Month: April 2020

Talking points circulated by the Biden Campaign asking supporters to cite a New York Times investigation into sexual assault accuser Tara Reade “inaccurately suggest” that the Times concluded the 1993 incident never happened.

The talking points, first reported Monday night by BuzzFeed, advise surrogates to say the allegation “did not happen,” and that “a thorough review by the New York Times has led to the truth: this incident did not happen.”

Not so fast, according to the Times.

“BuzzFeed reported on the existence of talking points being circulated by the Biden campaign that inaccurately suggest a New York Times investigation found that Tara Reade’s allegation ‘did not happen,‘” said Times VP of communications, Danielle Rhoades Ha, in a statement to the which told the Washington Free Beacon, adding “Our investigation made no conclusion either way.“

The Biden campaign is asking supporters to lean into the Times report as evidence of Biden’s innocence. “In this case, a thorough review by the New York Times has led to the truth: this incident did not happen,” they say.

The Times, however, made clear in its April 12 story on the allegations that it was unable to reach a definitive conclusion about the veracity of Reade’s claims. The paper’s reporters spoke both to former colleagues of the alleged victim who said they didn’t recall the incident as well as to friends who said that Reade detailed Biden’s sexual advances at the time.

“As BuzzFeed correctly reported, our story found three former Senate aides whom Reade said she complained to contemporaneously, all of whom either did not remember the incident or said that it did not happen,” Rhoades Ha said. “The story also included former interns who remembered Reade suddenly changing roles and no longer overseeing them, which took place during the same time period that Reade said she was abruptly reassigned. The Times also spoke to a friend who said Reade told her the details of the allegation at the time; another friend and Reade’s brother say she told them of a traumatic sexual incident involving Biden.” -Washington Free Beacon

Biden’s talking points have been repeated by supporters, including VP hopefuls Stacey Abrams and Sen. Amy Klobuchar (D-MN).

And as the Beacon notes, additional witnesses have emerged since their investigation was published who have corroborated Reade’s account that Biden forced himself upon Reade and penetrated her against her will with his fingers. 

Meanwhile, the Times removed a reference to Biden’s “hugs, kisses and touching that women previously said made them uncomfortable” after a request by the Biden campaign, which “thought that the phrasing was awkward and made it look like there were other instances in which he had been accused of sexual misconduct.”

NY Times writes a story.

Story is changed at demands of Biden campaign.

Biden campaign cites story they had changed in their talking points.

Biden allies circle talking points using story they had changed.

— Stephen L. Miller (@redsteeze) April 29, 2020

Authored by Ryan McMaken via The Mises Institute,

As of April 26, there were nearly 55,000 COVID-19 deaths reported in the United States. Of those, more than 22,000 (or about 40 percent) were in the state of New York alone. New Jersey was in second place with nearly 5,900 COVID-19 deaths reported.

If we combine these two states, we find that a majority of COVID-19 deaths in the United States have come from only these two states. Combined, these states accounted for more than 51 percent (28,213) of all deaths, while all other states combined made up less than 48.5 percent (or 26,567) of deaths.

Measured in deaths per 100,000 of population, New York (114 per 100,000) and New Jersey (66 per 100,000) had the highest rates. But New York had the worst rate by far.

New York’s deaths per 100,000 soar above all other states, are double that of Massachusetts, and more than seven times that of Maryland and Pennsylvania.

The difference becomes even more stark as we move west and south. New York’s death rate is now 22 times as large as Florida’s and 25 times that of Alabama.

Many states now report total deaths per 100,000 that are one-thirtieth the size of New York’s toll. Texas, for instance, reports total deaths numbering 2.3 per 100,000. The total in South Dakota, which has been much maligned for not imposing any statewide lockdowns, has 1.2 deaths per 100,000.

