First US Economic Data of the COVID-19 Era Emerges. It’s Ugly

This is just the beginning. There will be more of the same and worse.

By Wolf Richter for WOLF STREET:

Nearly all economic data as reported on a monthly or quarterly basis have so far reflected the era in the US before the economy reacted to the coronavirus. These reactions – from panic-buying of toilet paper to airlines shutting down much of their international and now even domestic routes – were phased into the economy beginning in later February and have now risen to a crescendo. But they’re slow in making their way into the economic data.

We get company by company warnings, and we get the government’s and the Fed’s reaction to the events, but we haven’t seen the impact in the official data yet. The first data to seriously reflect this are the surveys of company executives such as the Purchasing Manager’s Indices for March, out later this month, or the New York Fed’s Empire State Manufacturing index, which was released this morning,

And it’s ugly: The Empire State Manufacturing index of General Business Conditions plunged by 34.4 points, the largest point-drop on record, from a still relatively sanguine level of 12.9 in February, to the level in March of negative -21.5, the lowest since 2009, and right at where it had been in October 2008, following the Lehman bankruptcy in September. And this was just the first reaction related to the impact of Covid-19 mitigation measures:

Timing: This survey was sent on March 1 to executives at manufacturing companies in New York State. Most responses normally come in by the 10th. And the cutoff is the 15th. So this survey data released today reflects what the executives of manufacturing companies saw in the first half of March.

Manufacturing had already been weak all last year and earlier this year, before the coronavirus was even an issue in the US. But now the measures aimed at slowing the spread of the virus are hitting it. Some highlights among the sub-indices:

  • New Orders plunged to a level of -9.3, down 31.4 points from February’s level of +22.1.
  • Shipments plunged to a level of -1.7, down 20.6 points from February’s level of +18.9.
  • Number of employees dropped to a level of -1.5, down 8.1 points from February’s already low level 6.6.
  • Average Employee workweek dropped to a level of -10.6 from February’s already negative level of -1.0.

“Optimism about future activity wanes,” the report said about how companies see general business conditions over the next six months. And the index about these future business conditions plunged by 21.7 points to +1.2, the lowest level since the depth of the Financial Crisis in January and February 2009:

This was the first indicator of what the US economy is currently going through – namely a partial shutdown of economic activity – in response to efforts aimed at slowing the spread of the corona virus. Similar plunges, and likely some even worse plunges, in the data will crop up over the next few weeks and months as the impact of the Covid-19 measures percolates to the surface in the data.

Holy moly, what a mess. But here is our hilarious cartoon of Jerome Powell tearing out his hair. Gotta keep you sense of humor. Read…  Panicked Fed Slashes Rates to Near 0%, Throws $700 Billion QE on Top, after $1.5 Trillion Shock-and-Awe Repos Fizzled. Stock Futures Plunge 5%, Hit Limit Down

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  156 comments for “First US Economic Data of the COVID-19 Era Emerges. It’s Ugly

  1. IdahoPotato says:

    Norwegian government alert to everyone in “poorly developed” countries including the USA”

    “In line with the advice from the Ministry of Foreign Affairs, I, as NTNU’s Rector, strongly recommend that all NTNU students who are outside Norway return home.

    This applies especially if you are staying in a country with poorly developed health services. This also applies for countries with poorly developed collective infrastructure, **for example the USA
    **, where it can be difficult to get transport to the airport if you don’t have a car. The same applies if you don’t have health insurance.”

    • Phoenix_Ikki says:

      Norway is absolutely right, blunt but right to the point. Good Ol’ USA, failed state for everyone else except the mega rich and elites. I hate to say they will now learn from this but likely they will just find ways to profiteer from this disaster one way or another while busy still shoving that big government is bad for you from their playbook.

      I am still waiting for all the die hard libertarian to come out with their marvelous plan to save us all from this pandemic…

      • Phoenix_Ikki says:

        Totally agree. All well documented in The People’s history of United States by Howard Zinn. Sadly most people are still brainwashed by land of the free, equal opportunity type of collective euphoria.

      • Unamused says:

        The U.S. economic structure, since its inception with the use of widespread slavery in agriculture, has been entrenched in breathtaking income and racial disparity.

        The US was founded on genocide and slavery, and that has been its destiny. Now, as in the 1930s, its future depends on how well it can loosen its embrace of that destiny. Don’t get your hopes up.

      • Anon1970 says:

        You forgot the part about millions of pauper immigrants coming to the US over two centuries plus and doing well under its imperfect economy.

      • curiouscat says:

        Read “The Diligent: A Voyage Through the Worlds Of The Slave Trade” by Robert Harms. You will learn that it was not only the US that experienced rapid development by slavery, but also most of Europe. Very eye-opening.

      • IdahoPotato says:


        I am one of those “pauper immigrants”. Your observation doesn’t further the understanding of the causes of U.S. economic disparity.

        I have always kept a backup residence in my country of birth. I do not trust my “non-pauper” status in the U.S.

        In that other country, at least you can have a sensible science-based discussion about climate change and basic medication doesn’t cost $200 a dose..

      • Wolfbay says:

        Ron Paul has warned about this for decades. The virus is just the pin that popped the feds everything bubble.

        • Implicit says:

          I still have 2 “Ron Paul for President” stickers left; think I’ll put one on my car again for fun with my “Black Markets Matter” sticker.

      • Jdog says:

        As a libertarian, I can tell you I have no desire to save anyone from anything.
        I have been telling people for some time that this debt ridden system would not survive and it is now in the process of imploding. Liberalism has killed prosperity in this country, and now it is too late to save it.
        I will however possibly profit from it, as I watch my cash increase in value as assets decrease.
        You see, the best teacher is adversity, and those of you who think the bumbling idiots in government can save you are in for a revelation.
        Like we libertarians have been trying to tell you, government is an evil entity, and will rob your freedom and prosperity.
        You can only rely on yourselves and your abilities.
        We have now reached the reckoning, and reality is coming to reap whatever you have sown……

        • IdahoPotato says:

          “government is an evil entity, and will rob your freedom and prosperity.”

          The Internet was originally ARPANET, the Advanced Research Projects Agency Network, funded by the U.S. Department of Defense.

