The unprecedented response to the COVID-19 pandemic has prioritized keeping people apart to slow the spread of the virus. While measures such as business closures and travel restrictions are effective at fighting a pandemic, they also have a dramatic impact on the economy.
To help right the ship, the Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — was passed by U.S. lawmakers last week with little fanfare. The act became the largest economic stimulus bill in modern history, more than doubling the stimulus act passed in 2009 during the Financial Crisis.
Today’s Sankey diagram is a visual representation of where the $2 trillion will be spent.
Broadly speaking, there are five components to the COVID-19 stimulus bill:
Although the COVID-19 stimulus bill is incredibly complex, here are some of the most important parts to be aware of.
Funds for Individuals
Amount: $603.7 billion – 30% of total CARES Act
In order to stimulate the sputtering economy quickly, the U.S. government will deploy “helicopter money” — direct cash payments to individuals and families.
The centerpiece of this plan is a $1,200 direct payment for those earning up to $75,000 per year. For higher earners, payment amounts will phase out, ending altogether at the $99,000 income level. Families will also receive $500 per child.
There are three other key things to know about this portion of the stimulus funds:
There will be a temporary suspension for any student loan held by the federal government. This means no payments required and no interest accrued until the end of September, 2020.
Borrowers with federally backed loans can request forbearance on mortgage payments for up to six months.
There will be an expansion of unemployment benefits, including a four-month enhancement of benefits. This plan includes freelancers, workers in the gig economy, and furloughed employees.
Big Business
Amount: $500.0 billion – 25% of total CARES Act
This component of the package is aimed at stabilizing big businesses in hard-hit sectors.
The most obvious industry to receive support will be the airlines. About $58 billion has been earmarked for commercial and cargo airlines, as well as airline contractors. Perhaps in response to recent criticism of the industry, companies receiving stimulus money will be barred from engaging in stock buybacks for the term of the loan plus one year.
One interesting pathway highlighted by today’s Sankey diagram is the $17 billion allocated to “maintaining national security”. While this provision doesn’t mention any specific company by name, the primary recipient is believed to be Boeing.
The bill also indicates that an inspector general will oversee the recovery process, along with a special committee.
Small Business
Amount: $377.0 billion – 19% of total CARES Act
To ease the strain on businesses around the country, the Small Business Administration (SBA) will be given $350 billion to provide loans of up to $10 million to qualifying organizations. These funds can be used for mission critical activities, such as paying rent or keeping employees on the payroll during COVID-19 closures.
As well, the bill sets aside $10 billion in grants for small businesses that need help covering short-term operating costs.
State and Local Governments
Amount: $340.0 billion – 17% of total CARES Act
The biggest portion of funds going to local and state governments is the $274 billion allocated towards direct COVID-19 response. The rest of the funds in this component will go to schools and child care services.
Public and Health Services
Amount: $179.5 billion – 9% of total CARES Act
The biggest slice of this pie goes to healthcare providers, who will receive $100 billion in grants to help fight COVID-19. This was a major ask from groups representing the healthcare industry, as they look to make up the lost revenue caused by focusing on the outbreak — as opposed to performing elective surgeries and other procedures. There will also be a 20% increase in Medicare payments for treating patients with the virus.
Money is also set aside for initiatives such as increasing the availability of ventilators and masks for the Strategic National Stockpile, as well as providing additional funding for the Center for Disease Control and expanding the reach of virtual doctors.
Finally, beyond the healthcare-related funding, the CARES Act also addresses food security programs and a long list of educational and arts initiatives.
Execs Scramble To Buy Spyware To Keep Tabs On ‘Locked-Down’ Employees
Tens of millions of Americans have transitioned from their corporate desks to living room sofas in the last month as “shelter in place” government health orders have forced many to work at home amid the COVID-19 outbreak. Corporate executives, who once had unlimited control over employees, have lost much of it, and that is why they’re now panic buying spy software to monitor employees who work from home, reported Bloomberg.
Axos Financial Inc. told employees who are working from home that they’re monitoring every keystroke, logging every website, and taking screenshots of their desktops, in a bid to keep tabs on how productive they’re. In an internal email to employees, the company wrote that “disciplinary action” or “termination” is possible if slacking was seen.
