investmentwatchblog--2020-05-07--For the first time in 115 years, overnight subway service in New York City has been shut down to cle

For the first time in 115 years , overnight subway service in New York City has been shut down to @ @ @ @ @ t.co/OWHu7mhlJA pic.twitter.com/WV2aAPYJKk New York City ’ s subway system — the nation ’ s largest @ @ @ @ @ early morning hours Wednesday as the normally round-the-clock system shut down for train disinfecting .
@ @ @ @ @ March , but is now being stopped entirely from 1 a.m. to 5 a.m. each @ @ @ @ @ the first time in 115 years service hasn ’ t been 24/7 except in times @ @ @ @ @ Andrew Cuomo says there ’ s no way to know when service will return to @ @ @ @ @ York .

For the first time in 115 years, overnight subway service in New York City has been shut down to clean trains amid the pandemic t.co/OWHu7mhlJA pic.twitter.com/WV2aAPYJKk
New York City’s subway system — the nation’s largest — went silent in the early morning hours Wednesday as the normally round-the-clock system shut down for train disinfecting.
Service was curtailed in late March, but is now being stopped entirely from 1 a.m. to 5 a.m. each day.
It’s the first time in 115 years service hasn’t been 24/7 except in times of emergency, and Governor Andrew Cuomo says there’s no way to know when service will return to normal, notes CBS New York.


investmentwatchblog--2020-05-07--Is Trump Using The [CB] To Cripple The Corrupt Banking System?

Those in the MSM and who are pushing the idea that the economy will not recover will be exposed .
@ @ @ @ @ put certain mechanisms in place .
The reports that are out now will feed into @ @ @ @ @ do , take this economy that has been pushed to the brink of destruction and @ @ @ @ @ .
Trump has control over the [ CB ] , is he using it to @ @ @ @ @ system ?

Those in the MSM and who are pushing the idea that the economy will not recover will be exposed. Trump and the patriots have put certain mechanisms in place. The reports that are out now will feed into what the patriots plan to do, take this economy that has been pushed to the brink of destruction and brought it back to life. Trump has control over the [CB], is he using it to pressure or cripple the banking system?
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investmentwatchblog--2020-05-07--Targets Have Been Painted, Treason Doesn’t Pay Well In The End

The [ DS ] /MSM are now pushing everything they have , if that doesn ’ t work they will @ @ @ @ @ patriots have now painted the targets , they are locked on , boom week coming @ @ @ @ @ beginning , those who committed treason will be held accountable .

The [DS]/MSM are now pushing everything they have, if that doesn’t work they will push a FF. The patriots have now painted the targets, they are locked on, boom week coming. This is just the beginning, those who committed treason will be held accountable.
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investmentwatchblog--2020-05-07--Surviving 2020 #3: Plans A, B and C

Surviving 2020 #3: Plans A, B and C

Readers ask for specific recommendations for successfully navigating the post-credit/speculative-bubble era and I try to do so while explaining the impossibility of the task .
As the bogus prosperity economy built on exponential growth of debt implodes , we all seek ways to protect ourselves , our families and our worldly assets .
There are any number of websites , subscription services and books which offer two basic “ practical recommendations : ” 1 .
Buy gold ( and/or silver ) and don ’ t worry about timing the market as everything else will become worthless .
2 .
Establish @ @ @ @ @ @ @ everything implodes .
My problem with these suggestions is that they are predicated on a decisive “ end of the world as we know it ” collapse of civilization .
While I am alive to the possibility of this cataclysm , an analysis of the many feedback loops which will slow or counteract such a decisive collapse suggests other alternatives are even more likely : my term for the slow , uneven decline of the credit/speculative-bubble era is devolution .
I cover feedback loops , historical cycles and why a lengthy devolution is @ @ @ @ @ @ @ abrupt collapse in my book Survival+ ( free downloadable version is linked below ) .
In other words , I do not see planning for eventualities as “ either/or.
” I look at it in terms of three levels : 1 .
Plan A : dealing with devolution : government services are cut back , prices for essentials rise over time , fulltime paid jobs become scarce , the State ( all levels of government ) becomes increasingly repressive as it pursues “ theft by other means , ” i.e .
the stripmining @ @ @ @ @ @ @ fiefdoms and Elites ; most assets fall in purchasing power ( value ) as the system ’ s financial props erode .
2 .
Plan B : When things become rationed/unavailable , services become sporadic , pensions stop being paid in full , spontaneous homeless encampments arise in heretofore “ nice ” areas , cities go bankrupt , small businesses go underground to survive the ever-higher taxes being levied on the few remaining productive enterprises , etc .
Plan C : if things fall apart : either move to communities where you or @ @ @ @ @ @ @ for all the millions of rootless Americans shifted around by corporate “ relocations ” the past 50 years ) or turn to your neighborhood , town , friends , family , church and other social networks for cooperative strength .
The problem with putting all your resources into a “ bug-out ” strategy ( Plan C ) is that it might not come to pass , in which case you ’ ve misallocated your assets .
This is why I focus Survival+ on structuring a prosperity which will work on all levels .
@ @ @ @ @ @ @ 1 .
Prepare for hybrid work by developing multiple skillsets , interests and contacts and understand that being productive and reciprocal is more important than getting paid ( as I put it : “ to take care of Number One , first take care of numbers 2 through 9.
” ) 2 .
Develop sustainable , overlapping social networks ( self-organizing networks ) in which you have more than one place to interact with the same person , i.e .
at church or in the neighborhood .
I call these non-State , voluntary @ @ @ @ @ @ @ are independent of the State and Monopoly/Predatory Capital Elites .
3 .
Cut expenses to the bone so you no longer need a large income to “ survive.
” Consider lowering your taxable income by working less so you ’ re no longer working so hard just to pay taxes generated by high incomes .
( Thanks to correspondent Stephen A. for noting that barter that results in gains is generally taxable .
As always , check with the I.R.S .
or a licensed tax advisor to confirm what income is taxable/nontaxable .
@ @ @ @ @ @ @ of “ prosperity ” : health and social wealth are the “ treasures ” which money can not buy .
Yes , we all need some money , and preserving/growing whatever capital you do have will be difficult and time-consuming .
There is no easy “ one size fits all ” solution .
5 .
Understand the importance and strength in building and maintaining personal integrity , the one asset we each control in totality and that no one can take from us .
All reciprocal networks ( financial , political , religious @ @ @ @ @ @ @ , and the bedrock of trust is complete personal integrity .
Much of the devolution we now face is a direct result of the degradation of integrity .
This moral/ethical component of financial implosion is glossed over by the corporate media because the Power Elites have implicitly undermined integrity and morality as a means of soldifying their control of the media and of the national income .
Yes , I know this all sounds wonderful , but how do you do it in real life ?
Well , life is and always has @ @ @ @ @ @ @ million+ employable people in the nation , what advice or recommendations can I possibly give to any one individual , when only that person knows their own interests , strengths and potential customers , clients , allies , competitors and mentors ?
Let ’ s start with one simple truth : nobody knows the future .
Thus everything we discuss now is contingent on a number of unpredictable interactions .
To base our planning on one scenario is to risk misallocating our scarce assets and resources .
Now let ’ s hear from @ @ @ @ @ @ @ pick up the narrative .
Correspondent Mac posed this question–one which millions of other citizens should also be interested in : As a 56-year old watching his company lay off more and more… are there more books/blogs that give advice/information on post-credit/speculative-bubble economy livelihood ?
If I may be permitted to make a subjective ( and friendly constructive ) comment about your essays in general : I am having somewhat the same problem that I have with all such writings by assorted authors : superb analysis of what ’ s wrong with the @ @ @ @ @ @ @ detail on what individuals can DO about it–money , job , choice of place to live–in arranging one ’ s life for a future likely to be very different from both the present and the past half-century .
So I get to the end of my David Korten ( “ The Great Turning ” ) or my Jim Kunstler ( “ The Long Emergency ” ) and I find a lot of GENERALITIES about “ building a fine-grained , earth-centered , decentralized and localized community , ” and I have difficulty translating that @ @ @ @ @ @ @ .
