Two Million Restaurants Worldwide At Risk Of Collapse 

Two Million Restaurants Worldwide At Risk Of Collapse 

Tyler Durden

Thu, 06/25/2020 – 22:50

After several months of a slow recovery in restaurant dining data in the U.S. and across the globe, there is absolutely no evidence of a V-shaped recovery in the food industry and suggests millions of eateries are on the brink of collapse, consulting firm Aaron Allen & Associates told Bloomberg.

“Based on our estimates, we believe up to 10% of all restaurants globally will disappear, with 20% or more also going through a restructuring process,” said founder Aaron Allen. “This is a conservative case, in our view.” 

Of the roughly 22 million restaurants worldwide, about 2.2 million are expected to shutter operations. Global restaurant traffic data via OpenTable shows little improvement in late June.

We noted, on Sunday, June 14, after months of slow improvement, restaurant traffic suddenly plunged, sliding from a -66.5% y/y decline as of June 13 to -78.8% globally. The plunge was mostly due to a sharp drop in U.S. restaurant diners, which plunged by 13% – from -65% to -78% – the biggest one day drop since the start of the shutdown in the U.S., and the second biggest one day drop on record.

Another sharp drop in U.S. restaurant traffic was noticed on Monday, June 22, due mostly because of the emergence of the second virus wave in some states, Bloomberg reports:

Cases are surging in Texas, Florida, Arizona, and in California, which on Tuesday broke its record for new cases for the fourth day in the past week. Even in New Jersey, where numbers have been falling, Governor Phil Murphy warned that the transmission rate is “beginning to creep up.”

Coronavirus cases in the U.S. increased by 35,695 from the same time Monday to 2.33 million, according to data collected by Johns Hopkins University and Bloomberg News. The 1.6% gain was higher than the average daily increase of 1.3% the past seven days. Deaths rose 0.7% to 120,913….

So with the emergence of a second virus wave in the U.S., and, in fact, cases globally are rising, slumping restaurant traffic is going to be disastrous for heavily indebted eateries betting on a reopening.

 Several bankruptcies have already been seen, including Le Pain Quotidien and Garden Fresh Restaurants, the owner of Souplantation and Sweet Tomatoes. Also, TGI Fridays and Cousins Subs have reduced their retail footprint.  

“Weaker businesses are searching for pre-Chapter 11 solutions,” said John Gordon, principal at Pacific Management Consulting Group, an eatery consultancy. “There will be many closings, particularly independents.”

Allen said the emergence of the virus could supercharge the restaurant bankruptcy wave. 

OpenTable recently warned that 25% of all U.S. restaurants would never reopen

For restaurants with the most robust balance sheets – some are finding new ways to survive, from offering substantial discounts to outside seating to curbside pickup to selling groceries. The staff has been reduced to skeleton size, and menus have been significantly trimmed. 

The survival of the fittest has transformed big chains and small restaurants’ business models to now offer selling groceries. Panera Bread and Tijuana Flats, for example, are now offering meat by the pound, milk, and veggies to customers. 

“We can almost live in between this space between meal kits and online grocery delivery,” New York-based chain Just Salad’s CEO Nick Kenner said. He estimates groceries could be a quarter of sales this year. 

Pacific Management’s Gordon said a recovery in restaurants could be seen in 2022. 

“On the whole, most quick-service restaurant brands are in fair shape, while some fast-casual and casual dining brands are still struggling,” he said. “Fine dining brands need business travel to resume before they see traffic recovery.”

With 15.6 million workers employed in the US restaraunt industry, and tens of millions worldwide, the current state of the restaraunt industry does not suggest a V-shaped economic recovery narrative for this year. 

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House Passes Policing Reform Package, Including Provision That Would End Qualified Immunity

pelosi-schumer

The Democrat-led House of Representatives passed a package of criminal justice legislation Thursday night, largely along party lines, to address nationwide protests and demands for policing reforms following the killing of George Floyd by a Minneapolis police officer last month.