“We have seen individuals taking unfair advantage of flexible work arrangements,” Axos Financial CEO wrote in an internal email reviewed by Bloomberg. If daily tasks aren’t completed, workers “will be subject to disciplinary action, up to and including termination.”
It’s not just corporations that are ushering in digital surveillance tools to monitor employees, but also we’ve noted that governments are utilizing mass surveillance to monitor social distancing and the health care system.
“Of course, digital surveillance has been used for years on office desktops, yet it seems a violation of privacy to a lot of workers when they’re required to have software on their computers that tracks their every move in their own homes.
Employers justify going full Orwell by saying that monitoring curbs security breaches, which can be expensive and helps keep the wheels of commerce turning.
With so many people working remotely because of the coronavirus, surveillance software is flying off the virtual shelves.” – Bloomberg.
Brad Miller, CEO of surveillance-software maker InterGuard, said businesses are “scrambling” to purchase software that monitors the productivity of employees who are working from home.
Axos spokesman Gregory Frost released a statement to Bloomberg that said, “the enhanced monitoring of at-home employees we implemented will ensure that those members of our workforce who work from home will continue” to be productive during these challenging times.
Along with InterGuard, software makers include Time Doctor, Teramind, VeriClock, innerActiv, ActivTrak, and Hubstaf have developed monitoring tools for corporations.
Stacy Hawkins, a professor at Rutgers Law School, said some employers are going to far in their attempt to track workers.
Some workers who have been subjected to extreme surveillance while working at home have vented their frustration on forums such as CodeAhoy.
“I’ve heard from multiple people whose employers have asked them to stay logged into a video call all day while they work,” said Alison Green, founder of the workplace-advice website Ask a Manager. “In some cases, they’re told it’s so they can all talk throughout the day if questions come up, but in others, there’s no pretense that it’s for anything other than monitoring people to ensure they’re working.”
The virus has been the perfect cover for corporate America to rollout massive spy surveillance technology to monitor employees. Simultaneously, the government is ushering in the surveillance state.
China is waging a propaganda war against the coronavirus on several fronts. In addition to its well-documented efforts to deflect attention from its early suppression of information about the disease and to claim that it has among all nations now halted the scourge, it is also pushing an alternative explanation of its origins—namely that it didn’t start in Wuhan after all, but was a creation of a military biochemical lab in the United States and was brought to China by an American team that competed in the Military World Games in Wuhan last October.
While that conspiracy theory was quickly noted and dismissed in much of the West, it is continuing and broadening all over social media in China – a country that strictly monitors what appears on its online platforms, regularly scrubbing it of what the authorities call “rumors.” But a lot of it, put on platforms that are banned in China, seems aimed outward, part of a concerted effort to convince the world that China, once the villain of the coronavirus story, is actually its hero, and that the real villain is America.
Its effectiveness may provide a new illustration of how fake news, if repeated loudly and often enough, uses social media as a carrier to spread misinformation around the globe.
Recently, for example, Global Times, an English-language mouthpiece of the Chinese Communist Party, called on the American government to release the medical records of all the members of the American team that competed in Wuhan, so as “to end the conjecture about U.S. military personnel bringing Covid-19 to China.” In asking the United States to be “transparent,” the paper was giving credence to a claim at the heart of the conspiracy theory, that a 50-year-old bicycle racer named Maatje Benassi, a member of the American delegation, was “patient zero,” the first victim of the disease, which would mean that the virus was brought to China by the United States. This claim has been amplified across Twitter.
Among the ironies in this is that the demand for transparency is coming from China, one of the most secretive and opaque regimes in history. Another is that the idea that Benassi is “patient zero” stems from an American conspiracy theorist named George Webb. In a Youtube video earlier this month, Webb advanced that notion, along with the theory that the virus was created, not in China, but at Fort Detrick in Maryland.
It’s not the first time that China has given quasi-official sanction to the rewriting of the recent coronavirus past. The theory that the American army created the coronavirus has been propagated on Twitter, for example, by Zhao Lijian, a spokesman for China’s foreign ministry. What’s become clearer over time is the possible goal of China’s effort: to win respectful treatment for its evidence-free claim, to present the question of the virus’s origins as undecided, something urgently requiring further research and disclosure.
