Sunday, March 29, 2020

Best Take on When the COVID-19 Drama Will End

Scott Gottlieb is a former commissioner of the Food and Drug Administration (from 2017 to 2019).

I don't trust him completely. On his Twitter page he lists affiliations with Pfizer, Illumina, Aetion, Inc. and Tempus Labs. So the dude is cashing in and as you will be able to judge from the background of his house, he is not cashing in for small change.

That said, when he sticks to science he appears to tell is straight, much more so than Tony Fauci or Deborah Birx.

I have a couple of small problems with what he says in this clip but overall I think this is a solid analysis of where we stand now and what to expect. I consider what he says as likely but also a worst-case scenario. Things might turn out a bit better depending on how much things warm-up weather-wise on the East Coast over the next couple of weeks and how much warm weather impacts the virus. 


Beyond the $6 Trillion Bailout, There Are More Federal Bailouts Coming

To date, since the start of the COVID-19 panic, $6 trillion in bailouts have been announced

There has been a $2 trillion dollar package announced by the Federal government to businesses and individuals. And the Federal Reserve is in the process of launching a bailout of its own up to $4 trillion.

There is likely a phase 2 package to businesses and individuals, and on top of that a bailout of state governments. In a little-noticed response at a press conference, the president hinted at the bailout of state governments that is coming:
He is not joking when he says, “It’s our money. It’s our currency.”

The dollar is the US government currency and it is going to be printed at a very rapid rate.

I continue to advise in the EPJ Daily Alert that price inflation is going to be very strong on the other side of the lockdown.

Note: This does not mean the Consumer Price Index will be strong at first. There are some areas of the economy that may discount to get consumers back, such as hotel and airline sectors. This may drag the CPI down for a bit, but the areas where you are going to be spending your money is going to see the strong bidding up of prices.

In other words, the things you want to spend your money on are going to be going up in price, the things you don't want to spend your money on will not be going up in price (at first).

One further caveat, not all of the multi-trillions in bailout activity will become newly printed money some will just be paper shuffling. But the numbers that I calculate and publish in the EPJ Daily Alert are starting to indicate that the part that becomes new money is going to be a staggering amount.


Saturday, March 28, 2020

HEROIC: Black Market in Haircuts

I don't want to blow anyone's cover but, with the draconian lockdown in San Francisco, black market barbers have emerged on the scene.

Black markets = an attempt to restore free-market exchange at a time of authoritarian rule.


The Unthinkable Cruelty and Inhumanity of the Coerced Shutdown

By John Tamny

On Wednesday of this week a prominent oyster provider for D.C. area restaurants was forced to let 350+ workers go. Readers can likely imagine that more than a few lack any kind of familial safety net. It’s also not unreasonable to guess that many won’t be receiving a $1,200 check on account of the under-the-table nature of their employment.

Such is the cruelty of economic contractions care of overdone hysteria and political force. The reverberations are broad. The seen is the empty restaurants; that, or restaurants reduced to a fraction of their former capacity in the form of curbside takeout. The unseen is, among other things, the brutality endured by the suppliers of those restaurants. Sick-inducing is that the 350 workers mentioned above are but a fraction of the total number who will have to figure out ways to get by without a paycheck given the forced shutdown of all “nonessential” businesses in various parts of the country. That all too many of these businesses were open, and thriving not too many weeks ago, is a reminder that politicians have a different understanding of “essential” than do investors, businesses heads, and employees.

It’s hopefully a reminder of what a desperate situation businesses across the U.S. find themselves in. And by extension, existing and former employees of those companies. Assuming politicians cease their nannying whereby they disallow work and certain forms of commerce, will the existing and lost jobs still exist? Will the 350 laid off be able to return to what they were doing before? All too many in government are too out of touch to contemplate the previous question given the unique way in which they’re employed.

But for now it’s useful to tack however briefly to the virus that brought on all the hysteria that led to mass economic devastation. In asking readers to think about the virus, it should be stressed that this is not some blanket dismissal of the Coronavirus. Some say it poses little threat, some say it’s major. For the purposes of this piece, let’s assume major.

Precisely because the virus’s impact could be brutal and lethal in terms of health, it’s not unreasonable to say that people don’t need a law or laws telling them to be careful, to wash their hands, to be distant. Neither do restaurants and other service-oriented public places. Assuming lethality, it’s nor normally the goal of businesses to kill their customers, or employees. Since it isn’t, businesses of all stripes would have and could have moderated their operations and daily doings with health and wellness of employees and patrons top of mind.

