investmentwatchblog--2020-04-24--We Have Never Seen An Economic Collapse Quite Like This, And It Is Largely A Self-Inflicted Wound

The rate at which the U.S. economy is unraveling is absolutely breathtaking .
On Thursday , we learned that another 4.4 million Americans filed new claims for unemployment benefits last week , and that means that a grand total of more than 26 million Americans have lost their jobs during this pandemic so far .
To get an idea of just how dramatically this record-setting unemployment spike dwarfs what we witnessed during the last recession , check out these charts .
Prior to this year , the record for new unemployment claims in a single week was just 695,800 , @ @ @ @ @ @ @ weeks has been at least four times larger than that old record .
And as I discussed in an article earlier today , millions of those workers have absolutely no incentive to go back to work any time soon , because thanks to Congress they are bringing home more money now than when they were actually working .
So even if efforts are made to return the economy “ to normal ” , millions of workers will want to stay home until the $ 600 per week “ unemployment bonus ” finally expires @ @ @ @ @ @ @ new economic crisis is largely a self-inflicted wound , and I will explain why that is true later in this article .
But first let ’ s talk about where things currently stand .
Based on the unemployment claim numbers that we have been seeing , experts are now projecting that the current rate of unemployment in the U.S. “ is about 16 percent ” … For a long time I have been warning that the next crisis would make the last recession look like a Sunday picnic , and now that has @ @ @ @ @ @ @ unprecedented number of initial claims for unemployment benefits , we have also absolutely smashed the all-time record for the number of “ continuing claims ” … And now that Congress has given workers a tremendous financial incentive to stay unemployed , the number of “ continuing claims ” is likely to keep going higher with each passing week .
Of course this isn ’ t just happening in the United States .
Over in Europe , business activity is falling at the fastest pace ever recorded… To put those numbers in perspective , @ @ @ @ @ @ @ .
Needless to say , these absolutely horrific statistics are the result of the coronavirus lockdowns , but were these lockdowns actually necessary in the first place ?
As I discussed yesterday , the only reason why any sort of a lockdown should be implemented is if the hospitals in a particular area are being overwhelmed , because if people are unable to get medical treatment that could definitely push the ultimate death toll from the pandemic higher than it otherwise would have been .
But in most parts of the U.S. and @ @ @ @ @ @ @ being even close to overwhelmed .
Keeping everyone at home is not going to defeat this virus or end this pandemic .
When you are dealing with a virus that spreads from person to person this easily , there is no way that you are going to contain it .
In fact , the U.S. just had 31,900 newly confirmed cases in the 24 hour period that just ended even though most of the nation has already been locked down for weeks .
Yes , these lockdowns have temporarily slowed down the spread @ @ @ @ @ @ @ have also extended the duration of this pandemic .
Ultimately , this pandemic is never going to be over until it sweeps through the population and “ herd immunity ” is achieved .
And as I discussed yesterday , 70 to 90 percent of the population is going to have to develop antibodies in order to get to that point .
And if you are waiting for a “ vaccine ” to get us out of this mess , you are going to be waiting for a very , very long time .
@ @ @ @ @ @ @ for any coronavirus in all of human history , and the task of trying to develop one for COVID-19 has become exceedingly more difficult now that scientists have discovered that there are 30 different strains of the virus .
So the truth is that this outbreak is going to rip through our population , and nothing that our politicians can do will be able to stop that from happening .
But the good news is that new numbers from New York seem to indicate that we are closer to “ herd immunity ” @ @ @ @ @ @ @ study that was conducted in L.A. County found that only 4 percent of their residents had developed antibodies , and that is probably more representative of the nation as a whole .
In any event , everyone agrees that the vast majority of the U.S. population has not developed antibodies , and that means that there will be many more cases and many more deaths in the months ahead .
And that is going to happen no matter how our politicians respond to this crisis .
So as long as our hospitals are @ @ @ @ @ @ @ t a need for any lockdowns .
The final case total and the final death toll will be roughly the same whether there are lockdowns or not .
But these lockdowns are definitely killing our economy , and tens of millions of American workers now find themselves unemployed .
And if we continue to try to keep the U.S. economy shut down for a few more months , the economic damage will be incalculable .
Please don ’ t misunderstand what I am saying .
I am not saying that we should sacrifice @ @ @ @ @ @ @ .
What I am saying is that about the same number of people are eventually going to die whether we have the lockdowns or not .
And if we can ’ t handle this , how in the world are we going to deal with what else is coming ?