By a 236-181 vote, with only three Republicans voting in favor of it, the House passed the George Floyd Justice in Policing Act. The legislation would end qualified immunity—a legal doctrine that shields cops from liability in civil rights lawsuits—establish a national registry for police misconduct, ban police chokeholds and no-knock raids in some circumstances, and limit the transfer of military equipment to state and local police departments. It would also require federal law enforcement officers to wear body cameras and to have dashboard cameras installed in their vehicles.

Ending qualified immunity has long been on criminal justice reform advocates and libertarians’ wish lists.

“Qualified immunity is a failure as a matter of policy, as a matter of law, and as a matter of basic morality,” said Robert McNamara, a senior attorney at the Institute for Justice, a libertarian-leaning public interest law firm. “For too long, qualified immunity has denied victims a remedy for violations of their constitutional rights. It’s encouraging to see Congress is finally taking steps to fix this pernicious mistake by the Supreme Court.”

Although civil liberties groups say the bill is far from perfect—they criticized provisions that would increase federal funding for state and local law enforcement—Kanya Bennett, senior legislative counsel at the American Civil Liberties Union (ACLU), said in a press release that tonight’s vote is still “the most significant action that Congress has taken on police reform in the six years that have transpired between the deaths of Michael Brown in Ferguson and George Floyd in Minneapolis.”

“Given this significant and historic moment we are in, though, Congress can and must do more,” she continued. “We can’t band-aid police with more federal dollars or take away just some of the military weapons. Congress must divest entirely from an institution that has brutalized Black people for centuries.”

However, the fate of any comprehensive policing reform, at least at the federal level, seems doomed, at least for the moment. The White House and congressional Republicans have made it clear that ending qualified immunity is off the table.

Meanwhile in the Senate, Democrats have blocked Republican’s more modest policing reform bill, the Just and Unifying Solutions to Invigorate Communities Everywhere (JUSTICE) Act, introduced by Sen. Tim Scott (R–S.C.). 

The JUSTICE Act would, among other things, increase the penalties for filing a false police report and incentivize departments to create systems to share disciplinary records with each other to stop problem officers from being rehired. Another section, the Breonna Taylor Notification Act—named after a Louisville woman who was killed in a botched no-knock raid in March—would require states to collect and report data on the use of no-knock raids.

Democrats and civil liberties groups like the ACLU say Scott’s legislation doesn’t go nearly far enough in addressing systemic problems in American policing. Republicans, however, say their bill balances the need to address problematic policing while still supporting police overall.

“The American people know you do not really want progress on an issue if you block the Senate from taking it up,” Senate majority leader Mitch McConnell (R–Ky.) said in a floor speech Thursday night. “They know that most police officers are brave and honorable and that most protesters are peaceful. And they know our country needs both.”

For the moment, both parties are at an impasse. In a press release after tonight’s vote, Rep. Doug Collins (R-Ga.), a member of the House Judiciary Committee, said Democrats’ legislation is “just another thinly veiled Democrat attempt to look like they are getting something done when we all know this bill will never become law.”

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Senators Move To Make UFO Data Public

Senators Move To Make UFO Data Public

Tyler Durden

Thu, 06/25/2020 – 22:30

Authored by Benjamin  Wilson via SaraACarter.com,

Lawmakers in the Senate Intelligence Committee are moving forward with a request that would order the Defense Department and U.S. Intelligence agencies to create a public, unclassified, collection of all information and data on “unidentified aerial phenomenon,” also known as unidentified flying objects, UFOs.

According to The NY Post, Senators recognized the existence of a “Unidentified Aerial Phenomenon Task Force” and the need for a comprehensive analysis of unidentified flying objects.

“In his report attached to the 2020-2021 Senate Intelligence Authorization Act, Florida Sen. Marco Rubio, acting chairman of the Senate Intelligence Committee, instructs the director of national intelligence, the secretary of defense and other agency heads to compile data on ‘unidentified aerial phenomenon,’” according to The Post.

