investmentwatchblog--2020-05-26--Thanks to the Fed companies are even more levered AFTER the crash than before. The coming wave of de

Thanks to the Fed companies are even more levered AFTER the crash than before. The coming wave of defaults looks like it is going to be brutal. BofA cautions on fake markets.

LONDON ( Reuters ) – Analysts at BofA said the cash mountain stockpiled by investors during the coronavirus outbreak looks @ @ @ @ @ cautioned that rampant central bank stimulus was fixing bond prices and creating “ fake markets @ @ @ @ @ to print more money , because he wants to put it into the hands of @ @ @ @ @ earners.
” Hertz Files for U.S. Bankruptcy Protection as Car Rentals Evaporate in Pandemic The @ @ @ @ @ car rental firm Hertz Global Holdings Inc filed for bankruptcy protection on Friday after its @ @ @ @ @ coronavirus pandemic and talks with creditors failed to result in much needed relief .

Thanks to the #Fed companies are even more levered AFTER the #crash than before. pic.twitter.com/A6lmZ87WTH — Lance Roberts (@LanceRoberts) May 26, 2020
The coming wave of #defaults looks like it is going to be brutal. pic.twitter.com/j3hNPlEavv — Lance Roberts (@LanceRoberts) May 26, 2020
Debt Wave is comming… pic.twitter.com/GgBH4hamH7 — Piotr Janiszewski (@ATAFIN) May 26, 2020
#Deflationary phase is not over! Range of #Commodities incl. #Wheat indicate another strong move down. We will not see inflationary forces dominate before this final deflationary bust! #TheZebergReport pic.twitter.com/RoDgRnLuJm — Henrik Zeberg (@HenrikZeberg) May 25, 2020
twitter.com/paranoidbull/status/1265119849816240128
The Tourism Collapse Is Unprecedented… The recovery will be challenging pic.twitter.com/mKICDDJu2w — Daniel Lacalle (@dlacalle_IA) May 26, 2020
BofA cautions on fake marketst.co/r24m9ppVBi — Sven Henrich (@NorthmanTrader) May 26, 2020
LONDON (Reuters) – Analysts at BofA said the cash mountain stockpiled by investors during the coronavirus outbreak looks to have now peaked and cautioned that rampant central bank stimulus was fixing bond prices and creating “fake markets”.
In some states, the unemployment rate is 30% to 40%. There is a 29 point gap between the worst state and the best state which is much more than the 10 point gap at the peak of the last recession.
(h/t) @lisaabramowicz1 Article: t.co/1rNuPqwBeZ pic.twitter.com/yHJr5LVovn — UPFINA (@UPFINAcom) May 26, 2020
“He wants to print more money, because he wants to put it into the hands of the lowest third of income earners.”
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The more than a century old car rental firm Hertz Global Holdings Inc filed for bankruptcy protection on Friday after its business was decimated during the coronavirus pandemic and talks with creditors failed to result in much needed relief.


investmentwatchblog--2020-05-26--COVID-19 outbreaks at 9 facilities in one city, including food processing plants: “What we’re seeing

COVID-19 outbreaks at 9 facilities in one city, including food processing plants: “What we’re seeing is the high prices, shortages in some commodities and this will continue,” Vyas said. “This impact will likely outlast the virus itself.”

One California city is grappling with COVID-19 outbreaks at nine of its industrial facilities , including one food processing plant that reported having at least 153 positive cases , according to health officials .
The Los Angeles County Department of Public Health said the largest outbreak occurred at the Farmer John meatpacking plant in Vernon , California , which is owned by Smithfield Foods and produces Dodger Dogs , among other products .
Health officials said 153 employees of 1,837 who work at that facility tested positive for COVID-19 when testing was conducted between March through May , and of @ @ @ @ @ @ @ work .
MORE : Supermarkets add more plant-based products to meet demand amid possible meat shortages The other Vernon facilities with reported outbreaks include Cal Farms Meat Company , CLW ( meat ) , F. Gavina & Sons Inc. ( coffee ) , Golden West Trading ( meat and other products ) , Overhill Farms ( frozen food ) , Rose & Shore ( deli meat and prepared foods ) , Takaokaya USA ( tea , seaweed and other products ) and Vie De France Yamazaki ( baked goods ) .
Smithfield Foods @ @ @ @ @ @ @ the largest pork supplier in the United States and employs 40,000 people across the country .
Tune into ABC at 1 p.m .
ET and ABC News Live at 4 p.m .
ET every weekday for special coverage of the novel coronavirus with the full ABC News team , including the latest news , context and analysis .
The company said it offers free COVID-19 testing to all of its employees , according to its website , where it also lists a series of measures it has taken to help contain the spread @ @ @ @ @ @ @ measures , according to the company , include increased social distancing , plexiglass barriers and temperature scanning .
COVID-19 has dramatically impacted the food industry in the United States .
Dozens of food processing plants across the country have had to shut down for days or even weeks to slow or stop the spread of the virus since March .
Nearly 5,000 meat-packing workers at 115 facilities in 19 states have been infected with COVID-19 , according to the Centers for Disease Control .

One California city is grappling with COVID-19 outbreaks at nine of its industrial facilities, including one food processing plant that reported having at least 153 positive cases, according to health officials.
The Los Angeles County Department of Public Health said the largest outbreak occurred at the Farmer John meatpacking plant in Vernon, California, which is owned by Smithfield Foods and produces Dodger Dogs, among other products.
Health officials said 153 employees of 1,837 who work at that facility tested positive for COVID-19 when testing was conducted between March through May, and of those 153 employees, 41 returned to work.
MORE: Supermarkets add more plant-based products to meet demand amid possible meat shortages
The other Vernon facilities with reported outbreaks include Cal Farms Meat Company, CLW (meat), F. Gavina & Sons Inc. (coffee), Golden West Trading (meat and other products), Overhill Farms (frozen food), Rose & Shore (deli meat and prepared foods), Takaokaya USA (tea, seaweed and other products) and Vie De France Yamazaki (baked goods).
Smithfield Foods, which owns Farmer John, is the largest pork supplier in the United States and employs 40,000 people across the country.
Tune into ABC at 1 p.m. ET and ABC News Live at 4 p.m. ET every weekday for special coverage of the novel coronavirus with the full ABC News team, including the latest news, context and analysis.
The company said it offers free COVID-19 testing to all of its employees, according to its website, where it also lists a series of measures it has taken to help contain the spread of COVID-19 at its facilities. These measures, according to the company, include increased social distancing, plexiglass barriers and temperature scanning.
COVID-19 has dramatically impacted the food industry in the United States. Dozens of food processing plants across the country have had to shut down for days or even weeks to slow or stop the spread of the virus since March.
Nearly 5,000 meat-packing workers at 115 facilities in 19 states have been infected with COVID-19, according to the Centers for Disease Control.
www.msn.com/en-us/news/us/covid-19-outbreaks-at-9-facilities-in-one-city-including-food-processing-plants/ar-BB14A1h1


investmentwatchblog--2020-05-26--Since March Springfield, Massachusetts has had the National Guard help the police enforce the law.

SPRINGFIELD , Mass .
( WWLP ) – Springfield city officials are bringing in the National Guard to help with @ @ @ @ @ .
Springfield Mayor Sarno said in a news conference that he requested 75 national guardsmen @ @ @ @ @ after some officers are out due to various concerns of the coronavirus .
Springfield Police @ @ @ @ @ the department is down about 20 officers after testing positive for COVIDS-19 and 12 others @ @ @ @ @ .

www.wwlp.com/news/health/coronavirus-local-impact/national-guard-to-support-springfield-police-department-amid-covid-19/
SPRINGFIELD, Mass. (WWLP) – Springfield city officials are bringing in the National Guard to help with COVOD-19 management in the city.
Springfield Mayor Sarno said in a news conference that he requested 75 national guardsmen to support the police department after some officers are out due to various concerns of the coronavirus. Springfield Police Commissioner Clapprood told 22News that the department is down about 20 officers after testing positive for COVIDS-19 and 12 others are waiting for test results.


investmentwatchblog--2020-05-26--VIDEO: “Everything You’ve Ever Seen About Cuba Is A Lie” – Media Coverup Exposed

Everything You ’ ve Ever Seen About Cuba Is A Lie Everything You ’ ve Ever Seen About Cuba Is @ @ @ @ @

Everything You’ve Ever Seen About Cuba Is A Lie
Everything You’ve Ever Seen About Cuba Is A Lie
www.facebook.com/watch/?v=558121088114324
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h/t dr0id


investmentwatchblog--2020-05-26--Russia Considers Extending Oil Output Cuts Beyond June

Russia ’ s Energy Minister Alexander Novak is discussing with oil firms on Tuesday the possible extension of the current oil production cuts beyond June , sources with knowledge of the meeting ’ s agenda told Reuters .
The OPEC+ group pledged in April production restrictions of 9.7 million bpd in May and June , before easing the cuts to 7.7 million bpd for July through December .
As part of the OPEC+ deal , Russia pledged to cut its production to 8.5 million bpd in May and June from a February 2020 baseline , or by around 2 million @ @ @ @ @ @ @ from February 2020 , Novak told Interfax in an interview last month .
The discussion of the possibility of extending the current level of cuts after June could be a sign that Russia is open to further support the rebalancing of the oil market after the price crash and coronavirus hit the economies of all oil-producing countries , including Russia .
Russia has said it would hold regular meetings with its oil firms to take stock of the deal ’ s implementation , and today ’ s meeting is part of those regular @ @ @ @ @ @ @ Russian news agency Interfax that minister Novak would discuss the OPEC+ cuts with the top managers of the local oil firms .
According to reports from last week , Russia is almost complying with its share of the cuts , with its crude oil production averaging 8.72 million bpd in the first three weeks of May , as per Reuters estimates .
This is close to the 8.5-million-bpd quota , especially considering Russia ’ s far-from-perfect track record in complying with the cuts .
Novak said on Monday that the market would rebalance @ @ @ @ @ @ @ and quicker-than-expected production cuts from OPEC+ and from producers outside the pact .
The effect of the OPEC+ deal is undoubtedly positive , Vladimir Putin ’ s Press Secretary Dmitry Peskov told Russian media on Tuesday , noting that largely thanks to the deal , the oil market avoided a much more negative scenario .