Some restaurants might have gone full takeout on their own, others might have shrunk the number of tables served in order to space out customers, others might have instituted surge pricing to guard against big crowds.. Movie theaters, as opposed to shutting down, might have sold fewer tickets per theater, mandated separation of attendees, raised prices per ticket to limit demand, or perhaps a combination of all three. The main thing is that businesses succeed based on a demonstrated ability to meet the needs of patrons. Assuming more fearful customers, why hand over customer relations to politicians with one-size-fits-all solutions that amount to shutting operations down altogether? What a missed opportunity for businesses to learn how to operate in crisis conditions.

And what a missed potential opportunity for workers to innovate, as opposed to sitting unemployed based on the decisions of others. The others in this instance, mostly politicians.

Which brings us back to the 350 displaced workers mentioned at the beginning of this piece. Their situation is sad on so many levels for so many obvious reasons, including that there’s no guarantee that their jobs will exist once the forced shutdowns end. All of which raises a question of why politicians would be so heartless as to make blanket decisions that cruelly disrupt the hard-won employment of so many.

One reason might be that politicians and those who work in government haven’t a clue about the true meaning of shutdown. To understand why, readers need only think about the $2 trillion just summoned by Congress to dole out to individuals, businesses, and favored organizations. About the $2 trillion raised, the outrage of it isn’t discussed nearly enough. But it rates major comment. A federal government with powers “few and defined” somehow has the power to hand out $2 trillion? Something’s wrong with this picture, even though it’s easily explainable. Stated rather simply, the U.S. Treasury can summon trillions precisely because it has enormous present and future claims on the largest economy in the world. Basically the federal government can hand out $2 trillion to favored constituents based on it having previously arrogated to itself exponentially more of the present and future income of every single American.

All of the above must be said when trying to explain the why behind the cavalier attitude of politicians and government workers toward shutdowns. They don’t know what they are. No doubt they’ll claim that every so often non-essential federal workers are furloughed, but in light of the federal government’s taxing and borrowing power, these furloughs are nothing more than vacations that, when they end, come to a grand conclusion in the form of a big check to pay federal workers for the time when they were off the job.

While the 350 laid off oyster workers will likely receive very little severance, along with no assurance of future employment, those in the employ of the federal government get paid for all of their time off, health benefits, seniority income gains, you name it. To say all of this isn’t fair is to shoot fish in a crowded barrel. It’s much more than unfair. It’s downright cruel and inhumane.

John Tamny, research fellow of AIER, is editor of RealClearMarkets. His book on current ideological trends is: They Are Both Wrong (AIER, 2019)

Originally posted at

Details of COVID-19 Payouts to Individuals: This is What You Are Going to Get

Better get your piece of the newly printed money the government is going to pass out to keep up, at least a bit, with the price inflation it is going to cause.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act directs the Department of the Treasury to make a one-time direct payment to individuals to help them recover from the economic impact of the COVID-19 pandemic.  The federal government will send you a payment if (1) you meet the eligibility criteria; (2) you fall within the income cap; and (3) you have filed a tax return or you already receive Social Security benefits.  If you filed a tax return in 2018 or 2019 or you receive Social Security benefits, you do not need to apply for this benefit.  If you do not fit into those categories, you can file a tax return for free to receive your payment.
  • Anyone other than a nonresident alien, a dependent, or an estate, is eligible.
  • You must have a Social Security number for you, your spouse, and any child you are claiming.  There is an exception for spouses of active duty military members.
Amount of payment
  • Individuals receive $1,200 (joint filers receive $2,400) plus $500 per child under 17 years old.
  • Benefits start to phase out for those with incomes exceeding $150,000 for married couples, $75,000 for singles, and $112,500 for single parents.
  • With the phase-out, payments will not go to single filers earning more than $99,000; head-of-household filers with one child, more than $146,500; and more than $198,000 for joint filers with no children.
  • Your income is based on your 2019 tax return; if you did not file taxes in 2019, the Treasury will use your 2018 tax return.
  • If you did not file a tax return in those years, the Treasury can use your Social Security benefit information or you will have to file a tax return. 
How will it be paid?
  • If you filed a tax return in 2018 or 2019, or you receive Social Security benefits, you will receive the rebate automatically.
  • If you provided bank account information to receive your tax refund as a direct deposit, you will receive your rebate that way.
  • If you did not provide information for direct deposit, you will be mailed a rebate check to the address provided on your 2018 or 2019 tax return, whichever you filed most recently.
  • If you did not file in 2018 or 2019, but you receive Social Security benefits, you will receive the rebate the same way you receive your Social Security benefit.
  • After the payment is made, you will receive a notification in the mail from Treasury within 15 days.
  • If you do not fit within one of these categories you can file a tax return now to receive your payment (to file a return for free, go to
When will the payments be made?
  • Payments will be made as fast as possible but could still take a month or longer
(via Senator Brian Schatz (Hawaii) 

