Morning Report: Coronavirus kills 10 million jobs

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S&P futures 2452 4.4
Oil (WTI) 22.16 1.89
10 year government bond yield 0.59%
30 year fixed rate mortgage 3.54%


Stocks are flattish after a record 6.6 million people file for unemployment. Bonds and MBS are flat.


So, with last week’s revised filing of 3.3 million, a total of 10 million people have lost their jobs over the Coronavirus. Compared to the roughly 200k cases in the US, that works out to be 50 jobs lost per case. That puts the cost of social distancing in perspective.


Construction spending fell 1.3% MOM and rose 6% YOY. These are February numbers, so they were still largely unaffected by the COVID-19 crisis.


Pretty much everyone has gone to 680 minimum FICOs on FHA loans now. Secondary bulk buyers are pulling back their bids for all loans as well. Everybody is padding margins to take into account the various risks in the financial system.


Good piece on mortgage forbearance and what needs to be done. Bottom line, you can’t just stop paying your mortgage and assume everything is fine. Call your servicer before you start missing payments. FHFA Director Mark Calabria estimates that 700,000 mortgage will need forbearance. Given that 10 million people lost their jobs in the past two weeks, that number is probably way too low.


New York State has loosened restrictions on in-person showings, appraisals and inspections.


Rent was due yesterday for the nation’s renters. Washington is looking for a way to get some relief to them. New York State is considering allowing the security deposit to take the place of rent. I know that Fannie and Fred are allowing forbearance for multifam investors, but I have not seen anything for 2-4 units specifically. The multifam relief is conditional on a freeze of evictions.

34 Responses

  1. Lulu, timing and luck have had a lot to do with relative success, from CA and Seattle to NYC and New Orleans, from Germany to Italy, etc. South Korea and particularly Taiwan jumped very early. Watch this:

    There are regular flights between Taipei and Wuhan. The Taiwanese CDC picked up on trouble in China early – well before the Chinese Communists even admitted it. So Taiwan prepared accordingly. If it turns out that Taiwan’s CDC told our CDC what was happening and that either our CDC or the Admin ignored it, I would like to know, but I probably never will.


    • Am I wrong or did both Florida and Texas exempt churches from the “stay at home” orders? They just can’t resist can they?


      • lms:

        They just can’t resist can they?

        Can’t resist what?


        • Scott,

          Can’t resist what?

          It appears to me that some governors can’t resist an exception of some sort. Arizona has an exception for beauty salons and barbers. I don’t understand the reasoning.


        • lms:

          It appears to me that some governors can’t resist an exception of some sort.

          Some? I would be shocked if you could find a single lock-down order anywhere, issued at any level of government, that didn’t have an exception of some sort.


      • …did both Florida and Texas exempt churches…

        Texas’ Gov. did call religious services “essential businesses”, but most churches went on line. Naturally a few Evangelical churches insisted on opening, with distancing requirements and limitations on service size, from what I have read.

        George can correct me, but I do not think TX handled this like FL. In TX, the state at first did statewide restrictions less severe than a “stay at home” model, but expressly told cities and counties to do what they thought best, above and beyond that. So 90% of the population of the state were under CA type orders while the 10% were only on school closure, distancing, and no gatherings orders. The 10% were in decidedly empty places raising wheat, cattle, fruits, and nuts, to be frank. Those will be “essential” businesses in any case, now that we have statewide orders.

        To a non-Texan this looked “worse” on a map, as the 90% were in 70 counties or so and the ten percent were in 180+ counties.


        • Agreed.

          I also think that Abbott was erring on the side of religious freedom from a state standpoint and avoiding expensive litigation. Other states and/or municipalities trying to enforce that on religious entities are going to face A LOT of litigation costs that just deliver virtue signaling to Democrats. It’s a futile and expensive gesture. I mean, you see it in states and municipalities trying to shut down gun stores, in the end it fails, they know it will fail but they don’t care, it’s not their money, it’s yours.


        • Thanks Mark, hopefully the churches and counties not under stay at home, and no gatherings restrictions, will continue to respect the other guidelines. As you know we have huge swaths of CA with limited population as well and a very large agricultural industry.