By Tsvetana Paraskova
Russia’s Energy Minister Alexander Novak is discussing with oil firms on Tuesday the possible extension of the current oil production cuts beyond June, sources with knowledge of the meeting’s agenda told Reuters.
The OPEC+ group pledged in April production restrictions of 9.7 million bpd in May and June, before easing the cuts to 7.7 million bpd for July through December.
As part of the OPEC+ deal, Russia pledged to cut its production to 8.5 million bpd in May and June from a February 2020 baseline, or by around 2 million bpd, or by 19 percent, from February 2020, Novak told Interfax in an interview last month.
The discussion of the possibility of extending the current level of cuts after June could be a sign that Russia is open to further support the rebalancing of the oil market after the price crash and coronavirus hit the economies of all oil-producing countries, including Russia.
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Russia has said it would hold regular meetings with its oil firms to take stock of the deal’s implementation, and today’s meeting is part of those regular updates. Earlier today, sources told Russian news agency Interfax that minister Novak would discuss the OPEC+ cuts with the top managers of the local oil firms.
According to reports from last week, Russia is almost complying with its share of the cuts, with its crude oil production averaging 8.72 million bpd in the first three weeks of May, as per Reuters estimates. This is close to the 8.5-million-bpd quota, especially considering Russia’s far-from-perfect track record in complying with the cuts.
Novak said on Monday that the market would rebalance by July, thanks to improving demand and quicker-than-expected production cuts from OPEC+ and from producers outside the pact.
The effect of the OPEC+ deal is undoubtedly positive, Vladimir Putin’s Press Secretary Dmitry Peskov told Russian media on Tuesday, noting that largely thanks to the deal, the oil market avoided a much more negative scenario.
By Tsvetana Paraskova for Oilprice.com


investmentwatchblog--2020-05-26--CHINA is PREPARING FOR WAR. XI URGES PREPAREDNESS for MILITARY COMBAT

President Xi Jinping said on Tuesday China would step up its preparedness for armed combat and improve its ability to carry out military tasks as the coronavirus pandemic is having a profound impact on national security , state television reported .
China ’ s performance in fighting the new coronavirus has shown the success of military reform , Xi was quoted as saying , adding that the armed forces should explore new ways of training amid the pandemic..
They know the world ’ s going to sanction their goods and destroy their economy , if it hasn ’ t been @ @ @ @ @ @ @ about the true impact the virus has had on them .
China deploys two new aircraft carriers to stoke tensions with US after warning of a ‘ new cold war ’ CHINA is reportedly set to deploy its two new aircraft carriers off the coast of Taiwan as it warns the US of a “ new cold war ” .
The huge carriers , the Liaoning and Shandong , are currently engaged in combat readiness training in the tightly controlled Bohai Bay , in the Yellow Sea before sailing to join an invasion @ @ @ @ @ @

President Xi Jinping said on Tuesday China would step up its preparedness for armed combat and improve its ability to carry out military tasks as the coronavirus pandemic is having a profound impact on national security, state television reported.
China’s performance in fighting the new coronavirus has shown the success of military reform, Xi was quoted as saying, adding that the armed forces should explore new ways of training amid the pandemic..
www.usnews.com/news/world/articles/2020-05-26/chinas-xi-urges-preparedness-for-military-combat-amid-coronavirus-epidemic-state-tv
They know the world’s going to sanction their goods and destroy their economy, if it hasn’t been destroyed already and they’re lying about the true impact the virus has had on them.
China deploys two new aircraft carriers to stoke tensions with US after warning of a ‘new cold war’
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CHINA is reportedly set to deploy its two new aircraft carriers off the coast of Taiwan as it warns the US of a “new cold war”.
The huge carriers, the Liaoning and Shandong, are currently engaged in combat readiness training in the tightly controlled Bohai Bay, in the Yellow Sea before sailing to join an invasion war game near Pratas island.
www.the-sun.com/news/881173/china-deploys-aircraft-carriers-stoke-tensions-us-warning-new-cold-war/
Tess


investmentwatchblog--2020-05-26--WHO warns of ‘immediate second peak’ of coronavirus as countries reopen. Brazil surpasses US in dail

WHO warns of ‘immediate second peak’ of coronavirus as countries reopen. Brazil surpasses US in daily coronavirus death toll. Coronavirus cluster found on cargo ship in Australia.

WHO warns of ‘ immediate second peak ’ of coronavirus as countries reopen Countries could see an “ immediate second peak ” of coronavirus if they reopen too quickly , warned a top World Health Organization official who said the world is still battling the first wave of the disease .
“ Right now , we ’ re not in the second wave , ” Dr. Mike Ryan , a WHO executive director , said Monday .
“ We ’ re right in the middle of the first wave globally .
“ We ’ re still very much in a @ @ @ @ @ @ @ the way up , ” he told reporters , pointing to South America , South Asia and other areas seeing burgeoning numbers of infections .
Noting how epidemics often come in waves , Ryan said outbreaks could pop up later this year in places where the first wave has subsided .
Saudi Arabia will revise curfew times this week , and lift it entirely across the Kingdom with the exception of the holy city of Mecca starting June 21 , state news agency reported in a statement early on Tuesday .
Brazil daily @ @ @ @ @ @ @ the United States for the first time over the last 24 hours , according to the country ’ s Health Ministry .
Brazil registered 807 deaths over the last 24 hours , whereas 620 died in the United States .
A total of six people on the Al Kuwait have tested positive for Covid-19 .
A coronavirus cluster has been detected on a freight ship berthed in the Australian west coast port of Fremantle .
Six of 48 crew members from the Al Kuwait tested positive for the virus four days after the @ @ @ @ @ @ @ Emirates on Friday , Western Australia state Premier Mark McGowan said .
The six infected crew were transferred to hotel quarantine in the nearby city of Perth while health officials consider what to do with the remaining 42 people on board , he said .
The ship ’ s cargo of 56,000 sheep is being held at a facility near the port .
They were to be loaded within days and can not be returned to farms because of quarantine restrictions , Mr McGowan said .
Authorities expect more crew members will get @ @ @ @ @ @ @ deep cleaning before it can leave .
Two federal government departments strongly disagreed with the Western Australian government ’ s account of how the Kuwait-registered ship was permitted to dock .
Mr McGowan said the Al Kuwait left the United Arab Emirates on May 7 and was given permission by Australia ’ s Department of Agriculture , Water and Environment last Wednesday to berth at Fremantle despite the vessel ’ s report that three crew members had elevated temperatures .
Get ready , there will be another pandemic

WHO warns of ‘immediate second peak’ of coronavirus as countries reopen
Countries could see an “immediate second peak” of coronavirus if they reopen too quickly, warned a top World Health Organization official who said the world is still battling the first wave of the disease.
“Right now, we’re not in the second wave,” Dr. Mike Ryan, a WHO executive director, said Monday. “We’re right in the middle of the first wave globally.
“We’re still very much in a phase where the disease is actually on the way up,” he told reporters, pointing to South America, South Asia and other areas seeing burgeoning numbers of infections.
Noting how epidemics often come in waves, Ryan said outbreaks could pop up later this year in places where the first wave has subsided.
Brazil surpasses US in daily coronavirus death toll
Saudi Arabia will revise curfew times this week, and lift it entirely across the Kingdom with the exception of the holy city of Mecca starting June 21, state news agency reported in a statement early on Tuesday.
Brazil daily coronavirus deaths were higher than fatalities in the United States for the first time over the last 24 hours, according to the country’s Health Ministry.
Brazil registered 807 deaths over the last 24 hours, whereas 620 died in the United States.
Coronavirus cluster found on cargo ship in Australia
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A total of six people on the Al Kuwait have tested positive for Covid-19.
A coronavirus cluster has been detected on a freight ship berthed in the Australian west coast port of Fremantle.
Six of 48 crew members from the Al Kuwait tested positive for the virus four days after the livestock carrier arrived from the United Arab Emirates on Friday, Western Australia state Premier Mark McGowan said.
The six infected crew were transferred to hotel quarantine in the nearby city of Perth while health officials consider what to do with the remaining 42 people on board, he said.
The ship’s cargo of 56,000 sheep is being held at a facility near the port.
They were to be loaded within days and cannot be returned to farms because of quarantine restrictions, Mr McGowan said.
Authorities expect more crew members will get sick and the ship will need a deep cleaning before it can leave.
Two federal government departments strongly disagreed with the Western Australian government’s account of how the Kuwait-registered ship was permitted to dock.
Mr McGowan said the Al Kuwait left the United Arab Emirates on May 7 and was given permission by Australia’s Department of Agriculture, Water and Environment last Wednesday to berth at Fremantle despite the vessel’s report that three crew members had elevated temperatures.
Get ready, there will be another pandemic


investmentwatchblog--2020-05-26--Fascinating piece from former CBS News president about how media are too far gone to correct course.

WELL , I NEVER !
Liberal Media Scream : Media bigs tell Kayleigh McEnany don ’ t you dare challenge @ @ @ @ @ re screaming so much — and that they ’ re getting support from disgraceful NeverTrumpers @ @ @ @ @ ’ s doing them real harm .
If it were bad for Trump , they @ @ @ @ @ .
Personally , I think spoiled , ignorant children should be treated as such .
@ @ @ @ @ unpleasant experience to be spoiled and ignorant , they ’ ll never change .
AND @ @ @ @ @ REMAINS OF ITS CREDIBILITY IN ORDER TO TAKE DOWN ORANGEMANBAD .
REMEMBER THAT : Repressive @ @ @ @ @ ’ Media Enable Trump to Run as the “ Freedom President ” .