( That situation is aggravated by the fact that my wife and I are in a sprawly , car-centered Sunbelt place where she loves her job but where we might not otherwise have chosen to live–but the need to translate glittering generalities about the future into concrete actions would exist no matter where we lived . )
.
.
.
It is particularly difficult to decide what to DO to prepare for the future we see , when so few other people around us see it .
We feel quite alone .
@ @ @ @ @ @ @ a definite interest in living an ethical and environmentally less damaging life , but they are still focused on recycling , fair trade coffee , and finding a way to run cars and the suburban lifestyle on something other than gasoline .
Talk to them about “ a fine-grained , earth-centered , decentralized and localized community , ” or talk to them about co-housing or some sort of mutually cooperative/supportive living arrangement intentionally chosen by a group of people , and they look at you as if you have just spoken in some @ @ @ @ @ @ @ We also have trouble figuring out what to do with our MONEY for this world ahead , as the day will come when we stop working ( at least for regular wages ) , so exactly what kind of “ retirement ” future are we supposed to be preparing for , and what are we to do with our savings in the PRESENT if saving money is still a good idea at all but the “ consensus trance ” assumptions about the FUTURE are about to become “ inoperative ” ?
.
.
@ @ @ @ @ @ @ places–but don ’ t know how to evaluate them in terms of a future which is just now beginning to form .
Our current fallback definition of such a place is : “ university town with Amtrak service , good local public transit and/or walkability/bike-ability , relatively benign climate not dependent on oil for household heating , and good agricultural land with locally selling growers of food ( for humans , not herd animals ) nearby .
Would certainly appreciate more online commentary from persons as perceptive as yourself about what people should @ @ @ @ @ @ @ and living patterns appearing on the horizon .
In other words , somewhat less analysis of “ what is ” and somewhat more “ how to ” guidance on positioning one ’ s own life for it .
Reasonable questions/suggestions : thank you , Mac and Marc .
Here are some concrete suggestions which flow directly from the Survival+ framework .
1 .
Join existing networks based on your interests and locale .
A church can be an amazing organization , and if you find the right church , the one where you @ @ @ @ @ @ @ pastor/minister/priest , it is a rewarding experience .
Yes , people are still petty and annoying , but there are strengths which can not be duplicated on one ’ s own .
It is possible to start your own networks of like-minded people , but it ’ s a lot easier to join an existing one .
Most community groups ( recycling , conservation , hunters , religious , political action , education , etc . )
are desperate for people willing to contribute some time/energy .
My own view is that history @ @ @ @ @ @ @ violent inner-city ghetto or near-wilderness , is more survivable if you have multiple layers of social reciprocity working for you .
2 .
Your neighbors/neighborhood are already a community .
You don ’ t have to agree with their politics or lifestyle , but you already share an interest in keeping the street safe and attractive .
Now here ’ s the thing that ’ s completely , utterly lost on the Internet .
Any fool can diss someone else and insult them on the Web because it ’ s anonymous .
Real @ @ @ @ @ @ @ real community ( something many suburban Americans may never have experienced , sadly ) , you can ’ t make “ enemies ” because you ’ re going to see that person on your street , in your church/synagogue/temple , and in the grocery store–or you ’ ll see their brother , sister , husband , kids , etc .
These multiple layers of interaction make it too risky to alienate someone over some petty difference .
3 .
If there really is no group or people who you can relate to , @ @ @ @ @ @ @ with people who have similar interests and are rooted .
Rootless zombies who move every two years and who spend their time being “ entertained ” in the Cone of Silence in their McMansion will have little to offer in the way of reciprocity until they find they are in need themselves .
But as the Chinese saying goes , “ If you wait until you ’ re thirsty , it ’ s too late to dig a well.
” 3 .
I am a believer in the Peach Pie strategy .
When @ @ @ @ @ @ @ we make dozens of pies and share them with neighbors , friends , and customers/clients .
We don ’ t expect anything back , but the gesture is appreciated .
Networks get built by someone offering something freely .
Our corrosive environment of Predatory Capitalism has created a culture of “ first I get mine ” rather than “ what can I do for you ?
” It ’ s not being “ generous ” –it ’ s building a base for reciprocity , which is the foundation of sustainable networks/communities .
In @ @ @ @ @ @ @ organization called a Kumiai as an example .
4 .
OK , work/jobs .
I anticipate the continuing erosion of fulltime paid work .
The “ factory model ” of employment ( the monolithic State or Corporation as employer ) will be replaced by hybrid work which is an adaptable , flexible mix of paid and unpaid work , private enterprise , community work , creative endeavors , etc .
In hybrid work , what ’ s important is being productive and building experiential capital .
The other goal is to develop multiple @ @ @ @ @ @ @ no longer dependent on one skillset ( or one network/business ) .
I ’ m going to do a brief brain-dump here on hybrid work .
Yes , I speak from experience because I ’ ve been pursuing the hybrid work model for several decades , even before I understood the concept .
Many of you have done so , too .
The point of hybrid work is to reduce the vulnerability created by relying on one source of income or skillset .
( Nowadays this is called “ antifragile.
” ) The @ @ @ @ @ @ @ and relying on one job/skillset is like sitting on an inverted pyramid : it ’ s inherently unstable .
So the goal is to flip the pyramid over and have a base of multiple income streams/interests/skills .
No one can parse out another ’ s interests or talents .
That ’ s up to you to figure out .
We do have one clue : we are what we do every day .
If you think you like doing some sort of work , but you never seem to have the time to @ @ @ @ @ @ @ idea of the work more than the actual work .
I would caution anyone who is confident that the “ gummit ” ( State ) will never fold up/stop paying its employees/beneficiaries .
As I say in the book , the State has various means to evade its obligations .
For instance , you might receive your $ 4,000/month pension as “ promised , ” but then a loaf of bread will cost $ 2,000 .
That ’ s probably not what you thought was “ promised , ” but strictly speaking , @ @ @ @ @ @ @ to you .
Important point : skillsets and networks can not be depreciated like money .
They can not be stolen .
As I also explain in Survival+ , I am a fan of gold/silver for the simple reason they can not go to zero value like stocks , bonds , derivatives , and paper money .
But I also point out that gold is a capital trap .
It is not a productive investment like digging a well or installing a solar panel .
I submit that controlling as much of the @ @ @ @ @ @ @ ) assets as possible has some intrinsic value which gold does not have .
Yes , gold might buy those resources in the future , but that ’ s a different proposition than saying gold will not go to zero .
The relative price of various assets comes into play , and since we can ’ t know future relative prices , then it behooves us to spread our bets and to trade in and out of assets as they rise to absurd valuations and then fall to the mean .
In other @ @ @ @ @ @ @ , owning a mix of non-correlated productive assets offers better probabilities for dynamic stability .
It would be easier for all of us if the “ checklist ” was as easy as , say , this : Now these are perfectly good ideas for the right person , and they are certainly a good backstop , combining a mix of skillset capital , means of exchange ( gold and beer ) , store of value ( gold ) and an instant network ( “ anyone want a taste of my homebrew beer ?
@ @ @ @ @ @ @ beer to be effective . )
But it isn ’ t that easy , because we ’ re each a unique mix of interests , talents , tropisms , etc .
Last important point .
Some things can not be outsourced to distant lands .
These include most medical care , fitness , cooking , gardening/yardwork , childcare , caring for the elderly , fixing actual physical objects and software /networks for local enterprises , repairing appliances , installing solar panels on your house , selling at the farmers market , making sales @ @ @ @ @ @ @ a good time .
As a result , finding some overlap of your own interests and the above enduring needs of human communities might suggest some opportunities for hybrid work and new skillsets/experiential capital to acquire .
The best way to learn is by doing with others–a mentor , a group , a friend .
The best way to get paid for work is to start out offering to do it free , to show you can do it and that you ’ re trustworthy .
This is not a tidy checklist but @ @ @ @ @ @ @ the future will likely be even more untidy than the present .
These concepts are from my book Survival+ .

