Repo Commentary-05/20/20

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It is Day 71 (on 5/20) since the start of the COVID-19 American shelter-in-place/quarantine response (7 states did not issue a shelter-in-place order), and the day that the WHO declared it a ‘pandemic’ (3/11/20). Things have changed a lot in the past week, with many states relaxing restrictions, while several states extended restrictions.

I hope that you and your families are staying healthy and safe. The COVID-19 pandemic continues to take its literal mortal, economic, and mental toll on millions of people around the world.

I mentioned that the book I ghostwrote last year, became the No.1 bestseller on Amazon last week, in Kindle form. Today, the hardcopy version of my book is being released. I am outlining another book, which will be a true story written by me, and not a memoir about someone else. I believe the first of a series of articles that I was commissioned to write will be published sometime in the next 2 weeks.

I am still not retired from the Securities Finance industry. I am working with an electronic trading platform, and making great headway on providing a large electronic solution for several markets. I am also available for hire as a consultant, with almost 38 years of experience in the Repo & Securities Lending industry. So, if you need my Securities Financing expertise or access to my vast network of about 9000 clients, call my mobile (646-753-1300), email (jeffkidwell82@gmail.com), or hit me up on LinkedIn.

My Repo Commentary, however, is posted FREE (it’s actually always been free) on my website: www.repocommentary.com. It also pops up on LinkedIn, the Global Investors Group (ISF Magazine) website, and on CentralBanks.com as an op-ed. I am interested in entertaining you and taking your mind off the pressures you are under. I intend to publish a Repo Commentary every week on Monday or Tuesday.

Since its inception in 1982, the Repo Commentary does not represent the views of any of my former firms and reflects only my opinion and includes only publicly available information. I make a strong effort to attribute any quotes or thoughts that are not my own, I do not make any marketing spiels, and I really am more interested (70-80%) in entertaining you than boring (20-30%) you with too much market info. Feel free, as always, to send me information or pictures, to make it better! But, I digress, on with the non-fake news.

Holidays or Events (05/20):

Be A Millionaire Day
Eliza Doolittle Day
Emergency Medical Services for Children Day
Flower Day
Pick Strawberries Day
National Rescue Dog Day
National Quiche Lorraine Day
International Clinical Trials Day
World Bee Day
World Autoimmune Arthritis Day
Weights and Measures Day
Turn Beauty Inside Out Day
World Metrology Day
National Day (Cameron)
National Awakening Day (Indonesia)
Josephine Baker Day (NAACP)
Independence Restoration Day (East Timor from Indonesia)
European Maritime Day (EC)
Emancipation Day (Florida)
Day of Remembrance (Cambodia)

Next Monday is Memorial Day in the US. All US markets will be closed for this Federal holiday.

Some Famous People Born on 05/20 in History:

1818-Willam Fargo, American businessman and politician, co-founded Wells Fargo and American Express
1851-Emile Berliner, German-American inventor, invented the Gramophone record
1919-George Gobel, American comedian
1925-Alexei Tupolev, Russian engineer, designed the Tupolev Tu-144
1927-Bud Grant, American football player and coach
1940-Stan Mikita, Slovak-Canadian ice hockey player and sportscaster
1940-Sadaharu Oh, Japanese-Taiwanese baseball player and manager
1944-Joe Cocker, English singer-songwriter
1948-Cher, American singer-songwriter, producer, and actress
1946-Bobby Murcer, American baseball player, coach, manager, and sportscaster
1949-Dave Thomas, Canadian actor, director, producer, and screenwriter
1960-Tony Goldwyn, American actor and director
1963-David Wells, American baseball player and sportscaster
1971-Tony Stewart, American race car driver
1972-Busta Rhymes, American rapper, producer, and actor
1984-Patrick Ewing Jr., American basketball player

Daily Weird Facts:

The Chivas Regal effect is when an increase in the price of a product drives increased sales without a change in the quality of the product. This happens because consumers frequently associate quality with cost.

Daily Affirmation/Thought/Pun/Quote:

“Still haven’t decided where to go for Memorial Day—The Living Room or The Bedroom.”–anonymous

Currency and Commodity Markets:

Oil prices closed at:

$74.34/barrel on 10/5

$47.66/barrel on 12/23

$48.63 on 01/07

$52.31/barrel on 01/16

$55.26/barrel on 2/3

$55.41/barrel on 2/26

$73.77/barrel on 4/29

$63.28/barrel on 5/17

$54.07/barrel on 6/18

$55.96/barrel on 7/24

$58.31/barrel on 9/10

$53.50/barrel on 10/2

$59.10/barrel on 12/8

$58.81/barrel on 1/17

$54.39/barrel on 2/7

$35.92/barrel on 3/11

$27.15/barrel on 3/18

$29.90/barrel on 3/23

$27.43/barrel on 3/27

$24.90/barrel on 4/01

$31.80/barrel on 4/12

$28.31/barrel on 4/17

$20.03/barrel on 4/27

$26.78/barrel on 5/04

$30.39/barrel on 5/09

$35.69/barrel on 5/20

Oil prices are a mess. Norway has resorted to its first ever withdrawal of an estimated $37 billion from its $1 trillion sovereign oil fund, due to the financial pressures from the pandemic and the oil price collapse. This method keeps it from having to borrow the money from the bond markets. The Norway fund is now the world’s largest sovereign wealth fund and was established in 1969. Meanwhile, oil traders needing to store oil for future sale are booking more expensive US-based vessels that are normally limited to domestic shipments under the century-old Jones Act. Some Jones Act tankers are also reportedly being used for international fuel shipments. EIA reports the second straight weekly decline in US crude supplies. The price of gasoline at my West Palm Beach station has stopped falling and risen another 3 cents in the past week, at $1.79/gallon. Most of the other stations in the area are 20-60 cents more per gallon.

One USD versus the Yen was trading at (these are all around Repo Commentary dates):

112.20 on 12/24

108.60 on 01/07

109.07 on 01/16

103.18 on 02/03

104.86 on 2/25

103.86 on 5/17

102.59 on 6/18

102.43 on 7/24

101.72 on 9/10

102.16 on 10/02

102.96 on 12/06

104.30 on 01/17/20

104.80 on 02/07/20

99.23 on 03/11/20

101.67 on 03/18/20

104.77 on 03/24/20

102.22 on 04/13/20

102.14 on 04/19/20

101.57 on 04/27/20

106.82 on 05/04/20

100.80 on 05/10/20

102.04 on 05/20/20

One Euro was trading on:

12/24 at $1.1426

01/07 at $1.1478

01/16 at $1.1396

02/03 at $1.2047

02/25 at $1.1955

05/17 at $1.1761

06/18 at $1.1825

07/24 at $1.1740

09/10 at $1.1623

10/02 at $1.1504

12/06 at $1.1688

01/17 at $1.1721

02/07 at $1.1543

03/11 at $1.1937

03/18 at $1.1575

03/24 at $1.1400

04/13 at $1.1523

04/19 at $1.1394

04/27 at $1.1407

05/04 at $1.0903

05/10 at $1.1402

05/20 at $1.1522

One British Pound was trading on:

12/24 at $1.2655

01/07 at $1.2770

01/16 at $1.2880

02/03 at $1.3758

02/25 at $1.3728

05/17 at $1.3427

06/18 at $1.3157

07/24 at $1.3070

09/10 at $1.2959

10/02 at $1.2882

12/06 at $1.3819

01/17 at $1.3753

02/07 at $1.3574

03/11 at $1.354

03/18 at $1.2665

03/24 at $1.2231

04/13 at $1.3143

04/19 at $1.3058

04/27 at $1.3052

05/04 at $1.2435

05/10 at $1.3005

05/20 at $1.2844

One USD versus the CAD at:

1.3442 on 12/24

1.3297 on 01/07

1.3255 on 01/16

1.2492 on 2/03

1.2492 on 2/25

1.2800 on 5/17

1.2740 on 6/18

1.2480 on 7/24

1.2520 on 9/10

1.2560 on 10/02

1.2530 on 12/06

1.2390 on 01/17
1.2640 on 02/07

1.3020 on 03/11

1.3540 on 03/18

1.3690 on 03/24

1.3250 on 04/13

1.3390 on 04/19

1.3350 on 04/27

1.4090 on 05/04

1.3250 on 05/10

1.3250 on 05/20

The USD has advanced strongly against all major currencies over the past week. The Euro/USD exchange was very close to the Maastricht Treaty low of $1.08. The CAD/USD is near historic highs.

Gold closed on 9/09 at $1504.90/ounce. On 10/02, it closed at $1498.70/ounce. On 12/6, it closed at $1,464.40/ounce. On 1/17, it closed at $1557.30/ounce. On 2/07, it closed at $1,576.20/ounce. On 3/11, it closed at $1,641/ounce. On 3/18, it is trading at $1,487.60. On 3/24 it was trading at $1,659.80, way up. On 3/27 it is trading at $1,627.00. On 4/01, it is trading at $1,591.60. On 4/12, it skyrocketed to $1,738.00. Yet, on the eve of 4/20, it has backed off a little to $1,694.50. On 4/27, it traded at $1,724.20/ounce. On 5/04, it was trading $1,712.70. On 5/10, it was trading at $,1,708.90/ounce. On 5/20, it was trading at $1,753.80/ounce.

Bitcoin was trading at (around Repo Commentary Dates):

$8,185.21 on 7/25

$6,350 on 10/5

$3,774.97 on 12/24/18

$3,7774.97 on 01/07

$3,598.90 on 01/16

$3,421.10 on 02/06

$3,826.44 on 02/26

$8,100.00 on 05/16

$7,215.79 on 05/17

$9,088.59 on 06/18

$11,919.30 on 06/25

$9,790.37 on 07/24

$10,183.90 on 09/10

$8,235.46 on 10/02

$7,470.41 on 12/06
$8,876.87 on 01/17/20

$9,793.18 on 02/07/20

$7,871.60 on 03/11/20

$5,216.64 on 03/18/20

$6,728.03 on 03/24/20

$6,646.60 on 03/27/20

$6,443.44 on 03/31/20

$6,908.13 on 04/12/20

$7,128.45 on 04/19/20

$7,748.29 on 04/27/20

$8,775.36 on 05/04/20

$8,771.73 on 05/10/20

$9,525.54 on 05/20/20

After rebounding in 2019 dramatically since the beginning of the year, although certainly not to its $19,000 high, Bitcoin hit a wall at the beginning of the Summer, then rallied during the Summer, and tumbled again in Q4, and had rallied in early in 2020. It then gave up all of those 2020 gains with the COVID-19 contagion. Now, it has rallied sharply in the last few weeks, leading to its impending ‘halving event’. In fact, this 15% rally in the past week is probably because of the allure of having twice as many bitcoins for owners, similar to a stock-split. Last week’s gain was part of the first seven-week rally streak in Bitcoin in a year. In fact, Bitcoin is up over 130% since 3/13/20, when it hit $3,867. This will be the 3^rd‘halving event’ for Bitcoin, since its inception, and will occur on 5/12/20. There were strong rallies prior to the other two ‘halvings’ as well. ‘Halving’ refers to a programmed-in event in Bitcoin’s code, which reduces the reward per block mined by 50% every 4 years to control inflation. Following the halving, rewards issued will drop to 6.25 BTC from the current 12.5 BTC. I’ve heard the promotional material that halving events create lesser supply (half the payment for miners, so less supply of coins) and increase the media attention on Bitcoin and could lead to a rally. But, the charts from the previous halvings have shown more of a sideways move, even a drop in prices for one, and months later, a rally. You know, being a huge stochastics fan my entire career, I have always felt, naively, that any market, at any time, is operating in a pattern either predictable by stochastics or as the result of changing fundamentals. Except Bitcoin. I have not been able to recognize the stochastic patterns easily or correlated the fundamentals with market reaction. So, that’s what I reported in the 5/11 Repo Commentary, but instead, Bitcoin has rocketed higher, after the halving. In fact, it has already tested the $10,000 level three times by 5/20.

Global Financial News:

Nasdaq is planning rule changes that could limit Chinese businesses’ access to the Exchange and ability to launch IPOs, because of alleged concerns about the reliability of accounting information. Bond analysts are warning companies that it is “inappropriate” for them to use alternative performance metrics such as so-called ebitdac, to analyze their bonds, which artificially increases earnings calculations by assuming that the COVID-19 crisis didn’t happen, per FT. Users of Robinhood reported outages while the stock market was in a particularly positive trading phase on Monday, which Robinhood said it has fixed. E*Trade users also reported glitches on the platform on Monday. The American Securities Association has sued the SEC to prevent the consolidated audit trail from collecting investors’ personally identifiable information, alleging that it is a substantial risk to the privacy of American investors. The first OTC swaps linked to the Singapore overnight rate average were cleared at LCH on 5/18. SORA is similar to SOFR in the US. Previously, the Bank of China and France’s Credit Agricole had executed the first cross-currency swap between the US dollar and China’s renminbi based on SOFR. The $10 million one-year swap was confirmed on the China Foreign Exchange Trade System platform. JPMorgan reports that it has loaned $30 billion to 250,000 small businesses through the PPP. Janus Henderson is forecasting that the COVID-19 pandemic could make $493 billion in global dividends evaporate, a drop of more than one-third. Trade tensions and tariffs, along with COVID-19, have heightened nationalism over globalization, including data on citizens. Countries are increasingly requiring data localization, keeping info stored about citizens in the country where they live and not releasing to other countries. For bankers, that could mean that the client information that they think is stored in the Cloud, may actually be stored in a specific country’s server and not available to them in the future. Four months after Ecuador sold $400 million in Social Bonds to build affordable housing, the bonds are trading below their original offering price, but yet investor demand still remains. The bonds yield 7.3%. UBS posted a 40% profit gain and has signaled confidence on its credit portfolio. HSBC profit slid to $3.2 billion, as loan losses loom. Morgan Stanley is launching a Canada Wealth business. I used to run the Morgan Stanley Repo desk. President Trump said he is considering holding the G-7 meeting at Camp David.

US Market News:

The COVID-19 pandemic continues to wreak havoc on global economies and equity markets. US GDP declined 4.8% in Q1. That was the sharpest contraction since the global Financial Crisis and ended the longest economic expansion on record. The reduction of COVID-19 lockdowns is having a direct impact on stock prices rising. The Dow is up today (5/20) as I write this, about 400 points on Caterpillar and Intel.

