Will it be enough to buy a rally this morning? If not, we have Jerome Powell speaking at 9am and you know Powell doesn't speak before the open unless he's going to boost the market, lest he face the wrath of the President. We also get the Atlanta Fed Report at 10am and there's a 30-year bond auction at 1pm that should go well becuase, despite the low rates – people are still terrified.
The US is already running a $3Tn deficit in Q2 and no country in history has ever had to borrow so much money in such a short period of time so jacking that number up to $6Tn is concerning – especially as it would put Trump's accumulated deficit up over $13Tn – addding 66.6% (of course) to the National Debt in just 3.5 years since he took office.
Of course we have to spend money in a crisis – that's not Trump's fault (though the extent of the crisis is) but it's not like we were starting with a budget that was under control. Spending $6Tn would be fine if we knew FOR A FACT that this would be the end of it but we haven't cured anything, we haven't prevented anything, we haven't even got a plan for riding this thing out. The Administration, at the moment, is pushing for "Get back out there and try not to die."
While the Trump Administration is rushing to get the economy opened back up, Dr Fauci was testifying to Congress yesterday that this is a terrible idea:
“There is a real risk that you will trigger an outbreak that you may not be able to control,” Dr. Fauci warned. That could result not only in “some suffering and death that could be avoided,” he said, “but could even set you back on the road to trying to get economic recovery.”
“We have met the moment and we have prevailed,” President Trump declared on Monday. Now, I know everyone is now an Epidemiologist but the guys who actually went to school for it believe it's too soon to open up the cities while the Adminstration and their usual Propagandists are pointing to numbers to show the spread of the virus is slowing. Well, that's nice but IT'S SLOWING IN A LOCKDOWN!!! That's kind of a key point. The other key point is it's slowing but not stopped DESPITE the lockdown so – if we end the lockdown – will the spread of the virus get better or worse? Come on – it's not a trick question – you can work it out.…
Worse, in this case, MIGHT mean catastrophic. You may think this is a catastrophe but this is NOTHING compared to what will happen if Donald Trump is wrong and Dr Fauci is right (the head of the CDC agrees with Dr Fauci too) because we got to where we are now (1.4M infected Americans, 82,389 deaths already) from 1,557 cases on March 13th so up about 1,000 times in two months. And that's 2 months that we were in lockdown!
So if the disease spreads 1,000 x while we are in lockdown – imagine what it can do once we get back out there! I know that the lockdown is devastating for the economy but we can bring the economy back to life – we can't bring our friends and family back to life – the moral choice is clear even if the economic choice is hard.
The major problem is we won't know the lockdown is failing until it's far too late. We are potentially putting 15,000 infected people back on the streets and giving them a week to infect 15M more Americans and THEN we will go back on lockdown where we already know the virus will continue to spread. Is this a rational thing to do?
I know how everyone feels, restaurants in my town are re-opening with outside tables and I REALLY want to go out, sit down and have a meal. It's something I used to do every day and now it's what I want for Christmas – funny how things change. But is it worth my life, my family's lives? And what is the real point of opening restaurants at 25% capacity? Are we going to run the economy at 25% capacity? Aren't we better off FIXING The problem first and then trying to restart things?
CNBC has been interviewing businesses that are opening up and they are saying they can't afford to re-staff and they can't get PPE supplies or even disinfectant – none of the things we need to have in place to safely re-open. Not to mention the lack of testing, which Trump has now decided to claim is not a problem anymore but every person who leaves their home without knowing if they are carrying the virus or not is a huge problem.
I feel like I'm on the Titanic yelling "Iceberg!" while the band just keeps on playing…