Collapse of the Labor Market in 5 Charts: Employment Plunged to 1999 Level. Everything’s a Gut-Wrenching Record

Tens of millions of people, many at the lower end of the income scale, lost their jobs. But stocks surge thanks to the Fed’s helicopter money for Wall Street & asset holders.

By Wolf Richter for WOLF STREET.

The total number of employed people collapsed by 22.3 million in April from March, the largest monthly drop in the history of the data series going back to 1948. This left only 133.4 million people still employed, the lowest level since June 1999. This is based on surveys of households by the Bureau of Labor Statistics and includes full-time, part-time, and gig workers:

Of these 22.3 million people who lost their jobs, there were 15.0 million who said they usually work full time and 7.4 million who work part time – in other words, one-third of the people who lost their jobs were those who normally work part time, and this includes part-time gig workers.

The number of part-time workers, including gig workers, who’d rather work full time nearly doubled to 10.9 million. This includes those who were full-time workers and then got their hours cut in April and people who were part-timers before but were looking for a full-time job.

Households also reported that about 18.1 million people who lost their jobs considered it a temporary layoff, while 2 million people considered the job loss permanent, with no prospect of being called back.

The number of unemployed people, based on household surveys, spiked by 15.9 million in April, the biggest monthly increase ever, to 23.1 million people, the largest number of unemployed ever:

The unemployment rate spiked over 10 percentage points in April from March, the largest monthly increase in the history of the data going back to 1948, to 14.7%, the highest unemployment rate ever in the data:

The Employment-Population Ratio collapsed by 8.7 percentage points in April from March, to 51.3%, the lowest ratio in the history of the data going back to 1948. This ratio, based on household surveys, shows the percentage of people who have jobs compared to the overall working-age population (16 years and older). It includes full-time, part-time, and gig workers.

What employers reported.

The above data was what households reported. Employers look at it from their point of view. And employers reported that they eliminated 20.5 million jobs in April, after having cut 870,000 jobs in March. This was the largest monthly job loss ever. Employment losses were spread across the industries, but hit some industries particularly hard, with leisure and hospitality at the top:

The service sector shed 17.16 million jobs, including:

  • 7.65 million in leisure and hospitality
  • 2.13 million in professional and business services
  • 2.11 million in retail
  • 2.09 million in health care and social assistance
  • 1.27 million in other services
  • 584,000 in transportation and warehousing.

The goods-producing sector shed 2.35 million jobs, including:

  • 1.33 million in manufacturing
  • 914,000 in construction
  • 50,000 in mining and logging

Governments shed 980,000 jobs.

And no, people didn’t suddenly make more money.

Interestingly – because it shows that the layoffs hit people on the lower end of the income scale harder than people up higher on the income scale – employers reported that average hourly earnings jumped by 4.6% in April from March, the biggest monthly jump ever, to $30.01 per hour, after shedding lower-income employees, including those in the leisure and hospitality sector, where pay is relatively low, and where employment plunged by the most:

The hope in this gut-wrenching scenario is that most of the people who lost their jobs will get their jobs back. But first, it’s still going to get worse because…

The data from households was collected in April, and the questions in the survey asked people whether they were employed or unemployed in the week between April 12th through April 18th. Since then, there have been many more layoffs, and layoffs are still being announced in May on a daily basis. So the total number of unemployed are going to balloon further in May.

Whatever the final tally will be at the peak, it will be previously unimaginable. Without doubt, a large number of people will be called back. But also, many will not be called back, and that will be the unemployment crisis that households and the overall economy will have to struggle with for years to come.

But stocks surged today, and have been surging for weeks, thanks to the Fed’s Helicopter Money for Wall Street and asset holders, now amounting to $2.4 trillion in seven weeks, a gift for those that hold assets, and those that hold the most assets got the biggest gifts, while tens of millions of Americans, many of them low-paid workers with few or no assets, lost their jobs. Read…  Fed Cuts QE Helicopter Money for Wall Street Further. Still Hasn’t Bought Junk Bonds or ETFs. Was Just Jawboning

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  312 comments for “Collapse of the Labor Market in 5 Charts: Employment Plunged to 1999 Level. Everything’s a Gut-Wrenching Record

  1. Millennial says:

    Bullish, stock should jump 10% on this news.

    • nick kelly says:

      I wonder if WR is tempted to short again. Good God, this market is nearing its peak valuation BEFORE the collapse of the economy, when it was just merely the most expensive since August 1929. Where do the bulls expect the Dow would be if there was no crisis, 50,000?

      • Wolf Richter says:

        nick kelly,

        Watch the helicopter money for Wall Street. If it runs dry, I’ll be more than tempted to short. But not before. No way that I’m going to short this current circus.

        • sunny129 says:

          By mid July we will clear picture of extent of unemployment, the continuing effects of the virus, after easing of lock down and the earnings of the 2nd qtr>

          Will just the low low price of capital, even NIRP, enough to continue the current multiples, without the justifying earning numbers? Voodo Economics without the consumers spending?

          Either the Mkt or the real economy on the ground is WRONG! Until then Dip buyers rule and Fed is the enabler!

        • Willy Winky says:

          Trillions of dollars of pension money is invested in the markets… so it’s not only Wall Street benefiting.

          Everyone right down the hobos on the streets of Sanfran are benefiting…

          Because if the markets collapse then they would be fighting for food in the dumpsters with millions of other people in a failed state.

        • Wolf Richter says:

          Nah, about half of Americans own no stocks and far more than half have no pension. Many people that do own stocks, only own small amounts. The people that own significant amounts of stocks are a small group.

        • Lance Manly says:

          Eventually helicopter money stops working, see Japan or the EU

        • This rally isn’t being animated by the Fed. The stock market is a hybrid of (globally driven) futures contracts and day trading. Important to know who is in control and why. For the Fed, market stability, without control, is a bigger problem. So far the promises haven’t been held to the test. Optimism on Wall st has no intrinsic value and they know it. The currency and the debt determines the outcome, and perhaps Federalist issues.

        • Lisa_Hooker says:

          “short circus” – I like that, having been an electronics engineer for a spell. I may use it in the future (perhaps even with an attribution). Thanks Wolf!

        • Wolf Richter says:

          Yeah, my pun didn’t come out quite right.

      • Reality says:

        Get it into your head. The house never loses.

        • suny129 says:

          It did lose in 2000 and 2008!
          It was dot com first and then the housing bust. this it is the 3rd largest ‘everything’ bubble with record DEBTS of all or any kind, world wide! European Banks almost insolvent. $ shortage in the EM mkts, Fx exchange and commerce.

          But, but this time, it is different, right?

          Btw: Has ANY Country in human history has prospered merely by spending debt on debt?

        • Willy Winky says:

          Wolf – for sure huge numbers of Americans do not participate in the markets…. but millions of ordinary Americans do own stocks (and bonds) because their pension funds have invested in them.

          There income is dependent on the stock market not imploding.

          e.g CalPERS has around $200 billion in equities, which make up around 50% of its overall portfolio. CalPERS Chief Investment Officer Ben Meng has expressed concern at meetings over the last year that CalPERS portfolio was very dependent on strong equity returns.

          If they lose their pension income then that would remove a massive chunk of spending power from the economy and that would impact everyone (it would be a huge recessionary force)

      • nick kelly says:

        Had a realization about this: there is no physical economic activity required for the trading of baseball cards, Bitcoin or stocks.

        BTW: great read on Oilprice. As you would expect it’s mostly about oil and gas and all the geo-political factors. One title: how a trader risked 70K and lost 9 million.
        The one relevant here is: Is the Tesla Bubble about to burst?

        The author began trading in the era and did so well that at the age of 21 he was sought after for advice by people 3 times his age.

        So we know how that ended but he does a great job of taking you through the names and the hotshot analysts who sold them. Goldman was calling for 200+ oil a year before it hit 37.
        Qualcomm had it all covered: lost 90%.
        He thinks Tesla ticks the boxes.

    • OutWest says:

      Oddly, a large major of health care professionals in my state are unemployed. Sitting home. Idol.

  2. Tim says:

    A population cannot be hammered like this without consequences.

    They are going to demand a new paradigm to meet their hopes and dreams.

    After they have defaulted on whatever debt they are not going to be able to pay between now and Christmas.

    God, this is turning into a bonfire.

    • Stephen says:

      Bonfire of the Vanities – vanities of so called scientists and the politicians who are willing to follow them to hell – and throw in the vanities of central bankers who think that as long as the very top tier is fed and watered, the rest of the beast will work just fine!

    • Joe in LA says:

      That would be nice, but I doubt much will change. There was a class war in America, but that war is over now. This is the moping up phase. JP Morgan, for example, has just committed almost a billion to scoop up more single-family homes. There will be no resistance to this, no Occupy Wall Street.

      It’s not written anywhere that America cannot go forward with same class structure as Mexico or Brazil.

      • Thomas Roberts says:

        Once the current economic system fails, then things will happen, what things are hard to guess.

        Right now, even after the lockdown ends, America will emerge in the midst of an economic recession/depression. Right now, it hasn’t caught up to most people, but it will. The big question is whether or not the fed can pull a 2008 a second time. Even if it can, it may only last a few years. The biggest issue is the baby boomers retiring, it will pull alot of people out of the workplace, while simultaneously turning alot of pension funds into net subtractors from stock markets and more.

        The general thought seems to be that the fed will basically, just buy up all of the boomers stocks at crazy high valuations, but, the problem is that unlike the previous bailouts, directly giving mass printed money to a large section of the general public will cause massive inflation. The previous money printed, was mostly just stockpiled and so with such a low money velocity, inflation didn’t skyrocket. The Fed may attempt it for some period of time, but, doing it for too long will endanger the US Dollar, and thus the Fed. I think the Fed will have enough self preservation, to not totally destroy the US Dollar.

        It’s also important to remember that as soon as people lose confidence in the stock market, people will pull out, as well as stop putting in.

        If everyone starts to lose their retirements, that might be big enough to cause large change, but we’ll see. For those pulling their money out of the stock market, the question will be, where to put it.

        • Memento mori says:

          I think we will trace the same steps as in the beginning of the century, pandemic of 1918, then small depression in 1920, lots of money injected by the Fed, the bubble inflated till 1929 and the WWII.
          We are currently at the pandemic level. All this money injected by the Fed will blow this bubble to unimaginable levels by 2030 when it will burst with devastating consequences, just in time for a hot war with China. Same as ever was.

        • Marc says:

          Market drop and high inflation. Wouldn’t that suggest TIPS as a good investment?

        • mtnwoman says:

          Yes. Out of market. But where to put the money?

          I think it might be time to put the savings into a basement renovation, then rent the space.

        • Tim says:

          It’ll probably be a bit more brideshead revisited.

          Those that lose, well, many won’t emerge from the confusion of how they did.

          It will have happened so swiftly, so completely, that the shock will bake itself into the them.

          Creating a feedback loop of bewilderment-anger-shame-bewilderment that they will never be able to stop holding to themselves.

        • Tim says:

          Those that are going to do well will have one characteristic in common.

          They will be the ones who can still keep moving, thinking, doing, no matter how dreadful their world is around them.

          It won’t be anymore complicated than that, for many.

        • Jdog says:

          The vast majority of baby boomers are already retired, and beginning to die off. There is no threat of inflation, because money is being destroyed faster than it is being loaned.

        • Wolf Richter says:


          Boomers are now between 55 and 75. The “vast majority” retired??? You gotta be kidding. Most of them cannot afford to retire. “Dying off”?? Well, a few are. But Boomers are a hardy folk and intend to stick around for a few more decades. So don’t get your hopes up prematurely.

      • timbers says:

        That’s why I’ve been hammering need for aid to states & local govt. They can’t compete against eternally bailed out & Fed subsidized JPMORGAN, Blackstone and similar fraudsters. Without Federal aid, real estate taxes will have to explode, driving middle class out of they homes so JPMorgan can scoop them up at fire sale prices. You’d think the liberations might see this, too, but them seem too closed in their approach, perhaps helping their own demise toward serfdom.