by Charles Hugh-Smith
Readers ask for specific recommendations for successfully navigating the post-credit/speculative-bubble era and I try to do so while explaining the impossibility of the task.
As the bogus prosperity economy built on exponential growth of debt implodes, we all seek ways to protect ourselves, our families and our worldly assets. There are any number of websites, subscription services and books which offer two basic “practical recommendations:”
1. Buy gold (and/or silver) and don’t worry about timing the market as everything else will become worthless.
2. Establish a heavily armed and well-supplied hideaway before everything implodes.
My problem with these suggestions is that they are predicated on a decisive “end of the world as we know it” collapse of civilization.
While I am alive to the possibility of this cataclysm, an analysis of the many feedback loops which will slow or counteract such a decisive collapse suggests other alternatives are even more likely: my term for the slow, uneven decline of the credit/speculative-bubble era is devolution.
I cover feedback loops, historical cycles and why a lengthy devolution is as least as likely a scenario as abrupt collapse in my book Survival+ (free downloadable version is linked below).
In other words, I do not see planning for eventualities as “either/or.” I look at it in terms of three levels:
1. Plan A: dealing with devolution: government services are cut back, prices for essentials rise over time, fulltime paid jobs become scarce, the State (all levels of government) becomes increasingly repressive as it pursues “theft by other means,” i.e. the stripmining of private assets to feed its own fiefdoms and Elites; most assets fall in purchasing power (value) as the system’s financial props erode.
2. Plan B: When things become rationed/unavailable, services become sporadic, pensions stop being paid in full, spontaneous homeless encampments arise in heretofore “nice” areas, cities go bankrupt, small businesses go underground to survive the ever-higher taxes being levied on the few remaining productive enterprises, etc.
Plan C: if things fall apart: either move to communities where you or your family have roots (tough luck for all the millions of rootless Americans shifted around by corporate “relocations” the past 50 years) or turn to your neighborhood, town, friends, family, church and other social networks for cooperative strength.
The problem with putting all your resources into a “bug-out” strategy (Plan C) is that it might not come to pass, in which case you’ve misallocated your assets.
This is why I focus Survival+ on structuring a prosperity which will work on all levels. This prosperity has five basic parts:
1. Prepare for hybrid work by developing multiple skillsets, interests and contacts and understand that being productive and reciprocal is more important than getting paid (as I put it: “to take care of Number One, first take care of numbers 2 through 9.”)
2. Develop sustainable, overlapping social networks (self-organizing networks) in which you have more than one place to interact with the same person, i.e. at church or in the neighborhood. I call these non-State, voluntary networks transparent non-privileged parallel structures because they are independent of the State and Monopoly/Predatory Capital Elites.
3. Cut expenses to the bone so you no longer need a large income to “survive.” Consider lowering your taxable income by working less so you’re no longer working so hard just to pay taxes generated by high incomes. (Thanks to correspondent Stephen A. for noting that barter that results in gains is generally taxable. As always, check with the I.R.S. or a licensed tax advisor to confirm what income is taxable/nontaxable.)
4. Reach a new understanding of “prosperity”: health and social wealth are the “treasures” which money cannot buy. Yes, we all need some money, and preserving/growing whatever capital you do have will be difficult and time-consuming. There is no easy “one size fits all” solution.
5. Understand the importance and strength in building and maintaining personal integrity, the one asset we each control in totality and that no one can take from us. All reciprocal networks (financial, political, religious or social) depend entirely on trust, and the bedrock of trust is complete personal integrity.
Much of the devolution we now face is a direct result of the degradation of integrity. This moral/ethical component of financial implosion is glossed over by the corporate media because the Power Elites have implicitly undermined integrity and morality as a means of soldifying their control of the media and of the national income.
Yes, I know this all sounds wonderful, but how do you do it in real life? Well, life is and always has been a do-it-yourself affair. With 200 million+ employable people in the nation, what advice or recommendations can I possibly give to any one individual, when only that person knows their own interests, strengths and potential customers, clients, allies, competitors and mentors?
Let’s start with one simple truth: nobody knows the future. Thus everything we discuss now is contingent on a number of unpredictable interactions. To base our planning on one scenario is to risk misallocating our scarce assets and resources.
Now let’s hear from two readers and then I’ll pick up the narrative.
Correspondent Mac posed this question–one which millions of other citizens should also be interested in:
As a 56-year old watching his company lay off more and more… are there more books/blogs that give advice/information on post-credit/speculative-bubble economy livelihood?
Reader Marc M.W. offered this insightful critique of general advice:
If I may be permitted to make a subjective (and friendly constructive) comment about your essays in general: I am having somewhat the same problem that I have with all such writings by assorted authors: superb analysis of what’s wrong with the current American situation, but not much detail on what individuals can DO about it–money, job, choice of place to live–in arranging one’s life for a future likely to be very different from both the present and the past half-century.
So I get to the end of my David Korten (“The Great Turning”) or my Jim Kunstler (“The Long Emergency”) and I find a lot of GENERALITIES about “building a fine-grained, earth-centered, decentralized and localized community,” and I have difficulty translating that into CONCRETE actions in our personal lives. (That situation is aggravated by the fact that my wife and I are in a sprawly, car-centered Sunbelt place where she loves her job but where we might not otherwise have chosen to live–but the need to translate glittering generalities about the future into concrete actions would exist no matter where we lived.) . . .
It is particularly difficult to decide what to DO to prepare for the future we see, when so few other people around us see it. We feel quite alone. Most of the people we know have a definite interest in living an ethical and environmentally less damaging life, but they are still focused on recycling, fair trade coffee, and finding a way to run cars and the suburban lifestyle on something other than gasoline.
Talk to them about “a fine-grained, earth-centered, decentralized and localized community,” or talk to them about co-housing or some sort of mutually cooperative/supportive living arrangement intentionally chosen by a group of people, and they look at you as if you have just spoken in some obscure foreign language. . . .
We also have trouble figuring out what to do with our MONEY for this world ahead, as the day will come when we stop working (at least for regular wages), so exactly what kind of “retirement” future are we supposed to be preparing for, and what are we to do with our savings in the PRESENT if saving money is still a good idea at all but the “consensus trance” assumptions about the FUTURE are about to become “inoperative”? . . .
We think of moving to other places–but don’t know how to evaluate them in terms of a future which is just now beginning to form. Our current fallback definition of such a place is: “university town with Amtrak service, good local public transit and/or walkability/bike-ability, relatively benign climate not dependent on oil for household heating, and good agricultural land with locally selling growers of food (for humans, not herd animals) nearby.
Would certainly appreciate more online commentary from persons as perceptive as yourself about what people should DO to position themselves for the economy and living patterns appearing on the horizon. In other words, somewhat less analysis of “what is” and somewhat more “how to” guidance on positioning one’s own life for it.
Reasonable questions/suggestions: thank you, Mac and Marc.
Here are some concrete suggestions which flow directly from the Survival+ framework.
1. Join existing networks based on your interests and locale. A church can be an amazing organization, and if you find the right church, the one where you feel comfortable with the congregation, the pastor/minister/priest, it is a rewarding experience.
We are primarily funded by readers. Please subscribe and donate to support us!
Yes, people are still petty and annoying, but there are strengths which cannot be duplicated on one’s own.
It is possible to start your own networks of like-minded people, but it’s a lot easier to join an existing one. Most community groups (recycling, conservation, hunters, religious, political action, education, etc.) are desperate for people willing to contribute some time/energy.
My own view is that history suggests that any environment, be it violent inner-city ghetto or near-wilderness, is more survivable if you have multiple layers of social reciprocity working for you.
2. Your neighbors/neighborhood are already a community. You don’t have to agree with their politics or lifestyle, but you already share an interest in keeping the street safe and attractive.
Now here’s the thing that’s completely, utterly lost on the Internet. Any fool can diss someone else and insult them on the Web because it’s anonymous. Real life is not anonymous.
In a real community (something many suburban Americans may never have experienced, sadly), you can’t make “enemies” because you’re going to see that person on your street, in your church/synagogue/temple, and in the grocery store–or you’ll see their brother, sister, husband, kids, etc. These multiple layers of interaction make it too risky to alienate someone over some petty difference.
(Plus in real life, someone who gets insulted might just beat the living heck out of the smartass. Word associations: “having manners,” and “live and let live because it’s not worth alienating someone.”)
3. If there really is no group or people who you can relate to, then by all means find a locale with people who have similar interests and are rooted. Rootless zombies who move every two years and who spend their time being “entertained” in the Cone of Silence in their McMansion will have little to offer in the way of reciprocity until they find they are in need themselves.
But as the Chinese saying goes, “If you wait until you’re thirsty, it’s too late to dig a well.”
3. I am a believer in the Peach Pie strategy. When we have a bounty of peaches, we make dozens of pies and share them with neighbors, friends, and customers/clients. We don’t expect anything back, but the gesture is appreciated. Networks get built by someone offering something freely. Our corrosive environment of Predatory Capitalism has created a culture of “first I get mine” rather than “what can I do for you?”
It’s not being “generous”–it’s building a base for reciprocity, which is the foundation of sustainable networks/communities.
In the book, I use the Hawaii-based organization called a Kumiai as an example.
4. OK, work/jobs. I anticipate the continuing erosion of fulltime paid work. The “factory model” of employment (the monolithic State or Corporation as employer) will be replaced by hybrid work which is an adaptable, flexible mix of paid and unpaid work, private enterprise, community work, creative endeavors, etc.
In hybrid work, what’s important is being productive and building experiential capital. The other goal is to develop multiple sources of income so you’re no longer dependent on one skillset (or one network/business).
I’m going to do a brief brain-dump here on hybrid work. Yes, I speak from experience because I’ve been pursuing the hybrid work model for several decades, even before I understood the concept. Many of you have done so, too.
The point of hybrid work is to reduce the vulnerability created by relying on one source of income or skillset. (Nowadays this is called “antifragile.”) The goal is adaptable, dynamic stability, and relying on one job/skillset is like sitting on an inverted pyramid: it’s inherently unstable. So the goal is to flip the pyramid over and have a base of multiple income streams/interests/skills.
No one can parse out another’s interests or talents. That’s up to you to figure out.
We do have one clue: we are what we do every day.
If you think you like doing some sort of work, but you never seem to have the time to pursue it, maybe you like the idea of the work more than the actual work.
I would caution anyone who is confident that the “gummit” (State) will never fold up/stop paying its employees/beneficiaries. As I say in the book, the State has various means to evade its obligations.
For instance, you might receive your $4,000/month pension as “promised,” but then a loaf of bread will cost $2,000. That’s probably not what you thought was “promised,” but strictly speaking, the State will have met its obligation to you.
Important point: skillsets and networks cannot be depreciated like money. They cannot be stolen.
As I also explain in Survival+, I am a fan of gold/silver for the simple reason they cannot go to zero value like stocks, bonds, derivatives, and paper money.
But I also point out that gold is a capital trap. It is not a productive investment like digging a well or installing a solar panel. I submit that controlling as much of the FEW (food, energy, water) assets as possible has some intrinsic value which gold does not have. Yes, gold might buy those resources in the future, but that’s a different proposition than saying gold will not go to zero. The relative price of various assets comes into play, and since we can’t know future relative prices, then it behooves us to spread our bets and to trade in and out of assets as they rise to absurd valuations and then fall to the mean.
In other words, since the future is unknown, owning a mix of non-correlated productive assets offers better probabilities for dynamic stability.
It would be easier for all of us if the “checklist” was as easy as, say, this:
1. buy and secure gold
2. learn to make decent beer
Now these are perfectly good ideas for the right person, and they are certainly a good backstop, combining a mix of skillset capital, means of exchange (gold and beer), store of value (gold) and an instant network (“anyone want a taste of my homebrew beer?” Hint: it must be good beer to be effective.)
But it isn’t that easy, because we’re each a unique mix of interests, talents, tropisms, etc.
Last important point. Some things cannot be outsourced to distant lands. These include most medical care, fitness, cooking, gardening/yardwork, childcare, caring for the elderly, fixing actual physical objects and software /networks for local enterprises, repairing appliances, installing solar panels on your house, selling at the farmers market, making sales contacts in your town/city, and having a good time.
As a result, finding some overlap of your own interests and the above enduring needs of human communities might suggest some opportunities for hybrid work and new skillsets/experiential capital to acquire.
The best way to learn is by doing with others–a mentor, a group, a friend. The best way to get paid for work is to start out offering to do it free, to show you can do it and that you’re trustworthy.
This is not a tidy checklist but then life is not tidy, and the future will likely be even more untidy than the present.
These concepts are from my book Survival+.