Were New York a foreign country, the US’s total death rate from COVID-19 would be cut by 36 percent:

Whenever comparisons of this sort are made, however, many claim that all areas of the country will closely follow in New York’s footsteps unless ever more strict lockdown measures are taken immediately.

Indeed, we’ve been hearing for weeks that various states and regions are just “two weeks behind New York” in terms of COVID-19 infections and deaths.

For example, more than a month ago, the Philadelphia Inquirer on March 27 quoted one medical expert claiming: “We anticipate we are no more than two weeks behind New York City … Cases are doubling every two to three days. We had 46 confirmed cases last night. You do the math.”

Also in Pennsylvania, a medical expert from the Lehigh Valley on March 22 insisted “we are two weeks behind Manhattan in terms of spread and seriousness.”

On April 3, Maryland Governor Larry Hogan proclaimed his state is “about two weeks behind New York.“

Meanwhile, on April 1 WBHM reported an Alabama health official claimed: “Birmingham is about two weeks behind New York City ” (Nearly a month later, Jefferson County Alabama, where Birmingham sits, reports a death rate of 5 per 100,000, or 4 percent the size of New York’s death total.)

When we note outlandishly incorrect predictions like these, a common response is “well, social distancing prevented that!”

But did it?

So far, there’s no empirical evidence even showing that social distancing works. As TJ Rodgers writes in the Wall Street Journal this week , there is no correlation between government-forced “shutdowns” and a muted number of deaths from COVID-19:

No conclusions can be drawn about the states that sheltered quickly, because their death rates ran the full gamut, from 20 per million in Oregon to 360 in New York. This wide variation means that other variables—like population density or subway use—were more important. Our correlation coefficient for per-capita death rates vs. the population density was 44%. That suggests New York City might have benefited from its shutdown—but blindly copying New York’s policies in places with low Covid-19 death rates, such as my native Wisconsin, doesn’t make sense.

Similarly, political scientist Wilfred Reilly ran the numbers, taking into account factors like population and population density. He found no evidence “that lockdowns are a more effective way of handling coronavirus than well-done social-distancing measures.” and concluded:

The question the model set out to ask was whether lockdown states experience fewer Covid-19 cases and deaths than social-distancing states, adjusted for all of the above variables. The answer? No. The impact of state-response strategy on both my cases and deaths measures was utterly insignificant.

Moreover, the timing is less than convincing for the “lockdowns worked!” claims. For example, in the case of Maryland, the governor claimed “we’re two weeks behind New York” even after a stay-at-home order was in place. That is, his prediction assumed social distancing. Nearly a month later, Hogan was clearly very wrong.

In Alabama, on the other hand, a statewide stay-at-home order did not come down until 13 days (i.e. nearly two weeks) after the New York lockdown. Had Alabama been truly “two weeks behind,” then Alabama would have already been nearly comparable to New York in its death rate by the time the stay-at-home order was implemented. Obviously, that didn’t happen.

The truth of course, is that these statements by politicians and government “experts” were attempts to justify extreme government edicts that have created widespread unemployment, poverty, child abuse, and illness.

They are irresponsible scare tactics employed for political purposes, and were never based on any actual evidence or knowledge about the situation. After all, these officials don’t even know the fatality rate of COVID-19.

Now, it’s entirely possible that as time progresses, later waves of illness could certainly increase total deaths, and there may be some “hot spots” where there are serious strains on the medical infrastructure. However, given the track record of the experts in predicting who is two weeks behind New York, it looks like it will only be a coincidence if these predictions of New-York-like death rates prove correct at some point. Just as financial perma-bears often “predict 10 of the last 2 recessions,” I have no doubt many government-employed experts will predict 12 of the next 3 hot spots. Meanwhile, thanks to these experts’ recommendations, important medical procedures will be banned, people in need of medical care will be frightened into staying home, and food shortages may become a reality.