If you are elderly , have a compromised immune system or are in some other high risk group , you are going to have to quarantine yourself for the foreseeable future , but that would be true whether there are lockdowns or not @ @ @ @ @ @ @ groups are much , much higher than for the general population as a whole , and the danger is very real .
But everyone else should be allowed to get back to work , because most of the population is eventually going to catch this virus no matter what we do .
As long as our hospitals can handle it , we should proceed with life as normal .
Unfortunately , that isn ’ t going to happen .
Most of the current lockdowns are going to remain in place for quite some @ @ @ @ @ @ @ is just going to get deeper and deeper .

by Michael Snyder
The rate at which the U.S. economy is unraveling is absolutely breathtaking. On Thursday, we learned that another 4.4 million Americans filed new claims for unemployment benefits last week, and that means that a grand total of more than 26 million Americans have lost their jobs during this pandemic so far. To get an idea of just how dramatically this record-setting unemployment spike dwarfs what we witnessed during the last recession, check out these charts. Prior to this year, the record for new unemployment claims in a single week was just 695,800, and now each of the last five weeks has been at least four times larger than that old record. And as I discussed in an article earlier today, millions of those workers have absolutely no incentive to go back to work any time soon, because thanks to Congress they are bringing home more money now than when they were actually working. So even if efforts are made to return the economy “to normal”, millions of workers will want to stay home until the $600 per week “unemployment bonus” finally expires. The sad thing is that this new economic crisis is largely a self-inflicted wound, and I will explain why that is true later in this article.
But first let’s talk about where things currently stand. Based on the unemployment claim numbers that we have been seeing, experts are now projecting that the current rate of unemployment in the U.S. “is about 16 percent”…
With a labor force that totals about 162 million people, the claims figures suggest the unemployment rate is about 16 percent, or roughly one in six Americans — significantly higher than the 10 percent peak seen during the 2008 financial crisis. The previous one-week high for jobless claims was 695,800 in 1982.
For a long time I have been warning that the next crisis would make the last recession look like a Sunday picnic, and now that has actually happened.
In addition to an unprecedented number of initial claims for unemployment benefits, we have also absolutely smashed the all-time record for the number of “continuing claims”…
A person who has filed an “initial claim” for Unemployment Insurance (UI) and still doesn’t have a job a week later is added to “insured unemployment.” The number of the “insured unemployed” – often called “continued claims” – skyrocketed to 15.98 million, by far the highest in the history of the data series. The high before this Covid-19 era was 6.63 million in May of 2009.
And now that Congress has given workers a tremendous financial incentive to stay unemployed, the number of “continuing claims” is likely to keep going higher with each passing week.
Of course this isn’t just happening in the United States. Over in Europe, business activity is falling at the fastest pace ever recorded…
“The eurozone economy suffered the steepest falls in business activity and employment ever recorded during April as a result of measures taken to contain the coronavirus outbreak,” it said. The company’s purchasing manager’s index (PMI) dived to a record low of 13.5 in April, from the previous all-time low of 29.7 in March, confirming private sector gloom that is savaging the 19-nation eurozone.
To put those numbers in perspective, any reading below 50 indicates a contraction.
Needless to say, these absolutely horrific statistics are the result of the coronavirus lockdowns, but were these lockdowns actually necessary in the first place?
As I discussed yesterday, the only reason why any sort of a lockdown should be implemented is if the hospitals in a particular area are being overwhelmed, because if people are unable to get medical treatment that could definitely push the ultimate death toll from the pandemic higher than it otherwise would have been.
But in most parts of the U.S. and Europe right now, hospitals are not being even close to overwhelmed.
Keeping everyone at home is not going to defeat this virus or end this pandemic. When you are dealing with a virus that spreads from person to person this easily, there is no way that you are going to contain it. In fact, the U.S. just had 31,900 newly confirmed cases in the 24 hour period that just ended even though most of the nation has already been locked down for weeks.
Yes, these lockdowns have temporarily slowed down the spread of the virus, but the lockdowns have also extended the duration of this pandemic. Ultimately, this pandemic is never going to be over until it sweeps through the population and “herd immunity” is achieved. And as I discussed yesterday, 70 to 90 percent of the population is going to have to develop antibodies in order to get to that point.
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And if you are waiting for a “vaccine” to get us out of this mess, you are going to be waiting for a very, very long time. There has never been a successful vaccine for any coronavirus in all of human history, and the task of trying to develop one for COVID-19 has become exceedingly more difficult now that scientists have discovered that there are 30 different strains of the virus.