        • timbers says:


        • Cas127 says:

          “Without Federal aid, real estate taxes will have to explode, driving middle class out of they homes so JPMorgan can scoop them up at fire sale prices.”

          Federal aid = printed money = inflation soon or late.

          For all the latent inflation possible *if* the Fed actually prints money to bail out junk corporates (talked about a ton but zero actually done so far), the Fed can’t merely jawbone unlimited state/local tax revenue replacement…it would actually have to print the money.

          Both bailouts (if actually carried out on a widespread basis) are inflationary – DC has no real asset creation fairy buried in a basement somewhere…all it has is a printing press and and an endless line of bullsh*t.

          In all probability there is going to be (and already has been) some degree of state/local bailouts…but it won’t be as much as the states/localities want.

        • polecat says:

          There ain’t enough sheriffs/popo able to throw millions of steamed & pissed-off mokes outta their homes ..
          In fact, some of those same uh, “public service” folk will be out on their ear as well, when things Really go south !

        • Jdog says:

          Aid to States and local government is simply more of the moral hazard that got us in this situation to begin with.
          If you continue to reward people for doing the wrong things, they will continue doing the wrong things. Why is that so hard for people to understand?

      • Shawn says:

        Mexico, Brazil, only. Try the world. The whole world is either in this scenario or is getting there.

      • hidflect says:

        Yes, you’ve nailed it. When I travelled around SE Asia in the ’90’s, it occurred to me that it was more likely that the West would move towards the developing economy model than visa versa. Small islands of extreme wealth where the rents and salaries are as high as any major Western city ringed by a vast pool of impoverished labour squatting in the gloom awaiting the crook of the finger from the elite if some service is required that they can perform. It’s been like that for decades and there has been no revolution.

        • jon says:

          There has been no revolution but the quality of life for rich has gone down.
          They can’t go out without elaborate security, can’t roam or job with no security guards etc.
          Always live in the fear of getting kidnapped .. their loved ones as well

        • rhodium says:

          Sounds like a conservative paradise. Some of the poor are surely mad but others will just lay down and repeat to themselves “I am a good little peon. I am a good little peon.”

      • Karen says:

        Bingo. That’s the question: does the US wish to remain a democracy or not?

        That question should haunt those with wealth who think they can have it both ways. They cannot.

        You cannot have a democracy in which 90% of the public is immiserated for the benefit the few. Their self-regard will suffer as they consider their options.

        • Lisa_Hooker says:

          We need to remember that the Greek democracy was a slave-based economy.

    • Concerned American says:

      What the people need to do is demand that Washington stop catering to Wall Street by bailing out zombie companies and start providing support to Main Street. The gap between the “haves“ and the “have nots” gets bigger every year and is exacerbated by our elected representatives in Washington. Wall Street has already shown that a significant number of companies are not fiscally responsible. Last year’s tax cut and this year’s $2.7 trillion dollar bailout panders to the “haves”. I say throw the bums in Washington out.

      • otishertz says:

        Just like the comment above which referenced occupy wall street, a social media event that amounted to no change when all the children were told to go home nationwide on the same day and did – there will be no resistance.

        However, consumption patterns are going to change and this factor is bigger than faux resistance mediated by controlled social media. Asset deflation is bigger than debt creation at the moment.

        Jerome powell strategy 101: create a crater sized hole and fill it up with money.

        • otishertz says:

          JP Strategy 102: pay yourself and your bros billion$ to fill up the hole. After all, there’s no blame here. Nobody could have predicted the World govt would shut down everything on the advice of doctors.

        • polecat says:

          “What about this scenario labeled ‘Chicxulub’ Plan F, Jerome?? Waddathink? ..”
          “Yeah! .. Let’s try that! Might as well go out in a Big Way!

    • Jdog says:

      You have not seen anything yet. There is very little real suffering occurring presently. But there will be. Wait until the helicopter money runs out, the market crashes wiping out retirements, property values collapse, and government figures out it cannot fix this.

      This is a category 5 hurricane and most people are living in a tent.

      • Tim says:

        Or find a disused mine. Load up on supplies to keep you either warm or cool. Depending on said type of mine.

        And then actually live like a mushroom.

        Face it, it would only be physical representation of what we’ve all been doing for years…..

        • andy says:

          Will I need a canary in such mine? And will Amazon deliver its food?

        • FromKS says:

          A lot of mines have air quality problems and heavy metals in the water.

        • Lisa_Hooker says:

          When I held a corporate job for over a decade, after three decades of self-employment, I was a mushroom – they kept me in the dark and just piled shit on me.

    • phathalo says:

      hey! you lied.. that starts with “R” and ends with “!”

    • Octopus Garden says:

      Hopes and dreams? They’re going to demand a new paradigm for three squares and a hovel to live in. No such thing as hopes and dreams for years, if ever.

      It will be a weird techno-poverty, third world way of life.

  3. HD says:

    “because it shows that the layoffs hit people on the lower end of the income scale harder than people up higher on the income scale”

    Gut-wrenching indeed. What are these people to do?

    • Stephen says:

      Don’t worry. Coming to an upper middle class neighborhood soon. I am one of those ‘high end’ white collar worker, but I certainly know that if the state governors do not completely release people from lockdown, then we will not have an economy and all will eventually be laid off – federal workers last! Apparently, the idiot governors (like our FL governor) thinks the country can get by without an economy. Covid 19 will be the least of their worries as this thing grinds through the economy!!

    • VintageVNvet says:

      Good question HD. I think we can expect the ”food banks” and other similar non guv mint programs to expand tons,,, this would include The Salvation Army and similar that are working hard to fulfill their mandate in accordance with their plans for this kind of event,,, just one of the reasons we are huge supporters of that non guv organization.
      Other things people are going to do, again, or for some for the first time, will include ”squatting” in empty homes and apts, likely including many squatting in the home they may have occupied previously, perhaps for a long time… and that only if the forbearance policies now in place are not sufficiently lengthy.
      As a side note, but only slightly to the side, I expect to see more folks walking on the streets with lawn mowers, other such tools,,, window washing equipment, etc., as was common where I lived in the late 40s early 50s era,,, offering to mow, wash windows, etc., for any reasonable offer of cash…
      Actually been happening where I am in tpa bay area since we came back here in fall of 15, but nothing like the amount of folks in the earlier era, (that included me doing all of the above in summers, after delivering my am paper route) …
      And, of course, ‘pan handling’ (formerly known as begging) as has been going on since time began being counted, eh

      • MiTurn says:

        But the Salvation Army, among others, need donations and financial support to keep doing what they’re doing. Might get tight.

        • Yertrippin says:

          Don’t worry folks..

          You’ll get pie in the sky when you die.

          That’s a lie!

          I think the phonograph is skipping. Decades.

      • Implicit says:

        If they want to survive they’ll be signing up for Housing section 8 food stamps, early Social Security if possible, andor Social Security disability-it’s not hard to be crazy when your hungry and desperate.
        Also buy a nice set of pics

      • Frederick says:

        In 1982 after being laid off and just having bought a house getting married and becoming a father I was in this position myself Never bothered with Unemployment just went door to door looking for work and thank god I found some

        • rip says:

          This is not a 1982 economy. That approach does not work anymore.

        • Lisa_Hooker says:

          Frederick – did you have the proper required licensing and personal protective equipment and OSHA and EPA qualified equipment? Or, maybe not?

        • neplusultra says:

          lmao boomers are so out of touch

    • No Expert says:

      Have a look at how the third world ‘survives’. A video of a woman ‘cooking’ a rock to trick her kids there was food coming until they fall asleeep haunts me from yrs ago.

      • rip says:

        How about that picture of a hungry vulture behind the starving baby in Africa?

        • No Expert says:

          Terrifying glimpse of the future for many, humans are not a viable species.

      • Lisa_Hooker says:

        Then there were (are?) the mud “pies” people were making in Haiti a few years ago.

  4. Jon says:

    The stock market is going up and up !

    • andy says:

      Up and up and back where it was two years ago. Unless you like small caps and back to 2016.

  5. Phoenix_Ikki says:

    Yup, as I predicted last night, market up over 300 pts now and probably will close up 500 pts today. To my dismay and my frustration, I can kind of put the stock market MO playbook as simplified like below:

    Bad news = Good news because it’s either slightly less bad (hey 14% unemployment vs 20%, see not so bad cause we expected it anyway) or if it’s really bad enough, daddy Jerome will come swooping in anytime now..double win

    Good news = Excuse to rally up higher, companies withdraw guidance? good news cause then they are not setting up expectation for us to be disappointed, more buying please

    Neutral news = No news or not exciting news means everything kind of back to normal right? Rally up please

    Vaccine news = cure in 6 months right? Of course! You know what that means, rocket fuel up to the moon please

    I do love the narrative that market is forward thinking and how it priced in the downside already, well if that’s the case I can understand we hold near around March low and not rocket back up to have Nasdaq higher for the year. Makes no sense because the market price now reflect we will have enough higher earnings by Q3-Q4 IF go back to normal in a switch on manner (highly unlikely). Then again all these assumption might be a moot point anyway when FED gave you all the crack you can smoke in a lifetime in couple of weeks and promise more to come…

    How will all this end? Who knows but as much as I hate to admit, maybe the saying of market can stay irrational longer than you can stay solvent is likely true this time around. Just make a fundamental investor like myself feels like getting kick in the nuts over and over again and for regular joe that actually lost their jobs I am sure it feels like WS just keep punching them in the face with the utmost sense of callousness.
    That’s if regular joe even pay attention to the market instead of worrying about paying bills, meanwhile more yacht money give away for the top.

    • Just Some Random Guy says:

      Markets are up because the hysterics from March turned out to be untrue. Remember when CNBC and CNN were screaming about 30% unemployment? That drove markets down. Waaaaaay down. Now that it seems the worst we’ll see is mid double digits, stocks are slowly but surely moving back to pre ‘Rona hysteria levels. Today’s numbers are already ancient history since May brought with it a re-opening of the economy in the majority of the country. Next month UE will probably be under 10%.

      Nasdaq is already positive for 2020.

      • Tim says:

        I think your optimism may turn out to be icarean.

        • nick kelly says:

          I predict the one day plunge of 3K will be surpassed. Soon.
          We are in the Wiley Coyote phase, where he levitates until reality suddenly appears.
          Remember the name Dr. Bright. You will be hearing a lot more from this whistle blower about the attempts to push unproven drugs because the owners were politically connected, and politicians wanted a quick miraculous cure. That’s what this rally is largely based on: we have a cure and things will return to normal.

      • Cas127 says:

        And Russell 2000 is still down 25%.

        • andy says:

          Russell is not the economy. Do they sell ads like the top Trillion dollar companies? Didn’t think so.

        • Cas127 says:

          NASDAQ 100 (QQQ) ain’t the economy either…in fact, it ain’t even really 100…top 4 or 5 mega techs account for 40% of weighting (because based off market caps).

          Once people realize thin margins at Amazon can never justify 100 PEs…

          Or that Netflix streaming tech is avl to hundreds of competitors…

          Or that Google/Fbook can’t grow ad revenue faster than GDP for many more yrs given their current size…

          Or Tesla holders…stop huffing paint…

          The indices will fall a lot more.

        • MCH says:

          Cas… while I agree with the premise, I don’t think people are going to go out of their way to bet against FANGMAN.

      • VeryAmused says:

        Markets are up because the CBs of the world have once again pumped massive amount of debt in to the system and drove rates in to the ground. Markets have been up the last decade because the CBs of the world have created massive amounts of debt and drove rates in to the ground.

        All the CBs have are debt ridden zombie economies riding on a sea of debt. How this all comes crashing down is anyone’s guess.

        The ‘Rona was just the latest pin to prick the crazy.

        What will be the next pin?

      • Jdog says:

        Reminds me of the joke about the optimist falling off a sky scraper,
        he was heard to say as he passed the 20th floor , so far so good….

