Baltic Dry Index. 632 +40 Brent Crude 40.17
Spot Gold 1710
Coronavirus Cases 05/6/20
World 6,748,871
Deaths 396,085
Calvin Coolidge.
Later today, the US official employment/unemployment figures for May. Many economists are spinning May as being the bottom of the current economic slump. I can only hope that for once the economists are right.
But did all this week’s
rioting, arson and looting, generate the conditions for a surge in new coronavirus
cases in many of America’s major cities? We should know in about another two to
three weeks.
While it’s likely
that May will see the high point in the official unemployment figures, any new
lockdowns will likely upset that expectation. Even without new lockdowns
arising from a surge in new coronavirus cases, the economic picture for the rest
of 2020 still looks pretty bleak.
U.S. unemployment rate seen near 20% as COVID slams jobs market again in May
June 5, 2020 /
5:14 AM
WASHINGTON (Reuters) - The U.S.
unemployment rate likely shot up to almost 20% in May, a new post World War Two
record, with millions more losing their jobs, exposing the horrific human toll
from the COVID-19 crisis.
The Labor Department’s closely watched monthly employment report on
Friday could bolster economists’ dire predictions that it would take several
years to recover from the economic meltdown.
Still, May was probably the nadir for the labor market. While layoffs
remained very high, they eased considerably in the second half of May as
businesses reopened after shuttering in mid-March to slow the spread of
COVID-19.
Consumer confidence, manufacturing and services industries are also
stabilizing, though at low levels, hopeful signs that the worst was over.
“The good news is that we probably have hit the bottom,” said Sung Won
Sohn, a finance and economics professor at Loyola Marymount University in Los
Angeles. “But the recovery will be painfully slow. It will take years, probably
a decade to get back to where we were at the end of last year.”
The employment report is compiled from two separate surveys. According
to a Reuters poll of economists, the survey of households is likely to show the
unemployment rate jumped to 19.8% in May from 14.7% in April, which was the
highest since 1948 when the government started keeping records. The survey of
establishments is forecast showing nonfarm payrolls dropped by 8 million jobs
after a record 20.537 million plunge in April.
That would bring total job losses to 29.4 million since March, when U.S.
states began to shut down non-essential businesses to rein in the coronavirus.
That would be more than three times the jobs lost during the 2007-09 Great
Recession, and it took six years recoup the jobs lost during that downturn.
More
US likely suffered 'heartbreaking' unemployment in May
AFP •
Washington (AFP) - Even as the world's largest economy begins to reopen,
the scale of the job losses in May will be devastating, and economists fear it
will take many months to recover.
More than 21 million jobs disappeared in March and April as the
unemployment rate surged to nearly 15 percent, but the damage continued in May
and the government data to be released Friday is expected to show another 8.5
million positions eliminated.
That will push the jobless rate to close to 20 percent or higher,
economists expect, a level not seen in nearly a century.
Prepare for "another heartbreaking month of job losses," chief
economist at Grant Thornton Diane Swonk said in an analysis.
Private payrolls data and the Labor Department's weekly initial jobless
claims reports show that with government aid and steps to allow businesses to
reopen in most parts of the country, the pace of the layoffs slowed last month
and some workers have returned to their jobs.
But for the past week, the nation has been gripped by massive protests
over the police killing of George Floyd, an unarmed black man, and the unrest
could hinder efforts to get the economy up and running again and sap consumer
confidence, which is key to a recovery.
But while President Donald Trump, who has been banking on his economic
record to win re-election, remains optimistic that growth will come roaring
back, private economists warn the US will not soon see a return to pre-pandemic
levels.
Labor Secretary Eugene Scalia said he remains confident the unemployment
rate will fall below 10 percent by year end.
In an interview with Fox News, Scalia said "many of these jobs will
come back quickly because they were still there."
But Mickey Levy of Berenberg Capital Markets said an initial rebound
will be short lived.
"As the economy reopens, employment will jump initially as
businesses rehire furloughed and laid-off workers, but it will take years for
employment to return to pre-crisis levels as some firms permanently close and
as others operate at reduced capacity," Levy said in an analysis.