So the truth is that this outbreak is going to rip through our population, and nothing that our politicians can do will be able to stop that from happening.
But the good news is that new numbers from New York seem to indicate that we are closer to “herd immunity” than we previously thought…
Preliminary results from New York’s first coronavirus antibody study show nearly 14 percent tested positive, meaning they had the virus at some point and recovered, Gov. Andrew Cuomo said Thursday. That equates to 2.7 million infections statewide — more than 10 times the state’s confirmed cases. The study, part of Cuomo’s “aggressive” antibody testing launched earlier this week, is based on 3,000 random samples from 40 locations in 19 counties. While the preliminary data suggests much more widespread infection, it means New York’s mortality rate is much lower than previously thought.
However, another study that was conducted in L.A. County found that only 4 percent of their residents had developed antibodies, and that is probably more representative of the nation as a whole.
In any event, everyone agrees that the vast majority of the U.S. population has not developed antibodies, and that means that there will be many more cases and many more deaths in the months ahead.
And that is going to happen no matter how our politicians respond to this crisis.
So as long as our hospitals are not being overwhelmed, there isn’t a need for any lockdowns. The final case total and the final death toll will be roughly the same whether there are lockdowns or not.
But these lockdowns are definitely killing our economy, and tens of millions of American workers now find themselves unemployed.
And if we continue to try to keep the U.S. economy shut down for a few more months, the economic damage will be incalculable.
Please don’t misunderstand what I am saying. I am not saying that we should sacrifice lives in order to save the economy. What I am saying is that about the same number of people are eventually going to die whether we have the lockdowns or not. And if we can’t handle this, how in the world are we going to deal with what else is coming?
If you are elderly, have a compromised immune system or are in some other high risk group, you are going to have to quarantine yourself for the foreseeable future, but that would be true whether there are lockdowns or not. The mortality rates for high risk groups are much, much higher than for the general population as a whole, and the danger is very real.
But everyone else should be allowed to get back to work, because most of the population is eventually going to catch this virus no matter what we do. As long as our hospitals can handle it, we should proceed with life as normal.
Unfortunately, that isn’t going to happen. Most of the current lockdowns are going to remain in place for quite some time, and this new economic depression is just going to get deeper and deeper.


investmentwatchblog--2020-04-24--Fed Cut Back on Helicopter Money for Wall Street & the Wealthy

Tapered QE-4 Further , Still Hasn ’ t Bought Junk Bonds or ETFs , Was Just Jawboning .
Total assets on the Fed ’ s balance sheet rose by $ 205 billion during the week ending April 22 , to $ 6.57 trillion .
Since the week ending March 11 , when the bailout of the Everything Bubble and its holders began , the Fed has printed $ 2.26 trillion .
But the $ 205 billion increase was the smallest increase since the mega-bailout began with its Sunday March 15 announcement .
The Fed is tapering its purchases of Treasury @ @ @ @ @ @ @ .
Repurchase agreements ( repos ) are falling into disuse .
Lending to Special Purposes Vehicles ( SPVs ) has leveled off .
And foreign central bank liquidity swaps , after having spiked initially , only ticked up by a small-ish amount .
The sharply reduced increases confirm that the Fed is following its various announcements over the past two years that during the next crisis – namely now – it would front-load the bailout QE and after the initial blast would then taper it out of existence , rather than let it @ @ @ @ @ @ @ was further confirmed by Fed Chair Jerome Powell in on April 10 when he said that the Fed would pack away its emergency tools when “ private markets and institutions are once again able to perform their vital functions of channeling credit and supporting economic growth.
” Overall , the Fed has cut the big QE purchases by 65 % since the peak week ( week ending April 1 , $ 586 billion ) , to $ 205 billion : The Fed added $ 120 billion of Treasury securities to its balance sheet @ @ @ @ @ @ @ , down 67 % from the $ 362 billion it had added during the peak week : Demand for repos has abated .
Recently , there have only been a few nibbles .
What is left of the repos stems from prior term repos that will fall off the balance sheet when they mature .
Total repo balances fell to $ 157 million , down 64 % from the peak ( $ 442 billion ) : The Fed has “ dollar liquidity swap lines ” with the Bank of Japan , the ECB @ @ @ @ @ @ @ , Canada , Australia , New Zealand , Sweden , Denmark , Norway , Switzerland , Singapore , South Korea , Brazil , and Mexico .
The combined amount of those swaps increased by $ 31 billion from the prior week to $ 410 billion .
