty-seven states are still debating their budgets for next year.

Lawmakers in states with a budget in place may have to make changes, given the sputtering global economy.

“We are going to have to review our budget, there’s no question about it,” said Washington state Sen. Christine Rolfes, a Democrat and chairwoman of the Senate Ways and Means Committee. 

Rolfes said lawmakers adjourned on March 12 thinking they’d crafted a prudent budget, with a huge ending balance and a $1.8 billion rainy-day fund. But they didn’t anticipate the scale of the economic slowdown.

Cities also are bracing for a drop in tax collections.

“We’re looking at at least a $100 million deficit,” said Las Vegas City Manager Scott Adams. The total budget is about $650 million, he said. “And that’s a midpoint, that’s not the worst-case scenario. And I’m worried that we might be leaning closer to the worst-case scenario.”

Major sources of sales tax revenue, such as restaurants, are closed or doing a fraction of their normal business through curbside pickup and delivery, Adams said. 

He said the city has furloughed about 200 employees so far due to the pandemic. If the city doesn’t get federal funding to help it absorb the costs of fighting the coronavirus, he said, those furloughs will become unpaid. 

Comparisons to the Great Recession underscore how damaging the pandemic could be for states. Sharp declines in tax collections during the 2007-2009 recession and subsequent slow recovery led lawmakers nationwide to lay off state workers and cut spending on education, health care and social services.

Ten years later, spending on some programs still hadn’t recovered, according to research from the Pew Charitable Trusts (Pew also funds Stateline).

Unlike the federal government, almost all states are required to balance their budgets.

It’s not clear that comparisons to the Great Recession can help states and cities weather the current crisis, fiscal experts say, as the nature of the pandemic is so different — it’s not a slowdown caused by a financial crisis, or a housing bust — and its duration is so uncertain.

“We’ve never had a recession before where businesses are under order to close their doors,” said Jared Walczak, director of state tax policy for the right-leaning Tax Foundation, a Washington, D.C.-based tax policy nonprofit.

In a typical recession, sales tax collections fare better than income tax collections because laid-off workers still make basic purchases, Walczak said. But if businesses stay closed for months and consumption patterns change, sales taxes could emerge as a bigger pain point.

“The one class of purchases that’s doing extremely well right now is groceries, and everything else is falling off the cliff,” he said. Most states don’t tax grocery sales, he noted.

Some states have built up substantial rainy-day funds and budget reserves over the past decade which can help them absorb a short-term drop in revenues and address the pandemic. Governors such as Newsom and Washington’s Jay Inslee, a Democrat, already have drawn upon their state budget reserves.

But even large reserves may not be big enough as lawmakers scramble to fight the pandemic. California budget analysts, for instance, began the year projecting a $21 billion cash reserve by this summer. They’re now warning the money could be spent in months.

“I think to some extent states did learn from the last crisis — they built up their rainy-day funds to the highest nominal level on record,” said Tracy Gordon, a senior fellow at the Urban Institute, a Washington, D.C.-based research organization. “It’s just that nothing could prepare them for this.”

Senate Majority Leader Mitch McConnell (R-KY) is putting the brakes on House Speaker Nancy Pelosi’s (D-CA) attempt to rush a phase-four coronavirus relief package through Congress – insisting that they take a wait-and-see approach after a $2.2 trillion rescue package was signed into law last month by President Trump.

Pelosi, who has been holding near-daily calls with reporters, has been aggressively pushing for the follow-up legislaton which would make funds available for transportation, coronavirus treatment (not just testing), more money for states, and benefits for employees such as paid family and sick leave, according to The Hill.

“The coronavirus is moving swiftly, and our communities cannot afford for us to wait. House Democrats will continue to work relentlessly and in a bipartisan way to lift up American families and workers to protect their health, economic security and well-being today and throughout this crisis,” Pelosi insisted on Friday.