"We expect the unemployment rate to fall to 9.6 percent at the end
of 2021, which would be almost three times the pre-crisis rate."
More
Millions Of Americans Skip Payments As Tidal Wave Of Defaults And Evictions Looms
June 3, 20205:00 AM ET
Americans are skipping payments on mortgages, auto loans and other
bills. Normally, that could mean massive foreclosures, evictions, cars repossessions
and people's credit getting destroyed.
But much of that has been put on pause. Help from Congress and leniency
from lenders have kept impending financial disaster at bay for millions of
people. But that may not last for long.
The problem is that these efforts aim to create a financial bridge to
the future for people who've lost their income in the pandemic — but the bridge
is only half-built. For one thing, the help still isn't reaching many people
who need it.
"My wife has filed, certified every week for her unemployment for
10 weeks now, and they have done nothing," says Jonathan Baird of
Bruceton, Tenn. "We've struggled."
Baird is a disabled veteran, not injured in wartime, who gets a small disability pension. When the pandemic hit, his wife lost her job as a home health aide. That was most of their income. And like many other contract workers, she has run into long delays trying to collect unemployment.
Meanwhile, Baird says his mortgage company told him that he didn't qualify for a federal program to postpone payments. Many homeowners have been given wrong or misleading information from lenders about that. And it appears that is what happened in Baird's case.
Baird also called Ford to try to get a break on the payments for his pickup truck. "When I contacted them, they told me that there was nothing they could do," he says. "Just basically make your payment or suffer the late fees."
More
Nearly 25% of Americans have no emergency savings: Lost income due to coronavirus is piling on even more debt
Published: June 3, 2020 at 5:07 p.m. ET
The coronavirus pandemic compounds an already dire
financial situation for millions of Americans.One-third of homeowners have less than $500 or, worse, nothing set aside for an emergency home repair, according to a report released Wednesday, and that includes 50% of homeowners with an annual household income of less than $50,000.
There’s growing concern among many Americans — especially those who are most in need of the checks and already have bills piling up — that the economy won’t restart in time to save them from paying the rent, their mortgage and going hungry.
The survey found that over half of homeowners (53%) have experienced a home repair emergency in the past 12 months. The poll, conducted online by The Harris Poll on behalf of HomeServe, a home-repair company, questioned 1,400 homeowners.
Some 38% of Americans could not come up with $500 in cash without selling something or taking out a loan, another report released Wednesday from SimplyWise, a website that gives advice on Social Security; 1 in 10 are planning to withdraw from their emergency savings to pay bills.
What’s more, nearly 25% of all Americans had no emergency savings and
16% have taken on more debt, and nearly one-third of households reported lower
income since the start of the pandemic, a separate report by Bankrate.com
concluded.
“The pandemic is deepening the financial hardship for millions of
Americans,” Bankrate chief financial analyst Greg McBride said. “The financial
legacy of this pandemic will be elevated unemployment, reduced household
incomes, more debt and even less savings.”
The pandemic has hit the Northeast hard, with 36% of Northeasterners
reporting a fall in income, compared to 31% in the West, 29% in the Midwest,
and 28% in the South. People in the Northeast are also more likely to have
increased debt than those in those other regions.
More
In US business news, the picture is not much better, and
worse is yet to come.
Largest U.S. mall operator sues Gap for missed rent payments
June 4, 2020 /
11:34 AM
June 4 (UPI) -- Simon Property Group, the largest mall operator in the United
States, is suing clothing retailer Gap for $66 million for unpaid rent during
the coronavirus pandemic.The lawsuit, filed in Delaware state court, says back rent owed by Gap Inc. will continue to accrue each month, plus interest.
Gap is already being sued by landlords in Manhattan and Southern California after it stopped paying rent in April.
There are more than 400 Gap-owned U.S. mall locations, making the retailer Simon's largest in-line rent tenant.
In an earnings call last month, Simon CEO David Simon said he will hold tenants accountable for rent they miss during coronavirus-related closures.
