Month: April 2020

Tonight at midnight, the most critical – if hardly biggest – part of the Fed’s $2 trillion fiscal stimulus is expected to begin: that’s when small and medium business with 500 employees or less can request a loan of up to 2.5x the average monthly payroll (capped at $10 million), and meant to buy cash-strapped small businesses just under 3 months in liquidity. As we discussed previously, the loans which are packaged under the SBA’s Paycheck Protection Program, carry a 0.5% interest rate, and would be forgiven if their proceeds are used toward payrolls, utilities, and rent.

Needless to say, getting these loans into the hands of America’s small business is absolutely critical: they employ about half of U.S. private sector employees, according to the Small Business Administration website.

There is just one problem: with just hours to go until millions in small businesses across the nation scramble to apply for much needed funding, the program appears to be on the verge of collapse amid what appears to be sheer chaos between the Treasury, the Small Business Administration, and the various commercial banks that will be tasked to loan the action money.

One reason why the program is woefully unprepared for a Friday midnight rollout is that banks that haven’t underwritten SBA loans before will need to get onboarded in the system. However, as Politico reports, as of last night, there was no application available for banks to do this, and as CNBC’s Kayla Tausche adds, Treasury remains committed to originating these loans beginning tomorrow, despite hiccups.

But wait there’s more: as CNBC’s Kate Rogers reports, an “official familiar with the Paycheck Protection Program loans rolling out tomorrow says official guidance for banks is not yet finalized” with Kayla Tausche adding that in addition to general guidance, banks are asking Treasury for two specific changes to the small biz program:

• Smaller banks want higher interest rate so they don’t lose money
• Big banks want “know your customer” rules waived so they can lend to co’s they haven’t worked with

In addition to general guidance, banks are asking Treasury for two specific changes to the small biz program:
– Smaller banks want higher interest rate so they don’t lose money
– Big banks want “know your customer” rules waived so they can lend to co’s they haven’t worked with

— Kayla Tausche (@kaylatausche) April 2, 2020

Meanwhile, with the supply side choked off amid last minute rollout chaos, demand for the bailout cash is exploding with some estimates that as many as $1 trillion in loan requests will be available for the $350BN in “first come, first serve” loans. As Tausche adds, “industry sources say a “feeding frenzy” of small biz demand for limited resources will be problematic for the system, technically” and notes that “executives are preparing for a situation akin to the 2013 roll-out of http://Healthcare.gov“

That, for those who may not recall, was an unmitigated disaster lasting for months.

But while logistical issues will be overcome, a potential dealbreaker of a problem is that the physical source of new loans is getting cold feet. According to Reuters, thousands of U.S. banks, including some of the country’s largest lenders, have said they may not participate in the federal government’s small-business rescue program due to concerns about taking on too much legal and financial risk.

While the Trump administration has said it wants the loans disbursed within days, bank representatives, as well as thousands of community lenders, have expressed serious reservations about participating in the scheme in its current form and called that deadline totally unrealistic.

Their biggest concern is that the Treasury Department said on Tuesday that lenders will be responsible for preventing fraudulent claims by verifying borrower eligibility, which is determined by a few measures including the borrower’s number of employees and its average monthly payroll costs.

That’s not all: banks also must take steps to prevent money laundering and terrorist financing, a process that would normally take weeks, the sources said. Additionally, banks are concerned they could face regulatory penalties or legal costs down the line if things go awry in the haste to get money out the door. But at the same time they are worried they will be blamed for not moving funds fast enough if they perform due diligence the way they would under normal circumstances, the sources said.

Then there is the mandated interest rate on the loans: community banks said the Treasury’s guideline interest rate of 0.5% will be unprofitable, and that many small banks will not have sufficient liquidity to front up the loans (this, as we said yesterday, may have been a primary consideration for the Fed to release Treasuries and deposits from the Supplementary Leverage Ratio test, effectively opening up over $1 trillion in additional loan capacity across the US banking sector).

“Taking all of the above concerns into consideration, many banks have already indicated that they will not be able to use the Program under the current terms,” the Independent Community Bankers of America wrote to the U.S. Treasury and Small Business Administration, which are jointly administering the loans program, on Wednesday.