McConnell is having none of it – and has made abundantly clear that he wants to wait to see if the first package has had any impact.

“We’re not going to be doing, in the name of an emergency, items unrelated to the emergency,” he told Fox News Radio when asked about the next bill.

Of note, while Congressional leaders have remained in Washington, most lawmakers are out of town until at least April 20.

Congressional Republicans are backing McConnell, however they’ve been privately discussing a fourth bill as well.

House Minority Leader Kevin McCarthy (R-Calif.) backed up McConnell, telling reporters that while Pelosi “is trying to talk about a fourth bill, I don’t think that is appropriate at this time.”

Some rank-and-file GOP senators say they are already informally discussing a fourth bill as the number of coronavirus cases in the U.S. is expected to skyrocket in the coming weeks. As of Friday evening, there were about 274,000 cases in the United States and more than 7,000 deaths, according to data from Johns Hopkins University. –The Hill

Speaker Pelosi’s ambition to create a select committee on the coronavirus crisis isn’t about oversight. It’s pure politics.

She wants to exploit this crisis in order to fundamentally restructure America and advance her political agenda. pic.twitter.com/hYHXx6F5kS

— Kevin McCarthy (@GOPLeader) April 3, 2020

Barbs between Pelosi and McConnell have spilled into the public sphere – with McConnell telling Pelosi to “stand down” in one interview – suggesting she’s trying to “jam” Senate Republicans.

Pelosi, meanwhile, suggested that McConnell’s comments – along with verbal sparring between Trump and Senate Minority Leader Chuck Schumer (D-NY) was “chicken feed,” and that “you can’t pay attention to that stuff,” adding “They’re playing to their base.”

The Trump administration has remained on the periphery while Congressional leaders continue to spar – with Treasury Secretary Steve Mnuchin telling reporters that he has spoken with lawmakers – saying “I’ve spoken to the leader, I’ve spoken to the Speaker. I’ve spoken to the president constantly. When the president is ready and thinks we should do the next stage, we’re ready.“

Read the rest of the report here.

Summary:

• NY reports first drop in daily deaths since outbreak began
• FT shows how US has become COVID-19s “epicenter”
• NY hospitalizations drop
• India bans export of Trump’s ‘miracle’ coronavirus drug
• Tokyo reports yet another jump in new COVID-19 cases
• Queen Elizabeth plans special televised address to Britain, only the 4th during her reign
• Australia launches criminal probe into Carnival Cruises
• COVID-19 deaths in Japan pass 100

*    *    *

Before we delve into our daily breakdown of some of the biggest coronavirus-related news from around the world, we’d like to highlight yet another grim milestone in COVID-19’s “conquest” (are we still allowed to use war metaphors or has that been declared un-PC?) of the US. While the outbreaks in Mexico and Canada have only produced about 16k cases between them, the total number of cases confirmed in the US has ballooned past 300k in the US (to 312,249 as of 11amET Sunday morning).

Now, here’s the FT, which detailed the shift in momentum from Asia, to Europe, to the US. It’s a little more complicated than look at only the overall totals and the current daily figures.

In a little over one month the daily number of Covid-19 cases globally has grown exponentially from 2,359 on March 1 to 101,503 on Saturday. At the beginning of March, Asia accounted for more than half of the total cases reported each day. This quickly shifted as outbreaks began in continental Europe, with Italy, Spain, Germany and France all reporting cases in the thousands. By mid-March, Europe was responsible for four in every five new confirmed cases each day. While Europe is still responsible for nearly 40 per cent of daily cases, the US has become the new centre of the Covid-19 pandemic. The country accounts for nearly one-third of all daily cases, with New York state particularly affected.

Here’s most of that, broken down into a chart:

All that said, with the US gearing up for what President Trump and NY Gov. Andrew Cuomo expect to be the week where the outbreak peaks (in New York, at least), the Empire State has at least started off on the right foot.

