Ignore Dismal Retail Sales Report: Latest Daily Spending Data Shows 2020 Is Now Higher Than 2019

Ignore Dismal Retail Sales Report: Latest Daily Spending Data Shows 2020 Is Now Higher Than 2019

Tyler Durden

Fri, 05/15/2020 – 10:49

One month ago, when looking at the March retail sales report – which only captured the last two weeks of the US shutdown- and comparing it to the Bank of America real-time credit and debit card spending data, we concluded that “Retail Sales Were Bad; The Reality Is Catastrophic.”

Fast forwarding to today, when this morning the Commerce Dept published its snapshot for retail spending in April, which as we duly noted saw the biggest drop on record, with a total collapse in auto and clothing sales.

However, in a mirror image of last month, while the government’s April “snapshot” report was indeed terrifying, a daily series tracking day-to-day outlays shows that consumer spending bottomed in mid/late-April and has since rebounded vigorously. As Bank of America writes in its latest consumer spending report which tracks BofA credit and debit car spending, “the daily data show meaningful improvement in spending into May, driven by the lower income population. Total card spending is now running at a pace of -10% yoy over the 5-day period of May 3- May 7, a big shift from the low of -36% yoy during the last 5 days of March.

And in a remarkable reversal, retail sales ex-auto spending is now actually increasing, running at a 1% yoy rate over the same 5-day period.”

There are two critical reasons for the improvement in consumer spending: stimulus payments and phased reopening of the economy. Stimulus payments started to filter in on April 15th through direct deposits which was followed by physical checks.

These have boosted incomes for the lowest population quintiles, which have the highest propensity to spend, and that’s precisely what they are doing, as retail spending surges led by those making less than $20K.

In addition, an increasing number of unemployed have successfully filled jobless claims. This combined stimulus has helped to backstop income and make people more confident about the future, according to BofA, and sure enough one can see that in the spending data.

Meanwhile, the impact from the reopening is more recent – we zero in on spending in GA and TX given that both states have begun the reopening process. Spending at beauty salons in GA averaged -46% yoy between May 1- 7th, up from the low of -96% in the beginning of April (TX didn’t open beauty salons until May 8th). Both states also saw a pickup in spending at restaurants and department stores.

Looking at overall discretionary spending by major Metropolitan Statistical Area (MSA), we found the biggest relative improvement over the week in Dallas, Atlanta and Houston.

The picture is more mixed when looking at spending on discretionary goods, where the strong rebound in furniture store spending continues, offset by weaker restaurant, transit and department store trends.

Despite the overall recovery, spending on the “socially intensive” travel and entertainment categories remains near all time lows.

However, no matter what the trends are “out there”, one persistent winner is online spending, which continues to grow by leaps and bounds, as the following series of charts shows.

It appears that not even a global viral pandemic can keep the US consumer down even during the biggest economic shock in history.

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Job Openings Plunge Most On Record Amid Mass Layoffs, Plunge In Hiring

Job Openings Plunge Most On Record Amid Mass Layoffs, Plunge In Hiring

Tyler Durden

Fri, 05/15/2020 – 10:30

With the BLS’s JOLTs, or job openings and labor turnover, survey coming in with an extra month delay, we already knew that the March data would be dismal (especially considering the total implosion in April when over 20 million people lost their jobs), and sure enough that’s what happened when the BLS reported that in March the number of job openings plunged from an upward revised 7.004 million to just 6.191 million, the 813K monthly drop the largest on record going back to 2000.

The largest declines in job openings took place in accommodation and food services (-258,000) and durable goods manufacturing (-82,000).

As a result of the surge in unemployed people in March and the plunge in job openings, the series of 24 consecutive months in which there were more job openings than unemployed workers is now officially over, with 949K more unemployed workers than there are job openings, the biggest gap since May 2017.

Keep in mind this is from March; the April data will be far, far worse.

Also far worse will be the number of hires, which in March dropped by 658K, from 5.864 million to 5.206 million, something which one can argue was long overdue considering the persistent outperformance of this series relative to the rolling 12 month payroll change. Hires decreased in accommodation and food services (-344,000), health care and social assistance (-87,000), and durable goods manufacturing (-33,000). Hires increased in federal government (+8,000).