Chinese websites are carrying numerous videos detailing what one of those sites, dubbed Sharp Arrow Military News, calls “America’s ugly truth.” Slickly produced and professionally narrated, the videos list various supposedly incriminating facts about American behavior and spin them into a tale of a dark anti-China plot — for example, that as late as February President Trump seemed unconcerned about the spread of the virus to the United States.
One video making the rounds recently provides one of the more elaborate presentations of the theory to date. It’s not entirely clear who created it, or how broadly it is circulating in China or how great its influence is. A brief, unscientific survey of people inside China, mostly well-educated middle-class city dwellers, turned up nobody who actually believed its claims.
But the video is professionally done, with a Chinese-language narrator speaking with very much the style and intonation of official Chinese news broadcasts. It has the look and format of other videos that have been put out by a Chinese army propaganda unit in Wuhan, though it could not be confirmed whether this new video was produced in this way or not.
“We have to find patient zero, the first coronavirus case,” the narrator says at the beginning of what appears to be a piece of investigative journalism, a supposedly sincere and objective effort at sifting through the facts to arrive at “the truth” of the virus’s origins. “At the beginning, everybody thought it came from a seafood market in Wuhan, but now it appears maybe not,” the narrator says, going on to advance the theory that the video will explore: “Maybe it’s related to the Wuhan military competition.”
In support of that notion, the narrator – according to RealClearInvestigations’ translation – reminds viewers that the 2019 World Military Games were held in Wuhan in October last year, with participation by some 10,000 athletes from more than 100 countries, including the American team with nearly 300 athletes and staff. The U.S., which, the narrator says, “has very strong abilities,” did poorly in the competition, and indeed, the American team won just eight medals, none of them gold, compared to China’s 239.
Isn’t this a strange thing? the narrator goes on to say, putting the poor American performance into a sinister light and using it to support the theory that the coronavirus must have originated in the U.S., not in China.
“Do you think the Americans came to Wuhan to buy soy sauce?” the narrator asks sarcastically. “They didn’t come to compete; they came because they had a job to do,” and while he doesn’t say so explicitly, the implication is clear: the “job” was to plant the new virus in Wuhan, thereby framing China as the creator of the new disease.
And from there, the video moves to other suspicious “facts” about the epidemic, among them: that some Japanese who had never been to China came down with the virus after vacationing in Hawaii; that more strains of the virus have been detected in the U.S. than in China; that Fort Detrick was mysteriously closed by the Centers for Disease Control last July.
The narrator also repeats some by now discredited claims, notably that Robert Redfield, the head of the CDC, admitted at a press conference that some Americans believed to have died of the flu last fall actually died of Covid-19. Redfield admitted this “very firmly,” the narrator says, thereby, he contends, providing irrefutable confirmation of the theory that the virus was in the U.S. before it was in China.
What Redfield actually said during congressional testimony in March, well after the virus had begun to spread in the U.S., was that it is possible that some people whose deaths were believed to have been caused by the flu might actually have been victims of the coronavirus but weren’t tested for it. He did not say that people died of Covid-19 last fall, before the disease appeared in China.
The Chinese video then goes on to answer its question regarding the identity of patient zero: It was Maatje Benassi, the army bicycle racer.
“The circle is complete,” the narrator says, and then addresses President Trump: “What is your response?”
The outward circulation of the Chinese claims on platforms like Twitter and YouTube (whcih are banned in China), could be in part a simple matter of national pride, a concern for the country’s international image, and a response to President Trump’s use of the term “Chinese virus” to refer to the disease, which has infuriated many Chinese. But some commentators point out that China’s withholding of information was a breach of international law that could make it legally liable.
China’s failure to provide timely information about the virus and its level of contagion to the World Health Organization, for example, “is more than a moral breakdown,” James Kraska, a professor of international maritime law at the Naval War College, wrote recently. “It is also a breach of a legal duty that China owed to other states under international law, and for which injured states – now numbering some 150 – may seek a legal remedy.”
To be sure, conspiracy theories are legion around the world, whether it’s the claim that the 9/11 attacks were a CIA plot to give President Bush an excuse to invade Iraq, or whether it’s the notion, reiterated by Tom Cotton, the Republican senator from Arkansas, that the virus originated in a high-tech biochemical lab in Wuhan itself.