The Dow Jones Industrial Average continues to experience enormous volatility recently, as regulators continue to resist reinstating the Uptick Rule, which disappeared after the Great Recession. Nasdaq’s CEO Adena Friedman said that the triggering of the SEC’s market-wide circuit breakers in March provided an opportunity to reassess how useful they are, and said “they can be effective, but we should obviously be looking at how we can improve them.” Here are the latest DJIA closes for the past month or so, just to demonstrate the massive volatility (I’m starting to think I missed the bottom to buy in):

5/19/20 24,206.86

5/18/20 24,597.37

5/15/20 23,685.42

5/14/20 23,625.34

5/13/20 23,247.57

5/12/20 23,764.76

5/11/20 24,221.99

5/08/20 24,331.32

5/07/20 23,875.89

5/06/20 23,664.64

5/05/20 23,883.09

5/04/20 23,749.76

5/01/20 23,723.69

4/30/20 24,345.72

4/29/20 24,633.86

4/28/20 24,101.55

4/27/20 24,133.78

4/24/20 23,775.27

4/23/20 23,515.26

4/22/20 23,475.82

4/21/20 23,018.88

4/20/20 23,650.44

4/17/20 24,242.49

4/16/20 23,537.68

4/15/20 23,504.35

4/14/20 23,949.76

4/13/20 23,390.77

4/10/20 market closed

4/09/20 23,719.37

4/08/20 23,433.57

4/07/20 22,653.86

4/06/20 22,679.99

4/03/20 21,052.53

4/02/20 21,413.44

4/01/20 20,943.51

3/31/20 21,917.16

3/30/20 22,327.48

3/27/20 21,636.78

3/26/20 22,552.17

3/25/20 21,200.55
3/24/20 20,704.91

3/23/20 18,591.93

3/20/20 19,173.98

3/19/20 20,087.19

3/18/20 19,898.92

3/17/20 21,237.38

3/16/20 20,188.52

3/13/20 23,185.62

3/12/20 21,200.62

3/11/20 23,553.22

3/10/20 25,018.16

3/09/20 23,851.02

3/06/20 25,864.78

3/05/20 26,121.28

3/04/20 27,090.86

3/03/20 25,917.41

3/02/20 26,703.32

2/28/20 25,409.36

2/27/20 25,766.64

2/26/20 26,957.59

2/25/20 27,081.36

2/24/20 27,960.80

2/21/20 28,992.41

2/20/20 29,219.98

2/19/20 29,348.03

2/12/20 29,551.42 record high

The Dow Jones closed at (Repo Commentary Dates):

26,656.77 on 9/20/18

26,447.05 on 10/5/18

21,792.20 on 12/23/18

21,712.53 on 12/26/18

24,207.16 on 01/16/19

25,063.89 on 2/06/19

26,106.47 on 2/25/19

25,862.68 on 5/16/19

26,465.54 on 6/18/19

27,269.97 on 7/24/19

26,793.09 on 9/10/19

26,229.31 on 10/02/19

28,015.06 on 12/06/19

29,348.10 on 01/17/20

29,185.07 on 02/07/20

29,551.42on 02/12/20 record high

23,553.22 on 03/11/20

21,237.38 on 03/17/20

18,591.93 on 03/23/20

22,552.17 on 03/26/20

21,917.16 on 03/31/20

23,719.37 on 04/09/20

24,242.49 on 04/17/20

24,133.78 on 04/27/20

24,331.32 on 05/08/20

24,206.86 on 05/19/20

A 30% rebound on the S&P 500 since 3/23/20 has underscored the ways in which different markets appraise the outlook for the economy, amid the COVID-19 pandemic. This is a disparity with the Labor Department data showing that the real economy has lost 20.5 million jobs in just April. The S&P 500’s forward price-to-earnings ratio has reached 21, the highest point since 2001 (during the Dot.com bubble), despite disappointing corporate earnings.

S&P 500 has closed on:

10/5/18 at 2,885.58

12/26/18 at 2,467.70

01/07/19 at 2,549.69

01/16/19 at 2,616.10

02/06/19 at 2,706.53

02/25/19 at 2,799.34

05/16/19 at 2,876.32

06/18/19 at 2,917.75

07/24/19 at 3,019.56

09/10/19 at 2,969.04

10/02/19 at 2,906.94

12/06/19 at 3,145.91

01/17/20 at 3,329.62

02/07/20 at 3,335.27 down 10.51 from new all-time high

03/12/20 at 2,480.64

03/17/20 at 2,529.19

03/23/20 at 2,237.40

03/26/20 at 2,630.07

03/31/20 at 2,584.59

04/09/20 at 2,789.82

04/17/20 at 2,830.88

04/24/20 at 2,854.65

05/08/20 at 2,929.80

05/19/20 at 2,922.35

Nasdaq too gave up its 8/28/18 high of 8,030.04, closing on:

10/5/18 at 7,788.45

12/26/18 at 6,554.36

01/07/19 at 6,823.47

01/16/19 at 7,034.70

02/06/19 at 7,263.87

02/25/19 at 7,561.87

05/16/19 at 7,898.05

06/18/19 at 7,953.68

07/24/19 at 8,321.50

09/10/19 at 8,043.58

10/02/19 at 7,809.22

12/06/19 at 8,656.07

01/17/20 at 9,388.95

02/07/20 at 9,555.96 down 16.19 from new all-time high

03/12/20 at 7,201.80

03/17/20 at 7,334.78

03/23/20 at 6,860.67

03/26/20 at 7,797.54

03/31/20 at 7,700.10

04/09/20 at 8,153.58

04/17/20 at 8,650.14

04/27/20 at 8,730.16

05/08/20 at 9,121.32

05/19/20 at 9,185.10

The US Treasury department expects to borrow a record $2.99 trillion during Q2, more than any quarterly amount during the Great Recession. Fed’s Thomas Barkin said that the large volume of borrowing undertaken by the US government is necessary to respond to economic turmoil caused by the COVID-19 pandemic. In March, US Treasuries saw a record amount of foreign selling, to the tune of $299.3 billion (a sharp contrast to February’s overall BUYING of $4.9 billion!). The CME Group has seen its profit jump from trading volatility. As the Fed is winding down its latest QE (is that QE 3?), while US Treasury supply is increasing, it is having the most impact on MBS, where the market was relying on Fed purchases more to prop up day-to-day prices. Over the last few weeks, the Fed has reduced its MBS purchases from $8b per day to $6b per day. But, the Fed’s initial move to buy whopping amounts of MBS already has dearly cost some MBS originators, like Quicken Loans, according to Bloomberg, about $5 billion in margin calls from Street hedge counterparties, which has had a ripple effect on the rate of originations. There is less money available for people to purchase homes or refinance at lower interest rates. Mortgage lenders promise to lock in interest rates for borrowers weeks before the loans are closed, then hedge that short-term risk by shorting mortgage-related securities. But, the Fed’s massive buying program made those securities’ prices immediately shoot up, causing the hedges to plunge into the red and forcing Street margin calls on the lenders. Instead of a safety hedge for the lenders, the hedges became immediate drains on their cash. This is also a symptom of the 24 primary dealers not necessarily passing along the easy money they are receiving from the Fed to originators who then pass it to the public. Maybe the Fed should go directly to Fintech digital hedge firms that could create mid-market execution for the originators, bypassing the Street?

2 YEAR NOTES closed on:

10/5/18 at 2.88%

12/18/18 at 2.65%

01/07/19 at 2.53%

01/16/19 at 2.55%

02/06/19 at 2.52%

02/22/19 at 2.48%

05/16/19 at 2.20%

06/18/19 at 1.86%

07/24/19 at 1.83%

09/09/19 at 1.58%

10/01/19 at 1.56%

12/06/19 at 1.61%

01/17/20 at 1.58%

02/06/20 at 1.44%

03/11/20 at 0.50%

03/17/20 at 0.47%

03/23/20 at 0.28% wow!

03/26/20 at 0.30%

03/31/20 at 0.23%

04/09/20 at 0.23%

04/17/20 at 0.20%

04/27/20 at 0.24%

05/10/20 at 0.16% historic low

05/19/20 at 0.17%

3 YEAR NOTES closed on:

10/5/18 at 2.99%

12/18/18 at 2.64%

01/07/19 at 2.47% (inverted to 2years)

01/16/19 at 2.53%

02/06/19 at 2.50%

02/22/19 at 2.46%

05/16/19 at 2.15%

06/18/19 at 1.80%

07/24/19 at 1.79%

09/09/19 at 1.52%

10/01/19 at 1.51%

12/06/19 at 1.64%

01/17/20 at 1.58%

02/06/20 at 1.43%

03/11/20 at 0.58%

03/17/20 at 0.54%

03/23/20 at 0.31% wow!

03/26/20 at 0.36%

03/31/20 at 0.29%

04/09/20 at 0.29%

04/17/20 at 0.26%

04/27/20 at 0.29%

05/10/20 at 0.21%

05/19/20 at 0.22%

5 YEAR NOTES closed on:

10/5/18 at 3.07%

12/18/18 at 2.65%

01/07/19 at 2.49%

01/16/19 at 2.54%

02/06/19 at 2.51%

02/22/19 at 2.47%

05/16/19 at 2.18%

06/18/19 at 1.83%

07/24/19 at 1.82%

09/09/19 at 1.49%

10/01/19 at 1.51%

12/06/19 at 1.67%

01/17/20 at 1.63%

02/07/20 at 1.45%

03/11/20 at 0.66%

03/17/20 at 0.56%

03/23/20 at 0.38%

03/26/20 at 0.51%

03/31/20 at 0.37%

04/09/20 at 0.41%

04/17/20 at 0.36%

04/27/20 at 0.41%

05/10/20 at 0.33%

05/19/20 at 0.35%

7 YEAR NOTES closed on:

10/5/18 at 3.18%

12/18/18 at 2.74%

01/07/19 at 2.60%

01/16/19 at 2.62%

02/06/19 at 2.59%

02/22/19 at 2.55%

05/16/19 at 2.28%

06/18/19 at 1.93%

07/24/19 at 1.93%

09/09/19 at 1.57%

10/01/19 at 1.59%

12/06/19 at 1.78%

01/17/20 at 1.74%

02/06/20 at 1.56%

03/11/20 at 0.78%

03/17/20 at 0.91%

03/23/20 at 0.63%

03/26/20 at 0.72%

03/31/20 at 0.55%

04/09/20 at 0.60%

04/17/20 at 0.53%

04/27/20 at 0.56%

05/10/20 at 0.53%

05/19/20 at 0.54%

10 YEAR NOTES closed on:

10/5/18 at 3.23%

12/18/18 at 2.82%

01/07/19 at 2.70%

01/16/19 at 2.73%

02/06/19 at 2.70%

02/22/19 at 2.65%

05/16/19 at 2.40%

06/18/19 at 2.06%

07/24/19 at 2.05%

09/09/19 at 1.83%

10/01/19 at 1.65% dramatic drop in one month!

12/06/19 at 1.84% dramatic rise in two months!

01/17/20 at 1.84%

02/06/20 at 1.65% and back down again!

03/11/20 at 0.82%

03/17/20 at 1.02% and back up again

03/23/20 at 0.76% and back down again

03/26/20 at 0.83%

03/31/20 at 0.70%

04/09/20 at 0.73%

04/17/20 at 0.65%

04/27/20 at 0.67%

05/10/20 at 0.69%

05/19/20 at 0.70%

30 YEAR BONDS closed on:

10/5/18 at 3.40%

12/18/18 at 3.07%

01/07/19 at 2.99%

01/16/19 at 3.07%

02/06/19 at 3.03%
02/22/19 at 3.02%

05/16/19 at 2.84%

06/18/19 at 2.55%

07/24/19 at 2.58%

09/10/19 at 2.11%

10/01/19 at 2.11%

12/06/19 at 2.29%

01/17/20 at 2.29%

02/06/20 at 2.11%

03/11/20 at 1.30%

03/17/20 at 1.63% way up!

03/23/20 at 1.33% back down

03/26/20 at 1.42%

03/31/20 at 1.35%

04/09/20 at 1.35%

04/17/20 at 1.27%

04/27/20 at 1.29%

05/10/20 at 1.39%

05/19/20 at 1.43%

Housing News:

Reuters reports that about 4.1 million US borrowers have had their mortgage payments reduced or put on hold, due to the COVID-19 crisis, but that the pace of requests is marginally slowing, according to the Mortgage Bankers Association. Mortgages in Forbearance rose to 8.16% (from 7.91%) between 5/4 and 5/10, representing the smallest weekly increase since March.

Looking at Commercial Real Estate again, after speaking with my attorney and real estate friends on the ground, particularly in NYC, increasing commercial real estate vacancies from companies that realize that their people can work from home, is creating new challenges for urban real estate. In a 5/6 Bloomberg article, it was shown that new leases in NYC have sunk to the lowest Q1 level since 2009. The collapse began with the shutdown of businesses in March, but has been exacerbated by a market facing a surge of new offices. Now, many companies are delaying expansion plans and cancelling leases, as they re-think how much NYC space they actually need in a post-COVID-19 world. While that may be good for society’s progress and innovation and efficiency, it is not good for commercial real estate owners and landlords. Two of the largest NYC landlords have already seen more than $5 billion in market value evaporate. So, the question is, does conventional office setting need to still exist?

WeWork made an aggressive move to withhold/renege on rent or renegotiate terms on other rent payments, hammering CMBS, driving down prices of securities backed by the company’s payments, according to the Financial Times. See the Bankruptcy section for more info.

Fannie Mae and Freddie Mac intend to hire financial advisers to help them emerge from US Government conservatorship. These advisers will be tasked with developing strategies for recapitalization and updating their business plans. Speaking of FNMA and FHLMC, FHFA clarified rules on homeowner forbearance plans for loans from those two GSEs, saying that homeowners who are given forbearance to skip mortgage payments as part of the government’s stimulus efforts will not be required to repay them as a lump sum later. Although this only applies to FNMA and FHLMC loans, the FHFA is encouraging all lenders to follow suit.

The WSJ reports that auto loan delinquency rates increased faster than credit card delinquencies during Q1, as the COVID-19 pandemic began to hit the US economy. Meanwhile, the rate of forbearance for auto loans was 7.5%, compared to just 3.6% for credit cards.

Let’s go back to mortgage borrowers, who see incredibly low interest rates on US Treasuries, where the government can borrow money, and which typically are a sign of where mortgage borrowers can get mortgage loans. The 10-year Treasury note rate has typically been a proxy for the 30-year mortgage loan rate. But, instead, a vast disparity between the US government’s cost of borrowing money and the rates offered to homeowners has emerged. The gap now between 10-year Treasuries and 30-year mortgages is about 290bp, near the extraordinarily high levels last seen in late 2008 and early 2009. It has averaged about 174bp for the past 5 years. So, the mortgage rates now should be around 2.25% for a 30-year government-backed mortgage, but instead, according to Bankrate.com, are up above 3.5%. Then, add to this that mortgage originators have gotten hammered on their hedges and margin calls and have less money available to homeowners (as I mentioned in the last section), and lenders have made the process more complicated to slow the rate of mortgages, and suddenly the homeowners/consumers (whom the Fed wants to reach) are not benefitting from lower rates. Even the lockdown and social distancing is hampering the mortgage process, as property appraisals and processing of loan documents are literally being delayed.