And while we wait for the true shocker of a JOLTs report next month, there was one series that hinted at just how ugly it will get, when the number of layoffs soared to 11.372 million, up by 9.5 million in one month, and the biggest monthly total on record. . The number of layoffs and discharges increased for total private to 11.2 million (+9,445,000) and for government to 175,000 (+80,000). The layoffs and discharges level increased significantly in all but one industry, with the largest increases in accommodation and food services (+4,136,000) and retail trade (+908,000)

And, inversely, with everyone getting fired, virtually nobody had any interest in voluntarily quitting and such the number of quits tumbled by the most ever, from 3.436MM to 2.782MM, the lowest level since 2015. Total private quits fell to 2.6 million (-640,000), while government edged down to 177,000 (-14,000). Quits decreased in a number of industries, with the largest decreases in accommodation and food services (-145,000) and retail trade (-137,000).

 

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Government Handouts Spark Upside Surprise In Sentiment But Hope Tumbles

Government Handouts Spark Upside Surprise In Sentiment But Hope Tumbles

Tyler Durden

Fri, 05/15/2020 – 10:09

Having plummeted in April, UMich consumer sentiment was expected to deteriorate further in preliminary May data as the reality of nationwide lockdowns sink in to the American psyche. However, it appears the stock market’s gains prompted some gains as bailouts hit but hope continued to tumble…

  • Current economic conditions index rose to 83.0 vs. 74.3 last month

  • Expectations index fell to 67.7 vs. 70.1 last month

Source: Bloomberg

Confidence inched upward in early May as the CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes:

Consumers were asked to identify their top concerns about the pandemic: was it the threat to their health, the required social isolation, or the impact on family finances? The health threat dominated in both months, cited by 61% in April and 57% in May. The original hypothesis was that as their primary concerns shifted from health to finances, consumers would become less accepting of constraints on reopening the economy. 

Those that cited damages to their finances as their top concern fell to 17% in May from 22% in the prior month. Surprisingly, it was greater concerns about social isolation that increased, cited as the top concern by 21% in May up from 14% in April. While these shifts were quite small, they indicate the growing costs of social isolation and its potential to shift opinions about reopening the economy.

 

Somewhat surprisingly, Democrats confidence improved as Republicans faded further…

Source: Bloomberg

Buying Conditions rebounded modestly…

Source: Bloomberg

The percentage of Americans who have a positive view of the stock market in the next 12 months fell to its lowest sicne June 2016…

Source: Bloomberg

Finally, bearing all that in mind, a worsening economy was reported by 95% of all consumers, only below the peak of 96% in February 2009.

Thanks to the media!!

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Josh Trank’s Capone Is a Portrait of a Director in Meltdown

There are two performances of note in Capone, director Josh Trank’s truly strange, mostly unsuccessful portrait of a syphilitic Al Capone as he suffers a physical and mental breakdown. 

The first is Tom Hardy’s turn as the title character, which sails far past parody and ends up in fascinatingly bizarre cartoon territory. With his facial appliance and bug-eyed looks, his ostentatious pinstripe suits and luxury pajama-sets, Hardy looks more like a Dick Tracy villain than a real historical person. By the end of the film, he’s chomping a carrot instead of a cigar, and blasting away with a solid gold Tommy gun. And he sounds even less human than he looks. 

Hardy has frequently given his characters unusual, difficult-to-understand voices—the raspy croak of Bane in The Dark Knight Rises, the lumbering roar of Max Rockatansky in Fury Road—but here he delivers an unsurpassed level of unintelligibility. He chokes and gurgles and hacks out his dialogue; it’s possible there’s more phlegm than clearly decipherable language. Even when you can understand the lines, the particular words become almost meaningless: They are barked and grunted as physical emanations of confusion and rage, not sentences meant to communicate particular information. Every line of dialogue is rendered into a spittle-tinged “Eeeeuuuurgghhuuughrrgh.” Imagine listening to Miss Piggy attempting to shout paranoid nonsense in Italian while being violently choked to death for 100 minutes, and you’ll have some idea what it’s like to listen to Hardy in Capone

I can’t entirely say I enjoyed it, but it’s clear Hardy put a lot of effort into the act. Which brings us to the other performance—director Josh Trank’s. 

