Relevant and even prescient commentary on news, politics and the economy.

Pandemic boundaries

Via the Boston Globe  comes the consideration of boundary problems this pandemic poses between US states. Worth a discussion. Also, on the world stage, the EU and other countries consider relaxing travel restrictions from ‘safe’ countries, the US not among them.

Visitor quarantines may seem like a smart intervention to keep the virus from crossing state lines. Symptoms can take up to 14 days to appear after someone is infected, and research suggests people can transmit the virus even when they’re showing no signs of illness, said Dr. Nahid Bhadelia, an infectious diseases physician and medical director of the Special Pathogens Unit at Boston Medical Center.

But a quarantine strategy may not be a realistic approach to stopping further infections, she said, because it’s hard to monitor every car crossing the border, and the state can’t stop travelers flying in to airports, which are federal sites.

“After states have been going it on their own, we are now quickly realizing our state is tied to [other] states,” Bhadelia said. “What happens in Florida or Arizona is not independent. Our borders are so porous.”

Legal issues associated with attempting to block or impede travel may also prove an obstacle, said Wendy Parmet, a professor of law, public policy, and urban affairs at Northeastern University.

“Travel advisories are themselves deeply problematic,” she said. “The dilemma is showing up the disaster of what’s been happening: the fact that we don’t have a federal policy, and no consistency among the states.”

She allowed that the plight of Massachusetts this summer “may be an instance where there is some merit to [travel quarantines] because you have situations with people coming in from jurisdictions that are not doing social distancing, or widespread use of masks, and it’s a real problem.”

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Weekly Indicators for June 22 – 26 at Seeking Alpha

by New Deal democrat

Weekly Indicators for June 22 – 26 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha. The coincident indicators, as well as the short leading indicators, have continued to improve gradually each week.

But this week may be the near term peak, as the reality of renewed exponential spread of the coronavirus in recklessly reopened States starts to hit home. You cannot force people to patronize businesses if they believe it is unsafe, and when complacency leads to new outbreaks, the pain threshold will be hit at which people pull back again. Most noteworthy is that restaurant reservations did not improve in the past week – people are shying away from danger.

As usual, clicking over and reading rewards me with a little jingle in my pocket as well as bringing you right up to date with what is happening in the economy.

P.S.: I plan on putting up an extra coronavirus update later today. Stay tuned.

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Housing rebounded sharply in May

by New Deal democrat

Housing rebounded sharply in May

One aspect of the economy that is important in terms of how well things will go once the pandemic ultimately recedes (which won’t occur until after next January 20) remains housing.

And low-interest rates brought housing back from the depths in May.

My look at the current state of mortgage rates, housing sales, and prices is up over at Seeking Alpha.

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Global oil output surplus was at 8.6 million barrels per day in May, despite OPEC cut of 6.3 million bpd

Via Economic Populist, rjs writes:

Global oil output surplus was at 8.6 million barrels per day in May, despite OPEC cut of 6.3 million bpd

Wednesday of this past week saw the release of OPEC’s June Oil Market Report, which covers OPEC & global oil data for May, and hence it gives us a picture of the global oil supply & demand situation during the first month of the two-month agreement between OPEC, the Russians, and other oil producers to cut production by 9.7 million barrels a day from an elevated October 2018 baseline.   But before we review it, ​we have to caution that estimating oil demand while most countries on the planet are restarting their economies after a month or two of lockdown is pretty ​speculative, and hence the demand figures we’ll be reporting this month should be considered as having a much larger margin of error than we’d normally expect from this report…

The first table from this monthly report that we’ll review is from the page numbered 44 of this month’s report (pdf page 54), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate. For all their official production measurements, OPEC uses an average of estimates from six “secondary sources”, namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thus avert any potential disputes that could arise if each member reported their own figures…

 

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What Will History Say

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        The Past                                                                  Now             The Future

What Will History Say

by

Ken Melvin

When the new US History books come out in 2040, what will they have to say about 2020? What will they say about:  Globalization?  The Trump Presidency?  Global Warming?  The 2020 Pandemic?  China’s Rise?  America’s Decline?  Capitalism and Free markets?  Mitch McConnell?

to run where the brave dare not go.

Globalization: From a US perspective, globalization began in the 1970s with the first large-scale offshoring of semi-conductor, clothing, shoe, electronic, … manufacturing, and the large-scale importation of automobiles, and accelerated during the 1980s. Capitalists and 401Ks were the most significant forces driving globalization. As a result of globalization, the DJI soared to new heights.

By 2020, most all of our critical medicines were being manufactured in China and India; hampering our ability to respond to the Covid-19 Pandemic, causing tens of thousands of Americans to die unnecessarily. The US was no longer self-sufficient, hadn’t been for more than twenty years.

Significant unintended consequences of Globalization include:   Millions of well-paying jobs were sent overseas.  A Globalization related Opioid Epidemic that began in the 1990s. The American landscape was littered with dead and dying communities.   By 2020, 40% of US Workers were living from paycheck to paycheck; working at jobs that did not pay a living wage.   America suffered a soaring homeless population. Due to offshored critical manufacturing, the nation was unable to respond to a worldwide pandemic.

