I guess Wall Street is happy Liz and Bernie are out but that doesn’t change the fundamentals a bit.

6.6 million Americans filed for unemployment last week, bringing the pandemic total to over 17 million
By Heather Long and Andrew Van Dam, Washington Post
April 9, 2020

The surge of job losses continued last week with 6.6 million Americans applying for unemployment benefits, the Labor Department said Thursday.

More than 17 million new jobless claims have been filed in the past four weeks, a rapid and unprecedented escalation in unemployment in the United States since the week President Trump declared a national emergency because of the novel coronavirus.

The 17 million figure includes new reporting from the Labor Department that even more people filed for unemployment in the prior week, pushing the jobless claims up during the week ending March 28 to a record 6.9 million, up from 6.6 million.

Top government and health officials have ordered sweeping closures of businesses in an effort to fight the deadly coronavirus by keeping workers and customers at home, but the side effect has been a massive rise in unemployment. Janet L. Yellen, one of the world’s top economists, said the U.S. unemployment rate has jumped to at least 12 or 13 percent already, the worst level of joblessness the nation has seen since the Great Depression.

“It looks like the unemployment rate is headed to 15 percent,” said Chris Rupkey, chief financial economist at MUFG Bank, in a note to clients. “This isn’t a recession, it’s the Great Depression II.”

Relief has been slow to reach people losing their jobs as states have been overwhelmed with claims. The Washington Post spoke with more than a dozen workers across the country who lost their jobs. The majority have not received money yet.

As tens of thousands of businesses closed because of shelter in place orders in more than 40 states, the hospitality sector — hotels, restaurants and amusement parks — weathered the steepest losses. For the week that ended March 28, California reported 872,000 workers from service industries filed for unemployment.

Now, nearly every sector of the economy is shedding workers, including manufacturing, construction and even health-care facilities outside of hospitals. In Texas, which reported 121,000 newly unemployed for the week ended March 28, jobs were lost in food services, manufacturing, mining, agriculture, forestry, health care, waste management, transportation and warehousing, among other sectors.

“Today’s report continues to reflect the purposeful sacrifice being made by America’s workers and their families to slow the spread of the coronavirus,” said Labor Secretary Eugene Scalia in a statement.

Well, I’m glad it was for a purpose. What was that exactly? Make a Billionaire some more money?

Treasury Secretary Steven Mnuchin also said it’s possible the nation could reopen for business in May.

The stock market surge came after the Federal Reserve unveiled over $2 trillion in new lending to businesses of all sizes, as well as struggling city and state governments. Fed Chair Jerome H. Powell said the nation’s top priority is fighting the pandemic and caring for the ill, but the central bank is doing whatever it takes to provide economic relief.

“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible,” Powell said.

On top of the Fed’s historic actions, the federal government has been scrambling to get checks and loans into the hands of workers and companies to buoy employment and keep paychecks flowing, but job losses have continued to build, even after Congress passed a historic $2 trillion relief package. Businesses small and large are struggling to get loans. As companies run out of cash, they are cutting workers and telling them to file for unemployment benefits. But many states have been slow to distribute money.
…
As unemployment checks are slow to arrive, people are turning to whatever aid they can find. Modern day “bread lines” have started appearing in cities like Orlando, San Diego, Pittsburgh and Cleveland where thousands lined up for free food. The slow release of funds in the United States is a marked contrast from Denmark where the government is paying workers 75 percent of their salaries during the pandemic, and Canada, which vowed to get money to workers in 10 days or less.

“There were already hurdles to accessing unemployment benefits before the pandemic hit. Many states had done everything they could to reduce access to benefits. Well, now we are seeing the result,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.
…
Economists say the millions of workers likely to file for unemployment in April will strain America’s safety net programs even more. They are urging companies to furlough workers instead of doing a full layoff. A furlough usually allows workers to keep their health insurance and return quickly when business resumes. But many companies have cut ties entirely, leaving workers with no income and bills piling up in the midst of a pandemic.