The young director broke onto the scene with 2012’s Chronicle, a cleverly constructed, modestly budgeted riff on the superhero origin story. It was a hit. Trank was not yet 30 years old, but he was set to become a major force in Hollywood, signing a deal to make a Star Wars film and landing at the helm of a major superhero production. But his 2015 reboot of Fantastic Four was an unmitigated disaster, plagued by huge conflicts both on and off the set, where Trank reportedly isolated himself from the rest of the cast and crew. Those battles broke into public view when, just days before release, he tweeted, “A year ago I had a fantastic version of this, and it would’ve recieved [sic] great reviews. You’ll probably never see it. That’s reality though.”

It’s never a great sign when a director publicly condemns his own film. Somehow, Fantastic Four managed to be even worse than almost anyone expected, earning a well-deserved reputation as one of the worst studio blockbusters in recent history. Trank’s Star Wars deal fell apart, and he was branded as difficult to work with. Once a hot Hollywood property, Trank was on the outs.

Capone, then, represents a comeback of sort, or at least an attempt at one. As with Hardy’s bizarrely over-the-top portrayal, Trank, who wrote, directed, and edited the film, has clearly put in some effort. There’s a dour mood to the production, a looming sense of the ominous. At times it becomes almost dreamlike, especially when Twin Peaks‘ Kyle MacLachlan appears as Capone’s doctor. Trank’s camera seems to haunt Capone’s gaudy South Florida estate, and he occasionally cuts away from the action to languorous shots of the swamp and sky. He stages elaborate hallucinatory sequences, a mixture of grandiose memory and paranoid confusion, as if to take viewers inside Capone’s head.

Trank, who spent much of the last five years in director jail, clearly sees a bit of his own story in the aging, post-prison gangster. Capone, whose rise to power peaked in his late twenties and early thirties, may have been a bad man, but he was a somebody, a boss who ran things and made an impact—all while he was very young. And at what should have been the peak of his life, he was put in jail. He came out the other side distraught, confused, paranoid and bitter, sometimes hurting the people he loved the most. Who couldn’t relate to that?

Trank seems to sees this as a story that people will connect with, but despite his technical flourishes, it’s told in such a halting, discursive manner, with so little driving conflict that it’s likely to leave most viewers cold. The movie reveals almost nothing about Capone or his motivations, nothing about the particulars of his criminal enterprises or the Prohibition era that enabled his brand of violent terror. It probably tells us more about Trank himself, and the perils of rapid Hollywood success, than it does about the storied gangster it’s putatively about. It’s a portrait of a director in meltdown. 

That Capone is garnering much attention at all is probably due, at least in part, to the fact that coronavirus lockdowns have wiped Hollywood’s release schedule clean. Normally this would be the start of the summer movie season, but the lack of major releases means that more attention is paid to oddities like this or last week’s Arkansas, another interesting, modestly budgeted failure. I didn’t care for either, yet I’m glad to have both available to watch at home: Weird, unsuccessful, self-indulgent movies are far better than no movies at all.

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Remy: Surfin’ USA (Beach Boys Lockdown Parody)

Remy discovers the dangers of exercising alone.

Written and performed by Remy. Music tracks, mastering, and background vocals by Ben Karlstrom. Video produced by Meredith and Austin Bragg.

LYRICS:
If you go out on the ocean
Across the USA
And you’re wearing a swim shirt
‘Cuz of your scrawny weight (it’s for the sun, I swear)

Well, uh, you just might notice
The police in your wake
Cuz it’s illegal to be surfing
In the USA

They’re catching them out paddle boarding
Letting their children play
While they’re releasing this guy
A logical checkmate

You’re out in nature alone now
No one in six-foot range?
Well it’s illegal to be surfing
In the USA

If only you had flashed some children
It’d be your release date!
But you’re going to jail for surfing
In the USA

You’ve been distancing for months now
To keep the spread rate down
The only places you’ve been going
Are where there are no crowds

You’re making sacrifices
For your community
Now put your hands on your head because you are surfing
In the USA

He’s helping the flattening the curve now
He’s exercising alone
Rocking a super baggy swim shirt
To hide his muscle tone (I said it’s for the sun)

If only you had flashed some children
It’d be your release date!
But you’re going to jail for surfing
In the USA

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Josh Trank’s Capone Is a Portrait of a Director in Meltdown

There are two performances of note in Capone, director Josh Trank’s truly strange, mostly unsuccessful portrait of a syphilitic Al Capone as he suffers a physical and mental breakdown. 