Fascinating piece from former CBS News president about how media are too far gone to correct course. Our media are the most powerful and unaccountable political advocacy group in the country. t.co/6LNznHwmgn — Mollie (@MZHemingway) May 25, 2020
Now George Soros owns the Nytimes? Things can only get worse and they were bad enough to begin with. — Chuck Woolery (@chuckwoolery) May 25, 2020
WELL, I NEVER! Liberal Media Scream: Media bigs tell Kayleigh McEnany don’t you dare challenge us.
That they’re screaming so much — and that they’re getting support from disgraceful NeverTrumpers — is proof that she’s doing them real harm. If it were bad for Trump, they’d be encouraging it. Personally, I think spoiled, ignorant children should be treated as such. Unless it’s an unpleasant experience to be spoiled and ignorant, they’ll never change.
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AND THE MEDIA IS BURNING WHAT REMAINS OF ITS CREDIBILITY IN ORDER TO TAKE DOWN ORANGEMANBAD. REMEMBER THAT: Repressive Democrats and ‘Panic Porn’ Media Enable Trump to Run as the “Freedom President”.
h/t GR


investmentwatchblog--2020-05-27--600 Physicians Scream At Trump “We’re Having a MASS Casualty Incident, But Not Because of COVID…”

For More Information See : www.scribd.com/document/462319362/A-Doctor-a-Day-Letter-Signed

For More Information See:
www.scribd.com/document/462319362/A-Doctor-a-Day-Letter-Signed
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investmentwatchblog--2020-05-27--SERIOUSLY?! – CDC Admits Virus Is Almost IMPOSSIBLE To Die From! – This Is INSANE!

Josh Sigurdson reports on a new CDC study that shows the coveted virus that has lead to mass lockdowns and a global depression ( at least as a catalyst ) has about a 0.26 % mortality rate .
Moreover , if you remove nursing homes from the equation it ’ s about a 0.1 % mortality rate if you HAVE it .
If you consider the asymptomatic numbers , that actually puts the likelihood realistically if you have it down to as low as 0.04 % .
The final figure represented by the CDC not including pre-existing conditions , age @ @ @ @ @ @ @ for the average person of 1 in 6,745 of dying from the virus .
Meanwhile millions face death from poverty and the biggest global depression in history .
Unemployment is cratering and 52 % of small businesses say they will likely never reopen .
People are being beaten and arrested for walking down the street without contraptions on their face that don ’ t actually work .
People are being told that if they wish to leave their house in the future , they ’ ll have to be tracked everywhere .
But @ @ @ @ @ @ @ CDC were around 3.5 % mortality and stretched at one point as high as 7 % .
We ’ ve been lied to .

Josh Sigurdson reports on a new CDC study that shows the coveted virus that has lead to mass lockdowns and a global depression (at least as a catalyst) has about a 0.26% mortality rate.
Moreover, if you remove nursing homes from the equation it’s about a 0.1% mortality rate if you HAVE it. If you consider the asymptomatic numbers, that actually puts the likelihood realistically if you have it down to as low as 0.04%. The final figure represented by the CDC not including pre-existing conditions, age or real asymptomatic numbers shows a likelihood for the average person of 1 in 6,745 of dying from the virus.
Meanwhile millions face death from poverty and the biggest global depression in history. Unemployment is cratering and 52% of small businesses say they will likely never reopen.
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People are being beaten and arrested for walking down the street without contraptions on their face that don’t actually work. People are being told that if they wish to leave their house in the future, they’ll have to be tracked everywhere.
But again, the original numbers by the CDC were around 3.5% mortality and stretched at one point as high as 7%. We’ve been lied to.


investmentwatchblog--2020-05-27--Re-Opening the Economy Won’t Fix What’s Broken

The stock market is in a frenzy of euphoria at the re-opening of the economy .
Too bad the re-opening won ’ t fix what ’ s broken .
As I ’ ve been noting recently , the real problem is the systemic fragility of the U.S. economy , which has lurched from one new extreme to the next to maintain a thin , brittle veneer of normalcy .
Fragile economies can not survive any impact with reality that disrupts the distortions that are keeping the illusion of “ growth ” from shattering .
For the past two decades , @ @ @ @ @ @ @ , and the “ fix ” was to duct-tape the pieces together with new extremes of money-creation , debt , risk and speculative excess .
While the stock market has soared , the real world falls apart .
If your region needs a new bridge built , count on about 20 years to get all the “ stakeholders ” to agree and get the thing actually built .
Count on the cost quintupling from $ 500 million to $ 2.5 billion .
Count on corners being cut as costs skyrocket , so those @ @ @ @ @ @ @ already rusting before the bridge is even finished ?
Oops .
Replacing them will add millions to the already bloated budget .
Want to add a passenger stop on an existing railroad line ?
Count on 20 years to get it done .
The complexity thicket of every regulatory agency with the power to say “ no ” basically guarantees the project will never get approved , because every one of these bureaucracies justifies its existence by saying “ no.
” Sorry , you need another study , another environmental review , and @ @ @ @ @ @ @ ?
I hope you started the process 15 years ago , so you ’ ll get approval in only five more years .
Every agency with the power to say “ no ” will stretch out the approval , so they have guaranteed “ work ” for another decade or two .
Did your subway fares double ?
Was the excuse repairing a crumbling system ?
Did the work get done on budget and on time ?
You must be joking , right ?
All the fare increase did was cover the costs @ @ @ @ @ @ @ costs .
Repairs to the tracks and cars– that ’ s extra .
Let ’ s float a $ 1 billion bond so nobody have to tighten their belts , and have riders pay for it indirectly , through higher taxes to pay the exorbitant costs of 20 years of interest on the bond .
Have you been thrown off your bicycle by the giant potholes in the city ’ s “ bike lanes ” ?
The city reluctantly admits that these streets that haven ’ t been maintained for decades–yes , decades @ @ @ @ @ @ @ maintenance out of its general budget , but alas , that ’ s been eaten up by skyrocketing salaries , pensions and administrative costs , so now we need to float $ 100 million bond to fund filling potholes .
If all goes according to plan ( ha-ha ) , we should be able to re-pave the streets that have been crumbling for 20 years in… the next 20 years .
These real-world examples are just four of thousands of manifestations of a broken system .
Rather than make tough choices that drain @ @ @ @ @ @ @ we simply borrow more money , in ever increasing amounts , to keep the entrenched interests and elites happy .
There are two “ solutions ” in the status quo : dump the debt on taxpayers or on powerless debt-serfs–for example , college students .
( See chart below of the $ 1.6 trillion that ’ s stripmining student debt-serfs . )
Who benefits from selling all the municipal bonds , bundled student loans , etc .
to investors starving for a yield above 0.1 % ?
Wall Street , of course .
@ @ @ @ @ @ @ soared , productivity and earned income have stagnated .
The statistical narrative has been ruthlessly gamed to hide the erosion of living standards , but even with the bogus “ low inflation ” of official statistics , wages for the bottom 95 % have stagnated for decades .
Measures of productivity have also been gamed to mask the ugly reality that the vast majority of the U.S. economy is stagnating under the weight of interest payments on debt , mal-investments in speculative gambles , higher junk fees and taxes , crushing regulatory compliance @ @ @ @ @ @ @ cartels and a well-cloaked decline in the quality of just about everything the bottom 95 % uses or owns .
What little productivity gains have been made have been skimmed by the top 5 % .
Coupled with the Federal Reserve ’ s single-minded goosing of the one signaling device it controls , the stock market , the top 0.1 % in America own more wealth than the bottom 80 % .
If productivity stagnates and winners take all , the wages of the bottom 95 % can not rise .
Real wealth @ @ @ @ @ @ @ productivity of labor and capital ; everything else is phantom wealth .
The only way stagnant incomes can support more debt is if interest rates decline .
Presto , the Fed dropped interest rates to near-zero a decade ago .
Of course you and I can ’ t actually borrow millions for 0.1 % ; that privilege is reserved for financiers and other financial parasites and predators .
Debt-serfs were able to refinance their crushing mortgages to save a few bucks , and so they can afford to 1 ) take on more @ @ @ @ @ @ @ to fund the ballooning public debt .
Every one of these extremes has increased the systemic fragility of the American economy .
This fragility is reflected in the impoverishment of the bottom 95 % , the thin line between solvency and bankruptcy , the decay of public trust in institutions run for the benefit of entrenched interests , and the quickening erosion of America ’ s social contract .