      • ru82 says:

        NASDAQ 100 top 6 companies make up almost 50% of the index. The top 10 make up 60%. Crazy

        • otishertz says:

          The top companies are all tied to the surveillance state and are all engaged in censorship, propaganda, and snitching. Thats a huge part of the e.Con-omy so of course stock markets are shooting up to Uranus.

      • Do you have a post or a YouTube vid because I don’t ever remember CNN or CNBC screaming about any 30% unemployment. As far as next month’s unemployment being under 10%; wanna bet? What drove the markets waaaaay down was mass layoffs and not CNN.

      • Candyman says:

        And why does anyone believe CNN cbc CBS or any major media outlet? Major misreporting.

      • Jdog says:

        Even the Secretary of Treasury says the real UE rate is about 25% and he is downplaying it……

    • timbers says:

      Or more to the point:

      Bad news = Stocks rally because Jerome does more QE.

      Good news = Stocks rally because Jerome does more QE/bailouts.

      Neutral news = Stocks rally because Jerome does more QE/bailouts.

      Vaccine news = Stocks rally because Jerome does more QE/bailouts

      Fill-in-the-blank news (MSM says Stock rally because reasons) = Stocks rally because Jerome does more QE/bailouts

      • Jdog says:

        I used to think that faith in the Fed had evolved into a religion.
        Now I realize it is closer to a cult. Soon to be a suicide cult…..

    • SuzeB says:

      I’m a regular Jane who tries to follow the market. But I will readily admit that although I try to understand, a lot of the issues discussed on this great site literally make my head spin.

      My question is: when do us regular Joes and Janes who are “of a certain age” (I’m turning 59 this year) get out of the market and put everything in cash? Or is that a good idea? I’m told “no one can time the market”. But everything I’m reading points to a bigger crash, potentially in the fall.

      I have significant savings in money market and “high yield” accounts earning between 1.4 and 2.0%. The 2.0% rate ends in July and who knows that it will be then. What happens if there are negative interest rates? You pay the banks to hold your money?

      Yet I do have mutual funds in both an IRA and one liquid account. I thought about “getting out” in January/February when the DOW was over 29,000 but I did not.

      The fear is being able to retire and have enough money to live on as a SWF, no children, renter, partially disabled but still working part time, living in a very expensive northeast city that begins with a “B” – I’m a native – where real estate (reportedly) just goes up, up and UP!

      So today the stock market is “up” but on Monday it may likely be “down”. What to do, what to do….?

      • Raging Texan says:


        There is no simple answer about what to invest in right now, and anyone who has pat answers such as “Buy this” or “Buy that” is a fool. Every kind of asset has pitfalls and nothing is truly safe.

        I would recommend you begin deeply studying and learning about what money is, what is leverage, and the principles of investing. I have read at least 20 or 30 books on the subject and still consider myself a beginner. But I finally charted out a course that works for me.

        One thing I like to ask people- if an investment such as the high yield savings you mentioned is earning 2% interest, and the money supply is expanding at 20% or more, as it is right now, is the investment making you richer or poorer?

        • sunny129 says:

          Even Warren Buffett is sitting this one out with Billions in cash unlike during GFC!

          Watch his favorite one stock mkt indicator – Mkt cap to GDP!

          It was 155% on Feb 19th, a record in history ( Normal 65-85%)
          Today may be around 140-145% , still higher than 2000!

          S&P is 2x rich with PE at around 20! All the future earnings+ growth has been brought forward!

          Now where is the further earnings and growth coming from, in the post corona world? A lot of hopium and wishful thinking at Wall St, in denial of reality.

        • Octopus Garden says:

          Money supply is expanding but the velocity is very low, so currently no inflation. I have nearly all my cash in the bank, Suze.

          I wish you luck and my best wishes to you.

      • cb says:

        Rule 1 Protect Principle

        A thought: consider moving

        • Cas127 says:

          “Consider moving”


          Usually the steps taken to *save* money are significantly more likely to work (less risky) than steps taken to “earn more” money.

          Nationwide monthly rent surveys by Zumper, Apartmentlist, etc. will help a lot in targeting (much) lower cost metros that might appeal to you (including better weather).

          Housing is a huge chunk of monthly expenses…anything that can reasonably be done to lower housing expenses is probably one of the best “investments” you could find.

        • SuzeB says:

          It’s funny. I had put this in my original post but removed it: “don’t tell me to move”. This is often the advice one receives on the internet when they mention living here in Beantown and when the topic is about financial security and the future.

          Born here, spent my life here, my now socially isolated partner is here, my entire family and my entire social network, my job is here, and I’m told to “move”, start over somewhere else alone at nearly age 60? Possible, sure but unlikely at least in the near future. I mentioned I was a saver, so don’t worry… :-) I’m actually doing quite well….not poor by any stretch. Cash rich and house poor. Rent is way below market. Have lived my life way beneath my means, preparing.

          Here’s the thing: I don’t want to work past age 62. Dear old dad retired at age 60 and died at age 69. Other friends have died in their 50’s. Life is obviously short and to loosely quote Hobbes, right now for many life is “solitary, poor, nasty, brutish and short.”

          Perhaps I should have said: is anyone else who is close to retirement age, and hopefully early retirement age, getting out of the stock market and going into cash pending the anticipated big ole “leg down”? I do appreciate your comments!

      • Petunia says:

        If I were you, I would have a very liquid emergency fund that would take me to early retirement, at minimum.

        • Dave Kunkel says:

          The problem with retiring before age 65 is medical insurance. You’ll have to pay an outrageous amount until you can get medicare at 65.

      • Jdog says:

        Just a word about reality. Investments have a perceived value. That means their value is based entirely on perception. Perception is not reality, and is subject to change, sometimes very substantial change.
        The only time the real value of an investment is realized is when it is sold, and the cash is in your hand. Until then it is subject to the whims of human emotions…..

        • sunny129 says:

          It is the VALUE of an asset for which you paid the PRICE!

          The VALUE is NOT apparent to buyer when the PRICE DISCOVERY is actively suppressed by Fed/CBers. All you are getting is their narrative of ‘strong’ economy, after record expansion of the Economy since March of ’09!

          Perception rules the day until the reality or the truth, burst through their ‘layers; of false narratives!
          It happened in 2000 and again in 2008. It will definitely happen again, soon or later.
          Meanwhile go ahead and play in the casinos. your money and your choice!

      • Tim says:

        Honestly, stop.

        If you panic, you’ll reach for the most comforting answer.

        Write down on a piece of paper what you’re most afraid of. Fold it over and out it in a drawer.

        Then go out and do something you enjoy tomorrow and don’t look at that piece of paper until Sunday.

        You might feel differently by then.

        • Gerrard White says:


          panic is not merely personal in this situation, it’s like the virus, spread everywhere, sometimes asymptomatic but everyone has caught it

          Thucydides reports from the Athens Plague 430 BC that once people are instilled with an even greater fear than the fear they have of the state then they will enter a panic about personal survival which will dissolve the conventional bases of the social order

          ”Neither the fear of the gods, nor laws of men, awed any man: not the former, because they concluded it was alike to worship or not worship, from seeing that alike they all perished: nor the latter, because no man expected that lives would last till he received punishment of his crimes by judgment”

      • Tim says:

        It doesn’t sound like you have not been able to make good choices before, so why should now be different?

      • roddy6667 says:

        You need to lower your expenses. the cost of a roof over your head is probably the biggest one. The cost of heating, cooling, and enabling the landlord to pay property taxes are major factors. If possible, relocate. It’s hard to control your income, but it’s much easier to adjust your cash outflow.

      • Old-school says:

        The smartest people in the world do not know what to do. It is going to be easy to make a big mistake for retail investors.

        I would say think about it in 3 buckets:

        Cash bucket for year 1
        CD’s for income next 14 years
        Mutual fund for growth for income beyond 15 years.

        That would be a 50/50 portfolio for a 30 year time horizon. That way if stocks go way down it is easier to sleep because you are not counting on that money for a long time.

        • MCH says:

          Or you could do a 25 equity, 25 gold, 25 real estate, 25 treasury. Then rebalance quarterly or annually.

          There is just no sure thing… because if you look at the above, then on the year, you would probably be about even now.

      • Endeavor says:

        Only invest what you can afford to lose. You need savings, not speculation.

      • Lisa_Hooker says:

        SuzeB – I have a similar situation with an account yielding 2.25% which ends in July. I am purchasing a small fireproof safe and will begin “depositing” currency in my own “bank.” When/if things turn around it’s easy to put it back into the system. You won’t lose much if the cash markets are yielding 0.1% and you will gain peace of mind that is priceless. Fewer 100’s and more 50’s and 20’s.

        • Lisa_Hooker says:

          SuzeB – Do not keep a safe in your home. Use a place of business, boat, summer cabin, RV, etc. If considering a safe deposit box remember that bank times of access are limited.

        • SuzeB says:

          Thank you, Lisa_H. I will definitely consider this option!

    • Tim says:

      On a different note,some good results coming out of initial trials into plasma infusion treatment for those admitted with COVID-19, but not yet at the point of admission to intensive care.

      Reducing intensive care admission rates.

      Oh so I hear from colleagues.

      That potentially opens up a ‘third way’ of effective treatment instead of waiting for a vaccine.

      Vaccines being a wonderful concept for infections like measles and diptheria, but for influenza and coronavirus’s that easily and rapidly mutate, less so.

      Could work more effectively for another reason. If identification of new strains can be matched by plasma sourcing ( and then, big if) manufacture, more adaptive approach to disease management could be developed.

      In an ideal situation this would lead to someone presenting to the ER with a dry cough and temperature. PCR or the other more effective tests being developed confirm COVID-19. Unit of virus matched plasma is prescribed and administered before the patient leaves the ED.

      Big it’s in all of that. But if it can be done at scale with blood for trauma patients, well, just saying..

      • Tim says:

        Big it’s in all of the above.

        But , if again, it is feasible then there’s a potential to reduce the need for wider society based restrictions.

        Obviously, will also depend upon the scale and quality of available healthcare services. Hmmm..

        • Tim says:

          Autocorrect intervening again – Big if’s!

        • c1ue says:

          The Chinese tried plasma infusion for critical – I may remember wrong, but it didn’t do much.
          The problem for nCOV critical patients is that they have other problems than the coronavirus at that point: it is no longer about the immune system fighting ncOV, it is pneumonia caused by invasion of other viruses, bacteria and even fungi due to nCOV breaching the lower respiratory tract, it is inflammation of alveoli induced by the immune reaction lowering lung capacity and it is sepsis causing organ failure.
          So what plasma transfusion is really good for is accelerating/priming immune systems to fight nCOV in its early stages.
          So who gets the “good stuff”? I see rich people paying premiums for it as being much more likely than any objective distribution system providing it to the most at-risk.
          So yet again, the problem isn’t the capability – the problem is the way health care operates in the US.

      • c1ue says:

        plasma infusion won’t matter even should they work.
        1 person can contribute enough plasma to infuse maybe 1 or 2 other people.
        Hardly scalable.

        • polecat says:

          And Gilead et. al. won’t lift a skeletal finger, cuz they won’t make bank .. unless those plasma donors are hookedup Matrix umbilicus-style, harvested 24/7 .. for Eternity !

        • Tim says:

          Well, yes. Obviously.

          Hence my point about blood provision for trauma patients.

          If mass donation of whole blood can be arranged, as it is now, why not blood donation for plasma extraction?

          Now, honestly, I’m not going to say that such an approach will be easy. We both most likely know plasma production is far less efficient than that of units of O negative . There are massive logistical, screening and delivery hurdles.

          But blood delivery still occurs, notwithstanding the issues that arise following HIV and others.

          And on a separate note, imagine the sense of dignity for those that participate (and political utility for candidates for office) of donation campaigns….?

          It can be done.

      • MCH says:

        For vaccines, remember, there might not be one. Don’t care about what the so called scientists promised, because they still don’t have one for SARS or MERS.

        Until they show something that works, all of it is nothing more than empty promises.

        Having said that, people cannot continued to be cooped up like prisoners in their own homes. I read this thing on SCMP a week or so ago about the experience of a US citizen (I think) bringing her kids back to China, Shanghai specifically, and what they went through for two weeks to be able to go outside. I think if that’s what it really takes, people might be willing to go for it to be sure of safety and security. But talk about a slippery slope.

        • roddy6667 says:

          Anybody that enters China now gets examined at the airport. If they have symptoms, they go by ambulance to a hospital. Everybody else goes to a designated hotel for 14 days. You do not leave your room. This has stopped over 1600 sick individuals from mixing with the general population so far. Most of the people entering the country now are Chinese citizens fleeing America and Europe. Things are almost back to normal here in Qingdao. Even Wuhan has zero sick people.
          I don’t think Americans can do what needs to be done.

        • MCH says:

          Yup, that is true, imagine people whose job it would be to go around taking temperatures in the US, they would be under fire from all side. Those in the south would get lynched, the ones going to the inner city are going to get robbed, it would never work.

          Too much freedom.

      • Cas127 says:

        One unfortunate trend – despite hundreds of drug candidates for treatment, the trials needed for approval (even where already existing drugs have long since passed adverse effect test phases) seem to be ramping up very, very slowly.

        I wonder if it has to do with test subject recruitment problems given the rather binary nature of C19 (80%+ very mild…to the point of being unaware of infection…with maybe 5% needing ICU level care…by which time ARDS may have kicked in, leading to separate intractable issues.).

        So the vast majority of C19 infected don’t want to risk a drug trial…while the 5% who would benefit the most…are often very sick with a related but separate condition triggered by the C19 (ARDS) by the time they know the risk/benefit of trialing.

        How do drug testers handle this problem with other infectious diseases that have widely binary outcomes?

      • Jdog says:

        Good news , I have always thought the answer to this lies in effective treatment. So long as people believe the doctor can fix them, their fear will dissipate.

        • Warnihazard says:

          Treacherous market, Suze. Maybe some annuities with a guaranteed payout?
          Ever more stimulus gets spent for less and less growth. It’s a trap. Really bad things are likely; when I can’t say.
          I trade so this is my kind of market but those without market skills are in a bad spot. I’m extremely concerned about them. Traditional methods of investing that ignore market cycles and catastrophe will eventually fail IMO.

      • MC01 says:

        Tim, ICU patients in Italy have been literally going down in a straight line over the past two weeks. In my Region alone they went down 16% yesterday.
        What mysterious cure have we found? None.

        The reason for this is the virus has changed its behavior: new cases are overwhelmingly mild in nature and don’t require hospitalization anymore. They are just ordered home for two weeks and tested several times at the end of that period to make sure they are virus free.
        How did these folks get sick if everybody wears masks and most people just stay at home? Epidemiologists know, but don’t say: I have noticed the highly detailed data are not available to the public since Monday when the lockdown ended. We are just told to wear facemasks, keep at least 7ft between us if we cannot (for example if jogging or doing hard manual labor), avoid gatherings etc.
        How do these people know they are sick? Most have a single symptom: loss of smell and taste. No abnormal body temperature, no dry cough, nothing else. Technically they are not considered asymptomatic but since the loss of taste and smell often lasts just a few days they are almost so.

        Sadly we still have plenty of people who have been hospitalized or even in the ICU for weeks now. The saddest part is that many long-term patients cannot be discharged even if they are virus-free because their health has now degraded to the point they haven’t got a whole lot to live: we will see a long tail of Covid-19-related deaths for many months to come. There’s obviously already a heated debate if these deaths should be counted as Covid-19 fatalities or not.

        Personally I believe at this point a vaccine has more to do with calming nerves than anything else. Governments all over the world (apart perhaps from France and India) seem to have realized at one point we’ll have to climb out of the hole we dug for ourselves and the vaccine is the perfect solution: it doesn’t need to be “perfect” because no vaccine is. When I had my lockjaw recall I was told there’s still “a statistically significant chance” I can contract the disease if I am exposed to the patogen. I love when attorneys write the user’s manual. ;-)

        Final comment: perhaps this thing will finally jumpstart virology. The big problem with virology, as my biochemistry text put it, is that is a “largely experimental science”. In short theory will only get you so far and that’s the reason there’s still no cure for the common cold and why flu shots seem to be hit or miss.
        Ebola is still out there and perhaps even the deadlier Marburg Virus and to be honest I haven’t got that long to live to waste my time going from lockdown to lockdown.

    • No Expert says:

      Same thing happened in 1937, recession eased and economy grew 4% so govt turned off tap thinking economy is improving – market crash, never recovered until 1941 dun dun dun. War is coming, I can smell it.

  6. gorbachev says:

    One of the things any of us with some cash flow can do is

    hire someone to do work around the house. It might

    have to be outside for now.Don’t forget to overpay them a little.There is

    and going to be a big need to pitch in .

    • Kevin Carhart says:

      And give them a ____ W2 if you have direction & control. Don’t repeat the sharing economy.

      • Lisa_Hooker says:

        And don’t forget to pay the State and local employer taxes, including unemployment, if you give them a W2.

  7. MF says:

    This just goes to show that we’re not all in this together. I’m sorry Wolf, but saying it doesn’t make it so.

    Hourly, temporary and gig workers are on their own. Wealthy oligarchs have a generous safety net.

    Governments everywhere shut everything down and then handed working people’s tax money to a bunch of people who don’t even pay taxes here.

    I’m dreading what they’ll dream up next when the tax streams dry up because they killed off the tax donkeys.

  8. polistra says:

    The headline “but stocks surge” is wrong. Should be “therefore stocks surge”. The stock market has been a Murder Meter for many years. It rides on an ever-growing pile of carcasses.

    • Kevin Carhart says:

      I agree with this. The perversity would hit people a little harder if it wasn’t masked out and shuffled. You read your pension ROI, and the pension ROI travels back, through line items on a Fidelity statement, back to Business A making the returns, back to their cost cutting measures or asset stripping that got them the boost (“therefore stocks surge”) and back to the human beings that those measures damaged or killed. You could say hi to your neighbor while your ROI depends on the airtight mercilessness of how Business A forecloses on them, lays them off, unionbusts them. But the audit trail is bundled up in a line item, so the bizarre irony stays under wraps.

    • Bead says:

      You can’t make any interest on savings. That’s your “therefore”

      Bonds don’t pay much for the risk, either.

  9. Max Power says:

    There was an article in the WSJ recently which calculated about half of folks on unemployment will earn more on it than they previously did while employed thanks to the no-questions-asked, qualify-if-you-can-fog-a-knife $600/week Federal bonus.

    Basically, people are ‘gonna have a very strong incentive to stay on unemployment for as long as they can.

    • Petunia says:

      The people “making more” on unemployment are getting a larger take home pay, but they are not making more money. They are not getting any SS credit, retirement match, or health benefits while unemployed. The extra money is the money that would have been deducted from their pay for benefits and retirement.

  10. BuySome says:

    However horrible, it is quite regular that shifts in technological fundamentals bring with them a massive displacement of jobs and workers. Many devious instruments and fake positionings build up during this period and then fall apart. Employment is often stimulated with little games…things like the GI Bill (1940’s) and student loans (1958-) can extract excess workers to reduce the pool while bringing about a new class of labor. Shit instruments and policies can be weeded out, but that’s often not enough. It may take a massive program to set this straight, and our biggest gap right now is targeted housing beyond the kind we have been building. I doubt that electronic toys are what we really need to get us out of this. We need something on the order of a DC-3 rather than more Curtiss Jenny barnstormers.

    • Petunia says:

      We need to get rid of the mega landlords before they displace the entire working class. Rent control is a start.

      • Cas127 says:

        If Habitat for Humanity can build homes for close to $100k while the median new home prices (ZIRP engorged due to monthly pmt effects) are $300k…maybe it is smarter to start a discount homebuilder using H4H techniques rather than imposing rent control…which does not add a single housing unit and which guts new home invt over time.

        • Petunia says:

          I specifically said mega landlords should be rent controlled. I don’t care if regular investors own a few houses. It’s the guys with 10,000 houses that need to be controlled.

          As a start I would recommend small investors be allowed to own up to a dozen homes without rent control. Anything over that or any in a corporate, trust, or business name be rent controlled.

        • Tim says:

          There’s people still living post-war prefab houses.

          Not the most efficient to keep heated, but heck, they are still far more appealing than low ceilinged new apartments.

      • andy says:

        Why are rents always highest in the rent-control places?

        • cas127 says:

          In fairness, you probably have chickens and eggs reversed…high rent prices create political pressure for rent control…(which really does little to lower prices, because it undercuts invt in new supply).

          In the end, either demand or supply have to change for prices to drop…just slapping price restraints on is only going create different negative distortions elsewhere (rotting housing in inventory, illegal subletting, illegal overcrowding, kickbacks to brokers split with owners illegally, etc).

        • Petunia says:

          Rents are high anywhere the local population has been priced out of housing either through non resident owners or through wage suppression.

          In Canada, foreigners have priced out locals. The same is true in major coastal cities in America.

        • Wolf Richter says:


          The other way around: in high rent places, people clamor for rent control.

        • Paulo says:


          Canada is a pretty big place, slightly larger than US. Rents across Canada are not priced out by foreigners. Specifically, Toronto (GTA) and Vancouver have felt the pressure of foreign ownership in rent and home prices, perhaps Victoria, but there are plenty of rentals elsewhere across a country this size. For example, we have one foreign couple living in my area, from Japan. They have leased the house for two years.

          Rent seems expensive to me, but the situation is that wages have not kept up to all costs. In a normal market a modest home mortgage payment + taxes is no more than rent. The renter always pays the taxes as it is blended in.


        • nick kelly says:

          The rooster thinks the sun comes up because he crows.

      • Jdog says:

        Rent control is a bad idea. Real bad….

    • WES says:


      I flew on ex-military cargo DC3s for the first 10 years of my life!

      The mining company my Father worked for used a fleet of DC3s to shuttle people and equipment between it’s three towns in northern Quebec/Labrador.

      We used to sit on the canvas fold down benches that ran lengthwise with our backs to the fuselage of the airplane’s body like paratroopers did. This sloped sideways seating arrangement felt strange compared to today’s forward facing level seating’s.

      Because the DC3 was not pressurized we didn’t fly very high so you could see the ground clearly if it wasn’t cloudy. Large yellow mining trucks looked like moving dinky toys!

      The ride on a DC3 was anything but smooth!

      Typically after travelling over land and then over water, the DC3 would suddenly fall hundreds of feet in the air as it got caught in in the riff between warm rising land air currents and falling colder air over water.

      After crossing a big lake, the opposite would happen as the DC3 jumped back up a few hundred feet in the air! That would leave your stomach stuck in your throat!

      This happened due to the DC3’s high lift wing configuration. Needless to say the constant rises and falls of the DC3 induced air sickness in those with weak stomachs! Holders with round ice cream sized containers lined the walls!

      I usually did O.K. since I was used to flying in float planes, like the Beaver, Otter, or Northmen. My Father controlled one of the largest private fleets of float planes with it’s own sea plane base and lake, in the 1950s-1960s.

      Another unique feature of flying in DC3s, was the strength of headwinds. If you were flying into strong headwinds, your flight time could last more than a hour longer, as your net ground speed could be less than 100 miles per hour! If you had a tail wind, your trip could end up being shorter than usual!

      So, yeah, I loved the CD3 and the unquie sound of it engines, my first airplane!

      • BuySome says:

        WES, great tales! BTW, while driving a back highway some 30 years ago, spotted one on a small field. Talking to the owner he had bought it from a defunct airline to use for his jump school. What he didn’t know was that it was the first war baby released to Pan Am for the South America-North Africa run. Boy was he thrilled with that news. I’ve still got one of the few seating charts he inherited from that prior owner.

      • Paulo says:


        Norseman, you meant to say.

        I have thousands of hours flying beavers and otters, a bit in a norseman and even some twin beech time.

        Were you around Red Lake or other parts of NW Ontario? Nice country and great fishing…except for the bugs. Did lots of mineral exploration flying in Yukon and NWT. It’s all kaput, though. Roads everywhere, now.

      • DawnsEarlyLight says:

        Great story!

  11. The thing I don’t get is that these meat packers are being ordered back to work, immigrants mostly, they are dying, so everyone can have pork chops for Sunday dinner.

    • Suzie Alcatrez says:

      Heaven forbid people eat vegetarian for a month.

      • and people in California being arrested because they can’t go the beach. I always thought the yellow vest thing in France was street theater.

        • polecat says:

          During a heat wave, no less!

          But the ass orted state reps and governors and high city poobas still * get * THEIR’$, right?

          Recompense for THEM.

          Stone Soup, with a few stale crumbs scattered about, for the lowly mokes.

        • MC01 says:

          Funny thing the Italian government decreed today that people can go to the beach… but only to take a bath, paddle a canoe and practice other “water sports”. No sunbathing or other forms of idling allowed. The issue on how to dry oneself after a bath has apparently not been addressed so citizens are invited to rush to their cars in their swimming trunks and dripping wet.
          The government won’t be held accountable for any damages to the interior of your car caused by saltwater.

      • Tim says:

        Yup, nothing wrong with a marmite and chips sandwich

    • Nicko2 says:

      An interesting conundrum….if the processing plants don’t open, farmers are forced to euthanize the pigs (by the tens of thousands).

      Lab grown meat can’t get here fast enough.

      • noname says:

        I’m delighted that one hog confinement near me doesn’t appear to be in operation. May many more follow suit. Horrifically disgusting pollution.

      • They were going to be euthanized anyway, Smithfield is one which considers workplace safety orders to only recommendations, owned by China, and your arteries are the real winner?

    • noname says:

      They and their living conditions are being blamed for the spread of Coronavirus. I guess administration members have never actually seen the inside of a processing plant?

      • polecat says:

        One sprained wrist or finger, and they’d make tracks !

      • noname says:

        self-selected name, candy***.

        why are you so obsessed with people’s identities? on mar 25 you called commenter “S” — “Satan”.

        you also said this to “Satan”, “So, hoping the shut down can be lifted by Easter is meant to give you hope and strength to forge onward. 330 million folks are listening, as is the world.”

        we listened. he was wrong. you are wrong. all your posts are in defense of him. get over yourself.

        bye, candy***!

    • Cas127 says:

      How many meat cutter deaths so far?

    • Jdog says:

      The food supply is a matter of national security. The same thing has happened in other industries in the past.
      If social order begins to break down over toilet paper, what do you think would happen when food shelves go empty?

      • ultra says:

        jdog: Meat can be replaced by soy protein and other vegetable proteins, especially when you consider the amount of soy products, corn, sorghum, and other vegetable products that these livestock consume. The result would be a huge surplus of these agricultural commodities that would be available for human consumption.

        • andy says:

          Caviar is also good source of protein.

        • Jdog says:

          Who wants to eat that crap? If you want to be a grass eater be my guest, but do not try to dictate to others what they should or can eat.

        • noname says:

          Who wants to eat that crap? If you want to be a grass eater be my guest, but do not try to dictate to others what they should or can eat.

          If you want it so bad, have an old-fashioned hog k/ill yourself. What gives you and the administration the right to dictate to people to slave away in unsafe conditions for your bacon?


          Again, I’d love to see certain persons in a packing house taking over the reins in this “national emergency”. All hands on deck?

      • Brant Lee says:

        Beef has already doubled in price at my local store. I noticed the price on one brisket was in triple digits.

        • Jdog says:

          The grocery stores are price gouging. The ranchers are getting less per pound than last year….

        • noname says:

          They’re getting less per pound because there had been less demand for some time before Coronavirus. Ask a livestock hauling company—demand is down. They’ll probably change their tune now though to get some dough from Uncle $ugar.

      • doug says:

        Bacon is not a national emergency, except that folks eat way too much of it.

  12. MiTurn says:

    Wolf, looking at those charts, it’s time to come up with an updated catch phrase. “Out the wazoo!” is not strong enough. I like “to infinity and beyond!”

    • R U Kiddin says:

      I like “Brace for Impact!”

      • Crazy Chester says:

        Just needs a velocity component.
        Maybe: “I’ll call you back”; “wow!”; “damn!”; “good lord!”; “holy shit!”; “help me!”; “you’re breaking up!”; “IEEEEEEEE!!!”.

    • Counterpointer says:

      Assume Crash Positions – that brings back memories of the GFC.

      Maybe I should run the numbers again on a new business in emigration consultancy. Maybe throw in bunkers too.


  13. Joe says:

    This is very terrible for everyone.
    The entertainment end of this is seeing the Toronto Mayor trying to get the Province to put into law of non evictions of businesses and to accept the federal government plan of the landlords must eat 25% of rents and the government will guarantee 50% from the government and the business only pays 25%.
    The landlords do not agree with this at all and do not want to comply with this government bailout deal.

    • Memento mori says:

      Sure enough, let’s pitch tenants against landlords.
      Since when should government abrogate private contracts?
      Why stop at landlords, mandate a 25% reduction at the price of groceries as well.
      How about a maximum 3% interest rate on credit cards?
      It’s always easy to order others to foot the bill. I have a better idea, how about government reduces taxes to 10% flat rate and restructure itself to live within the means?

      • Matt Belben says:

        The government should get involved in private contracts when it’s in the public interest to do so. Especially when the government had a hand in creating the environment in which these insane rents emerged in the first place, through zoning codes, parking minimums, height restrictions, environmental review panels, bans on ADUs and sublets and any number of other things. To say that they’ve turned all the land into a giant Monopoly board would be accurate were it not for the fact that in Monopoly you can upgrade a house into a hotel and justify it’s rent that way, rather than the house being locked under glass while assuming the price of a hotel though speculation, government subsidies, Ponzi dynamics and naked price gouging. There’s nothing sacred about the current market to prevent the government from intervening just as they did when they helped to create the market in the first place.

  14. timbers says:

    We’re in the middle of a health crisis, and still nothing done to fix America worst-in-the-world healthcare system with 40 million…PLUS tens of millions recently added to that, with no access to healthcare.


    The only crisis that exists in the eyes of our leaders, is when the stocks fall.

    Truly mind blowing. A towering testimony of utter incompetence and financial greed above all else on the part of our ruling elites, government, and corporate ruling class.

    Based on the stats over at worldometer, there can no doubt that America is King Of The Hill, A#1 in terms of absolute, bottom of the barrel, worst in the world performer against Covid.

    Because to American leaders, Covid is irrelevant. They simple do not care about Covid. At all.

    Which means to them healthcare is irrelevant, which is why they have not lifted a finger to fix it, because the only thing they care about is making the stocks go up.

    • Marc says:

      Actually, total numbers are meaningless, except for such propaganda. America’s death rate is lower than most.

      • Kurtismayfield says:

        America’s death rate to terrorism is non existent, and yet we spent two decades chasing that tiger’s tail.

      • timbers says:

        Actually, your propaganda is… propaganda. American death rates are amongst the worst of advanced nations.

        • Wolf Richter says:


          These countries have higher or far higher deaths per million pop than the US:
          San Marino

    • polecat says:

      Their personal stock portfolios are no doubt, to die for … when it’s Not Nancy, or Mitch taking a licking, right .. you dumb plebs !

    • Jdog says:

      Sorry but the facts do not support your position. Deaths per 1 mil population are much lower in the US than any European country touted as having superior free healthcare. We are seeing just how well the healthcare system works in all countries right now and the US is right at the top..

      • timbers says:

        Sorry but the facts are clear. American Life expectancy is among the lowest at twice the cost, and all fact based studies rate American healthcare at best middling at twice the cost.

        • Jdog says:

          Life expectancy has nothing to do with the healthcare system. It has to do with too much prosperity. Too much eating, drinking, and sitting. Americans indulge themselves to death. You cannot blame the healthcare system for that…..

        • VintageVNvet says:

          Gotta agree w de dog on this woody. Been pretty damn clear that we ‘murricans are killing ourselves as fast as we can shovel in the steaks and chops and wines and brewskis,,, not to mention the fentanyl and all the other legal and otherwise drugs…
          Read somewhere a while back that the fentanyl alone took 1.5 years or so off the average life expectancy…
          Meanwhile FWIW, once ya reach 75, your life expectancy goes to 86,,,
          I guess having gotten past the most sinful years, or some such,,, (and I keep trying, but am now apparently captured by the old saying, “He who drinks sleeps; he who sleeps does not sin; he does not sin goes to heaven; So, if you want to go to heaven, drink!)

      • roddy6667 says:

        A simple check with any search engine would show your statement to be false. The US mortality rate is waaaaaay down the list, and getting worse every year.

        • timbers says:

          A simple check with any search engine would show your statement to be false. U.S. life expectancy and medical outcomes is and has been rated amongst the very worst among advanced nations, yet at twice the cost, and or life expectancy to among the lowest.

          Facts are important. They really do matter.

      • Paulo says:


        Why then, is it 2.5X higher than Canada’s?

        “In March, Americans were dying from COVID-19 at a per-capita rate 3.6 times higher than that of Canadians. In the first half of April, it was 3.1 times. It was 1.7 times in the last half of April. In early May, death rates have been similar.”

        The death rates are close to the same now because of nursing home outbreaks in Quebec and Ontario. In my Province it is 17deaths per million, or about 20% of the US rate, but similar to Arkansas. It is just luck of the draw, sometimes. However, mitigation is all about leadership and….

        • Jdog says:

          There are more factors that just healthcare. It is obvious now that population density has a big effect on mortality. NY has almost half of all America’s fatalities because of NY City, and the population density. You see increased infection and mortality rates in any environment where people are using common facilities and are in close quarters. The US has the best health care in the world and I will take it any day over Canada’s system. That is why the wealthy travel to the US for their healthcare…

    • mtnwoman says:

      The 98% are absolutely on their own ($1200 one time payment –pfft!)

      The Federal govt/current Administration has no interest in curbing this pandemic, no interest in testing, no interest in getting supplies to HCW. They just don’t want to hear about it anymore or be bothered by it anymore.

      Total incompetence and /or callous disregard bordering on genocide.

      All they care about is enriching themselves, their pals, the well-off and a rosy stock market.

      Just read that India –India! — in 2 months became world leader in production of PPE. Here in the “greatest nation ever” after 8 weeks still can’t put isopropyl alcohol on the shelves.

      Good luck to us all.

      • Candyman says:

        I bet you have at least two bottles

      • MC01 says:

        India has been the world’s largest manufacturer of everything healthcare related for years now. very high quality and very professional firms. What’s really surprising is how fast China and Vietnam have caught up with them in just two months.

        The Indian pharma industry (I think it is still the largest in the world) has already ordered billions of dollars worth of raw materials for producing Covid-19 vaccines: as soon as one is cleared for use and the manufacturing agreements are worked out they will have not millions but billions of doses rolling out. They will make a fortune, the company that patented the vaccine will make a fortune and Volga-Dnepr will make a fortune shipping them all over the world.

        Also watch out Israeli healthcare companies: they are shipping stuff here by the planeload, and these are not facemasks and disposable gloves but highly sophisticated medical equipment, stuff worth millions and millions of dollars.
        According to my neighbor (who sells the stuff) most of this equipment will “never be used”, but it will have to be paid anyway.

        As I said before this crisis is producing endless misery but will also produce hundreds of new millionaires and billionaires.

  15. David Hall says:

    Starbucks reopened near me on Monday. People went in and out. Strip shopping center parking lots had parked cars again. There is more traffic on the roads.

    • timbers says:

      My recent new tenant makes deliveries for Starbucks.

      He mentioned to me yesterday that his deliveries were at 3, but this just increased back to 9 locations, the pre-Covid level.

      We both commented on the recent increase in care traffic.

      So based on this, you heard it here, just now, from me:

      Oil $100/barrell.

      Dow 45k.

      Then, the MSM will splain to us that the Dow rallied because Starbuck.

      QE and bailouts to the Moon will be erased from MSM memory banks.

  16. Rod says:

    “Whatever the final tally will be at the peak, it will be previously unimaginable. Without doubt, a large number of people will be called back. But also, many will not be called back, and that will be the unemployment crisis that households and the overall economy will have to struggle with for years to come.”

    Many will be called back if the lockdowns end. If they don’t more small and medium sized businesses will close for good.

    Those that won’t be called back will impact the economy more in the future because they won’t buy as much and will require Gov’t assistance to make ends meet.

    I still believe that shutting down the Global Economy for this particular virus was the wrong approach. What we see playing out now is what happens when you have a highly complex networked global economy. Knock one domino over and several more will topple over without touching them. It’s the knock on effect that will be brutal for the global economy going forward.

    • KPL says:

      “I still believe that shutting down the Global Economy for this particular virus was the wrong approach. ”

      Same here.

      I would have taken the Sweden route of not hyping it, locking down the vulnerable, banning big gatherings of 500+ and banned ALL INTERNATIONAL FLIGHTS the moment China cases jumped exponentially (who knows even that may have been late). Also I would tried to get makeshift hospitals ready wherever I can – stadium, exhibition halls open spaces etc. again like China.

      Here the advantages would have been:

      1. No fear
      2. Vulnerable protected
      3. Stopped spread
      4. Work as usual
      5. Ready for hospitalisation

      One country following this will not work. All countries should do it. That said, the damage is still going to be enormous “given highly complex networked global economy” and supply chains concentrated in China. But then the domestic travel and movement within the country would have not damaged the hospitality industry as much. Airlines would be toast.

      • Zantetsu says:

        Absolutely everything you said comes from a position of hindsight, where you already get to know who were the most valuable, in what areas the disease spread the most, what areas of the economy was most effected, etc.

        With a crystal ball everyone can come up with a great plan.

      • Wolf Richter says:


        Sure, as long as it is not your life that gets sacrificed for someone else’s stocks.

        Deaths per million:
        Sweden: 319
        US: 242

        Total deaths now in the US: 80,000 — if the US had the same deaths per capita as Sweden, there would have been an additional 25,000 deaths in the US for a total of 105,000.

        I know a Swedish family of four in Sweden. They all got it. The kids (teens) were only mildly sick. The husband was pretty badly hit for three weeks, but recovered. The wife got hit really bad, is still sick but getting better. Been over four weeks, still cannot breathe normally, etc. but didn’t go to the hospital. And those were lucky ones. Just because you don’t die doesn’t mean it’s not a terrible disease to get.

        • VintageVNvet says:

          Unfortunately Wolf, just by looking at the shapes of the curves of the daily “new cases” in various places in the world on the Johns Hopkins website it certainly appears almost everywhere except Italy, Spain, France, and perhaps other Europe areas have a long way, perhaps a long long way to go with this iteration of this virus.
          I feel sure that the ”lockdowns” have done some good flattening the curve in some places, esp. CA,,, but I also feel just as sure that those places will eventually catch up to the average, and I just hope that eventual average is not the 10+% of the worst areas of Europe; just a hope because of the really inconsistent measures.
          Another factor being widely discussed is the reporting of cases and especially deaths being falsified for political reasons everywhere; if so, that will also mean it’s a long way to Tipperary, and a longer way home, eh?
          OTOH, good news is stim paper cheque arrived ==More Liquidity == need larger WS mug!! Cheers!

      • Jdog says:

        Are you an epidemiologist? Do you spend your life studying the spread of disease and the implications?
        If not, then why do you feel people should listen to your opinion over the expertise of people who have studied this subject extensively for many years?

  17. Jeff Larsen says:

    I feel there is a profound and despicable disconnect between economic pursuits and fundamental morality been revealed to everybody right now. The cleft between people buying into ridiculous risk on the stock market because the Fed will backstop the whole system and the people who aren’t part of the passive-wealth equation (78 percent of households live paycheck to paycheck, pre-COVID-19) fuels a situation like never before seen in modern capitalism. This country is about to create a permanent underclass that should make people really evaluate what is the purpose of this republic in the first place.

    • Cas127 says:

      In the not very long run…the stock mkt “backstops” may turn out to be less than advertised (no actual Fed buys yet…and the Fed let hundreds of energy companies go BK post 2014…) and the mkts may look a lot more like the GDP ends up looking like.

      In the short term the mkt is a voting machine…in the long term it is a weighing machine.

      • WES says:


        That brings up the question of how much do Zombies weigh!

      • ultra says:

        The Federal Reserve backstops the investment markets by giving helicopter money to big banks and finance companies, who proceed to use this money to invest in stocks, real estate, and commodities, keeping their prices elevated. In this way, the “voting machine” of the market place has been rigged to favor investors over workers, causing ever greater economic inequality in the US.

    • Paulo says:

      Best comment of the day, Mr Larsen. I just want to add a change to “should make people really evaluate the purpose of this country (______________) in the first place”.

      Mega corporations have taken too much control, everywhere.

      My 100 year old recently passed away mother used to say, “There’s always money if someone at the top wants something. There’s always money then.” Our countries have enough resources to help individuals through this. I think the system is just being manipulated to step on all the ‘uppity’ working class members. Never waste a good crisis.

    • Double Bluff says:

      A firebrand like Huey Long might scare the heck out of Wall Street. Is that even politically possible any more? Of course he or she would also find an early grave no doubt.

    • sierra7 says:

      Jeff Larson:
      The “purpose” of this country has been as it was in the beginning:
      Kill all the opposition; make as much money as possible and on Sunday go to church and ask forgiveness for the evil you did all week. Then go out and do it again.
      That’s called “freedom”……..

  18. Nicko2 says:

    Countries with competent governments that follow the science are doing much better and will recover quicker than those that do not – Germany, China, South Korea, New Zealand, Canada…… vs. those who follow demagoguery, ie. USA, UK, Brazil, Mexico, Iran ect…

  19. Iapetus says:

    A 14.7% April unemployment rate seems suspect to me. If you divide the 30.31 million initial jobs claims over the six weeks ending April 30th by the 164.6 million people in the U.S. labor force, then you get a quick and dirty 18.4% unemployment rate. That’s before considering the pre-Coronavirus unemployment rate (net of the few job gains over this six week period). And according to Reuters:

    “Millions of U.S. residents were counted as employed in April despite having no job, suggesting April’s true unemployment rate was closer to 20%, much higher than the official 14.7% reported, the Labor Department said Friday.The jobless rate should have included people on temporary unpaid leave, furloughed because of the coronavirus pandemic, the government said.But responses to the survey by which the data was collected show 11.5 million people were categorized as employed but absent from work because of vacation, parental leave or other reasons, but including 8.1 million absent for “unspecified” reasons, a group that usually numbers about 620,000.”

    • Wolf Richter says:


      You’re using the wrong week (Apr 30 initial claims).

      READ THE ARTICLE!!! Here is what it said:

      “The data from households was collected in April, and the questions in the survey asked people whether they were employed or unemployed in the week between April 12th through April 18th.”

      So this is mid-April data. Mid-April, initial unemployment claims were 22 million. That’s about how many people reported here having lost their jobs. The link below is of the mid-April initial claims:

      • Iapetus says:

        I see. The April unemployment rate measures unemployment through mid April and not for the end of April. My mistake.

        • Iapetus says:

          If it measured unemployment through the end of April then I suspect the rate would be closer to 20%.

        • Wolf Richter says:

          Yes, I think that’s close. This stuff lags, and these layoffs came so fast. It may be the June report (early July) that will finally capture this whole mess. This just came with lightening speed.

  20. BuySome says:

    The main health crisis is the one for the ultimate rich. Most would like to stay alive in reasonable comfort. They love their countries too. They might soon come to an awareness of the dire situation and consider gifting most of their assets back to the treasuries if a proper plan is worked out on where to put the debts for payment over a long period in a just manner. There would have to be changes to protect everyone from the stupidity of political manipulations. They have seen what happens time and again to those who push the population to the extremes, and they do not want this again. Redistribution can be volunteered or forced. It is never completely fair, but it can be approached rationally. A bigger question is that of this whole tendency toward excessive spying and invasions of privacy that comes with social changes. It seems to get carried away with piss poor justification. We might need a standard based on “Mind your own godd*m business and my privacy is not part of your business!”

    • MonkeyBusiness says:

      The rich sent those good jobs away and somehow we are supposed to believe that “they love their countries too”. I mean what are they going to say later? “We are just kidding guys??”

      As someone said: “the rich is very different from you and I”. For one thing, the rich are less rac**t, after all marriages made in the boardroom are pretty much driven by money.

      • BuySome says:

        Those born rich are who Fitzgerald was referencing. (He also gave us an early warning about automobile dangers which no one seemed to listen to. As well as several other things he saw.) Yes, they do actually love their countries…but they don’t understand what they have done anymore than the small potatoes guys who are channeling funds. The people who have made so many bad decisions and given bad advice are another layer altogether. It was our own educational system that prepared them to make these stupid choices. As to the true new rich waking up soon enough, I’m not holding my breath on that so far…a long road ahead.

  21. otishertz says:

    As a lifelong business owner, my thought is that most small businesses can’t survive two months of no income, nor can most wage earners suffer a loss of three paychecks. If I had a business that was shut down by doctors I would preen my staff of all the problem people and as many desk jobs as possible without worrying about claims of wrongful termination.

    If I had an onerous lease I would likely parse my lease agreement and look for a force majeure type out. Point is the old normal was abnormal and we are not going back to that.

    The labor force participation rate is abysmal, its at 1970’s lows which was when women were entering, and later doubling, the work force. 3.5 % unemployment (gag, cough, laugh) is not coming back any time soon.

    What we have here is a change in mindset. Consumption patterns are going to change dramatically.

    • Anonymous Coward says:

      This is perhaps the most sane comment here. Things are NOT going back to the way they were. To claim that is delusional. They are probably not even going back to a facsimile of the way they were. This will take time to play out in the economy. It will take 3-6 months for reality to set in. Until then hopium to the moon. When hopium is all you got, you down the whole bottle.

      • MD says:

        The current relief rally in the stockmarket is predicated on looking forward to end of lockdown and the deluded belief that things will return to ‘normal’ (ie the state of detached debt-driven exuberance) within a very short time frame, despite the fact that consumers have been removed from activity above and beyond basic needs in their tens of millions.

        No new cars on lease for the newly-created 30 million+ Americans out of work, many of whom will come to realize their jobs aren’t coming back any time soon.

        But I guess it’s a no-lose bet because if – when – that doesn’t happen then the printing presses will be fire up again.

        • WES says:


          It will be interesting to find out the true extent between;

          those people who believe they have a job to go back to,

          and those businesses that believe they have permamently shed people.

      • polecat says:

        It’s ALL mirrors & smokium.

        Wait till the mirrors are shattered .. but that noxious fed fume lingers, having sickened multi-millions.

        Apesh!t – it’s what’s for dinner .. richies!

        • otishertz says:

          Seems like you’ve been staring into the same mirror as long as me.

          Who knows when sanity, prudence, and preparation will prevail.

        • polecat says:

          I’m toward the back end of the boomer crowd, and was always situated as a outlier re. pension, steady pay, ladder scrambling, investing etc. 2008 was an wake-up to just how conniving & dishonest the whole show was. Now, the entire curtain has been pulled back, revealing the total machinery of chicanery brought forth by BOTH legacy political party apparatchiks hand in hand with big Bidness, and big Banksta, towards all of us liliputians. They’re just trolling us at this point!

    • DR DOOM says:

      The wise know that the Carnage has not yet arrived.

    • Jdog says:

      The only thing I would add, is that all bushiness operates on a fairly thin profit margin. That profit margin is based on a certain volume of business.
      It does not take a prophet to see that business volume is likely to be quite a bit lower for most businesses going forward. This is going to require a lot of repricing going forward, and that is going to be a painful process.
      It is going to involve a lot of wealth being wiped off the books, and getting used to doing a lot more for a lot less.

    • Tim says:

      Yup. HR departments are going to use this to get rid of deadwood, definitely.