The real question we should be asking ourselves is why New York is such a mess in terms of COVID-19. New York’s deaths aren’t just high by US standards.The state’s total deaths per 100,000 are higher than both Spain and Italy, both of which are considered to be among the most hard-hit countries on earth. New York has reported nearly as many COVID-19 deaths as Spain (23,500), even though Spain has a much larger population of 46 million. New York is also only about 5,000 deaths behind Italy, even though Italy has a population three times the size of New York State.

Indeed, these numbers are so high, one wonders if deaths are even being counted properly, or if there is something about New York’s medical infrastructure that is especially inferior. Perhaps New York is home to a particularly virulent strain of the disease. Perhaps the disease was in circulation for far longer than the experts insist is the case. The experts don’t know the answers to these questions.

Nor should we expect answers to these questions any time soon. But what we do know is it strains the bounds of credibility to insist that South Dakota will soon be New York if it doesn’t impose similar lockdown measures. This doesn’t mean no caution is warranted, or that high-risk populations should neglect social-distancing measures. But the claims we’re all “two weeks behind New York” are neither accurate nor helpful.

When Dr. Fauci said the FDA and Gilead would move to “quickly” get remdesivir into the hands of COVID-19 patients, we didn’t think they’d move this quickly.

In a sudden break from a federal virus response that has at times been criticized for unnecessary delays – delays drive by petty political squabbles and other hangups, from the ‘PPP’ to the CDC’s badly botched testing rollout – the FDA could move to grant emergency approval to remdesivir, an antiviral initially developed to treat ebola, but was never approved for that, or any other, medical purpose – as quickly as Wednesday aka tomorrow.

That’s according to the NYT, which spoke to a ‘senior official’ about the matter. It has all the hallmarks of an authorized ‘leak’, probably OK’d directly by Dr. Fauci himself (native New Yorker that he is).

To be sure, there remains some dispute about the drug’s efficacy, as we pointed out earlier. Despite all that, Gilead announced some positive data from a NIAD study earlier today – that the drug had met its ‘target’ of shortening recovery time – by Gilead is apparently enough to satisfy Dr. Fauci, who said remdesivir reminded him of the early data on studies of AZT during the AIDS outbreak. He explained that some of the initial studies were inconclusive, even as positive results seemed to be readily apparent.

Whether the drug can reduce the mortality rate in a more “statistically significant” way remains unclear, as does whether the drug is strictly safe for all human patients.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Having gone above and beyond the call of duty in their role as lender, asset-buyer, moral-hazard-enabler, and zombie-firm-creator of last resort; lifting stocks back towards record highs amid the greatest economic collapse since the great depression (or worse), we suspect today’s press conference will be stress-free for the man that saved the world again… for now…

Watch Live at 1430ET:

We wanted “moar”…

A lack of forward guidance (perhaps) has sparked selling almost everything (albeit modest)…

Stocks down…

Dollar down…

And bond prices down (yields up)

Neil Dutta, head of economics at Renaissance Macro Research in New York, criticizes the Fed’s existing forward guidance, calling it confusing:

“The economy will weather recent events much sooner than it will be on track to achieve the Fed’s dual mandate goals. In the meetings ahead, the Fed should make it more obvious that it is keeping rates at zero long after the crisis has been put behind us.”

“This is about as dire as the language the Fed uses can get.” That was kneejerk reaction from Bespoke’s George Pearkes as he reflects on what The Fed promises and worries about going forward.

*  *  *

Since the weekend when The Fed went “all-in”, the dollar is marginally lower, Treasury bond prices are marginally higher, Gold is strong… but stocks are f**king insanely bid…

And during that same exuberant rampage in stocks after The Powell Put was “reportedly” unleashed, earnings expectations have collapsed…

Source: Bloomberg

Is this really all that matters now?

Can The Fed not see it has fueled a FOMO-framed multiple-expansion versus complete collapse in consumer’s economic confidence…

Source: Bloomberg

It would appear so and therefore any hint of a doubt about The Fed’s full-throated “all-in”, “print-or-die” approach to monetary policy forever will hit markets (stock markets most of all) like a ton of bricks.