Unemployment benefits typically cover less than half a worker’s salary, but the $2 trillion relief package passed by Congress directed states to give an extra $600 a week to people out of work, including self-employed and gig workers. The Trump administration issued rules Sunday night for states to begin disbursing that extra money, but state officials say it will take time to process all the applications. Many states have not even set up a process yet to handle applications from self-employed workers like hairdressers and Lyft drivers.

“Understand that it takes approximately 25-30 minutes to file one claim,” tweeted Mike Ricci, spokesperson for Maryland Gov. Larry Hogan (R). He said staff were working round-the-clock, but there was only so much they could do given the state received more claims in March alone than all of 2019.

And this is the positive, governmment approved spin.

I call it a selling opportunity.

Well, this was unexpected. Citizen Kane, if you haven’t seen it you should. Can’t imagine it will be up for long.

Alright, now that you’ve done the reading, here’s everything that’s wrong with it.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:00am (ET) (or whenever we get around to it) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

American Civil War effectively ends; Iraq celebrates collapse of Saddam Hussein’s regime;NASA announces first seven astronauts dubbed the Mercury Seven; Marian Anderson performs at the Lincoln Memorial; Prince Charles marries Camilla Parker Bowles.

We have the power to do any damn fool thing we want to do, and we seem to do it about every 10 minutes.

J. William Fulbright

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So I’ve had a chance (and the will since what I actually want to do is crawl under a rock) to visit some of my Economic sites which are a catalog of Neo Liberal Fail.

Ian is relatively positive (for him) and has been uncharacteristically productive.

Geopolitics and the Economy After Covid-19
by Ian Welsh
2020 April 7

Covid-19 isn’t going to bring down the “system.” It’s not a hard enough shock.

There are things we should learn from it, about what work is actually needed, about the fact that more people will not die because of reduced pollution during isolation periods than from the virus, and so on.

Mostly, we won’t learn those lessons.

One lesson which will be, not exactly learned, but used, is that if you don’t make it in your country, you can’t be sure of having it when it matters. Physical manufacturing matters: It can be designed in the US, but if it’s made in China, well…Trump almost stopped 3m from selling masks to Canada, be sure that the fact that he can has also been noticed.

There were already powerful forces, and not just in the Trump administration, who were unhappy with the current world trade and offshoring system. The more intelligent parts of the American permanent ruling class have noticed that the actual threat to American hegemony is China, and that when China makes things the US needs, China has the US by the balls.

They’ve been wanting to bring as much production back to the US as possible and they’ve been wanting to force the world into two trading blocs. These are the sort people who become livid when a European country chooses Huawei 5G, and start making threats about NATO.

They are, of course, right to be worried. The offshoring of production had catastrophic effects for Britain, when they off-shored to the US in the 19th century. They said the same sort of things Americans say now, “We still design, they just make the stuff.” That didn’t last: Manufacturing produces designers in time, there are things learned best when you’re right next to the plants. It took about three decades, but the design moved to the US, and Britain never recovered, eventually surviving through financialization, a weak shadow of itself, sustained on rents which the rest of the world can easily, one day, decide not to pay.

So Covid-19, which is putting shocks through the trade system anyway, is going to be used to justify bringing production back to various countries, to re-shoring. Trade will go down, not up, the supply chain will be less broken into pieces, and there will be a push towards a new cold war with two trade blocs. There may wind up being three depending on what Europe does, but the plan is to force Europeans into the US bloc.

In general economic terms in the US and UK, what will happen is just what happened after 2008—the big boys will be bailed out, those who have money (or are given trillions by the Fed and Treasury) will then buy up distressed assets. There will be fewer, bigger players again, the general economy will be worse for ordinary people, blah, blah. You know the play.

This won’t lead to revolution or revolutionary change yet, I suspect. I think it’ll take at least one more big shock before people become desperate enough. And, of course, the right play is to pick some part of the poor and have them oppress the other half of the poor in exchange for not-too-shitty a life. Poor white sharecroppers who get to call the equivalent of African Americans “boy.”

That play, given the weakness of the left in America and the UK, may well work. We shall see.