      Unionised labor is going to be quite firmly in the cross hairs. That is if they’ve any sense.

      • Paulo says:

        I think your statement is long after the fact. Not much union work left in the States. Hate unions? Try it and see how layoffs work in a negotiated system. A union member just has to do his/her job and not brown nose to stay employed. You think labour laws came about because employers want to provide days off and OT? And before you jump on me I used to work piecework and relished it because I busted ass. My record is 100 days straight of 10-12 hour days. I did this 3 years running, and is why I had a house paid for by age 30. A union job is sanity and allows respect to flourish on the shop floor. Just sayin’.

        • Jdog says:

          Paulo: Like you I worked piecework in my early years, although in my work they called it flat rate, but same concept, the more you get done the more you make.

          Later in life, I worked in a union shop, and in my experience the union shop was a haven for freeloaders. Production was a joke compared to a non union shop, and their was absolutely no incentive to produce. In fact if you did produce both your co workers and the union would harass you and accuse you of trying to make the others look bad. Unions are a great concept theoretically, they just don’t work in reality. Especially for government, just look at police unions, they literally allow cops to get away with murder.

        • Cas127 says:

          “Not much union work left in the States.”

          Except among government workers.

          Everyone should think about why that might be.

          And the consequences of it.

          Which tend to show that unions are more about insularity than solidarity.

    • RenterinNYC says:

      > What we have here is a change in mindset. Consumption patterns are going to change dramatically.

      In which ways? Where do you think household savings rate will stabilize?
      Household formation? Fertility rates?

      • Anonymous Coward says:

        >> What we have here is a change in mindset. Consumption patterns are going to change dramatically.

        >In which ways?

        Just think about what industries are most impacted from (1) changes in attitudes about social distancing including institutional crowd control measures; (2) expected longer-term border-health measures (quarantining) or “stranger danger”; (3) loss of stability & wealth within certain segments of the population (among lower 80% economic classes) will mean more saving, less spending … immediately.

        Start with the obvious and work your way out from there:

        – Airlines: on some delay, airfares will be going up up up, because air travel revenues will be staying down. Seat configurations will change. Far fewer business travelers & tourism. It will be harder to cross international borders.
        – Business travel: will be going down down down, now that distance meetings over video have proven so effective. See airlines.
        – Business leasing (office space): on some delay, will see greatly expanded investment in work-from-home and downsizing of office spaces. Immediately, guaranteed to be dramatic changes to the “open workspace” style configurations and in offices of every type.
        – Cruise ships (& places served by them): fncked … just fncked
        – Global tourism (& places that rely on it): fncked … just look at what is taking place with quarantine of tourists in Hawaii for a long-term perspective. The temporary measures will become semi-permanent.
        – Global hospitality industry: just fncked up and down!
        – Rental car industry: fncked due to change in corporate and tourist travel.
        – Automobile industry: fncked because fleet buyers are going to die and a flood of lightly used cars will simultaneously be entering the market, along with downsizing by households (WFH = less need for 2 car household, or simply to raise cash). Who will be buying a new car for the next 18 months? A lot less folks than did the past 18.
        – Restaurants: some will adapt & survive, many will not.
        – Movie theaters: mostly fncked, some will adapt & survive. Look for a revival of drive-in theaters.
        – Global festival industry (music, film, conferences): some will adapt (partially online) and survive, many will not.
        – Universities: fncked if they try to force students online. Why pay top dollar for an online education?

        I have no idea what percentage of the economy is contained by these various industries, but it’s not a small portion, and we’re only talking direct impact not secondary. Social attitudes have permanently changed, both due to the pandemic itself and the economic impact of preventing the spread. This toothpaste doesn’t go back into the tube as the optimists among us might hope.

        • Island teal says:

          Very well stated on all points. Only the Public Sector has not faced facts and done much to cut the spend. Continue to wave the flag of returning to normal. Completely out of touch with the”new normal”. ?

  22. andy says:

    Shouldn’t we count all the jobs the corporations created in India and other places. Higher profit margins, higher stocks to buyback.

    • Bead says:

      Inviting the rest of the world to the middle class! Altruism. It feels politically correct. What would university faculty say?

  23. A says:

    We’re back into the “bad news is good news” era where every bad news story will be met with free money from the federal government. Every middle class job lost will result in another dump of money into stocks.

  24. michael says:

    The chorus has begun to bailout state and local governments. The parties that caused this economic strife. they should starve.

  25. Wisdom Seeker says:

    Re “The fatality rate in the folks most affected, i.e., healthy young productive and reproductive, is on par with the flu, or lower.”

    You really ought to familiarize yourself with actual data at some point.

    COVID is 5-10x more fatal at all age levels than influenza. That’s why COVID is leading cause of death in USA in the past month, and influenza is a footnote way down the list.

  26. ru82 says:

    Another thing. Federal Tax receipts are going to be way down. As Amazon grabs market share from everyone, Amazon does not pay any tax on $300 billion in sales and $10 billion in Net Income. They put the money into R&D supposedly and can probably then spend it how they like.

    I took a look at Macys 10-k and their effective tax rate is 21%. I a guessing that is the case with Kohls, Best Buy…etc. So as Amazon gets bigger, the government gets less tax revenue. Even worse is that Amazon pays their warehouse workers less than they do Walmart. So I am guessing many are on Food Stamps and child care assistance…etc.

    • DeerInHeadlights says:

      Rule by kleptocracy

    • Cas127 says:

      “Amazon does not pay any tax on $300 billion in sales ”

      Untrue for a few years now…sales tax has been applied…and you do know that gross product revenue figure of $300 billion includes about 50% of which goes to thousands of 3rd party merchants that Amazon provides a front office website for…it isn’t revenue to Amazon.

      Let alone taxable profit.

      • Portia says:

        You’re saying they pay tax on what they already collect from customers, and honor the fee agreements they have with vendors. It’s really honest of them to actually pass it on, no? they should get a f*ckin medal.

        • Cas127 says:


          Actually what I was doing was correcting the errors and misleading impressions created by RU82, not lobbying to get Amazon a medal.

          If your hatred of Amazon is such that it leads you to make easily disproven statements…then you are a much less effective enemy of Amazon.

        • Portia says:

          Thank you for your clarification. I’m sure your check from Amazon is in the mail.

        • Sammy Iyer says:

          In India Govt has mandated that no re seller with out GST can sell in any online platform. Amazon has to with hold & remit 1% of the sales to GOVT quoting seller tax id. Seller on filing GST tax return monthly will see that credit & pay the balance GST (Goods & sevices tax similar to european vat). Under this system not a single $(I mean ₹) escapes the tax net. Amazon can not sell on its own in India. But They have formed 30/70% patnership with Indian co’s & abusing the system & sells all merchandise more cheaply .

      • Bead says:

        Sales tax is not federal tax. Original claim seemed to refer to Federal tax receipts.

        • Sammy Iyer says:

          you are right .Income tax (federal) is different from Sales Tax (GST more like a consumption tax) . By the way due to aggressive discounting expenses (aka building market share ), Amazon India made a loss of 25% of turn over . so no federal tax payable to Indian IRS !

    • WES says:


      Well, obviously Amazon is a more efficient tax model business than say B&M retail.

  27. Jdog says:

    You really need to study this subject and stop with the idiotic rhetoric.
    I guarantee you ANYONE can get extremely ill and die from this virus.
    Leave public healthcare policy to the medical experts, and if you really believe this is just the flu, your local hospital would love you to volunteer to help them….

  28. otishertz says:

    Parts of this dialouge are not minding the influence of population growth on the qouted statistics

  29. otishertz says:

    Went to Mt.Tabor with an old friend today. Had to park then hike a mile. People were everywhere flouting mask and distance orders, enjoying simple sunshine and a view, with groups of girls drinking beer taking highly animated selfies.

    • otishertz says:

      Hike a mile past the covid street closed barricades is what I meant to say.

  30. Tim says:

    And in different news…

    It seems that the Bank of England are actually referencing the collapse of the South Sea Company in1720 as relevant to current difficulties.


  31. Bobby Dents says:

    Actually, Stocks didn’t surge. Most of mean is driven by lack of diversity on the market and into sentiment. A market falling below 20000 again wouldn’t much. A point you miss.

    • Kasadour says:

      Wait until the Atlanta FED releases its Q22020 GDPNow report. According to a textbook definition, an economic depression occurs when a recession lasts two years or longer OR there is a 10% or greater decline in GDP in a single quarter. Morgan Stanley forecasts a 35%+ decline in GDP for Q22020.

      How are the grand viziers going to explain the disparity between a population languishing in unemployment, a GDP decline of 35% or more in a quarter, and a surging stock market with no economic justification whatsoever? I guess we’ll find out soon enough.

      • sunny129 says:

        ‘grand viziers going to explain’

        To whom are they accountable to? NONE!

      • Bead says:

        The solution is happy pills. Soma. People will be too debt distracted to put up much of a fight.

      • sierra7 says:

        October 2020 third Q will tell a much better (worse) story. Much of the “support” $$$$ will be expended; return to work under restrictions or not; 2nd Q report in my opinion too early (yet).

  32. Tim says:

    Oh well, cobber, there’s always a silver lining.

    If there’s less substance use, there is less money leaving the country for discrete fields in sunnier climes.

    Can’t but be good, hey?

  33. ultra says:

    At present, COVID-19 is killing 2,000 people in the US everyday. If this trend continues, that’s 60,000 people per month and 720,000 people per year! How many more people must sacrifice themselves in order to save a bloated and unsustainable economy?

  34. rip says:

    What I don’t understand is that with these absolutely horrific job losses, how my local Toyota dealership was able to sell down almost their whole fleet of Tacoma trucks. They had over 120 in stock, and with deferred payments, offers of 0% interest, and a $1,750 incentive from the manufacturer the inventory has dropped to a mere 26 trucks. Unreal. Who is buying these things?

    • sunny129 says:

      Top 10% or so who have more than 90% of Wall St wealth compared to bottom 90% who have barely 7%! This data is an open secret!

      There two economies – one for the top 10% and another for you and me!
      Go Figure!

      • Just Some Random Guy says:

        Sunny: So you’re saying only people in the top 10% buy Tacoma trucks? That’s an interesting take on the world.

        rip: I saw the same thing over the last 2 months shopping for a new trucks. Nit just Toyota, everyone. Dealers were as busy as ever, no deals to be had. Attitude was this is our price, take it or leave it. I finally took it.

        Who’s buying them? Normal people that’s who. There seem to be two realities. One is the MSM created reality where everyone is broke and about to starve to death. And then there’s the actual reality where people are living their lives, buying trucks, buying houses, buying RVs, and not succumbing to the hysterics.

        • Wolf Richter says:

          Just Some Random Guy,

          Your acting clueless — being able to pull it off is the sign of a true comedian — is superbly entertaining. But here are some actual numbers:

          Overall new-vehicle sales in April in the US plunged by 46.7% yoy.

          Trucks are doing better: Toyota sold 14,474 Tacomas in April, down only 29% from 20,375 April last year. ??????

    • tom says:

      I did not see a chart for how many politicians lost their jobs.
      Keep a close watch on those trucks. Could be your governor, mayor, county board member….monitoring social distancing.

      Remember…..STAY SAFE STAY HOME comrades

  35. Willy Winky says:

    Everyone benefits from a rising stock market

    In an interview with CNBC on Friday, White House economic czar Gary Cohn said that the main beneficiaries of a planned corporate-tax cut are workers.

    Touting the benefits of cutting the corporate-tax rate, he said it’s not just rich investors who stand to gain. He said pensions own most of the corporate stocks in the world, and when corporate profits and corporate stocks go up from a cut in the corporate tax rate, pensions funded by workers will reap the rewards.

    “Who owns equity in the world today?” Cohn asked during the interview. “The big pools of equity owners in the world today are the pension funds. The biggest public pension funds are the biggest owners of equity in the world.”

    He added: “They’re the policemen, they’re the firemen, they’re the teachers, they’re the civil servants of America today”

    • Wolf Richter says:

      Yes, Gary Cohn, former COO and president of Goldman Sachs, would say that, wouldn’t he? What’s good for Goldman Sachs is good for America!!!

      • BuySome says:

        I can tell you what this is. Some three decades ago I was looking into Kondratieff Cycles for a paper and came across Volker’s book. I raised the question of what if they were real but something else was in play. Starting in the late ’20’s and tracking events, I postulated that everytime the upcycle tendencies of the wave curve had played out and downcycle tendencies were in force, something would force the upcyle back in causing the wave to shift forward. (Not flattening, but being pushed out entirely.) Sure enough, each time the downcycle started again there would be another war, government program, tax change etc. to act as a booster and push the curve forward. It was repetitiously correct in targeting when the downcycle would return and when they would throw something at it again. At the time I left off (1992-3), I had noted another turn would start in the coming period and naturally another event or program would appear on the way down. But these interferences had cumulative strengths which were building toward a massive breaking point that required bigger event responses to overcome the downcycles…ie massive debt jumps. That jibberish is just another one if these magic carpets to fly upward…I doubt it comes close to enough this time. This is that some old wave which has never been allowed to crash down but the amplitude is huge…surfers beware!

        • Jdog says:

          Kondratieff Cycles are like technical charting, what you are basically looking at is human psychology, and behavior.
          Humans basically always react the same under certain circumstances.
          People who grow up during hard times develop their psychology base on their experiences of hard times. People who grow up in prosperous times develop their psychology based upon their experience of prosperity.
          It is the frugality and hard work learned during hard times that result in prosperity, and the recklessness and entitlement of prosperity that causes the downfall of prosperity and the new time of hardship and poverty.
          It is an endless cycle.

    • Karen says:

      Except that pensions are being raided by corporations who go bankrup and put the obligations onto the taxpayer via the PBGC. Who believes anymore than their private (or even public) pensions will be there when retirees need them?

    • rip says:

      This is that “trickle-down economics” nonsense that has been proven bunk. It’s “trickle-up poverty.”

      • sierra7 says:

        I have to repeat myself time and time again that the whole purpose of globalization was the wet dream of total destruction of organized labor in the Western countries and the imposition of the millions of horribly exploited labor on those same areas. And, it has been enormously successful. I saw this developing in the 1980’s on the West Coast (US) working for a major retail food corp. and being involved with organized labor….policies being carried out by second or third tier major American corporations’ affiliates in Latin America and those same companies attempting to break labor contracts where I worked. Almost all my co-workers and union affiliates thought I was around the bend but here we are.
        Thru corrupt politicians, corporations, major labor leaders and the quiescence and lack of historical knowledge of the rank and file (union or not) we are now slipping and sliding into “third world” existence.
        It’s a “Great Game” played by the global rich and you ain’t in it except as common “cannon fodder”.

  36. SocalJim says:

    American companines will be bringing their jobs back home from China. This is the next big US jobs creator and it is starting now. This will happen because America now realizes the pres was right and bringing jobs back is a national security issue. There will be lots of jobs but they will trigger a round of steady mid single digit inflation.

    • Anthony A. says:

      For manufacturing, it will take years to pull that off. Factories will have to be built/re-purposed, people trained, vendor supply chains established. It’s not going to happen quickly, or at all, if the Chinese have any say in the matter.

      And then customers will have to be found.

      • MonkeyBusiness says:

        Exactly this. Except the Chinese part, because what are they going to do? Wage war on us? America can only bring jobs home if all the above criterias are met, and American execs and shareholders are WILLING to take a paycut i.e. they have to finance this.

        Making our society great again involves sacrifices from everyone.

        Nah, I don’t see it happening.

        • SocalJim says:


          Stricter trade policy will make this happen … the shareholders and executives will have their hands tied. Watch what happens in the drug industry.

    • MC01 says:

      I strongly suggest looking into the industrial philosophy called “Lights Out”: very much like TPS it was pioneered by a Japanese company, in this case FANUC. It has been around for a while but it only started to make an impact over the past 4-5 years as industrial robots become cheaper, more reliable and much more capable.
      With Lights Out you will bring back the manufacturing capacity but not the jobs because, well, humans do not need to apply. Robots do not get tired, do not get sick, do not get angry and their output is throughly predictable.

      The US is already one of the cheapest places in the world to manufacture cloth, spun yarn etc because the US textile industry is one of the most heavily automated in the world: as soon as robots will be able to sew like humans expect the garnment industry to return to the US in mass.
      However not all States will be equally blessed: the “problem” with Lights Out is there are no workers to fire if I want to move my factory to a State that will give me big tax credits or other benefits. Just put the robots in their crates, put the crates on a lorry and take them away.
      Local politicians won’t even understand what happened.

      With the present disruption in supply chains around the world I fully expect Lights Out to become more and more palatable to manufacturers, and investments in robotics are bound to skyrocket. Robots don’t spread diseases and don’t get sick: there’s no reason to stop them so they are the most palatable workers right.

      • Anthony A. says:

        The trouble with industrial robots (I had a few in my plant) is that they need engineers to program them, keep them running, fix “glitches”, and they do break down occasionally. Plus, not all jobs are suited for this kind of mechanization. Anything, of a custom nature is not easily mechanized. Repetitive operations are generally well suited for robot application.

        The Gillette plant in Boston (built in 1904) is an amazing manufacturing facility. I toured it several years ago. It can make a hand use razor system,completed in packaging for retail, without human hands touching the process once the base stock(s) is loaded. But, this plant still employees 1,300 people, many of them technical and engineers. These products fit robot application, but not many do.

    • First they bring us the Chinese virus, then China’s wages, and then China’s politics. What ever happened to exporting American values around the world? Pres gets the single digit.

      • MonkeyBusiness says:

        You need to be very specific when you say exporting “American values”. If you are referring to Hollywood, then yeah, Hollywood movies are still dominant everywhere.

        Made in China was Made in America. Nixon started the process. And then your neighbors exported those jobs overseas. Then came along Private Equity, the scourge of all retail businesses, hospitals, etc. We exported that too.

        And then there’s social media where as Ricky Gervais said, you can now read all of the world’s toilet walls.

        From where I am sitting, American values dominate the world. And I am not being sarcastic. We’ve been winning for so long, it’s hard to see when it will stop.

        • I am old enough to remember when expanded trade status with China was to be based on progress in “human rights”. The issue is not whether we achieved that goal, which was hubristic. We failed, and we drove American businesses out subsidizing products made in a nation with anti-American values, especially labor.

        • MonkeyBusiness says:

          The Brits outsourced their production to us at the beginning of the last century. Did it automatically lead to progress in human rights and the middle class? Not really. Otherwise we wouldn’t be reading Upton Sinclair’s The Jungle.

          Also read the following:

          The middle class and “American values” came out of Roosevelt’s New Deal and WWII. It might be a one time thing.

    • Jdog says:

      I doubt it. They may relocate some manufacturing away from China, but they will simply find other low cost labor countries to exploit.
      Corporations will continue to offshore so long as it is profitable to do so.
      The only way that will change is by changing trade agreements to nullify the profitability of offshoring. Seeing how the big corporations have every politician in Washington bought and paid for, I do not anticipate any change in the trade agreements… ever.

  37. mtnwoman says:

    Stephanie Kelton, MMT economist:

    “I think most of the people I talk to are far too optimistic about what lies ahead. When asked, “What do you think is going to happen?” I say, “What‘s your worst case scenario for the next 3 years?” Then I say, “Double it, and you have my best case scenario.

    Unless we get a MUCH better policy response and unexpectedly rapid breakthroughs in treatment/vaccine.”

  38. Agnes says:

    The graphs look like NNTaleb’s graph of contented Turkey meets Thanksgiving.

  39. Just Some Random Guy says:

    Disneyland China is re-opening Monday. And tickets are already sold out. Same will happen here. There is pent up demand, there, here, everywhere for normalcy. As soon as places like Disneyworld, Six Flags, etc open back up here, they will be packed as usual.

    • Wolf Richter says:

      Just Some Random Guy,

      You’re hilarious with your twisted unwitting humor and your constant forgetting to mention the most important things. Like a true comedian. So entertaining…

      So for our dear readers who may not get your sense of humor about Shanghai Disneyland being sold out: Disney CEO Bob Chapek said that to provide social distancing, Shanghai Disneyland will operate at 30% of its capacity. At 30% of capacity means 70% down from normal ?????

      • MonkeyBusiness says:


        The South Koreans opened up and had to promptly close entertainment districts in Seoul AGAIN after they detected a new cluster coming from those areas. Yikes.

        Also the Chinese opened up movie theaters, and now they are shuttered again.

        30% capacity at Disneyland is a Godsend for people who can get tickets though. Not sure if Wolf ever visited Tokyo’s Disneyland and Seaworld. The lines were OMG. I would NEVER visit those places again at full capacity.

        • Cookdoggie says:

          The 30% limit is only part of it. EACH ride will run ONLY with members from the same household. So the lines will probably be even worse than at full capacity. Honestly, why bother even opening under those conditions.

  40. Just Some Random Guy says:

    Anecdote from the real estate world:

    My wife’s friend lives just outside Salt Lake City and is moving to Reno with her family. They put up their house for sale this week and have had non-stop showings from the second it was listed.

    Like on all other fronts, the predicted real estate crash is not happening.

    • Wolf Richter says:

      Hilarious, my wife’s friend said that they put up their house for sale and 6,000 people were fighting over it….

      OK, some data: In San Francisco — this data comes from Compass — closed sales in April collapsed by 60% from a year ago.

      In a day or two I will do an article on the San Francisco North Bay, including Marin, Sonoma, Napa, and Solano counties with similar results.


    • Tom20 says:

      Out here in flyover, we are busy. We will keep the machinery running
      M-S until the slow down hits. Shocked at the amount of new construction we are doing. I will admit it is a very high % urban people wanting to go rural. The rural counties that took the grant money to get fiber down every road will benefit greatly from the wuhan flight.

      I have no doubt the slow down will hit, and be a hard one. Mill guys tell me wood flooring prices and demand are tanking.

      No inventory on existing homes for sale. Friends daughter…against my advice of sitting on the sidelines…put a offer of 10k above asking.
      Got beat by another @ 30k over ….asking was @ 135k.

      Crazy times.

  41. Phil says:

    Hi Wolf,

    Is there a way to chart this out for the effect on the developed economy, and the total economy using actual data? I think the IMF had some pretty staggering assumptions a few weeks ago. If I recall it was something like over 1 billion people could be affected by this. I think it would be interesting to see how both developed and total economy start recovering from this.


  42. joe2 says:

    Well here we are. Busted economy and nothing to show for it. I predicted this before and said the Swedish model was more reasonable than the totalitarian US democrat governor model.
    When 66% of the NY cases are for stay at homes and nursing homes, you know staying at home doesn’t work.

    But hey, it accomplished what it was designed for. Are you not afraid enough yet?

    • Wolf Richter says:

      Deaths per million:
      Sweden: 319
      US: 242

      Total deaths now in the US: 80,000 — if the US had the same deaths per capita as Sweden, there would have been an additional 25,000 deaths in the US for a total do 105,000. And this is just the beginning, as Sweden is finding out.

      • MonkeyBusiness says:

        The Swedish model will be MORE “successful” in the long run IFF herd immunity can be built. There’s no evidence of this whatsoever i.e. there’s studies showing that the level of antibodies in recovered patients are low i.e. they can get it again.

        Also studies have shown that people’s internal organs can be affected. “Look ma, I am alive but my kidneys are shot” is not something to shout from the rooftops.

  43. joe2 says:

    BTW Wolf, I changed my name to joe2 since I saw there was another joe.

  44. HT Manning says:

    Dr. Frankenstein, we need more juice!

  45. B Wilds says:

    The ramifications resulting from this surge in unemployment have not yet been fully internalized, this is a huge deal. We are looking at more than 33 million unemployed, or a real unemployment rate of 20.6%.

    This massive unemployment surge poses a huge cultural and financial shock that cannot be ignored. A big part of this problem is that we have no idea how long these people will remain without jobs.

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