“We strongly recommend that you make changes to the guidelines before the Program goes live so that it will work as intended by Congress,” the group, which represents thousands of small banks across the country, wrote.

Alas, that is impossible as going back to the drawing board would mean days if not weeks of additional delays, which for an economy where every hour matters, is simply not feasible.

Still, as Reuters reports, as of late Wednesday night, after hearing the concerns, Treasury officials are considering withdrawing Tuesday’s guidance and are working to fix the issues, although as of this moment the same guidelines for the PP program were still in place as earlier this week.

Banks also want a document customers can sign attesting to their eligibility and other requirements, thereby relieving the industry of responsibility for potential misconduct. One source said banks are also seeking a written assurance from the government regarding their legal liabilities and obligations before they agree to participate in the program.

Reuters could not learn which specific big banks are thinking about shunning the program. The Bank Policy Institute (BPI), a Washington trade group, hosted a call on Wednesday during which executives from its members discussed their concerns, three of the sources said. Members of the group include JPMorgan Chase, Bank of America, Wells Fargo Citigroup, Truist Bank and PNC.

“Our banks are committed to ensuring this program works and that all of the operational complexities and process challenges are worked through so we can achieve Congress’s goal of helping America’s small businesses,” Greg Baer, President and CEO of the BPI, said on Thursday.

Which is ironic: back in September 2008 all the banks demanded multi-trillion taxpayer funded bailouts right this instant as the world was going to implode if a few banks went under. However, now that the tables are flipped, and mainstream America and half of all the private sector employees demand a similar turnaround time or else the US economy will truly collapse, banks suddenly think that taking their time, dotting i’s and crossing t’s is far more important than getting money into the hands of America’s workers. Money which, as a reminder, is now of the “helicopter” variety, openly printed by the Treasury, monetized by the Fed, and which can be delivered to banks through the back door if need be.

With that we look forward to seeing how this chaos resolves itself. Here is a recap of the biggest challenges courtesy of CNBC’s Tausche.

$350 billion of small business loans will be made available tomorrow, but is the government ready to roll out the program? @kaylatausche has the details on bankers’ concerns that the program is not ready for prime time on @CNBC. pic.twitter.com/fmheeBTNmE

— The Exchange (@CNBCTheExchange) April 2, 2020

Update (1420ET): It looks like news wires like Bloomberg and Reuters have gotten a hold of that memo, or at least the details, judging by these headlines.

• IRS COULD TAKE UP TO 20 WEEKS TO ISSUE ALL PAPER CHECKS – HOUSE MEMO
• IRS TO BEGIN ISSUING PAPER CHECKS TO INDIVIDUALS DURING WEEK OF MAY 4 – HOUSE MEMO

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Around the country, millions of Americans are anxiously wondering when their stimulus checks will be arriving, as they hope to God that they have a job to come back to, or that – if they’ve already been laid off – the government stimulus money manages to save their employers and help them get their jobs back.

But as President Trump has said several times during the White House’s daily press briefings, nothing like this has ever been done before. And while it sounds simple, as we explained the other day, handing out $2 trillion (or at least the amount that’s been earmarked for unemployment expansion and stimulus checks) is harder than it sounds.

And as the administration continues to string people along – Steven Mnuchin said last week that “our expectation is three weeks” for those who have depository information on file – whispers about the timeline for the payments are seeing the ‘whisper timeline’ number are seemingly growing in proportion.

And now, CNN is now reporting that instead of the three week timeline that Mnuchin gave last week, which would have resulted in checks going out the week of April 6, the first checks likely won’t go out until the week of April 13, and – what’s worse – it could as long as 20 weeks for all the stimulus checks to go out, leaving millions of poor and desperate Americans (many of whom voted for President Trump) twisting in the wind.

Americans likely won’t begin to see direct payments from the coronavirus stimulus bill until at least April 13 and it could take 20 weeks for all the checks to be mailed, Trump administration officials told lawmakers, according to a House Democratic memo obtained by CNN.