An Indication Small Business Hourly Work is Down by More Than 50% in the Unites States in the Face of COVID-19 Lockdowns

Harvard's Greg Mankiw reports:

I received the following email yesterday:
Thank you for blogging on the papers concerning the economic impact of coronavirus. I've been a fan of yours for many years, since using your textbook as an undergraduate. I'm reaching out to share some data that might be of interest to you. I am a software engineer at Homebase, the leading scheduling and time tracking solution for small businesses across the US, so we see daily clock-in and clock-out data. We are able to see how many workers are working fewer hours or no hours versus before coronavirus and track the economic impact of this on workers and businesses across the country in real-time.
You can see their data at this link. It shows that hours worked by hourly employees is down by more than 50 percent. FYI, hourly workers make up about 60 percent of the labor force, most of the rest being salaried workers. It is not clear to me how representative the Homebase data are, but they may turn out to be a good resource for tracking the economy in real time.


HOT HOT: More Promising Hydroxychloroquine Test Results

Dr. Didier Raoult
There is great news out from Dr. Didier Raoult, Director of l'IHU Méditerranée Infection.
and Professor of Medicine with specialties in infections and microbiology, concerning new results on more patients treated with hydroxychloroquine and azithromycin.

 Raoult is the Fench physician and microbiologist who conducted the original study showing the effectiveness of hydroxychloroquine and azithromycin.

Here is the  new abstract:

The full paper can be found here.

Previously from The City Journal:
France has a new savior—neither its president nor the savior proclaimed as such by its former religion, but Professor Didier Raoult, an eminent microbiologist who works in Marseille. He strongly, indeed loudly, advocates the use of hydroxychloriquine and azithromycin in the treatment of patients with Covid-19. By implication, at least, President Trump believes, or believed, in him.
The professor looks the part of guru or savior. He has been described as resembling a chieftain from the pages of the Asterix comic strip, or an aging hippie who strums a guitar. His long, dank hair is in the style of a pop singer, circa 1970, and underneath his white clinician’s tunic he dresses with the studied, or provocative, casualness of the soixante-huitard, the type whose life congealed in 1968, after the events of May. But no one should mistake his scientific stature: he has discovered new pathogenic organisms that have been named after him. He is a highly respected and prolific researcher. 
This makes his current position all the odder. On the basis of some laboratory evidence and a single poorly controlled study with a small number of subjects and a large number of defects, he has announced to the world that, combined with large-scale diagnostic testing, his drug regime is the solution to the epidemic.
Note the new results based on 80 paitents just came out, after the City Journal piece.


Friday, March 27, 2020

The Shallow Thinking of Bill Gates

Bill Gates appeared on CNN last night and cheered on the lockdown:
Well, talk about being smacked in the face. What’s going on here is mind-blowing. Never in my lifetime have we had to change our behavior and have this drastic effect on the economy in order to save lives. And, you know, there are people who wish we didn’t have to do that. That is fully understandable. This is some very tough medicine, but it’s better to take the economic problem where the economy can come back than to allow it to spread throughout the country and take millions of deaths as the price that we have to pay here. And so, yeah, I think this is a smack on the head. You know, this will cost trillions of dollars.
It is not clear where he is getting the "millions of deaths" from, for one. The only scientist making that claim has retracted it.

But more to the point, Gates appears to rule out alternatives when considering the support for the lockdown.

For example, it appears that a sound alternative to locking down the entire country is to advise the elderly and those with serious chronic illnesses to be-careful and self-isolate. It is these people for whom COVID-19 is a serious threat, not the entire damn country.

Does Gates propose that the entire country go on long down every year during the flu season because somewhere between 20,000 and 60,000, mostly elderly, will die in this country from the flu?

Does he want to ban cars and air travel because some will die when traveling in them?

Does he not understand that suicides and child-abuse will climb because of a lockdown?