MarketWatch said that there is a mansion ‘to ride out the pandemic’ being offered for rent in Los Angeles, at a mere $350,000/month.

Repo/Securities Financing News:

GC repo rates continue to confound, dropping with Fed Funds at the low end of the target range. Even term GC rates have dropped this week, by 2-4bp. With QE purchases winding down and issuance increasing (like the $647 billion in CM bills), many thought that repo rates would move higher to at least the mid-target area. Instead, repo rates dropped on Monday and continued Tuesday. It looks like the new issuance is being absorbed easily by the market. Maybe there is temporary new cash in the market from uncertain outright investors in equities and bonds? Or maybe the cash that used to come monthly to GSEs, who then put it to work in the repo market, has returned?

I missed something in the last Repo Commentary that Scott Skyrm brought to my attention: GC Repo Rate Volatility. This volatility is the daily highest GC repo rate that traded minus the daily lowest GC repo rate that traded on the same day. That repo rate volatility back in 2010, on the heels of the Financial Crisis (and at much higher real interest rates), was only about 6-7bp. It hovered below 10bp for the next 4 years, then started increasing in 2015 and 2016 to 14bp. It continued that increasing trend, until it hit 2019, which was the record year for this volatility, averaging 26.9bp. 2020 began with lower repo rate volatility than 2019, but still above previous years, then COVID-19 hit and the Fed dropped its target range to 0%-0.25% (which should have dropped volatility as a percentage of the real interest rate), which has sent it rising again. The trend is for it to continue to rise, perhaps eclipsing 2019’s record high, at some point.

I am hearing that the Federal Reserve may be working on resurrecting the Term Asset-Backed Loan Facility (TALF), which was a subset of the successful TARP program, both from the 2008 Financial Crisis response in 2009/2010. I don’t have a list yet of the securities that the Fed will take in the proposed program, and am curious to see if they will take real estate loans.

In case you have been in a coma or are new to the Securities Financing market, this is broadly a summary of what has happened since the Financial Crisis.

Issuance of US Treasuries was about $10 trillion.
The regulators, particularly the Federal Reserve, instituted emergency liquidity programs for each of the different sectors of the money market (CP, Corporate Bonds, Broker/Dealers, GSEs, etc.). They eventually unwound those many programs.
They opened up for a brief time the Discount Window to more participants and without the previous stigma attached, for collateral providers to access cash.
They put FNMA and FHLMC into conservatorship.
They began easing Monetary Policy massively for years.
They began Quantitative Easing and built up the Fed’s balance sheet to $4.5 trillion. They added to it by buying more securities every month from the paydowns on their MBS portfolio.
They propped up some of the 47 primary broker/dealers, allowed some to fail, and helped others to consolidate/merge.
The Repo Market shrunk in the US from about $7 trillion to $3 trillion, before recent increase to about $3.6 trillion.
Regulators instituted mountains of new reforms, especially the 310 new rules of Dodd-Frank, globally to decrease the likelihood of systemic risk in the financial system and to force, particularly the broker/dealers and GSIB banks to hold more capital/reserves for liquidity.
The market began looking for alternatives to financing through the fewer and crimped broker/dealers via CCPs, peer-to-peer financing, Sponsored Repo, and electronic trading platforms (some of which I initiated).
The Fed began its much hailed RRP program, kind of like a P2P repo, which added over 300 cash providers from the Repo market to finance the Fed’s balance sheet and provide ‘liquidity’ for those cash providers. Of course, that didn’t help the Primary Dealers, who were using those cash providers to finance their own balance sheets.
The Fed stopped QE and began reducing their balance sheet down to $2.5 trillion.
The US Treasury began ramping up issuance to the tune of about $1 trillion more, which is funneled through the 24 primary broker/dealers and the central banks.
The Fed began tightening monetary policy and tinkering with new measures of repo rates and LIBOR replacement. They also began tinkering with the Interest on Excess Reserves (IOER) from banks and credit unions, to try to create higher reserves.
COVID-19 pandemic hit. The Fed did an about-face and began easing monetary policy immediately. They also went back to doing daily System RPs and Term RPs with the primary dealers. They had also lowered IOER. They now have raised IOER in two of the last three FOMC meetings.
The Fed effectively reinstated QE, injected at least $500 billion to buy US Treasuries again, $200 billion to buy Agency MBS again, and injected funds into the Dollar Roll market. They have said their buying power is unlimited. They have purchased about $733 billion in securities so far. They actually started QE BEFORE COVID-19, to raise “bank reserves” in Q4 2019.
They then began reinstating specific bailout/backstop programs of 2008, and continue to add to the list.
QE purchases are winding down slowly, about $2 billion per day. That would have QE end sometime in June. Of course, they can always restart QE. Open Market Operations (RP Operations) have continued, although at a less hectic pace.
Issuance of US Treasuries hits $23.5 trillion, and is expected to go higher.
The Fed is getting ready to roll out their Main Street Lending Program to mid-market companies.

The current state of Central Clearing Counterparties (CCPs) and Electronic Trading Platforms (ETPs):

CCPs:

Europe

Eurex/Deutsche Borse/Clearstream (CCP)-has been doing predominantly European governments repo for some time now.
LCH-Clearnet-London (CCP)-I do not have any info yet.
LCH-Clearnet-Paris (CCP)-split out years ago, not because of Brexit.

Asia

Shanghai Clearing House-China (CCP). I do not have any info yet.

North America

OCC (CCP)-has hit daily volumes of $80 bilion of repo and outright trading, with futures and options as well. It also still owns AQS/Quadriserve (ETP) for US securities lending.
FICC/DTCC (CCP)-has hit high volume of $552 billion, increases coming from the 3 participant banks in Sponsored Repo, bringing their clients into the CCP, along with their standard dealer vs dealer repo.Has been around a while now.
CDCC-Canada (CCP)-brand new CCP involving derivatives and repo.

ETPs:

Europe

com (ETP)-fairly new, trades total return swaps.
HQLAx (ETP)-securities financing, just started, uses blockchain tokens to represent trades.
Liquidity Marketplace-LMX (ETP), I do not have any info yet.
Asterisk (ETP)-brand new, focused first on government securities and equities financing.
Treasury Spring (ETP)-fairly new, focused on European asset managers.

North America

GLMX (ETP)-a Silicon Valley solution, primarily dealers and some asset managers.
TradeWeb (ETP)-longtime system, primarily dealers and some asset managers.
BNY DBVX (ETP)-fairly new and has changed, for internal BNY Mellon clients now.
DealerWeb (ETP)-primarily for dealers.
AFX/CBOE (ETP)-trades collateralized loans and futures.
State Street Direct Access (ETP)-fairly new, has started securities financing for internal State Street clients.

Securities Finance Industry Conferences: (subject to COVID-19-related postponements or cancellations)

Deutsche Borse/Clearstream/Securities Lending Times held their annual GFF Summit in Luxembourg, 1/28-1/30/20, which I attended two years ago.
IMN 26^thBeneficial Owners International Securities Finance conference will be held in Fort Lauderdale, FL on 2/12-2/13/20. I was the Chairperson in 2019 and will be a moderator this year. I hope to see many of you there!
iMoneyNet/Informa has yet to announce its annual MMExpo, after the merger. I have spoken at this one several times.
PASLA/RMA will hold its 17^thannual Conference on Asian Securities Lending in Tokyo, Japan on 3/3-3/5/20.
GIOA will hold its 16^thannual conference in Las Vegas 3/18-3/20/20. I have spoken (and sung) at this one. I may attend.
Crane Data will hold its annual Bond Fund Symposium in Boston, MA on 3/23-3/24/20.
IHS Markit will hold its annual Securities Finance Forum in London, England on 3/24/20.
Finadium will hold its 4th annual Investors in Securities Lending Conference in NYC on 5/13-5/14/20. I’ve spoken and sponsored this one.
GFOA will hold its gigantic 114^th(wow!) annual conference in Los Angeles on 5/17-5/20/20. I have attended this one in the past.
IMN/AFME will hold its annual Global Bank ABS (West) conference in Barcelona, Spain on 6/16-6/18/20.
Worldwide Business Research will hold its annual Fixed Income Leaders USA Summit in Nashville, TN on 6/8-6/10/20.
ISLA will hold its 29^thAnnual Securities Finance and Collateral Management conference in Vienna, Austria on 6/23-6/25/20. I have spoken (and sung) at this one before.
ICMA/Securities Lending Times will hold their annual AGM and conference also in Vienna, Austria, on 6/24-6/26/20.
Crane Data will hold its annual Money Fund Symposium on 6/24-6/26/20 in Minneapolis, MN. I heard there were 580 attendees in Boston last year. I have spoken at this conference before.
National Association of State Treasurers will hold its annual conference in San Diego, CA on 9/13-9/16/20. I’ve spoken and sung at this one.
IMN will hold its annual European Securities Finance conference in London, England on 9/15-9/16/20. I’ve attended this before.
Worldwide Business Research will hold its annual Fixed Income & FX Leader Summit in Singapore on 9/22-9/24/20.
IMN will hold its annual ABS East conference in Miami Beach, FL on 10/5-10/7/20. I’ve attended this before and might again.
Worldwide Business Research will hold its annual Fixed Income Leaders 2020 conference in Barcelona, Spain on 10/12-10/14/20.
RMA will hold its 38^thannual Conference on Securities Finance and Collateral Management in Amelia Island, FL on October 12-15. I saw many of you last year in Boca Raton. It was my 37^thRMA I’ve attended.
Crane Data has yet to announce its annual European Money Fund Symposium.
Finadium has yet to announce its 4th annual Investors in Securities Lending Conference Europe.
American Financial Professionals (AFP) will hold its large annual conference in Las Vegas, NV on 10/18-10/21/20.
Finadium has yet to announce its Rates & Repo conference in New York. I’ve spoken and sponsored this one.
net has yet to announce its 26^thannual Risk USA conference. I’ve chaired this one.
SIFMA has yet to announce its annual Meeting.

Federal Reserve News:

The Secured Overnight Financing Rate (SOFR) is supposed to be a broad measure of the cost of borrowing cash overnight collateralized by US Treasury securities. It is also reported by the NY Fed on its website. It has been controversial and has been considered as the likely replacement for LIBOR. SOFR includes trades in the Broad General Collateral Rate of Repo plus bilateral Treasury Repo transactions cleared through the DVP services at CCP FICC, ostensibly filtering out issues trading Special. However, critics (and I am one) say that it only picks up the Offered Side of Repo (not a median), that it only picks up the small amount of DVP transactions cleared at FICC and Triparty Repo done at Bank of NY, ignoring the growing amount of bilateral (non-Triparty) repo being done peer-to-peer, dealer-to-dealer, and client-to-dealer, outside of FICC. It is a good representation of where Money Funds (except for a few savvy ones who trade peer-to-peer) are paid on their cash versus US Treasuries in Repo each day by broker/dealers. It almost completely ignores other sectors, particularly buy-side clients with collateral. My friend Scott Skyrm addressed this recently in his Repo Market Commentary, pointing out that since the beginning of April, GC Repo averaged 4.2bp above SOFR, and that the difference is even greater in the futures contracts (where it increases to 7.2-14.9bp spread, depending on the term.) He agrees with me that SOFR will always be lower than GC Repo, because it is skewed to the offer-side of the market, particularly with the inclusion of the tri-party repo rates.

The Fed Funds rate, which is still the target rate of Federal Reserve monetary policy and changes to which are made by and announced by the FOMC at regularly scheduled meetings, is currently set at 0.00-0.25% (remember, the Fed has been using a target ‘range’ for a while). The Federal Reserve posts an Effective Fed Funds Rate (EFFR). The Overnight Bank Funding Rate (OBFR), is also published by the NY Fed to capture the volume-weighted median of overnight federal funds transactions, Eurodollar transactions, and the domestic deposits reported by banks.

The next FOMC meetings (and they are all two-day meetings so these are the second day, when they actually announce) are: 6/10/20, 7/29/20, 9/16/20, 11/5/20, and 12/16/20. However, as we saw on 3/3/20, the FOMC can call emergency meetings at any time, even on weekends, especially during the Crisis we are facing now.

The Federal Reserve’s Reverse Repo Facility (RRP), which has over 300 approved participants (mostly banks, GSEs, and MMFs) is used as a tool by the Federal Reserve, along with its Fed Funds target-setting monetary policy, and IOER for depository institutions, to help control short-term interest rates. The Fed is currently only repoing out US Treasuries from its portfolio and typically only Overnight.

The Federal Reserve has begun buying ETFs and Corporate Bonds, as well as Municipal debt. Fed Chairman Powell explained the Fed’s new round of $2.2 trillion in lending programs, which will include Corporate Debt backstops for states, cities, and small businesses. This will include riskier bonds issued by corporations that had recently lost their investment-grade status. This brings me back to my earlier point about CMBS and mortgage loans needing a Fed backup program like TALF. For the Fed’s $500 billion municipal lending facility, the Fed has told US states, cities and counties that they must show written proof that they have applied for a municipal loan from a bank, BEFORE they will be considered for the lending facility. This positions the Fed facility more as a ‘last resort’ for applicants. The Fed has since broadened the eligibility for the MLF, lowering the population requirement to 250,000 from 1 million for cities and to 500,000 from 2 million for counties. Also, the Fed has expanded the duration of the debt it will purchase to 3 years from 2 years. More than 200 municipalities are already eligible to participate.

The Fed has promised leniency towards banks’ decisions, underscored by Fed’s Bostic, who said that the Fed will not penalize banks for decisions made during the COVID-19 pandemic, when the Fed conducts its regulatory reviews 9-12 months from now. Fed’s Powell is calling for more fiscal response, saying that the US economy might not fully recover from the pandemic, until a vaccine exists. On 60 Minutes, he urged more government aid and pointed to health issues and “medical metrics” as being the most important data now for the economy. He acknowledged that the US has been spending more than it’s been taking in for some time. But, that’s something we will have to deal with, when the economy is strong. The Federal Reserve is about to launch its Main Street Lending Program (MSLP), which will target middle-market companies that didn’t qualify for small business relief (such as the PPP). The WSJ says it could be the most complicated and tricky initiative yet.

Earthquakes and Volcanoes:

Friday, a 6.5-magnitde earthquake hit between Reno, NV and Las Vegas, NV. It was followed by an earthquake of similar magnitude. The two earthquakes did major damage to part of the main highway between the two cities. There hadn’t been such an earthquake there since the 1920s.