New York reported 8,327 new cases of coronavirus and 594 new deaths on Sunday (compared with 630 a day ago), marking the state’s first drop in daily deaths since the outbreak began. In total, 122,031 cases have been confirmed in the state (roughly equivalent to the national totals of both Italy and Spain )and 4,159 deaths. While we’re certainly no epidemiologists, we suspect others might point to this as a small, but hopefully promising, hint that the ‘peak’ is near, or here.

And as we noted last night, hospitalizations in the state have shown another encouraging decline, even as many ICUs in NYC remain very close to, or at, capacity.

Cuomo is beginning his daily press briefing below:

Holding a briefing with updates on #Coronavirus. WATCH LIVE: https://t.co/gLjk74Ghtt

— Andrew Cuomo (@NYGovCuomo) April 5, 2020

The governor kicked off Sunday’s presser by thanking New York’s health-care workers.

Being a pandemic with almost no precedent in modern times (other than the Spanish Flu pandemic of 1918), traditions of culture and governance are being disrupted left and right (hell, we just cancelled the Olympics). In keeping with that trend, Queen Elizabeth will deliver a special televised address to Britain; it will be only the fourth time she has done so during her nearly 70-year reign. Excerpts from the address have already been released, and in them, the Queen acknowledges the suffering of hundreds of thousands of families around the country, while seeking to “lift their spirits” and “offer hope,” according to ABC News.

The 93-year-old monarch is expected to acknowledge the suffering that many families have experienced because of the COVID-19 crisis, which has infected more than 42,000 people in the U.K. and killed at least 4,313 of them. She will seek to lift spirits and offer hope to the country in its hour of need.

“I am speaking to you at what I know is an increasingly challenging time,’’ she said, according to excerpts released ahead of remarks that were being broadcast Sunday night. “A time of disruption in the life of our country; a disruption that has brought grief to some, financial difficulties to many and enormous changes to the daily lives of us all.”

Elsewhere, Tokyo reported yet another record jump in daily cases, with 143 new coronavirus infections announced on Sunday, metropolitan government officials said. Meanwhile, the number of COVID-19-related deaths finally surpassed 100 in Japan, Nikkei reports. In India, the government of Narendra Modi has banned the export of hydroxychloroquine, a drug widely touted by Trump for treating COVID-19. In Australia, prosecutors have launched a criminal investigation into Carnival Cruises as hundreds were sickened, dozens died on their ships.

Authored by Robert Wright via The American Institute for Economic Research,

The world has 99 problems but coronavirus is only one of them – and arguably not the most important…

The world’s biggest problem right now seems to be a type of irrationality called groupthink. It occurs when there is a lot of information of dubious quality about and a lot of uncertainty on a topic widely recognized as important. The Harvard Business Review says it infected JFK’s inner circle, but Jack nipped it in the bud before it caused a nuclear holocaust in October 1962.

We are not there yet, but the COVID-19 Crisis is rapidly becoming an existential one because apparently nobody can think rationally about what steps to take to a) keep people as safe from the novel coronavirus as they want to be and b) to prevent the economy from sinking into Depression.

The crisis has been presented time and again as a tradeoff between lives and money but, in fact, this is an instance where we can have some of our cake and eat some of it too, all by remembering what once made this country great: individual liberty.

The key insight is this: 

That an individual or family leaves their place of “shelter” does NOT expose another individual or family to SARS-COV-2. The only way that another can be exposed is by leaving their place of “shelter” and coming into contact with someone or something that carries the virus. Therefore one individual or family has no business telling another individual or family to stay indoors, or vice versa. 

That basic point seemed widely understood early in the crisis.

Some governments, though, said that all people leaving their respective places of shelter caused negative externalities for others, namely in the form of getting infected, spreading it to others, and potentially needing hospitalization and, eventually, funerary services.