But be sure of this, there will be more shocks. This is a system which has no “give.” It has no surplus capacity to handle shocks, not at the real economy level: All our elites know is politics and printing digital money and giving it to their friends, without insisting on real production. Oh, they’ll try to re-shore production, but they are fundamentally incompetent and will run it badly. Be sure of that.

So this isn’t the big one. But climate change is rumbling, resource shortages are onrushing, and our sclerotic society and incompetent elites will turn what should be shocks that are easily handled into crisis after crisis.

The future is going to be interesting. Be prepared. The old world is dying, the new world has not yet been born, and there will be a great deal of pain and screaming in both the death and birth.

Buy! Buy! Buy! Buy! Buy! Buy!

There will never bee an opportunity like this again! The Market always goes up, over the long term.

Over the long term we are also all dead. Well, not Corporate Persons. They live forever.

I’ve always been circus folk.

All hail the Great God Mammon! Bow before Him! Sacrifice your Children and Elders that you may experience His Bounty!

Yeah, this is about Money again.

Get over it. Money is a mechanism for facilitating Trades. That’s it.

The Neo Liberal Elite think you can’t handle the notion so it’s best to keep the Peasants (and make no mistake what they think about you) Stupid lest they not clap for Tinkerbell when bidden.

New York Fed, FDIC Tout “Opacity in a Banking Crisis” to Keep Corporations, Hedge Funds, PE Firms & Counterparties in the Dark about Weak Banks
By Wolf Richter, Wolf Street
Apr 6, 2020

US banks are now finding themselves in a situation where homeowners don’t have to make mortgage payments for few months, and renters don’t have to pay rent for a while, which leaves many landlords unable to make their mortgage payments – not to speak of the many Airbnb hosts that have no guests and won’t be able to make their mortgage payments. Commercial real estate is in turmoil because the tenants have closed shop and cannot or won’t make rent payments, and these landlords are going to have long discussions with their bankers about skipping mortgage payments. And subprime auto loans and subprime credit card loans, which were already blowing up before the crisis, are now an unspeakable mess, as tens of millions of people have suddenly lost their jobs.

Amid this toxic environment for the banks, here come the New York Fed and the FDIC and tout the “Value of Opacity in a Banking Crisis,” explaining, supported by empirical data from the Great Depression, that it’s better to stop disclosing balance sheet information about individual banks.

So here we go, as to why it’s important for “authorities” to lie about banks during a crisis. It’s not directed at households, as we’ll see in a moment – but at corporations, hedge funds, PE firms, state and local government entities, and other institutional bank customers whose bank balances by far exceed deposit insurance limits and that would yank their mega-deposits out of that bank at the first sign of trouble.

The authors of the article, a joint production by the FDIC and the New York Fed, cite Great Depression data before the arrival of FDIC deposit insurance to show how lying about balance sheets of individual banks is beneficial in ending runs on weak banks.

Talk about the FDIC, Flash Forward.

These uninsured deposits are in accounts that exceed by a wide margin the FDIC deposit insurance limit of $250,000. They’re held mostly by businesses, institutions, state and local government entities, hedge funds, PE firms, and the like. They may have hundreds of millions or even billions of dollars in their transaction accounts.

Few households have daily liquidity needs that exceed FDIC deposit insurance limits, and savers can spread their bank deposits to different banks and stay within the FDIC limits with each deposit account.

Also, these “call reports” are not easy to dig up and read – though they’re available online. This is something that normal households have neither the time nor the expertise to deal with. So this suppression of information is not directed at savers and households.

But it is directed at businesses, state and local government entities, hedge funds, PE firms, and other institutional bank customers that need big balances in their accounts to fund their operations on a daily basis, engage in transactions, and the like, and that have the staff and expertise to study the call reports and use them as actionable data. And they’d yank their mega-deposits out of that bank at the first sign of trouble appearing in the call reports.

They are protecting “other types of Investors”.

These “other types of investors” are bond holders who would sell their bank bonds at the first sign of trouble in the call reports, thereby driving up the yield of the bonds and making funding for the bank more expensive and difficult; and these “other types of investors” include counterparties that might refuse to do business with the bank at the first sign of trouble.