The first is Tom Hardy’s turn as the title character, which sails far past parody and ends up in fascinatingly bizarre cartoon territory. With his facial appliance and bug-eyed looks, his ostentatious pinstripe suits and luxury pajama-sets, Hardy looks more like a Dick Tracy villain than a real historical person. By the end of the film, he’s chomping a carrot instead of a cigar, and blasting away with a solid gold Tommy gun. And he sounds even less human than he looks. 

Hardy has frequently given his characters unusual, difficult-to-understand voices—the raspy croak of Bane in The Dark Knight Rises, the lumbering roar of Max Rockatansky in Fury Road—but here he delivers an unsurpassed level of unintelligibility. He chokes and gurgles and hacks out his dialogue; it’s possible there’s more phlegm than clearly decipherable language. Even when you can understand the lines, the particular words become almost meaningless: They are barked and grunted as physical emanations of confusion and rage, not sentences meant to communicate particular information. Every line of dialogue is rendered into a spittle-tinged “Eeeeuuuurgghhuuughrrgh.” Imagine listening to Miss Piggy attempting to shout paranoid nonsense in Italian while being violently choked to death for 100 minutes, and you’ll have some idea what it’s like to listen to Hardy in Capone

I can’t entirely say I enjoyed it, but it’s clear Hardy put a lot of effort into the act. Which brings us to the other performance—director Josh Trank’s. 

The young director broke onto the scene with 2012’s Chronicle, a cleverly constructed, modestly budgeted riff on the superhero origin story. It was a hit. Trank was not yet 30 years old, but he was set to become a major force in Hollywood, signing a deal to make a Star Wars film and landing at the helm of a major superhero production. But his 2015 reboot of Fantastic Four was an unmitigated disaster, plagued by huge conflicts both on and off the set, where Trank reportedly isolated himself from the rest of the cast and crew. Those battles broke into public view when, just days before release, he tweeted, “A year ago I had a fantastic version of this, and it would’ve recieved [sic] great reviews. You’ll probably never see it. That’s reality though.”

It’s never a great sign when a director publicly condemns his own film. Somehow, Fantastic Four managed to be even worse than almost anyone expected, earning a well-deserved reputation as one of the worst studio blockbusters in recent history. Trank’s Star Wars deal fell apart, and he was branded as difficult to work with. Once a hot Hollywood property, Trank was on the outs.

Capone, then, represents a comeback of sort, or at least an attempt at one. As with Hardy’s bizarrely over-the-top portrayal, Trank, who wrote, directed, and edited the film, has clearly put in some effort. There’s a dour mood to the production, a looming sense of the ominous. At times it becomes almost dreamlike, especially when Twin Peaks‘ Kyle MacLachlan appears as Capone’s doctor. Trank’s camera seems to haunt Capone’s gaudy South Florida estate, and he occasionally cuts away from the action to languorous shots of the swamp and sky. He stages elaborate hallucinatory sequences, a mixture of grandiose memory and paranoid confusion, as if to take viewers inside Capone’s head.

Trank, who spent much of the last five years in director jail, clearly sees a bit of his own story in the aging, post-prison gangster. Capone, whose rise to power peaked in his late twenties and early thirties, may have been a bad man, but he was a somebody, a boss who ran things and made an impact—all while he was very young. And at what should have been the peak of his life, he was put in jail. He came out the other side distraught, confused, paranoid and bitter, sometimes hurting the people he loved the most. Who couldn’t relate to that?