by Charles Hugh-Smith
Re-opening a fragile, brittle, bankrupt, hopelessly perverse and corrupt “normal” won’t fix what’s broken.
The stock market is in a frenzy of euphoria at the re-opening of the economy. Too bad the re-opening won’t fix what’s broken. As I’ve been noting recently, the real problem is the systemic fragility of the U.S. economy, which has lurched from one new extreme to the next to maintain a thin, brittle veneer of normalcy.
Fragile economies cannot survive any impact with reality that disrupts the distortions that are keeping the illusion of “growth” from shattering. For the past two decades, every collision with reality cracked the illusion, and the “fix” was to duct-tape the pieces together with new extremes of money-creation, debt, risk and speculative excess.
While the stock market has soared, the real world falls apart. If your region needs a new bridge built, count on about 20 years to get all the “stakeholders” to agree and get the thing actually built. Count on the cost quintupling from $500 million to $2.5 billion. Count on corners being cut as costs skyrocket, so those cheap steel bolts from China that are already rusting before the bridge is even finished? Oops. Replacing them will add millions to the already bloated budget.
Want to add a passenger stop on an existing railroad line? Count on 20 years to get it done. The complexity thicket of every regulatory agency with the power to say “no” basically guarantees the project will never get approved, because every one of these bureaucracies justifies its existence by saying “no.” Sorry, you need another study, another environmental review, and so on.
Need a new landfill? I hope you started the process 15 years ago, so you’ll get approval in only five more years. Every agency with the power to say “no” will stretch out the approval, so they have guaranteed “work” for another decade or two.
Did your subway fares double? Was the excuse repairing a crumbling system? Did the work get done on budget and on time? You must be joking, right? All the fare increase did was cover the costs of skyrocketing salaries, pensions and administrative costs. Repairs to the tracks and cars– that’s extra. Let’s float a $1 billion bond so nobody have to tighten their belts, and have riders pay for it indirectly, through higher taxes to pay the exorbitant costs of 20 years of interest on the bond.
Have you been thrown off your bicycle by the giant potholes in the city’s “bike lanes”? The city reluctantly admits that these streets that haven’t been maintained for decades–yes, decades. The city once paid for street maintenance out of its general budget, but alas, that’s been eaten up by skyrocketing salaries, pensions and administrative costs, so now we need to float $100 million bond to fund filling potholes. If all goes according to plan (ha-ha), we should be able to re-pave the streets that have been crumbling for 20 years in… the next 20 years.
These real-world examples are just four of thousands of manifestations of a broken system. Rather than make tough choices that drain power and wealth from vested interests, we simply borrow more money, in ever increasing amounts, to keep the entrenched interests and elites happy.
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There are two “solutions” in the status quo: dump the debt on taxpayers or on powerless debt-serfs–for example, college students. (See chart below of the $1.6 trillion that’s stripmining student debt-serfs.) Who benefits from selling all the municipal bonds, bundled student loans, etc. to investors starving for a yield above 0.1%? Wall Street, of course.
The problem is that while debt has soared, productivity and earned income have stagnated. The statistical narrative has been ruthlessly gamed to hide the erosion of living standards, but even with the bogus “low inflation” of official statistics, wages for the bottom 95% have stagnated for decades.
Measures of productivity have also been gamed to mask the ugly reality that the vast majority of the U.S. economy is stagnating under the weight of interest payments on debt, mal-investments in speculative gambles, higher junk fees and taxes, crushing regulatory compliance, high costs imposed by monopolies and cartels and a well-cloaked decline in the quality of just about everything the bottom 95% uses or owns.
What little productivity gains have been made have been skimmed by the top 5%. Coupled with the Federal Reserve’s single-minded goosing of the one signaling device it controls, the stock market, the top 0.1% in America own more wealth than the bottom 80%.
If productivity stagnates and winners take all, the wages of the bottom 95% cannot rise. Real wealth is only created by increases in the productivity of labor and capital; everything else is phantom wealth.
The only way stagnant incomes can support more debt is if interest rates decline. Presto, the Fed dropped interest rates to near-zero a decade ago. Of course you and I can’t actually borrow millions for 0.1%; that privilege is reserved for financiers and other financial parasites and predators.
Debt-serfs were able to refinance their crushing mortgages to save a few bucks, and so they can afford to 1) take on more debt and 2) pay higher taxes to fund the ballooning public debt.
Every one of these extremes has increased the systemic fragility of the American economy. This fragility is reflected in the impoverishment of the bottom 95%, the thin line between solvency and bankruptcy, the decay of public trust in institutions run for the benefit of entrenched interests, and the quickening erosion of America’s social contract.
Re-opening a fragile, brittle, bankrupt, hopelessly perverse and corrupt “normal” won’t fix what’s broken.


investmentwatchblog--2020-05-27--It Starts: The Corporate Mega-Bailout Bonanza in Europe, Germany on Top

Airlines , automakers at the forefront .
And it has only just begun .
EU waives rules banning state aid .
Ryanair , which doesn ’ t need a bailout , is furious .
Governments around Europe have rolled out a dizzying array of measures , including loan programs , tax payment deferrals , and furlough schemes , to help companies , large and small , withstand the fallout of the Covid-19 lockdowns .
Large companies have also benefited from massive central bank purchases of their corporate bonds , which has helped to keep their debt costs low .
But @ @ @ @ @ @ @ Europe ’ s largest corporations , it ’ s not enough .
The UK government last week launched Project Birch , an initiative that will allow the UK treasury to offer “ last resort ” support to select firms in order to avoid bankruptcy-type restructurings , that could have severe repercussions for bondholders and stockholders .
Those firms could include Tata-owned Jaguar Land Rover , which is currently in talks with the government to secure a loan of more than £1 billion .
“ In exceptional circumstances , where a viable company has @ @ @ @ @ @ @ disproportionately harm the economy , we may consider support on a ‘ last resort ’ basis , ” said a Treasury spokeswoman , who reassuringly added : “ As the British public would expect , we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer.
” Not exactly reassuring given the UK government ’ s recent record when it comes to contingency planning .
Across Europe , governments are following the same playbook .
The EU has granted member countries unprecedented fiscal leeway @ @ @ @ @ @ @ the coronavirus , enabling governments to open the spending spigots , and wave aside EU budget rules and competition rules that were supposed to , but didn ’ t really , limit government borrowing and state assistance for national companies .
In France alone , the government has mobilized €450 billion of funds to mitigate the impact of the lockdown .
That does not mean France has spent €450 billion , since roughly two-thirds of the amount are in the form of state-guaranteed loans .
Those guarantees will only be needed if the @ @ @ @ @ @ @ .
Nonetheless , the government still expects France ’ s public debt to reach 115 % of GDP by the end of this year — almost double the 60 % ceiling established in the EU ’ s Stability and Growth Pact .
So far , the biggest recipients of state aid in Europe are European airlines , some of which are still refusing to refund passengers for cancelled flights .
Some airlines that don ’ t want government handouts , such as budget carrier Ryanair , have taken legal action against the airlines @ @ @ @ @ @ @ Unlike most airlines , Ryanair has €4.1 billion in cash reserves .
Its CEO Michael O ’ Leary is furious that his cash-flush airline will have to compete with airlines primed with bailout cash , including Italy ’ s Alitalia which has turned a profit only once since 1946 .
This week , it looks as if it ’ s the car industry ’ s turn for a bailout bonanza , with the likes of Renault , Jaguar Land Rover and Fiat Chrysler expecting billions of euros in direct loans and state guarantees @ @ @ @ @ @ @ billion plan to save the country ’ s car industry that includes government subsidies for car buyers and long-term investment in innovative tech , especially battery-electric vehicles .
Europe ’ s sprawling aerospace industry will apparently be next in line for government handouts .
With so much splashing around , here ’ s a rundown ( in descending order ) of seven of Europe ’ s largest corporate bailouts to date : Lufthansa , €9 billion .
Germany — and Europe ’ s — biggest corporate rescue so far .
In return for @ @ @ @ @ @ @ government has taken a 20 % stake in the airline group , which includes brands such as Lufthansa , Austrian , Swiss , Brussels Airlines and Eurowings and whose market value is now just €4.5 billion .
It also gets two seats on the company ’ s board .
The government says it intends to sell its stake by 2023 .
“ When the company is afloat again , the state will sell its shares , ” Finance Minister Olaf Scholz said , adding he hoped to do so with a small profit @ @ @ @ @ @ @ Germany ’ s , made similar comments about the banks they bailed out in the wake of the global financial crisis , many of which to this day are still partly or majority state owned and continue to rack up losses .
Air France-KLM , €7.7 billion ( and counting ) .
It didn ’ t take long for the European Commission to sign off on the French government ’ s proposed €7.7 billion rescue of Groupe Air France-KLM , which includes a €4 billion state-backed bank loan and €3 billion in direct @ @ @ @ @ @ @ guarantee and shareholder loan will provide Air France with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak , ” Margrethe Vestager , the EU ’ s competition chief , said .
Brussels also appears to have few qualms about the Dutch government ’ s plans to inject a further €2-4 billion into the country ’ s flagship airline group .
Fiat Chrysler , €5.6 billion .
This deal , currently the biggest for a European carmaker , is still on standby .
According to a Bloomberg report @ @ @ @ @ @ @ nearing approval of the massive state-guaranteed loan facility .
It would come in handy for the world ’ s eight largest automaker after it lost €1.7 billion in the first quarter following a 98 % plunge in car sales .
That comes on the heels of a net profit of 2.7 billion in 2019 .
Renault , €5 billion .
This bailout , like the FCA one , has not yet been signed and sealed .
But given Renault has reached an agreement on the loan with its main banks , the French @ @ @ @ @ @ @ ’ s stock and France ’ s finance minister has said that without a bailout Renault “ could disappear , ” it appears to be a done deal .
But it will do little to solve the deepening marital strife the French car giant is having with its corporate partner , Nissan .
TUI , €3.55 billion .
To weather the Covid-19-generated storms lashing the global tourism industry , Europe ’ s biggest holiday operator recently received a €1.8 billion loan commitment from German state-owned lender KfW .
That ’ s on top @ @ @ @ @ @ @ March .
“ The commitment of the KfW bridging loan is an important first step for TUI to successfully bridge the current exceptional situation , ” said Chief Executive Fritz Joussen at the end of March .
The company ’ s shares have almost doubled in the past two weeks on hopes that some of Europe ’ s summer tourist season can still be salvaged .
They are still down 50 % since the virus crisis began .
Alitalia , €3 billion .
Italy ’ s flagship carrier is no stranger to government @ @ @ @ @ @ @ in state subsidies in the decade before it entered special administration in 2017 .
In early March , Italy ’ s government seized the opportunity provided by the Covid-19 disaster to fully re-nationalize the perennially troubled carrier .
Since then , it has received €3 billion in fresh capital .
Adidas , €2.4 billion .
The German sportswear maker initially agreed to take a €2.4 billion government-backed loan in April to cope with the closure of stores and the postponement of the Olympic Games and Euro soccer tournament , though it bristled at @ @ @ @ @ @ @ a condition of the loan .
It now wants to replace that loan with other financial options as soon as possible and is reportedly planning a multi-billion euro bond .
Geconomy , €1.7 billion .
The German electronics supplier received a government-backed loan of €1.7 billion in April to cushion the impact of forced shop closures on its business .
It ’ s worth noting that four of the seven bailed out companies listed above are German .
This is no great surprise .
Germany has more fiscal firepower than any other European @ @ @ @ @ @ @ , its government is quick to use it to support the corporate sector .
Berlin has already mobilized €750 billion in grants and loan guarantees to companies , both large and small .
Other countries are now playing catch up , particularly when it comes to saving the really large companies .
By Nick Corbishley , for WOLF STREET .