They therefore suggested, cajoled, and eventually ordered socioeconomic practices designed to “flatten the curve,” to avoid as much as possible the negative externalities caused by lots of people getting sick and needing medical care at once.

At that point, many policy analysts crunched numbers and found that the most pessimistic models were not adding up but could not offer anything more certain in their stead. 

Others launched into ideological debates about Left and Right, right and wrong, socialism and capitalism, i.e., the usual drivel about nothing.

In the meantime, we all forgot that first crucial point: that one person doesn’t control what happens to another person, only that other person does. How does that insight help us? Well, add it to the notion that adult human beings are the best judges of their own actions, particularly when reputed authorities admit they have insufficient information and understanding to know what will happen, and the following protocol recommends itself:

1. Let businesses do as they see fit: open, close, change hours, change policies, or maintain the status quo ante pandemic. 

2. Anyone or any family who wants to can remain in his/her/their respective shelters for as long as a state of emergency exists without fear of any sort of loss of services, permanent job loss, foreclosure, eviction, and so forth.

3. Anyone or any family who wants to go about their lives can do so if they agree to self-isolate if they show symptoms of COVID-19, decline to seek hospitalization for COVID-19 and instead ride it out, and allow the proper parties to dispose of their bodies on an expedited basis, at the expense of their estate, should they perish.

This is what would occur in a state of natural liberty, i.e., if governments were not forcing everyone into option 2 on the supposition that everyone will want medical treatment. But some of us are willing to “flatten the curve” by opting out of hospitalization instead of opting out of our lives and liberty, a point I made a full month ago incidentally. 

Some of you might think, “who in their right mind would choose 3?” but others are thinking the same of 2. There is no need to debate the matter as selection into each group should be entirely voluntary, with the caveat that 3 cannot be revoked once made so that they can credibly commit not to burden a healthcare system rendered unscalable due to regulatory sclerosis. But people who choose 3 can, of course, stay home if they think the risk of being infected has grown too high, especially given that they will not receive medical attention beyond what you can buy at the pharmacy.  

I cannot say for certain what will happen but I imagine group 3 will be composed of people who already recovered from COVID-19 or think that they have developed immunity, young adults with no risk factors, and those skeptical of the severity of the outbreak or the risk of death or serious complication. And who knows, maybe, like the old Belgian woman who gave up her ventilator, brave grandparents will join 3, either as a noble sacrifice for their grandchildren or as a way of committing suicide due to the sadness over the whole situation that might infect their hearts.

Many proprietors and entrepreneurs will join 3 as well because there will be ample money to be made in the weeks and months ahead, if only figuring out how to best serve people who remain in group 2.

Some, many, most, or all of group 3 will eventually get COVID-19, depending on how much physical distancing and such they voluntarily undertake as they go about their daily lives. They will provide much-needed revenue to 1, especially those businesses, like haircutters, who can’t sell electronically or by delivery. And they will move us toward the herd immunity that will allow more and more members of group 2 to emerge until the curve has been flattened and the emergency ended.

This proposal is more tourniquet than economic panacea. Unless 3 grows very large, very quickly, the economy is going to suck for quite a while. No need to get fancy about this: supply is all that matters in the end. Bailouts and stimulus packages and such do not make toilet paper, or milk, or anything else for that matter; people do. Until people return to work and production ramps back up, many things will be in short supply, which means higher prices, shortages, and/or nonprice rationing (“limit one per customer”). 

This proposal, however, does solve many looming political problems, like the specter of paramilitary police or National Guard troops shooting some Americans (those who would have volunteered for 3) with a probability of death near 1, to save some other Americans with a probability of death near 0. The only thing troops and police should be thinking about now is keeping us safe from foreign powers and terrorist attacks while our rear end remains so dangerously exposed. 

There is no reason to turn on ourselves, just to get the groupthink out of our heads by realizing that unless our neighbors break into our houses and cough in our faces, what they do is their business, not ours. Our business is to do what we think best for ourselves and our families, whether that means cowering in the basement binging Tiger King or pledging not to seek medical care and rejoining the economy, you know that thing that keeps most of us alive and well.