Earthquakes above 5.5-magnitude, in the last few days:

05/18 5.5 Ferndale, CA

05/16 5.9 Lakatoro, Vanuatu

05/15 6.5 Monte Cristo Range

05/14 5.7 Easter Island

Weather:

We have been having significantly dangerous weather lately in Florida, as we were brushed by a Tropical Wave and then hot, humid weather brought 3 days of bad thunderstorms from the West coast of the state to the East coast of the state, bringing some damage and 60mph winds with it. We are entering our rainy season, just in time, as we were near drought levels. I hear the thunder as I write this. Kind of ironic that since the beaches opened on 5/18 in Florida, the weather has been horrible. Floodwaters are threatening a chemical plant in Michigan, as dams failed. Mandatory evacuations have been issued. California is finally getting a reprieve from the heat, down into the 60s and 70s. The Southwest has heated up, particularly Arizona, New Mexico, and Texas into the 90s. The rest of the country is a little soggy, but mild temperatures in the 60s, 70s, and 80s.

The Atlantic Hurricane Season begins June 1^stand ends November 30^th. I want you to know that I am constantly searching for good or uplifting news, but at the moment, the majority of news items are on the negative side and almost all dealing with COVID-19. Here is something different, but once again, while informational, kind of to the negative. According to Accuweather, the 2020 Atlantic hurricane season is expected to have a more -active-than-normal season, worse than normal. They expect about 12 storms, 6 hurricanes, and 4 of them major hurricanes. The 2019 season had 18 named storms, matching 1969 for the 4^thmost-lively season in the past 150 years. For the 2019 storm season, CSU, which has historically been the most used, had forecast a near-average season of 13 named storms, 5 hurricanes, and 2 major hurricanes. It turned out to be the 4^thyear in a row of above-average damaging seasons. We had 18 named storms, 7 hurricanes, of which 3 were major hurricanes. It became the 7^thyear that there were multiple Category-5 hurricanes in one season.The official hurricane forecast for the Atlantic Hurricane Season came from CSU, giving us Floridians something else to worry about: CSU is predicting an above-average hurricane season in the Atlantic for 2020, with the likely absence of El Nino. Tropical and subtropical Atlantic sea surface temperatures are currently higher than normal, which tends to promote active hurricane seasons. Also, for the Pacific Hurricane Season, they have warm ENSO conditions, with waters slightly warmer than normal in the eastern and central tropical Pacific, but will likely cool and dissipate El Nino. Consequently, CSU predicts 16 named storms in the Atlantic, with 8 to become Hurricanes, and 4 to reach Category 3 or above strength.

The Pacific Hurricane Season started 5/1/20 and ends 11/1/20. There is yet to be a forecast for this Hurricane Season.

Okay, this one is not in the Atlantic or the Pacific. Cyclone Amphan is headed towards India and Bangladesh, sending millions to shelters ahead of the potentially devastating storm, with winds over 100mph. The evacuation is made more challenging by COVID-19 virus.

Sports News:

MLB:

The 2019 MLB regular season began on 3/28 last year and ended on 9/30 (more than 6 months). The Washington Nationals beat The Houston Astros in 7 games in The World Series. As these 2 teams played each other in March 2020, in the Spring Training facility that they share and that I sing the National Anthem at, the Spring Training season (and eventually MLB season) ended about 3/15, with the pandemic shutdown. MLB coaching great, Art Howe, 73, was released from a Houston hospital on Sunday, after being admitted with COVID-19 several weeks ago. Pitcher Roberto Colon expects to play one more season at age 46. Diamondbacks Starling Marte said his wife Noelia has died of a heart attack. Astros’ HOF and MLB manager, Bob Watson, died at age 74. The last surviving member of the original 1943 Rockford Peaches of the All-American Girls Professional Baseball League during WWII, has died at age 101. Mary Pratt was a pitcher for the Peaches. The League, which temporarily replaced MLB as MLB players went off to war, from 1943-1954, inspired the 1992 classic movie A LEAGUE OF THEIR OWN, which was based on her second team, the Kenosha Comets, for whom she also pitched.

On 4/29, USA Today reported that MLB was discussing a plan to start the regular season in late June, no later than 7/2, playing at home stadiums, but with realigned league. Three executives said that they plan to play at least 100 regular season games. But, there would be no fans in their stadiums, and it would likely be a 3-division, 10-team plan, in which teams play only within their division. This would abolish the traditional American and National Leagues, and realign teams based on geography, which was the original intent. The players seem to like the idea, as they could still play in their home ballparks and not have to travel as much. The players were opposed to playing the entire season in Arizona/Florida/Texas. The new MLB protocols will include no spitting, high-fiving, or team showers. This is what USA Today was thinking was likely:

EAST

NY Yankees, NY Mets, Boston Red Sox, Washington Nationals, Baltimore Orioles, Philadelphia Phillies, Pittsburgh Pirates, Toronto Blue Jays, Tampa Bay Rays, and Miami Marlins

WEST

Los Angeles Dodgers, Los Angeles Angels, San Francisco Giants, Oakland Athletics, San Diego Padres, Arizona Diamondbacks, Colorado Rockies, Texas Rangers, Houston Astros, Seattle Mariners

CENTRAL

Chicago Cubs, Chicago White Sox, Milwaukee Brewers, St. Louis Cardinals, Kansas City Royals, Cincinnati Reds, Cleveland Indians, Minnesota Twins, Atlanta Braves, Detroit Tigers

MLB is considering how the 30 teams could refund COVID-19 postponements. As for not having fans in the seats, MLB and union officials are discussing the ramifications of not having fans, ticket sales, and concession revenue. Last season, MLB attendance was 68.5 million and the average ticket price was $53. Several teams want significant pay cuts for players, to play a shortened season. There is division about how the revenue-sharing should be split, from the lucrative TV contracts. MLB’s revenue was $10.7 billion in 2019, mostly due to its TV deal. Blake Snell, pitcher for the Rays, made a video of strong points about players not playing for less money. Other stars, like Bryce Harper and Nolan Arenado, defended Snell’s position. Alex Rodriguez tweeted on Friday to encourage players to take a 50-50 split in the shortened season, seemingly siding with the owners. It’s interesting that A-Rod, of all former players, who signed two 10-year/$250 million contracts when he was playing, would suddenly favor revenue-sharing over large contracts.

Golf:

The PGA Tour 2020 season was in ‘full-swing’ and they had the Players Championship at Ponte Vedra, FL (TPC Sawgrass and the island green). But, then it cancelled the tournament before Friday’s Round 2 and shut down for the pandemic. At that time, it also announced that it was postponing the Masters in Augusta. Augusta National Golf Club announced that the postponement of the Masters would be to November 9-15. On Friday, the PGA announced that the Tour would resume its 2020 season with tournaments on 6/11. On Monday, the USGA announced that the local and sectional qualifying for the US Open have been cancelled. I think that was wise, since there were to be some 120 events around the country and 3 sectionals outside the country to be staged. However, those 36-hole events, with club pros, amateurs, mini-tour players, and nonexempt Tour pros competing were how half of the US Open field made their way into the tournament, and it was the allure of this particular Major and what made it an “Open”. I’m sure many of you remember the movie which portrays an amateur beating the great Ben Hogan in the US Open. Instead, the tournament will be an all-exempt field, whatever that means. The US Open has been postponed until 9/17 Winged Foot in Mamaroneck, NY. The USGA, at the same time, also announced that 4 of its other championships were being cancelled: the Mid-Amateur, the Women’s Mid-Amateur, the Senior Amateur, and the Senior Women’s Amateur. That will leave the USGA with just (besides the US Open): the US Women’s Open (12/10-12/13) at Champions Golf Club in Houston, US Amateur (8/10-8/16), and the US Women’s Amateur (8/3-8/9).

I watched the charity golf tournament on Sunday between Matt Wolfe/Rickie Fowler and Rory McIlroy (current World No.1)/Dustin Johnson. The TaylorMade Driving Relief skins tournament was held at nearby ultra-private Seminole Golf Club, home course of Ben Hogan (and now member, Tom Brady). It is considered always one of the top 25 golf courses in the world, but had never been filmed on TV (in fact, rarely photographed at all). The McIlroy/DJ won on a tiebreaker hole with closest to the pin by Rory, after Rory picked up 6 skins on the 18^thhole. Ironically, Rory’s father is a member at the Club. The President of Seminole is Jimmy Dunne, a former client and one of the founders of Sandler O’Neill, now Vice Chairman of Piper Sandler. The tournament raised over $4 million for COVID-19 relief organizations. I couldn’t watch the whole thing, as it is tough to follow one foursome around a golf course for hours. The event drew an average of 2.35 million viewers. The PGA Championship is still schedule for August. President Trump talked about the return of professional golf and his hopes that tens of thousands of fans will again line the courses and won’t have to wear masks, sooner than later.

The European Tour’s Hero Indian Open, was postponed due to COVID-19 concerns, as have all other scheduled tournaments.

NFL:

The 100^thNFL season ended last year, in Miami, in an entertaining 31-20 comeback Super Bowl victory for the Kansas City Chiefs over the San Francisco 49ers. An Indianapolis infectious disease doctor has voiced significant doubts about having an NFL season this year. However, NBC News quotes direct sources who say that ongoing pandemic has created only an “extremely small” chance that there will be no NFL season in 2020. According to NFL personnel, the biggest impediment to playing football would be the availability of adequate testing, both for players/staff and the general public. But, it is expected that testing will be prevalent by August and expected to be simple, with a quick turnaround time. This is one of the few team sports that believes it will open up the season with fans IN the seats. The NFL is also the one team sport that puts a lot more weight on the unfair advantages and disadvantages of fans in home stadiums. So, not having fans would have a much greater impact on NFL outcomes, as opposed to NHL, NBA, or MLB. I don’t know if I agree with that. I think that is true for NCAA team sports though. The NFL also recognizes that ‘social distancing’ will be impossible for fans in a stadium. All of this does not mean that training camps will necessarily open in late July/early August and that the regular season will start precisely on Thursday night, 9/10. The NFL is testing new face masks with surgical material. Apparently, LeBron James becoming a Dallas Cowboy was closer to happening than any of us ever thought. QB Matthew Stafford has listed his Detroit-area home, featuring a Detroit Pistons court, for $6.5 million. QB Cam Newton has still not found another NFL team. The Chargers reportedly gave him a look. Colts’ Reich expects QB Phil Rivers to play beyond 2020. Bills DT Oliver was arrested on DWI and gun possession charges. Two NFL cornerbacks, DeAndre Baker (Giants) and Quinton Dunbar (Seahawks), have turned themselves in to Broward County Sheriffs on Saturday, after partygoers were robbed by them at gunpoint at a Miramar, FL party. Party attendees alleged that at the party last Wednesday, the two NFL players stole thousands of dollars in cash and valuables from them, while armed with weapons. Each faces 4 felony counts. Michael McCaskey, president of the Chicago Bears, died 5/16, at age 76 of leukemia. Also, I’m not sure that I wrote about this, but the all-time winningest NFL coach, Dolphins’ Don Shula, died at age 90.

Tennis

The Tennis Tours (ATP, FFT, WTA) are discussing when and how to reopen their seasons. We know that the French Open will has been postponed to 9/24-10/4. We know that the 134^thWimbledon, scheduled for 6/29-7/12 has been cancelled for 2020. The US Open is still expected to be played at its normal time in September. There is still a strong possibility that initially there will NOT be fans in the tennis stadiums.

Olympics

The Summer Olympics, which were to start in July 2020, will be postponed until 2021. This is the first time ever that a Summer Olympics was held on an odd year. The start of WWII in 1939, forced the 1940 Summer Olympics to be delayed a few weeks, and then canceled. The 1944 Olympic Games were also not held. The Summer Olympics did not begin again until London in 1948. But, they were never postponed. The Tokyo Olympics will begin in July 2021.

Fighting

MMA continues, despite the pandemic and fanless fights. This Saturday was UFC 249. Former WWE star Shad Gaspard has gone missing on Monday 5/18 at Venice Beach in California. Oh, make it stop, please…CBS reports that Mike Tyson (53) and Evander Holyfield (57) are working out the details of Tyson vs Holyfield III! They are both in tremendous shape and want to stage a 4-round charity exhibition fight (kind of like the end of Rocky III). Holyfield won the first fight between the two in November 1996. In the rematch, in June 1997, Tyson was disqualified after biting both of Holyfield’s ears in the fight, taking a big chunk out of one of them. Both of them have been separately talking about returning to the ring for short charity exhibition bouts, but now are intrigued about fighting each other again. Tyson had said that he would only return to fight against a “real boxer”, after turning down $3 million to fight New Zealand rugby star Sonny Bill Williams. Holyfield absolutely wants to fight Tyson, calling the potential fight a “win-win-win”, although he is even more interested in fighting Riddick Bowe, another old rival. I don’t know what the 3 “wins” are either. With both Tyson and Holyfield in their 50s, it may be unsafe for either of them to be on the receiving end of punches. Neither of them ended their careers well, with Holyfield hanging on to try to get one last heavyweight championship and failing, while Tyson finished with losses to Danny Williams and Kevin McBride. I think it’s risky for them to do, although it would be a huge audience draw and would likely have a lot of action.

Soccer

All leagues are now discussing when to reopen and whether to have fans in the seats. Germany’s Bundesliga resumed soccer games 5/16, as Bayern Munich beat Werder Bremen 4-1. Irish Premier and AFC Champions League, and Ugandan Super League have yet to restart. Costa Rican Primera Division Clausura has restarted. The games will be played in empty stadiums, which could influence the results, as the home team won’t have the advantage of its cheering fans. However, research shows that it has less effect on the players and a raucous crowd influences the referees more. We’ve certainly read about reports of some US restaurants putting mannequins in some seats, to reduce the awkwardness of half-empty restaurants and social distancing. However, South Korean soccer club FC Seoul has had to apologize after being accused of putting sex dolls in empty seats during Sunday’s match against Gwangju FC.

NCAA Football:

LSU played Clemson for the College Football National Championship, and despite being down 17-7 in the 2^ndquarter, came roaring back behind Heisman Trophy-winner QB Joe Burrow, and won 42-25. The NCAA announced that all Spring sports were cancelled and that all players in all sports would have another year of eligibility, because of the COVID-19 pandemic.