It is interesting that the “value” of suppressing information about bank balance sheets are being touted now as banks are suddenly finding themselves stuck in a financial crisis so vast that the Fed decided to unleash the biggest amount of money printing in history in an attempt to bail out all aspects of Wall Street.

And it is even more interesting that this is so clearly directed at business and institutional bank customers and counterparties that apparently need to be kept in the dark about the health of their banks, lest they yank out their large deposits.

Runs on the bank don’t take place today by people waiting in line at the branch to take out their $500 in savings. They happen when corporations, financial entities, and counterparties lose confidence in the bank and yank their millions and billions out.

It’s also an opportunity for Graft (like we haven’t seen Congress Critters Insider Trading already).

Yves Smith @ Naked Capitalism

“If we hide bad information, we prevent runs on banks” is that it will make interested parties even more eager to seek out information however they can. I was hardly all that plugged to informal sources in 2008, but in August, I was hearing of large-scale withdrawals at Citi and WaMu. If I had this sort of thing being tossed over my transom, don’t you think hedgies, who might see both risk and opportunity, would seek out this sort of intel aggressively?

What?! You don’t salute the Prosperity Gospel you Heretic Traitor?!

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:00am (ET) (or whenever we get around to it) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

Funeral of Pope John Paul II; Pablo Picasso dies at 91; Teen aids patient Ryan White dies at 18; Hank Aaron hits 715th home run; Kurt Cobain found dead in home from self-inflicted gunshot wound.

Success is never final, failure is never fatal. It’s courage that counts.

John Wooden

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I have been reliably informed by an Online Test (and you know how accurate those are) that I swear like a Millennial and it’s true I’m on a constant lookout for new words and ways to string them together.

The temptation to use another title more descriptive of Acting Secretary of the Navy Thomas Modly is strong but I will resist it.

I’ve been wanting to come out to the ship since we first found out you had COVID cases on here. I was actually planning on being here last Tuesday after I went to see the Mercy off in Los Angeles. So I want you to know that no one in my level has been ignoring the situation here from the very beginning.

I reached out to your CO through my Chief of Staff very, very early on in this crisis. On Sunday, told him that I wanted to come out to the ship and if it would be okay or if it would be too disruptive. I told him that because I wanted to be able to help, if there was anything else he needed as this massive effort was underway, to get you guys healthy and clean and safe. He waved me off. He said he felt like things were under control. He had been concerned a day or so before that things weren’t moving quickly but things—he still wanted to get more beds—but he didn’t think it was necessary. He also talked to my Chief of Staff and emailed back and forth with him.

On Sunday night, he sent that email. And that email went out to a broad audience of people. I know that I mentioned that it was over 20. We believe that it was forwarded to even far more than that. And immediately it was picked up by the San Francisco Chronicle, which published sensitive information about the material condition of a Naval war ship. If he didn’t think—it was my opinion, that if he didn’t think that information was going to get out into the public, in this information age that we live in, then he was A, too naive or too stupid to be the commanding officer of a ship like this. The alternative is that he did this on purpose. And that’s a serious violation of the Uniform Code of Military Justice, which you are all familiar with. That message, and all the contents of that message was perfectly fine for him to send to people in his chain of command in a confidential way so they could get acting on it. He in fact could have given it to me, through my Chief of Staff, or to me, as I asked him to do when I first reached out to him on the ship, when we first found out that there were COVID cases here.

It was a betrayal of trust with me, with his chain of command, with you, with the 800 to a thousand people who are your shipmates on shore right now, busting their asses every day to do what they need to do to convert what they do in a normal day to get you guys off of here, get you safe and get you healthy, get you clean, and get you back on this ship where you are supposed to be.

I’ll stop to point out that this is the moment a Sailor uses Sailor language to critique this statement.

It was betrayal. And I can tell you one other thing: because he did that, he put it in the public’s forum, and it’s now become a big controversy in Washington, DC, and across the country…

More Sailors.

about a martyr CO, who wasn’t getting the help he needed and therefore had to go through the Chain of Command, a chain of command which includes the media. And I’m gonna tell you something, all of you. There is never a situation where you should consider the media a part of your chain of command. You can jump the Chain of Command if you want, and take the consequences, you can disobey the chain of command and take the consequences, but there is no, no situation where you go to the media. Because the media has an agenda. And the agenda that they have depends on which side of the political aisle they sit. And I’m sorry that’s the way the country is now, but it’s the truth. And so they use it to divide us. They use it to embarrass the Navy. They use it to embarrass you.

