Displaying items by tag: coronavirus

(Washington)

The President and his team are working furiously on plans for how to open the $22 tn US economy after its unprecedented lockdown. “We’re looking at the concept where we open sections of the country and we’re also looking at the concept where you open up everything”, says Trump. In particular, the White House is looking to open the economy entirely within 30 days, or possibly 60 days, with different schedules being considered. The new strategy is to open the economy based on much more widespread and rapid testing. This will allow workers to be verified as having (or not) the virus and sent back to work.

FINSUM: Just as the coronavirus is a nearly unprecedented occurrence, so is the reopening of the world’s largest economy. It is going to take exceptionally good planning to balance the competing priorities of public health and economic restoration.

(United States)

A lot of calculations are being done to see which states will be most hard hit by the current coronavirus lockdown. Within those assessments it is becoming clear that specific housing markets will be hit hard too. The states that look likely to have their housing markets fall the most are New Jersey, Maryland, and various counties elsewhere in the mid-Atlantic. Specifically, Sussex County (NJ), Charles County (MD), Atlantic County (NJ), Passaic County (NJ), Rockland County (NY), Orange County (NY), and Sussex County (DE).

FINSUM: These are all the locations you’d expect. The percentage of income it takes to manage a mortgage and other ownership expensive is quite high in these areas, so there is going to be a surge in delinquency.

(Brussels)

Even though cases and deaths are still rising rapidly across the European continent, many governments within the EU are planning their re-opening from the Covid lockdown. Spain, Italy, Austria, and more are undertaking and/or announcing plans to reopen as soon as this coming Monday. The rollouts don’t look likely to be rapid anywhere, but their announcement may be received as an important turning point both socially and economically.

FINSUM: Markets are up big today and this is a significant part of it. Might the US start to re-open in a 2-3 weeks (?)—that is the question on investors’ minds.

(New York)

Goldman Sachs, who has been a leader in putting out new research n the economic effects of the current lockdown, has issued new guidance on this week’s pending jobless claims. The bank thinks jobless claims will increase to a whopping 6m this week. If that happens, it would mean this week’s figure would exceed the record that stood until last week by a whopping 9x. The coming release will cover the week from March 22-28th. “Jobless claims will be the timeliest hard data point for assessing the depth of the recession and catching the start of the recovery”, says Goldman.

FINSUM: The period the release covers is not even likely to be the worst. There is probably still a few weeks before the full scale of the layoffs becomes apparent and the numbers peak.

(New York)

Citibank is pitching a convincing and optimistic view of the economy, and it is a refreshing take in an otherwise bleak landscape. The bank says the big influx of tests that will become available may allow the economy to open much sooner than planned. Their argument is that the growth in tests will allow 60% of working-age US individuals to be tested by the end of April, and 95% by the end of May. As workers are tested, they can head back to work, quickly re-opening the economy. Accordingly, by the end of this month 90 million Americans may be back at work. “While potential therapeutic strategies for COVID-19 seize headlines, we believe diagnostics rather than therapeutics are far better positioned to materially change the economic and even medical outlook for the current COVID-19 pandemic”, says Citi.

FINSUM: Honestly, this sounds like more of a plan than a forecast, but it is a very good one, and does lend some useful optimism.