The Democrats are blocking the re-opening of the economy and the Republicans are blocking a middle class bailout. Both sides are doing their part to make this the biggest clusterfuck in world history. In today's Idiocracy, maintaining appearances is a full time job.
Another Thursday, another 4+ million jobless claims. Dow up 200 at the open. Good news all around - more free money:
These bailouts are NOT reaching down to the people who ACTUALLY need them. The U.S. now has a massive proportion of its working class who are living on a marginal basis in the shadow economy, where they can be usefully exploited sans regulation. Gig workers, part-time, minimum wage, and small business owners who are living on a subsistence basis. These people have ZERO social safety net. So for them, shutdown is tantamount to starvation. However you wouldn't know that by listening to CNN. We are constantly being told that the responsible thing to do is shelter in place. There isn't one yuppy in the liberal media who would be ok with this shutdown if they couldn't feed their own families. However, as usual, the toll of this economic shutdown is falling on those who have no voice in this society.
This was the news yesterday:
"In projections released Tuesday, the UN’s World Food Programme (WFP) predicted that the number of people facing “acute food insecurity” stood to rise to 265 million by the end of this year, up from 135 million in 2019.
That would mean an additional 130 million people were “living on the edge of starvation,” largely due to the economic impact of the coronavirus crisis, with wages, supply chains and humanitarian aid under pressure as a result of the outbreak."
Biblical plagues, locusts, and famines. What's not to like?
The virus itself will disproportionately affect older people who were already within the last few years of life. However, the lingering economic impacts will burden younger generations for years and potentially decades longer. Recent polls show that Trump is now between a rock and a hard place politically. His patently irresponsible instant gratification political strategy turned off young voters from the outset, and now his gambit of re-opening the economy ASAP is going to wipe out his elder base as well. Literally:
"By a nearly 6-to-1 margin, people ages 65 and older say it’s more important for the government to address the spread of coronavirus than it is to focus on economic goals. And as President Donald Trump increasingly signals interest in prioritizing the economy, America’s senior citizens are growing critical of his approach"
Meanwhile, the fairy tale that this shutdown comes with a v-shaped happy ending is what abides this fiasco. Monetary euthanasia. The belief that sending $2,000 checks to everyone will end well is the next delusion we will be forced to believe. I would like nothing more than to believe that free money for a year will make everyone's life better, however, it can only end in hyperinflation. Regardless, the GOP will ensure that the full MMT option is delayed as long as possible. Meaning it will only arrive after the crash and non-social distanced rioting. Today's extreme deflation will eventually morph to extreme inflation. Few investors will successfully make the transition. Most are currently of the view that this new greater depression is temporary and will pass with the Coronavirus.
Both sides are doing their best to make this into the biggest clusterfuck in world history.
Meanwhile a decade of debt-fueled stock buybacks has impaired the balance sheets of the S&P 500. Turning the stock market into a call option on the cycle. Insiders cashed out at public expense, once again leaving the sheeple holding the bag under the delusion of an imaginary retirement. Told constantly that if they don't buy stocks they will never retire.
These mass layoffs are a function of the fact that large companies can't afford to hold onto their employees because they have too much debt.
It's a vicious cycle of layoffs, collapsing demand, and insolvency now playing out across the entire corporate sector:
Earnings No Longer Matter. The Goal Now Is Survival
"Ford is in trouble. Its U.S. manufacturing operations are shut down, and there is no restart date. European operations have halted. Mexican plants are closed. Billions in losses are projected. The dividend has been scrapped. The firm has drawn down its entire credit line. Even so, there are said to be just 6 months of cash left. Maybe."
Ford has issued a great deal of debt that is now junk-rated – $36 Billion – slightly more than the primary debt load of the government of Ford’s home state of Michigan. The company is now in fact the “single largest issuer of below-investment-grade debt.”