But, don’t forget The Fed has been tapering its QE-Infinity recently…

As we detailed earlier, WSJ’s Fed watchers Jon Hilsenrath and Nick Timiraos started off their expose on how the “Fed Is Changing What It Means to Be a Central Bank” in which the only thing that really mattered was the first paragraph:

The Federal Reserve is redefining central banking. By lending widely to businesses, states and cities in its effort to insulate the U.S. economy from the coronavirus pandemic, it is breaking century-old taboos about who gets money from the central bank in a crisis, on what terms, and what risks it will take about getting that money back.

This is a good description of what the Fed has done in the past month: the breach of virtually every central bank taboo imaginable, crossing lines not even Ben Bernanke dared to cross by openly buying corporate bonds and backstopping virtually all credit instruments, all in the pursuit of stabilizing markets the US economy and avoiding a full-blown depression, even if it meant institutionalizing moral hazard as the only imperative and ending free and capital markets as we know them, resulting in “markets by decree.”

Broadly speaking, markets don’t expect big policy decisions at today’s FOMC – After all, with rates at zero and QE already “unlimited” what can the Fed do absent announcing negative rates and starting to buy stocks (it will likely pursue both, but it first needs another market crash.)

*  *  *

So what did they say…

Pretty obvious and expected:  Fed says it will do all it can to help economy still facing considerable risk

The Federal Reserve on Wednesday committed itself to use its full range of tools to help the economy facing considerable risk from the coronavirus pandemic.

“The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the Fed said in a statement after two-day meeting.

The Fed kept its benchmark rate close to zero and repeated it would hold policy steady until the economy has weathered recent events and “is on track” to achieve full employment and price stability.

“In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. “

That is unchanged from the March’s broad-based forward guidance.

In a novel twist, the Fed went so far as single out oil prices as a reason for low CPI:

Weaker demand and significantly lower oil prices are holding down consumer price inflation

This should be sufficient to answer any questions if the Fed plans on hiking rates in the medium or long-term.

Also notable, in addition to inflation the Fed will now be monitoring incoming health data:

“The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy”

Finally, we note that The Fed offers no guidance on future QE (which we noted above is tapering rapidly), and surprised many Fed-watchers with a lack of actual quantitative forward guidance on asset purchases, timing, rates, inflation, or bubble size, suffice to say that it will be “in amounts needed to support smooth market functioning.” Of course, the irony here is that it is the Fed’s interventions in the first place that made smooth market functioning impossible.

To support the flow of credit to households and businesses, the Federal Reserve will continue to purchase Treasury securities and agency residential and commercial mortgage-backed securities in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions

Neil Dutta, head of economics at Renaissance Macro Research in New York, was quick to criticize the Fed’s existing forward guidance, calling it confusing:

“The economy will weather recent events much sooner than it will be on track to achieve the Fed’s dual mandate goals. In the meetings ahead, the Fed should make it more obvious that it is keeping rates at zero long after the crisis has been put behind us.”

Oh, and as we cautioned shortly before the FOMC, the Fed indeed punted on IOER, keeping it unchanged at 0.10%. Here is Ian Lyngen’s take:

“The Fed announcement included a stable IOER level at 0.10% – demonstrating little willingness on the part of the Committee to risk any further disruption in the front end of the market. The forward guidance also confirmed a willingness to purchase Treasuries and MBS ‘in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions.’ The absence of numeric caps confirms that QE remains of the limitless variety – which allows for inter meeting flexibility.”

Full Statement below:

Quite a cutdown from its ‘war and peace’ statement in March…

Jeff Gundlach and Kyle Bass are not the only ones who think the market’s April rally has gone to extremes. A new poll via UBS Global Wealth Management shows increasing concern among the world’s wealthiest investors that a pullback in the stock market is needed before they start buying.

