Eye of the Storm

America is in the eye of the storm, hunkering down for what Mr. Trump promises will be a “very painful two weeks.” Some may have gotten the impression that the economic pain could begin to ease then, but he was talking about the death toll and the rising count of infections. No one can say how long the economic fallout will continue, but the most optimistic estimate I’ve seen suggests the nation will lose perhaps a quarter year’s production. If so, that seems manageable, especially when you add in the Fed’s $2Tr rescue package and stepped-up unemployment benefits that in most cases will equal lost pay.  Fear seems to have ebbed from the stop market in the meantime, even if there is insufficient enthusiasm at the moment to push stocks into a sustained rally.

  • Shanti Rajathurai April 1, 2020, 11:29 am

    Shane’s note said the service people will get 600/week, if look at it most of them have come from 3rd world country. I work as a nurse, when I came to the Western world to get my nursing training , I earned 150. dollars a month , you live on monthly check, we never received any money from the government. The caregivers that look after the rich are getting more money than the people with degrees. Some even have got millions when the patient dies, not the nurse nor the Dr.

  • Ben March 31, 2020, 11:48 pm

    “No one can say how long the economic fallout will continue, but the most optimistic estimate I’ve seen suggests the nation will lose perhaps a quarter year’s production. If so, that seems manageable […]”

    Bear in mind, Rick, that every country is lying about its numbers of infected and dead, for the sake of a line on some chart or other, as well as the letter grade of their debt. Here’s some proof of the lying…

    https://www.youtube.com/watch?v=DSV1oME_TJs

    As of this moment, Ecuador is reporting 79 deaths. There’s no way there isn’t that many, in that two-room section, alone!

    Meanwhile, at least one Lake County, IN hospital has requested two refrigerated trailers because the morgue was said to be full. But all of LC is currently reporting only 5 deaths.

    So Indiana and Ecuador are lying. Iran is lying. China lied. Germany and Turkey have been accused of lying. Russia is thought by many to be lying. North Korea is definitely lying! More liars surely will be discovered. I’m sure even the best economic lie-stimates will have to be revised (with less untruthful lies, until a plausible lie can be agreed upon by everyone).

    &&&&&&&

    I tend to believe the Fauci/Birx graphs, even if some local reports are inaccurate. They capture the broad statistical shape of the pandemic, and I trust that eventual cases and deaths will fall within their bands.
    RA

  • John Jay March 31, 2020, 8:59 pm

    My local chain grocery stores are still out of toilet paper and paper towels.
    Water is coming back in the shelves a little, fruits and vegetables are back in stock.
    But frozen foods, lunch meats/ cheese, bread and canned goods and frozen pizzas are always sparse now.

    I believe that what is happening is: with all the restaurants closed, and the schools as well, families that used to eat out every night, and have the government feed their kids lunch, now need to buy more food than ever before, and no one feels like actually cooking. The meat department has plenty of beef, pork, and chicken, but you have to cook that first.
    Nothing doing!
    So it’s frozen pizzas, micro waved hot dogs, and ham and cheese sandwiches again tonight!

    Not to mention all the tourists staying home and not eating at some resort or foreign tourist trap.

    The restaurant supply chain can’t switch over to the grocery store supply chain like magic.
    It will take some time for all that to sort itself out to the new reality, and why bother if this will all be over in a month?

    And with car, truck, and especially aircraft traffic, down a bunch, how long before refineries start to shut down for lack of places to store gasoline, diesel, and jet fuel?

    This is all unprecedented, a sort of simultaneous economic equation, very hard to predict the outcome with precision.

    &&&&&&&&

    Bloomberg’s expert thinks oil storage will run out by June and that prices will fall to $10/barrel. RA

  • Shane March 31, 2020, 8:35 pm

    With service workers getting a MINIMUM of $600/week for unemployment ($15/hour in a 40 hour week), what incentive will they have to come back to work? Many employers were having a hard time finding employees before Corona, with a few of them closing their doors because of it. Economic socialism is here.

    &&&&&&&&

    Benefits eventually run out, although it’s hard to know how long they will be extended in this emergency. During the trough of 1973-74, 13-week extensions were announced like clockwork, just before they were to have run out.
    RA