Mutinous chatter.

While you’re out here dealing with something that this county hasn’t had to deal with in over a hundred years, and the world hasn’t ever dealt with anything like this on this scale, the American people believe in you. They think of all the people in the world that can keep their shit together in something like this—it’s the United States Navy…

Sailors gripping their Cutlasses, Belaying Pins, and Boarding Axes.

and our sailors—and they’re stressed. They may be stressed, they may be tired, they may be scared, but they’re keeping their shit together and they’re taking care of their people on the shore who are busting their ass to get them off this ship. They’re not taking shots at them. They’re asking, how can we help them? What can we do? How can I help the E3 that works for me? I’m an E4. I’m concerned. What do I do to help the E2’s and E3’s that are on this ship? That’s your duty. Not to complain.

Everyone’s scared about this thing. But I tell you something, if this ship was in combat and there were hypersonic missiles coming at it, you’d be pretty BLEEP scared too.

Well, that’s a heck of an example to set you Mother BLEEP Son of the Sea. You talk like that in Church?

But you do your jobs. And that’s what I expect you to do, and that’s what I expect every officer on this ship to do, is to do your jobs.

One of the things about his email that bothered me the most was saying that we are not at war. Well we’re not technically at war. But let me tell ya something, the only reason we are dealing with this right now is because a big authoritarian regime called China was not forthcoming about what was happening with this virus. And they put the world at risk to protect themselves and to protect their reputations. We don’t do that in the Navy. We are transparent with each other, in the proper channels, and with each other. And that’s what we are supposed to do and that’s what you’re expected to do.

I got your list of questions. I’m very, very thankful to have gotten them. I know they’re all sincere. I don’t think there is any agenda in any of those. But there’s a lot of them and I’m gonna answer every single one of them, but I’ve gotta do it respectfully, and I’ve gotta take some time so you understand all the nuances of the questions you are asking. And there’s a lot of them here. So rather than answer them all today, I’m going to take them back with me to Washington and I’m going to answer them.

And let me say one other thing, everything I am telling you guys now, I will never, ever, ever throw you guys under the bus in Washington or anywhere else in the media, anywhere else. And don’t, I expect you never to do that to your shipmates either—the ones on the shore right now who told me that when Captain Crozier’s email made it to the San Francisco Chronicle after working 15 hour days, they were demoralized because they knew what they had been doing for you guys since the 25th of March to get you guys what you need.

And the other thing you need to understand is we’re in Guam. It’s a US territory but they have their own government, and they have their healthcare problems, and they’re scared too, just like every other part of the world. And the Governor of Guam has stuck her neck out big time with their own population to say that she is willing to open up hotel rooms all over this this country, or this state, this territory, so that sailors from the USS Teddy Roosevelt can go and be safe. Because she believes that you all are her brothers and sisters, her brothers and sisters who are protecting this place for her citizens. And so she’s willing to put all that at risk to take care of you guys.

And she told me today when Captain Crozier’s letter came out in the public, she had to then deal with all her constituents—who are saying, “holy crap what’s happening? We’re going to have 5,000 people with COVID in our city, without proper health care and everything else.”

So think about that when you cheer the man off the ship who exposed you to that. I understand you love the guy. It’s good that you love him. But you’re not required to love him.

So I want to share something with you that I read at the Navy Academy graduation in 2018. I said it to the graduating class, but I’m going to expand it a little bit. I said, as officers and sailors of the United States Military, you are given tremendous responsibility to respect and protect those who are placed under your command. The American people will trust you with their sons and daughters. And they place their security and the security of our nation in your hands. Do not expect to be loved by everyone for this—even though it may happen. As Secretary Mattis my former boss was fond of saying to us who were so honored to work with him in the Pentagon—he said your job is to protect the nation.

