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(NY TIMES) The International Monetary Fund issued a stark warning on Tuesday about the coronavirus’s economic toll, saying that the world is facing its worst downturn since the Great Depression as shuttered factories, quarantines and national lockdowns cause economic output to collapse.
“As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown,” said Gita Gopinath, the I.M.F.’s chief economist. “The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.”
This year’s fall in output would be far more severe than the last recession, when the world economy contracted by less than 1 percent between 2008 and 2009.
The grim forecast underscored the magnitude of the shock that the pandemic has inflicted on both advanced and developing economies and the daunting task that policymakers face in containing the fallout.
(RT) As organizations like the IMF and the UN warn that this is the worst economic crisis since the Great Depression, the US central bank has once again decided to pump trillions of dollars into the economy.
RT’s Boom Bust talks to the CEO of Transformity Research, Tobin Smith, who has been sounding the alarm lately, saying that the economic downturn in the United States is not due to the coronavirus pandemic.
“Let’s bear in mind that up until eight days ago we were in a free fall and then the Fed put the United States on its back and it really put the world on its back. It basically said that the world is too big to fail,” Smith says.
“There’s been a dramatic difference which is not only the liquidity in the United States, but the IMF, which we fund primarily, opening the spigot to Asian countries, to other parts of the world. And that’s a big deal,” he added.
The CEO explains that there is “enough firepower” in the world to add to the $290 trillion of debt we have right now, and that’s what scares central bankers the most. “So, they’ll continue to monetize this debt and keep the wheels turning until our self-inflicted closures come back…”
(THE ECONOMIC COLLAPSE) We have never seen an “employment apocalypse” in the United States like we are witnessing right now, and it is not going to end any time soon. Over the past several days, “coronavirus shutdowns” have officially been extended all over the nation, and the longer these shutdowns last the more jobs our economy is going to lose. And because most Americans were living paycheck to paycheck before this pandemic hit us, many unemployed workers are already unable to pay their bills. Yes, our authorities may be slowing down the spread of the virus, but in the process they have absolutely killed the economy.
About 5.2 million people filed for unemployment benefits last week, the Labor Department said Thursday. Jobless claims provide the best measure of layoffs across the country. Economists surveyed by Bloomberg had estimated that 5.5 million Americans would file initial applications for unemployment insurance last week.
That brings the total claims over the past four weeks to a staggering 22 million. By comparison, the labor market added 21.5 million jobs since the Great Recession.
22 million jobs wiped out in one month.
Six states — including New York, which has the highest number of cases in the US — can only fund up to 10 weeks of unemployment benefits from their state coffers before money runs out and they have to turn to the federal government for additional funding, according to a recent estimate from the Tax Foundation.
Another 15 state trust funds don’t meet the federal Department of Labor’s recommended minimum solvency standard, which requires being able to pay benefits for a year in an economic downturn similar to the Great Recession.
The coronavirus pandemic is crippling global trade because crews on transport ships have been stranded at sea for months and food processing plants have been forced to close, threatening to bring the world’s supply chain to a grinding halt.
Shipping workers at sea are denied entry into ports, truckers can’t get to work in some countries or are confronted with complications at borders, food plants are closing and farm harvests going to waste in the crisis.
But it is probably going to take some time for Congress to get through the process of passing another crazy spending package, and meanwhile deep economic suffering is erupting all over the nation.
(NY POST) It’s beyond tragic: The loan program to aid small businesses hit by lockdowns is almost out of cash, yet Democrats still refuse to OK new funds unless their unrelated demands are met.
If small-business closures spike, costing countless workers their jobs, Americans shouldn’t forget the Dems’ cynicism.
Treasury Secretary Steve Mnuchin offered ample warning more than a week ago that the $350 billion Paycheck Protection Program would soon run dry; now the fund may be just days from collapse.
Congress created the PPP in its rescue plan last month; the idea was to help small businesses that were ordered shut and seeing little income keep paying workers and creditors. Everyone agreed that was urgent, given these businesses’ economic importance and the threat of cascading collapses as the failure of some small companies pushes others under.
Yet as funds ran low, Democrats like Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi blocked a GOP push for $250 billion to save the program.
(BUSINESS INSIDER) Dire unemployment forecasts are sending a shock through the already-pummeled economy and garnering comparisons to the Great Depression. But experts are still holding out hope for a sharp, V-shaped rebound.
Nobel Prize-winning economist Paul Krugman issued one of the most ominous forecasts yet on Friday. He deemed CFE’s timeline projection for 20% unemployment “wildly optimistic,” adding “we may well be there in two weeks.”
Yet as economic data begins to paint a picture of a deep economic recession, optimism remains. Features unique to the coronavirus-induced plunge suggest demand is primed to spring back once the pandemic fades — a luxury the economy didn’t enjoy during the Great Depression era, which lastest much of the 1930s.
Others point to the US government’s expedited policy response as a critical support for bringing the economy back online.
The nation also faces a possible W-shaped recovery without a coordinated plan for containment, Janasiewicz said. Individual states, counties, and cities have issued shutdowns on different timelines and of different intensities throughout recent weeks. The lack of a singular shutdown strategy could fuel new outbreaks and a second economic collapse.