Here is the post-bowls, final AP Top 25 Poll:

LSU 13-0
Clemson 14-1
Ohio State 13-1
Georgia 12-2
Oregon 12-2
Florida 11-2
Oklahoma 12-2
Alabama 11-2
Penn State 11-2
Minnesota 11-2
Wisconsin 10-4
Notre Dame 11-2
Baylor 11-3
Auburn 9-4
Iowa 10-3
Utah 11-3
Memphis 12-2
Michigan 9-4
Appalachian State 13-1
Navy 11-2
Cincinnati 11-3
Air Force 11-2
Boise State 12-2
UCF 10-3
Texas 8-5

NCAA Hockey

Near the halfway point of the college hockey season, analysts were seeing Cornell University (my alma mater) and North Dakota as legitimate national title contenders to be in the Frozen Four. Cornell is currently ranked No.1 in the nation. That all froze, when the NCAA cancelled the college hockey season due to the COVID-19.

NCAA Basketball

As teams entered their week of Conference Championship Tournaments, prior to the Committee’s decision on the 68 seeds for the National Championship (also known as March Madness), it all came to halt due to COVID-19. One after another conference cancelled their tournaments and the NCAA cancelled the National Championship, before it ever started.

I know this is a little weird, but Kentucky is No.1 on the early 2020-2021 Coach’s Poll basketball rankings. Gonzaga is No.2, followed by (in order) Baylor, Creighton, FSU, Villanova, Virginia, Duke, Iowa, and Texas Tech.

Here was the current AP Top 25 for the regular season:

Kansas 28-3
Gonzaga 29-2
Dayton 29-2
FSU 26-5
Baylor 26-4
San Diego State 30-2
Creighton 24-7
Kentucky 25-6
Michigan State 22-9
Duke 25-6
Villanova 24-7
Maryland 24-7
Oregon 24-7
Brigham Young 24-7
Louisville 24-7
Seton Hall 21-9
Virginia 23-7
Wisconsin 21-10
Ohio State 21-10
Auburn 25-6
Illinois 21-10
West Virginia 21-10
Houston 23-8
Butler 22-9
Iowa 20-11

NHL:

Last season ended in Game 7 of the Stanley Cup Finals on 6/12, when the St. Louis Blues beat my Bruins 4-3 in the Finals. The puck dropped on this current season on 10/2/19. Then it all ended about 70 of 82 games into the regular season. The NHL is providing updates to the public every Monday. Although the 31 NHL general managers said they intend to resume the regular season in July, on-ice action remains on the shelf. Commissioner Gary Bettman said that ending the season without awarding a champion is “not something I’m even contemplating.” I’m glad for that, being a Bruins fan and that the Bruins were in first place overall. Luc Robitaille, Kings’ president, told season-ticket holders last Thursday that it seems the NHL is “leaning toward” jumping right to the playoffs, rather than concluding the regular season. The working plan is a 24-team playoff field, which would include the ‘bubble’ teams (just on the bubble of the 8 teams of each conference), Blackhawks and Canadiens. It is clear that there has been pushback to restart the season from the teams that are far outside the playoff picture and having teams reconvene at centralized sites for about a dozen regular season games. The NHL and NHLPA have a jointly appointed Return to Play Committee that was working over the weekend. Here are the issues that ESPN reports the Committee is working on:

How long they need for training camps?
What would be the playoff format?
How quarantine and testing procedures would work (for example, since Russia has seen a recent spike in cases, forced to self-isolate and for how long)?
What happens if someone tests positive?
How to accommodate the players’ wishes to bring their families to hub cities?
What to do about fans or fan noise?

NBA:

This year, the NBA season did not start until 10/22/19, 18 days later than last year. We were nearing the playoffs, when the pandemic shut the regular season down, with just a little over a month left. Basketball fans, unlike many of the other team sports’ fans, have had something new and interesting to watch, in the Michael Jordan documentary The Last Dance.Bob Costas says MJ’s legacy will grow after the documentary. MJ has been playing golf at the private course just below my balcony and has gotten his handicap down to scratch, with the help of coach Davis Love III. MJ just built his own private golf course just North in Hobe Sound, FL, not far from his new restaurant 1000 North in Jupiter, FL. The golf course, The Grove XXIII, is uber-exclusive, designed after Shinnecock Hills in NY, and only allows professional or former professional athletes. It actually has an ingenious double-helix routing that can be played as 4 9-hole combinations, as well as in shorter 3-6 hole loops. Unlike some of the other professional team sports, the NBA and the NBA players’ union agreed, in a poll, to restart the season, and have at least some regular season and then the playoffs. They will not formally decide in the month of May. A one- or two-site setup for teams is among the most likely scenarios, such as Orlando and Las Vegas, per ESPN. The Union and the NBA did agree on a deal that would begin with last Friday’s bimonthly paychecks to withhold 25% of player salaries in the event that games are formally canceled under the league’s Force Majeure provision in the CBA. Distance running coach at Michael Jordan’s alma mater, UNC, inspired by MJ, at age 30, just broke the world record for dribbling.

Horse Racing:

For the first time since WWII, the Kentucky Derby was postponed. It will be run on 9/5/20, Labor Day weekend. Horse racing is expected to begin soon, but will likely be without in-person fans. Churchill Downs ran a virtual showdown of the 13 Triple Crown winners running the Kentucky Derby. Seattle Slew was leading from the wire, but Secretariat and Citation overtook Seattle Slew, and Secretariat won. It was very cool to watch! The production raised funds for COVID-19 relief charity.

Racing:

NASCARbegan the 2020 season with 4 races at Daytona, followed by 3 scheduled races, the last on 3/8/20. But, then the pandemic shut everything down, wiping out the next 7 scheduled races. The season finally restarted this past Sunday, at Darlington Raceway on 5/17. The race was run without fans in the stands. NASCAR is making every effort to get as many of the originally schedule races in to the abbreviated season that had been postponed. Some races will be cancelled.

In the NASCAR Cup Series of 2019, Kyle Busch won in the last race at Homestead. In 2018, the winner was Joey Logano, who beat Martin Truex Jr. in the final 15 laps of the final race at Homestead. Truex Jr. won the crown in 2017. The 2020 regular season will begin in February with the Daytona 500. Here is the complete (updated) schedule of races for the Monster Energy NASCAR Cup in 2020 and the results (you will notice that, after 3/8/20, some races have been postponed, some have been cancelled, and some have been replaced by other races):

2/16 Daytona 500 (postponed by rain to 2/17)-winner Erik Jones

2/23 Las Vegas, Jiffy Lube Pennzoil 400-winner Joey Logano

3/1 Auto Club 400-winner Alex Bowman

3/8 Phoenix, FanShield 500-Joey Logano

3/15 Atlanta, Folds of Honor QuikTrip 500-POSTPONED

3/22 Homestead, Dixie Vodka 400-POSTPONED

3/29 Texas, O’Reilly Auto Parts 500-POSTPONED

4/5 Bristol, Food City 500-CANCELLED

4/19 Richmond, Toyota Owners 400-POSTPONED

4/26 Talladega, GEICO 500-POSTPONED

5/3 Dover, NASCAR Cup Race at Dover-POSTPONED

5/9 Martinsville, NASCAR Cup Race at Martinsville-POSTPONED

5/16 Charlotte, NASCAR All Star Open-CANCELLED

5/17 Darlington, Darlington 400-winner Kevin Harvick

5/24 Charlotte, Coca-Cola 600 as originally scheduled

5/31 Kansas, Kansas 400-replaced by NASCAR CUP SERIES at Bristol which was scheduled for 4/5

6/7 Michigan, FireKeepers Casino 400-replaced by Atlanta, which was scheduled for 3/15

6/10 Martinsville, NASCAR Cup Race at Martinsville, which was scheduled for 5/9

6/14 Sonoma, Toyota/Save Mart 350-replaced by Homestead, Miami, which was scheduled for 3/22

6/21 Chicagoland, Chicagoland 400-replaced by Talladega, which was scheduled for 4/26

6/28 Pocono, Worry-Free Weather Guarantee 350-as scheduled

7/5 Indianapolis, Big Machine Vodka 400-as scheduled

7/11 Kentucky, Quaker State 400 presented by Walmart-as scheduled

7/19 New Hampshire, Foxwoods Resort Casino 301-as scheduled

8/9 Michigan, Consumers Energy 400-as scheduled

8/16 Watkins Glen, Go Bowling at The Glen-as scheduled

8/23 Dover, Drydene 400-as scheduled

8/29 Daytona, Coke Zero Sugar 400-as scheduled

PLAYOFFS:

9/6 Darlington, Southern 500

9/12 Richmond, Federated Auto Parts 400

9/19 Bristol, Bass Pro Shops NRA Night Race

9/27 Las Vegas, South Point 400

10/4 Talladega, Alabama 500

10/11 Charlotte, Bank of America ROVAL 400

10/18 Kansas, Hollywood Casino 400

10/25 Texas, Texas 500

11/1 Martinsville, NASCAR Cup Fall Race

11/8 Phoenix, NASCAR Cup Series Championship

Formula Onebegan with F1 Car Launch Dates for the various teams from 2/12 through 2/15 for Renault, Racing Point, McLaren, and Ferrari. That was followed by the Pre-Season Testing schedule. The opening of the season coincided with the COVID-19 lockdown and FIA announced that the season would be delayed at least until the 5/3 Dutch Grand Prix. It announced a number of race postponements. F1 is considering having an abbreviated 19 race season, when it begins. The reports are that they are thinking about 7/5 as a start date. It was set to have a record 22-race season, when pre-season testing ended and the Australia Grand Prix was about to run. Fortunately, I never posted the original 2020 schedule, so I don’t have to update it. F1 is currently working with its promoters on a revised 2020 calendar with the actual sequence and schedule dates for races expected to differ significantly from the original 2020 calendar. There will likely be no summer break and they anticipate that the season end date will extend beyond the original end date of 11/27-29.

Here is the IndyCar Racingcircuit (Indy cars are generally considered faster than F1 car along straight lines, mostly because their races are on oval tracks, while F1 tracks are more intricate, requiring better brakes and more aerodynamic grip than Indy cars). In 2019, Josef Newgarden came in 8^thin the last race, to just edge out Simon Pagenaud for the championship. COVID-19 pandemic was going to allow only one IndyCar race to run so far this season, St. Petersburg, and it would be without spectators. However, just before the race, IndyCar announced that the rest of the season would be postponed at least until June 14, and several races would be cancelled, including this one. It then announced that all races through April would be cancelled. They have announced some postponements of later races, which I will update as I receive them:

3/15 Firestone Grand Prix of St. Petersburg-POSTPONED to 10/25

3/22 Circuit of the Americas-CANCELLED

4/5 Grand Prix of Alabama-Takuma Sato-CANCELLED

4/19 Grand Prix at Long Beach-CANCELLED

4/26 AutoNation IndyCar Challenge at Austin, TX-CANCELLED

5/9 GMR Grand Prix of Indianapolis-postponed to 7/4

5/24 104^thIndianapolis 500-postponed to 8/23

5/30 Chevrolet Dual in Detroit Race 1-CANCELLED

5/31 Chevrolet Dual in Detroit Race 2-CANCELLED

6/6 Genesys 600 at Texas Grand Prix-This race is expected to be run without spectators in a shortened 300 miles

6/21 Rev Group Grand Prix at Road America-

6/27 Indy Richmond 300-

7/12 Honda Indy Toronto-POSTPONED

7/18 Iowa 300-moved to double-header with Monterey Grand Prix

8/16 Honda Indy 200 at Mid-Ohio-

8/22 Bommarito Automotive Group 500-

9/6 Grand Prix of Portland-

9/20 Firestone Grand Prix at Monterey-moved to double-header with Iowa 300

10/3 IndyCar Harvest GP at Indianapolis-ADDED

10/25 Firestone Grand Prix of St. Petersburg-ADDED as final race

Travel News:

American now has a major shortage of bicycles, as people in lockdown have taken to bikes to get around and to exercise. Many bike shops are out of bikes and have backordered thousands of them. The FAA announced new safety measures in response to Boeing 737-MAX crashes, that will be the new safety protocols aimed at enhancing the regulatory and certification process for all planes. However, despite the changes, manufacturers will still be entrusted to handle certain certification tasks. Royal Caribbean posted a big loss and drop in revenue today. Royal Caribbean and Norwegian Cruise Lines both announced today that they are suspending cruises scheduled to depart in the month of July. I missed the flyover salute to healthcare workers two weeks ago, performed by a joint Navy Blue Angels and Air Force Thunderbirds team, as they flew down to Fort Lauderdale, then Miami, then looped back up the West Coast of Florida. They completely missed West Palm Beach. However, I have a chance to see another flyover this Saturday that will salute not only healthcare workers, but also honor first responders and the military for Memorial Day weekend. This “Salute Flight”, sponsored by Hyandai, will be made up of four US Air Force F-16C Fighting Falcon aircraft (from the 482^ndFighter Wing), (The Makos from Air Force Reserve Command in Homestead), and US Coast Guard MH65 Helicopter, and US Coast Guard C-144 Aircraft (from US Coast Guard Air Station Miami). The four aircraft will soar over 34 South Florida hospitals and the Coast Guard helicopter and aircraft will fly a separate route over 16 South Florida hospitals, all on Saturday, between 11:30am-1:30pm. Like the Blue Angels/Thunderbirds salute flight, this event is being organized by The National Salute to America’s Heroes and presented by Hyundai. Their Air and Sea Show had originally been scheduled to take place on South Beach over Memorial Day weekend, before the COVID-19 pandemic hit. That show will resume next year on Memorial Day weekend. I see on the schedule that I have about a 7-minute window starting at 12:18pm to see them over my area. Rolls-Royce, which also makes aircraft engines, announced today that it will have to cut 9,000 jobs from its civil aerospace division, due to the COVID-19 crisis. It said that it will take “several years” for the airline industry to recover from the pandemic. Rolls-Royce employs 52,000 people globally. The US and Canada are expected to extend travel restrictions. The TSA will likely start taking your temperature before you board your flight. Cancun and Riviera Maya are reopening for tourists by early June. US-based airlines will resume operating international flights as early as next month. Elvis Presley’s Graceland reopens on 5/21. I saw this news item on NBC News last night and it has not gotten much media attention, there are some 100,000 cruise line crew members (including cooks, maids, shop keepers, entertainers, etc.) who have been stranded for more than 2 months on-board these cruise ships, unable to dock in international cities or even in the US, although passengers have been whisked away to homes or hospitals. There is general outrage from the crew members, and one, in fact, committed suicide.

Health News:

As of this afternoon (5/19), globally, more than 321,459 people have died from COVID-19. More than 4.8 million people have been infected with COVID-19. On the positive side, more than 1,664,885 people have totally recovered, after getting COVID-19. The US has the most confirmed cases and most deaths, as well as most recovered from the virus. No.2 in number of confirmed cases is Russia and Spain has fallen to No.5 from No.2. No.3 in number of confirmed cases is Brazil, supplanting the UK, which has fallen to No.4 in confirmed cases. As for deaths from the virus, No.2 is now the UK with 35,421, No.3 is Italy with 32,169, No.4 is France with 28,025, and No.5 is Spain with 27,778.