Some highlights : • The Bank of Japan is the largest counterparty with $ 195 billion in liquidity swaps , or 48 % of the total .
• The ECB , with $ 142 billion in swaps , accounts for 32 % of the total .
• @ @ @ @ @ @ @ place , with $ 27 billion .
• No swaps with the central banks of Canada , Brazil , New Zealand , and Sweden .
The balance sheet is for the week ended Wednesday April 22 .
The chart , which depicts the most current daily balances released by the New York Fed , also includes Thursday ( right column ) : With a swap , the Fed lends newly created dollars to a central bank , which posts newly created domestic currency at the Fed as collateral .
The exchange rate is @ @ @ @ @ @ @ the contract .
The swaps come with two types of maturities : 7 days or 84 days .
When the swaps mature , the Fed collects its dollars , and the other central bank collects its own currency .
The Fed books these swaps on its balance sheet in dollars , at the exchange rate in the agreement .
The line item on the balance sheet labeled “ Loans ” represents the Fed ’ s loans to Special Purpose Vehicles ( SPVs ) it set up , and to its Primary Dealers ( @ @ @ @ @ @ @ does business with ) .
By using SPVs , the Fed can buy whatever it chooses to , because legally , it just lends to the SPV , a separate legal entity that then can use this money to buy whatever the Fed wants it to buy , or to re-lend the money against whatever collateral the Fed deems acceptable .
Congress , which could stop these schemes , applauds them .
When the Fed first announced its alphabet soup of bailout programs , the “ loans ” ballooned .
But over the @ @ @ @ @ @ @ have remained essentially unchanged , currently at $ 122 billion : The Fed splits these loans into category : • Primary credit : $ 34 billion , down from $ 43 billion two weeks ago .
Expanded to include “ fallen angel ” junk bonds .
But since the expansion , the balance has dropped and the Fed hasn ’ t bought any fallen angel bonds .
• Secondary credit : $ 0 .
Designed to purchase corporate bonds , bond ETFs , and even junk-bond ETFs .
None were purchased , but @ @ @ @ @ @ @ was enough to trigger a massive rally in junk bonds and junk bond ETFs .
• Primary Dealer Credit Facility : $ 32 billion , down from $ 36 billion last week .
Amounts the Fed lent to primary dealers to buy stuff with .
After the initial burst , nothing .
• Money Market Mutual Fund Liquidity Facility : $ 49 billion down from $ 53 billion two weeks ago .
This is the money-market fund bailout where the Fed ’ s SPVs bought corporate paper and other short-term assets that money-market @ @ @ @ @ @ @ burst , nothing .
• Paycheck Protection Program Liquidity Facility : $ 8 billion .
Showing up for the first time .
This is where the Fed lends to the SPV to buy from the banks the loans they have issued to “ small businesses ” under the PPP program .
So over the past four weeks , the Fed has not done any of the things with these SPVs and Primary Dealers that the markets were raving about it would do .
It didn ’ t buy junk bonds , it didn @ @ @ @ @ @ @ ’ t buy stocks , it didn ’ t buy old bicycles .
But Wall Street sure loved raving about it .
The Fed has slashed its purchases of MBS over the past three weeks , as reported by the New York Fed transaction summary ( for the weeks ended ) : MBS trades take a long time to settle .
For example , all of the $ 56 billion in MBS the Fed bought this week will settle in May .
The MBS the Fed bought last week will settle variously in @ @ @ @ @ @ @ But the Fed books the trades only after they settle .
So the Fed ’ s balance sheet lags by some time the actual trades .
Something else is different with MBS .
Holders of MBS , including the Fed , receive pass-through principal payments as the underlying mortgages are paid down or are paid off .
Due to the current boom in mortgage refinancing – 75 % of all mortgage applications are now refis – these pass-through principal payments have become a torrent .
Just to keep its balance of MBS level @ @ @ @ @ @ @ a significant amount of MBS .
On the Fed ’ s balance sheet , MBS increased by $ 54 billion to $ 1.62 trillion , down from an increase of $ 108 billion last week .
This $ 54 billion increase is a mix of MBS trades that the Fed did in prior weeks and that just now settled , minus the torrent of pass-through principal payments : The Fed has stated last year a number of times that it would like to get rid of the MBS on its balance sheet because @ @ @ @ @ @ @ for monetary policy purposes .
And it was getting rid of them until the MBS market started blowing up in early March .
That ’ s when the Fed held its nose and started buying them again .
