WINTER OF THE APOCALYPSE PANDEMIC

The pandemic will not abate any time soon. In fact some medical professionals have said this may be the 5^th Corona-type virus that has eluded scientific community of epidemiologists virologists, and medical professionals for decades.  The other 4 of the viruses cause the common cold.  There are some professionals, which have a concern that a vaccine for the current novel virus may never be successful and we should plan accordingly.  Endemic areas still remain for three other viruses to this day, HIV/AIDS, Chicken Pox, and Measles.  If the virus turns to be universally endemic, it may loose its potency over time, with its effects diminishing when the body’s immune system adapts to the virus.  Don’t count on a vaccine. It may be wishful thinking, however, it is hope.

The near term is bleak with over 100,000 deaths over a 3-month period and an impending potential second wave of the virus, which could be as high as 2x as large as the first wave we just finished (the beginning of the end).  The second wave is projected for the fall.  With the onset of cooler temperatures, large gatherings such as protests, and the premature reopening of at least 20 states not meeting CDC guidelines, will we feel the impact in the Fall? Doom and gloom to follow?

SEASONAL FLU

The current Coronavirus and the flu at the same time could create numbers that are staggering.  The current Coronavirus could generate as much as 200,000 additional deaths by December 2021.  The normal Flu death toll annually is 20-40,000, with some years going as high as 70,000.  This would impact everyone.  The combination would be like 4-5 times Vietnam in a year.  Let us hope this worst-case scenario does not even come close to being the outcome.

HURRICANES/TORNADOES/EARTHQUAKES/FLOODS

The National Weather Service issued its annual hurricane predictions.  This season’s models show an increase in activity, with approx. 16 named storms and 4 major hurricanes with potential landfall.  A hurricane along with the virus would be devastating.

Tornadoes typically strike in the summer, in the South and Mid-West. These are just as devastating to those who lose their lives and property.  It’s gone with the wind.

Earthquakes keep property in the same location, however property may not take up the same volume or configuration as before the quake. California is way overdue for the “big one” in a populated area.  Fortunately large quakes do not have the killing power of by-gone days as a result of retrofitting structures.

Flooding is always a potential with climate change.  Areas of the country are experiencing 100 year floods within years of each other.  This is another potential for this winter of devastation adding to the misery of the catastrophes.

WILDFIRES

This year, The West has an abundance of fuel laying on the forest floor, as a result of a last years rains.  The hotter and dryer months, along with summer winds will make the potential for conflagrations inevitable.  These conflagrations will look like the apocalypse generating their own weather and destruction in its path.

PESTILENCE

Pestilence is already with us in the form of the cicada arrival, after a 17-year hiatus.  This noisy critter is not a crop destroyer like the locust, however it swarms and is a pest.

NO SURPRISE HERE

The following paragraphs contains quotes from a New York Times Business section article dated 30 May, 2020. In one of my previous rants, in which I spoke about the actions of the Federal Reserve headed by swamp creature and the 50 million dollar man, Jerome H. Powell, Chair.  I stated the obvious, that the Reserve is going where no other Federal Reserve has gone before.  And no other economist worth his salt would have recommended.  What could go wrong?  On a Princeton University webinar on Friday 29 May 2020, when asked about his actions said, “We felt called to do what we could” and felt they needed to use tools at their disposal to “to their fullest extent”

His most revealing statement was this, “We crossed a lot of red lines that have not been crossed before”.  He admitted to this and also said, ”this is a situation in which you do that, and you figure it out afterward”.  This is mighty slim justification for shear stupidity.  How many “oops I did it again” Brittney Spears moments does this administration get?  His admission, knowing there were red lines, and that he knowingly crossed them, and in retrospect he is going to look into the potential damage? And at what cost? I thought gambling was illegal in Washington D.C.?

The swamp gas has overtaken all of Washington DC.  Where is the outrage about the 3 trillion dollars the Reserve made out of thin air (roll the presses) being squandered, in an effort to booster the Dow and S&P averages?  I may have been incorrect when I thought the Fed would be looking at the total economy, comprised of millions of small and medium sized businesses.  These are the ones that comprise the real measure of economic health, not those two indices that are comprised of the actions of only 530 stocks.  The remainder of the country’s economic health is sinking like it hit an iceberg. 