As we’ve noted in recent months, COVID-19 is the perfect cover for the government to usher in a massive surveillance state. 

Residents in Kentucky are figuring this out firsthand, have already seen an increase in digital surveillance of smartphone tracking by the government to make sure everyone is practicing social distancing. And now, there’s a new report that shows anyone refusing to quarantine after virus exposure could be subjected to wearing a GPS/cellular ankle bracelet issued by the courts. 

As a response to the virus outbreak in the state, Jefferson Circuit Court judge Angela Bisig ordered anyone who has been infected by COVID-19 and fails to isolate will wear an ankle monitoring device. 

CNN affiliate WDRB reported last week that Bisig ordered an individual identified as “D.L.” to wear a GPS monitoring device for 14 days after refusing to self-quarantine. 

In the court order, D.L. is living with “someone who has tested positive for the illness and another person who is a presumptive case,” according to an affidavit from Dr. Sarah Moyer, director of the health department.

D.L. was ordered to self-isolate at home after being exposed to the highly contagious disease, but according to court documents, family members said the person “leaves the house often.”

After D.L. failed to respond to Bisig’s request, she ordered the Department of Corrections to fit D.L. with a monitoring device. Bisig told the person if they leave the house again, criminal charges would be next. 

WDRB said D.L. is not the only Kentuckian wearing an ankle monitor device to mitigate the spread of the virus from non-compliant and suspected carriers. There are three other cases. 

This report comes after a group of millennials threw a “coronavirus party” that resulted in one person contracting the deadly virus. So far, 917 people in the state have tested positive, and 40 have died (as of Sunday morning, April 5). 

And before you know it, “pandemic drones” could be circling above, identifying if a person is a suspected COVID-19 carrier. In essence, America’s dystopian future is arriving a lot faster than anyone has anticipated.

Authored by Rob Stumpf, via The Drive,

The coronavirus pandemic has left no part of the global economy untouched. People are staying indoors, businesses are shuttering left and right, unemployment is skyrocketing and virtually nobody is buying cars. Now, as we edge toward a downturn worse than the 2008 financial crisis, Ford is nudging the U.S. government toward another Cash for Clunkers-style car buying incentive program.

“We think some level of stimulus somewhere on the other side of this would help not only the auto industry and our dealers, which are a huge part of our overall economy, but will help the customers as well,” said Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, in a phone interview with Bloomberg. “We’re in discussions about what would be the most appropriate.”

After the U.S. auto industry got its $80 billion taxpayer-funded bailout (minus Ford, which survived through private loans), a $3 billion taxpayer-funded initiative called the Car Allowance Rebate System (CARS) was signed into law, aimed at promoting consumers to trade in their old “clunkers” and purchase a brand new vehicle—ideally a cleaner and more fuel-efficient one. Anyone who owned a car built after 1984 with a rating of 18 MPG or less could be given a voucher worth between $2,900 and $4,500 toward their new car. Their old vehicle would then be disabled and taken out of circulation.

The program was nicknamed Cash for Clunkers and on the surface, it was a politician’s dream; better cars, more jobs, a boost to the economy, and an overall less harmful environmental impact.

Consumers bit the hook and auto sales immediately spiked. In total, 677,842 cars and trucks got traded in under the CARS program, totaling vouchers worth $2.85 billion. Fast forward 11 years and Ford is looking for a repeat.

“Cash for clunkers was very effective at that time,” LaNeve told Bloomberg. “It would be nice to think we could have something equally as effective for 2020 when we get out of this because it was a great program.”

Except, it wasn’t really a great program.

While Cash for Clunkers did result in a significant number of new cars parked in the driveway of Americans, the spike was brief. In fact, the program ran out of its initial $1 billion in funding within a month, prompting the U.S. government to provide another $2 billion influx. Its second round of funding was exhausted in just 17 days.