Airlines, automakers at the forefront. And it has only just begun. EU waives rules banning state aid. Ryanair, which doesn’t need a bailout, is furious.
Governments around Europe have rolled out a dizzying array of measures, including loan programs, tax payment deferrals, and furlough schemes, to help companies, large and small, withstand the fallout of the Covid-19 lockdowns. Large companies have also benefited from massive central bank purchases of their corporate bonds, which has helped to keep their debt costs low. But for some companies, including many of Europe’s largest corporations, it’s not enough.
The UK government last week launched Project Birch, an initiative that will allow the UK treasury to offer “last resort” support to select firms in order to avoid bankruptcy-type restructurings, that could have severe repercussions for bondholders and stockholders. Those firms could include Tata-owned Jaguar Land Rover, which is currently in talks with the government to secure a loan of more than £1 billion.
“In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a ‘last resort’ basis,” said a Treasury spokeswoman, who reassuringly added: “As the British public would expect, we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer.” Not exactly reassuring given the UK government’s recent record when it comes to contingency planning.
Across Europe, governments are following the same playbook. The EU has granted member countries unprecedented fiscal leeway to deal with the economic impact of the coronavirus, enabling governments to open the spending spigots, and wave aside EU budget rules and competition rules that were supposed to, but didn’t really, limit government borrowing and state assistance for national companies.
In France alone, the government has mobilized €450 billion of funds to mitigate the impact of the lockdown. That does not mean France has spent €450 billion, since roughly two-thirds of the amount are in the form of state-guaranteed loans. Those guarantees will only be needed if the companies that use them default on them. Nonetheless, the government still expects France’s public debt to reach 115% of GDP by the end of this year — almost double the 60% ceiling established in the EU’s Stability and Growth Pact.
So far, the biggest recipients of state aid in Europe are European airlines, some of which are still refusing to refund passengers for cancelled flights. Some airlines that don’t want government handouts, such as budget carrier Ryanair, have taken legal action against the airlines and governments involved in the bailouts.
Unlike most airlines, Ryanair has €4.1 billion in cash reserves. Its CEO Michael O’Leary is furious that his cash-flush airline will have to compete with airlines primed with bailout cash, including Italy’s Alitalia which has turned a profit only once since 1946.
This week, it looks as if it’s the car industry’s turn for a bailout bonanza, with the likes of Renault, Jaguar Land Rover and Fiat Chrysler expecting billions of euros in direct loans and state guarantees. Today, Macron announced an €8 billion plan to save the country’s car industry that includes government subsidies for car buyers and long-term investment in innovative tech, especially battery-electric vehicles.
Europe’s sprawling aerospace industry will apparently be next in line for government handouts. With so much splashing around, here’s a rundown (in descending order) of seven of Europe’s largest corporate bailouts to date:
Lufthansa, €9 billion. Germany — and Europe’s — biggest corporate rescue so far. In return for the €9 billion rescue package, the government has taken a 20% stake in the airline group, which includes brands such as Lufthansa, Austrian, Swiss, Brussels Airlines and Eurowings and whose market value is now just €4.5 billion. It also gets two seats on the company’s board.
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The government says it intends to sell its stake by 2023. “When the company is afloat again, the state will sell its shares,” Finance Minister Olaf Scholz said, adding he hoped to do so with a small profit. Governments all over Europe, including Germany’s, made similar comments about the banks they bailed out in the wake of the global financial crisis, many of which to this day are still partly or majority state owned and continue to rack up losses.
Air France-KLM, €7.7 billion (and counting). It didn’t take long for the European Commission to sign off on the French government’s proposed €7.7 billion rescue of Groupe Air France-KLM, which includes a €4 billion state-backed bank loan and €3 billion in direct loans. “This €7 billion French guarantee and shareholder loan will provide Air France with the liquidity that it urgently needs to withstand the impact of the coronavirus outbreak,” Margrethe Vestager, the EU’s competition chief, said. Brussels also appears to have few qualms about the Dutch government’s plans to inject a further €2-4 billion into the country’s flagship airline group.
Fiat Chrysler, €5.6 billion. This deal, currently the biggest for a European carmaker, is still on standby. According to a Bloomberg report, Italian lender Intesa Sanpaolo SpA is nearing approval of the massive state-guaranteed loan facility. It would come in handy for the world’s eight largest automaker after it lost €1.7 billion in the first quarter following a 98% plunge in car sales. That comes on the heels of a net profit of 2.7 billion in 2019.
Renault, €5 billion. This bailout, like the FCA one, has not yet been signed and sealed. But given Renault has reached an agreement on the loan with its main banks, the French State already holds 15% of Renault’s stock and France’s finance minister has said that without a bailout Renault “could disappear,” it appears to be a done deal. But it will do little to solve the deepening marital strife the French car giant is having with its corporate partner, Nissan.
TUI, €3.55 billion. To weather the Covid-19-generated storms lashing the global tourism industry, Europe’s biggest holiday operator recently received a €1.8 billion loan commitment from German state-owned lender KfW. That’s on top of a €1.75 credit agreement agreed in March.
“The commitment of the KfW bridging loan is an important first step for TUI to successfully bridge the current exceptional situation,” said Chief Executive Fritz Joussen at the end of March. The company’s shares have almost doubled in the past two weeks on hopes that some of Europe’s summer tourist season can still be salvaged. They are still down 50% since the virus crisis began.
Alitalia, €3 billion. Italy’s flagship carrier is no stranger to government handouts, having already received €7 billion in state subsidies in the decade before it entered special administration in 2017. In early March, Italy’s government seized the opportunity provided by the Covid-19 disaster to fully re-nationalize the perennially troubled carrier. Since then, it has received €3 billion in fresh capital.
Adidas, €2.4 billion. The German sportswear maker initially agreed to take a €2.4 billion government-backed loan in April to cope with the closure of stores and the postponement of the Olympic Games and Euro soccer tournament, though it bristled at the idea of suspending dividend payments as a condition of the loan. It now wants to replace that loan with other financial options as soon as possible and is reportedly planning a multi-billion euro bond.
Geconomy, €1.7 billion. The German electronics supplier received a government-backed loan of €1.7 billion in April to cushion the impact of forced shop closures on its business.
It’s worth noting that four of the seven bailed out companies listed above are German. This is no great surprise. Germany has more fiscal firepower than any other European economy, and whenever a crisis arrives, its government is quick to use it to support the corporate sector. Berlin has already mobilized €750 billion in grants and loan guarantees to companies, both large and small. Other countries are now playing catch up, particularly when it comes to saving the really large companies. By Nick Corbishley, for WOLF STREET.


investmentwatchblog--2020-05-27--We Are Being Told To Prepare “To See High Prices At Grocery Stores” And “It’s Likely That Shortages

We Are Being Told To Prepare “To See High Prices At Grocery Stores” And “It’s Likely That Shortages May Only Get Worse”

If you have been to a grocery store lately , then you already know that prices are higher than usual and that there are shortages of certain items .
Many Americans have been assuming that as COVID-19 restrictions are slowly rolled back that these shortages will eventually disappear , but now even the Washington Post is admitting that “ shortages may get worse ” in the weeks and months ahead .
Of course there will still be plenty of food available in the grocery stores , but you may have to do without some of your favorite products for a @ @ @ @ @ @ @ yourself for significantly higher prices for many of the products that do remain available .
As WBTV has noted , this will especially be true for basic meat staples such as ground beef and chicken… Americans looking to get outside this holiday weekend , maybe fire up the grill , should be prepared to see high prices at grocery stores , especially cookout staples like ground beef and chicken .
The meat at the store is a little bit more expensive because of plants that are shutting down and causing a logjam in @ @ @ @ @ @ @ the country , COVID-19 is playing havoc with food distribution systems , and nobody has been hit harder than meat processing facilities .
The virus has spread like wildfire in such facilities , and this has resulted in many of them being forced to shut down for an extended period of time .
With less supply and roughly the same level of demand , meat prices have escalated quite a bit in recent weeks .
In fact , in April we witnessed the largest spike in food prices in 46 years… Of course @ @ @ @ @ @ @ funny business has been taking place among the meatpacking giants , and federal officials are now investigating allegations of price fixing… Federal prosecutors are looking into allegations that the meatpacking industry is coordinating or manipulating prices , a person familiar with the investigation told FOX News .
The Department of Justice investigation has been going on for “ months , ” the source said .
Prosecutors are specifically scrutinizing the four largest meatpackers in the U.S. , which control more than 80 percent of the market : JBS , National Beef , Tyson @ @ @ @ @ @ @ how that investigation unfolds , we should expect higher prices to continue , because the industry simply can not produce as much meat as usual with so many facilities shut down right now .
And with each passing day , we learn of more workers that have become infected .
In fact , 570 workers at a single Tyson Foods plant in North Carolina just tested positive for the virus… With so many meat processing facilities all over the nation currently idle , many farmers simply do not have anyone to sell to @ @ @ @ @ @ @ many of them to the brink of financial ruin .
For example , it is exceedingly expensive to raise chickens on a massive scale , but with so many plants closed down North Carolina farmers are now being forced “ to euthanize 1.5 million chickens ” … Similar scenarios are playing out all over the U.S. , and this is truly a tremendous tragedy .
Unlike some other areas around the globe right now , we would actually have plenty of meat if the farmers could get their animals through the supply chain @ @ @ @ @ @ @ thrown the supply chain into a state of chaos , and that is likely to continue for the foreseeable future .
In fact , the mainstream media is now warning us “ that shortages may only get worse ” … The good news is that eventually this pandemic will subside , and when that happens it is likely that the supply chain will start to revert back to normal once again .
But if fear of COVID-19 can cause this much chaos for our food distribution systems , what will happen once a @ @ @ @ @ @ @ When things really start going crazy in this country , basic supplies will disappear from the stores very rapidly , and the government is not going to be bringing baskets of food to your door .
In the end , you will be on your own .
And in the short-term , you should expect food prices to continue to rise .
The federal government has been borrowing and spending trillions of dollars that we do not have during this pandemic , and the Federal Reserve has cranked up the money creation machine @ @ @ @ @ @ @ means is that the value of our currency is rapidly being devalued , and eventually we will see very painful inflation .
I know that food prices seem really high right now , but they are only going to go up from here .
So stock up on what you can while you have this window of opportunity to do so , because this window of opportunity will not last indefinitely .