The timeline means tens of millions of Americans will have to wait to get badly needed assistance, despite repeated suggestions from Treasury Secretary Steven Mnuchin that the money would go out as soon as April 6. He said this past Sunday after passage of the $2.2 trillion stimulus bill that payments would not go out until mid-April.

CNN reported in March that former IRS officials said the wait would likely be weeks or months.

According to the memo cited by CNN, the IRS is expected to make about 60 million payments, likely starting during the week of April 13, for taxpayers who provided their direct deposit information via their 2018 or 2019 tax returns. Three weeks later, the IRS expects to start issuing paper checks to individuals whose bank information isn’t already on file, a process that will take significantly longer. House Democrats expect that up to 5 million checks can be issued per week.

For those who don’t have tax information on file, the checks will take even longer.

All of the information is based on conversations with Treasury and the IRS, the memo said.

And all of this is after a group of Democratic Senators pushed for a change in guidance that Elizabeth Warren said would get money into the hands of seniors’ faster.

I joined @SenatorHassan, @SenSherrodBrown, and 31 other senators in urging @USTreasury Secretary Mnuchin & @SocialSecurity Commissioner Saul to reverse the IRS’s guidance and provide stimulus payments to Social Security beneficiaries even if they don’t file tax returns. pic.twitter.com/5g0NGf6CTx

— Elizabeth Warren (@SenWarren) April 1, 2020

The stimulus law signed by President Trump last week stipulates that individuals who earn $75,000 or less will receive $1,200, while couples that make $150,000 or less will receive twice as much, as well as an additional $500 per child. Payments decrease for those who earn more, and individuals earning more than $99k a year will get nothing.

Additionally, CNBC’s Kate Rogers reported Thursday after on some issues between the SBA and Treasury about the small-and-medium-sized business section of that bill. “The SBA and Treasury are not on the same page,” Rogers said.

Bottom line: If the Trump Administration doesn’t figure all of this out quickly, the stimulus bill rollout could become the biggest government debacle since the rollout of healthcare.gov.

Since 2017, we have been following the bread-crumbs of the mysterious VIX-whale nicknamed “50-Cent” – so-called for his habit of scooping up super-cheap VIX calls at a price around 50c (and with very good timing):

• April 2017 – Who Is The Real “50 Cent” – A Mystery Trader Is Systematically Betting Massive On A VIX Spike

• Feb 2018 – VIX-Trader ’50Cent’ “Steamrolls” XIV-Traders To $200 Million Gain

• Jul 2019 – Is VIX Whale ’50-Cent’ Back? Volatility Collapse Sparks Huge Bearish Bets

• Dec 2019 – VIX Options-Whale ’50 Cent’ Re-Emerges As New Short-Vol ETF Appears

He is among several VIX whales discovered in recent years.

And now,  according to The FT, the real ’50-cent’ has stepped forward as Jonathan Ruffer – a London-based fund manager for investment firm Ruffer Capital.

His strategy, which is believed to have spent $200m to protect against a rise in volatility in US stocks, saw its strategy pay off during the recent market turmoil.

“That means they’ve made about $400 million mark-to-market this month,” said Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors.

“We don’t know if “Fiddy” has monetised any of their options . . . Regardless, this is still an impressive result.”

Either way, speaking for himself in a letter to investors, Ruffer says that “catastrophe insurance” strategy has run its course extreme successfully.

When the elements speak, elemental forces are unleashed, and it is important, in the middle of this storm, to capture the right tone of voice. Any false attempt to give reassurance, to boast about early success, to bury oneself in clichés, is unhelpful – even worse, it is historic: by the time these words are read, events will have unfolded which make them, as the CD music reviews have it, ‘of historic interest only’. We are a long way from terra firma; at the time of writing, it’s a case of ‘so far, so good’. If this were a tennis match, all we could say is that we’ve had a decent first set.

We have been writing for a long time – too long? – about the cataclysm ahead. If our judgement has been sound, then the maelstrom cannot be put down to a pandemic – utterly unforeseeable, and certainly not predicted by us. The Titanic was sunk by an iceberg; the Ark Royal by a torpedo – both were great surprises, as coronavirus has been.