The Fed has printed $ 2.26 trillion since March 11 to inflate asset prices and bail out asset holders and Wall Street .
If the Fed had spread that $ 2.26 trillion equally over the 130 million households in the US , each would have received $ 17,380 .
But this was helicopter money for @ @ @ @ @ @ @ losing part their wealth in the sell-off .
Those are the folks that matter to the Fed .

Tapered QE-4 Further, Still Hasn’t Bought Junk Bonds or ETFs, Was Just Jawboning.
Total assets on the Fed’s balance sheet rose by $205 billion during the week ending April 22, to $6.57 trillion. Since the week ending March 11, when the bailout of the Everything Bubble and its holders began, the Fed has printed $2.26 trillion.
But the $205 billion increase was the smallest increase since the mega-bailout began with its Sunday March 15 announcement. The Fed is tapering its purchases of Treasury securities and mortgage-backed securities (MBS). Repurchase agreements (repos) are falling into disuse. Lending to Special Purposes Vehicles (SPVs) has leveled off. And foreign central bank liquidity swaps, after having spiked initially, only ticked up by a small-ish amount.
The sharply reduced increases confirm that the Fed is following its various announcements over the past two years that during the next crisis – namely now – it would front-load the bailout QE and after the initial blast would then taper it out of existence, rather than let it drag out for years.
This concept was further confirmed by Fed Chair Jerome Powell in on April 10 when he said that the Fed would pack away its emergency tools when “private markets and institutions are once again able to perform their vital functions of channeling credit and supporting economic growth.”
Overall, the Fed has cut the big QE purchases by 65% since the peak week (week ending April 1, $586 billion), to $205 billion:
Purchases of Treasury securities get slashed.
The Fed added $120 billion of Treasury securities to its balance sheet, the smallest amount since this began, down 67% from the $362 billion it had added during the peak week:
Repos balances continue to decline.
Demand for repos has abated. Recently, there have only been a few nibbles. What is left of the repos stems from prior term repos that will fall off the balance sheet when they mature. Total repo balances fell to $157 million, down 64% from the peak ($442 billion):
Central Bank Liquidity Swaps.
The Fed has “dollar liquidity swap lines” with the Bank of Japan, the ECB, and the central banks of England, Canada, Australia, New Zealand, Sweden, Denmark, Norway, Switzerland, Singapore, South Korea, Brazil, and Mexico. The combined amount of those swaps increased by $31 billion from the prior week to $410 billion. Some highlights:
The Bank of Japan is the largest counterparty with $195 billion in liquidity swaps, or 48% of the total.
The ECB, with $142 billion in swaps, accounts for 32% of the total.
The Bank of England is in third place, with $27 billion.
No swaps with the central banks of Canada, Brazil, New Zealand, and Sweden.
The balance sheet is for the week ended Wednesday April 22. The chart, which depicts the most current daily balances released by the New York Fed, also includes Thursday (right column):
With a swap, the Fed lends newly created dollars to a central bank, which posts newly created domestic currency at the Fed as collateral. The exchange rate is the market rate at the time of the contract. The swaps come with two types of maturities: 7 days or 84 days. When the swaps mature, the Fed collects its dollars, and the other central bank collects its own currency. The Fed books these swaps on its balance sheet in dollars, at the exchange rate in the agreement.
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“Loans” to SPVs & Primary Dealers level off.
The line item on the balance sheet labeled “Loans” represents the Fed’s loans to Special Purpose Vehicles (SPVs) it set up, and to its Primary Dealers (the big broker-dealers and banks the Fed does business with). By using SPVs, the Fed can buy whatever it chooses to, because legally, it just lends to the SPV, a separate legal entity that then can use this money to buy whatever the Fed wants it to buy, or to re-lend the money against whatever collateral the Fed deems acceptable. Congress, which could stop these schemes, applauds them.
When the Fed first announced its alphabet soup of bailout programs, the “loans” ballooned. But over the past four weeks since then, they have remained essentially unchanged, currently at $122 billion:
The Fed splits these loans into category:
Primary credit: $34 billion , down from $43 billion two weeks ago. Expanded to include “fallen angel” junk bonds. But since the expansion, the balance has dropped and the Fed hasn’t bought any fallen angel bonds.
, down from $43 billion two weeks ago. Expanded to include “fallen angel” junk bonds. But since the expansion, the balance has dropped and the Fed hasn’t bought any fallen angel bonds. Secondary credit: $0 . Designed to purchase corporate bonds, bond ETFs, and even junk-bond ETFs. None were purchased, but the Fed’s jawboning about it was enough to trigger a massive rally in junk bonds and junk bond ETFs.