The difference with China is that misinformation there has been used as an element of state policy, sometimes officially, sometimes more informally, but in either case without any possibility that a free press or an independent judicial machinery will challenge the official “truth.”
Perhaps the most blatant and well-known example of this in China was the country’s denial that its military massacred civilian demonstrators when it brought an end to the massive pro-democracy protests in Beijing in 1989. Almost immediately after the army moved in to crush the protest movement, killing hundreds of people in full view of thousands of eyewitnesses, Chinese television was saying that the only people killed that night were brave army soldiers attacked by “hooligans.”
The disinformation effort on the coronavirus hasn’t reached that point; it isn’t a massive propaganda campaign inundating the media. Indeed, some efforts to propagate the idea of American responsibility for the virus have fallen flat. Earlier this month, for example, a blogger in China’s Guizhou Province posted a video of a Caucasian man slyly putting spittle on a subway pole. “This is a solid proof showing that Americans were spreading the virus during the Military World Games,” the blogger wrote, asserting that the man in the video was a member of the U.S. Army team and was riding the subway in Wuhan.
In fact, the video showed a man riding a subway, not in Wuhan at all, but in Brussels, Belgium, where he was arrested and the subway car disinfected. When other social media users in China pointed that out, the blogger retracted his claim, though not before his original post had been viewed by an undetermined number of people.
But the idea that Maatje Benassi was patient zero and that there is now a “debate” between China and the United States over the origins of the virus has spread around the world, as a Google search of Benassi’s name shows. China’s demand for the U.S. to be “transparent” by releasing the military team’s medical records has appeared on everything from websites about international cycling to 24-hour news sites across the globe.
Meanwhile, there has been no retraction of the lengthy video “investigation” of the coronavirus’s origins with its claim that it was insinuated into China by the American military. While some Chinese officials are giving credence to that claim, the government has not officially endorsed it. It seems content to put it out there, to spread an idea that might shift discussion about the virus from China’s responsibility to the question: Did it actually originate in America?
Correction March 30, 2020, 10:45 AM Eastern
An earlier version of this article misstated the location of Fort Detrick. It is in Maryland, not South Carolina.
As we wait for scientists and healthcare professionals to develop a vaccine for COVID-19, there is another, more readily available tool at our disposal.
Social distancing, defined as measures taken to reduce physical contact, is the first line of defense for containing an infectious disease like COVID-19. That’s because these infections spread when people cough, sneeze, or touch surfaces on which the virus resides.
To help us grasp the impact these measures can actually have, Visual Capitalists’ Marcus Lu illustrates how a reduction in social exposure can theoretically contain the spread of infection in the following infographic.
Theoretical Potential
The calculations used to create today’s infographic come from Signer Laboratory, a stem cell research lab located in the Moores Cancer Center at the University of California San Diego.
Using a summation formula makes it possible to estimate the number of new infections over a 30 day period, across three scenarios.
To arrive at the figures reported above, Robert A.J. Signer, Ph.D., and his team made a number of key assumptions.
First, they estimated the basic reproduction number (R0) of COVID-19 to be 2.5, a figure supported by recent research. This means that, on average, an infected individual will spread the disease to 2.5 other people.
Next, they assumed that an infected individual will unknowingly spread COVID-19 over the median five day incubation period. After this period, the individual will begin to develop symptoms, immediately self quarantine, and no longer pose a threat.
Finally, they assumed a direct linear correlation between social interactions and R0. This means that when an infected person reduces their physical contact with others by 50%, they also spread the disease by an amount 50% less.
Timing is Everything
While the figures above are the results of mathematical estimations, researchers have actually studied social distancing from a variety of angles.
One study used simulations to determine the magnitude and timing of social distancing measures required to prevent a pandemic. The distancing measures simulated were:
The results, for a community of 30,000 people and an epidemic with R=2.5, are charted below. We can define the final illness attack rate as the share of people from an at risk population who ultimately catch the disease.