          You shouldn’t be using it.

        • David G LA says:


        • Unamused says:

          Not liberalism. Corporatism. They’re not the same thing. The middle-class prosperity of the last 70 years has been founded on the reforms of FDR, which are liberal, and not corporatist. Americans have been induced to forget the lessons it learned decades ago.

        • ultra says:

          Jdog: You can’t have a modern economy without big government and big corporations. Someone has to be around to enforce the rules, otherwise the whole thing will collapse.

        • ewmayer says:

          Jdog, a little light reading I think you may enjoy:

          On For The Long Haul | Classic Esquire

          Purely fiction, of course.

        • Harvey Cotton says:

          I would love to know what assets you own or are now planning to buy, and how none of them have or will benefit from public largesse, including the Fed.

        • backwardsevolution says:

          IdahoPotato – “The Internet was originally ARPANET, the Advanced Research Projects Agency Network, funded by the U.S. Department of Defense.

          You shouldn’t be using it.”

          As the Internet is currently being strangled, free speech being stifled, he probably won’t be using it much longer.

          Government-sanctioned monopolies abound, and very little is done about it.

          The government is in league with the corporate elite. All hail the government!

        • backwardsevolution says:

          Unamused – FDR was trying to save capitalism from communism. He didn’t do it for the people’s benefit. Once there was no longer any threat, unions were crushed, jobs offshored, and the financial games started. Late 70’s.

          Ultra – “You can’t have a modern economy without big government and big corporations. Someone has to be around to enforce the rules, otherwise the whole thing will collapse.”

          You’re kidding, right? Yes, you must be.

        • Thomas Roberts says:


          Libertarianism just leads to fascism.

          The only thing “Libertarianism” in a large country can lead to is a society in which the rich eventually own everything and then decide all the rules. The remaining government will enforce the rule of the rich “fascism”. Almost everyone, except the rich will then be poor.

          Yes, it can be possible for some small countries like the Cayman Islands to be more free than America, but they depend on large producing countries like America and Germany to have a well-regulated country to invent and produce almost everything. The world cannot remain industrialized with only libertarian countries, unless you think everyone, except the rich, should be poor forever.

          The only way for the world to continue to push forward is with large mixed state economies, who will always be struggling with corruption, a divided populace, and short term vs long term thinking. But, there is a chance for success with large mixed state economies, large libertarian “fascist” countries will always fail.

        • Canadian says:

          Libertarians mostly became MAGAheads after 2016. Most of the Ron Paul fanatics from 2007 now want big military spending, border militarization, discrimination against immigrants, etc. They love government now that they feel in charge of it.

      • RD Blakeslee says:

        Your thinking is collective, P.I. which misunderstands libertarians.

        With them it’s the individual’s way of life that counts. We are not here “to save (you) all”.

        Those who practice what they preach are continuously prepared for societal disruption.

        • cesqy says:

          The hive mentality in EU doesn’t seem to be doing much better than the self reliant US though they do have higher negative interest rates….smiling

      • Happy1 says:

        Of course this makes us different from Germany, oops, Japan, oops, China, oops, the UK, oops, well nevermind…

      • Curious says:

        Actually, Unamused, the U.S. was not founded on slavery. The British began bringing African slaves to its colonies over here 150 years before it became a country, with just 13 states, in 1776.

        Thousands of British families who grew rich on the slave trade, or from the sale of slave-produced sugar, in the 17th and 18th centuries. The Slavery Abolition Act of 1833 formally freed 800,000 Africans who were then the legal property of Britain’s slave owners. Among Britain’s 46,000 slave owners were the relatives of Gladstone and Orwell. This was explained by a BBC documentary about five years ago, and in a Guardian article called, “The history of British slave ownership has been buried: now its scale can be revealed”.

      • Happy1 says:

        Anon 1970 is correct, this is a land of opportunity and always has been. Doesn’t mean it’s also not a land tainted by slavery and inequality. It can be both things at the same time. And it’s unquestionably a more fair place now than at any time in history, those of you who look wistfully back on the 1930s forget that women only had the vote a few years earlier and people of all races and religions other than WASP were actively discriminated against at all levels of government and society.

      • Unamused says:

        Actually, Unamused, the U.S. was not founded on slavery.

        It’s in your Constitution.

      • Curious says:

        The only reference in it to slavery is when it was abolished.

      • Unamused says:

        The only reference in it to slavery is when it was abolished.

        Your congress is structured with an upper house, the Senate, as a compromise designed to protect the slave states, so as to induce them to join the union. An entire article of your Constitution is devoted to expanding the empire, also as an inducement to the slave states. Then there’s the 3/5 rule regarding slaves, later repealed.

        Antebellum Southern politicians contended for decades that the US was founded on slavery, so as to ensure the preservation and propagation of the peculiar institution. Go argue with them about it.

      • RagnarD says:

        ?? So it’s been the wonderful innovative pharmaceutical /and tech products from the command and control economies that have extended and enhanced everyone’s life on this planet?

        Complain about libertarians after we’ve have a few years on non trillion deficits, etc etal.

      • polecat says:

        This pandemic will be a scattershot event, in that ‘class’ will largely be irrelevant, (the virus doesn’t care threads one wears, whether it be a suit or levis… ) and differing by degree as each wave hits .. geographically.

        I wish you all my best.

    • timbers says:

      I’ve read that a fairly common view in Europe regarding U.S. healthcare system.

      It’s Americans who are possibly the most uninformed about how awful it compares to the rest of the world. Even countries like Vietnam and Costa Rica are starting to compare favorably to U.S. on that front.

      • MD says:

        It makes me laugh the most when I read them parroting lines such as ‘rationed state healthcare’ and ‘death panels’…totally unaware of course that it’s the US healthcare system which has these very facets, in the form of the private insurance middlemen who are at every turn trying to obstruct and deny treatment in order to maximize profits.

        The very definition of irony.

        • timbers says:

          I used to work at TopSource. It’s business was to pool/combine various grocery store chains to band together when purchasing supplies from vendors, using their volume to get the best price.

          A guy I worked who did the sourcing of the combined purchases and understood the obvious benefits of this. But when I attempted to explain how single payer is exactly what he does every day to be done to benefit you, me, all of us – of which he could clearly see the benefits of – he stubbornly would not concede the point, outright denied it.

          He clearly must have seen it, but wouldn’t admit it. He would say things like “but there are waiting lists in Canada.” I replied there was a permanent waiting list in the States of about 40 million, greater than the entire population of Canada.

          He refused to get it. He did get I know, but he wouldn’t admit it.

          Later he left and went to work for Google in California.

        • Corleone says:

          Never try to convince a man otherwise, when the ‘lie’ is his livelihood.

          Hamiltonian Democracy, USA is a Kleptocracy, where common criminals share the loot, and deny they’re stealing. Of course they lock up the victims and keep them out of sight.

          Everybody knows the entire US medical system is a criminal racket, where papa warren-buffet has created ‘collect premium, deny claims’ more effort is spent on denying claims, than any other part of the insurance racket, then the cash is invested in the stock market, this has been going on since 1950’s. So today guy’s like Buffet are richest men on earth, and the US Medical system does more harm than good.

          Then along comes a pandemic and brings the 100% fraudulent system to its knees. Time to go to the cuban model, where every child of IQ >120 if tested can become a doctor, where pharmacy’s on every corner dispense pills for $1/bag, where a doctor is as common as the cold.

          The entire USA system from AMA to big-phama is a criminal organization, backed by GOV ( Murder, Inc )

        • polecat says:

          I believe many of the ‘medical intermediaries’ will soon become Dis(sed)intermediaries as the medical daisy chains breakdown. Dead ones pay no bills ! .. and it appears that our so-called leadership can’t get their collective act together, in terms that are of any real benefit (as in eliminating predatory pricing, for just one instance) to the Body Plebian … even if it means nationalizing the medical establishment to that end. Let the For-profit medical insurance corpses, their brethren in Taj Mahospital, and the Pharma Ferengi, starve of oxygen !

          But that would take true leadership, with foresight, rather than unbridaled avarice …

        • SwissBrit says:


          I was in Cuba about 10 months ago and one of the people that I met was a lady selling crochet shawls in a market.
          She had been a medical student, studying to become a doctor, but had had to quit. She explained that she could not afford to study any longer as there are no bursaries or other financial aid of any kind for students; either your family supports you, or you support yourself (but with 100+ hour weeks of study/practical learning, you have no time to do so).
          She told us that each individual required approx. USD 200 per month to survive and that she was supporting her son, her younger sister and her mother, who all lived together. Her husband had left her so wasn’t helping in any way. She said that just their shared electricity bill was around USD 120 a month.
          She also told us that a doctor is a state worker, so earns a state salary, which is apparently flat across the board. If you’re a doctor, a nurse, a street sweeper, a police officer, whatever, if you’re employed by the state, you get the same salary, which she told us was about USD 140 per month.
          Not being able to afford to study is understandable; it happens in most other countries too, but when a part time job crocheting and selling your wares in a tourist market earns more than a medical doctor, there’s something seriously wrong with the system.
          If a government wished to do well for its people, investing in medical staff would be great.
          Pay for them to study, on the proviso that they work for the state medical system for a minimum set time frame, after which they can choose to go the private road if they wish.
          It’s a win-win; free education for gifted students (who may not otherwise be able to afford it) with a rosy future, and good healthcare supplied by the state at a minimal cost.

      • VintageVNvet says:

        These comments ignore the reality of ”free clinics” almost everywhere these days, now including free dental in some places. Most county Health Depts. I have seen last 20 years treat all comers, either free or very very low fee…
        Also ignored is the VA medical system that has done very well for my father in law, a vet of WW2 and Korea now 93 needing and getting full service care, as well as doing just fine for me so far. I did just cancel tomorrows non urgent appointment, but that solely my own choice.
        I preferred expertise of the 1970 era Free clinic in Berkeley over the also no cost to students Cowell hosp.

      • Canadian says:

        Most Europeans and my fellow Canadians are ignorant about the US.

        The US system is vastly superior for those responsible enough to have health insurance. The cost of federal tax plus health insurance is way lower in the USA than income tax alone is in Canada, and the quality of care is absolutely better.

        I love telling friends in Montreal and London that I can see my GP the same day if I want to, and visit a specialist without jumping through referral hoops. They always insist it is impossible to do so.

    • Winston says:

      16 MARCH 2020
      COVID-19 coronavirus: Top ten most-affected countries


      COVID-19 cases in Norway have crossed 1,200 making Norway one of the top ten most affected countries with coronavirus. With the addition of Norway, the number of European countries among the top ten reached six signifying how intensely the EU is affected by COVID-19.

      The Norwegian government announced a lock-down for 14 days and other measures such as banning public events, and closing schools and universities, restaurants and bars to arrest the coronavirus transmissions.

      Norway is the second country outside China to announce a nation-wide lock-down, following Italy. First death was reported in Norway on 12 March.

    • Raymond Rogers says:

      I’m curious as to why someone like yourself who seems to favor greater collectivist policies did not stay in California? I suppose Idaho needs to be brought to heel as well.

      I m originally from New York, with matching New York values. I moved to a state with less taxes and more freedom. I lost my serf status and became what is known as a “citizen”. I left my values behind. I figured being a locust was simply rude. It’s like going to a friend’s house and wrecking the place.

      If we didn’t have so many regulations in place, we might have a healthcare system that was competitive. And if these facilities were not forced by the federal and state governments to pay the bill for so many others, we might actually have a system that works.

      • Canadian says:

        Your “low tax state” is collectivist.

        Your taxes are low because the red state you live in is subsidized by productive blue states. It takes in significantly more federal dollars than it pays in taxes, allowing artificially low tax rates to prevail.

        You can tell that the rhetoric about collectivism is baloney when you see the absolute screams of rage that emanate from red states when the proposal is made to end subsidies and giveaways and make them pay their own way. Suddenly they all sing the Internationale and demand socialism.

        • IdahoPotato says:

          Correct. I love me all the pretty blue checks that come flowing into Idaho from California where I used to live.

          Many of the people I used to work with sit in a facility for small private businesses with subsidised rent funded by the Federal government and complain loudly about the government.

        • Raymond Rogers says:

          Productive blue states? You mean the financial centers that were allowed to gut the US economy, sending production overseas?

          You cant complain about the big businesses that are headquartered out of large liberal cities one moment, and then pretend they are great producers the next.

          Most of those Red States would be manufacturing powerhouses if the globalists who reside in NY, CA, and Ill didnt throw them under a bus.

          And that whole blue state production nonsense is a myth. It comes from a cherry-picked study.

          If California is so grand, why wouldn’t you go back? Just curious. I’m from NY, but Im not gonna pretend it’s a state I would ever live in again.

          There are fewer and few places for those who want to live with limited government to go. Colorado, Texas, Idaho, and Montana are filling up with people who flee high-tax and high cost areas (conditions these very people created), and then bring the same misery to the native populations of other states. Socialism is no different than any other religion- my response being the same- would you mind keeping it to yourself and stop insisting the rest of us adopt it.

          There are no serious political movements I am aware of in which conservatives are trying to turn blue states red. It’s called live and let live.

  2. IdahoPotato says:

    The Larry Kudlow optimism index is very high.

    “We have contained this. I won’t say airtight, but pretty close to airtight.”

    “The virus story is not going to last forever. To me, if you are an investor out there and you have a long-term point of view I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.”

  3. Iamafan says:

    I think Outright Coupon Purchases are done for the day.

    The Desk plans to purchase approximately $40.0 billion in Treasury purchases.

    Schedule for Monday, March 16, 2020 (all times ET)

    10:15 – 10:30 am: Treasury Coupons 0 to 2.25 year sector, for around $10 billion
    11:00 – 11:15 am: Treasury Coupons 2.25 to 4.5 year sector, for around $8 billion
    11:45 am – 12:00 pm: Treasury Coupons 4.5 to 7 year sector, for around $9 billion
    12:30 – 12:45 pm: Treasury Coupons 7 to 20 year sector, for around $5 billion
    1:15 – 1:30 pm: Treasury Coupons 20 to 30 year sector, for around $5 billion
    2:00 – 2:15 pm: TIPS 7.5 to 30 year sector, for around $3 billion

    Result:: Accepted: 40.004 billion; Submitted: 97.373 billion.

    Another overnight repo was done this afternoon. $19.400 billion. Interest rate 0.10%.
    Total repo today: $167.45 billion.

    Add the two together, you get $207.454 billion in one day.


    • MD says:

      Numbers so large it’s difficult for the human mind to comprehend. Shows how utterly broken the financial system is. All meaningless figures which will only increase as the system atrophies and consumes itself.

      No amount of NIRP, TARP, QE, repo alters (all of which appear to be nothing much more in reality than gifts to massively wealthy stockmarket speculators) the fact that if global supply chains are broken and people can’t get out to work or shop, it’s going to go belly-up.

      We are through the looking glass IMO.

  4. timbers says:

    Meanwhile, the Fed’s “liquidity” thingy is working out well. Umm, well say instead as planned…to that gambling casino called Wall Street:

    “WASHINGTON, March 16 (Reuters) – A group representing major U.S. airlines said the industry needs $50 billion in grants and loans to survive the dramatic falloff in travel demand from the coronavirus outbreak.

    In a letter made public on Monday, Airlines for America said members need $25 billion in grants and $25 billion in loans, while cargo carriers need $4 billion in grants and $4 billion in loans.”

    So, what’s the point of providing ZIRP, trillions in repo funding and QE for “liquidity” if the money doesn’t go to the economy or businesses that need it?

    • Social Nationalist says:

      Money printing and fiscal responsibility is a government matter.

    • MD says:

      Why should they have any of this money..? It’s either free market capitalism – or it isn’t.

      They should have been building a contingency fund, or investing in insurance, to cover one-off ‘exogenous’ events such as this, rather than using the money to pay stockholder dividends.

      How many of these airlines have implemented stock buyback programs? The same question stands as to why then they should get their begging bowl filled by state funds.

      Utterly ridiculous.

      • Gandalf says:

        This is Socialism for Corporations at work here.

        Anybody who claims that Socialism is Pure Evil usually means “except for the rich and corporations”

        That’s the way the political discourse has gotten twisted here in the US

      • Canadian says:

        They should be allowed to go bankrupt. Smarter businesses will buy the aircraft at pennies on the dollar and launch airlines that are efficient, well run, and that have better customer service to boot.

        • Robert says:

          This was Herbert Hoover’s attitude- it is highly defensible, but he was crucified for it. However, it led to FDR’s Big Government and $25 trillion in unpayable debt today. Instead of Truman’s “The Buck Stops Here,” the current slogan is “Money is no Object” (literally)
          On the subject of debt, you were very unfair to Ron and Rand Paul: nearly the last two Congressmen who believed in a balanced budget, a reduction in military spending and globalist footprint, and, both physicians, reverent in preserving life. Do not blame the MAGA excesses on them.

    • Lune says:

      All I have to say is, f*ck the airlines. They can go through bankruptcy like the rest of us. heck they’re experts at using BK to stiff their workers and raid their pension plans. Now they can use it for its actual legitimate purpose.

      I’d rather the $50bil is spent on small businesses that are forced to close due to quarantine, or parents forced to stay home to take care of kids who aren’t going to school anymore. They’re the ones who are really hurting.

      $50billion is higher than the book value of all the airlines combined. If we give them this handout, as I’m sure Trump and his “free market” Republican hypocrites will do, then we should just buy them outright, then resell them to the market once the epidemic is over. If we’re going to socialize the losses then we damn better socialize the gains too.

      Of course none of this will happen. Those private airlines whining about Middle Eastern and European airlines being subsidized will feed at the trough like the pigs they are, most of the money will disappear down share buybacks, their workers will still be fired, and we’ll still have shitty service except we’ll be $50bil poorer. Oh yeah, and in a month, Forbes will be on its knees fellating the CEOs as “heroes” for saving the industry. Of course no such service will be provided in the obituaries of the thousands of people who will be dead by then, if they’re recognized at all.

    • Beardawg says:

      Yup – bailouts are what is needed – for legitimate businesses (i.e. not banks).

    • rhodium says:

      Why not give the money to consumers and let businesses earn it from them by providing goods and services? You give money to a business and they may just sit on it and layoff their employees anyway if they don’t think there’s a market for their product/service. Then what do you have…

  5. Satya mardelli says:

    Focus on consumer sentiment, retail sales, non-farm payroll and unemployment rate. We live in a consumer-driven economy. This information will reveal a tipping point. If these four reports start deteriorating in unison then it’s time to head for the door.

    • Jdog says:

      If you are not already looking at that door in your rear view mirror, I am afraid it is way late…..

    • Social Nationalist says:

      Nonfarm payrolls are guessing. Replace with household employment and you may have something.

  6. Unamused says:

    The administration in the US is pursuing policies of aggressive austerity, so I guess you’re not all Keynesians now after all. SS cuts, Medicare cuts, food stamp cuts – the list is rather extensive. Militarised policing: ramping up.

    Americans generally get the kind of government they deserve. That should terrify you.

    • Jdog says:

      It does….

    • timbers says:

      True that, but don’t forget the other side did and/or tried to do the same thing when they were in the WH, and just recently even insisted on giving him more military than he asked for.

      It’s outside the duopoly one has to reach to get to intelligent solutions.

  7. Bobber says:

    Why can’t businesses in impacted industries temporarily shut down 75% of their capacity and tell employees to collect unemployment. That would help companies avoid restructurings and allow for transmission of already-approved federal stimulus to the right people. Employees could return to their same job after the unemployment period ends?

    • Frederick says:

      What if the “unemployment period” never ends ? Or gets worse

    • curiouscat says:

      Have you ever tried to live for a month on unemployment checks?

    • Lance Manly says:

      Unemployment compensation is a joke, the best thing we could do now it to raise to a point that someone could live with

    • Lisa_Hooker says:

      Yup, all you need is an unemployment check, a large refrigerator shipping box, and a flat spot under a large bridge to protect the box from rain.

  8. Jdog says:

    This appears to be a “perfect storm”. It begins in China, where the supply chain is disrupted, and shipping begins to grind to a halt. It spreads to Europe which was already sinking, and now it is shutting down the worlds largest market for goods and service the USA.

    Deflation will rock the world as debt implodes from default and assets are dumped into a non existent market.

    As incompetent lawmakers scramble to make headlines with idiotic proposals they scare business and property owners to death which will result in businesses proactively firing employees to prevent being trapped into paying benefits they cannot afford.

    Recessions happen as a result of economic imbalances.

    Depressions happen as a result of several economic calamities happening simultaneously and incompetent government actors making the situation infinitely worse as they create an assclown circus of stupidity closely resembling an episode of the 3 stooges.

  9. Unamused says:

    It’s Ugly

    Still to come: weird ugly.

    The US CDC is projecting the cov-19 crisis will escalate and eventually come under control by July, maybe August. Let’s assume they can come up with a couple of million test kits between now and then and that the administration’s proposed austerity measures will fail.

    Given way conditions are deteriorating, and the fact that lockdowns only began a few days ago, how much of the US economy and its social structures do you think will be left in four months?

    • timbers says:

      Is it just me, or does the lower the market goes, the lower our leader tells us is the largest allowed recommended gathering? Various deadlines today said 50, then 25, and now he says 10.

      Ironically, by his own standard (stock market), he is a failure now.

      By his own standard….

      • Escher says:

        Wonder if he will postpone the 2020 elections if the Dow doesn’t come back up by December.

    • Paulo says:


      Just to add to your point, when people go through stuff like this they never return to being the same, or living the same way. It changes people. I really struggled during the recession early ’80s. It made me a lifelong saver and a land owning prepper. People will not go back to the foolishness, imho. My parents were formed by the Great Depression, and passed it down to their family.

      The economy will never return to what a doof like Kudlow thinks is ‘normal’.

      • RD Blakeslee says:

        My experience mirrors yours, Paulo, as you know …

        • A/C in SD says:

          Same here, question is this, What’s a saver to do? I don’t play the market, have gotten basically no return on my funds in the bank for years. Recently I have been using Treasury Direct but now they have tanked too! Municipal Bonds used to be good but now the premiums are excessive. Guess I should join the indentured class. Sigh…………………..

      • Iamafan says:

        You don’t need the Great Depression. There are millions living in poor, third world countries, now. Just look at nearby Haiti or El Salvador, even Guatemala and Honduras. In the USA, the homeless.

        • Unamused says:

          For most of the world, and a lot of the US, it has always been a depression. The poor will always be with you because the rich will alway insist on it. In the US it’s federal policy.

        • TXRancher says:

          “The poor will always be with you because the rich will alway(s) insist on it. In the US it’s federal policy.”

          No it is in the bible that there will always be the poor.

    • Happy1 says:

      The administration’s proposed austerity measures will never be passed, the clear history on entitlements is that both parties continually increase them. Dem a little more then Repubs.

    • Lisa_Hooker says:

      The 1918 Spanish Flu took approximately 2 1/2 years to burn out.

      • SwissBrit says:

        Modern medicine may bring that timescale down somewhat, but only if it’s available to all.

  10. Social Nationalist says:

    The Fed needs to give up. Their asset swaps won’t work this time. This is like 1957 with the slowing of structural growth. Nothing will change it.

    fwiw, you will see consumer spending weakness with the big consumer purchases first. Then the stockers will crash this spring causing the entire segment to crash. Lets also note “elective” medical procedures like Dentistry will be down as well, consuming less.

    It won’t be until June things start returning to normal. The damage won’t fully heal itself until 2021 if that. 1958-59 ended up being a robust, but incomplete recovery that double dipped by 1960. I suspect the real debt bingers this cycle, subprime commercial banks start showing up like dead whales on the beach soon enough, probably by June. That means a permanent downturn, even after the snapback.

  11. IdahoPotato says:

    Mitt Romney’s now talking about $1000 checks to all Americans. When Andrew Yang suggested universal income, he was a crazy liberal.

    It looks as though capitalism only works in bull markets. When it turns into a bear, everyone becomes a socialist.

  12. ng says:

    Trumponomics in action

  13. Seneca's cliff says:

    It seems ironic and scary that for the last few years ,many in the economic and financial field have touted the dominance of the service sector as the key to the stability and resilience of our economy. But now mother nature delivers us a roundhouse punch that seems to almost specifically target the service industry.

  14. Pilgrim says:

    The Great Reset.
    S&P down 12% today. A few more days like this and I’m buying!

  15. Iamafan says:

    Let’s stop virtue signaling or being PC. Who cares about the governments money, we have no control of it anyway. Let’s talk about our OWN money.
    If this continues, I will watch depression history films.

    • HotTub Marmalade says:

      I recommend “The Grapes of Wrath.”

    • cesqy says:

      Netflix will be sending a reality film crew over to your house to film next week. They will be wearing surgical masks.

    • NoEasyDay says:


      >Let’s talk about our OWN money.

      It hasn’t been earning anything, but I still have my 401k intact.

  16. Amazing how fast we got there. This is going to hit the service industry really hard. People who have the least cushion, thank goodness we gave the banks enough money they can remain fully staffed and foreclose on homes, place credit card accounts in collection and charge overdraft fees.

    • Beardawg says:

      That is soo funny I am crying – but they are not really tears of laughter. :-(

    • Unamused says:

      Banks pride themselves on their customer service. Have you been serviced?

    • Curious says:

      I’m sure there will be moratorium on most legal events, like foreclosures and evictions. A number of counties, including Los Angeles and San Francisco, have already put a hold on those, along with most civil court cases and even utility cut-offs for non payment. A force majeure event like this changes all dynamics. Let’s hope we can reboot after this has passed, and not have to reformat society.

  17. Iamafan says:

    Bagehot: “lend freely, at a penalty rate, against good collateral.”

    Wise words.

  18. Escierto says:

    In my local supermarket in a nice area of San Antonio, there is no food left on the shelves. There is no restocking happening and it looks like a 1970s Soviet super market now. We may be nearing the point of complete breakdown and mass starvation. I may have to drive up to Canada as I am also a Canadian citizen.

    • Wolf Richter says:

      There is plenty of restocking going on at our supermarkets, but people wait in line in the morning and rush in to clear out the shelves. No one saw this panic-demand coming, and the orders all the way up the supply chain are not set up for this.

      Some commenters here have said that Walmart can keep its shelves reasonably well stocked.

      Also, I saw lots of fruit and veggies on the shelf. Plus meat and other things that spoil, and they’re getting restocked. So the fresh and healthy things seem to be plentiful, around here at least.

      • Iamafan says:

        Hoarding won’t last. People don’t have much money and when they see their credit cards, they will change their behavior.

        You can only eat so much and your use of toilet paper is limited.

        The ones who really rally can hoard are retailers so they can overprice.

        If you lived (or live) in a third world country, you know what I mean. Hoarding is normal there.

        • Gandalf says:

          A lot of the hoarding is from people hoping to resell these items at marked up prices. Like the guy in Tennessee with 17.700 bottles of Purell.

          So no, until they start shooting some of these hoarders as a lesson, no there is no limit to how much they can buy up

        • cesqy says:

          I don’t need no stinking TP. I have a used shower head and a hose and spent time in Asia.

        • Jdog says:

          In a month or so the stores will be deserted, people will have stocked up for months and need very little.

      • Happy1 says:

        Walmart in Denver suburbs picked clean of shelf stable items, but full of fresh produce today. They closed overnight to restock and still empty of shelf stables by noon.

      • jm says:

        Local chain grocery is sold out last two days in bread, toilet paper, gallon-size bottled water, and some pharmaceuticals. Water sell-out is really odd as this community recently got pipeline to Lake Michigan water, and rural homes not on that presumably have their own wells.
        How much bread can you hoard?

      • VeryAmused says:

        It is especially good to be in one of the wealthiest places on the planet when it all goes sideways.

        That is until the unwashed masses invade.

        I am sure it will not come to that.

      • Bygone says:

        Different story this week. Flyover small town walmart out of bread.

    • Andrei says:

      “looks like a 1970s Soviet super market”

      just curious – how do you know ? :)

      there were really no supermarkets in USSR that time, but the shops were full. Supermarkets and shortages came later.

  19. David H says:

    Jesus Tap-dancing Christ did anybody see the Vix hitting 82 (highest reading ever)? I wonder if the sell off accelerated into the close after the GS article that suggested we will see S&P 500 hit 2000.

    Wolf a more pressing question for me is this: do you think large sums of money – in cash – will still be safe at brokerage companies attached to the big banks ? Or are we approaching the time when we need to consider getting cash out (which is difficult) or buying physical gold or assets?

    • VeryAmused says:

      American banks have the backing of the worlds printing press and the scariest military the world has ever seen. No need to panic.

      If your money is in some other bank around the second or third world…worrying would not be out of the question.

    • cesqy says:

      I would take out anything over $250k or move it to another bank.

    • X-Pat DE says:

      Personally speaking I’m drawing down my bank “deposits”. If all this blows over, then I can put it back into the account, if things go sideways I won’t be kicking myself and unable to acecss “my” money (actually my unsecured loan to the bank).

    • Wolf Richter says:

      I’m not worried about FDIC-insured accounts that brokers offer via their own banks, as mine does, as long as you stay within the limits. In other words, the cash in my brokerage account is swept daily into an FDIC insured bank account. If your cash in your bank account exceeds FDIC limits, place it elsewhere.

  20. TimTimNiceButEverSoDim says:

    Are we at the stage where Dorothy meets the wizard in the emerald city….

    or just at the point of sitting down like Alice to the Madhatter’s teaparty?

    • Sydney Collin says:

      Maybe we’re in the scene of Monty Python’s “The Meaning of Life” where the grossly obese Mr. Market has just gorged himself, then proceeds to explode all over us.

  21. TimTimNiceButEverSoDim says:

    What does anyone think of what is happening now being perhaps akin to the panic of 1871?

    • Happy1 says:

      You are making me wish I was more of a student of history, don’t know that one.

    • Unamused says:

      What does anyone think of what is happening now being perhaps akin to the panic of 1871?

      There was a depression in 1871 dating from the panic of 1869, and another panic in 1873. The current meltdown was triggered by cov-19, which had no analogue in 1871 in the US. The panic of 1871 was largely based in Paris, and not in the US.

      Are we at the stage where Dorothy meets the wizard in the emerald city…

      No, you’re at the point where Bastian enters the City of Lost Emperors. But that is another story and shall be told another time.

  22. Saltcreep says:

    A recent revealing statistic from my tiny, but highly impacted corner of the pandemic here in Norway, paints a bleak picture unfolding in respect of employment going forward. The main private sector employer organisation asked private sector employers whether they are considering laying off staff as a result of the ongoing pandemic crisis.

    The answers received from 3 700 employers between 6th and 9th March showed that 26% said that they were considering it, whereas the answers received to the same question from 4 700 employers between 12th and 13th March resulted in 79% saying that they were considering it. That’s a pretty big change in perception over the course of less than a week…

    This will hit the unemployment statistics very hard pretty soon, I fear. And I suspect the situation is not dissimilar in many other countries.

    It was quite weird talking with clients of my own little company, sensing how everything went from fairly normal and ‘See you tomorrow’, to ‘See you in two or three months, maybe…’. Luckily for us not because they’ve dropped us yet, but just because both they and we are working from home. But what comes next, who knows..?

  23. TimTimNiceButEverSoDim says:

    Correction – Panic of 1873.

    • Unamused says:

      The panic of 1873 was triggered by a collapse in the railroad boom due to overinvestment, not a plague.

  24. Francesco says:

    I’m so sorry, I’ve american friends and the people I’ve met was always kind, but your country is the most unprepared except third world countries and UK (by choice of Boris J. aka Mengele reborn). I’ve just looked at images shot at Chicago International Airport and others, endless queues of people sticked together. Oh my God ! What are you doing ? Haven’t you seen what happened in Hubei first and in my country, Italy, now (350 deads just today) ? Here, all the country is locked down since 2 weeks and locally since 4 weeks, while people are moving freely in the US. I believe our government was late, but your is utterly incompetent and criminal. Now you’re so late that nothing could prevent the US a catastrophe much worst than anything you’ve seen since the spanish flu. You’re going to have many millions cases by end of May, but so many will be unrecorded because the health care system will collapse in many states well before. The market ? Who cares, it’s going to zero. Why ? Why ? Why ? God helps you, us and everybody else.

    • Shane says:


      Interesting perspective and I appreciate your insights. And unfortunately, I agree with you, for the most part. But, in defense of the U.S., we are geographically a huge country with 50 somewhat independent states and a population in the 100s of millions. Hard to turn this country to a new direction quickly. Also, Americans are useless at doing anything preemptively but formidable in reacting to a crisis, i.e. Pearl Harbor vs WWII. The serious worry is the intellectual defective in the White House. That guy’s incompetence could screw up our ability to react as well or as quickly. But I think the U.S. will be ok (relative to the rest of the world) as soon as we find our feet with this situation.

    • Unamused says:

      Oh darn. Now everybody’s going to know.

      • Jon says:

        What country are you from?

        • Unamused says:

          Over the hills and far away. You can’t get here from there.

        • Francesco says:

          I’m from Parma, Italy, very close to Lombardia the epicenter of this pandemic. In my town the situation is getting ugly but we will avoid the pain of Bergamo that was hit extremely hard. I would like to tell you that health care in the north of Italy is one of the best of the world, still if the number of cases are too high and too fast, it’s impossibile to ensure ICU for all. In Lombardia capacity is full, patients are sent in other regions where there is spare capacity left but of course those ICU beds were for the other serious patologies ! Also, in the other regions pandemic is relatively contained but we’re far to be in control and this being just a little late in containmente well before the other contries. Also, all death cases where COVID-19 was found are considered as caused by the virus. This is not correct, many dead people were very old and/or with other serious pathologies so I think death rare is over reported. What really matter is the availability of ICU beds because about 10% of the cases need forced ventilation. If an ICU is not immediately available the sick dies quicly. So, it’s not true that this virus is not really deadly, it is if and only if all goes perfectly, in casethe health care system is overwhelmed becomes SARS like. This pandemic must be contained as fast as possible, so that death rate remains around 2% (up to 20x seasonal flu) otherwise explodes higher up to 100x seasonal flu. Take care.

        • Unamused says:

          Emilia-Romagna is one of the wealthiest and most developed regions in Europe and one of the finest on the planet. La calma è la virtù dei forti, e chi la dura la vince. Be well Francesco.

        • Saltcreep says:

          You know, Francesco, I’ve long been inadequately and ineffectively low-level chirruping my own frustration in respect of my government and health authority for its long lasting inexplicable lack of real response. Of course I’m not upstanding or strong enough myself to really go about it in a meaningful way, so it takes better people than me to really get the message across.

          They’ve finally, albeit sluggishly started to shift belatedly into a bit more urgency and proactivity (though still woefully inadequate), even after your brave compatriots in the medical professions in Italy have for some time been shouting at us through various media channels to get our arses in gear in order to avoid their own fate.

          We can only hope it’s not too late to avoid the hell it must be for victims, for families and for medical staff to have to sit and let a selection model choose who is allowed to live and who gets to suffocate to death for lack of a respirator in a converted gymnasium or something!

    • mtnwoman says:

      I surely hope you’re estimates are way off.
      Sadly Americans are brain washed by the corporate media — the moderates with MSNBC, CNN, and the right with FOX, WSJ — and I wager they will STILL not go for Medicare For All after the dust finally settles here. They will STILL be waving their Blue and Red pompoms for their “teams” who are nothing more that massive corporate interests.
      Good luck to us all.

      • Francesco says:

        Estimates are not right or wrong, just estimates on incomplete data sets on a pandemic that in many countries is in the early stage. The trajectory is extremely dependent on containmente measures. A 4 weeks minimum strict social distancing program can stop the wide spread pandemic, plenty of ICU beds is the only way to reduce fatalities where cases will pile up. US has a neo malthusian health care system with a 3rd world number of beds and top notch ICU beds but they are concentrated in the wealthiest places in very expensive private clinics. Poorer states like Alabama or West Virgina are like Egypt. One of the greatest mistery on earth is why american people still tolerate to have an health care system that is 1,5 more expensive than in Switzerland while covering only a fraction of the population. I don’t want to mess up in the bad politics of other countries, we have enough here, but for me a country where there is not health care for all cannot be a civil country. Take care and scream loud about this intolerable condition.

      • Canadian says:

        Medicare for All has nothing to do with effective response. M4A is an ideological cause with no practical value.

        Having a monopoly on health payments maintained by an enormous and unaccountable federal bureaucracy won’t magically create more doctors, hospitals, ICUs, etc.

    • Saylor says:

      Lines at airports and places like Costco…, natural selection at work.

      • NewGuy says:

        Oh yea ? I bet Darwin would be most proud to see who runs out of toilet paper first.

    • Jon says:

      Thanks for the comments
      From the humanitarian perspective we should be fine.
      30k or so people die every year in USA because of normal flu.

  25. jm says:

    An interesting knock-on effect of this is likely to be an even greater shift to online retail from brick-and-mortar, impacting even more greatly the commercial real estate REITs, which I believe are leveraged.

  26. Unamused says:

    It’s very easy to cherry pick the problems the US has had.

    And easier all the time. Just shake the trees over a few blankets and dump them in the carts. It would take too long to pick them.

  27. Unamused says:

    I’m not your civics instructor, Jon. Isn’t there a middle school class you could audit somewhere?

  28. MCH says:

    It’s ok, Here is always the service sector to save us. All of those Starbucks workers, restaurant workers, you name it. Service will save the day.

    Oh, and remember all those highly skilled programming jobs belong in the service sector. We will be just fine. They can all work from home.

    Thank God we’ve transitioned away from that manufacturing economy.

    Nyuk nyuk nyuk

  29. Michael Gorback says:

    The tenor of this discussion says it all. Confusion and panic.

    Got lead?

  30. IdahoPotato says:

    Let’s see.

    People have been proclaiming loudly since 1814 that the U.S. is the “land of the free” and “home of the brave”. The “Star-Spangled” Banner, written by Francis Scott Key, refers in its third verse to “the hireling and slave”. Key, who was a slaveowner, referred to African Americans as “a distinct and inferior race of people.”

    The Fifteenth Amendment, passed in 1870, granted all U.S. citizens the right to vote regardless of race. Yet African Americans had to pay the poll tax and most couldn’t vote.

    Women couldn’t vote until 1920 and Native Americans weren’t considered U.S. citizens until the Snyder Act of 1924.

    • Gandalf says:

      Let just step in here and provide a little perspective.
      Every current modern industrial country has its Little Shop of Horrors and Dirty Laundry. And some with Huge Shops of Horrors.

      Germany? Ahem. I think we all know what happened there

      Japan? The rest of Asia is far more aware of its WWII horrors, millions dead in China, Indonesia, and other occupied countries

      Great Britain’s record of disruption and what amounted to enslavement of its Empire, is, again pretty much unknown to most Americans beyond the Boston Tea Party. If you are Irish, however, I’m pretty sure you know what happened there with the Potato Famine, and centuries of repression

      An interesting side note of history that I think speaks volumes for how India, the Jewel of the British Empire regarded its former master is that members of the Indian National Army, an anti-British army of a few hundred thousand, formed by Subhas Chandra Bose with assistance from Japan during WWII, all received veteran retirement benefits from the newly independent country of India post-war, whereas the MILLIONS of Indians who had fought with the British got nothing (from either India or Great Britain). Far far more Indians died fighting for Britain than Japan – Montgomery especially loved to send his Indian regiments into frontal suicidal attacks against the German lines

      China? A whole century of civil war, famine, corruption, more war, millions dead under Mao, and now suppression of the Uighurs, Tibet, etc.

      I could go on. Canada and Australia are not free of sin either, with their history of repression of their Inuit and Aboriginal peoples

      France? The whole Vietnam fiasco would not have happened without the French Empire

      Right, Europeans would like to think they are so clean and morally pure, but not really. Europeans just don’t know their own history any better than Americans

  31. Chinese Curse says:

    The collapse of biz in China, started long before January flu hysteria.

    I saw a slowdown in the fall, before Sep 2019

    Now a complete halt to chinese junk arriving at LA-Port’s

    What does it matter to have fiat, when there is nothing to buy?

    Just in Time, to starve; The monkey even if they have money, find the Walmart shelves empty of trinkets

    Reminds me of Bulgaria in the 1980’s, nothing but cat food on the shelves, just out of curiosity I bought one and opened it, foul no cat of mine would eat it, but I’m certain that its better than eating your neighbor

    • Bruce says:

      Anyone check out the Puts on Amazon? Even with a nice move UP today Puts are UP too………

      This was almost a PERFECT crash – most shorts (except for maybe Wolf) got busted out in January (think Tesla) and now this

      $1200 Puts on Amazon one month out should be like .50 cents. Instead they’re at $20 bucks

  32. Brant Lee says:

    Anyone know how many dollars have evaporated from the stock market thus far? The Dow will most likely fall below 20K tonight, a huge psychological level perhaps?

    Can’t wait until next months Auto Repo Report Wolf, talk about doozy’s.

  33. charlie says:

    I am unamused to Unamused’s contribution to this discussion and am awaiting an unamusing retort

  34. polecat says:

    I saw panic-demand in the future, as of 4 weeks ago. Once I saw what was goin down in Hubai (sp) Provence, I figured that powers-that-be would try to keep Toto from pulling that curtain. So now, it’s curtains .. for more that should have, otherwise lived, including all those wizards who waffled !

  35. lisa says:

    RE: Thomas Roberts-“The only way for the world to continue to push forward is with large mixed state economies, who will always be struggling with corruption, a divided populace, and short term vs long term thinking. But, there is a chance for success with large mixed state economies, large libertarian “fascist” countries will always fail.”

    nice summary.
    it just depends on when.

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