"The bottom line is, we do have a contract and we do expect to get paid," Simon said.
Simon and Gap have begun to reopen in recent weeks. Gap brands include Old Navy and Banana Republic.
https://www.upi.com/Top_News/US/2020/06/04/Largest-US-mall-operator-sues-Gap-for-missed-rent-payments/2851591280569/?lh=8
AMC has ‘substantial doubt’ that it can survive coronavirus outbreak shutdown
Published Wed, Jun 3 202010:21 AM EDT
The world’s largest movie theater chain said Wednesday it
has “substantial doubt” it can remain in business after shuttering all of its
locations during the coronavirus
pandemic.In April, AMC Theaters said a new debt offering would allow the company to withstand these closures until a partial reopening ahead of Thanksgiving. However, in a filing with the Securities and Exchange Commission the company disclosed concerns about liquidity, its ability to generate revenue and the timeline of reopening its theaters.
In that filing, AMC released preliminary earnings results. The theater chain expects to have lost $2.1 billion to $2.4 billion in the first quarter ended March 31. It will release its earnings on Tuesday.
AMC also revealed that its revenue had fallen to $941.5 million, a nearly 22% drop from the $1.2 billion it garnered in the same quarter last year. The second quarter is expected to be even worse.
“We are generating effectively no revenue,” the company said in its filing.
As of April 30, the company said that it had a cash balance of $718.3 million.
Despite the announcement, AMC’s stock was trading higher Wednesday, recently up nearly 5%, likely the result of the company restructuring its debt, Wedbush analyst Michael Pachter said.
“Even though the rate is much higher (12% vs. an average of around 6%), it provides liquidity and buys them some time,” he said.
AMC had previously sought to conserve cash by furloughing its in-theater employees, halting its operations through June and suspending its dividend payments and share repurchases. The company also has been working with landlords to defer rent payments and has cut the salaries of its corporate level employees.
However, as it seeks to reopen its theaters this summer, it has had to ramp up its cash spending. While AMC believes it has enough of a cash reserve to resume operations this summer, or perhaps a little later, its liquidity after that point remains in question.
---- AMC said distributors may continue to push back new film releases either due to coronavirus restrictions on public gatherings or because of production delays. Then there is the possibility that some studios will begin offering audiences more movies on-demand or through streaming.
AMC had a public dispute with Universal in April over distributors’ decision to release “Trolls World Tour” in theaters and on-demand on the same day.
After taking a victory lap in the press over the digital success of “Trolls World Tour,” NBCUniversal CEO Jeff Shell suggested the studio could start to do more simultaneous releases, even after theaters reopen. That statement led AMC to say it would no longer showcase Universal films in its theaters.
More
Wall Street Warning to Corporate America: Get Cash While You Can
Davide Scigliuzzo June 4, 2020
(Bloomberg) -- Bankers have a message for America’s debt-laden
companies: raise money now, because things could get a lot worse.
The gradual reopening of businesses after months-long shutdowns and a
pick up in manufacturing activity have given investors reason for optimism in
recent weeks. But underwriters who cater to heavily indebted corporations are
offering their clients a bleak preview of what may lie ahead.
The long list of worries includes a new wave of coronavirus contagion in
the fall, an extended period of double-digit unemployment, a spike in defaults
and a slower-than-expected economic recovery as businesses around the globe
adapt to the realities of prolonged social distancing.
Of course, pitching bond sales to companies is part of the job
description, and corporate treasurers expect nothing less from bankers whose
bonuses are tied to how many deals they do. Still, the grim warnings to
stockpile cash reflect how the rally that credit markets have enjoyed since the
Federal Reserve took action may be obfuscating an economic picture still
fraught with risks.
“We are telling virtually every private equity firm and issuer out there
they ought to get to market,” said Peter Toal, global co-head of fixed-income
syndicate at Barclays Plc, one of the major underwriters of loans and bonds for
highly leveraged companies.