Results showed that when no action was taken, 65% of the population contracted the disease. However, if a combination of all four distancing measures were implemented instead, the attack rates were:
45% (distancing begins after a 4 week delay)
21% (distancing begins after a 3 week delay)
7% (distancing begins after a 2 week delay)
What’s clear is that social distancing was significantly more effective when implemented with minimal delay—the final illness attack rate rose quickest beyond the third week. These findings draw a parallel to the visualizations in today’s infographic, which showed us just how quickly a disease can spread.
Social distancing interventions are important as they represent the only … measure guaranteed to be available against a novel strain of influenza in the early phases of a pandemic.
– Kelso, J.K., Milne, G.J. & Kelly, H., BMC Public Health 9, 117 (2009)
We arrive at a similar conclusion when it comes to the types of distancing measures implemented. In the simulations, none of the four measures taken on their own were able to have a similar effect as when they were combined.
With the global number of COVID-19 cases still rising, many governments have issued quarantine orders and travel bans.
The math supports these decisions—reducing our physical contact with others, even when we aren’t experiencing any symptoms, is crucial. Studies like the one summarized above also prove that taking action sooner, rather than later, can go a long way in reducing the spread of infection.
The key takeaway from all of this? Social distancing is a powerful disease control tool, but only if we all participate.
Hydroxychloroquine Demand Triples Overnight Following FDA Approval
The Food and Drug Administration gave emergency-use authorization to hydroxychloroquine as a treatment for the coronavirus pandemic on Sunday. But demand for the drug backed by President Donald Trump that is typically used to treat malaria soared prior to the move, according to data from Symphony Health.
Weekly prescriptions soared from 100k to 300k over the past week, since President Trump first mentioned the drug as one of two commons drugs that produced potentially wondrous results if administered together (the other drug, azythromycin, better known as a Z-pak) to COVID-19 patients.
Given the market’s desperation for anything that might cure a disease that is killing 1 in 10 people it infects in certain areas, it would seem that concerns of those who took these medications regularly before the crisis might be struggling to source their medication for the first time.
The FDA gave emergency approval to a Trump administration plan to distribute millions of doses of anti-malarial drugs to hospitals across the country on Monday, saying it is worth the risk of trying unproven treatments to try and slow the progression of the disease.
There have been only a handful of anecdotal studies detailing a possible benefit of the drugs, hydroxychloroquine and chloroquine, to relieve the acute respiratory symptoms of COVID-19 and clear the virus from infected patients. If these effects could be widely replicated, it would be nothing short of miraculous. And the evidence certainly offers reason to hope, at least for some.
Interestingly, prescriptions for the drug surged during the week ended March 20, asnearly 300,000 prescriptions were written in the US that week, roughly triple the 113,000 weekly average in 2019.
We suspect these numbers will only continue to climb.
China Is Fixed: Chinese PMIs Soar Back Into Expansion, Smashing Expectations
Remember the record plunge in China’s manufacturing and non-manufacturing PMI for February when the entire economy imploded as a result of coronavirus pandemic? Well, forget all about it, because in the latest farce out of Beijing, moments ago the goalseekers at the National Bureau Of Statistics came up with March PMI numbers that are so ridiculous they not only make a mockery out of all Chinese “data” reporting, but put into question absolutely everything that Beijing is officially reporting in connection with the pandemic.
Here’s how China just made everyone around the world cackle with mad laughter:
Manufacturing PMI 52.0, exp. 44.8 and up from 35.7. The 50+ print means China is now solidly back in expansion; even more laughably, this was the highest print since September 2017.
Non-manufacturing PMI 52.3, exp. 42.0, and up from 29.6. This print is also well in expansion.
That these completely fabricated, laughable numbers come the day after China cut its reverse repo rate to 2.20%, the lowest on record, and broke its streak of 29 trading days without a reverse repo operating, injecting 50 billion yuan into the economy which is now cratering, was hardly a coincidence.
And speaking of cratering economy, just yesterday we reported that contrary to the PMI data, China’s consumer default tsunami has now started, to wit:
Delinquent credit-card debt in February rose by about 50% from a year earlier.
China’s delinquency ratio jumped to a staggering 20% in February, from 13% at the end of last year.
An estimated 8 million people in China lost their jobs in February.
Industrial profits crashed by 39%.
In short: China’s real economy is collapsing and the more it contracts, the more compelled Beijing feels to boost consumer confidence with totally fabricated numbers, which however nobody believes any more.