Gates appears to have an entire block about the nature of valuations, options and risk-reward in a world that is not the Garden of Eden.

If Gates really thinks he can bring the Garden of Eden to earth with his limited calculations than he is one delusional man.

Here is the sad clip.


The Odd Hospital Bed Shortage in New York City

As COVID-19 hits New York City with the brunt of its force, mainstream media has begun its onslaught of reports that the virus will overwhelm the city's hospitals.

The problem with this reporting is that neither mainstream media nor hospital administrators have a good track record when presenting reality.

And this: THE BIG SCAM: Understanding How Hospitals Price Individuals Versus Healthcare Insurance Companies.

From there, the problem gets worse because there is absolutely zero data being released that would provide information to independently analyze the situation.

We know that the number of hospital beds in New York City, depending upon the source, is somewhere between 20,000 and 25,000. But that is all the data that is generally available.

There is no data that I was able to find, for example, that lists how many patients are currently in the hospital because of the flu or the number that are admitted for flu over the flu season.

Indeed, there is no breakdown as to what type of patients take up hospital beds.

Although we get a daily announcement as to how many new "confirmed" cases of those infected with COVID-19, there is no breakdown of how many of those are hospitalized and the severity of their cases.

In other words, it is impossible to put the current situation into perspective in terms of what is different from routine flu or anything else that might cause people to end up in a hospital.

Finally, hospitals appear to run pretty much on a full occupancy basis. It would be interesting to understand what government regulations and funding incentives create this situation. Keep in mind that government regulations appear to be at the epicenter of the mask shortage.

A full hospital occupancy policy, which appears to be more of the situation than even for hotels, is odd when you would think that hospitals would in a free market have the ability to expand capacity rapidly for emergencies.

I, for one, can think of a number of options that would immediately improve the capacity situation that aren't being used by NYC hospitals at present.

Bottom line: It is impossible to understand what kind of an extreme outlier COVID-19 is for the New York City hospital industry, if at all, given that reports are coming from two sources that must be questioned as to their veracity and, at the same time, the data necessary to independently analyze the situation is not readily available.

There is definitely the potential for a PhD paper in applied economic policy concerning the structure of New York City hospitals and their ability to react to the COVID-19 panic. I smell crony government bureaucratic central planning and a lot of it.


Father-in-Law Closes Down the Country, Son-in-Law Reacts Demanding ASAP Action From His Tenants

Jared Kushner
There are no CoVID-19-related rent breaks if you live in an apartment controlled by Jared Kushner and his family, despite the fact that for many such renters they have no income thanks to large parts of the country being closed down as a result of the actions of President Trump (Kushner's father-in-law), local and state government officials, and the fearmongering of Trump's top health lieutenant Tony Fauci, the head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health.

Kushner apparently does not want his management staff to come in contact with renters but he does want to get paid, so he has set up an online payment that he wants his renters to sign up to "ASAP.".

Mother Jones reports:
On Thursday, March 19, Westminster Management—which is owned by the Kushner Companies and boasts of holding more than 20,000 apartments across six states—sent residents in at least one property a notice about rent collection—but it wasn’t about giving them a break on rent, nor did it include any reference to the unfolding COVID-19 crisis, according to emails and other correspondence reviewed by Mother Jones.

Under the corporate logo—a “W” with the roof of a house perched on top—the email began “IMPORTANT CHANGES TO BILLING & PAYMENTS,” before outlining a new online platform that would accept credit or debit card rent payments for a fee, or by e-check without additional charge...

Two days later, on March 21, the company sent another email to residents. While it acknowledged the global pandemic by saying the company hoped “you all stay safe and healthy in these challenging times,” it went on to tell tenants to sign up for the new payment platform “asap.” Despite the request for prompt action on payment, the email told residents the management company was running on limited resources and that, due to the need to prevent contact between staff and residents, rent-payers could expect fewer services and directed that anything beside emergency maintenance requests should wait “until the situation has improved.” In a separate communication days later, the company announced the closures of its buildings’ fitness centers, asked tenants not to come to their management office in person, and noted the company would be asking about the health status of tenants before completing non-emergency repairs.

“Please all be safe and healthy,” the March 21 message concluded. “We will get through this, it is all just a matter of time.”

On Wednesday, March 25, the company again reminded tenants of the new rent-payment platform, this time via paper notices slipped under apartment doors. The messages had no mention of any rent breaks or a willingness to work with tenants facing financial hardship due to the coronavirus.