The death toll from COVID-19 in the US, as of 5/19, now exceeds 91,179. New York is by far the worst-hit state by COVID-19. As of 5/19, there have been 28,451 deaths in the state, while 61,681 people have recovered from the virus. COVID-19 now has two strains: L strain and S strain. The Federal Government released details about the new Families First Coronavirus Response Act (FFCRA). The new act expands family and medical leave requirements for all public and private employers with up to 500 employees. Under the new act, covered employers must provide: 2 weeks of paid sick leave for qualifying reasons related to COVID-19; and up to an additional 12 weeks of paid expanded family and medical leave for employees who are unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

The US and Europe are now dealing with a rare, COVID-19-related Inflammatory Disease affecting children. The disease is referred to as PMIS and has been reported in parts of the US and Europe and reportedly some children have experienced organ failure. At least 3 deaths have been reported in NY.

LabCorp’s COVID-19 IgG Antibody Test is now available. If you have been exposed to the virus that causes COVID-19, your body will typically produce immunoglobulin G antibodies as part of the immune response to the virus, and this serology testing checks for that antibody. The test does not show if you have been exposed to COVID-19, because it can take 2-4 weeks after exposure to develop antibodies. So, this test is for individuals who think they may have had COVID-19 and do not currently have symptoms. It does not tell you if you have an active infection. There is a new contact tracing app that could become the model to save the world from the spread of COVID-19.

President Trump said Monday that he is taking the unproven malaria drug Hydroxycholoroquine as part of his personal fight against COVID-19, although he has repeatedly tested negative for the virus. He is taking a great deal of criticism, since the drug is unproven and is known to have some potentially fatal side effects. Dr. Fauci has had to dismiss, once again, the theories that the COVID-19 virus was man-made or accidentally released from a Chinese lab. Some encouraging news, after panicky reports of people getting re-infected with COVID-19. Of the 447 South Koreans who had recovered from COVID-19 and then tested positive again for the virus, they were not contagious and did not get virus symptoms again. The tests may be picking up the antibodies they now have.

Okay, I was going to stop debunking myths, but here is a new one, so I thought I should address it. A social media post claimed that these 5 big box stores, despite interacting with thousands of people every day, have not had any COVID-19 confirmed cases AND they haven’t shut any stores (Walmart, Amazon, Kroeger, Target, and Costco). First of all, they have a total combined workforce of 3,314,000, and I believe it is statistically impossible that none of the employees have contracted the virus. The claim is false. There have been news reports about infections and deaths from COVID-19 at the stores in these chains throughout the US. Also, certain stores with high confirmed cases or multiple deaths have been closed by local authorities. The social media post also ‘shaded’ (trying to appeal to younger readers) the meat packing industry, which was also a false accusation. Of the nation’s 2,700 slaughterhouses, 13 meatpacking and food processing plants ceased operations over the last 2 months after employees tested positive for COVID-19, and some of the closures were temporary, according to factcheck.org.

Animal News:

Okay, no emails please from Apocalypse-theorists, but we are experiencing a pandemic, have had all sports shut down, earthquakes, and entering hurricane season, AND apparently about to see the reemergence of the vast army of 17-year cicadas. These nearly 1.5 million cicadas (per acre) are from what is known at Brood IX and are set to emerge from the ground in Virginia, West Virginia, and North Carolina. They should start emerging at the end of the month. Broods are typically regional, although some Broods overlap regions. Some broods are on a 13-year cycle and some on a 17-year cycle. The Broods do not emerge at the same time, thankfully. Cicadas are very destructive to orchards, vineyards, and ornamental trees, as well as being very loud. Ultra-rare metallic blue bees have been found in Florida. The species had thought to have gone extinct in 2016. Wild rabbits are dying in the US from their own kind of COVID-19 virus. Rabbit Hemorrhagic Disease virus Type 2 has spread across the southwestern US and killing rabbits of all species, for the first time in this country. The disease has killed “thousands” of rabbits in New Mexico alone, and will impact the entire food chain. According to new analysis by an international team of scientists, the COVID-19 pandemic lockdown has caused an enormous 17% drop in global carbon emissions in Q1. In fact, the impact of lockdown measures is likely to lead to the largest annual decrease in CO2 emissions since the end of WWII. Of course, climatologists say that the brief pollution break is likely to be “a drop in the ocean” in climate change and that 2020 is still on track to be one of the five hottest years on record. For the first time ever, Stonehenge will livestream its Summer Solstice celebration. The ancient, mystical site typically hosts one of the world’s most popular Summer Solstice celebrations, attracting thousands of people, including the druid and pagan community, on the longest day of the year (6/21) to watch the sun rise behind the Heel Stone, of this (perhaps) ancient sun dial. However, COVID-19 has forced the English Heritage organization, which manages Stonehenge, to come up with a different plan. Scientists have discovered a real-life Kermit the Frog in the jungles of Costa Rica. New species are discovered every day. Scientists have been working in the Talamanca Mountains for over a century, but it wasn’t until this year that they found a tiny, semi-translucent frog resembling a real-life Kermit the Frog.

Entertainment News:

We seem to be losing a lot of entertainers lately, and some of that has been because of COVID-19, as they were in the high-risk, elderly group. Icon Little Richard died at age 87 of bone cancer. He was instrumental in the origin of Rock and Roll, with many hit songs (like “Tutti Frutti”, “Long Tall Sally”, “Lucille”, etc.) Ken Osmond, the actor best known for playing the role of Eddie Haskell on Leave It To Beaver, has died at 76. Former Kentucky first lady, the 50^thMiss America, and pioneer of women sportscasting, Phyllis George, has died at age 70. Canadian stage and screen actress, Monique Mercure, has died at age 90. Annie Glenn, American disability rights activist and philanthropist, died at age 100 of COVID-19, on 5/19. Willie K, an American musician, died at age 59 on 5/19. Brian Howe, English rock singer with Bad Company, died of a heart attack at age 66. Ty, British rapper, died from COVID-19 at age 47. Fred Willard, well-known actor of several sit-com TV shows and late night show guest, died at age 86. The Viewco-host, Joy Behar, has vowed to stay home “until Trump is out of office.” Chris Stapleton just postponed his tour dates to 2021. Twilight actor and girlfriend have been found dead in their home. Prince Charles is encouraging people to “Pick for Britain”. Bruce Springsteen has agreed to join Boston’s Dropkick Murphys to remotely perform inside an empty Boston’s Fenway Park. The concert will benefit the charity Entertain This! Ryan Seacrest’s repo says that he is fine and did not suffer a stroke during the American Idol finale on Monday night. It appeared that is right eyelid drooped and that he was slurring his words. Rita Wilson, wife of Tom Hanks, is getting creative with her time in quarantine. First, she donated antibody plasma to protect others from COVID-19. Then, she released a cool song for charity. Brian Austin Green has confirmed his split from Megan Fox, after 10 years together. Suzanne Collins has completed a new HUNGER GAMES prequel novel, “The Ballad of Songbirds and Snakes.” Mariah Carey and Melania Trump, among others, are marking their 50^thbirthdays in 2020. Amid much press controversy, Prince Harry and Duchess Meghan are marking their 2^ndwedding anniversary in Los Angeles. In case you are wondering, I am busy binge-watching Madmen,and watching Below Deck, and every spinoff of Dateline, 48Hours, and 20/20. Foreigner’s Juke Box Hero Tour 2020 has been canceled. Lionel Richie put together an all-star line-up to perform “We Are the World”, including new American Idol winner Just Sam and many other American Idol former winners. I feel like I need to highlight this one for potential employers (and maybe past ones too), Harvard Business Review wrote a piece that says side gigs can not only help pay bills and provide an outlet for a passion, but can also enhance careers and make the people better at their primary jobs. John Lennon’s Palm Beach estate has been listed at $47.5 million. Broadway theaters are expected to be closed at least until Labor Day. Unfortunately, some shows have already announcd that they are closing down for good. I think, these theaters, as opposed to movie theaters, have more of an opportunity to sanitize each seat between shows. Oprah Winfrey donated $12 million in COVID-19 aid to her ‘home’ towns. I’ve mentioned in the Repo Commentary recently that drive-in movies and drive-in service restaurants (like the old A&Ws) are becoming popular again, especially in this pandemic shutdown and social distancing environment. There is a lot of buzz about concerts doing the same thing, with a drive-up stage. Now, news comes that this Summer, Yankee Stadium will be turned into a giant drive-in theater and concert venue. NY state gave drive-in theaters the green light to reopen on 5/15. Time Out New York announced a new festival-like event known as Uptown Drive-In that will take place in the Yankee Stadium parking lot. Starting in July, the parking lot will transform into a hotspot that’s part drive-in movie theater and part local concert venue. Attendees will be able to roll up in their vehicles and enjoy either a movie or a live concert, while eating food from popular street venders with the festival’s car-side dinner service. The sound for the movies and the concerts will stream from a PA system that can be listened to through car radios. The event is being produced by MASC Hospitality Group, the NY-based company behind the Bronx Night Market and the Bronx Beer Festival. VH1 show Love & Hip Hop’s reality TV star in Atlanta, Maurice Fayne “Arkansas Mo” used a $2 million emergency loan from the federal PPP to lease a Rolls Royce, make child support payments and purchase $85,000 worth of jewelry, according to authorities from the Department of Justice. Payne is the sole owner of transportation business Flame Trucking and he applied for the PPP loan in April. I did not know that there were still any Blockbuster videos. There is only one in the world and it is located in Bend, Oregon, and it miraculously survived Netflix, and is now surviving the pandemic. The owner buys DVDs and Blu-Rays of movies from local Walmart, Target, Fred Meyer, and other local retailers, since her local DVD distributor is long since gone. She reopened by offering curbside pickup for the first time in the company’s history, in which buyers would rent or purchase movies over the phone and a Blockbuster worker would clean the DVD case with Clorox wipes, put it in a Ziploc bag, and take it to their car.

Technology & Space News:

Astronomers announced the discovery of the first black hole located in a star system that is visible to the naked eye from Earth. Annie Glenn, widow of astronaut/senator John Glenn, has died of COVID-19 complications, at age 100. Uber announced that it will provide free rides to veterans to their VA hospital appointments. Some major banks are reportedly trying out new technology to help monitor employees’ use of private messaging app WhatsApp. This technology has been designed by Symphony and due to officially be released later this year. About 4 million Americans will receive their Stimulus check on a prepaid Visa debit card, issued by the US Treasury’s banking agent, MetaBank. The cards allow purchases in stores and online, as well as ATM withdrawals. A majority of American Express employees will continue to work from home for the rest of the year, according to CEO Steve Squeri. This is an example of the pressure I have been writing about in the Repo Commentary for metropolitan office space leasing (NYC especially) and metropolitan residential rental space (NYC especially). The FBI has cracked an iPhone encryption and discovered al Qaeda links to a 2019 Florida Naval base shooter from the Royal Saudi Air Force. If you recall, this heads off a confrontation between Apple and the Justice Department over releasing customers’ privacy in the interests of national security. Visa lodged a patent application for a digital fiat currency in November 2019, which was just published on the US Patent and Trademark Office website. It would appear that Visa continues to have an interest in cryptocurrencies and blockchain technology. NASA is hiring, and you might qualify. Not for being an astronaut, probably, sorry. However, they are looking to recruit people for a new study, in collaboration with Russia’s Institute for Biomedical Problems, that will study how the human body might hold up to the physical and mental strain brought on by the long-term isolation space travelers would experience during a potential journey to Mars, on the heels of the pandemic quarantine. NASA is seeking for volunteers willing to be isolated in a lab in Russia for 8 months. Wow! Is this stay-at-home order the equivalent of that? Mastercard’s profits have fallen 7%, as its revenue has increased. AT&T CEO Randall Stephenson just retired at 59, with a ‘golden goodbye’ staggering pension account worth $64 million, enough to provide him with a guaranteed income of $274,000/month for the rest of his life. It’s not all he received, as President Trump chose to call him out on Twitter for “heavily indebted AT&T” and that it “owns and presides over Fake News CNN”. I’m sure Stephenson didn’t give it a second thought. Just as trailers for the new sitcom Space Force, have hit TV, the real US military sixth branch, the Space Force, just launched a secretive space plane from Cape Canaveral, FL. It is called the X-37B Orbital and little is known about it, besides that it will be carrying a satellite built by cadets at the US Air Force Academy. Green-tinged Comet Swan with an 11-million-mile-long tail is flying past Earth on its way to the Sun, and is visible to the naked eye. It will be at its brightest point by the end of May, if it doesn’t break up before then. It became visible last week. It will be best viewed from the southern hemisphere, but those in the northern hemisphere will still be able to see it low on the horizon in the pre-dawn hours. This particular ball of ice and dust visits the inner part of our solar system once every 11,597 years.

US News:

The President’s Plan to reopen the country, which outlined “Proposed State or Regional Gating Criteria” be met, prior to proceeding to Phased Opening, and then defined the Phased Opening’s 4 Phases that it suggested States follow, has not been strictly followed. State Governors have largely taken the reins of reopening procedures and have either loosely followed Federal plans or ignored them completely. However, the US Health Secretary said that there has been NO SPIKE in COVID-19 cases in the places that have reopened.

Here are the latest news items I have, regarding Reopening plans, by State:

ALABAMA-Gov. Ivey, on 5/11 put new rules in place, at least until 5/22, which include allowing non-work gatherings of any size, as long as people maintained 6 feet of social distancing, including houses of worship; allowing gyms, athletic facilities, barber shops, hair salons, nail salons with certain rules; retailers and beaches to reopen with restrictions; restaurants, bars, and breweries to allow on-property consumptions of food and drink with certain rules; but kept closed theaters, casinos, bowling alleys, and night clubs.

ALASKA-Gov. Dunleavy issued a 5 phase Reopen Alaska Responsibly Plan, with Phase 1 implementation on 4/24 opening most non-essential businesses with safeguards, 25% capacity for most businesses (except outdoor), small gatherings of less than 20 people, social distancing and no waiting rooms, elective medical services, restaurants open but bars/theaters/bowling alleys/bingo parlors/gaming centers remain closed, interstate and international travelers still required to quarantine for 14 days upon arrival in Alaska, and schools closed for rest of year. The Phase 2 began 5/8, with dine-in restaurants capped at 50% of capacity, bars at 25% capacity, and indoor fitness capped at 25%. Religious gatherings are now allowed, but with a limit of 50 people. The state also rules that anyone who sings should be 10 feet away from the nearest person.