‘Tough Winter’
The bankers’ private warnings to clients underscore the publicly visible
stampede for cash across corporate America. Debt sales by blue-chip companies
are running at a record pace this year, while issuance of junk bonds, which are
rated below investment grade, reached almost $44 billion in May, the
third-busiest month on record.
The Fed’s support has even allowed many of the companies hardest hit by
the coronavirus outbreak to tap markets in recent weeks. Yet borrowers that
rely on junk debt are the most exposed to the ebbs and flows of credit markets,
as they risk seeing their access to capital cut off when volatility spikes.
Barclays is hardly the only big player in the market encouraging company
executives to take advantage of today’s benign credit environment.
Bankers worry that even if businesses reopen and consumers resume
spending, the U.S. economy could go through a rough few quarters and
underperform investors’ expectations.
More
But there was better news from Europe. Germany expects to
be back to normal in just about two years.
German economy should reach pre-crisis level in second half of 2022 - minister
June 4, 2020 /
10:27 AM
BERLIN (Reuters) - German Economy Minister Peter Altmaier said on
Thursday that his aim is for Europe’s largest economy to return to pre-crisis
levels in the second half of 2022.
“There is light at the end of the tunnel,” Altmaier told reporters,
adding that he aimed for Germany to return to growth in the second half of this
year.
Chancellor Angela Merkel’s ruling coalition on Wednesday agreed a bumper
stimulus package amounting to 130 billion euros to speed up Germany’s recovery
from the coronavirus.
Altmaier said it would be the biggest economic package since the federal
republic of Germany was founded in 1949.
“The economy has not yet bottomed out,” he added. “In the coming weeks
and months we will experience difficult moments together. There is light at the
end of the tunnel.”
“My goal as economy minister, the goal of the federal government, is to
return to the growth path as early as this year - in the second half of the year
- to experience a strong growth dynamic of around 5% next year, and to return
to our old strength from before the corona pandemic in the second half of 2022
at the latest,” he said.
“Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his.”
Covid-19 Corner
Though
hopefully, we are passing/have passed the peak of new cases, at least of the
first SARS-CoV-2 outbreak, this section will continue until it becomes
unneeded.
Just
what went on at The Lancet and the New England Journal of Medicine? Why?
Major COVID Drug Study Accused of Relying on Falsified Data
The numbers just don't add up.
by Victor Tangermann / June 3, 2020
Last month, an apparent milestone drug trial study published in the esteemed journal The Lancet caught widespread media attention — including at Futurism.
The study claimed that the antimalarial drug hydroxychloroquine — touted by president Donald Trump, among others — is linked to an increased risk of death, citing clinical results involving almost 100,000 patients from around the world.
The results were so damning, in fact, that they reportedly influenced the World Health Organization and other research institutes’ decision to halt trials involving the drug.
But now, an open letter signed by hundreds of clinicians and researchers points out that there are many glaring issues with the paper, calling its validity in question, as Science reports.
First, here’s what the study got wrong. The scientists behind the study didn’t control for the fact that those getting the drugs were likely far sicker than those in the control group who didn’t receive the drug, according to Science.
The paper also involved an astonishingly high number of patients from around the world — so many that it rang the alarm bells for many of the co-signers of the open letter.
Specific irregularities include the research listing three African patients, for instance, in early March — when there were only two COVID cases listed in the entire continent. The study also reported more COVID deaths in Australia than were accounted for by government officials, according to The Guardian.
Some suspect that a mysterious US-based company with almost no web presence or track record may be behind the disastrous paper.
The CEO of Surgisphere co-authored the study, but the company seems to lack credibility. According to an investigation by The Guardian, the company basically has no online presence. Its short list of employees includes a science fiction writer and an adult-content model. A “get in touch” link on the company’s website redirected to a cryptocurrency website.
The CEO, Sapan Desai, has even been in several medical malpractice suits, albeit unrelated to the current study.
In a surprise reversal, WHO director general Tedros Adhanom Ghebreyesus announced today that drug trials of hydroxychloroquine will resume, noting in a tweet that the “temporary pause” on hydroxychloroquine trials was “taken as a precaution while the safety data were reviewed.”