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The Challenges to the Dollar

by Joseph Joyce

The Challenges to the Dollar

The dollar’s position as the premier global currency has long seemed secure. The dollar accounts for about 60% of the foreign exchange reserves of central banks and similar proportions of international debt and loans. But recent developments raise the possibility of a transition to a stratified world economy in which the use of other currencies for regional trade and finance becomes more common.

Such a statement may seem to be inconsistent with the Federal Reserve’s activities to stabilize global financial markets. As it did during the global financial crisis of 2008-09, the Fed has activated currency swap lines with other central banks, including those of the Eurozone, Great Britain, Japan, Canada and Switzerland, as well as the monetary authorities of South Korea, Mexico, and Singapore. Those central banks that do not have swap agreements can borrow dollars from the Fed via its new foreign and international monetary authorities (FIMA) facility. Under this program, central banks that need dollars for their domestic financial institutions exchange U.S. Treasury securities for dollars through a repurchase agreement. These moves accompany the Fed’s extensive range of activities to support the U.S. economy, which include cutting the federal funds rate to zero, purchasing large amounts of Treasury, mortgage backed and corporate securities, and lending to corporations and state and municipal governments.

But other governments are uneasy with the U.S. government’s use of the dollar’s position in international finance to enforce compliance with its foreign policy goals. International transactions in dollars are cleared through the Society for Worldwide Interbank Financial Telecommunications (SWIFT) banking network and the Clearing House Interbank Payments System (CHIPS). The U.S. has denied foreign banks access to these systems when they wanted to penalize the banks for dealing with governments or companies that the U.S. seeks to punish. This practice has become more common under the Trump administration, which has used the sanctions to strike at Iran, North Korea, Russia, Venezuela, and others.

European leaders have made clear that they find this use of the dollar’s international role no longer acceptable. When the U.S. abandoned the agreements on nuclear weapons with Iran, European banks were forced to choose between defying the U.S. or their own governments, which encouraged them to continue their ties with Iran. In response, Britain, France, and Germany have founded a clearing house, Instex, to serve as an alternative system, and several other European Union members will join it. Moreover, if the Europeans proceed with the issuance of a common EU bond, there will be an alternative safe asset to U.S. Treasury bonds that will foster the use of the euro in foreign exchange reserves.

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Meanwhile potable water becomes more of a problem for Americans

From The Guardian:

In 2010, the UN declared clean water to be a human right. Yet a decade later, millions of Americans lack basic indoor plumbing, more than 100 million are exposed to toxic chemicals in their drinking water, and water bills have risen by an average of 80% across 12 US cities, in a cascading crisis of water affordability.

The Guardian is tackling the subject of the US water crisis with a landmark series, in partnership with Consumer Reports and others – and we’re asking for our readers’ help to test the water quality in your area. As Bernie Sanders and the Michigan congresswoman Brenda Lawrence argue, it is time clean water ceased to be a source of government profit, and became a basic right:

Unbelievably, when it comes to water infrastructure, America’s challenges resemble those of a developing country. The American Society of Civil Engineers gives our drinking water infrastructure a ‘D’ grade and our wastewater infrastructure a ‘D+’.

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On Choosing a Belief System

On Choosing a Belief System

by

Ken Melvin

Belief Systems, these prisms through which we view the world, have been around from our earliest days. Not so long ago, the Ancient Greeks separated the concept of what we might call belief into two concepts: pistis and doxa with pistis referring to trust and confidence (notably akin the regard accorded science) and doxa referring to opinion and acceptance (more akin the regard accorded cultural norms).

In quest of a personal Belief System, should one: Go with the flow and adapt to the Social or Cultural Norm? Follow the Abrahamic admonishment to first believe? Follow their own Reasoning? Or, should one look to Science?

Social or Cultural Norms are standards for behavior engendered from infancy by parents, teachers, friends, neighbors, and others in one’s life. Social Norms are the shared expectations and rules that guide the behavior of people within social groups; Social Norms can go a long way toward maintaining social order. Engendered, Social or Cultural Norms can be enforced by something as subtle as a gesture, a look, or even the absence of any response at all. At the extremes, aberrant social behavior becomes a crime. One could adopt Social Norms as a part or all of their Belief System.

Most modern Religions are handed down from times long past, times before much was known about anything. Most, if not all, early Religions were based on mythology. Later on, some Religions found more of their basis in whatever evidence and reasoning skills were available to a people. From the earliest times, human cultures have developed some form or another of a Belief System premised on Religion.

Humans are, uniquely it seems, given the power of comprehending, inferring, or thinking in an orderly rational way; they are given the faculty of Reason. To Reason is to use the faculty of Reason so as to arrive at conclusions; to discover, formulate, or conclude by way of a carefully Reasoned Analysis. One might base a part or all of their Belief System on Reason.

 

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