          Unfortunately, we also have over 66,000 tests that have no results as yet so whatever modeling we’re doing is probably skewed one way or another. I am happy that we don’t project like NY here though.

          It’s interesting following the modeling, and I understand why we need it in order to prepare for different scenarios, but I also understand it’s essentially best guess math.

          Stay safe there!


        • That seems to be the choice Sweden made early. I linked the other day. It will be interesting to compare Sweden with the rest of northern Europe, moving along.

          There are other variables that probably should be taken into account, except we really do not know how they affect total results. For example, a healthy old guy like me, 119/77 BP, no heart or lung conditions, etc., is still more at risk than many less healthy younger guys. Why? Because my immune system OVER reacts. It is possible that Lulu, like me, never had an allergy until she was past 50. Every year my reaction to cedar and live oak pollen gets worse. I am a candidate for a cytokine storm but I was not one 30 years ago. So Fauci and company are working on immune suppressants that will stop a cytokine storm without lowering resistance to the virus.

          Then there are the non-vaccine antibodies that are being tested. These antibodies are synthetic, not from the blood of survivors, in order to avoid rejection. If any of the three that I think are being tested in NYC on actual patients work, it would mean that we could control outbreaks without a vaccine, sort of how we did with polio in my youth using Gamma Globulin. The difficulty with using antibodies is that they work for a few weeks. Gotta keep going back for shots. When Korea broke out all the GG went to the troops and suddenly there was no polio [or measles] protection around at all until the Salk vaccine for polio, at the end of the War. Fortunately shortages would not be the case if the antibodies are synthetic rather than culled from human blood, like GG was.

          Working antibodies would, it seems to me, immediately call for letting the work force go back to work. Whichever choice we make it is a gamble, of course.

          I suspect that if the Swedish model works we won’t know until next winter, but at least there is one experiment with herd immunity going on. Then again, Taiwan has already shown that strict isolation and rapid response works. The problem for the US is that we may not go in any one direction and the mixed results won’t tell us anything.

          Liked by 1 person

        • Mark, so far at one day away from turning 70, I still don’t have any allergies, other than some medicines. I also have no underlying health issues. I did however, in 2012 when I became very ill, almost die from sepsis. I’m actually terrified of catching COVID-19. I haven’t left the house in almost 3 weeks, other than a car drive last weekend and I didn’t get out of the car. We picnicked in the front seat while looking at the ocean.

          The only reason I’m alive today is because Walter literally carried me into the ER. I didn’t want to go, I wanted to lay on the couch and die. When I checked in I had a fever of 105, convulsions, dangerously low BP, and my kidneys were on the verge of shutting down.

          So I know what that kind of storm feels like and this thing sounds worse………….no thanks! I planned the next years around a life expectancy for myself of 90. I may just stay home until they come up with a vaccine.

          I’m scared for Walter too since he’s the one keeping us in groceries and going to the post office every few days. When he gets home we clean what we can of the groceries, wash his clothes and our shopping bags, and then clean the counter where we unload the supplies. After that we both wash our hands thoroughly.

          I spent the last two days sewing masks for family and friends so at least I feel like I’m doing something beneficial. Otherwise, I try to exercise as much as I can with a very painful hip, work in the garden, clean the house and organize cupboards, play games and work on bookkeeping when I can stand it. We do FaceTime and Zoom with the kids but I miss them all still.


        • lms:

          So I know what that kind of storm feels like and this thing sounds worse

          Probably can be, but I suspect the impact is highly individualized. A guy in my NY office tested positive, and apart from a cough for couple of weeks, he’s been totally fine, even continuing to work, albeit from home. But a friend of mine here in the UK emailed me yesterday to say that he is finally starting to feel better after 10 days of being bedridden and unable to eat. He never went to the hospital and so did not get tested, but he lost 17 pounds and said it was the sickest he had ever been in his life. So it looks like the effects run the gamut, depending on your own makeup.

          Liked by 1 person

        • Did either of them smoke?


        • The guy in NY has been a long-time smoker. The guy in the UK is not a smoker, as far as I know.