Economists also believe that sales weren’t really sustainable, and that instead of generating new transactions, it instead pulled forward later sales “from a far more distant future” by consumers who were already in the market for new vehicles.

Statistics indicate that the program benefited wealthier and better educated Americans more than it did lower income people. The idea that the program would create more jobs was correct, though not nearly as much as a reduction of payroll tax or an increase in unemployment aid.

It also wasn’t really that great for American automakers. Despite domestic cars representing at least 71.8 percent of all trade-ins, Detroit accounted for just 32.6 percent of all new car sales and leases under the CARS program.

Furthermore, the program took a substantial number of decent used cars off the road, many of which were still operable and roadworthy that could have been bought by lower-income families who live in areas where public transportation infrastructure is lacking. Instead, the vehicles exchanged under the program were destroyed.

It was the dealership’s responsibility to disable the vehicle’s engine after trade-in. This was typically done with a few quarts of sodium silicate solution (water, silica, and salt) and a minute or so of flat-footed revving until the inevitable seizure of ill-lubricated metal components was achieved. Disabled vehicles were then sent to recycling facilities where they would be crushed or shredded.

It’s worth noting that enthusiast vehicles suffered in this, too. Rare rides like the 1987 Buick ASC GNX and 1992 GMC Typhoon were sent to the crusher, though other fan favorites were also disposed off, including a BMW M3, 123 examples of the Subaru SVX, 381 Nissan 300ZXs and even four MK4 Toyota Supras. (One imagines Bring a Trailer would take care of many of those today.)

So in the end, Cash for Clunkers was a limited, mixed success at best. It was certainly a clever idea and a well-intentioned one, but if it happened again, some fine-tuning would absolutely need to be in order. 

Having said all that, Ford hasn’t officially solicited the U.S. government for this type of assistance—yet. Politicians are aware of the thought, though no movement appears to have been made in either direction at this time. Via Bloomberg once more:

U.S. Representative Debbie Dingell, a Michigan Democrat whose district is home to Ford’s headquarters, said a vehicle scrappage or purchase incentive to spur demand has been discussed as a possible form of relief for the industry, but said no consensus has been reached on the issue.

“It’s out there as an idea along with many other ideas,” she said. “We’re working with the entire ecosystem of automakers, workers, their unions, suppliers, dealers and consumers.”

There’s no denying that the auto industry will need to perk up in the future. Even before the global pandemic, the industry was already slowing for its fifth consecutive year. It’s difficult to say what the correct next move will be, especially while manufacturing plants across the nation are idled and unemployment has skyrocketed, but surely there’s a better answer than clunkernomics.

Multiple coronavirus patients were mistakenly transferred from New York’s Javits Center to the Navy hospital ship Comfort on Friday, according to Fox News, citing three US officials.

Until Friday, Javits was only treating non-coronavirus cases until President Trump – at NY Governor Andrew Cuomo’s request – authorized the facility to bring on COVID-19 patients. This meant that the existing patients at Javits – a few dozen – had to be transferred to Comfort some 10 blocks away. The ship is only supposed to treat trauma patients, not those infected with coronavirus. 

The number of patients on board Comfort is “less than five,” according to one official. Of note, the patients had initially screened as negative for the virus, while up to half of those infected with coronavirus show no symptoms, according to new data.

The top general leading the coronavirus response for the U.S. military told Fox News there was another COVID-19 patient who showed up to the hospital ship Comfort in New York earlier Saturday after being delivered by ambulance. The patient later tested positive on board while in isolation.

“We are treating the emergency situation that needs to be treated,” Air Force Gen. Terrence O’Shaughnessy said in a phone interview with Fox News Saturday afternoon and disclosed the new case aboard Comfort. –Fox News

Current protocol is to test patients before they come onboard Comfort, isolate them, and then wait for the results.