investmentwatchblog--2020-05-07--The Number Of Jobs Lost In April Was More Than Double The Total Number Of Jobs Lost During The Last

The Number Of Jobs Lost In April Was More Than Double The Total Number Of Jobs Lost During The Last Recession

Yes , you read that headline correctly .
The economic downturn of 2008 and 2009 is often referred to as “ the Great Recession ” because the U.S. had not experienced economic pain of that magnitude since the Great Depression of the 1930s .
Millions of Americans lost their jobs , mortgage defaults soared and Wall Street was shaken to the core .
But as bad as things were during the last recession , things are even worse now .
To say that what we are witnessing is “ unprecedented ” doesn ’ t do it justice , because what @ @ @ @ @ @ @ 2020 is truly , truly horrifying , and many believe that what we have experienced so far is just the beginning .
ADP has been tracking private payrolls in the United States for many , many years , and each month their payroll report is watched very carefully by economists .
Prior to this year , the worst month in the history of the ADP report was in February 2009 when 834,665 jobs were shed from U.S. private payrolls .
Needless to say , that old record just got completely shattered… So what @ @ @ @ @ @ @ private payroll jobs lost in the United States last month was more than 24 times greater than the previous all-time record .
In fact , the number of private payroll jobs lost last month was more than double the total number of jobs lost during the last recession… We have never seen an unemployment spike like this ever before , and we may never see a spike quite like it ever again .
Of course there are some people out there that have been quick to remind me that many of these job @ @ @ @ @ @ @ millions of Americans will soon be going back to work .
Yes , as states begin to end their lockdowns the U.S. economy will regain millions of the jobs that have been lost .
But there are also millions of jobs that we aren ’ t ever going to get back .
The following comes from a Bloomberg article entitled “ Layoffs Start Turning From Temporary to Permanent Across America ” … I personally know quite a few people that have permanently lost their jobs , and you probably do too .
This @ @ @ @ @ @ @ Taylor plans to start the process of liquidating , and all of their employees will soon be out on the street on a permanent basis… But much , much , much more importantly , we are about to see a wave of small business failures in the United States that will absolutely dwarf anything that we have ever seen before in our history .
Governors all across America can end the lockdowns , but they can ’ t order people to go out and spend money .
For many months to come , @ @ @ @ @ @ @ millions of consumers from resuming their normal economic patterns , and so small businesses all over the country will be facing greatly reduced revenues for the foreseeable future .
Needless to say , many of them aren ’ t going to make it and those that fail are going to have to let all of their workers go .
In an article that I just posted , I discussed a stunning new survey that discovered that 52 percent of all small business owners in the United States “ expect to be out of @ @ @ @ @ @ @ are talking about millions of businesses that may soon be saying goodbye to all of their employees for good .
Giant corporations have the resources to make it through an extended downturn , but most small businesses do not .
It is hard enough to try to run a profitable small business even when conditions are ideal , but now this pandemic has made that task nearly impossible in many cases .
So yes , the U.S. economy will recover some of the jobs that were lost during the lockdowns , but we @ @ @ @ @ @ @ in the months ahead .
I know that a lot of my readers are quite eager for a return to “ normal ” , but we have to realize that the “ old normal ” is gone .
Instead , a “ new normal ” is starting to emerge , and on Tuesday California Governor Gavin Newsom warned that we won ’ t fully get there “ until we get to immunity and a vaccine ” … Unfortunately , it is exceedingly unlikely that we will reach “ herd immunity ” in the @ @ @ @ @ @ @ quest for a “ vaccine ” is not going to be easy .
If you doubt this , just do some research and find out how many other successful coronavirus vaccines there have been in our history .
When they tell you that an easy solution is right around the corner , they aren ’ t being honest with you .
Meanwhile , the U.S. economy is literally imploding all around us , and this is just the start of our troubles .
The good news is that COVID-19 is not as deadly @ @ @ @ @ @ @ of millions dead , the final death toll in the U.S. will probably only be in the hundreds of thousands .
As this pandemic eventually begins to subside , use it as an opportunity to get prepared for what is coming next , because COVID-19 is definitely not the worst thing we are going to face .

by Michael Snyder
Yes, you read that headline correctly. The economic downturn of 2008 and 2009 is often referred to as “the Great Recession” because the U.S. had not experienced economic pain of that magnitude since the Great Depression of the 1930s. Millions of Americans lost their jobs, mortgage defaults soared and Wall Street was shaken to the core. But as bad as things were during the last recession, things are even worse now. To say that what we are witnessing is “unprecedented” doesn’t do it justice, because what is happening to the U.S. economy in 2020 is truly, truly horrifying, and many believe that what we have experienced so far is just the beginning.
ADP has been tracking private payrolls in the United States for many, many years, and each month their payroll report is watched very carefully by economists.
Prior to this year, the worst month in the history of the ADP report was in February 2009 when 834,665 jobs were shed from U.S. private payrolls. Needless to say, that old record just got completely shattered…
Private payrolls hemorrhaged more than 20 million jobs in April as companies sliced workers amid a coronavirus-induced shutdown that took most of the U.S. economy offline, according to a report Wednesday from ADP. In all, the decline totaled 20,236,000 — easily the worst loss in the survey’s history going back to 2002 but not as bad as the 22 million that economists surveyed by Dow Jones had been expecting. The previous record was 834,665 in February 2009 amid the financial crisis and accompanying Great Recession.
So what this means is that the number of private payroll jobs lost in the United States last month was more than 24 times greater than the previous all-time record.
In fact, the number of private payroll jobs lost last month was more than double the total number of jobs lost during the last recession…
“Job losses of this scale are unprecedented,” said Ahu Yildirmaz, co-head of the ADP Research Institute, which compiles the report in conjunction with Moody’s Analytics. “The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession.”
We have never seen an unemployment spike like this ever before, and we may never see a spike quite like it ever again.
Of course there are some people out there that have been quick to remind me that many of these job losses are “temporary” and that millions of Americans will soon be going back to work.
Yes, as states begin to end their lockdowns the U.S. economy will regain millions of the jobs that have been lost.
But there are also millions of jobs that we aren’t ever going to get back. The following comes from a Bloomberg article entitled “Layoffs Start Turning From Temporary to Permanent Across America”…
Plenty of layoffs that just a month ago were labeled “temporary” are now tagged “indefinite” or “permanent.” Alongside announcements of sweeping staff cuts by major employers such as Boeing Co. and U.S. Steel Corp. and the accelerating pace of downsizing in brick-and-mortar retailing, such notices are a sign that even as businesses continue to hope for a speedy recovery, they are starting to plan for a slow one.
I personally know quite a few people that have permanently lost their jobs, and you probably do too.
This week, we learned that Lord & Taylor plans to start the process of liquidating, and all of their employees will soon be out on the street on a permanent basis…
Venerable U.S. retailer Lord & Taylor plans to liquidate inventory in its 38 department stores once restrictions to curb the spread of coronavirus are lifted as it braces for a bankruptcy process from which it does not expect to emerge, people familiar with the matter said on Tuesday. Lord & Taylor’s preparations to liquidate its inventory as soon as its stores reopen offer a window into the grim future of a high-profile retailer – a storied department store chain founded in 1826 and billed as the oldest in the United States – that does not expect to survive the pandemic’s economic fallout.
But much, much, much more importantly, we are about to see a wave of small business failures in the United States that will absolutely dwarf anything that we have ever seen before in our history.
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Governors all across America can end the lockdowns, but they can’t order people to go out and spend money. For many months to come, fear of COVID-19 is going to prevent millions of consumers from resuming their normal economic patterns, and so small businesses all over the country will be facing greatly reduced revenues for the foreseeable future.
Needless to say, many of them aren’t going to make it and those that fail are going to have to let all of their workers go. In an article that I just posted, I discussed a stunning new survey that discovered that 52 percent of all small business owners in the United States “expect to be out of business within six months”.
We are talking about millions of businesses that may soon be saying goodbye to all of their employees for good.
Giant corporations have the resources to make it through an extended downturn, but most small businesses do not. It is hard enough to try to run a profitable small business even when conditions are ideal, but now this pandemic has made that task nearly impossible in many cases.
So yes, the U.S. economy will recover some of the jobs that were lost during the lockdowns, but we will also continue to bleed more jobs in the months ahead.
I know that a lot of my readers are quite eager for a return to “normal”, but we have to realize that the “old normal” is gone.
Instead, a “new normal” is starting to emerge, and on Tuesday California Governor Gavin Newsom warned that we won’t fully get there “until we get to immunity and a vaccine”…
California Gov. Gavin Newsom said as many counties around the state prepare to reopen retail for curbside pickup Friday, maintaining physical-distancing measures will be crucial to reduce the risk of coronavirus spread. “We’re not going back to normal,” said Newsom, who gave Tuesday’s press briefing from the site of a Sacramento business called Display California. “It’s a new normal with adaptations and modifications, until we get to immunity and a vaccine.”
Unfortunately, it is exceedingly unlikely that we will reach “herd immunity” in the United States before 2021, and the quest for a “vaccine” is not going to be easy.
If you doubt this, just do some research and find out how many other successful coronavirus vaccines there have been in our history.
When they tell you that an easy solution is right around the corner, they aren’t being honest with you.
Meanwhile, the U.S. economy is literally imploding all around us, and this is just the start of our troubles.
The good news is that COVID-19 is not as deadly as many were originally projecting. Instead of millions dead, the final death toll in the U.S. will probably only be in the hundreds of thousands.
As this pandemic eventually begins to subside, use it as an opportunity to get prepared for what is coming next, because COVID-19 is definitely not the worst thing we are going to face.


investmentwatchblog--2020-05-07--According To A Shocking New Survey, 52% Of Small Businesses “Expect To Be Out Of Business Within Six

According To A Shocking New Survey, 52% Of Small Businesses “Expect To Be Out Of Business Within Six Months”