The new survey showed 61% of wealthy investors and business owners (2,928 investors and 1,180 business owners between April 1-20) with over $1 million in investable assets or annual revenue are expecting a selloff in the market of 5% to 20% before they would buy the dip. About 23% of respondents said it was a market that they were willing to chase. And about 16% said the latest move was a bear market rally and further downside is ahead.

The April survey showed 60% of respondents believed a global recession was likely in the next 12 months.  

Gundlach and Bass, in separate interviews this week on CNBC, both echoed similar thoughts on how signs of unprecedented economic distress have resulted in a V-shaped recovery for the stock market. As shown below, the E-Mini S&P500 has soared 34% in 25 sessions to a near kiss of the daily 200EMA. 

The share of wealthy investors that are optimistic about the short-term performance of the US economy has more than halved from 68% to 30% in the period from the start of January to April.

“While short-term investor optimism across the globe has dropped significantly, levels seem to align regionally with the pandemic cycle,” said Paula Polito, divisional vice chairman at UBS Global Wealth Management.

“In Asia, where the Covid-19 crisis and mitigation occurred earlier, investors appear to be slightly more optimistic about their region’s stocks. By contrast, optimism appears lower in the US, which is currently experiencing an apex in the crisis.”

Of course, you don’t need to be a wealthy UBS client to understand there is a deep disconnect between the market and the real economy. Main street America has been wiped out, with approximately 30 million job losses in the past 6 weeks alone. And a new shocking report on Monday showed perhaps 50 million people have lost their jobs in the pandemic. Nevertheless, the Fed and Trump admin continue pumping record amounts of stimulus and bailout money to revive corporate America and Wall Street speculators. 

If the economy doesn’t improve, meaning a V-shaped recovery is not seen and more of a U-shaped or L-shaped, it would suggest stocks have a long way to drop, likely resulting in the Fed panic buying stocks.

Authored by Michael Snyder via The Economic Collapse blog,

For those of you that were expecting just a “deep recession”, I am afraid that you are going to be very disappointed.  It took years for the U.S. economy to fully unravel in the 1930s, but now we have witnessed a similar level of economic devastation in just a matter of weeks.  More than 26 million Americans have already lost their jobs, economic activity has come to a standstill, people are lining up for miles at food banks all over the nation, and businesses are being permanently shuttered at a staggering pace.  But the good news is that some states will attempt to “reopen” their economies in the weeks ahead.  In most instances, there will be several stages before all of the restrictions are finally lifted, and that means that economic suffering will be stretched out for an extended period of time.  And of course if cases and deaths start spiking again we could see another wave of strict lockdowns all over the country, and needless to say that would greatly escalate this economic downturn.

At this moment, so many hard working people all over America are deeply hurting.

I personally know people that have lost their jobs, and you probably do too.  And because virtually nobody is hiring right now, it is going to be exceedingly difficult for newly unemployed workers to find other jobs.

Because it has an economy that is so dependent on the entertainment industry, Nevada is being hit particularly hard by this downturn.  The New York Times spoke to one Nevada resident named Valicia Anderson, and she hardly knows anyone that is still actually working…

When Valicia Anderson starts to count the people she knows in Las Vegas who have lost their jobs, she runs out of fingers fast.

Her husband, the breadwinner of her family and a restaurant worker in the Rio casino. All 25 of his co-workers. Her grown son, in a temp agency. The technician who does her nails. The barber who cuts her husband’s hair. Her best friend, a waitress. The three servers and a manager at the TGI Friday’s that is her family’s favorite treat.

It has been estimated that the current unemployment rate in the state is “about 25 percent”, and that number is almost certainly going to go higher in the months ahead.