Rubio and his committee expressed concern about not having a concentrated analysis of these objects — especially since it could pose a national security threat. The lawmakers agreed the findings should be public.

“The Committee understands that the relevant intelligence may be sensitive; nevertheless, the Committee finds that the information sharing and coordination across the Intelligence Community has been inconsistent, and this issue has lacked attention from senior leaders,” the report reads.

According to Politico, if passed, the Intelligence Agencies would have 180 days to craft a report for the director of national intelligence and the secretary of defense.

This decision follows the Pentagon releasing videos of these objects two months ago.

As previously reported on this news site, The Pentagon released three unclassified videos showing the U.S. Navy’s encounters with “unidentified aerial phenomena” on April 27.

“The U.S. Navy previously acknowledged that these videos circulating in the public domain were indeed Navy videos. After a thorough review, the department has determined that the authorized release of these unclassified videos does not reveal any sensitive capabilities or systems, and does not impinge on any subsequent investigations of military air space incursions by unidentified aerial phenomena,” DOD said in a statement.

The provision passed today will move to the Senate for a vote and potentially lead to greater public knowledge on UFOs.

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JPM Finds That Rising Virus Cases Are Starting To Hit Consumer Spending Again

JPM Finds That Rising Virus Cases Are Starting To Hit Consumer Spending Again

Tyler Durden

Thu, 06/25/2020 – 22:10

Two weeks ago, in the immediate aftermath of renewed fears that various sunbelt states are seeing growing coronavirus infections, we showed that restaurant booking as measured by Opentable seated diners posted its biggest daily drop on its path to gradual recovery since the lockdowns were imposed in March.

Since then there was a modest stabilization in the trend, until another sharp drop took place on Monday amid new concerns of rising cases in states such as Texas, Arizona, Florida and California.

That said, two one-day drops in the closely watched restaurant index hardly is confirmation that the economy is starting to shutdown again. While that may be true, according to JPMorgan’s tracker of spending on the bank’s own debit and credit card, the bank said today that it can now detect a relative slowdown in spending growth in recent weeks in states where the virus has begun to spread again, even if differences across states are fairly subtle so far. In some states like New York and New Jersey where new virus cases are flat or falling, JPM’s spending tracker has risen by more than 10%-pts over the last two weeks through June 21. However, in states like Arizona, Texas, Oklahoma, and South Carolina, where the virus is spreading rapidly, the tracker is up by less than 4%-pts. Still, total spending has been increasing even in these
places thus far.

JPM has also found that spending patterns from a few weeks ago have some power in predicting where the virus has spread since then. Looking across categories of card spending, the bank has found that the level of spending in restaurants three weeks ago was the strongest predictor of the rise in new virus cases over the subsequent three weeks, echoing the results last week using OpenTable data. “Card-present” restaurant spending (meaning in-person, rather than online, spending) is particularly predictive. Interestingly, higher spending in supermarkets predicts slower spread of the virus, hinting that high levels of supermarket spending are indicative of more careful social distancing in a state. For example, as of three weeks ago, supermarket spending was up 20% or more from last year’s levels in New York and New Jersey, while it was up less than 10% in Texas and Arizona.

Elsewhere in the data, JPM notes that recent rebounds in spending in states like New York have been concentrated among  Millennial and Gen Z cardholders and in card-present spending, suggesting that younger generations are leading the way in returning to normal offline life.

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Fed’s Balance Sheet Shrinks For Second Consecutive Week

Fed’s Balance Sheet Shrinks For Second Consecutive Week

Tyler Durden

Thu, 06/25/2020 – 22:08

After three months of record gains, which saw an increase of $3 trillion to $7.2 trillion, the Fed’s balance sheet has posted its second consecutive weekly decline since the start of the corona crisis according to the latest H.4.1 statement.

While not nearly as large as last week’s decline which was the largest since May 2009, the $12 billion weekly decline to $7.082 trillion was certainly notable in a time when virtually every asset class now is driven by the rise and fall of the Fed’s balance sheet.