So l’m going to give you a little bit of advice to make this important—and often difficult—job far easier on yourselves. My best advice to you is don’t ever be—don’t ever worry about being loved for what you do. Rather, love the country that you are asked to defend. Love the constitution you pledged your lives to protect.

And importantly, love the people you are ordered to lead. Make sure they eat before you do. Care about their families as much as your own. Be invested in their success more than your own accomplishments. Nurture their careers more than you pursue your own advancement. And value their lives to the point that you will always consider their safety at every single decision you make. It’s only through this level of servant leadership that you will maximize and empower those you lead to meet the demands that will face us in this century. And those demands are getting more complicated every day, as we’re all learning. But it’s also going to accrue incredible personal satisfaction to you during time of service.

Crew of the Teddy Roosevelt. You are no obligation to love your leadership, only to respect it. You are under no obligation to like your job, only to do it. You are under no obligation to expect anything from your leaders other than they will treat you fairly and put the mission of the ship first.

Because it is the mission of the ship that matters. You all know this. But in my view, your Captain lost sight of this and he compromised critical information about your status intentionally to draw greater attention to your situation. That was my judgment and I judged that it could not tolerated from the commanding officer of a nuclear aircraft carrier. This put you at great risk even though I am certain he never thought it would. I’m certain he loved you all, as he should. But he lost sight of why the TR exists and fate brought you all together in the middle of this COVID crisis.

Your nation back home is struggling. No one expected this pandemic. As we are all working our way through it, your fellow sailors in the States are volunteering, putting on uniforms and running into the fire in places like New York, Los Angeles, Dallas, and New Orleans. I’ve seen them, no fear, running right into COVID.

Nothing is easy in this for anyone. But from the very beginning, we have been engaged from my level down to bring you the help you need as fast as we possibly could. Understand it takes time to flex up for a crisis this unique.

But the TR has to stand strong as warriors, not weak like victims. The TR has to work its way through this with grace, not panic. The TR has to demonstrate to the citizens back home that it has its act together, and that it is knocking down this virus, just as it would knock down the Chinese or the North Koreans or the Russians if any one of those nations were ever so stupid enough to mess with the Big Stick, because they thought she was vulnerable.

I cannot control or attempt to change whatever anger you have with me for relieving your beloved CO. If I could offer you a glimpse of the level of hatred and pure evil that has been thrown my way, my family’s way, over this decision, I would. But it doesn’t matter. It’s not about me. The former Vice President of the United States Joe Biden suggested just yesterday that my decision was criminal. I assure you it was not.

Well, he’s right and you’re a Liar.

Because I understand the facts, and those facts show that what your captain did was very, very wrong, in a moment when we expected him to be the calming force on a turbulent sea.

There was very little upside in this decision for me. You can believe that or not. I made the decision for the Navy I love, for the Navy I served in, and now serve for. And mostly for the sailors I’m responsible for, not just to you here, but on nearly 300 other ships in the fleet. Your captain’s actions had implications for them too. Imagine if every other CO also believed that the media was also the proper channel to hear grievances with their chain of command under difficult circumstances. We would no longer have a Navy. And not longer after that, we’d no longer have a country.

Still, I understand you may be angry with me for the rest of your lives. I guarantee you won’t be alone. But being angry is not your duty. Your duty is to each other, and to this ship, and to the nation that built it for you to protect them. Even amidst an unexpected crisis, it is the mission of this ship that matters. Our adversaries are watching, and that is why we are here. We will get you the help you need. You have my personal word on it. Your CO had my personal word on that from Day One. Whatever else you may think of me, I don’t go back on my word. And when it comes to the TR, whether you hate me or not, I will never, ever, ever give up this ship and neither should you. Thanks for listening, and I’ll get the detailed answers to your questions to you some time later this week. Go Navy.

I think I’ve mentioned I’m a collector of words and I’d be happy for new vocabulary more descriptive of this particular piece of crap and the Craven Sycophantic Coward who uttered it and his Boss Mark Esper. Modly has tendered his resignation (under pressure). Esper must go too, he’s a disgrace to the Service and a miserable excuse for a human being.