Anyone that was hoping for a “ quick recovery ” for the U.S. economy can forget about that right now .
Yes , many states are attempting to “ reopen ” , but in most cases it will be a multi-stage process that takes many months to complete .
Meanwhile , fear of COVID-19 is going to keep many Americans from conducting business as usual even after all of the restrictions have been finally lifted .
Even now , many of the stores , restaurants and movie theaters that have reopened are seeing very , very few customers .
Unfortunately @ @ @ @ @ @ @ going to be able to survive in such a depressed economic environment for very long .
In America today , the rules of the game are slanted very heavily in favor of huge corporations and are slanted very heavily against small businesses .
It has been this way for years , but millions of small business owners just kept soldiering on because they wanted to work for themselves and not some corporate behemoth .
But for most small businesses things have never been easy .
For most of them , it is usually @ @ @ @ @ @ @ out a very meager profit at the end of the month after covering expenses and payroll .
But now COVID-19 has come along , and many small businesses haven ’ t had any revenue for weeks .
The good news is that the lockdowns are starting to end , but the bad news is that many small business owners are facing a “ new normal ” in which their monthly revenues will be down by 30 , 40 or 50 percent ( or more ) .
All of a sudden many small businesses @ @ @ @ @ @ @ transformed into businesses that are bleeding a lot of cash each month , and many of them simply are not going to make it .
It was always obvious that this pandemic would kill a lot of those businesses , but the true scope of the problem wasn ’ t apparent until now .
According to Bloomberg , a survey that was just conducted found that 52 percent of U.S. small business owners “ expect to be out of business within six months ” … Yes , the big corporate giants dominate our @ @ @ @ @ @ @ lots and lots of small businesses out there .
Ultimately , we are talking about millions upon millions of businesses that are about to be destroyed… Around the country , governors can choose to end the lockdowns , but they can ’ t order customers to go out and spend money .
And considering the fact that more than 30 million Americans have lost their jobs over the last six weeks , a lot of them don ’ t have money to spend anyway .
But even if everyone was still working , @ @ @ @ @ @ @ population that will simply be afraid to venture into public places as long as this pandemic is going on .
If you doubt this , just consider what we are witnessing in Texas .
Reuters sent a reporter to one of the most popular malls in Austin , and what that reporter discovered is quite sobering… If even 20 percent of customers stay away for the foreseeable future , that is going to be enough to kill millions of small businesses .
So the truth is that we are facing a major national @ @ @ @ @ @ @ passed a bill that was supposed to help small businesses survive the lockdowns , but as I mentioned in a previous article it looks like that program has been a massive failure… We really are caught in a downward spiral now .
We desperately need to get Americans back to work so that they can start earning paychecks again , but with so few customers right now , businesses will continue to lay off even more workers in the weeks and months ahead .
Meanwhile , the cost of living is actually going @ @ @ @ @ @ @ shortages , fresh meat prices are escalating quite rapidly… The economic collapse that so many have been warning about is here , and it is going to continue whether there are lockdowns or not .
Yes , there will be ups and down ahead , and there will be moments of legitimate optimism .
But nobody is going to be able to stop the process that has now begun , and economic conditions will ultimately become far worse than most Americans would dare to imagine .

by Michael Snyder
Anyone that was hoping for a “quick recovery” for the U.S. economy can forget about that right now. Yes, many states are attempting to “reopen”, but in most cases it will be a multi-stage process that takes many months to complete. Meanwhile, fear of COVID-19 is going to keep many Americans from conducting business as usual even after all of the restrictions have been finally lifted. Even now, many of the stores, restaurants and movie theaters that have reopened are seeing very, very few customers. Unfortunately, millions of small businesses are not going to be able to survive in such a depressed economic environment for very long.
In America today, the rules of the game are slanted very heavily in favor of huge corporations and are slanted very heavily against small businesses.
It has been this way for years, but millions of small business owners just kept soldiering on because they wanted to work for themselves and not some corporate behemoth.
But for most small businesses things have never been easy. For most of them, it is usually such a struggle to try to eke out a very meager profit at the end of the month after covering expenses and payroll. But now COVID-19 has come along, and many small businesses haven’t had any revenue for weeks.
The good news is that the lockdowns are starting to end, but the bad news is that many small business owners are facing a “new normal” in which their monthly revenues will be down by 30, 40 or 50 percent (or more). All of a sudden many small businesses that were once barely profitable have been transformed into businesses that are bleeding a lot of cash each month, and many of them simply are not going to make it.
It was always obvious that this pandemic would kill a lot of those businesses, but the true scope of the problem wasn’t apparent until now. According to Bloomberg, a survey that was just conducted found that 52 percent of U.S. small business owners “expect to be out of business within six months”…
COVID-19 could shutter most American small businesses. That’s according to a new survey from the Society for Human Resource Management which found that 52% expect to be out of business within six months. The survey of 375 firms was conducted between April 15-21 and doesn’t account for improved business conditions as some U.S. states reopen this month.
Yes, the big corporate giants dominate our society today, but there are still lots and lots of small businesses out there.
Ultimately, we are talking about millions upon millions of businesses that are about to be destroyed…
“SHRM has tracked Covid-19’s impact on work, workers, and the workplace for months,” said SHRM Chief Executive Officer Johnny C. Taylor, Jr., “but these might be the most alarming findings to date. Small business is truly the backbone of our economy. So, when half say they’re worried about being wiped out, let’s remember: We’re talking about roughly 14 million businesses.”
Around the country, governors can choose to end the lockdowns, but they can’t order customers to go out and spend money.
And considering the fact that more than 30 million Americans have lost their jobs over the last six weeks, a lot of them don’t have money to spend anyway.
We are primarily funded by readers. Please subscribe and donate to support us!
But even if everyone was still working, there is a large segment of the population that will simply be afraid to venture into public places as long as this pandemic is going on.
If you doubt this, just consider what we are witnessing in Texas. Reuters sent a reporter to one of the most popular malls in Austin, and what that reporter discovered is quite sobering…
A dozen or so people were strolling about the sprawling open-air shopping center Monday afternoon, with three seated on the patio of a Tex-Mex restaurant. Only one shopper wore a mask, and the loudest noises were from songbirds perched in the live oak trees along the deserted pedestrian thoroughfares. “I’ve seen one customer today – they didn’t buy anything,” said Taylor Jund, who was keeping watch over an empty Chaser clothing store. “There’s absolutely no one coming around here.”
If even 20 percent of customers stay away for the foreseeable future, that is going to be enough to kill millions of small businesses.
So the truth is that we are facing a major national crisis.
A while back, Congress passed a bill that was supposed to help small businesses survive the lockdowns, but as I mentioned in a previous article it looks like that program has been a massive failure…
According to the CNBC/SurveyMonkey Small Business Survey released Monday, which surveyed 2,200 small business owners across America, while the $660 billion Paycheck Protection Program was instituted to give them a lifeline through the coronavirus and economic shutdown, only 13% of the 45% who applied for the PPP were approved.
We really are caught in a downward spiral now. We desperately need to get Americans back to work so that they can start earning paychecks again, but with so few customers right now, businesses will continue to lay off even more workers in the weeks and months ahead.
Meanwhile, the cost of living is actually going up. Thanks to the ongoing meat shortages, fresh meat prices are escalating quite rapidly…
Fresh meat prices escalated 8.1% in stores, compared to the same period last year, according to Nielsen data for the week ending April 25. Experts expect prices to skyrocket in the coming weeks, as meat processing plants across the U.S. are forced to close due to the coronavirus pandemic. Pork and beef prices could increase by as much as 20% compared to 2019, according to a new report from CoBank, a cooperative bank that is part of the Farm Credit System.
The economic collapse that so many have been warning about is here, and it is going to continue whether there are lockdowns or not.
Yes, there will be ups and down ahead, and there will be moments of legitimate optimism.
But nobody is going to be able to stop the process that has now begun, and economic conditions will ultimately become far worse than most Americans would dare to imagine.