by Michael Snyder
If you have been to a grocery store lately, then you already know that prices are higher than usual and that there are shortages of certain items. Many Americans have been assuming that as COVID-19 restrictions are slowly rolled back that these shortages will eventually disappear, but now even the Washington Post is admitting that “shortages may get worse” in the weeks and months ahead. Of course there will still be plenty of food available in the grocery stores, but you may have to do without some of your favorite products for a while. And you should also brace yourself for significantly higher prices for many of the products that do remain available. As WBTV has noted, this will especially be true for basic meat staples such as ground beef and chicken…
Americans looking to get outside this holiday weekend, maybe fire up the grill, should be prepared to see high prices at grocery stores, especially cookout staples like ground beef and chicken. The meat at the store is a little bit more expensive because of plants that are shutting down and causing a logjam in the food supply chain.
All over the country, COVID-19 is playing havoc with food distribution systems, and nobody has been hit harder than meat processing facilities. The virus has spread like wildfire in such facilities, and this has resulted in many of them being forced to shut down for an extended period of time.
With less supply and roughly the same level of demand, meat prices have escalated quite a bit in recent weeks. In fact, in April we witnessed the largest spike in food prices in 46 years…
Prices Americans paid for eggs, meat, cereal and milk shot higher in April as people flocked to grocery stores to stock up on food amid government lockdowns designed to slow the spread of Covid-19. The Labor Department reported Tuesday that prices U.S. consumers paid for groceries jumped 2.6% in April, the largest one-month pop since February 1974. The spike in supermarket prices was broad based and impacted items from broccoli and ham to oatmeal and tuna.
Of course there have also been whispers that some funny business has been taking place among the meatpacking giants, and federal officials are now investigating allegations of price fixing…
Federal prosecutors are looking into allegations that the meatpacking industry is coordinating or manipulating prices, a person familiar with the investigation told FOX News. The Department of Justice investigation has been going on for “months,” the source said. Prosecutors are specifically scrutinizing the four largest meatpackers in the U.S., which control more than 80 percent of the market: JBS, National Beef, Tyson Foods and Cargill.
But no matter how that investigation unfolds, we should expect higher prices to continue, because the industry simply cannot produce as much meat as usual with so many facilities shut down right now.
And with each passing day, we learn of more workers that have become infected. In fact, 570 workers at a single Tyson Foods plant in North Carolina just tested positive for the virus…
Meat processing plants across the country are struggling with outbreaks of the coronavirus. That includes the Tyson Foods chicken processing facility in Wilkes County, N.C. More than 2,200 workers were tested at the Wilkesboro plant, and 570 were positive for the coronavirus.
With so many meat processing facilities all over the nation currently idle, many farmers simply do not have anyone to sell to right now, and this has pushed many of them to the brink of financial ruin.
For example, it is exceedingly expensive to raise chickens on a massive scale, but with so many plants closed down North Carolina farmers are now being forced “to euthanize 1.5 million chickens”…
Coronavirus outbreaks at meat processing plants are forcing North Carolina farmers to euthanize 1.5 million chickens, according to a state official. Assistant Agriculture Commissioner Joe Reardon told The News & Observer that this is the first time during the pandemic that North Carolina farmers have had to euthanize their animals. Roughly a third of the 1.5 million chickens already had been killed, Reardon said.
Similar scenarios are playing out all over the U.S., and this is truly a tremendous tragedy.
We are primarily funded by readers. Please subscribe and donate to support us!
Unlike some other areas around the globe right now, we would actually have plenty of meat if the farmers could get their animals through the supply chain.
Unfortunately, fear of COVID-19 has thrown the supply chain into a state of chaos, and that is likely to continue for the foreseeable future. In fact, the mainstream media is now warning us “that shortages may only get worse”…
The Centers for Disease Control and Prevention has estimated at least 5,000 workers were infected by the end of April, though advocates have suggested there could be more than 17,000. And with plants already slow to respond to outbreaks and some still partially closed, it’s likely that shortages may only get worse.
The good news is that eventually this pandemic will subside, and when that happens it is likely that the supply chain will start to revert back to normal once again.
But if fear of COVID-19 can cause this much chaos for our food distribution systems, what will happen once a much more severe crisis hits us?
When things really start going crazy in this country, basic supplies will disappear from the stores very rapidly, and the government is not going to be bringing baskets of food to your door.
In the end, you will be on your own.
And in the short-term, you should expect food prices to continue to rise. The federal government has been borrowing and spending trillions of dollars that we do not have during this pandemic, and the Federal Reserve has cranked up the money creation machine to absolutely absurd levels. What this means is that the value of our currency is rapidly being devalued, and eventually we will see very painful inflation.
I know that food prices seem really high right now, but they are only going to go up from here.
So stock up on what you can while you have this window of opportunity to do so, because this window of opportunity will not last indefinitely.


investmentwatchblog--2020-05-27--The Big War Between Israel And Her Enemies Could Begin As Soon As July 1st

The level of tension in the Middle East is sky high right now , and it is about to go even higher .
On Monday , Israeli Prime Minister Benjamin Netanyahu said that he would move ahead with a plan to annex portions of the West Bank in the months ahead .
The coalition agreement that he reached with Blue and White chairman Benny Gantz allows him to submit annexation for a vote as early as July , and if Netanyahu is actually going to do this it will almost certainly happen before the U.S. election in November .
The @ @ @ @ @ @ @ ’ s annexation under certain conditions , but a Biden administration would be 100 percent opposed to such a move .
So Netanyahu realizes that this opportunity may never come again , and he is fully prepared to seize the moment .
But of course if Israel does annex large portions of the West Bank , that could easily spark a huge regional war .
Needless to say , the Palestinians and their allies will never , ever accept the annexation of any West Bank territory , but Netanyahu seems absolutely determined to @ @ @ @ @ @ @ following comes from Time Magazine… Israeli Prime Minister Benjamin Netanyahu on Monday pledged to annex parts of the occupied West Bank in the coming months , vowing to move ahead with the explosive plan despite a growing chorus of condemnations by key allies .
The Palestinians , with wide international backing , seek the entire West Bank as the heartland of a future independent state .
Annexing large chunks of this territory would all but destroy the faint remaining hopes of a two-state solution .
And Haaretz is reporting that Netanyahu specifically stated @ @ @ @ @ @ @ annexation is July 1 , and we don ’ t intend to change it ” … The Americans said recently that they ’ re prepared for annexation “ within weeks.
” Under the coalition agreement between Likud and Kahol Lavan , on July 1 – meaning in a month ’ s time – Netanyahu will be able to “ bring the agreement reached with the United States on the issue of applying sovereignty to a debate in the security cabinet and the full cabinet , and for the approval of the cabinet and/or @ @ @ @ @ @ @ told a meeting of Likud ’ s Knesset faction , in response to an MK ’ s question , that “ the target date for beginning annexation is July 1 , and we don ’ t intend to change it.
” He added that “ this is an opportunity that can ’ t be missed.
” It looks like this is really going to happen , and Israeli settlers in the areas that are going to be annexed will greatly celebrate once it happens .
But at the same time we will see @ @ @ @ @ @ @ Palestinians and their allies .
In the south , Hamas and Islamic Jihad are not strong enough to invade Israel , but they will almost certainly start firing rockets toward Israel in retaliation .
In the north , Hezbollah has more than 150,000 missiles aimed at Israeli cities right now , and Hezbollah was on the brink of a new war with Israel even before talk of annexation became public .
In the West Bank , Palestinian Authority President Mahmoud Abbas has already voided all previous agreements with the United States and Israel @ @ @ @ @ @ @ he is warning that there will be grave consequences if it actually happens .
Needless to say , most of Israel ’ s Arab neighbors are vehemently opposed to any annexation as well , and Jordan ’ s King Abdullah has even warned of “ a massive conflict ” if Israel does not back down… More than two weeks after Jordan ’ s King Abdullah issued what can only be described as the sternest warning to Israel if it goes ahead with its annexation plans , Jordanians and Israelis are still wondering how @ @ @ @ @ @ @ Benjamin Netanyahu does go ahead with his intention to annex parts of the West Bank and the Jordan Valley as early as July .
In his May 15 interview with German magazine Der Spiegel , the king warned of “ a massive conflict ” between Jordan and Israel “ if Israel really annexed the West Bank in July.
” For such a long time the Middle East has seemingly been on the brink of war , and this could potentially be the trigger that finally pushes everyone over the edge .
Of course @ @ @ @ @ @ @ unless the Trump administration was willing to support it .
And it turns out that the Trump administration has made it abundantly clear that support for annexation will only be given if Netanyahu is prepared to fully accept Trump ’ s plan to permanently divide the land of Israel… That certainly puts a different spin on things , doesn ’ t it ?
As I have discussed previously , Trump ’ s plan would double the amount of territory currently under Palestinian control and would permanently divide the city of Jerusalem .
At @ @ @ @ @ @ @ nation of Israel has once again taken center stage , and what happens next is going to have staggering implications for all of us .
If a major war erupts in the Middle East and Donald Trump is still the president of the United States , it is quite likely that the U.S. would side with Israel in such a war .
But if Joe Biden wins in November , that would probably not be the case once he is in the White House .
In any event , it appears that war @ @ @ @ @ @ @ man of his word , and I believe that he is quite serious about beginning the annexation process on July 1st .
And there is no way in the world that the Palestinians and their allies will allow annexation to go unchallenged .
It does not look like either side is going to back down , and so that means that we are on a course toward military conflict .
And once war starts , it may not be so easy to stop .