Another way of looking at the fate of the Titanic and Ark Royal is that the former sank because of inadequate bulkheads, the latter because of a flaw in the siting of the engine exhausts. In the long run-up to market dislocation, we were preoccupied with the ship, not the icebergs or torpedoes. The instruments of destruction are always out there. If markets are resilient, they cope with them. The danger comes when they are not, and this has been the centre of our earnest enquiry: where were things going wrong? Where were they headed?

This is a far harder market to navigate than the crisis of 2008 – or the one before it at the turn of the century; in both cases the market dropped by 50%. In the first, you needed to observe just one rule of the road: avoid the tech and media stocks completely. In the second, you needed to know one thing – that loads of borrowing would give way, dislocatively, to loads of de-gearing. In 2008, we had a single insight: that the many people who had borrowed in Swiss francs and Japanese yen, to take advantage of low interest rates, would in a crisis compete to buy these currencies back, to pay off their loans. As that bloody meerkat says, ‘simples’.

This time round, it is neither ‘simples’ nor ‘easyies’. The problem can be condensed into a single idea – where there is borrowing, there is danger – but this does not come with an obvious solution. Leverage has flooded into every asset class. In the world’s portfolios, the most exposed positions have been the first to tumble. But as investors have struggled to re-establish an even keel, they have had to sell the things which are not obviously wrong, simply because these things are capable of being sold. This is not a surprise, of course, but it does mean that there has been, ahead of this rough water, a good reason for not owning any type of asset at all. In many ways, the battle has been less frightening than the eve of battle, when there seemed no certainties of safety.

Here’s an account of our battle units.

At the forefront was our catastrophe insurance. In a world in which most people didn’t want to spend good money on protecting against what might go wrong, we chose to buy insurance that would benefit from an abrupt fall in the markets. We felt the micro structure of markets left them vulnerable to ‘gap risk’ (something our Chief Investment Officer Henry Maxey highlighted in the 2019 and 2020 Ruffer Reviews).

Insuring against deep trouble in the very near future was relatively cheap, because there were many people who were happy to enter into the other side of the trade – they saw the risk of a tremendous fall in the near future as vanishingly unlikely. Our preferred insurance was in volatility – when markets are racked with fear, they become more volatile, and this is measurable through an index called the VIX. We had a tranche of options which expired, worthless, ten days before the action began. But the next tranche were winners – multiplying in four weeks by around 100 times.

We sold (within inches, again, of being time-expired) when they had yet to put in their final double. We also had puts on the American and European stock markets, which did very well. And we held currency and interest rate swaptions (our positioning that long-dated interest rates would rise more sharply than short-dated rates worked, while our judgement that the Japanese yen would do better than the US dollar didn’t work).

In sum, the catastrophe insurance did absolutely everything that might be expected of it. And it is now spent. It is likely to be some time before this insurance again prices at levels that makes it attractive as a defensive investment.

So, what will Ruffer shift to now as his ‘catastrophe insurance’?

Authored by Alexander Deluce via GoldTelegrapoh.com,

Over the last few weeks, the Federal Reserve has been in utter desperation mode to try to revive and keep the American economy on life support.

What many in the mainstream media have failed to include in this recent coronavirus economic narrative is that the virus was just the pin of one the biggest bubbles ever created, which we call the central bank bubble revolving around U.S sovereign bonds.

Before we dive deep into this, let’s start with what the Fed has been doing to combat against the coronavirus and to keep markets alive for the time being. To begin, welcome back to the era of the printing press, but this time they have made it clear they will conduct “QE infinity” if this is a prolonged depression, which it will be. 

