Morning Report: 22 million jobs lost in the past month

Vital Statistics:


Last Change
S&P futures 2790 15.1
Oil (WTI) 20.13 0.29
10 year government bond yield 0.61%
30 year fixed rate mortgage 3.37%


Stocks are higher this morning as the Trump Administration works on how to re-open the economy. Bonds and MBS are up.


The Trump Administration is looking to ease the lockdown as it looks like cases have peaked in the US. He is planning to hold a conference call with governors this afternoon and will announce something by the end of the day. Of course it will be up to the states and local governments to make the ultimate decisions for their respective jurisdictions. State and local governments are starting to get starved for cash as sales taxes have fallen off a cliff. In all honesty, if masks and gloves work (and they appear to), then it probably makes sense to have people return to work wearing them. Note that the food supply is at risk for shortages, so that is something the government must work to avoid.


Initial Jobless Claims fell to 5.25 million last week. Over the past month, 22 million people have lost their jobs. That is about 34 jobs lost per case of the virus, and 770 per death from the illness.


Housing starts fell to 1.216 million. This is down 22% from February, but is actually up 1.4% on a YOY basis. Building permits came in at 1.35 million, which was down 6.8% sequentially, but up 5% on an annual basis. Starts are going to be super-sensitive to local economies. The rumor is that KB Home simply walked away from all their land deposits in Las Vegas.


Neel Kashkari is recommending that the big banks raise $200 billion in capital to help buffer against the effects of the recession. Note that Shelia Bair was jawboning the Fed to force the banks to suspend dividends and bonuses, the way most European banks have. Of course the European banks are in much weaker capital positions than the US banks, and the US banks have already suspended share buybacks. Oh, and bonuses are paid at the end of the year, so that is just a throwaway talking point. But bonuses, buybacks, and dividends are kind of an evergreen topic for liberal policy types.


The NHMC found that 84% of renters made a full or partial April rent payment. As of a week ago, that number was only 69%. Good news for the apartment REITs.

“We are pleased to see that it appears that the vast majority of apartment residents who can pay their rent are doing so to help ensure that their properties can continue to operate safely and so apartment owners can help residents who legitimately need help,” said Doug Bibby, President of NMHC. “Unfortunately, unemployment levels are continuing to rise and delays have been reported in getting assistance to residents, which could affect May’s rent levels. It is our hope that, as residents begin receiving the direct payments and the enhanced unemployment benefits the federal government passed, we will continue to see improvements in rent payments.”

“Anecdotally, we are hearing that different parts of the industry are experiencing different levels of rent payments,” said David Schwartz, NMHC Chair and CEO Chairman of Chicago-based Waterton. “As you would expect, more expensive Class A properties, whose resident base may be more able to work from home, are reporting much higher percentage of rent payments than operators of more affordable workforce properties whose residents are more likely to have had their incomes disrupted because of the pandemic.”



9 Responses

  1. State and local governments are starting to get starved for cash as sales taxes have fallen off a cliff

    I don’t get having everything closed. Why not institute some sort of sanitation requirements and social distancing requirements and let lots of stuff–especially retail stores–open up? Hair salons and nail salons might be an issue, but there’s no reason Michael’s and Hobby Lobby and Hallmark stores can’t operate like grocery and hardware stores.

    Liked by 1 person

  2. Worth noting:

    “A Richmond doctor’s dramatic story of COVID-19 infection, hospitalization and survival
    By ERIC KOLENICH | Richmond Times-Dispatch

    Jones compares the body’s response to a forest fire. It’s not too difficult to extinguish a match. But once the match has been dropped and the brush begins to burn and the fire spreads, the devastation is more extensive and the resources needed to stop the fire are more substantial.

    Jones thinks the treatment many COVID-19 patients are receiving needs to occur in an earlier stage. On March 27, he administered to Brown a medicine called Actemra, a brand of tocilizumab, which disabled Brown’s inflammatory response by blocking specific cytokines called interleukin-6 or IL-6.

    Actemra hasn’t been approved to treat the coronavirus but it has shown promising results across the U.S. and in China. Roche, the Swiss maker of the drug, received $25 million from the U.S. Biomedical Advanced Research and Development Authority last week to accelerate the drug’s trial. The medicine is traditionally used to treat rheumatoid arthritis.

    Jones prescribed one other unconventional treatment — intravenous vitamin C. He had called Dr. Alpha “Berry” Fowler, a professor of medicine at Virginia Commonwealth University who runs the lab where Jones was a fellow. Fowler suggested the vitamin C.

    Vitamin C isn’t an approved treatment for the coronavirus, either, and it isn’t recommended by Bon Secours. But the playbook for treating COVID-19 is being written on the fly, and Fowler says there’s a growing amount of anecdotal evidence that vitamin C might be effective in treating COVID-19. Fowler is hoping a clinical trial to approve the use of vitamin C in COVID-19 patients will begin this summer.

    A large amount of vitamin C is injected — 4,000 to 5,000 times the normal amount in the bloodstream. Whether it was the timing of the Actemra, the vitamin C or the combination of medicines that saved Brown is unknown.

    The drugs began to take their effect in Brown’s lungs, binding with the proteins and preventing inflammation. The response was nearly instantaneous.

    In 45 minutes he began to feel a change. Within two hours his discomfort had subsided. His fever diminished and his heart rate slowed.

    On March 28, Brown received a second dose of Actemra. A day later, a Sunday, he felt well enough to go home. The day after that he did go home. In three days he had gone from his body almost being overrun by the disease to leaving the hospital.

    “I’ve never seen anybody recover as quickly as he did with that level of disease,” Jones said.

    Jones wrote up a case report detailing his treatment and the results. Bon Secours’ protocols for treating COVID-19 have grown to at least 51 pages.”

    Liked by 1 person

    • That’s the thinking (shutting down the cytokine storm) behind a lot of the treatments. The magic is finding the right cytokine(s) to shut down in a given disease (and when).

      If they all behaved the same, it would be a lot easier. . .


      • I just recently watched a video from a guy in Australia, I think. He explained how you can’t catch viruses, and that viruses are actually solvents. Viruses are created by the body as a response to trauma–so you don’t ever have to worry about contagion, because there’s no such thing. Or something.

        Got the link from a guy who apparently agrees.

        Amazing what you can learn on the Internet!


  3. Liked by 1 person

Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: