I'm not here to blow my own horn or the movie by Frank Sinatra. However, JFL told you one month ago that the unemployment numbers should be 10 million higher and he was right. Now, we get reports like this one from the University of California at Beck Institute. It says that 42% of all recently laid off workers will permanently lose their job. Not good.
Another opinion with a similar observation comes from Michael Feroli of JP Morgan Chase. He sees the recovery and return to employment as very slow. In a related aspect the stock market has been betting on artificial intelligence firms in the recent rally. This won't be good for workers or their wages.
Covering Your Ass
The Fed Chairman, Powell said in an interview on 60 Minutes that the economy will recover. Don't bet against America. Another Great Depression is unlikely.
However, later he said, "No one knows what will happen and it appears the recovery will drag out into 2021. It depends on Congress."
I see a lot of "ifs" to his call. If you are making bets, I'd rather go with the Yankees.
Isn't it the norm that one politician blames another segment of government for our problems, most notably the economic ones? We, at Evolution see it as both of our political parties are corrupt. They both allowed manufacturing to outsource labor. They refuse to provide protectionism while every nation in the world resorts to utilize protectionism. Every nation claims that they don't, but they lie just like our politicians. We have reached an inflection point in our economy. Our rising poverty rates, homelessness and shrinking middle class all point to an economy that has little social mobility. This was all evident prior to the virus. The virus showed us that we cannot protect ourselves because we don't produce anything. Not even a simple protective mask. The supply chains are all imports from China. The only thing that we export is DEBT!
P.S. The amount is $3 billion per day.
Here is another reason to End the Fed!
The excessive money printing is mind boggling until you realize some concrete points.
1 million seconds = 11 days
1 billion seconds = 1988
1 trillion seconds = 30,000 B.C.
This is currency destruction and standard of living destruction. For example, your household earns
$50,000 a year. It will take 20 million years to earn one trillion.
A job that pays one dollar per second or $3,600 a day which translates to $86,400 a year needs 31,700 years to reach $1 trillion. The Federal Reserve printed $9 trillion in one month.
Not alone...
The Fed has all central, fiat banks doing the same thing. The G-20 recently agreed to freeze bilateral loan repayments until the end of 2020. I bet that this will be extended. Why, you ask? Because defaults are happening so fast with so many that they are overwhelming the international court system just like the virus overwhelmed hospitals. Oil is central to the economic well being of Mexico, Nigeria, Columbia, Ecuador as well as many other nations. Their budgets are busted with the decline in the price of oil. This is also happening in the EU due to expenses that were not planned due to Covid-19. There is a rising meme to split from the EU and Brexit has not yet been resolved.
Housing worries
It is bad enough that housing had a no spring sale season, but with people losing their income, this is beginning to surface. Vacation homes are coming onto the market. Oxford Economics estimates that 15% of Americans are behind on their mortgage payments. With home prices high the owners of second homes are deciding to change future plans. These homes are far from services. If a flood of them hit the market at the same time, prices will not only fall, but the housing market could change overnight. It could go from a limited supply to a glut of homes. This is doubly possible in retirement communities.
More tension...
China passed a new law circumventing Hong Kong's current legislation. This could cause economic problems to the 1300 US firms doing business in Hong Kong. That huge number should give everyone some insight to the amount of US jobs lost to outsourcing. I can almost hear the critics saying, "This is the positive effects of globalization." Yeah, I got your positive effects, right here, pal. Try to find a job that pays a living wage in America? Anyway, this law will come in conflict to the special trading privilege relationship that the US has with Hong Kong. To be honest, I did not know that we enjoyed a special relationship with Hong Kong. Nevertheless, going forth this is in doubt.
In a related aspect...
Nations are displaying low-level, tit-for-tat tendencies. France said that it will impose a 14-day quarantine on all foreign fliers. The UK responded with a similar quarantine. This only hurts both nations and all airlines. The international airline agency, IATA said the airlines need stimulus, but it should come without political strings. Global airlines recovery will be slow and hard as the firms have to much debt. We, at Evolution feel nations should make a decision. Either you impose flight restrictions on a nation or allow travelers to fly freely like before the virus hit.
Don't believe all stats...
The makers of the game, "Fortnight" claim that they have 350 million users in the US. Last time I checked with the US Census, the population figure was 320 million. I guess the company uses modern math? Go figure! Be save. Be positive. Be with His peace.