. Designed to purchase corporate bonds, bond ETFs, and even junk-bond ETFs. None were purchased, but the Fed’s jawboning about it was enough to trigger a massive rally in junk bonds and junk bond ETFs. Seasonal credit: $0
Primary Dealer Credit Facility: $32 billion , down from $36 billion last week. Amounts the Fed lent to primary dealers to buy stuff with. After the initial burst, nothing.
, down from $36 billion last week. Amounts the Fed lent to primary dealers to buy stuff with. After the initial burst, nothing. Money Market Mutual Fund Liquidity Facility: $49 billion down from $53 billion two weeks ago. This is the money-market fund bailout where the Fed’s SPVs bought corporate paper and other short-term assets that money-market funds normally buy. After the initial burst, nothing.
down from $53 billion two weeks ago. This is the money-market fund bailout where the Fed’s SPVs bought corporate paper and other short-term assets that money-market funds normally buy. After the initial burst, nothing. Paycheck Protection Program Liquidity Facility: $8 billion. Showing up for the first time. This is where the Fed lends to the SPV to buy from the banks the loans they have issued to “small businesses” under the PPP program.
So over the past four weeks, the Fed has not done any of the things with these SPVs and Primary Dealers that the markets were raving about it would do. It didn’t buy junk bonds, it didn’t buy ETFs, it didn’t buy stocks, it didn’t buy old bicycles. But Wall Street sure loved raving about it.
MBS purchases get tapered.
The Fed has slashed its purchases of MBS over the past three weeks, as reported by the New York Fed transaction summary (for the weeks ended):
$157 billion (Mar 25)
$145 billion (Apr 1)
$109 billion (Apr 8)
$58 billion (Apr 15)
$56 billion (Apr 22)
MBS trades take a long time to settle. For example, all of the $56 billion in MBS the Fed bought this week will settle in May. The MBS the Fed bought last week will settle variously in April, May, and June. But the Fed books the trades only after they settle. So the Fed’s balance sheet lags by some time the actual trades.
Something else is different with MBS. Holders of MBS, including the Fed, receive pass-through principal payments as the underlying mortgages are paid down or are paid off. Due to the current boom in mortgage refinancing – 75% of all mortgage applications are now refis – these pass-through principal payments have become a torrent. Just to keep its balance of MBS level, the Fed would need to buy a significant amount of MBS.
On the Fed’s balance sheet, MBS increased by $54 billion to $1.62 trillion, down from an increase of $108 billion last week. This $54 billion increase is a mix of MBS trades that the Fed did in prior weeks and that just now settled, minus the torrent of pass-through principal payments:
The Fed has stated last year a number of times that it would like to get rid of the MBS on its balance sheet because they’re cumbersome to deal with for monetary policy purposes. And it was getting rid of them until the MBS market started blowing up in early March. That’s when the Fed held its nose and started buying them again.
If…
The Fed has printed $2.26 trillion since March 11 to inflate asset prices and bail out asset holders and Wall Street. If the Fed had spread that $2.26 trillion equally over the 130 million households in the US, each would have received $17,380. But this was helicopter money for Wall Street and the wealthy that were losing part their wealth in the sell-off. Those are the folks that matter to the Fed.


investmentwatchblog--2020-04-24--Millions Of Americans Are Now Making Far More Money Being Unemployed Than They Did When They Were Ac

Millions Of Americans Are Now Making Far More Money Being Unemployed Than They Did When They Were Actually Working

More than 26 million Americans have filed new claims for unemployment benefits in recent weeks , and a lot of them will now be bringing home much more money than they did while they were actually working .
Needless to say , this is going to create a perverse incentive for people to stay unemployed for as long as possible .
Just think about this for a moment .
If you could earn more money sitting on your sofa gobbling down chips and watching Netflix , what possible motivation would you have to go back to work ?
Many low @ @ @ @ @ @ @ ride this gravy train all the way to the end , and as you will see below , this is already causing big problems for businesses all across America .
So how did we get to this point ?
Well , the Democrats pushed extremely hard to get a provision into the CARES Act that would give unemployed workers an additional $ 600 a week on top of any normal unemployment benefits .
The following comes from USA Today… This means that for the next several months , unemployed workers all over America @ @ @ @ @ @ @ equivalent of $ 15 an hour based on a 40 hour work week , and some Republican members of Congress were very concerned about this… Despite those concerns , the CARES Act easily sailed through both chambers of Congress , and now we are stuck with it .
