Covid-19 – worldwide countries, states, counties and cities weigh the cost of opening back up the economy versus maintaining social distancing/shelter in place. Texas announced they will re-open with a clear plan:
4/20: State Parks – masks required, groups more than 5 prohibited, maintain social distance
4/22: surgery restrictions lifted
4/24: all retail stores open limited to curbside/to go service (innovation time!!)

If you value a human life at $10M (like the government does in their risk analysis – not age weighted) the math shows it made sense to shut down the economy. Low estimates figure 1M lives were saved by shutting down and $10T is half of our GDP. Shutting down did not cause a loss of 50% of GDP but at some point that math also points to re-opening as you cannot shutdown the economy until zero deaths.

Rates – improved slightly this week in the face of forbearance fears and guideline updates.

Jobs – 5.2M people filedfor unemployment for the first time last week which is down from the previous week by 1.4M. It’s possible that we see a large revision next week as their are reports of the system being overloaded. In the previous 4 weeks 22M people filed for unemployment pegging the unemployment rate at roughly 17%.

Forbearance Claims – first week of April

Forbearance – as of April 5th 3.74% of folks with non-bank serviced loans were in forbearance, an 80% increase from the previous week. Assuming no acceleration (unlikely since most people wait until the last minute) we are already at 12%. Meanwhile Mark Calabria refuses to set up a liquidity facility for non-bank servicers. While The Care Act forced servicers to allow their borrowers to go into forbearance (without any evidence of hardship) it has not set up a method for servicers to access $$ to pay the bills for the folks in forbearance. Unfortunately this severely hampers homeowners ability to access their home equity (while Chase has increased the guidelines 700 Credit and 20% others have not) and tax payer’s shot at the American dream.

Dollar printing

The Bank of England announced they would be printing money. Normally governments raise money by issuing debt or taxation but historically governments have also printed money which can lead to hyper inflation. Hopefully it is a small amount and a short term emergency policy that other countries don’t adopt.

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