What could cross a red line you say?  The Federal Reserve is making unlimited purchases of both corporate, state and local government bond debt.  This with interest rates for borrowing from the Fed at -0- or near 0-% .  Full disclosure is the Fed buying bonds and debt?  Are the actual purchases by private equity firms borrowing the funds at 0% interest and holding the actual debt?  Buying bonds and loaning money to the same corporations to prop up stock prices?  How can you tell there is no (zero, zip, nada) oversight that will produce any accounting until after the elections in November?  Total transparency?  The electorate is for sale?

All the stated actions by the Fed are meant to soothe the impact of the Third Quarter. In other words make a rosy picture out of a crap storm all for the election in the 4^th quarter.  The Third Quarter economic numbers will most likely be in record negative values, not seen since the great depression. 

If the Fed is actually holding debt bond paper from Cities and States, Trump now holds the deck.  Without congress giving, and Trump approval of grant in aid to cover shortfalls in revenues, the cities and states the eventually default on their bonds.  Cities and states can’t print money, and if revenue sources dry up, services likewise dry up.  Taxpayers hold your ankles. Uncle Trump will be at it again.  Is this covfefe?

Corporations can and will file for bankruptcy.  A prolonged period of having no vaccine, no universal testing, and with premature mission accomplished moments, doom and gloom awaits for a majority of corporations involved in services and hosting type employment.

This is an artificial feel good, make happy with dirt move by the Fed, to prop up something that has the potential to not only fail, but may be a 3 trillion dollar experiment with the monies being better spent on the public at large. With the influx of money in the hands of the general public, the revenue stream from normal business activities will prop up cities and states so they can maintain public services.  Allocate the money to the lenders and borrowers and what happens? You have the Federal Reserve making winners and losers, all the while widening the gap between the top and the bottom of society.  If the money is put at the bottom it will eventually get to the top.

 The problem is, the top income group is so greedy they insist on getting the money now.  They are using lousy disproven economic theories as the justification.  You put the money at the top so they can say they are the employers, and it will reduce the unemployment levels.  So what did they do in the last dole out?  The companies bought back shares to booster up their stock prices. 

If you dole it out to the unemployed, in amounts maintained near their prior salaries, as if they were employed (like they did in Europe), the jobs would not vanish and demand would be the same as it was prior to the event.  The Top suffers without the profit; however their capital is in tact and the gap between rich and poor is temporarily less.

 The purchases of debt, with the potential to have the virus linger on for years, is banking on the same miracle.  A vaccine, if not available by Christmas 2021, will it make the bonds look like a good investment?

A concern is with the potential erosion of services the lack of revenue brings to all levels of government.  My long-term concern is what I’ve seen before.  Could we have similar long-term results as below?

The Middle East could give some context to where we could be headed.  The Middle East has militias to protect one tribe within an enclave of a rival tribe that refuses to garner any justice for the minority tribe. Militias could just as easily be called mobs, with one tribe taking over  punishment when justice is not otherwise available. Budget cuts to social services is being enacted to the point where justice is no longer justice, it’s just us.  Tribalism with the addition of racism can turn into mob/militia-type activity cropping up.   Without justice, this can lead to a cycle of violence.

IS IT IRONY OR IS IT JUST ME?

In addressing the 40 million unemployed, Mr. Powell noted that the “burdens” of job loss has fallen on those least able to bear the hardship.  Those who work lower paid, unskilled and service industry jobs, he has acknowledged that it has widened the inequality gap between rich and poor.  He also acknowledged that there is tremendous inequality in how the pandemic is affecting the public.  In addition, he raised a concern of a second wave having an effect on the economy.  Duh, do you think?

So Mr. Powell, you give us your take on the impact to the service and lower income groups, yet you throw all the taxpayer money at the top, with wishful thinking that roses and lollypops are just around the corner.   You might just as well bet on commodities, say like soybeans, or better yet, give the lesser of those among us that bread?

As stated by Mr. Powel, “a full recovery of the economy will really depend on people being confident that its safe to go out”.

The Chair obviously has little influence on POTUS and is more than likely taking orders from the demands of dear leader.  Mr. Powell knows that confidence and health safety are key.  The vaccine and universal testing would be the best remedy to ease the hesitation and increase confidence.  The availability of cover either is currently wishful thinking.  Confident? Safe? Ok.