It’s still unclear whether the news regarding the Surgisphere study directly influenced the decision.
But to some, it’s already too late.
“The problem is, we are left with all the damage that has been done,” Nicholas White, a malaria researcher at Mahidol University in Bangkok, who’s investigation into the drug for COVID-19 purposes was halted by UK regulators last week, told Science. “The whole world thinks now that these drugs are poisonous.”
Both The New England Journal of Medicine and The Lancet have issued
an “Expression of Concern,” calling for further investigation into the validity
of the study.
Authors retract journal studies on hydroxychloroquine use for COVID-19
June 4, 2020 /
4:51 PM
June 4 (UPI) -- The Lancet and New England Journal of Medicine announced Thursday
that the authors of published studies on use of the anti-malaria drug
hydroxychloroquine to treat COVID-19 have retracted their findings.The retractions come after reports questioned the validity of data used in the studies, and researchers and third-party reviewers could not verify data supplied to them for the study.
Published May 1, the New England study found COVID-19 patients with cardiovascular disease were at greater risk of death if treated with the drug.
On May 22, the Lancet study found the drug offered no clinical benefit in treating patients infected with the new coronavirus, SARS-CoV-2, and may also cause significant heart-related side effects.
More
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards.
Extra salty sodium battery performs on par with lithium
May 31, 2020
Batteries that use a sodium-ion chemistry rather than the
commonplace lithium-ion could offer a number of advantages, owing to the cheap
and abundant nature of the element. Scientists at Washington State University
have come up with a design billed as a potential game changer in this area – a
sodium-ion battery offering a comparable energy capacity and cycling ability to
some lithium-ion batteries already on the market.In a way, sodium-ion batteries function just like lithium-ion batteries, generating power by bouncing ions between a pair of electrodes in a liquid electrolyte. One of the problems with them in their current form, however, is that while this is going on inactive sodium crystals tend to build up on the surface of the negatively-charged electrode, the cathode, which winds up killing the battery.
Additionally, sodium-ion batteries don't hold as much energy as their lithium-ion counterparts.
"The key challenge is for the battery to have both high energy density and a good cycle life," says Washington State University's Junhua Song, lead author on the paper.
Song and his team believe they may have come up with a solution to these shortcomings. Experimenting with the design of sodium-ion batteries led the team to produce a version with a cathode made of layered metal oxide and a liquid electrolyte with a higher concentration of sodium ions.
In testing, the team found that this led to a much smoother interaction between the electrolyte and the cathode, enabling the continuous movement of the sodium ions and avoiding the troublesome buildup of inactive crystals on the cathode surface. The upshot of that was battery offering capacity similar to some lithium-ion batteries and with an uninterrupted generation of electricity, maintaining 80 percent of its charge after 1,000 cycles.
"Our research revealed the essential correlation between cathode structure evolution and surface interaction with the electrolyte," Lin says. "These are the best results ever reported for a sodium-ion battery with a layered cathode, showing that this is a viable technology that can be comparable to lithium-ion batteries."
Enthused with the results, the team is now investigating how the electrolyte interacts with the cathode to better understand these interactions, with hopes of improving the design further, possibly even to avoid the use of other rare metals like cobalt.
More
Another weekend, and
hopefully moving on from all the rioting, arson and looting in the USA. Two
wrongs never make a right, just another wrong for innocent people. Still
hopefully we are passing through the trough of the current global downturn.
Though I don’t expect
a “V” shaped recovery, and stocks are priced far ahead of reality, a long
lingering depression risks a summer and autumn of social discontent. That risks
stocks crashing back to earth. Have a great weekend everyone.
Unemployment or the loss of income which will always affect some
in any society is certainly less degrading if it is the result of misfortune
and not deliberately imposed by authority.
F.A. Hayek
The Monthly Coppock Indicators finished May
DJIA: 25,383 +12 Down. NASDAQ: 9,490 +178 Up.
SP500: 3,044 +83 Down.
The NASDAQ has remained up.
The S&P and the DJIA still remain down despite the best efforts of the Fed
to get them to higher.
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