If it was just a small percentage of workers that were being overpaid not to work , we could certainly live with that on a temporary basis .
But according to one study , more than 42 percent of all workers made less than $ @ @ @ @ @ @ @ is the economy supposed to “ get back to normal ” if more than 40 percent of our workers would be better off unemployed ?
In a previous article , I documented the fact that Social Security Administration numbers show that half of all U.S. workers make less than $ 33,000 a year .
Of course if you multiply $ 600 by 52 weeks , you get $ 31,200 .
The provision in the CARES Act that pays this bonus money to unemployed workers is supposed to expire on July 31st , but @ @ @ @ @ @ @ tremendous push to extend these benefits far beyond that date .
To some of my readers , it may sound “ heartless ” to want to deny unemployed workers these big checks during a global pandemic , but businesses all over America are not going to be able to “ return to normal ” if millions upon millions of workers simply do not want to work .
In fact , a coffee shop owner in Harlan , Kentucky named Sky Marietta just had to close her entire business down because it would cost @ @ @ @ @ @ @ dollars per week ” to be employed .
The following comes from her personal blog… When our family opened a coffee shop in Harlan , Kentucky we had big plans for something that could contribute to the fragile economy of an Appalachian community just beginning to recover from the decades-long loss of coal jobs .
We wanted to repurpose a vacant , historic downtown building to give some life to a Main Street that was beautiful but looked forgotten .
We wanted to provide a safe gathering space with good internet where people @ @ @ @ @ @ @ than anything , we wanted to create dignified , living-wage jobs .
And when we announced our first openings , it was clear that those jobs were needed : we had 96 people apply to be a barista in a town with a population of 1,425 .
So perhaps one of the most shocking outcomes of the Coronavirus Pandemic – and especially of the Coronavirus Aid , Relief , and Economic Security Act ( CARES ) – is that the very people we hired have now asked us to be laid off .
@ @ @ @ @ @ @ jobs or because they did not want to work , but because it would cost them literally hundreds of dollars per week to be employed .
It is the nail in the coffin of a Main Street business , and our last day open will be Saturday .
Let ’ s talk about why the very program that is supposed to support small businesses is currently helping their demise and take a hard look at the economic realities we are setting ourselves up for .
Are you starting to understand how serious this @ @ @ @ @ @ @ ’ t have an economy , and right now we are incentivizing people not to work .
In an article that was just posted , Zero Hedge is reporting that employees at one business in Washington State were “ furious ” with the owner because the owner has kept paying them during this crisis… For the foreseeable future , there is going to be an unprecedented stampede of people applying for unemployment benefits , and almost all of them are going to want to stay unemployed until at least July 31st .
And @ @ @ @ @ @ @ , most unemployed workers are going to want to remain on the sidelines until the bonuses finally end .
For a very long time I have been warning that economic collapse was coming , and now that it has arrived Congress is making it even worse with their meddling .
So don ’ t expect the unemployment rate to bounce back very much once this pandemic begins to subside .
Congress has decided to make it very financially rewarding not to work , and millions upon millions of Americans are going to be @ @ @ @ @ @ @ that opportunity for as long as it lasts .

by Michael Snyder
More than 26 million Americans have filed new claims for unemployment benefits in recent weeks, and a lot of them will now be bringing home much more money than they did while they were actually working. Needless to say, this is going to create a perverse incentive for people to stay unemployed for as long as possible. Just think about this for a moment. If you could earn more money sitting on your sofa gobbling down chips and watching Netflix, what possible motivation would you have to go back to work? Many low paid workers are going to want to ride this gravy train all the way to the end, and as you will see below, this is already causing big problems for businesses all across America.
So how did we get to this point?
Well, the Democrats pushed extremely hard to get a provision into the CARES Act that would give unemployed workers an additional $600 a week on top of any normal unemployment benefits. The following comes from USA Today…
The CARES Act includes a $600-a-week bonus until July 31 for those registered as unemployed. The $600 is issued in addition to the standard unemployment benefit, which varies by state and by individuals’ record of previous earnings.
This means that for the next several months, unemployed workers all over America will be bringing home at least the equivalent of $15 an hour based on a 40 hour work week, and some Republican members of Congress were very concerned about this…
Some Republican lawmakers warned about this unintended consequence of the relief bill when it was being drafted, noting that $600 a week amounts to $15 an hour, more than twice the federal minimum wage. That’s in addition to state unemployment benefits, which vary widely, from a maximum of $235 per week in Mississippi to $795 per week in Massachusetts.