Trank seems to sees this as a story that people will connect with, but despite his technical flourishes, it’s told in such a halting, discursive manner, with so little driving conflict that it’s likely to leave most viewers cold. The movie reveals almost nothing about Capone or his motivations, nothing about the particulars of his criminal enterprises or the Prohibition era that enabled his brand of violent terror. It probably tells us more about Trank himself, and the perils of rapid Hollywood success, than it does about the storied gangster it’s putatively about. It’s a portrait of a director in meltdown. 

That Capone is garnering much attention at all is probably due, at least in part, to the fact that coronavirus lockdowns have wiped Hollywood’s release schedule clean. Normally this would be the start of the summer movie season, but the lack of major releases means that more attention is paid to oddities like this or last week’s Arkansas, another interesting, modestly budgeted failure. I didn’t care for either, yet I’m glad to have both available to watch at home: Weird, unsuccessful, self-indulgent movies are far better than no movies at all.

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via IFTTT

Remy: Surfin’ USA (Beach Boys Lockdown Parody)

Remy discovers the dangers of exercising alone.

Written and performed by Remy. Music tracks, mastering, and background vocals by Ben Karlstrom. Video produced by Meredith and Austin Bragg.

LYRICS:
If you go out on the ocean
Across the USA
And you’re wearing a swim shirt
‘Cuz of your scrawny weight (it’s for the sun, I swear)

Well, uh, you just might notice
The police in your wake
Cuz it’s illegal to be surfing
In the USA

They’re catching them out paddle boarding
Letting their children play
While they’re releasing this guy
A logical checkmate

You’re out in nature alone now
No one in six-foot range?
Well it’s illegal to be surfing
In the USA

If only you had flashed some children
It’d be your release date!
But you’re going to jail for surfing
In the USA

You’ve been distancing for months now
To keep the spread rate down
The only places you’ve been going
Are where there are no crowds

You’re making sacrifices
For your community
Now put your hands on your head because you are surfing
In the USA

He’s helping the flattening the curve now
He’s exercising alone
Rocking a super baggy swim shirt
To hide his muscle tone (I said it’s for the sun)

If only you had flashed some children
It’d be your release date!
But you’re going to jail for surfing
In the USA

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The ACLU Sues To Stop Rules That Strengthen Due Process

The ACLU vs. due process. If you were looking for more evidence that the American Civil Liberties Union (ACLU) has been losing its principled approach to civil liberties, look no further: The group has filed suit to thwart Education Secretary Betsy DeVos’s recently proposed reforms to bolster due process protections for students accused of sexual misconduct.

“DeVos has discarded decades of [the Department of Education’s] experience addressing sexual harassment and assault by promulgating regulatory provisions that sharply limit educational institutions’ obligations to respond to reports of sexual harassment and assault,” wrote the ACLU in its lawsuit. “If allowed to be implemented at educational institutions nationwide, these provisions will make the promise of equal educational opportunities irrespective of sex even more elusive. This is true for all students, including students of color, LGBTQ students, and students with and without disabilities, in grade school, high school, and higher education.”

The lawsuit frequently asserts that marginalized students will suffer under the new rules, but it never acknowledges that students of color were disproportionately harmed by the old rules. White woman accuses black man of rape; black man is expelled was a distressingly common series of events under the old regime—one that might have invited sympathy from an older model of the ACLU, given the organization’s historic concern that racism in the criminal justice system has led to disparately harsh outcomes for black people.

Not this time. To the extent the lawsuit addresses racism, it uses it as a cudgel to break apart DeVos’s carefully considered revisions to some Obama-era rule changes. The lawsuit frequently notes—as if this is some trump card that should override the new protections—that there is now a different standard for allegations of sex-based discrimination than there is for race-based discrimination on campuses:

The newly issued Rule, however, includes several provisions that are contrary to both the language and spirit of Title IX [the federal statute that governs sexual misconduct in schools], and depart significantly not only from consistent past practice, but create a double standard, in which educational institutions have dramatically different obligations to respond to harassment based on sex, on the one hand, and race, national origin, and disability on the other. Despite issuing a 2,000 page “preamble,” [the Department of Education] never adequately explains why it is treating sexual and racial/national origin/disability harassment differently, despite similar statutory prohibitions. This double standard will have a devastating effect on survivors of sexual harassment and assault and their educations.