The drop, however, was not due to a reversal or even slowdown in QE which continues almost every single day, with the Fed adding over $52 billion in Treasurys and MBS in the 7 days ended June 24, but due to a second consecutive decline in liquidity swap, which shrank by $77.5 billion to $275 billion, after a $92 billion decline in the week prior. The amount of outstanding repo agreements also declined for a second consecutive week by a modest $8.9 billion.

The total amount outstanding in the swap lines, designed to ease a surge in demand for U.S. currency in the participating banks’ jurisdictions during the early weeks of the crisis, was the lowest since early April.

Coupled with other indications of slackening demand for the Fed’s bevy of emergency liquidity facilities, the reduction in currency swap line usage is for many analysts a sign that global financial markets are returning to near-normal after being upended by the coronavirus outbreak in February and March. “We expect a more rapid decline over the coming months as the majority of the swaps will roll off,” Citigroup economists wrote in a note last Friday.

The flipside is that it also means that the system is once again seeing a shrinkage in the circulation of the world’s reserve currency, an explicit tightening in financial condition, and the adverse global impact of any macroshock will be substantially greater if and when one hits in the coming weeks.

Meanwhile, with the S&P500 closely tracking the Fed’s balance sheet in the past three months, which has served as the primary factor behind the rebound in the market, the latest weekly drop coincides with the period of heightened volatility in the past three  weeks.

The shrinkage comes at a time when the Fed’s monthly liquidity injection has been tapered to approximately $120 billion, which suggests that while the balance sheet is likely to resume growing in the next week, it will be at a more gradual pace.

It also means that for the stock market to surge from this point on – since the market is now fully disconnected from fundamentals and is simply a derivative of endogenous liquidity and fund flow – Powell will need to find another justification to expand the Fed’s QE aggressively. Something like a second wave of the coronavirus pandemic…

Finally, those keeping track of how much corporate bonds the Fed has bought, the latest total for the Fed’s Corporate Credit Facilities LLC which includes purchases of both ETFs and corporate bonds, the Fed disclosed that as of June 25, there was $8.3 billion in book value of holdings (the Fed does not break out how many actual bonds it has bought vs ETFs), and increase of $1.7 billion from the $6.6 billion a week prior. Which means that the Fed is now buying around $350MM in corporate bonds and/or ETFs every single day.

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Rail Traffic Still Down

Rail Traffic Still Down

Tyler Durden

Thu, 06/25/2020 – 21:50

By Andrew Corselli of Railway Age,

Total carloads for this week were 201,823 carloads, down 21.8% compared with the same week in 2019, while U.S. weekly intermodal volume was 255,455 containers and trailers, down 4.4% compared to 2019.

None of the 10 carload commodity groups posted an increase compared with the same week in 2019. Commodity groups that posted decreases compared with the same week in 2019 included commodities such as coal, down 26,340 carloads, to 52,392; metallic ores and metals, down 8,176 carloads, to 14,459; and nonmetallic minerals, down 6,839 carloads, to 29,478.

For the first 25 weeks of 2020, U.S. railroads reported cumulative volume of 5,306,511 carloads, down 15.7% from the same point last year; and 5,933,616 intermodal units, down 10.8% from last year. Total combined U.S. traffic for the first 25 weeks of 2020 was 11,240,127 carloads and intermodal units, a decrease of 13.2% compared to last year.

North American rail volume for the week ended June 20, 2020, on 12 reporting U.S., Canadian and Mexican railroads totaled 294,794 carloads, down 19.3% compared with the same week last year, and 334,884 intermodal units, down 6% compared with last year. Total combined weekly rail traffic in North America was 629,678 carloads and intermodal units, down 12.7%. North American rail volume for the first 25 weeks of 2020 was 15,545,401 carloads and intermodal units, down 11.9% compared with 2019.