Despite those concerns, the CARES Act easily sailed through both chambers of Congress, and now we are stuck with it.
If it was just a small percentage of workers that were being overpaid not to work, we could certainly live with that on a temporary basis.
But according to one study, more than 42 percent of all workers made less than $15 an hour in 2015…
According to a report by the Leadership Conference Fund and the Georgetown Center on Poverty and Inequality, 42.4% of people working in the United States in 2015 earned less than $15 an hour.
So how is the economy supposed to “get back to normal” if more than 40 percent of our workers would be better off unemployed?
In a previous article, I documented the fact that Social Security Administration numbers show that half of all U.S. workers make less than $33,000 a year. Of course if you multiply $600 by 52 weeks, you get $31,200. The provision in the CARES Act that pays this bonus money to unemployed workers is supposed to expire on July 31st, but there is likely going to be a tremendous push to extend these benefits far beyond that date.
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To some of my readers, it may sound “heartless” to want to deny unemployed workers these big checks during a global pandemic, but businesses all over America are not going to be able to “return to normal” if millions upon millions of workers simply do not want to work.
In fact, a coffee shop owner in Harlan, Kentucky named Sky Marietta just had to close her entire business down because it would cost her former employees “literally hundreds of dollars per week” to be employed. The following comes from her personal blog…
When our family opened a coffee shop in Harlan, Kentucky we had big plans for something that could contribute to the fragile economy of an Appalachian community just beginning to recover from the decades-long loss of coal jobs. We wanted to repurpose a vacant, historic downtown building to give some life to a Main Street that was beautiful but looked forgotten. We wanted to provide a safe gathering space with good internet where people could meet and work. But more than anything, we wanted to create dignified, living-wage jobs. And when we announced our first openings, it was clear that those jobs were needed: we had 96 people apply to be a barista in a town with a population of 1,425. So perhaps one of the most shocking outcomes of the Coronavirus Pandemic – and especially of the Coronavirus Aid, Relief, and Economic Security Act (CARES) – is that the very people we hired have now asked us to be laid off. Not because they did not like their jobs or because they did not want to work, but because it would cost them literally hundreds of dollars per week to be employed. It is the nail in the coffin of a Main Street business, and our last day open will be Saturday. Let’s talk about why the very program that is supposed to support small businesses is currently helping their demise and take a hard look at the economic realities we are setting ourselves up for.
Are you starting to understand how serious this is?
Without workers, we don’t have an economy, and right now we are incentivizing people not to work.
In an article that was just posted, Zero Hedge is reporting that employees at one business in Washington State were “furious” with the owner because the owner has kept paying them during this crisis…
And now, as BizPacReview.com’s Vivek Saxena details below a Washington State business owner faced backlash from her employees after she obtained a forgivable Paycheck Protection Program loan from the federal government that has allowed her to keep them fully paid through the coronavirus pandemic. In an interview with CNBC this week, salon owner Jamie Black-Lewis of the Oasis Medspa & Salon in Woodinville and Amai Day Spa in Bothell said her employees were furious because they were already “making” more money being unemployed.
For the foreseeable future, there is going to be an unprecedented stampede of people applying for unemployment benefits, and almost all of them are going to want to stay unemployed until at least July 31st.
And if the CARES Act bonuses get extended, most unemployed workers are going to want to remain on the sidelines until the bonuses finally end.
For a very long time I have been warning that economic collapse was coming, and now that it has arrived Congress is making it even worse with their meddling.
So don’t expect the unemployment rate to bounce back very much once this pandemic begins to subside. Congress has decided to make it very financially rewarding not to work, and millions upon millions of Americans are going to be more than happy to take advantage of that opportunity for as long as it lasts.


investmentwatchblog--2020-04-24--The Federal Reserve Has Failed Miserably

The Federal Reserve banks make more by bail out than actually performing valuable banking services .
It is UBI for @ @ @ @ @ is the problem in America in 2020 .
Everyone does better with some version of @ @ @ @ @ anything valuable .
US Military commanders are like that too .
They get to retire @ @ @ @ @ they are losers based on their results .
The curse of petro dollars is upon @ @

The Federal Reserve banks make more by bail out than actually performing valuable banking services. It is UBI for people with power. That is the problem in America in 2020. Everyone does better with some version of universal income rather than doing anything valuable. US Military commanders are like that too. They get to retire in gated communities even though they are losers based on their results. The curse of petro dollars is upon us.
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