It would be one thing if the ACLU’s complaint was that due process protections for students accused of racial harassment are insufficient, given the stronger protections for those accused of gender-based harassment. But no: The organization wants the protections to be equally thin.

Indeed, the lawsuit takes aim at one of the most important aspects of the reforms: mandatory reporting. Under the new rules, universities do not have to initiate a formal Title IX investigation unless the alleged victim requests one. (In K–12, investigations are still mandatory.) A student who finds herself the victim of misconduct can now confide in a university employee—a supportive teacher or a coach—without worrying the matter will immediately escalate into formal and adversarial adjudication. Many victims do not want their assailants investigated, or to go through the steps that it would take have them sanctioned. They want to be heard, supported, and counseled. Several Title IX lawsuits have involved scenarios where the university conducted an investigation that was contrary to the victim’s wishes.

“Sexual harassment and assault have no place in our schools,” declared the ACLU in its press release. “Federal law imposes obligations on schools to make sure that’s the case. Students shouldn’t have to jump through hoops just to report abuse.”

Under the new rules, the “hoop” is a Title IX official. Report misconduct to the official, and an investigation begins. For victims who wish to begin formal adjudication, this hardly seems like an unreasonable requirement.

This is damning with the faintest of praise, but it’s a relief the ACLU is refrains from taking aim at DeVos’s requirement that Title IX investigations involve hearings where attorneys or representatives for both parties can question each other. Still, the fact that the lawsuit exists at all is deeply troubling. This is an organization once known for refusing to betray its principles, no matter how unsympathetic the person whose rights are being violated. (One wonders what the new ACLU would do if a member of the Westboro Baptist Church enrolled at a university and began shouting one of the church’s crude “God hates X” slogans at a person belonging to a group protected under Title IX.)

Compare the actions taken by the ACLU on this front with the stance it took on victims’ rights vis a vis Marsy’s Law:

Marsy’s Law is premised on the notion that victims should have “equal rights” to defendants. This opening salvo is a seductive appeal to one’s sense of fairness. However, the notion that victims’ rights can be equated to the rights of the accused is a fallacy. It ignores the very different purposes these two sets of rights serve.

Victims’ rights are not rights against the state. Instead, they are rights against another individual. The Marsy’s Law formula includes the rights to restitution, to reasonable protection, and to refuse depositions and discovery requests, all of which are enforced against the defendant. Such rights do nothing to check the power of the government. In fact, many of the provisions in Marsy’s Law could actually strengthen the state’s hand against a defendant, undermining a bedrock principle of our legal system—the presumption of innocence.

This risk further underscores one of the overarching concerns about Marsy’s Law: It pits victims’ rights against defendants’ rights. Creating such a conflict means that defendants’ rights may lose in certain circumstances. This result accepts that defendants’ rights against the state will be weakened or unenforced in some cases, potentially at a significant cost to constitutional due process. In other words, the chances that an innocent person could be convicted of a crime they did not commit could potentially increase. The proponents of Marsy’s Law may not intend for this outcome, but nothing in their formula prevents it.

So much for that.


CORONAVIRUS QUICK HITS

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Watch: Gaffes Pile Up During Bumbling Biden “Virtual Roundtable”

Watch: Gaffes Pile Up During Bumbling Biden “Virtual Roundtable”

Tyler Durden

Fri, 05/15/2020 – 10:00

Presumptive 2020 Democratic presidential candidate Joe Biden continues to struggle through media appearances where he consistently has trouble communicating basic stances and policies, or even articulating coherent sentences for that matter, teleprompter or not.

Of course, as we’ve highlighted multiple times things get drastically worse any time he has to field questions not specifically scripted, making it deeply awkward for the mainstream media interviewers who seem desperate to prop him up as the only “serious” candidate, not to mention raising serious questions of the sharpness of the 77-year old’s mental faculties.