Canadian railroads reported 72,171 carloads for the week, down 14.9%, and 64,537 intermodal units, down 7.7% compared with the same week in 2019. For the first 25 weeks of 2020, Canadian railroads reported cumulative rail traffic volume of 3,465,280 carloads, containers and trailers, down 8%.

Mexican railroads reported 20,800 carloads for the week, down 7% compared with the same week last year, and 14,892 intermodal units, down 21.5%. Cumulative volume on Mexican railroads for the first 25 weeks of 2020 was 839,994 carloads and intermodal containers and trailers, down 10.2% from the same point last year.

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“Hard To Build Bullish Argument” – Corn Futures Pummeled On Prospects Of Bumper Crop

“Hard To Build Bullish Argument” – Corn Futures Pummeled On Prospects Of Bumper Crop

Tyler Durden

Thu, 06/25/2020 – 21:30

Well, it’s that time of year when grain prices can have a quick reaction to weather forecasts and or trade data. 

Chicago corn futures dipped 2% on Thursday morning after favorable crop weather in the Midwest supported the view of a big harvest this year. Disappointing weekly U.S. exports also weighed down prices. 

Concerns about a second coronavirus wave worldwide have led to a slump in corn futures in the last several weeks. 

r/t Reuters Commodity Desk 

Wet weather and moderate heat across the Midwest have eased fears among grain traders about crop stress after a recent dry streak. 

FIGURE 1: Forecasted temperature anomaly pattern for July 2020. Temperatures with equal chances of being +/- 1 °F of normal are indicated by “=” signs, temperatures between 1-3 °F above normal are indicated by the “+” signs, and temperatures more than 3 °F above normal are indicated by the “++” signs. h/t Reuters

FIGURE 2: Forecasted precipitation anomaly pattern for July 2020. Precipitation 25-75 mm below normal of normal is indicated by a “-“, precipitation within 25 mm of normal is marked by “=”, and precipitation 25-75 mm above normal is indicated by a “+.” h/t Reuters

“With a bumper 400 million tonnes of U.S. corn crop coming our way, it is hard to build a bullish argument for corn,” Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney, told Reuters. 

Uncertainty over Sino-US relations has led to concerns about weak Chinese purchases of U.S. farm goods, including corn and soybeans. 

If readers recall, we used vessel tracking software to determine a “rush hour traffic” of bulk carriers carrying soybean were flowing from Latin America to Asia/China – while very little activity was seen in North Amerca. 

A US-China phase on tracker chart via the Peterson Institute for International Economics (PIIE) shows China’s monthly purchases of U.S. goods covered by the phase one deal is still way below commitments agreed upon in early 2020.

Iowa Soybean Association president Tim Bardole told NBC News that President Trump’s signing of the phase one trade deal had been a disappointment, and China’s commitments as per the trade deal will likely not be met. 

“At this point, it hasn’t done near what we were hoping would happen with it,” Bardole said. “At this point, we’re kind of running out of time for it to get close to the numbers we might have hoped.”

Bardole had discussions with the House Ways and Means Committee last Wednesday, U.S. Trade Representative Robert Lighthizer told him that China is expected to satisfy trade deal purchase agreements – though as we’ve noted, from day one, the commitments were unrealistic targets

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MMT: Not Modern, Not Monetary, Not A Theory

MMT: Not Modern, Not Monetary, Not A Theory

Tyler Durden

Thu, 06/25/2020 – 21:10

Authored by Jeff Deist via The Mises Institute,

Modern monetary theory (MMT) has a new champion, and a new bible. Stephanie Kelton, economics professor at SUNY Stony Brook, is the author of The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. Professor Kelton was an advisor to the Bernie Sanders presidential campaigns, and her ideas increasingly find purchase with left progressives.

It is certainly possible that she has a future either in a Biden administration or even on the Federal Reserve Board, which is a testament to how quickly our political and cultural landscape has shifted toward left progressivism. And left progressivism requires a “New Economics” to provide intellectual cover for what is essentially a political argument for painless free stuff from government.