        • Scott

          So it looks like the effects run the gamut, depending on your own makeup.

          I think that’s probably right. They’re even saying that as much as 25% of people who contract it are asymptomatic. I just think that Mark is right for folks in our age group. Our chances seem to be worse as far as surviving goes than younger people. Although young people are dying as well, just not as many.

          I read the Federalist piece you linked. I can understand the point it’s making. When I think of the number of cases in the US, and we’re not at peak supposedly yet, we’re already getting herd immunity even with the “stay at home” measures and physical distancing. It seems it’s much more contagious than anyone realized early on. There are enough essential workers out there spreading it around still. It would be impossible to keep everyone at home for a month.

          We’re doing a lot in CA and even here the cases just keep going up and up. My county jumped from just under 200 cases to over 600 in a week and they’re predicting we won’t reach our peak until early to middle of May here…….uggghhh


        • lms:

          I just think that Mark is right for folks in our age group.

          It’s smart to be cautious.

          My county jumped from just under 200 cases to over 600 in a week and they’re predicting we won’t reach our peak until early to middle of May here

          I don’t take any of the case numbers or peak predictions seriously. Given the absence of testing, and the asymptomatic nature in many people, it is a dead on certainty that way more people already have or had it than are being counted. It’s entirely possible that we’ve already peaked, and we just have no way of knowing it. The constant media focus on daily announcements of new highs in number of cases is all just a hype game to keep eyes glued to the tv or the newspaper.

          Liked by 1 person

        • The constant media focus on daily announcements of new highs in number of cases is all just a hype game to keep eyes glued to the tv or the newspaper.

          Just to be more clear, it seems to me that the thing that really matters is the number of people being hospitalized, not the number of positive tests. In my mind, the only possible justification for shutting down the economy in the way that has been done is not simply to prevent the disease from spreading, but rather to prevent hospitals from being overrun, thus preventing them from dealing with all the other health issues that the health care system exists to deal with. So to me the numbers that matter are hospital beds being used and doctor-hours being absorbed treating covid patients, not the daily growth in positive tests.

          Liked by 1 person

        • 4 people in my office have caught it. Most of them seem to be able to work through it.

          Liked by 1 person

        • Scott

          So to me the numbers that matter are hospital beds being used and doctor-hours being absorbed treating covid patients, not the daily growth in positive tests.

          I agree completely. I’m not watching much news but I do watch our governor’s updates and he agrees with you too. He gives us the number of hospital beds and ICU beds being used because of positive tests in CA. It keeps going up and since testing is atrocious here, they’re mostly modeling with those numbers. I also read the county stats every day or so because if the numbers get too high I’m going to insist to Walter that we have our groceries delivered.

          We’re doing what we can and watching the news or reading too much world and national news is just depressing to me and makes me lose sleep.

          Edited to add that in CA we only have results from 32,000 tests and over 60,000 with results pending. My daughter was able to get tested up in SF early in her illness but when her doctor decided that she did probably have the virus and wanted her retested Kaiser said no. We won’t know until the antibodies tests are up and running whether she had it or not. She was very sick with fever and cough as well as loss of taste and smell. She lost about 18 lbs in 2 weeks. She’s still coughing but is much better. They put her on steroids last week because of her asthma and she was using both her daily inhaler, a rescue inhaler and nebulizer as well as taking cough medicine. She is on the mend though and was able to work a little (from home) last week.

          Also, she takes after her dad and is a very funny person. When I asked her one day last week if she was going to try to work she said she was stuck in traffic and then the next day she told me there was a pile up in the hallway! 😉


        • Agree with both of you that hospital beds used and ICUs converted to one purpose wards are the critical numbers to watch, when we know that hardly anyone, percentage wise, is being tested.

          Lulu, you are exactly one year younger than my little sister. Happy Birthday, tomorrow!

          Liked by 1 person

        • Thanks Mark!

          As you can imagine I’m pretty excited about the milestone……….hahaha


    • I’d like to know too Mark!