For some prospective, previous QE programs were: 

• QE1: $1.7 Trillion 

• QE2: $600 Billion 

• QE3: $1.6 Trillion 

With this latest being: 

• QE4:$1.6 Trillion 

An overwhelming number in such a short period, making previous QE programs look like peanuts in comparison. In fact, the Fed printed roughly $970,000 every second last week to keep the market afloat. To validate that the Fed is artificially keeping the market alive, just look at this next chart: 

This chart showcases that while the Fed balance sheet has shot up ($5.2 Trillion), corporate earnings have plummeted. The market is clearly on life support with the Federal Reserve as its temporary backstop. Presently, the aviation, hotel, and automotive industries, to name a few, are in a major crisis. This applies to all businesses, but since 2008 companies have taken advantage of prolonged zero interest rates and have gone on a total debt binge, with the majority of this debt going strictly to share buybacks and dividends to shareholders.

It is expected the Federal government will bail some of these companies out with the unprecedented stimulus package passed last week. Which displays we don’t live in a real capitalistic society, wealth effects have been the primary mandate for the Federal Reserve for the past three decades (beginning with Greenspan).

But we now face a severe issue, which resides in the bond markets. The Fed has made it very clear that they will conduct QE forever if needed to normalize things; however, the more and more they print, and as more stimulus gets announced from the U.S government, the confidence in the U.S dollar will begin to dwindle.

Many prominent investors are calling for a significant dollar rally, as they believe the USD will forever be the world’s most sought out currency given its reserve currency status. However, they fail to realize this is a much different world we are navigating through then the 2008 financial crisis.

For starters, this will not be a temporary few month recovery. There are many signals being sent to the market that we are entering a great depression type environment. As CNBC reported just two days ago, the Federal Reserve itself has made estimates public that the unemployment rate could hit 32%, which would have 47 million Americans out of a job. For comparison, during the great depression of 1933, peak unemployment was 24.9%.

It’s worth revisiting the great depression, which had devastating effects. Personal income, tax revenue, profits, and prices dropped, while international trade fell by more than 50%. The great depression lasted until the beginning of World War II.

Countries have been preparing for this moment since the financial crisis as this chart showcases:

Since the 2008 financial meltdown, central banks have gone from being net sellers to being net buyers of gold as demand from central banks is currently at 50-year highs. Why might you wonder? Well, for one, it’s money which is recognized universally with zero counterparty risk. I will save why it’s money for another report. Still, one of the primary reasons why there is such unprecedented demand from central banks is because they do understand that there is historic debt circulating the global economy, which eventually has to be dealt with. I believe the grand game plan that these “academics” at these central banks are planning is to allow inflation to run hot for the foreseeable future until this debt becomes more manageable. By allowing inflation to run, debt will become cheaper to service.

These inflation concerns could be why foreign central banks dumped more than $100 billion in treasuries in the three weeks to March 25, and it is on track to be the biggest monthly drop on record. 

Countries holding U.S. Treasuries are afraid of this likely scenario as well, which explains the record dump. Remember, rampant inflation will destroy the value of the countries holdings. The continuous fire sale of U.S. treasuries is the Federal Reserve’s worst nightmare as if it becomes out of control, interest rates would skyrocket and the dollar would completely collapse on foreign exchange markets. The result of this would be MAJOR financial dislocations as mortgage costs would become much higher, and real estate would collapse.

Now the Fed is trying to stay ahead of this by implementing a backstop by introducing a temporary repurchase agreement facility. This program allows central banks to swap treasuries for dollars. It is quite evident; these central banks are in urgent need of these dollars so they can spend quickly. On top of the inflation concerns, countries are selling this due to being major oil importers and want to tap up reserves. 

You might be wondering as to why the USD is currently holding up, well its because many investors and money managers have yet to realize this very fact with regards to the upcoming inflation. Many believe like in the great depression in the 1930s we are on the verge of deflationary episode due to a credit crisis.

They are failing to comprehend a very important variable at this present moment. More and more supply chains are being absolutely eviscerated by the day. Meaning, fewer and fewer goods will be produced in the foreseeable future until this pandemic gets sorted out. But before that happens, there will be much more panic economically as critical necessities that we humans need is beginning to take a hit, which is food.

Food supply chains in developed economies are beginning to become strained, and countries are already starting to stockpile food instead of exporting it to prepare for this type of food shortage. Many countries are doing this, but the primary ones I will mention are Russia and Kazakhstan.