Kelton’s essential argument, first advanced by MMT guru Warren Mosler in the 1990s, is quite simple: federal spending is unconstrained by revenue. Taxes function only to regulate demand and hence inflation; federal borrowing functions only to regulate interest rates. Sovereign government treasuries can create and spend as much money as they like to stimulate growth, especially when the economy is underperforming. If inflation spikes, taxes can be imposed to take money out of the economy.

Thus the only constraints on unlimited government spending are political. Unleashing ourselves from these “self-imposed” constraints, as Mosler puts it, is purely a matter of political will. Revenue is irrelevant to how you fund a government, so why not use government to fund the economy as a whole?

I direct readers to Dr. Bob Murphy’s recent substantive review of Kelton’s book here, as Bob does a thorough and effective job of debunking MMT and providing Austrian rebuttals to her claims regarding money, debt, and deficits. But I would make three quick points of my own:

  • MMT is not modern. Kings have used seigniorage and currency debasement for centuries to fund their endeavors, always at the expense of their subjects.

  • MMT is not monetary. It is primarily a fiscal approach to state finance, focused on tax policy as the economic accelerator and brake. Its roots predate the US Federal Reserve Bank, and in fact predate the present notion of “monetary policy.” MMT finds origins in early twentieth-century chartalism, whose proponents opposed gold in favor of paper money issued by government and mandated as legal tender. It is also a genealogical heir to the Greenbackers of the late 1800s, who believed Congress should direct the issuance of unbacked paper currency.

  • MMT is not a theory. It is accounting. In fact, it relies on an accounting subterfuge which bizarrely claims government deficits represent private (societal) surpluses. Because government is the font from which currency springs, all financial assets (denominated in that currency of issue) exist thanks to government! Thus, under “national accounting,” the more government spends, the richer we the people get. When tax revenue is $100 but government spends $120, Americans are richer by $20. And so on. This is not a theory; this is accounting gimmickry almost purposefully designed to obscure what’s really going on.

In the relentlessly circular world of MMT, government is the source of all finance and in effect all wealth. Taxpayers don’t fund government, because after all government first provides the “tokens” (currency) taxpayers need to pay their IRS bills! Government funds taxpayers, which is broadly speaking what the American left really believes. It’s a version of Obama’s “You didn’t build that” rewritten into policy.

But let’s not kid ourselves: the US federal government already finances its operations of MMT. Twenty twenty federal spending may exceed $8 trillion as Congress and the Trump administration blow the roof off the authorized $5 trillion budget with COVID relief bills. More than half of that amount, maybe as much as $4 trillion, will be “deficit financed”—a nice way of saying not financed by tax revenue. This is a first in American history, to put it mildly.

This $4 trillion will not simply issue forth from Treasury Department printing machines, as Kelton would prescribe, but the effect is the same: the Treasury issues debt to cover the shortage, which the “public” buys, implicitly understanding that the Fed will always provide a ready market for such debt. And where does the Fed get the money to buy Treasurys? It creates it from nothing, in Keltonite fashion.

Chicagoites, market monetarists, supply-siders, NDGP targeters, and other free market proponents frankly don’t have much to say about MMT. They already accept the premise of “monetary policy,” i.e., that government or central banks should issue and control money in society. They already accept treating the money supply and interest rates as forms of policy tools. They already accept deficits and taxes as methods to prime or slow the economy. So although they may object to how Ms. Kelton wants to use money politically, they can’t much object to whether money is used politically.

Kelton deserves credit for writing a book aimed at lay audiences instead of for her peers in academic economics. Unlike most of those peers, she seems genuinely interested in helping us understand how the world works. And unlike most left progressive academics, she also seems interested in helping average people improve their lot in life. Perhaps most importantly, she does not display the kind of contempt and anger toward Red State America we see from the Paul Krugmans and Noah Smiths.