by Michael Snyder
The level of tension in the Middle East is sky high right now, and it is about to go even higher. On Monday, Israeli Prime Minister Benjamin Netanyahu said that he would move ahead with a plan to annex portions of the West Bank in the months ahead. The coalition agreement that he reached with Blue and White chairman Benny Gantz allows him to submit annexation for a vote as early as July, and if Netanyahu is actually going to do this it will almost certainly happen before the U.S. election in November. The Trump administration is prepared to support Israel’s annexation under certain conditions, but a Biden administration would be 100 percent opposed to such a move. So Netanyahu realizes that this opportunity may never come again, and he is fully prepared to seize the moment. But of course if Israel does annex large portions of the West Bank, that could easily spark a huge regional war.
Needless to say, the Palestinians and their allies will never, ever accept the annexation of any West Bank territory, but Netanyahu seems absolutely determined to move ahead with his plans. The following comes from Time Magazine…
Israeli Prime Minister Benjamin Netanyahu on Monday pledged to annex parts of the occupied West Bank in the coming months, vowing to move ahead with the explosive plan despite a growing chorus of condemnations by key allies. The Palestinians, with wide international backing, seek the entire West Bank as the heartland of a future independent state. Annexing large chunks of this territory would all but destroy the faint remaining hopes of a two-state solution.
And Haaretz is reporting that Netanyahu specifically stated that “the target date for beginning annexation is July 1, and we don’t intend to change it”…
The Americans said recently that they’re prepared for annexation “within weeks.” Under the coalition agreement between Likud and Kahol Lavan, on July 1 – meaning in a month’s time – Netanyahu will be able to “bring the agreement reached with the United States on the issue of applying sovereignty to a debate in the security cabinet and the full cabinet, and for the approval of the cabinet and/or the Knesset.” On Monday, Netanyahu told a meeting of Likud’s Knesset faction, in response to an MK’s question, that “the target date for beginning annexation is July 1, and we don’t intend to change it.” He added that “this is an opportunity that can’t be missed.”
Wow.
It looks like this is really going to happen, and Israeli settlers in the areas that are going to be annexed will greatly celebrate once it happens.
But at the same time we will see a massive outpouring of fury from the Palestinians and their allies.
In the south, Hamas and Islamic Jihad are not strong enough to invade Israel, but they will almost certainly start firing rockets toward Israel in retaliation.
In the north, Hezbollah has more than 150,000 missiles aimed at Israeli cities right now, and Hezbollah was on the brink of a new war with Israel even before talk of annexation became public.
In the West Bank, Palestinian Authority President Mahmoud Abbas has already voided all previous agreements with the United States and Israel because of this pending annexation, and he is warning that there will be grave consequences if it actually happens.
Needless to say, most of Israel’s Arab neighbors are vehemently opposed to any annexation as well, and Jordan’s King Abdullah has even warned of “a massive conflict” if Israel does not back down…
More than two weeks after Jordan’s King Abdullah issued what can only be described as the sternest warning to Israel if it goes ahead with its annexation plans, Jordanians and Israelis are still wondering how Amman will react if Israeli Prime Minister Benjamin Netanyahu does go ahead with his intention to annex parts of the West Bank and the Jordan Valley as early as July. In his May 15 interview with German magazine Der Spiegel, the king warned of “a massive conflict” between Jordan and Israel “if Israel really annexed the West Bank in July.”
For such a long time the Middle East has seemingly been on the brink of war, and this could potentially be the trigger that finally pushes everyone over the edge.
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Of course Netanyahu would never be pushing for annexation unless the Trump administration was willing to support it.
And it turns out that the Trump administration has made it abundantly clear that support for annexation will only be given if Netanyahu is prepared to fully accept Trump’s plan to permanently divide the land of Israel…
According to the Trump plan itself and senior U.S. officials, including Pompeo, Israeli annexation is dependent on acceptance of the entire plan, especially its agreement to conduct direct negotiations with the Palestinians for at least four years. During this period, Israel is asked to freeze all construction and demolitions in the territory earmarked for the Palestinian state, as well as possibly in other areas. The plan also includes the establishment of a Palestinian capital in East Jerusalem neighborhoods and the release of Palestinian prisoners.
That certainly puts a different spin on things, doesn’t it?
As I have discussed previously, Trump’s plan would double the amount of territory currently under Palestinian control and would permanently divide the city of Jerusalem.
At this moment in history, the little nation of Israel has once again taken center stage, and what happens next is going to have staggering implications for all of us.
If a major war erupts in the Middle East and Donald Trump is still the president of the United States, it is quite likely that the U.S. would side with Israel in such a war.
But if Joe Biden wins in November, that would probably not be the case once he is in the White House.
In any event, it appears that war is coming. Benjamin Netanyahu is a man of his word, and I believe that he is quite serious about beginning the annexation process on July 1st.
And there is no way in the world that the Palestinians and their allies will allow annexation to go unchallenged.
It does not look like either side is going to back down, and so that means that we are on a course toward military conflict.
And once war starts, it may not be so easy to stop.


investmentwatchblog--2020-05-27--Despite Record-Low Mortgage Rates, New House Prices Drop to Lowest April since 2015, Sales to Lowest

Despite Record-Low Mortgage Rates, New House Prices Drop to Lowest April since 2015, Sales to Lowest April since 2017

More than plenty of supply : 6.3 Months ’ unsold inventory of speculative houses .
Sales of new single-family houses in April dropped 6.2 % from a year ago , after having dropped 11.6 % in March , to a seasonally adjusted annual rate of 623,000 houses , down nearly 20 % from the peak in January : This decline in sales has occurred despite record low mortgage rates in April , with the average 30-year fixed rate dropping to 3.23 % in the week ended April 30 , the lowest ever , according to Feddie Mac data .
The @ @ @ @ @ @ @ fell 8.6 % from April a year ago to $ 309,900 , according to the Commerce Department , based on data produced jointly by the Census Bureau and the Department of Housing and Urban Development .
The peak in prices occurred over two years ago in November and December 2017 , at $ 343,000 .
This median-price data is “ volatile ” on a month-to-month basis .
The twelve-month moving average of these median prices – which indicates longer-term trends amid the volatility – smoothens out the volatility and shows a downward bias @ @ @ @ @ @ @ The median price in April of $ 309,900 was the lowest median price for any April since April 2015 : The median price – which means half of the houses sold for more , and half sold for less that month – is also impacted by the “ price mix ” of houses that sold in that month .
If there is a larger number of lower-priced houses – lower-priced by design – in the mix that month , it helps push down the median price .
The multi-year trend shows that , @ @ @ @ @ @ @ into price resistance , and that they ’ re losing sales if they push beyond it , and in order to maintain their volume the best they can , they have to meet the market .
Prices of new houses had a turbulent history over the past 20 years .
During the Housing Bust , the median price dropped 22 % in the two years from the peak in March 2007 to the bottom in March 2009 , then surged by about 55 % through November 2017 , to top out 31 % @ @ @ @ @ @ @ , where it hit that ceiling and has since then dropped about 10 % : Inventory of new houses that have not sold yet , at 325,000 houses , was roughly flat with March , and provided 6.3 months ’ supply at the current rate of sales .
Four months ’ supply would be more than enough for speculative houses , as it was the case before the Housing Bust – but that hasn ’ t been the case in years : Homebuilders , the pros in the housing market , are not @ @ @ @ @ @ @ prices of houses in their core segment .
Unlike homeowners , they have no illusions about the market .
When they build speculative houses – houses for which they have no buyers lined up yet , and that ’ s what the 6.3 months ’ supply represents – they have to meet the market in order to sell those houses .
They constantly adjust what they build , from price levels and floorplans down to the finishes .
And then , they can not sit on their speculative houses for long .
They @ @ @ @ @ @ @ sell them .
And they ’ re working on it .

More than plenty of supply: 6.3 Months’ unsold inventory of speculative houses.
Sales of new single-family houses in April dropped 6.2% from a year ago, after having dropped 11.6% in March, to a seasonally adjusted annual rate of 623,000 houses, down nearly 20% from the peak in January:
This decline in sales has occurred despite record low mortgage rates in April, with the average 30-year fixed rate dropping to 3.23% in the week ended April 30, the lowest ever, according to Feddie Mac data.
And the median price fell.
The median price of new houses in April fell 8.6% from April a year ago to $309,900, according to the Commerce Department, based on data produced jointly by the Census Bureau and the Department of Housing and Urban Development. The peak in prices occurred over two years ago in November and December 2017, at $343,000.
This median-price data is “volatile” on a month-to-month basis. The twelve-month moving average of these median prices – which indicates longer-term trends amid the volatility – smoothens out the volatility and shows a downward bias since its peak in October 2018.
The median price in April of $309,900 was the lowest median price for any April since April 2015:
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The median price – which means half of the houses sold for more, and half sold for less that month – is also impacted by the “price mix” of houses that sold in that month. If there is a larger number of lower-priced houses – lower-priced by design – in the mix that month, it helps push down the median price. The multi-year trend shows that, as an industry, builders have run into price resistance, and that they’re losing sales if they push beyond it, and in order to maintain their volume the best they can, they have to meet the market.
Prices of new houses had a turbulent history over the past 20 years. During the Housing Bust, the median price dropped 22% in the two years from the peak in March 2007 to the bottom in March 2009, then surged by about 55% through November 2017, to top out 31% above the peak of Housing Bubble 1, where it hit that ceiling and has since then dropped about 10%:
Plenty of Supply.
Inventory of new houses that have not sold yet, at 325,000 houses, was roughly flat with March, and provided 6.3 months’ supply at the current rate of sales. Four months’ supply would be more than enough for speculative houses, as it was the case before the Housing Bust – but that hasn’t been the case in years:
Homebuilders, the pros in the housing market, are not hung up for too long on aspirational prices of houses in their core segment. Unlike homeowners, they have no illusions about the market. When they build speculative houses – houses for which they have no buyers lined up yet, and that’s what the 6.3 months’ supply represents – they have to meet the market in order to sell those houses. They constantly adjust what they build, from price levels and floorplans down to the finishes. And then, they cannot sit on their speculative houses for long. They have to do what it takes to sell them. And they’re working on it.


investmentwatchblog--2020-05-27--US Air Passenger Traffic over Memorial Day Weekend Down 87%, Amid Signs of Slow Recovery