investmentwatchblog--2020-05-07--The Enslavement of Infinite Money

The Enslavement of Infinite Money

The phrase “ don ’ t fight the Fed ” is an unfortunate but popular delusion .
It presupposes that the central bank has limitless power to direct the economy because it can print limitless money .
I ’ m not sure where this idea comes from , but consider the fact that anyone today who is under 30 years old was barely old enough in 2008 to understand or care about the credit collapse .
These people spent their formative years knowing only stimulus and QE .
In their minds , this is the norm , and they think @ @ @ @ @ @ @ t yet witnessed a collapse .
I would say a better phrase for the 2020s is “ The Fed is not going to save you ” ; the Fed is not a superhero and it does not have the power nor the inclination to protect the little people from economic folly .
This should be readily apparent today , as the COVID-19 pandemic continues to spread and the central bank can ’ t seem to cure it with Quantitative Easing .
My position has always been that the Fed has no intention of @ @ @ @ @ @ @ appear as if they care .
This is evident in the fact that they created the Everything Bubble in the first place with years of near zero interest rates , then abruptly hiked interest rates into economic weakness , just like they did during the Great Depression .
All it took was a few rate increases to cause stock markets to plunge in December 2018 ; liquidity was strangled and repo markets became unstable .
Jerome Powell knew perfectly well that this would be the result ; he openly discussed it in the @ @ @ @ @ @ @ Market Committee .
The Fed ignored the decaying economic conditions of historic national debt , corporate debt and consumer debt , all the while claiming that the U.S. economy was “ strong ” and “ in recovery ” in their Beige Book assessments .
The financial elites were lying .
They knew they were lying , and they knew that the system was on the verge of a breakdown .
What they needed was an event that would provide cover for the crash that they created , and lo and behold , the @ @ @ @ @ @ @ outbreak appears .
Now , all the buildup to the crash will be forgotten by the masses and the mainstream financial media .
The fact that the central banks set this collapse in motion will be overshadowed by the pandemic , and the virus will be blamed for everything ( alongside nationalism , conservatives , “ selfish ” people that want their freedoms and defy lockdowns , etc. )
.
To be sure , the lockdowns are the final nail in the economy ’ s coffin , but it was the Fed that @ @ @ @ @ @ @ Fed stimulus is achieving little other than stalling the free fall of stock markets ; the rest of the economy is done .
The Fed knows it , but the public doesn ’ t see it yet .
With the word “ reopen ” on everyone ’ s minds right now , hopes are high , but it is a false hope .
According to the elites own schematics for handling the pandemic , the plan is to use a kind of “ wave theory ” in which the economy is reopened for @ @ @ @ @ @ @ – and then closed again for another couple of months .
The goal is to cause the spread of the virus in the span of that month and then use the spike in infections and deaths as an excuse to close everything down again .
The public does not seem to be aware of this plan , even though it is openly admitted .
The next widespread lockdowns will likely occur in June .
Some places in the U.S. are not opening up at all .
This will cause a rush of people @ @ @ @ @ @ @ looking to escape the restrictions , even if just for a week or two .
Infections will then spike in places that were once free of community transmissions .
The rationale will then be in place to enforce even harsher restrictions .
When the lockdowns are instituted again , the U.S. population is going to go berserk .
They think the crisis is almost over ; they have no idea that it ’ s only just beginning .
The calls for unlimited stimulus are rising in the wake of the disaster .
Small @ @ @ @ @ @ @ in less than two weeks with only 4 % of loan demands accounting for 45 % of the total money made available through the government program .
The second round of bailouts will probably follow the same trend .
The problem is that the economy was already in dire straits before the pandemic ; everyone needs money now .
The debt vacuum is forever hungry .
But what about the $ 6 trillion in stimulus the Fed has already generated ?
Well , that has mostly going into U.S. treasuries and major corporations @ @ @ @ @ @ @ though small businesses employ around 50 % of U.S. workers .
So here is what is about to happen… A large portion of small businesses will shut down .
People will not be going back to shopping in droves like they used to , as the average American now realizes their resources are finite .
The spend-easy mindset is now over , as people will be more likely to set cash aside “ just in case ” .
Lingering concerns about the virus will probably stifle any rush to normalcy .
This is @ @ @ @ @ @ @ one of the first states to reopen , as businesses still suffocate as they wait for shoppers to return .
They will try to hang on through the reopening , but without a steady flow of cash from the government , they will not last .
The calls for regular bailouts will grow .
On top of this , stimulus checks to individuals have also fallen flat , as a number of people continue to wait for aid .
When it finally arrives , these checks will stave off personal crisis for maybe @ @ @ @ @ @ @ end of June , as reality begins to set in , I expect to see very real desperation among lower income Americans .
Stimulus can buy us months , but with the stagflationary environment we find ourselves in , Universal Basic Income will have limited effect for the long term .
As prices of necessities inflate , government stimulus will buy less and less .
And the more the Fed continues to print , the more inflation we will see in certain sectors of the economy .
The government could try to introduce @ @ @ @ @ @ @ production to slow down , as there are no incentives and the cost of manufacturing outweighs any potential profits .
Wages will decrease dramatically , and unemployment will skyrocket .
The government will offer only one option : nationalization of all essential industries .
This is what happens when all economic activity is centralized under the control of governments and central banks .
There is no avoiding the consequences .
The average citizen will be reduced to near-third-world status , waiting desperately every month for a government check that barely allows them to @ @ @ @ @ @ @ regular occurrence , which means landlords and owners will either have to work out some kind of alternative deals with renters or sell off properties that they can ’ t afford to maintain .
By the end of this year and into 2021 , I believe the collapse will start to peak .
Fed stimulus is a Catch-22 , a non-solution .
Having the ability to print money in unlimited amounts still has limited benefits .
It does not account for rising production costs , nor does it account for inflation in necessary @ @ @ @ @ @ @ supply chain disruptions and manufacturing shutdowns due to the pandemic .
No money printing scheme in history has ever successfully solved an economic crisis .
Not one .
At most it can slow down the collapse for a time , but not stop it .
The real answer to the problem is one that the banking elites will never acknowledge : decentralization and localization .
Localized production , self-sustaining independent economies in which trade and manufacturing is promoted on the micro-level , not to mention local scrip backed by commodities , as well @ @ @ @ @ @ @ ; these can create redundancies in cities and counties and states that could save them from national and global level disasters .
The sad thing is people will not consider these solutions until they are already mired in the crash .
Those communities that do implement such measures will be attacked by the establishment , and this will only confirm for us what the real fix is .
You are not allowed to save yourself , you are only allowed to sit and wait for help .
The stimulus machine is enslavement ; @ @ @ @ @ @ @ on it even as it drags us down into endless poverty .
The goal of infinite money is not to protect the economic system ; the goal of infinite money is to collapse the system and transform it from a once free market into a feudal plantation .

From Brandon Smith
The phrase “don’t fight the Fed” is an unfortunate but popular delusion. It presupposes that the central bank has limitless power to direct the economy because it can print limitless money. I’m not sure where this idea comes from, but consider the fact that anyone today who is under 30 years old was barely old enough in 2008 to understand or care about the credit collapse. These people spent their formative years knowing only stimulus and QE. In their minds, this is the norm, and they think it always works because they haven’t yet witnessed a collapse.
I would say a better phrase for the 2020s is “The Fed is not going to save you”; the Fed is not a superhero and it does not have the power nor the inclination to protect the little people from economic folly. This should be readily apparent today, as the COVID-19 pandemic continues to spread and the central bank can’t seem to cure it with Quantitative Easing.
My position has always been that the Fed has no intention of saving the economy, only making it appear as if they care. This is evident in the fact that they created the Everything Bubble in the first place with years of near zero interest rates, then abruptly hiked interest rates into economic weakness, just like they did during the Great Depression. All it took was a few rate increases to cause stock markets to plunge in December 2018; liquidity was strangled and repo markets became unstable. Jerome Powell knew perfectly well that this would be the result; he openly discussed it in the minutes of the October 2012 Federal Open Market Committee.
The Fed ignored the decaying economic conditions of historic national debt, corporate debt and consumer debt, all the while claiming that the U.S. economy was “strong” and “in recovery” in their Beige Book assessments. The financial elites were lying. They knew they were lying, and they knew that the system was on the verge of a breakdown. What they needed was an event that would provide cover for the crash that they created, and lo and behold, the “lucky” coincidence of the coronavirus outbreak appears.
Now, all the buildup to the crash will be forgotten by the masses and the mainstream financial media. The fact that the central banks set this collapse in motion will be overshadowed by the pandemic, and the virus will be blamed for everything (alongside nationalism, conservatives, “selfish” people that want their freedoms and defy lockdowns, etc.).
To be sure, the lockdowns are the final nail in the economy’s coffin, but it was the Fed that dug the grave. For now, Fed stimulus is achieving little other than stalling the free fall of stock markets; the rest of the economy is done. The Fed knows it, but the public doesn’t see it yet.
With the word “reopen” on everyone’s minds right now, hopes are high, but it is a false hope. According to the elites own schematics for handling the pandemic, the plan is to use a kind of “wave theory” in which the economy is reopened for a short time – perhaps a month – and then closed again for another couple of months. The goal is to cause the spread of the virus in the span of that month and then use the spike in infections and deaths as an excuse to close everything down again. The public does not seem to be aware of this plan, even though it is openly admitted.
The next widespread lockdowns will likely occur in June. Some places in the U.S. are not opening up at all. This will cause a rush of people from high population areas into rural areas looking to escape the restrictions, even if just for a week or two. Infections will then spike in places that were once free of community transmissions. The rationale will then be in place to enforce even harsher restrictions.
When the lockdowns are instituted again, the U.S. population is going to go berserk. They think the crisis is almost over; they have no idea that it’s only just beginning.
The calls for unlimited stimulus are rising in the wake of the disaster. Small business bailouts failed miserably, drying up in less than two weeks with only 4% of loan demands accounting for 45% of the total money made available through the government program. The second round of bailouts will probably follow the same trend. The problem is that the economy was already in dire straits before the pandemic; everyone needs money now. The debt vacuum is forever hungry.
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But what about the $6 trillion in stimulus the Fed has already generated? Well, that has mostly going into U.S. treasuries and major corporations, not to the little guy even though small businesses employ around 50% of U.S. workers. So here is what is about to happen…
A large portion of small businesses will shut down. People will not be going back to shopping in droves like they used to, as the average American now realizes their resources are finite. The spend-easy mindset is now over, as people will be more likely to set cash aside “just in case”. Lingering concerns about the virus will probably stifle any rush to normalcy. This is exactly what has happened in Georgia, one of the first states to reopen, as businesses still suffocate as they wait for shoppers to return.
They will try to hang on through the reopening, but without a steady flow of cash from the government, they will not last. The calls for regular bailouts will grow. On top of this, stimulus checks to individuals have also fallen flat, as a number of people continue to wait for aid. When it finally arrives, these checks will stave off personal crisis for maybe a month or two. By the end of June, as reality begins to set in, I expect to see very real desperation among lower income Americans.
Stimulus can buy us months, but with the stagflationary environment we find ourselves in, Universal Basic Income will have limited effect for the long term.
As prices of necessities inflate, government stimulus will buy less and less. And the more the Fed continues to print, the more inflation we will see in certain sectors of the economy. The government could try to introduce price controls, but this generally causes production to slow down, as there are no incentives and the cost of manufacturing outweighs any potential profits. Wages will decrease dramatically, and unemployment will skyrocket. The government will offer only one option: nationalization of all essential industries.
This is what happens when all economic activity is centralized under the control of governments and central banks. There is no avoiding the consequences.
The average citizen will be reduced to near-third-world status, waiting desperately every month for a government check that barely allows them to survive. Rent protests will become a regular occurrence, which means landlords and owners will either have to work out some kind of alternative deals with renters or sell off properties that they can’t afford to maintain. By the end of this year and into 2021, I believe the collapse will start to peak.
Fed stimulus is a Catch-22, a non-solution. Having the ability to print money in unlimited amounts still has limited benefits. It does not account for rising production costs, nor does it account for inflation in necessary goods, nor does it account for supply chain disruptions and manufacturing shutdowns due to the pandemic. No money printing scheme in history has ever successfully solved an economic crisis. Not one. At most it can slow down the collapse for a time, but not stop it.
The real answer to the problem is one that the banking elites will never acknowledge: decentralization and localization. Localized production, self-sustaining independent economies in which trade and manufacturing is promoted on the micro-level, not to mention local scrip backed by commodities, as well as gold and silver as money alternatives; these can create redundancies in cities and counties and states that could save them from national and global level disasters. The sad thing is people will not consider these solutions until they are already mired in the crash.
Those communities that do implement such measures will be attacked by the establishment, and this will only confirm for us what the real fix is. You are not allowed to save yourself, you are only allowed to sit and wait for help. The stimulus machine is enslavement; and we are meant to remain dependent on it even as it drags us down into endless poverty. The goal of infinite money is not to protect the economic system; the goal of infinite money is to collapse the system and transform it from a once free market into a feudal plantation.