It’s easy for those of a free market bent to dismiss MMT out of hand, but the impulse to create something from nothing resides deep in the human psyche, and politics is where this impulse finds expression. We should not underestimate the allure of MMT in the midst of our current upheavals, because it appears to make possible every left progressive program: unlimited public works and federal jobs, useless and uneconomic green energy schemes, reparations for black Americans, Medicare for All, free college, free housing, and a host of others. MMT is the perfect economic proposal for those who sincerely and deeply believe wealth simply exists in America, and will continue to exist, regardless of incentives. All we need to do is figure out how to more fairly divvy it up—and so why not through government spending?

The promise of something for nothing will never lose its luster. MMT should be viewed as a form of political propaganda rather than any kind of real economics or public policy. And like all propaganda, it must be fought with appeals to reality. MMT, where deficits don’t matter, is an unreal place.

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This Map Shows How The Coronavirus Spread Across The US

This Map Shows How The Coronavirus Spread Across The US

Tyler Durden

Thu, 06/25/2020 – 20:50

Working with a team of researchers, the New York Times has put together a comprehensive map of how the coronavirus spread from China and Europe to the US that, ironically, helps to undermine some of the paper’s own criticisms of President Trump’s decision to close the borders to travelers from China, while confirming that the initial delays in testing caused by faulty CDC tests and what has been described as “bureaucratic arrogance” greatly contributed to the spread.

Still, the picture painted of the American response to the virus isn’t pretty. Again and again, the states just didn’t act quickly enough to stop the virus from taking root in their communities. Outside the northeast and California, most moved far too slow. And even those states just named didn’t act swiftly enough.

The NYT’s narrative starts in early February, as the first known cases arrived in Seattle and Chicago.

By mid-February, there were only 15 known coronavirus cases in the United States, all with direct links to China. It was around then that President Trump triumphantly declared that the 15 cases would soon fall back to zero.

The problem is, by mid-February, there were already thousands of infections spreading across the country.

Unfortunately, by this point, the American response was weeks behind, per the NYT, as it would take 8 more weeks for testing capacity to start ramping up, and 10 in total after that until most states achieved widespread availability for tests. Still, NYT acknowledges that the China travel ban was a “partial” success. The problem is it wasn’t enough, and Trump should have listened to several advisers who were urging him to close travel to the EU. By the time Trump imposed the restrictions on China Feb. 2, only a few cases had made it to the US. but the decision to let the EU off the hook was a mistake.

But by the end of February, the flow of infected travelers had turned into a wave, as more than 1,000 infected patients are believed to have arrived in the US by the end of February, each kicking off a mini-flareup of their own.

By March 1, the number of infections had doubled 4 times as the exponential rate of spread was in full swing.

As President Trump pressed his administration not to be too ‘alarmist’ about the outbreak, he continued to encourage Americans to go about their lives, and they did, spreading the virus across the country as millions continued to travel.

The first sign that the outbreak was badly out of control, and that “community spread” was already well under way, arrived in late February when the first patient who hadn’t traveled to China was identified as infected om Seattle. Infections from this first community spread case in Seattle eventually spread to 14 states.

By March 1, when NYC Mayor Bill de Blasio was encouraging New Yorkers to “go about their lives as normal”, there were already more than 1,000 infected people roaming around the city.

Then more than 5,000 contagious travelers had left the city by mid-March, when the ‘stay at home’ orders in the Bay Area were first handed down, inspiring the lockdowns. Traveling New Yorkers spread the virus as far as New Orleans, where that city’s outbreak, which kicked off the outbreak in Louisiana more broadly, was later tied back to NYC.

Tracking so called “signature” mutations in genetic material of viral strains isolated in sick patients has allowed scientists to assemble a rough timeline, while providing more evidence to help them trace the spread of the virus around the country. By the time Trump blocked travel from the EU by mid-March, the restrictions were mostly useless; the virus was already widespread in the US as the Louisiana outbreak helped seed infections across the South.

A man returning from a basketball tournament in Tucson Ariz introduced the virus to the Navajo Reservation, the largest in the country.