Airlines don ’ t expect a quick recovery back to “ normal ” either .
Based on their decisions about aircraft in their fleets , they expect this to drag out for years .
This was the first big travel weekend of the Pandemic Era – meaning a holiday weekend when normally Americans like to go somewhere .
So let ’ s see how it went for airlines .
The worst for the economy may be over , meaning that the economy , which is in terrible shape , may not get worse from here on forward , and that @ @ @ @ @ @ @ economic data that lag by weeks and months , such as unemployment rates , consumer spending , or GDP , are certainly going to get a lot worse because they ’ re still trying to catch up with just how bad it already is .
In the immediate near-real-time data , such as passenger air traffic , measured by the TSA ’ s daily checkpoint screenings at airports around the US , we can see that the economy is getting better – in micro-steps .
These TSA screenings show : One , how @ @ @ @ @ @ @ industry ; two , that activity is picking up only a tiny bit when looking at the whole scene ; three , that activity remains so deep in the tank that the tiny uptick , when looked at without magnifying glass , can barely be seen ; and four , that this recovery is going to be slow and take a long time .
The TSA reported this morning that on Monday , Memorial Day , checkpoint screenings at US airports reached 340,769 .
On Friday , the total screenings had reached 348,673 @ @ @ @ @ @ @ and more than triple the 95,000-range in mid-April .
When something shoots up 265 % in six weeks , as the TSA checkpoint screenings have done , that ’ s encouraging .
However , this weekend ’ s screenings remained minuscule and abysmally low .
Last year on Friday , TSA screenings reached 2,792,670 , the highest in the March-May period .
And Monday last year , the screenings reached 2,512,237 .
Compare those figures ( black line ) to this year ’ s screenings ( red line ) , and note the @ @ @ @ @ @ @ , TSA screenings were down 87.5 % from Friday a year ago .
On Memorial Day this year , screenings were down 86.4 % from Monday a year ago .
You can see the improvement : The number of screenings at the low point in April were down about 95 % from a year ago : So there is an increase in passenger travel from the near-zero levels of early April – hence the “ recovery ” – but travel is still minuscule compared to a year ago .
And US airlines are @ @ @ @ @ @ @ .
In this environment , airlines reacted the only way they could : They engaged in drastic short-term culling of capacity , and they ’ re making big adjustments to their fleets to deal with this situation over the long term .
All airlines cut capacity by removing flights from their schedule and by parking planes .
United cut its capacity by 90 % in April and has since been lambasted publicly for packing people into full planes , ignoring any notion of social distancing .
I analyzed this phenomenon in a comment @ @ @ @ @ @ @ s what airlines are doing .
In April , the IATA reported that “ Almost 10,500 aircraft , representing 40 % of the global fleet , have been grounded already and that number is only likely to increase.
” These are the airlines ’ instant and short-term reactions to the crisis .
But airlines have also been making long-term decisions : Retiring planes in large numbers much earlier than anticipated .
Delta , for example , said that as of mid-May , it has “ parked more than 650 mainline and regional aircraft @ @ @ @ @ @ @ demand.
” And it announced that it would retire all its 18 Boeing 777 by the end of this year .
These planes entered the fleet between 1999 and 2008 .
“ The retirement will accelerate the airline ’ s strategy to simplify and modernize its fleet , while continuing to operate newer , more cost-efficient aircraft , ” it said .
In April , Delta had announced that it would accelerate the retirement of its MD-88 and MD-90 ( “ Why are they still in the fleet , ” says me , @ @ @ @ @ @ @ get on this museum piece ) .
Final flights will be on June 2 .
American Airlines announced that it would retire its fleet of Boeing 767 , Boeing 757 , Airbus A330-300 , Embraer 190 , Embraer 140 , and Bombardier CRJ200 .
Since these retirements were “ earlier than previously planned as a result of the decline in demand for travel due to COVID-19 , ” American Airlines said , they triggered write-downs of over $ 1 billion .
Airline after airline is using the collapse in demand to sort through @ @ @ @ @ @ @ the least efficient and costliest planes to operate .
These moves – as American Airlines has shown – are costly in the short term because equipment with a book value is being written off , triggering a hit to earnings .
Retiring these planes earlier than previously planned can also trigger labor contract expenses .
Decisions about what aircraft should be in the fleet , and what aircraft should exit the fleet , are long-term decisions .
And they indicate clearer than anything else that airlines don ’ t expect a quick recovery @ @ @ @ @ @ @ they expect this to drag out for years .
After 9-11 , it took nearly four years for operating revenues of US airlines to get back to pre-9-11 levels .
After the Financial Crisis , it took nearly three years .
And for the airlines , and for potential passengers , this crisis is far bigger than the prior two crises .

Airlines don’t expect a quick recovery back to “normal” either. Based on their decisions about aircraft in their fleets, they expect this to drag out for years.
This was the first big travel weekend of the Pandemic Era – meaning a holiday weekend when normally Americans like to go somewhere. So let’s see how it went for airlines.
The worst for the economy may be over, meaning that the economy, which is in terrible shape, may not get worse from here on forward, and that activity is ticking up, though the economic data that lag by weeks and months, such as unemployment rates, consumer spending, or GDP, are certainly going to get a lot worse because they’re still trying to catch up with just how bad it already is.
In the immediate near-real-time data, such as passenger air traffic, measured by the TSA’s daily checkpoint screenings at airports around the US, we can see that the economy is getting better – in micro-steps.
These TSA screenings show: One, how bad it has gotten for the travel industry; two, that activity is picking up only a tiny bit when looking at the whole scene; three, that activity remains so deep in the tank that the tiny uptick, when looked at without magnifying glass, can barely be seen; and four, that this recovery is going to be slow and take a long time.
The TSA reported this morning that on Monday, Memorial Day, checkpoint screenings at US airports reached 340,769. On Friday, the total screenings had reached 348,673, the highest since lockdowns started, and more than triple the 95,000-range in mid-April. When something shoots up 265% in six weeks, as the TSA checkpoint screenings have done, that’s encouraging.
However, this weekend’s screenings remained minuscule and abysmally low. Last year on Friday, TSA screenings reached 2,792,670, the highest in the March-May period. And Monday last year, the screenings reached 2,512,237. Compare those figures (black line) to this year’s screenings (red line), and note the seasonal increase in both:
On Friday, TSA screenings were down 87.5% from Friday a year ago. On Memorial Day this year, screenings were down 86.4% from Monday a year ago. You can see the improvement: The number of screenings at the low point in April were down about 95% from a year ago:
So there is an increase in passenger travel from the near-zero levels of early April – hence the “recovery” – but travel is still minuscule compared to a year ago.
And US airlines are not expecting an instant V-shaped recovery either. In this environment, airlines reacted the only way they could: They engaged in drastic short-term culling of capacity, and they’re making big long-term adjustments to their fleets to deal with this situation over the long term.
We are primarily funded by readers. Please subscribe and donate to support us!
All airlines cut capacity by removing flights from their schedule and by parking planes. United cut its capacity by 90% in April and has since been lambasted publicly for packing people into full planes, ignoring any notion of social distancing. I analyzed this phenomenon in a comment at the time:
“The idea is to pack them sardines into them cans, and if you don’t have enough of them sardines for them cans, you still pack them into them cans, but use fewer of them cans.”
And that’s what airlines are doing. In April, the IATA reported that “Almost 10,500 aircraft, representing 40% of the global fleet, have been grounded already and that number is only likely to increase.” These are the airlines’ instant and short-term reactions to the crisis.
But airlines have also been making long-term decisions: Retiring planes in large numbers much earlier than anticipated.
Delta, for example, said that as of mid-May, it has “parked more than 650 mainline and regional aircraft to adjust capacity to match reduced customer demand.” And it announced that it would retire all its 18 Boeing 777 by the end of this year. These planes entered the fleet between 1999 and 2008. “The retirement will accelerate the airline’s strategy to simplify and modernize its fleet, while continuing to operate newer, more cost-efficient aircraft,” it said.
In April, Delta had announced that it would accelerate the retirement of its MD-88 and MD-90 (“Why are they still in the fleet,” says me, Delta Frequent Flyer, every time I get on this museum piece). Final flights will be on June 2.
American Airlines announced that it would retire its fleet of Boeing 767, Boeing 757, Airbus A330-300, Embraer 190, Embraer 140, and Bombardier CRJ200. Since these retirements were “earlier than previously planned as a result of the decline in demand for travel due to COVID-19,” American Airlines said, they triggered write-downs of over $1 billion.
Airline after airline is using the collapse in demand to sort through its fleet and to get rid of the least efficient and costliest planes to operate. These moves – as American Airlines has shown – are costly in the short term because equipment with a book value is being written off, triggering a hit to earnings. Retiring these planes earlier than previously planned can also trigger labor contract expenses.
Decisions about what aircraft should be in the fleet, and what aircraft should exit the fleet, are long-term decisions. And they indicate clearer than anything else that airlines don’t expect a quick recovery back to “normal,” that they expect this to drag out for years. After 9-11, it took nearly four years for operating revenues of US airlines to get back to pre-9-11 levels. After the Financial Crisis, it took nearly three years. And for the airlines, and for potential passengers, this crisis is far bigger than the prior two crises.


investmentwatchblog--2020-05-27--70% Thinks Stocks recovery in less than 1Y with GDP -45%

🇺🇸🙆♂70 % Thinks Stocks recovery in less than 1Y with GDP -45 % @ BillardPhillipe @ AlessioUrban @ EconGlobal @ @ @ @ @ @ @ XRP_589_Theunis @ SpeculaThor @ bocajoes @ tey_west @ wheeliedealer @ Rafael60980545 @ ChileBitcoin @ @ @ @ @ @ t.co/MuWMtK0rED Based on valuation measures we find best-correlated with actual S & P 500 total @ @ @ @ @ history , today 's run to 3000 on S & P 500 brings likely 10-12 @ @ @ @ @ levels , and rival the 2000 and 1929 extremes .
Internals negative , technicals overbought @ @ @ @ @ going buy all the bonds and backstop everything….the entire market reduces to being long or @ @ @ @ @ all credit risk and therefore stock market risk is just treasury bond risk .
hence….. @ @ @ @ @ system faces the sober reality of a real shock , the truth is that it @ @ @ @ @ its prior state.
” Flipping through pages in Collusion and stumbled upon this section in @ @ @ @ @ what we face today .
pic.twitter.com/WyVc0DC7Zp

Based on valuation measures we find best-correlated with actual S&P 500 total returns across a century of history, today's run to 3000 on S&P 500 brings likely 10-12 yr SPX returns to negative levels, and rival the 2000 and 1929 extremes. Internals negative, technicals overbought pic.twitter.com/pZuACzjrkX
if the fed is going buy all the bonds and backstop everything….the entire market reduces to being long or short US treasury bonds therefore all credit risk and therefore stock market risk is just treasury bond risk. hence….. pic.twitter.com/UvV7juUj9s
"After the monetary system faces the sober reality of a real shock, the truth is that it may never truly return to its prior state.”
Flipping through pages in Collusion and stumbled upon this section in the book. Fitting for what we face today. pic.twitter.com/WyVc0DC7Zp
— Nomi Prins (@nomiprins) May 27, 2020