(NY POST) President Trump on Thursday announced new guidelines for reopening states as soon as May 1 now that the coronavirus appears to be peaking in the US, but he left the decision up to each state’s governor while recommending criteria that would have to be met for each to gradually reopen.
“America wants to be open, and Americans want to be open,” Trump said at the White House during the daily Coronavirus Task Force press briefing.
“Based on the latest data, our team of experts agree we can start the next front in our war, which we are calling Opening Up America Again, and that is what we are doing, opening up our country, and we have to do that.”
Trump stressed that getting the economy back in gear soon would help America recover from the pandemic.
“As I have said for some time now, a national shutdown is not a sustainable long-term solution. To preserve the health of our citizens, we must also preserve the health and functioning of our economy. Over the long haul, you cannot do one without the other,” he said.
Under the guidelines, states will need to demonstrate a downward trajectory of COVID-19 cases over a 14-day period and a “robust” system for testing health care workers before they can proceed to a phased opening.
The phases, as described by task force member Dr. Deborah Birx, include:
Phase 1, which recommends continued social distancing, closure of schools, teleworking and sheltering in place for vulnerable individuals. Non-essential travel would be discouraged, bars should remain closed and visits to nursing homes and hospitals should remain prohibited, the guidelines warn. “If a vulnerable population needs to return to work, there should be special accommodations for all vulnerable populations. If the schools are already closed, they should remain closed,” Birx said. “All visits to senior living facilities should continue to be prohibited. Large venues can only be operated under strict physical distancing protocols. Gyms could open if they adhere to strict physical distancing.”
Phase 2 allows schools, restaurants and bars to reopen with diminished occupancy. Non-essential travel can resume, and people can gather in groups no larger than 50, but teleworking is still encouraged. “This is for the employers. We still would like to encourage telework, and the common areas should remain closed or be physically distant,” Birx said. “This should be a relief to many households that have small children: schools, day cares and camps can reopen in Phase 2. Visits to senior living facilities however should remain and hospitals prohibited.”
Phase 3 allows workplaces to reopen with no restrictions, and visits to senior care centers and hospitals can resume. “It is essentially returning to our new normal. With all of the what we talked about through all phases: continuing the good hygiene practices, continuing the respect for spaces between individuals, because we know that we still have an issue with asymptomatic spread,” she said.
(TEXAS TRIBUNE) The reopening will happen in phases, Abbott said, and will be guided by data and doctors.
Gov. Greg Abbott on Friday announced initial steps to reopen the Texas economy during the coronavirus pandemic, including those that in the next week will loosen surgery restrictions at medical facilities, allow all retail stores to provide product pickups and reopen state parks.
Abbott also named a “statewide strike force” devoted to getting the economy going again. Austin banker James Huffines will chair the task force, and veteran lobbyist Mike Toomey will lead its staff. The group will oversee what Abbott described as a phased reopening, starting Friday with additional announcements set for April 27 and sometime in May.
(KUAR PBS) May 4 is the target date to begin “Phase 1” reopening of Arkansas’ economy, Gov. Asa Hutchinson said Friday. He added that Arkansans will have to remain focused on social distancing and other COVID-19 containment guidelines to meet the May 4 goal.
The Phase 1 criteria are based on an outline provided Thursday by the Trump Administration that provides a uniform way for the national economy to reopen but gives each state flexibility to adjust based on their specific medical and economic realities.
(WESTERN MASS NEWS) Gov. Charlie Baker addressed the president’s guidelines for reopening the country following the COVID-19 pandemic.
There’s been a lot of talk surrounding the president’s three-tiered “Opening Up America Again” plan. Baker said President Donald Trump was wise to defer the decision to each individual state. The Massachusetts reopening date remains May 4.
(REUTERS) Global stocks rallied on Friday on President Donald Trump’s plans to revive the coronavirus-hit U.S. economy and hopes of a potential drug to treat COVID-19, while the dollar fell amid investors’ growing risk-on sentiment.
China along with Germany, Italy, Spain and other parts of Europe also have plans to reopen their economies…
“It’s too early to signal the all-clear, but I do think we’re making progress,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Economies will not fully recover until people are comfortable they can move about in public without being exposed to the coronavirus and getting sick, he said. In addition, laid-off workers must be rehired, but there is a silver lining in that at least half indicate their situation is temporary, he said.
(THE STREET) Stocks ended higher on Friday, with the S&P 500 up for a second straight week.
The report from medical news publication STAT said a group of patients being treated were “seeing rapid recoveries in fever and respiratory symptoms.”
Trump, meanwhile, outlined plans to reopen the economy in three phases though the White House has yet to ensure that testing for the coronavirus will be made more readily available as has been urged by business leaders and infectious disease experts.
“We’re starting our life again,” the president said Thursday at a press briefing. “We’re starting rejuvenation of our economy again.”
“The market is fueled by hope and optimism (Friday) – hope for a vaccination and optimism around reopening the economy,” said Mike Loewengart, managing director of investment strategy at E*Trade.
“There is still plenty of uncertainty in the near-term which could cause the markets to do an about face. If there is one thing investors should remember it’s: Take the market’s moves in stride, investing is all about the long game,” he added.
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