Navy officials reasoned that since only a handful of patients had tested positive, their existing protocols are working. They also noted that this illustrates the complexity of the situation.

Comfort, which arrived in New York on Monday, is currently docked on Pier 90 located on Manhattan’s west side. It is said to have a “couple dozen” patients on board according to the Pentagon’s top spokesman, Jonathan Hoffman.

The positive patients were transferred off of Comfort and back to Javits on Saturday morning to continue treatment according to one official.

The Javits Center has been transformed into a 3,000 bed makeshift hospital by the Army Corps of Engineers.

The officials called the risk to the hospital ship’s crew “low,” because of the protocols were already in place.

“We were prepared with a contingency plan in case we received patients that later tested positive. Immediately upon arrival the patients were isolated while awaiting the test results,” the official added.

Another official pointed out this was why the hospital ship did not want to fill all 1,000 beds on board too quickly because the risk of the virus coming on board is so great. –Fox News

The crew of Comfort is now in the process of sanitizing areas in which the patients were housed, while all US Navy medical personnel were wearing personal protective equipment (PPE).

“We have infectious disease specialists on board as well,” an official told Fox.

“The Comfort has infection control procedures that are followed just like hospitals ashore. Our medical experts on board are well prepared for cases like this, and have taken the appropriate precautionary measures. The patients were isolated and received care aboard the ship while working to transfer the patients as soon as practical to the Javits Federal Medical Station, which is treating COVID-19 patients. The Comfort is capable of continuing its mission,” said Cmdr. Ashley Hockycko – a spokeswoman for the US Second Fleet.

Coronavirus has claimed just over 65,000 lives worldwide as of this writing, of which more than 3,000 were in New York.

Via Al-Masdar News,

On Friday the foreign ministers of the NATO nations held a teleconference to discuss the ongoing COVID-19 outbreak and their contingencies; however, the meeting would apparently turn sour when Greece and Turkey traded accusations over Ankara’s decision to open their European border to migrants, the Russian newspaper Gazeta.RU reported.

According to the publication, Turkish Foreign Minister Mevlut Cavusoglu left the virtual meeting earlier than all the other participants after disputes with Greece over migrants.

The diplomat recalled that an agreement was concluded between Ankara and the European Union in 2016, which obliged Turkey to accept about four million refugees from Syria and other countries of the Middle East, and not allow them to go to Europe.

In exchange for this, the EU promised to provide Turkey with assistance in the amount of €6 billion and provide other incentives, such as a visa-free regime for Turkish citizens. Cavusoglu stressed that the EU has not fulfilled its part of the deal.

“We advise them to think about the long term, because it is not just a matter of migration,” he said, demanding from Europe liberalization of the visa regime, updating the agreement on the customs union and strengthening the fight against terrorism.

Not long after this, Cavusoglu accused Greece of killing migrants trying to cross the common border of countries.

Refugees told ‘Europe is closed’ as tensions rise at Greece-Turkey border https://t.co/77oAPQ1VQQ

— The Guardian (@guardian) March 6, 2020

In response, Greek Foreign Minister Nikos Dendias said that Ankara’s claims are specially organized propaganda for political purposes and are fake news.

“Greece faced an organized and unprecedented attack on its border and a disinformation campaign from Turkey. The methods used by Turkey violated the values ​​of NATO. All allies have the right to call for NATO solidarity, but only if they fulfill their obligations,” the Greek diplomat emphasized, as quoted by Gazeta.RU.

Cavusoglu demanded to give him the opportunity to answer, but NATO Secretary-General Jens Stoltenberg stopped this attempt, so as not to contribute to inciting scandal online.

The Turkish Foreign Minister, in response, disconnected from the conference.

Turkish and Greek relations are at a decade-long low, as disagreements over the movement of migrants and Ankara’s oil exploration off the coast of Cyprus has put the two countries at odds.