2/7/20: America's Scariest Charts Updated

Some updates from the US Labour Markets to our America's Scariest Charts series today.

First, headline official Non-Farm Payrolls data for the month of June 2020 is out today. Here is the visual:

Total Non-Farm Payrolls dropped during the COVID19 pandemic to the crisis-period low of 130,303,000 in April 2020. This marks a drop of 22,160,000 on pre-crisis high - a decline of 14.53%, the sharpest drop on record for any recession. Since then, the payrolls improved in May and again in June. Payrolls rose 2,699,000 in May and by 4,800,000 in June, prompting the White House (and the army of its trolls) to herald an 'unprecedented' 'tremendous' recovery. However:

• Despite these gains, current employment levels remain 14,661,000 below pre-COVID19 highs.  
• Relative to the pre-COVID19 trend, current payrolls are 15,398,000 below where they would have been were the pre-crisis trends to remain place. 

Hardly 'tremendous' success so far.

Summary of comparatives of the current recession to prior recessions:

Now, next in the set of our America's Scariest Charts: initial unemployment claims 9also released today). The table above already shows the latest print for these series - for the week ending June 27, 2020, at 1,445,481 new claims filed. This was virtually unchanged on the revised final estimate for the week ending June 20, 2020 that came in at 1,460,056. New claims have basically stabilized from the week of May 30th through latest. 

The six-months moving sum of all initial unemployment claims filings is now at a massive 47.477,907. This number, of course, are reflective of claims filed. And it does not reflect expired claims or people moving from unemployment to employment. Hence, it is useful in only highlighting the relative magnitude of the current jobs crisis controlling for duration.

Prior to the COVID19 pandemic, there has been only one instance of initial unemployment claims exceeding 1 million count in any given week - during the week of January 9, 1982, when there were 1,073,500 new claims filed. Which means that last week's print - although well below peak COVID19 filings - still stands almost 35% above the worst weekly unemployment claims filing in pre-COVID19 history. 

So here is the overall 'recovery' to-date:

You can call it 'magnificent' or 'tremendous' or you can call it 'ugly'. I guess your perspective will depend on your party affiliations and the membership in the 1% vs 99% clubs.

19/6/20: Fox News, COVID19 Social Distancing and COVIDIOTS?

How influential is the U.S. mainstream media in defining public attitudes toward pandemic risk, decision-making under severe uncertainty and risks to their own health? It turns out - hugely influential.

A new paper from a group of U.S. economists, titled "The Persuasive Effect of Fox News: Non-Compliance with Social Distancing During the Covid-19 Pandemic" (authored by Andrey Simonov, Szymon Sacher, Jean-Pierre Dube, and Shirsho Biswas, May 17, 2020 https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_202067.pdf) finds that:

• "The average partial effect of Fox News viewership in a zipcode implies that 1 percentage point increase in cable viewership reduces the propensity to stay at home by 8.9 percentage points compared to the pre-pandemic average." 
• "A persuasion rate of Fox News on noncompliance with stay-at-home behavior during the crisis of about 33.5% − 50% across our various social distancing metrics."
• Simple regression (OLS) analysis o"generate a positive and statistically significant effect of Fox News viewership from early March onwards."
• More robust, IV estimates. "are considerably larger and indicate a take-off in the Fox News effect in early March and a stabilization in mid March, almost immediately after the declaration of a national emergency."
• "Since the supply-side measures, such as business closures, start to happen only two weeks later after the take-off of Fox News effects, the magnitudes of the viewership effects reflect the persuasive effect of Fox News on viewers and not a feedback effect from the equilibrium response of firms, at least early on."
• "Our findings for CNN are inconclusive, with imprecise point estimates centered near zero."

17/5/20: Sovereign Default Risks and COVID19

Euromoney is covering sovereign default risks in Latin America in the wake of COVID19, with a comment from myself: https://www.euromoney.com/article/b1320n1grh638l/argentinas-crisis-threatens-brazils-faltering-economy.

20/3/20: Central Banks are Failing to Reinflate the Deflating Bubble

In the last 5 days, central banks around the world have announced 2020 monetary stimuli to the tune of USD 4 trillion (inclusive of measures continuing from those announced back in late 2019). This is what this bought them in the markets:

The problem with 'doing more of the same and expecting different results' is that the measures being deployed by the monetary authorities are predominantly skewed on simply increasing the total quantum of debt in the global economy already croaking under a mountain of debt. The markets see this. The markets know this. And, at long last, the markets are not buying any more of this.

On what timeline will the central bankers and their masters in the governments recognize the same?..