ARIZONA-Gov. Ducey issued a Returning Stronger plan, which extended the stay-at-home order to 5/15 with modifications. Retail businesses can begin curbside pickup on 5/4 and in-person operations on 5/8, with safeguards. Barbershops and salons have now been reopened. On 5/11, restaurants were able to offer dine-in services again. The Navajo Nation extended the closure of its government until 5/17.

*ARKANSAS-Gov. Hutchinson never issued a stay-at-home order, now has been issuing Directives on Resuming certain operations: large indoor venues 5/18, restaurant dine-in operations 5/11, elective dental service 5/11, barber shops/body art/cosmetology/massage/therapy/spas 5/6, large outdoor venues and houses of worship 5/4, gym/fitness centers 5/4, elective medical procedures 4/27, and camps 4/17. One of only 7 states to not issue a stay-at-home order.

CALIFORNIA-Gov. Newsom issued a stay-at-home order that has no end date. He just extended social distancing into June. He also made a pact with Oregon Gov. Brown and Washington Gov. Inslee on 4/13. On 5/4, the state announced that some retailers (clothing stores, florists, and bookshops) would be allowed to reopen with curbside pickup and physical distancing. Manufacturing and supply chain for those retail businesses would be allowed to reopen. On 5/13, LA County opened beaches for running, swimming, and surfing (but not sunbathing or picnicking). However, LA County is expecting to extend its stay-at-home orders for the next 3 months. Even if the orders remain in place through the Summer, the County will be gradually relaxing restrictions in a 5-step plan. On 5/18, the Governor said that nearly half of the states’ counties were moving into Phase 2 of the four phase state approach to reopening. This allows restaurants to have in-store dining and permits shopping malls to reopen. Professional sports will be allowed to reopen in the first week of June. California reportedly gave 150,000 undocumented workers $500 each for COVID-19 aid. Many undocumented workers in the US pay taxes, and have a taxpayer ID, but no Social Security number, so wouldn’t have been eligible for the $1200 Aid check.

COLORADO-Gov. Polis extended the state’s stay-at-home order until 5/27. The state has transitioned to a “safer-at-home” order. Retail businesses can reopen with curbside delivery and elective medical procedures can take place. On 5/12, state park campsites reopened. On 5/25, the Governor said he will make a decision on restaurant reopenings.

CONNECTICUT-Gov. Ned Lamont extended the mandatory shutdown in the state until 5/20. CT has joined a coalition with the Northeast states of New Jersey, New York, Pennsylvania, Delaware, Rhode Island and Massachusetts to coordinate reopening their economies. On 4/30, Gov. Lamont unveiled a 4-stage plan to start the re-opening on 5/20. He will include outdoor areas of restaurants and bars, outdoor museums and zoos, offices, and some retail outlets. He is also including, specifically, barber shops, hair salons, and other personal care businesses. Summer camps can open on 6/29 with limited groups of children to 10. Summer schools may reopen in July. Connecticut has the distinction of being the last State to begin reopening.

DELAWARE-Gov. Carney extended a stay-at-home order until 5/31. He also joined the above Northeastern state coalition.He announced 5/14 that state beaches and community pools would reopen 5/22, and ice cream trucks and shops on 5/15. On 5/18, the Governor expanded the ability for churches and other houses of worship to conduct in-person services with restrictions. According to this release, anyone 13-years-old or older is required to wear face covering and high-risk people, including those over 65-years-old, and anyone who is sick, should not attend in-person services.

DISTRICT OF COLUMBIA-DC Mayor Bowser extended a stay-at-home order until 5/15. I don’t have any update beyond that.

FLORIDA-Gov. DeSantis issued a stay-at-home order until 4/30. He has been reopening certain businesses through much of the state, starting with the less-populated northern counties and moving South to the highly-populated southern Florida counties. There is still wide disparity in orders between counties. As of 5/18, the capacity of in-store dining at restaurants increased to 50% of capacity from 25% of capacity, beaches have been reopened (although with criticism, as thousands of people flocked to the beach and didn’t observe social distancing), some salons have reopened, and gyms/fitness centers were allowed to reopen (although only a few have reopened, I still can’t see how they are going to sanitize each machine between member use!). Hotels can also now operate at 50% capacity. But, bars, theaters, bowling alleys remain closed. The Florida Keys will finally reopen to tourists on 6/1. Checkpoints there will be removed then.

GEORGIA-Gov. Kemp issued a stay-at-home order until 4/30. He has closed schools until the end of the school year. Although he felt that his state is behind the curve, more so than other states, because of lack of testing, he changed tacks on 4/24, opening gyms, fitness centers, bowling alleys, body art studios, barbers, hair and nail salons, and massage parlors, with certain restrictions. He created a new shelter-in-place order for “medically fragile and elderly Georgians” until 6/12. Bars, nightclubs and music venues remain closed for now.

HAWAII-Gov. Ige issued a stay-at-home order through 4/30. He has been extremely quiet since. On 5/7, the First Phase of the reopening plan was implemented, opening shopping malls, car washes, pet grooming, elective surgery, nonprofit organizations, and in-person retail businesses. On 5/15, he reopened some beaches to recreational activities. He is still discouraging visitors to the islands for now, with immediate 14-day quarantine for anyone out of state.

IDAHO-Gov. Little issued a stay-at-home order until 4/30. His goal is for most businesses to open after that “Staged Opening” began, with Initial Stage on 5/1, Stage One 5/1-5/15, Stage Two 5/16-5/29, Stage Three 5/30-6/12, and Stage Four 6/13-6/26. In Stage Two, restaurant dining and salons are permitted to reopen.

ILLINOIS-Gov. Pritzker issued a stay-at-home order to 5/31. He reopened state parks, golf courses, retail stores and garden centers, as well as places of religion, keeping groups to 10 or less and social distancing. On 5/5, he announced a five-phase reopening plan. Phase 3, with manufacturing, offices, retail, barbershops and salons, won’t begin until 5/29, at the earliest.

INDIANA-Gov. Holcomb issued a stay-at-home order through 4/20, but then extended it to 5/1. He said he planned to take a phased approach to lifting restrictions. Stage 2 rolled out for most of the state on 5/4, allowing some essential travel and permitting social gatherings of up to 25 people. Retail and commercial businesses were allowed to reopen at 50% capacity, as well as shopping malls. Restaurants and bars that serve food were allowed to reopen on 5/11 at 50% capacity, as could salons, barbershops, and tattoo parlors.

*IOWA-Gov. Reynolds has not declared ANY stay-at-home order. However, she did issue an Emergency statement that closed all nonessential businesses until 4/30. She allowed 77 of Iowas 99 counties to reopen restaurants, fitness centers, retail stores, and enclosed malls at 50% capacity, and also lifted the ban on religious gatherings of more than 10 people. Counties where COVID-19 activity is higher had their closures extended to 5/15.

KANSAS-Gov. Kelly issued a stay-at-home order, which had been extended to 5/3, ended. The Governor allowed restaurants to reopen if they adhere to public health guidelines and 6 feet spacing for customers. Libraries and child care facilities may open. On 5/6, she opened dental services, campgrounds, drive-in movie theaters, tanning facilities, and medical spas. Fitness centers, malls, and other retail in the 22 counties that had not eased restrictions on 5/1, were now allowed to open at 50% capacity.

KENTUCKY-Gov. Beshear issued a “Healthy at Home” order that will be in effect indefinitely. He has closed schools until at least 5/1. Last Thursday, the Governor released a new timeline for reopening state’s industries. On 5/22, restaurants with limited 33% capacity and outdoor seating. 6/1, movie theaters and fitness centers. 6/11, campgrounds. 6/15, childcare facilities, with reduced capacity. He said that later, maybe in July, bars and gatherings of up to 50 people may reopen. Customers and employees will be asked to wear a mask at every reopened and essential business. I wanted to point out that Kentucky released some prisoners, because they were in for lesser charges and in danger of COVID-19 contagion, but also announced that they were going to put ankle monitors on quarantine breakers.

LOUISIANA-Gov. Edwards extended the stay-at-home order through 5/15. Under a new order, malls in Louisiana will remain closed, but stores can offer curbside delivery. Restaurants can still do takeout and delivery orders, but also outdoor seating, but without wait staff. Churches can operate outdoors with tents without flaps. Salons, barbershops, bars and casinos will remain closed. He said the State has not met the thresholds set by President Trump.

MAINE-Gov. Mills issued a “Stay Healthy at Home” order through at least 4/30. She then extended that order through 6/11. Gov. Mills announced on 5/8 a Rural Reopening Plan aimed at reopening certain additional business in rural Maine over the next 2 weeks. Under the plan, retail stores and restaurants will be permitted to open to in-store and some dine-in service. Retail stores in these specific counties are allowed to open on 5/11. Restaurants in these specific counties are allowed to open on 5/18. But, that does not extend to the cities or more populated areas of the state.

MARYLAND-Gov. Hogan issued a stay-at-home order with no end date. On 5/13, he allowed retail stores to open with 50% capacity, manufacturing operations to resume, barber shops and hair salons open with 50% capacity, and churches open with 50% capacity. Closed state parks and state beaches can reopen for people who are exercising.

MASSACHUSETTS-Gov. Baker issued an emergency order closing all nonessential businesses until 5/4. MA has joined the Northeastern states coalition. Gov. Baker decided to extend the timeline for nonessential businesses to 5/18. On 5/19, Boston Mayor Walsh said the city will reopen office spaces a week later than the rest of the state, which will reopen offices 5/25.

MICHIGAN-Gov. Whitmer extended the stay-at-home order through 5/15.She outlined the 4 factors she will take into consideration before reopening the state. She, along with Governors from New York and Florida, has been particularly vocal during the pandemic, particularly in criticizing the President. Her plan of action has been met with daily protests in Lansing at her doorstep, with mobs of people waving guns and some with Trump signs. Although the Governor extended the stay-at-home order to 5/15 on Friday, perhaps, because of the recent protests, she has relaxed some restrictions, like some outdoor activities and purchasing garden supplies. She also reopened golf courses and motorized boating (but only for people from the same household.)

MINNESOTA-Gov. Walz extended the stay-at-home order through 5/3. Minnesota did just open golf courses on 4/18.

MISSISSIPPI-Gov. Reeves (I think he is one of only two current Governors I have met personally) issued a shelter-in-place order which expires on 4/20. He announced this week that schools will remain closed for the rest of the semester. He also said that “There are still more sacrifices to be made.”

MISSOURI-Gov. Parson issued a “Stay Home Missouri” order through 4/24 and has made no plans to reopen the state.

MONTANA-Gov. Bullock extended the stay-at-home order through 4/24. He said last Monday that he will allow the state to reopen sooner rather than later. The Governor decided on Friday to lift its stay-at-home order on Sunday 4/26.

*NEBRASKA-Gov. Ricketts issued the “21 Days to Stay Home and Stay Healthy” order on 4/10, which ordered all hair salons, tattoo parlors, and strip clubs closed through 4/30, and all organized group sports cancelled until 5/31. Nebraska is one of only 7 states that did not issue a stay-at-home order.

NEVADA-Gov. Sisolak issued a stay-at-home order until 4/30. He is monitoring several parameters in his decision to reopen the economy. On Friday, the Las Vegas Mayor, already somewhat controversial, said she wants to open up the casinos and the Strip as soon as possible, “even if it risks some lives.”

NEW HAMPSHIRE-Gov. Sununu extended a stay-at-home order until 5/4. Public and private schools will remain closed for the rest of the school year.

NEW JERSEY-Gov. Murphy issued a stay-at-home order with no specific end date. NJ is part of the coalition of Northeastern states. He said “that no one is more eager to restart our economy than I am.”

NEW MEXICO-Gov. Grisham extended the state’s emergency order to 4/30. She is waiting for the peak to occur, before taking any actions.

NEW YORK-Gov. Cuomo issued a “New York State on PAUSE” executive order until 5/15. NY has joined the coalition of Northeastern states. He has been the most vocal Governor in the country during the pandemic and the one who has challenged the President the most (and vice versa). This past Wednesday, Gov. Cuomo flew down to Washington to meet in-person with the President, and they aired out some issues. Following the meeting, the President pledged to support NY and get the the medical supplies that they need. New York has moved towards the return of professional sports.

NORTH CAROLINA-Gov. Cooper issued a stay-at-home order until 4/29.

*NORTH DAKOTA-Gov. Burgum has only shut down schools, restaurants, fitness centers, movie theaters and salons. ND is one of only 7 states that did not issue a stay-at-home order.

OHIO-Gov. DeWine issued a stay-at-home order in place until 5/1.

OKLAHOMA-Gov. Stitt extended a “Safer at Home” order for adults over age 65 and other vulnerable residents until 5/6. He is working on a plan to possibly open the state’s economy on 4/30. He is also allowing elective surgeries to resume on 4/24. On Friday, the Governor allowed hair salons and pet-grooming services to reopen.

OREGON-Gov. Brown issued a stay-at-home order with no expiration date, until she sees a declining rate of active cases of COVID-19 and a return to normalcy.

PENNSYLVANIA-Gov. Wolf extended a stay-at-home order until 5/8. PA joined the coalition of Northeastern states. He has seemed, like NY Gov. Cuomo, to be on the reluctant side to reopening his state’s economy. He said, “If it’s not in the best interest of keeping people safe, I’m not going to go along with it.” I could see this potentially becoming a moral, political, and revenue issue, as other states (Florida and Texas, for example) may be willing to reopen earlier, possibly to attract business away from the northeastern states coalition (which has happened to some degree previously due to state tax differences).

RHODE ISLAND-Gov. Raimondo issued an extension to the state’s stay-at-home order to until at least 5/8. RI has joined that Northeastern coalition of states.

SOUTH CAROLINA-Gov. McMaster extended his previous “State of Emergency” executive order through at least 4/27. He has said that, “We want to get all of these businesses going back as soon as we can.” The Governor has been opening up beaches slowly. The Gov. announced on Thursday that the stay at home order will end next week. The University of South Carolina has announced that it will begin in-person classes in August. I wonder how this will impact the prices for colleges? If the risk of contagion increases with in-person, does that mean the tuition is less expensive?

*SOUTH DAKOTA-Gov. Noem has refused to issue a stay-at-home order, despite the state’s COVID-19 cases spiking. SD is one of only 7 states without such an order. South Dakota’s Governor has been praised for her Sweden-like approach to the COVID-19 pandemic, relying on herd immunity and sheltering only the at-risk population, while not cratering the local economy. However, on Monday, the NY Post reported that the confirmed cases in the state jumped from 129 to 988 since 4/1, when the Governor criticized other states’ “Draconian measures” of social distancing to stop the spread of the virus. She even went on to say “South Dakota is not New York.” South Dakota is now home to one of the largest single clusters of COVID-19, with 300 workers at one pork processing plant of Smithfield Foods infected, according to the Washington Post.