So what to make of this statistical farce?
Simple: it’s a political statement directed straight at the US and meant to indicate that China is now fixed, even though knowing just how idiotic these numbers must look, the China Statistical Bureau – as if out of guilt – said the “rebound does not mean the economy has returned to normal and March data alone cannot tell improving trend” adding that “further attention needed on PMI as China’s economy faces new challenges amid increasing pressure of inbound coronavirus infections.”
Of course, that statement is for international consumption, domestically China will now parade with the highest PMI print in nearly three years as proof that as far as it is concerned, the Wu Flu is now only the world’s problem.
As for the “data”, well the algos will dutifully lap it up even though everyone now knows that not only China’s economic data is completely made up but, by implication, its coronavirus statistics. Incidentally earlier today ground zero of the deadliest global pandemic in generations, Beijing, said that all 48 new coronavirus cases on March 30 were imported.
China’s fake bullshit aside, the real news is that the world was badly in need of laughter, and China just delivered.
Pentagon Confirms Over 1,000 COVID-19 Cases Among Military, Orders Bases To Stop Public Reporting
The Department of Defense (DoD) announced a grim milestone Monday — it’s total number of COVID-19 cases among US service members, civilian contractors, on-base civilian staff, and family dependents of troops has surpassed 1,000.
“Total DoD Cases (current, recovered and deaths) is 1,087,” according to DoD fact sheet released on Monday. The numbers are as follow:
569 military cases
220 civilian cases
190 dependent cases
64 contractor cases
Defense Secretary Mark Esper, via Reuters.
The Pentagon said 569 service members have been infected, among these 26 hospitalizations, and 34 have recovered.
The remainder of total cases involve civilian contractors working on military bases and/or at the Pentagon, as well as dependents. This number is up significantly from Friday’s total DoD number of 600.
But it appears we are fast heading toward a near total reporting blockage in terms of DoD-wide cases, and specifically where they originate, and in what branches of the US armed services. As Stars & Stripes reports:
The Defense Department has ordered commanders at all of its installations worldwide to stop announcing publicly new coronavirus cases among their personnel, as the Pentagon said Monday that more than 1,000 U.S. military-linked people had been sickened by the virus.
The order issued by Defense Secretary Mark Esper on Friday is meant to protect operational security at the Defense Department’s global installations, Jonathan Hoffman, the Pentagon’s chief spokesman, said in a statement Monday. He said Defense Department leaders worried adversaries could exploit such information, especially if the data showed the outbreak impacted U.S. nuclear forces or other critical units.
This constitutes perhaps the clearest admission thus far throughout the crisis that the coronavirus pandemic is a serious threat to US defense readiness and national security.
USS Theodore Roosevelt, via US Navy
Currently at least two aircraft carriers are battling outbreaks in their midst – both are in the Pacific Ocean and likely have seen their operational readiness deeply compromised as commanders try to contain the spread, with the USS Theodore Roosevelt already being diverted to Guam days ago.
The US 2020 Fiscal Deficit Will Explode To 18%, Unseen Since World War II
Authored by Chetan Ahya, Morgan Stanley chief economist
A Full-Court Policy Press
I hope that you and your families are well. The past few weeks have been challenging both personally and professionally. Covid-19 is at once a human tragedy and unparalleled synchronous shock, affecting both the demand and supply sides of the global economy.
Given the scale of disruption to economic activity, we expect a deep global recession in 1H20, with growth contracting by 2.3%Y in 1H20. Assuming the outbreak peaks by April/May, this will likely set the stage for a recovery in 2H20, to 1.5%Y by 4Q20. For the US, we expect an unprecedented drop of 30.1%Q SAAR in 2Q20 with the unemployment rate also rising to a record 12.8% (since data collection began in the 1940s) before we see it bouncing back at a 29.2%Q SAAR pace in 3Q20. However, global growth for full-year 2020 will still see a decline of 0.6%Y, past the 0.5%Y rate of contraction we saw during 2008 and, on our estimates, the weakest pace of growth during peacetime since the 1930s.