Russia is the world’s largest wheat exporter and has recently proposed limiting grain shipments to protect its own food reserves. However, for now, things will flow as usual, but this shows governments are beginning to think about stockpiling necessities for their people vs. worrying about trade. 

Kazakhstan, who is another major wheat exporter, has temporarily banned shipments of buckwheat, rye flour, sugar, carrots, and potatoes because the government is worried about domestic supply. Some major logistical bottlenecks are going on in the food supply chain that I don’t think many people will hear about until it’s a definite problem. But the supply chain destruction is one of the primary reasons why we will not have a deflationary episode like in the 1930s.

Next, on top of unprecedented quantitative easing coming from the Federal Reserve, there is a pipeline of liquidity in the form of an approved two trillion-dollar stimulus bill passed with many government officials calling for more. The American economy is currently being flooded with cash to keep things afloat.

The big story here, is looping back to the biggest bubble ever created which is the bond market and the question is, how will the Fed keep it from utterly collapsing?

The Fed has the following to worry about:

• The $10 trillion corporate bond market 

• The $16 – 19 trillion commercial real estate market (which is shutdown)

• The $23 trillion treasury market 

The only way the Fed is going to deal with this is by printing endless amounts of money, which is going to debase the USD purchasing power in the coming years dramatically.

As more and more money is printed, one of the most important charts to pay attention to is this one: 

The gold price will always be the best signal when it comes to inflationary concerns, as the metal is already at record highs in multiple currencies, and the industry is currently going through a physical supply crisis as premiums skyrocket.

The Dutch central bank summed up gold the best:

“Gold is the perfect piggy bank – it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”

We wish everyone good health during these difficult times.

Top Democratic strategists are furious that Google banned ads from mentioning or even discussing COVID-19, as they ramp up their efforts to criticize President Trump’s virus response on the internet.

Democrats say the Google ban allows the Trump administration to promote its response to the crisis while denying ads criticizing it. 

“…staffers of several Democratic nonprofits and digital ad firms realized this week that they would not be able to use Google’s dominant ad tools to spread true information about President Trump’s handling of the outbreak on YouTube and other Google platforms. The company only allows PSA-style ads from government agencies like the Centers for Disease Control and trusted health bodies like the World Health Organization. Multiple Democratic and progressive strategists were rebuked when they tried to place Google ads criticizing the Trump administration’s response to coronavirus, officials within the firms told Protocol.” – Protocol 

“We’re in the middle of the defining event of this election and potentially a generation,” said Mark Jablonowski, the CTO and managing partner of DSPolitical. This top digital ad firm works with Democratic campaigns and progressive groups.

“To not allow political candidates to mention or discuss COVID-19 is something that has the potential to dramatically bolster Trump’s and Republicans’ chances of reelection,” Jablonowski said.

Another Democratic strategist, who wanted to remain anonymous, said his firm has been operating several virus-related ads on Facebook, which still allows political ads about COVID-19.

 “As we were getting ready to start broadening [the ad campaign] into Google, we reached out to Google to clarify what their rules were going to be,” said the strategist. A Google representative told him that their virus ads wouldn’t be allowed on the platform. 

Josh Koster, a managing partner at DC-based digital advertising firm Chong & Koster, said Google’s refusal to run COVID-19 ads because it wants to avoid misinformation and price gouging of products makes sense. Still, he said there’s “an entirely separate use-case from nonprofit organizations trying to spread accurate information about the situation and holding elected officials accountable for the life-and-death decisions they are currently making.”

Protocol notes that the Trump administration and Republicans have suspended political ads for the timing being. Some Democratic strategists claim President Trump’s CDC and White House ads, which have been authorized by Google, sound a lot like political campaign messages. 

“For Google to basically say that the Trump administration is the only entity that is allowed to talk about the most important issue in politics really puts their thumb on the scale of the incumbent president and against anyone who is really looking to challenge him,” said Eli Kaplan, a founding partner of Rising Tide Interactive, a marketing firm for Democratic political organizations. 

The fight between Democrats and Google over political ads targeting President Trump’s virus response is a matter that has many on the Left enraged. Strategists are still running political Facebook ads jabbing the president for how the public health crisis has spiraled out of control.