investmentwatchblog--2020-05-07--Nothing’s Fixed: What’s Behind the Corporate Debt Bailout

Nobody knew what would trigger the next financial crisis , but just about everyone knew it would involve the record pile of corporate debt .
And so it happened .
Now the Fed fixed it… By Wolf Richter .
This is the transcript from my podcast last Sunday , THE WOLF STREET REPORT : Something spectacular happened in April , despite the gut-wrenching phenomenon that 30 million people lost their jobs in the United States : In late February and early March , credit markets were freezing up and corporate bonds , particularly junk bonds and the lowest rungs of @ @ @ @ @ @ @ of imploding .
But then in late March and in all of April , companies issued record amounts of bonds under blistering demand from once again yield-chasing institutional investors .
Corporate debt has already been at record high levels by any measure going into the year 2020 , and the Fed has been warning about it repeatedly , including in its Financial Stability Reports , and people figured this corporate debt bubble would eventually implode and put the economy at risk , and it could cause another Financial Crisis because at the next @ @ @ @ @ @ @ these companies would run out of cash and wouldn ’ t be able to refinance their debts , and wouldn ’ t even be able to make interest payments .
And defaults , debt restructurings , and bankruptcies would become the new growth industry .
Corporate leverage was gigantic .
But no one cared .
And then came February 20 , when it began to unravel .
And suddenly , people cared .
By early March , junk bond issuance was freezing up .
And it became clear that these overleveraged companies couldn @ @ @ @ @ @ @ ’ t borrow money to fund their losses , and would run out of cash soon , and would default .
Back in 2019 , nobody knew what would trigger the next financial crisis , but just about everyone could see that it would involve this record pile of corporate debt .
And so it happened .
But then the Fed decided to solve that problem of too much debt and too much leverage with even more debt and even more leverage .
On March 15 , the Fed announced that it would @ @ @ @ @ @ @ financial markets , buying via its Special Purpose vehicles , or SPVs , whatever wasn ’ t nailed down , and it expanded those programs to ever more asset classes , including investment grade corporate bonds , fallen-angel junk bonds , corporate paper , commercial mortgage-backed securities , even junk bond ETFs .
And all this was hyped in the media with great fanfare .
So the Fed plowed $ 2.3 trillion in seven weeks into Wall Street , buying mostly Treasury securities , government-guaranteed mortgage-backed securities , and smallish amounts of corporate @ @ @ @ @ @ @ , and hand $ 440 billion to foreign central banks , half of it to the Bank of Japan , via its central bank liquidity swaps .
But the Fed hasn ’ t yet bought a single corporate bond , neither investment-grade or junk-rated , and it hasn ’ t yet bought a single ETF .
Turns out , the Fed was just jawboning about buying corporate bonds and junk-bond ETFs .
Every Thursday , since this whole S-H-I-T-show has started , I post an analysis of the Fed ’ s weekly balance @ @ @ @ @ @ @ the Fed ’ s last balance sheet , the Fed still hasn ’ t bought a single corporate bond , not a single fallen-angel junk bond , not a single junk-bond ETF .
It was just jawboning – which is an official tool in the Fed ’ s tool box and goes by other terms , such as “ forward guidance.
” This jawboning worked like a charm .
It triggered a huge rally in stocks and bonds , and particularly in junk bonds and junk-bond ETFs .
Banks and hedge funds and @ @ @ @ @ @ @ the Fed and then sell this stuff to the Fed at a higher price , and stuck-at-home retail investors with nothing else to do were trying to ride up this wave too .
And this rally in corporate bonds , particularly junk bonds , did something else : It re-started the chase for yield , and investors jostled for position to buy bonds offered by companies from Carnival Corporation , with its pariah cruise ships , to Boeing with its 737 MAX fiasco .
And demand was so huge that these companies upped @ @ @ @ @ @ @ more bonds than they had imagined they could .
Boeing became the bond hero a couple of days ago .
Boeing is rated triple-B minus , which means one notch above junk .
If it is downgraded one notch into junk , it becomes a fallen angel .
Not too long ago , it was begging for a $ 60-billion government bailout for itself and the industry because it had hollowed out its balance sheet by incinerating $ 43 billion in cash on buying back its own shares since 2012 , and now @ @ @ @ @ @ @ cash in its operations .
Well , last week , it approached the bond market , hoping to sell between $ 10 billion and $ 15 billion in bonds , with maturities as long as 40 years , according to what some people familiar with the matter told Bloomberg .
These bonds were offered to private investors – so this was not a public offering , which means that filing requirements were much less onerous , and the deal could be pulled off quickly .
The buyers were institutional investors , such as @ @ @ @ @ @ @ buy investment-grade bonds , and also some hedge funds , and other investors that are usually focused on junk bonds , according to the sources .
And Boeing offered relatively high yields .
A mad scramble ensued to get some of these bonds .
Demand for these bonds was gigantic .
Over $ 70 billion were offered to buy these bonds .
So Boeing raised the bond sale to $ 25 billion .
Boeing had already fully drawn its term loan facility at the banks in March , which was over $ 15 @ @ @ @ @ @ @ at hand .
This $ 15-plus-billion in cash together with the cash from the $ 25 billion bond sale will give Boeing $ 40 billion in cash to burn and still have some cash left over on its balance sheet .
But it also means that Boeing will have $ 40 billion in additional debt , and as it burns this cash , its negative net worth will balloon , and while it was fragile and over-leveraged before all this happened , hollowed out by its $ 43 billion in share-buybacks , it @ @ @ @ @ @ @ a lot more overleveraged going forward .
It has been like this all month .
It was kicked off on April 1 , when Carnival Corporation the operator of pariah cruise ships , offered $ 3 billion in bonds at an interest rate of 11.5 % .
There was huge demand , with investors offering to buy $ 17 billion of those bonds , so it upped the bond sale to $ 4 billion .
And it also pulled off a stock sale to raise more cash .
In the week through April @ @ @ @ @ @ @ at an all-time ever record of $ 111 billion , in just one week .
This included the $ 19 billion in bonds from T-Mobile to fund the acquisition of Sprint .
That weekly record beat the prior all-time weekly record of $ 109 billion , which was set the week before .
In other words , since the Fed started jawboning the markets without ever buying a single bond , investors bought up everything with ravenous appetite , in part lured by the higher yields , and in part lured by the @ @ @ @ @ @ @ the Fed for a profit .
Fed Chairman Jerome Powell proudly pointed out the success of the Fed ’ s jawboning in his press conference on April 29 , when he said : “ Many companies that would ’ ve had to come to the Fed have now been able to finance themselves privately since we announced the initial term sheet on these facilities , ” he said .
“ There ’ s a tremendous amount of financing going on , and that ’ s a good thing , ” he said .
@ @ @ @ @ @ @ ’ s a good thing that investors funded those bond sales , and not the government and taxpayers , and not the Fed .
What ’ s not a good thing is this : prior to the crisis , the record amount of corporate debt had made many companies super-fragile and in no position to weather the crisis .
And then , when the whole thing threatened to implode , the Fed cut interest rates to zero and moved heaven and earth to enable and encourage these companies to load up on even @ @ @ @ @ @ @ here is the amazing thing that happened with corporate loans from banks .
Commercial and industrial loans are tracked by bank regulators , such as the Federal Reserve .
In terms of the total C & I loans outstanding , they had been essentially flat for about a year .
At the end of February , there were $ 2.4 trillion of C & I loans outstanding .
But then companies such as Boeing and many others drew down their credit lines and stand-by term loans to get through the crisis and avoid @ @ @ @ @ @ @ .
From March 3 through the end of April , those C & I loans outstanding jumped from $ 2.4 trillion to $ 3.0 trillion .
Over the span of eight weeks , they ’ d jumped by over $ 600 billion .
In percentage terms , they ’ d jumped by 25 % in just eight weeks .
How historic is this ?
C & I loans always jump during a crisis as companies draw down their credit lines .
During big-bad Financial Crisis 1 , during peak-panic following the Lehman bankruptcy @ @ @ @ @ @ @ 5.8 % .
This time , they jumped by 25 % .
This just never happened before in the data going back to 1973 .
So now we have this crazy situation where the “ next crisis ” has arrived , and the next downturn is here , and it ’ s a bad one , and likely the worst one we ’ ve seen in our lifetimes .
And the record amount of corporate debt , that everyone had warned about and that even the Fed had fretted about publicly , did @ @ @ @ @ @ @ it started blowing up , and the credit markets started freezing up .
And then the Fed came out with about $ 2.3 trillion of QE in a few weeks , cut its interest rates to zero , and added lots of jawboning about buying corporate bonds , and this has caused and enabled Corporate America to load up on even more debt than ever before .
And these companies will burn through the cash they raised from these debt sales because they ’ re now in deep trouble and losing money .
@ @ @ @ @ @ @ and what ’ s left over is the additional debt .
This record amount of new and additional debt is piled on top of the record amount of debt that was already weighing down these companies before the crisis , which already made these companies overleveraged and way too fragile going into the crisis , and that ’ s why they couldn ’ t handle the crisis .
And now these companies will be even more overleveraged and more fragile , in what will be a very rough economy for quite a while @ @ @ @ @ @ @ debt has become a lot more explosive and a much bigger risk in just a couple of months than it already was before .
That ’ s where we ’ re at now .
Nothing has been solved .
You can listen to and subscribe to my podcast on YouTube .