Down in Texas, they are also dealing with an oil crash at the same time that they are wrestling with this coronavirus pandemic, and this has created the worst budget crisis that the city of Houston has ever seen…

On the same day that the price for U.S. crude oil fell to about $30 below zero — a mind-bending concept and the first time oil prices had ever turned negative — Mayor Sylvester Turner of Houston, the self-proclaimed energy capital of the world, stood before reporters. His words were grim and muffled by the black mask covering his face.

The mayor announced that city employees would soon be furloughed, but he declined to say how many. The Houston Zoo, he said, could expect to see funding deferred under what he called “the worst budget that the city will deal with in its history.”

The high paying energy industry jobs that fueled an incredible real estate boom in Texas are now disappearing by the thousands, and it is being reported that many of those that are being laid off are learning the news “during painful Zoom sessions from home”…

Thousands of energy workers, some of whom only lately moved to the region to take advantage of the recent prosperity, have been laid off. Many of them were told the bad news during painful Zoom sessions from home.

Warning letters from energy companies have been flooding the Texas Workforce Commission about layoffs and furloughs: 3,500 at Halliburton, 223 at Tenaris, 184 at Baker Hughes, 102 at Diamond Offshore Drilling, 95 at Energy Transfer.

By the way, when did Zoom become such a big thing?

It seems like so many people are using it now, and I don’t understand why it is so popular.

Perhaps my readers will help me to understand this.

Getting back to the economy, at this point even the Trump administration is admitting that the unemployment rate will soon be approaching levels that “we saw during the Great Depression”…

White House senior advisor Kevin Hassett says US economy is in “grave situation” and the unemployment rate could be hitting the same numbers seen during the Great Depression due to the Covid-19 pandemic.

“We’re going to be looking at an unemployment rate that approaches rates that I think we saw during the Great Depression,” Hassett told ABC’ ‘The Week’ on Sunday.

Let’s put that into perspective for a moment.

During the last recession, we thought that things were really, really bad when the unemployment rate got up to about 10 percent.

But back in 1933 the unemployment rate peaked at 25 percent, and now we are being told that we should expect something similar here in 2020.

Wow.

And of course low income Americans are being hit harder than anyone else.  Just check out these numbers…

Most Americans support stay-at-home restrictions to protect public health. And yet the burden of the country’s shutdown is disproportionately falling on those least prepared to handle it: About 52 percent of low-income Americans say they or someone in their household has experienced job upheaval, compared to 43 percent of the broader adult population, the Pew Research Center found. Only 23 percent of low-income Americans say they have enough emergency funds to last them three months.

Hopefully as some states attempt “reopenings” it will help to slow down this enormous tsunami of unemployment.

But as I pointed out the other day, millions of Americans are now making much more money being unemployed than they did when they were working, and so that is going to provide an incentive for millions of Americans to stay unemployed for the foreseeable future.

And even if all of the coronavirus restrictions in the entire country were lifted tomorrow, fear of the coronavirus would cause economic activity to be greatly depressed for many months to come.

As I discussed yesterday, the meat processing industry is a perfect example of this.  Meat processing facilities are being shut down all over the nation, and one expert just told NBC News that we should expect shortages of meat in our grocery stores “around May 1″…

Beef, chicken and pork could be as scarce as toilet paper soon because so many meat processing plants have been temporarily shut down amid the coronavirus pandemic, industry experts are warning.

“We’ve just completed our third week of reduced slaughter and production,” Dennis Smith, a commodity broker/livestock analyst with Archer Financial Services in Chicago, said. “My guess is that about one week out, perhaps around May 1, shortages will begin developing at retail meat counters.”

So many of the things that we have been warning about for a long time are starting to happen, but most Americans still do not grasp the seriousness of this crisis.

All of the economic dominoes are starting to fall, and even if the remainder of this pandemic goes much more smoothly than anticipated, it will not fundamentally alter our current economic trajectory.

The “Everything Bubble” lasted far longer than it should have, but now that it has burst the pain is going to be absolutely immense.

And it is those at the bottom of the economic food chain that are going to be hit the hardest.