Google told Protocol that its ad policies are always evolving and will review its rules in the next several months. 

Until Google changes its rules, Democratic strategists said their message against the president would evolve with a theme of how the public health crisis has triggered an economic collapse affecting millions of American households. 

“I’ve had several different clients that have totally had to rethink the way that their political strategy is working right now,” said another Democratic strategist, who also requested anonymity. “They’ve had to toss out the old playbook and come up with a whole bunch of different issues.”

“Google should remove content that misleads the public as it relates to health issues surrounding COVID-19,” said Kaplan. “But shutting down all paid political advertising on the subject, including ad content that is 100% truthful, is completely irresponsible.”

President Trump’s approval rating has been soaring since the virus outbreak began. And maybe Google’s ban on COVID-19 ads has been a political gift to the administration. 

So how long until Google reverses its ad policy?

Unlike Boeing, which offered all of its 160,000 employees “voluntary buyouts” just so it can still keep its bailout option alive which would certainly be snuffed if the company were to announce mass layoffs, General Electric has no such qualms and moments ago the company told CNBC that it is planning to furlough half of its aviation unit’s engine-manufacturing staff as the coronavirus roils the industry.

“Due to the unprecedented impact of COVID-19 on the commercial aviation industry, GE Aviation is implementing a temporary reduction in commercial engine assembly and some component manufacturing operations for up to four weeks,” a GE spokesperson said. “We appreciate the commitment of all our employees during this difficult time, and we regret having to take this action. We will continue to deliver for our customers and preserve our capability to respond when the industry recovers.”

The move will involve thousands of jobs in the key unit – which has seen a total collapse in demand as a result of the shuttering of virtually all flight – and last for four weeks.

The additional reductions come less than a month after the company said it would cut 10% of its aviation unit, affecting roughly 2,600 workers. But as the coronavirus’ devastating toll on travel demand has increased, airlines are parking hundreds of planes while deferring orders of new aircraft.

 

Authored by Paul Joseph Watson via Summit News,

Dr. Anthony S. Fauci says that the United States will not come out of lockdown until there are no “new cases” of coronavirus, prompting some to question precisely how long that will be.

During yesterday’s White House briefing, Fauci, who has become the face of America’s response to the coronavirus, was asked by a reporter whether social distancing measures will be imposed until there is a drug or vaccine to treat COVID-19.

“I think if we get to the part of the curve that Dr. Birx showed yesterday when it goes down to essentially no new cases, no new deaths at a period of time. I think it makes sense that you will have to relax social distancing,” Fauci said.

“The one thing we hopefully would have in place, and I believe we will have in place, is a much more robust system to be able to identify someone who was infected, isolate them and then do contact tracing,” he added.

The prospect of there ever being zero new coronavirus cases appears to be a very long way off, leading some to question if Fauci was asking Americans to adopt social distancing indefinitely, or at least until a vaccine is available.

“Fauci said that we can start to “relax” social distancing once there are “no new cases, no deaths.” Is it just me or is that completely batshit insane?” asked Matt Walsh. “That would keep us in a lockdown for many months or years. And if the virus becomes endemic, forever. How can that be the plan?”

Fauci said that we can start to “relax” social distancing once there are “no new cases, no deaths.” Is it just me or is that completely batshit insane? That would keep us in a lockdown for many months or years. And if the virus becomes endemic, forever. How can that be the plan?

— Matt Walsh (@MattWalshBlog) April 2, 2020

“No kidding. We would need to assume that any vaccine would be immediately available, 100% effective, 100% of the population has access to it, and 100% of the population takes it,” commented another respondent.

“Sounds like they’ll eventually have to keep us “temporarily” locked in our homes. No cars on the road. No people at stores or gas stations, and the national guard will start leaving a box of food on our doorsteps every 3 days. And everyone will be ok with it,” added another.

Italy is already experiencing looting and civil unrest as a result of lockdown measures.

Experts have suggested that this could be a massive problem everywhere if authorities attempt to quarantine entire countries for too long.

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