Nobody knew what would trigger the next financial crisis, but just about everyone knew it would involve the record pile of corporate debt. And so it happened. Now the Fed fixed it…
By Wolf Richter. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT:
Something spectacular happened in April, despite the gut-wrenching phenomenon that 30 million people lost their jobs in the United States: In late February and early March, credit markets were freezing up and corporate bonds, particularly junk bonds and the lowest rungs of investment-grade bonds, were in the process of imploding. But then in late March and in all of April, companies issued record amounts of bonds under blistering demand from once again yield-chasing institutional investors.
Corporate debt has already been at record high levels by any measure going into the year 2020, and the Fed has been warning about it repeatedly, including in its Financial Stability Reports, and people figured this corporate debt bubble would eventually implode and put the economy at risk, and it could cause another Financial Crisis because at the next downturn, credit could freeze up and these companies would run out of cash and wouldn’t be able to refinance their debts, and wouldn’t even be able to make interest payments. And defaults, debt restructurings, and bankruptcies would become the new growth industry.
Corporate leverage was gigantic. But no one cared. And then came February 20, when it began to unravel. And suddenly, people cared. By early March, junk bond issuance was freezing up. And it became clear that these overleveraged companies couldn’t refinance their debt, couldn’t borrow money to fund their losses, and would run out of cash soon, and would default.
Back in 2019, nobody knew what would trigger the next financial crisis, but just about everyone could see that it would involve this record pile of corporate debt.
And so it happened. But then the Fed decided to solve that problem of too much debt and too much leverage with even more debt and even more leverage.
On March 15, the Fed announced that it would mess around with every aspect of the financial markets, buying via its Special Purpose vehicles, or SPVs, whatever wasn’t nailed down, and it expanded those programs to ever more asset classes, including investment grade corporate bonds, fallen-angel junk bonds, corporate paper, commercial mortgage-backed securities, even junk bond ETFs. And all this was hyped in the media with great fanfare.
So the Fed plowed $2.3 trillion in seven weeks into Wall Street, buying mostly Treasury securities, government-guaranteed mortgage-backed securities, and smallish amounts of corporate paper, and a few other things, and hand $440 billion to foreign central banks, half of it to the Bank of Japan, via its central bank liquidity swaps.
But the Fed hasn’t yet bought a single corporate bond, neither investment-grade or junk-rated, and it hasn’t yet bought a single ETF.
Turns out, the Fed was just jawboning about buying corporate bonds and junk-bond ETFs. Every Thursday, since this whole S-H-I-T-show has started, I post an analysis of the Fed’s weekly balance sheet. And no – as of the Fed’s last balance sheet, the Fed still hasn’t bought a single corporate bond, not a single fallen-angel junk bond, not a single junk-bond ETF.
It was just jawboning – which is an official tool in the Fed’s tool box and goes by other terms, such as “forward guidance.”
This jawboning worked like a charm. It triggered a huge rally in stocks and bonds, and particularly in junk bonds and junk-bond ETFs. Banks and hedge funds and others were buying this stuff to front-run the Fed and then sell this stuff to the Fed at a higher price, and stuck-at-home retail investors with nothing else to do were trying to ride up this wave too.
And this rally in corporate bonds, particularly junk bonds, did something else: It re-started the chase for yield, and investors jostled for position to buy bonds offered by companies from Carnival Corporation, with its pariah cruise ships, to Boeing with its 737 MAX fiasco. And demand was so huge that these companies upped their bond offerings and sold a lot more bonds than they had imagined they could.
Boeing became the bond hero a couple of days ago. Boeing is rated triple-B minus, which means one notch above junk. If it is downgraded one notch into junk, it becomes a fallen angel. Not too long ago, it was begging for a $60-billion government bailout for itself and the industry because it had hollowed out its balance sheet by incinerating $43 billion in cash on buying back its own shares since 2012, and now it’s burning huge amounts of cash in its operations.
Well, last week, it approached the bond market, hoping to sell between $10 billion and $15 billion in bonds, with maturities as long as 40 years, according to what some people familiar with the matter told Bloomberg.
These bonds were offered to private investors – so this was not a public offering, which means that filing requirements were much less onerous, and the deal could be pulled off quickly.
The buyers were institutional investors, such as asset managers and insurance companies that usually buy investment-grade bonds, and also some hedge funds, and other investors that are usually focused on junk bonds, according to the sources.
And Boeing offered relatively high yields. A mad scramble ensued to get some of these bonds. Demand for these bonds was gigantic. Over $70 billion were offered to buy these bonds. So Boeing raised the bond sale to $25 billion.
Boeing had already fully drawn its term loan facility at the banks in March, which was over $15 billion, to have the cash ready at hand. This $15-plus-billion in cash together with the cash from the $25 billion bond sale will give Boeing $40 billion in cash to burn and still have some cash left over on its balance sheet.
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But it also means that Boeing will have $40 billion in additional debt, and as it burns this cash, its negative net worth will balloon, and while it was fragile and over-leveraged before all this happened, hollowed out by its $43 billion in share-buybacks, it will be a LOT more fragile and a lot more overleveraged going forward.
It has been like this all month.
It was kicked off on April 1, when Carnival Corporation the operator of pariah cruise ships, offered $3 billion in bonds at an interest rate of 11.5%. There was huge demand, with investors offering to buy $17 billion of those bonds, so it upped the bond sale to $4 billion. And it also pulled off a stock sale to raise more cash.
In the week through April 2, issuance of investment-grade bonds surged at an all-time ever record of $111 billion, in just one week. This included the $19 billion in bonds from T-Mobile to fund the acquisition of Sprint.
That weekly record beat the prior all-time weekly record of $109 billion, which was set the week before.
In other words, since the Fed started jawboning the markets without ever buying a single bond, investors bought up everything with ravenous appetite, in part lured by the higher yields, and in part lured by the hope that they could sell it to the Fed for a profit.
Fed Chairman Jerome Powell proudly pointed out the success of the Fed’s jawboning in his press conference on April 29, when he said:
“Many companies that would’ve had to come to the Fed have now been able to finance themselves privately since we announced the initial term sheet on these facilities,” he said. “There’s a tremendous amount of financing going on, and that’s a good thing,” he said.
And that’s true, it’s a good thing that investors funded those bond sales, and not the government and taxpayers, and not the Fed.
What’s not a good thing is this: prior to the crisis, the record amount of corporate debt had made many companies super-fragile and in no position to weather the crisis. And then, when the whole thing threatened to implode, the Fed cut interest rates to zero and moved heaven and earth to enable and encourage these companies to load up on even more debt. See Boeing.
And here is the amazing thing that happened with corporate loans from banks. Commercial and industrial loans are tracked by bank regulators, such as the Federal Reserve. In terms of the total C&I loans outstanding, they had been essentially flat for about a year. At the end of February, there were $2.4 trillion of C&I loans outstanding.
But then companies such as Boeing and many others drew down their credit lines and stand-by term loans to get through the crisis and avoid having their access to cash cut off. From March 3 through the end of April, those C&I loans outstanding jumped from $2.4 trillion to $3.0 trillion. Over the span of eight weeks, they’d jumped by over $600 billion. In percentage terms, they’d jumped by 25% in just eight weeks.
How historic is this? C&I loans always jump during a crisis as companies draw down their credit lines. During big-bad Financial Crisis 1, during peak-panic following the Lehman bankruptcy, C&I loans jumped by 5.8%. This time, they jumped by 25%. This just never happened before in the data going back to 1973.
So now we have this crazy situation where the “next crisis” has arrived, and the next downturn is here, and it’s a bad one, and likely the worst one we’ve seen in our lifetimes. And the record amount of corporate debt, that everyone had warned about and that even the Fed had fretted about publicly, did what it was expected to do, it started blowing up, and the credit markets started freezing up.
And then the Fed came out with about $2.3 trillion of QE in a few weeks, cut its interest rates to zero, and added lots of jawboning about buying corporate bonds, and this has caused and enabled Corporate America to load up on even more debt than ever before.
And these companies will burn through the cash they raised from these debt sales because they’re now in deep trouble and losing money. And then the cash is gone, and what’s left over is the additional debt.
This record amount of new and additional debt is piled on top of the record amount of debt that was already weighing down these companies before the crisis, which already made these companies overleveraged and way too fragile going into the crisis, and that’s why they couldn’t handle the crisis.
And now these companies will be even more overleveraged and more fragile, in what will be a very rough economy for quite a while. And that record pile of corporate debt has become a lot more explosive and a much bigger risk in just a couple of months than it already was before. That’s where we’re at now. Nothing has been solved.
You can listen to and subscribe to my podcast on YouTube.