TENNESSEE-Gov. Lee extended the state’s stay-at-home order until 4/30. He said that the state would be reopening the economy in May.

TEXAS-Gov. Abbott issued a stay-at-home order through 4/30. He said last Monday that only businesses “that will have minimal or zero impact on the spread of coronavirus will be the first to open up.” He intends to open some businesses on 5/1. Gov. Abbott and a top law enforcement officer on Wednesday publicly came to the defense of a Dallas hair salon owner who was jailed for 7 days, for defying virus shutdown order. When hair salons in the State were legally reopened, her first customer for a haircut was, none other than, Sen. Ted Cruz, showing his support. Texas has moved towards a return of professional sports.

*UTAH-Gov. Herbert extended the “Stay Safe, Stay Home” directive through 5/1. Schools will remain closed for the remainder of the year. Technically, UT is one of the 7 states to not issue a stay-at-home order.

VERMONT-Gov. Scott issued a “Stay Home, Stay Safe” order which has been extended until 5/15.

VIRGINIA-Gov. Northam extended a stay-at-home order until 6/10. This is the longest such order among the 50 states, by more than a month.

WASHINGTON-Gov. Inslee extended a stay-at-home order until 5/4. But he says he may soon loosen some restrictions.

WEST VIRGINIA-Gov. Justice issued a stay-at-home order with no expiration date.

WISCONSIN-Gov. Evers issued a “Safer at Home” order that prohibits all nonessential travel until 4/24. Wisconsin just joined neighbor Minnesota in opening up golf courses on 4/18.

*WYOMING-Gov. Gordon did not issue a stay-at-home order, one of only 7 states that didn’t. A Wyoming strip club became one of the first to reopen in the country. On Friday night, they threw a “masks on, clothes off” party.

On the Unemployment front, the weekly US Initial Jobless Claims data skyrocketed from 282,000 on 3/14, to a record (and twice as high as expected) 3,283,000 on 3/21. Then, on 3/28, the number skyrocketed again by 6,648,000, making it almost a 10 million increase in 2 weeks (way more than expected). The 6,648,000 reading was also “the highest level of seasonally adjusted claims in the history of the seasonally adjusted series,” per the Department of Labor. On 4/9, Initial Claims jumped by 6,606,000. Then, on 4/15, Initial Claims were up another 5,000,000, taking the four week total of new Unemployment Claims to 22,000,000. Many officials and economists had forecasted a total COVID-19 impact on new Unemployment Claims reaching 20-30 million people, and that looks like a spot-on forecast. On 4/23, weekly Initial Jobless Claims were reported up another 4,427,000, taking the grand total to over 26 million. On 4/30, Initial Claims jumped another 3,839,000. On 5/7, weekly Initial Claims was up another 3,169,000, which at least was a decrease from the 4/30 reading. But, that brings the COVID-19 pandemic shutdown total since 3/14 to 33 million, more than forecasted. The Unemployment Rate is now 15.5% for the week ending 4/25. That is the highest unemployment rate since the Great Depression. Looking at the ADP National Employment Report, business closures to fight the COVID-19 pandemic prompted private employers to lay off a record 20.5 million people in April. On 5/14, Initial Claims were reported to be 2,981,000 more, although less than the previous week, bringing the total since 3/14 to 36 million. That put the Unemployment Rate up to 15.7% for the week ending 5/2.

There is a search underway for a 16-year-old missing Ohio girl. Missouri is planning an execution of a death-row inmate. President Trump has removed the Inspector General of the State Department, Steve Linick. The Inspector General is basically the watchdog of the cabinet office. He joins 3 other Inspectors General that the President has removed: Intelligence IG Michael Atkinson, Defense IG Glenn Fine, and HHS IG. The Boy Scouts have been banned from planting American flags on veterans’ graves for Memorial Day, due to COVID-19.

On Friday, the SBA has finally released its PPP Loan Forgiveness Application. For PPP 1, The borrower is expected to complete the application and submit it to their lender, who will ultimately be responsible for assessing forgiveness. The borrowers were to have used at least 75% of the money received on payroll and job retention. The other 25% could be used for mortgage interest, utilities, and rent. The rules were not very clear, but should become clearer with this application. For portions of the loan that were NOT forgiveable, there was a 6-month reprieve on repayments and interest, but interest will be 1% and loan principal would have to be repaid within 2 years. Apparent already on the Application, is that the SBA wants to know any borrowers who received a loan in excess of $2 million. Those loans will be audited by the government and borrowers will be required to show the money was necessary to keep operations running and that they had limited access to other sources of liquidity. As I’ve written before, it may not be easy for some business models to spend 75% of the money on Payroll (restaurants, bars, etc.) and for others, it may be difficult to spend the money appropriately within the 8 week guidelines. Of course, not every borrower may be seeking to get full forgiveness, as the loan has a very low interest rate (1%) and does not have to be repaid for two years. As of 5/15/20, the SBA said that $191.3 billion of PPP had been thus far distributed and that the average loan size was $72,296. US Treasury Secretary Mnuchin and Fed Chairman Powell were being grilled by the Senate Banking Committee on Tuesday, regarding the PPP, and how Treasury and the Fed are handling the economic downturn and the Crisis response. One of the things that a Congressional commission overseeing the Treasury’s and Federal Reserve’s emergency lending programs is that the agencies detail what metrics they will use to measure the success of the programs. Sen. Marco Rubio, who chairs the Senate’s small business committee, is urging an extension of the PPP, as it nears the end of its 8-week timeframe, in which recipients must use their allocated loans. He feels the date is arbitrary and doesn’t fit with the real world situation. The Justice Department has issued subpoenas to US banks, demanding details of the loans they have made as part of a wider investigation into possible abuses of the PPP, according to Reuters. Sources say that the banks themselves are not being probed. The Federal Reserve has previously published the full details of the loans made up to 5/6 under the PPP. The data shows over 3,000 loans routed through almost 600 lenders nationwide. The SBA has also announced that $191.3 billion has so far been distributed under the PPP and the average loan is $72,296. Mnuchin has said that companies that made false certifications to receive PPP loans will face consequences, which may include criminal liability. One thing that hampered PPP 1 and now the additional $310 billion of PPP 2, and that is the technical glitches in the SBA’s E-Tran system, which was never designed to cope with the volume of applications it is receiving. Lenders are urging the SBA to fix their system and update it.

The Treasury Department has announced plans to reclaim COVID-19 stimulus payments that went to the estates of deceased individuals. The erroneous $1200 payments were due to the IRS relying on outdated records and because some taxpayers from 2018 had died since filing.

Bankruptcy News:

On 5/16, The Economist ran an article “US faces unpredictable rate of business bankruptcies”, citing that 2020 is already the worst year for US bankruptcies since 2009, but it is uncertain whether it will get worse or stop. OpenTable predicts that 25% of US restaurants won’t reopen, as restaurants lost more than $30 billion in sales in March and $50 billion in sales in April. Some analysts believe that a higher percentage of the more than 27,000 NYC restaurants won’t reopen. Speaking of restaurants, today, Truluck’s in Fort Lauderdale announced that it is shutting down for good. I visited a restaurant this past Saturday and one this morning. It was weird with half the seats not being seated, and half the staff and half the noise. Maybe one of the ways some restaurants will adapt is by going back to the 1950s and using the natural social distancing of drive-in restaurants with carhop service, in which servers rush food from the kitchen directly to your car window. They seem to be making a comeback. Of course, it sort of implies that people are okay again with eating in their cars. In California, where in 1950, drive-in restaurants were all the rage, both Mel’s Drive-In and Bob’s Big Boys have brought back the carhop services they provided in the 1950s, in San Francisco and Los Angeles. The difference between then and now is that the servers wear gloves, sanitize payment options, and staple shut bags of food or place in to-go containers, on the trays attached to the car windows. I’m guessing that the model won’t work for ALL types of food. Gimmicks may be another way for restaurants to go, like a Maryland restaurant that is putting customers in individual bumper tables (inner tubes) to help guests maintain social distancing.

There has been a trend over the last few years of large retail chains filing bankruptcy in recent years, certainly more recently due to the COVID-19 shutdown, but in the past year, more due to brick and mortar stores losing revenue to online retailers. Just in 2019, Destination Maternity filed in October, Sugarfina filed in September, Forever 21 filed in September, Fred’s filed in September, Barneys New York filed (for the second time) in August, Avenue filed in August, A’Gaci filed (for the second time) in August, Charming Charlie (for the second time) in July, FTD Florists in June, Sonia Rykiel in April, Roberto Cavalli in April, Z Gallerie (for the second time) in March, Diesel in March, Charlotte Russe in February, FullBeauty Brands in February, Payless in February, Gymboree (for the second time) in January, and SHOPKO in January. And, that was just in 2019. In 2018, we saw some major retail bankruptcies in David’s Bridal, Sears, Mattress Firm, Gump’s, Brookstone, National Stores Inc., Rockport, Nine West, Remington Outdoors (a gun manufacturer during the height of that industry because of the lawsuits stemming from 2012 Sandy Hook school massacre), Claire’s, The Walking Company, Bon-Ton, among others. I mentioned a few weeks ago that Pier 1 is just waiting to reopen stores to sell off assets. Now, the news is that after 58 years, Pier 1 is closing all 540 stores. Instead of selling assets at steep prices to the public, they will sell all assets in a court-supervised auction. Luckin’ Coffee stock began trading again, after being de-listed, and is down 32% in price.

So, I’m watching these sectors that you will see shortly, filing bankruptcy: gyms, restaurants, retail stores, and movie theaters, as all of these groups are going to have a challenge to change their business models to accommodate social distancing and gathering guidelines. I’m not sure how bowling alleys will survive either, since the hygiene looks impossible to me. Brick and mortar retail stores were already getting their revenues hammered by online sales, for the last few years. The scary thing, and I’m hearing this from an inside source, is that you have not seen the small businesses file yet, because many of them can’t afford right now to even FILE bankruptcy. Not only do some business sectors have companies that may need to adapt their business models, or not survive, but many of their former employees need to adapt their skillsets to survive in the new environment.

According to USA Today and 24/7 Wall St., these are the 23 American brands that might not survive COVID-19 pandemic:

Neiman Marcus
StubHub
C. Penney
AMC Theatres
Sears
WeWork
Crew
Frontier Communications
Bed, Bath & Beyond
Hertz
Steak ‘n Shake
Nordstrom
GNC Holdings
Ruby Tuesday
Gold’s Gym
Chesapeake
Norwegian Cruise Line
Dave & Buster’s
Party City
Modell’s Sporting Goods
Best Buy
Revlon
Gogo

International News:

Italy has reopened shops and restaurants, after 10-week lockdown begins to ease. The Iranian Navy frigate Jamaran accidentally struck an Iranian support vessel Konarak with a missile, causing extensive damage and killing 19 sailors, during a military training exercise. A gas leak in Andhra Pradesh, India, killed 13 people and injured over 1,000 others. China is calling President Trump’s fiery letter to the WHO, in which he threatens to permanently withhold US funding from the UN health agency, “smearing”. Okay, I didn’t know where to write this, but Fanta is an odd beverage. For people in Thailand, strawberry Fanta is so revered that it is a popular offering at the country’s numerous shrines, according to atlasobscura.com. Thailand has become Fanta’s 4^thbiggest market, ahead of both the US and China, particularly the “red water” flavor. The surge in cases and deaths from COVID-19 in Brazil is catching everyone’s attention. Officials believe the numbers may actually be higher. The crisis there has disrupted its iron-ore market and increased prices.

Florida:

Gov. DeSantis announced that Florida would enter full Phase 1 on Monday, 5/18. He allowed for gyms and fitness centers to be open, beaches to be open, and retail stores and restaurants up to 50% capacity (from 25% last week). However, he did not open up bars, bowling alleys, movie theaters, or concerts/gatherings. A Florida scientist has been fired for allegedly refusing to “manipulate” the COVID-19 data. I’ve written and there has been much discussion around business and individual bankruptcies due to COVID-19 crisis, but what about municipalities? It turns out that here in Florida, the city of Miramar has furloughed all 1,000 full-time employees, as it tries to make up for a $23 million budget shortfall. It also cut the pay to every police officer and firefighter by 20%. City officials say that tax revenues have dramatically declined, as a result of the economic impact brought on by COVID-19. Some cities and towns in Florida are trying to help out local restaurants. West Palm Beach and Boca Raton have increased zoning for outdoor seating for restaurants, allowing them much more space for tables and no capacity restrictions. The problem for restaurants is that even at 100% capacity, the business model’s margin is so thin, that it makes the bulk of its profits on the sale (and markup of 2-3 times) of alcohol. That is also where it pays the bartenders in tips. 25% or 50% capacity is not enough to earn a profit for most of the restaurants, especially those that have large bars or rely on sports broadcasts (since there are no sports yet). The sports bar chain Duffy’s has not reopened yet and furloughed all 1500 employees at the start of the quarantine. It is possible that they never reopen their 37 Florida locations. Some restaurants and salons have begun a somewhat controversial practice of charging an extra COVID-19 surcharge on each customer’s bill, of $2.19. It’s not clear where that money is going, but I assume it is to help with the expenses of keeping the restaurant open. I saw that it actually started in Missouri and that it reflects that food costs have jumped the most in 46 years. Mar-a-lago opened on Monday, 5/18. You may have heard that a week ago, when the Governor opened up Cocoa Beach, just south of Daytona Beach in Brevard County, throngs of beachgoers infiltrated the sand, ignoring social distancing, and leaving 13,000 pounds of trash on the beach. This prompted another crackdown on littering, increasing fines and enforcement. Officials in Broward County are not agreeing on whether gyms should be allowed to reopen. I still don’t know how they can make those notoriously dirty, germ-infested places suddenly sanitary. Miami-Dade county businesses have begun to reopen, but customers seem to be hesitating to return.

I am usually singing in Palm Beach County, FL, at least somewhere. My National Anthems for MLB came to an abrupt halt in mid-Spring Training, due to the pandemic lockdown. I still did some charity singing in my 6-part harmony group Generation Gap, but mostly just drive-ups in parking lots at restaurants. I will be doing more solo gigs as an Elvis Presley Tribute Artist, as restaurants and events open up more. I am moving away from gigs with the harmony group (after 12 years), as well as expanding my songs to other artists, besides Elvis (Michael Buble, Johnny Cash, Neil Diamond, Tom Jones, Josh Turner, Sinatra, Jason Mraz, Roy Orbison, etc.). I will keep you all posted.

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Repo Commentary-05/20/20

Published by jkidwell561

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