On Thursday afternoon Biden held a “virtual roundtable” despite what seems a past half-year of his team finding any excuse possible to keep him away from interacting with the public, given the number of times things go horribly wrong into hilarity and embarrassment

From nearly the beginning of the event, Biden made bizarre and confused tongue-tied claims, saying:

“We’re … in the middle of a pandemic that has cost us more than 85,000 jobs as of today. Lives of millions of people. Millions of people. Millions of jobs. You know, and we’re in a position where, you know we just got new unemployment insurance, this morning, uh, numbers — 36.5 million claims since this crisis began.”

Currently there are a little over 300,000 deaths from COVID-19 globally, and over 85,000 in the United States. It’s hard to know exactly what Biden was trying to say, considering too he references “unemployment insurance… uh, numbers”. 

The Daily Mail describes of his switch-up on the numbers, something he didn’t seem aware he was doing:

And the self-proclaimed ‘gaffe machine’ did little to mitigate those apprehensions during a monologue about soaring unemployment levels on Thursday, in which he wrongly claimed 85,000 jobs have been lost in the US as a result of COVID-19, and millions of Americans have died

The former Vice President appears to have got his numbers confused. In reality, at least 85,000 Americans have died, while  36.5 million have lost their jobs.

Democrats might prefer that their presidential hopeful front-runner be hidden away somewhere until the general election, given that the more he talks the more it’s impossible to ignore what’s clearly not just the usual gaffes and Bidenisms, but which actually raise questions of cognitive capacities and potential senility.

Likely the Dem party bosses simply hope they can put a warm body in the White House after next November while they write the script, but this too could be overreaching given Biden at this point seems to struggle even when reading off a teleprompter.

* * *

As for Thursday’s roundtable  in consolation we can say at least there was no “lying dog-faced pony soldier” moment…

via ZeroHedge News https://ift.tt/2T6dr3G Tyler Durden

JC Penney Shares Halted As Bankruptcy Filing Looms

JC Penney Shares Halted As Bankruptcy Filing Looms

Tyler Durden

Fri, 05/15/2020 – 09:44

JC Penney shares have been halted Friday morning just minutes after the open as the company is widely expected to file for Chapter 11 bankruptcy protection.

We have been closely following the trials and tribulations of JCP, Neiman Marcus and other retailers who have filed for bankruptcy or are expected to soon file, as the coronavirus outbreak delivers the final blow toppling over the house of cards of junk corporate debt that has weighted down these businesses. Last night, NBC News, CNN and others reported that JCP’s filing was expected during the next day or so.

In anticipation of the filing, the New York Times published a story last night (appearing in Friday’s paper) highlighting one of our favorite themes: the role of Private Equity in bringing these retail giants to their knees by loading them down with debt and siphoning off money that could have been reinvested. JC Penney and its peers have been widely criticzed for failing to invest in their online platform, and developing more coordinated sales strategies allowing consumers to blend e-commerce with brick-and-mortar.

Some of JC Penney’s most liquid bonds were trading at roughly 6 cents on the dollar Friday morning.

As the NYT reminds us, JC Penney continues to struggle with roughly $1.7 billion in debt from a leveraged buyout – that is, debt that contributed nothing but moving the company from the grasp of one group of ineffective managers to another.

“Much of the difficulty that the retail sector is experiencing has been aggravated by private equity involvement,” said Elisabeth de Fontenay, a professor at the Duke University School of Law who specializes in corporate finance. “To keep up with everybody’s switch to online purchasing, there really needed to be some big capital investments and changes made, and because these companies were so debt strapped when acquired by private equity firms, they didn’t have capital to make these big shifts.”

However, as we reported a week ago, JCP has already struck a deal for another $500 million in financing to get it through bankruptcy. While that loan might be necessary to save the business and prevent a liquidation, we would ordinarily caution against using debt to solve a debt problem.

So far, evidence suggests that JCP’s management is still treating the company like a cash cow, as an SEC filing filed over the weekend revealed the company handed out big bonuses to execs while placing thousands of hourly workers on furlough. Of course, while many might be tempted to lash out at the company, these types of management-retention bonuses are standard practice during bankruptcy. They’re known as KERP – Key Employee Retention Packages – and virtually ensure that every politician and crusading journalist can bash big business every time a company files for Chapter 11 protection…

via ZeroHedge News https://ift.tt/2T6bunS Tyler Durden