Even before the coronavirus outbreak, the post-GFC global economy had been facing the triple challenge of demographics, debt and disinflation (the 3D Challenge we have written about previously), which the world last faced in the 1930s. At its core, the outbreak represents a substantial shock to incomes, and the impact on aggregate demand will ultimately create renewed disinflationary pressures. The debt challenge will also become more pronounced in the near term as nominal GDP growth weakens and nations, households and corporates face rising levels of indebtedness. Taken together, we expect these forces to bring the 3D Challenge back to the fore.
The silver lining is that the coronavirus has elicited a strong coordinated monetary and fiscal response. The pace and magnitude at which these policies have been implemented are also unprecedented. Since mid-January, 23 of the 30 central banks we cover have eased monetary policy. The global weighted average policy rate has declined to below post-GFC lows. All the G4 central banks have now announced aggressive quantitative easing programmes. We estimate that these central banks will make asset purchases of ~US$6.5 trillion in this easing cycle, with cumulative asset purchases of US$4-5 trillion by the Fed alone.
Over the last few days, the pace of fiscal action has also picked up significantly. We now expect that in the G4 plus China, the combined primary fiscal balance will rise by 440bp (~US$2.8 trillion) in 2020. As a percentage of GDP, the G4+China cyclically adjusted primary deficit will rise to 8.5% of GDP in 2020, significantly higher than the 6.5% in 2009 immediately after the GFC.
In the US, the speed and magnitude of the policy response have been truly remarkable. The Fed has cut rates to zero and put QE and other lending facilities in place much faster than during the GFC. A fiscal stimulus package has been assembled in a little over a week, compared with two months for the 2008-09 package. In terms of magnitude, we expect the cyclically adjusted primary fiscal deficit to rise to 14% of GDP in 2020 (assuming stimulus of US$2.0 trillion) compared with 7% of GDP in 2009 – the highest level since the 1930s. The headline fiscal deficit will rise to around 18% of GDP in 2020.
Based on the experience of the 1930s and of Japan since the 1990s, this aggressive, coordinated fiscal and monetary easing will be critical in addressing the 3D Challenge. With the help of this extraordinary policy action, and assuming an April/May Covid-19 peak, we expect the global economy to be on the mend from 3Q20 onwards.
However, based on the experience in China, we foresee a tepid pace of recovery initially, and it won’t be until 3Q21 that output reaches pre-Covid-19 levels in the US and euro area.
Hawks will undoubtedly argue (and we’ve already heard murmurings) that these expansionary policies bring the risks of rising inflation and deficits and risks to debt sustainability. However, we take the opposing view and argue that these policies need to remain in place for longer until inflation expectations have systematically risen closer to the central banks’ goals. Again, the 1930s offer a cautionary tale. Because expansionary policies were terminated prematurely in 1936-37, the US economy suffered a double dip in 1937-38 (see Global Macro Briefing: 1937-38 Redux?). Hence, policy-makers must not be too quick to sound the all-clear.
Greater Depression? Shocking Images Show Horror Of America’s New ‘Breadlines’
“It could never happen again…”
A quick Google search shows the horrific scenes from the 1930s as Americans lined up by the thousands for food as The Great Depression struck fast, hard, and deep…
And here is today’s shocking ‘breadlines’ – This video shows hundreds of cars waiting to receive food from the Greater Community Food Bank in Duquesne, near Pittsburgh…
The last two food bank giveaways drew massive crowds and caused major delays on Route 837. When they had one at Kennywood last week, it drew over 800 cars and backed up for miles.
How did America go from “greatest economy ever” to “Greater Depression” so fast?
For years regulatory agencies like the FDA have subtly targeted the use of such things as intravenous vitamins.
One method they use to target the fabric of culture in which people utilize simple, naturopathic remedies is the stringent enforcement of any regulation they can think of. It seems that the FDA targets regulatory violations supposedly committed by those who deal in naturopathic medicine far more than violations from Big Pharma.
Almost 10 years ago, in 2011 it was reported that the FDA sent out a warning letter to a small pharmacy, urging them not to stock intravenous vitamin C. In Australia, the mainstream media has consistently inundated the discussion surrounding health with propaganda over the last 10 years, and vitamin C has been specifically scoffed at.
Despite an observable urge for the regulatory agencies to crush the culture of vitamins and erase their history, it’s leaking out into the mainstream that intravenous (IV) vitamin C in high doses is effective against COVID-19.