Cellphone location data shows Americans didn’t start to curtail their movements until around March 10.

For more, the rest of the NYT’s project can be found here.

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How Do You Say (Way) Off-Balance-Sheet In Chinese?

How Do You Say (Way) Off-Balance-Sheet In Chinese?

Tyler Durden

Thu, 06/25/2020 – 20:30

Authored by Jeffrey Snider via Alhambra Investments,

Where central banks are concerned, it’s not conspiracy theory so much as the term “off-balance sheet.” There’s a reason Enron kicked off that mass-migration into the footnotes. For monetary officials, there’s the choice to be like Montagu Norman and what he thought of good practice at central banks. Silence.

For years, the Chinese have tried it the other way. Big Mama typically left huge muddy footprints wherever its clumsy feet might land. It certainly was that way back in 2015 when Euro$ #3 was strangling CNY and thus confusing the hell out of everyone over here (and more than a few over there):

By far the most openly audacious intervention came starting in March 2015. China’s currency for reasons the mainstream just couldn’t fathom had been falling and unsteady for over a year. At the same time, the Chinese economy had shown equally unsteady signs, the accumulation of shocking weakness.

There was no way Communist authorities would allow it go any further. The PBOC intervened first in February 2015 with a “double shot”, rate and RRR cuts, followed in March by a CNY exchange rate that looked like it was purposely put under control. Many were relieved by what they saw as Big Mama very publicly and skillfully planting a green shoot at just the right time.

No dice; the whole thing blew up later that summer, making August 2015 memorable for all the wrong reasons (and people today still call falling currencies “stimulus”).

Here’s the thing, though. While that was taking place, you could tell the PBOC was involved because of its own balance sheet figures. Each month SAFE would first report lower levels of foreign “reserves” which then got confirmed by the PBOC’s balance sheet lines, a central bank system which begins and often ends at the number for forex.

What’s going on now is a mockery – or an intentional shift in programming. Both SAFE and the PBOC report that foreign assets have been stable; in terms of the monetary base of the latter, suspiciously stable. I mean, hardly any variation month to month, a trend that’s gone on so long now it’s really year to year.

That can’t be an organic result, not in a dynamic world particularly the one we inhabit being ravaged by any number of potentially titanic forces that so often seem to get their start in this very country. What I’m saying is that there is almost certainly effort to the straight line (not the first time, either).

But what, exactly, is going on isn’t showing up anywhere. Not even on the one or two lines where in the past we could link them to hypothetical backdoor activities (the ubiquitous and useful “other”).

The ticking clocks became too noticeable and obvious? I think so; as did the decline in visible “reserves” which created the opposite effect of what was intended, amplifying negative monetary pressures market-wide (the nightmare scenario). The PBOC, unlike Western Economists, may just have found out that following the orthodox textbook where these things (the basics like money and dollars) are concerned will get your economy killed.

Reserves aren’t insurance against a dollar shortage, they are confirmation you’re the big target. Maybe better not to so blatantly advertise your dollar struggle?

Purposefully or not, a straight line isn’t expansion, either. And that still means the same thing in China: very little room for monetary growth. In what to me looks like more Xi vs. Li, currency growth has been bumped up for COVID-19 and the shutdown depression; bank reserves have not.

Quality growth in the real economy as opposed to quantity growth led by flooding banks.

Eurodollar University’s Making Sense; Episode 14: LI V XI II (Li versus Xi, The Rematch)

Though it may be more difficult to see it as it unfolds because of the PBOC’s sideways baseline, what I wrote in the middle of 2015 might still apply today especially where CNY remains concerned:

Even the Chinese yuan has become far more stable despite the rash of nasty economic indications and even more uncertainty about what the PBOC might or might not do about it. In other words, forget what is happening in China, the yuan is all about the “dollar” in the purest financial sense.

Especially when there are, curiously, no more muddy footprints at all.

via ZeroHedge News https://ift.tt/2B42sCm Tyler Durden