  2. I have continued to follow Sweden’s experiment with herd immunity as well as I could.


    If you are blocked there, as of last week this was the situation, in short:

    Swedes last weekend still enjoyed the springtime sun sitting in cafés and munching pickled herrings in restaurants. Swedish borders are open (to EEA nationals), as are cinemas, gyms, pubs and schools for those under 16. Restrictions are minimal: the government recommends frequent handwashing for all, working from home for those who can, and self-isolation for those who feel ill or are older than 70. That includes King Carl Gustaf and his wife Silvia, who are self-isolating in a castle. Only on March 29th did Sweden ban gatherings of more than 50.

    Anders Tegnell, the agency’s chief epidemiologist, advised the government to let the virus spread as slowly as possible while sheltering the vulnerable until much of the population becomes naturally immune or a vaccine becomes available.

    Business leaders have been more vocal in their opposition to a national lockdown than in other countries.

    Now the WaPo reports this:

    Indicating more Swedes per capita are getting sick than other Scandinavians, and the economy is not doing much better.

    I think that was to be expected, but that is not the point of establishing herd immunity.

    The bets on herd immunity as described by Tegnell above are that if the most vulnerable are isolated but most of the work force stays available and most businesses stay open herd immunity will happen before a vaccine and with minimal relative disruption to the economy.

    I don’t think the current state disproves the theory at all. But I do think, that like the UK which started with this approach, Sweden won’t complete the experiment. The fear, when so many get infected, that hospitals will be overwhelmed and that no one is safe, will override any attempt to approach this without shelter-in-place.

    Fear trumps logic. And in this case, we must concede that the fear is of a real menace, not an imaginary one.

    Liked by 1 person

    • And speaking of fear of a real menace, this is the story of CDC’s tracing of the origins of the disease in Chicago:

      The story laid out by the Centers for Disease Control and Prevention begins with a funeral in February. Patient Zero, a friend of the deceased who had recently traveled out of state and was experiencing mild respiratory symptoms, came to a dinner the night before the service. He shared a takeout meal from common serving dishes with two family members of the deceased at a house.

      Three days later, one of the dinner hosts started to show symptoms of the coronavirus. Two days after that, the other did too. A third member of the family, who hugged Patient Zero at the funeral, got sick.

      A few days after the funeral, Patient Zero – still only experiencing mild symptoms – went to a birthday party with nine other people. Seven of them soon fell ill. Two have died.

      Three of the seven people who would get sick after the birthday party then went to church. Someone sitting within a row of them in the pews during the service, who was passed the offering plate, soon developed symptoms.

      The first host of the dinner from the night before the funeral was hospitalized as their condition deteriorated. A ventilator would not be able to save this person, but a family member who came to visit the hospital soon developed a fever and cough.

      All these infected people unwittingly transmitted the disease to other loved ones, fellow parishioners, home health workers and so forth. This happened before Illinois Gov. J.B. Pritzker (D) banned gatherings of more than 50 people and, four days after that, issued a stay-at-home order.

      Patient Zero “was apparently able to transmit infection to 10 other persons, despite having no household contacts and experiencing only mild symptoms for which medical care was not sought,”
      the report concludes. “These findings support CDC recommendations to avoid gatherings and reinforce the executive order from the governor of Illinois prohibiting all public and private gatherings of any number of persons occurring outside a single household.”

      Liked by 1 person

    • Thanks for the info Mark. I’m very interested in the herd immunity concept and I think realistically if we’d had testing and tracing of contacts in place much earlier here, and maybe other countries as well, we could have done something similar.

      I remember here in CA, we first limited large gatherings, then smaller gatherings, then stay at home for Sr’s and health compromised folks, and finally the full on stay at home first in SF and then the entire state. Newsome tried at every step to change the trajectory but without testing and the ability to follow the contacts of those infected as well as what we now know about asymptomatic contagion, it seems to me it would have been a doomed experiment in herd immunity.

      Hopefully as we work through this first wave and begin to venture back out into the workforce and then back to some of the activities we all enjoy, with proper testing, we’ll do a better job of isolating just the infected, those who had contact with an infected person and those of us who are more at risk. I probably won’t venture out anytime soon. ;-(

      Liked by 1 person

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