Now New York’s largest hospital system is using Vitamin C for Covid-19
In New York’s largest hospital system, urgently ill COVID-19 patients are now being given large doses of IV vitamin C, an article from the New York Post reported a couple of days ago.
Dr. Andrew G. Weber, a pulmonologist and critical-care specialist affiliated with two Northwell Health facilities on Long Island, said his intensive-care patients with the coronavirus immediately receive 1,500 milligrams of intravenous vitamin C.
Identical amounts of the powerful antioxidant are then readministered three or four times a day, he said.
Each dose is more than 16 times the National Institutes of Health’s daily recommended dietary allowance of vitamin C, which is just 90 milligrams for adult men and 75 milligrams for adult women.
The regimen is based on experimental treatments administered to people with the coronavirus in Shanghai, China, Weber said.
“The patients who received vitamin C did significantly better than those who did not get vitamin C,” he said.
“It helps a tremendous amount, but it is not highlighted because it’s not a sexy drug.” (source)
They say the decision to use IV C in New York was based on reports of its effectiveness in China, but vitamin C’s reputation in America far predates that info, although not specifically in response to this virus.
Intensive-care patients who tested positive for the virus immediately receive a dose of intravenous vitamin C measuring 1,500 milligrams, says pulmonologist Dr. Andrew G. Weber, a Long Island, New York critical-care specialist affiliated with two Northwell Health facilities in the area.
Up to 4 times a day, the same dose is re-administered. It was not specified what form of IV C was used, but it is likely to be either Ascorbic Acid (what you typically buy at the store) or Sodium Ascorbate (a popular form intended to be easier on the stomach or the body’s acidity).
Some vitamins, originally derived from the phrase “vital amines,” have different, beneficial effects at much higher doses. At the same time, some minerals or vitamins can throw bodily processes into a state of imbalance with doses too high.
Vitamin C seems to be one of those vitamins that is potent and extremely beneficial at high doses.
Vitamin C is being “widely used” to treat this virus “throughout the system,” a spokesman for Northwell confirmed, the institution that operates 23 hospitals including Lenox Hill Hospital in Manhattan.
This may be a better choice than the more pharmaceutical option.
On a different note, a pharmaceutical combination consisting of malaria drugs known for horrific side-effects, mixed with antibiotics that are known to have no ability to kill viruses (hydroxychloroquine and azithromycin) was promoted by Donald Trump recently.
Nevada recently banned the use of hydroxychloroquine and chloroquine to treat the virus. For someone who believes in freedom, any sort of ban would seem like a step in the wrong direction, but the side effects of hydroxychloroquine and related compounds are well documented.
This 2018 paper published in the Journal of Thoracic Disease examined “HCQ-induced cardiotoxicity,” and heart failure in twins born to a mother who took the drug.
Another paper published in the European Heart Journal of Acute Cardiovascular Care said cardiotoxicity is a “rare but serious complication of hydroxychloroquine.”
Not only that but as of March 24, some kind of federal permission was granted to New York hospitals to dose patients with a “cocktail” of hydroxychloroquine and azithromycin to patients who were considered desperately ill, “on a ‘compassionate care’ basis.”
Hopefully, this compassionate care mentality can be directed toward the firm belief in voluntary treatment, of whatever a hospital has, wherever in the world the person is, rather than involuntary treatment with whatever a hospital chooses to give.
NY is ahead of the curve
In contrast to what is happening in other places, the NY Post reported the Vitamin C is being “administered in addition to such medicines as the anti-malaria drug hydroxychloroquine, the antibiotic azithromycin, various biologics, and blood thinners.”
So why Vitamin C?
Weber, 34, said vitamin C levels in coronavirus patients drop dramatically when they suffer sepsis, an inflammatory response that occurs when their bodies overreact to the infection.
“It makes all the sense in the world to try and maintain this level of vitamin C,” he said.
A clinical trial on the effectiveness of intravenous vitamin C on coronavirus patients began Feb. 14 at Zhongnan Hospital in Wuhan, China, the epicenter of the pandemic. (source)
Let’s hope we see more hospitals using IV Vitamin C in the fight against Covid-19.
