No amount of stimulus and spending is going to make the virus go away. What we are seeing are the very real effects of the global economy taking a hit because of the disruption caused by the Pandemic. The markets have reacted to new information and have corrected to reflect the reality. A lot of the over-reaction is due to uncertainty over the nature of the Pandemic (abnormally lethal v/s mortality rate slightly higher normal flu) and the OPEC+ breakdown. Once the impact is better understood, the markets will recalibrate to the right levels. Over a 6 month period, the economy will bounce back and so will the markets.
Predictions of doom and gloom are over-reactions
3
Democrats should play the same game Republicans and Mitch McConnell played with Democrats and Obama.
No cooperation with republicans unless they agree to medicare for all who want it.
7
Remember the old TV program, “That was the Week that Was....”. When I think about it, this one should definitely go down in history! First of all, we learn COVid19 is a pandemic, is spreading through the world, and America is led (?) by the worst president in history. The week includes a full moon and Friday the 13. Elizabeth Warren, the brilliant, ultra-prepared candidate, withdraws from the race for President. The documentary “Hillary” comes out. HRC may be the most vilified woman in modern American History. It’s a “Me Too” World. Oh, and the sacred Stock Market, an indicator of all things Capitalist, took an historic nose dive. Anyone else feeling vulnerable?
5
Can't he ever act like a president and not blame everyone for his problems?
I knew something was about to happen with the economy. We rely too much on China for manufacturing. Sadly, we don't have a president who knows what he is doing and is likely crying in bed wishing he could just be president when he doesn't need to make any tough decisions.
4
Absolutely amazing. There's a potential crisis here. Like every other major issue, people insist on blaming someone, usually someone they didn't like anyway, as their first reaction.
We never come together to solve anything. Just blame, blame, blame. Makes feel good, I guess like Nero did.
And, to make matters worse, whenever one side comes up with a recommendation, the other side ridicules it. No one is trying to find any common ground, lest they be seen as acknowledging that the other side may have any valid point whatsoever.
But, the most despicable among us actually cheer the crisis on, no matter the human cost, if it will help them achieve a political objectives.
If this society collapses, we are all complicit and we are all to blame. History will record us as having gotten exactly what we deserve.
The proof of my comments will be demonstrated by any replies which - yep, you guessed it - still insist on blaming someone.
7
@Gino G The fish rots from the head down.
Our leaders set the tone for our society overall. If one wants credit for anything good that happens (whether they caused it to happen or not) and subsequently accepts no responsibility when they've clearly messed things up, this leaves us with a fairly poor example to follow.
It doesn't mean that I will behave that way, but my observation is that many give themselves permission based on what's being modeled (and incented) at the highest levels.
2
Thank you for proving my point. You couldn’t resist getting a dig in there in the first sentence. Your first reaction, like most other people was to point out who you thought was to blame. That’s exactly what I predicted. People can’t get past their compulsion to first blame, then maybe, only maybe, try to find a solution. Children blame each other. A real adult wants to find a solution first. But, like children, we have to first make sure everyone knows that it is the other person’s fault.
3
They still believe him. My GOP Neighbors tell me it's like the flu. The Dem's are making this up to defeat him. The stock market is going to be fine. They're not worried. He "alone" can fix this ...
6
Can you say "Trump Recession?" Perhaps the emperor has no clothes.
6
What was our trade balance with China before tRump ripped up trade agreements with them, and insisted he could broker a "better deal?"
Did he not expel many of their business leaders and citizens sometime at the beginning of the year? That surely must have had a chilling effect on one of our most important trading partners?
It seems as though after decades of cultivating trade with China, the U.S. has become more dependent on China than they have become dependent on us. Especially when two-thirds of our economy is consumer driven.
Clifford - the Big Red Dog, could be an analogy to what we want our relationship with China to be. A happy big dog who only wants to have a friend to play with, and we get to tell him what to do.
It turns out that Clifford is a very industrious red dog and wants to not only drive the train, but to own the railroads. All that tRump can do is to lay on the tracks...!
2
Fear and greed are the eternal variables that control individuals investing in anything.
It is a healthy thing for fear to make an appearance.
I hope the Trump panic does not remove moral hazard from the equation. If one invested in high interest bearing notes and forgot about the risk it is time for a few lessons to be learned.
I hope the uptick in the market this AM is because some firms computer algorithms indicated the market is at the bottom and not people thinking Trump's solutions are a panacea. For they are not.
27
@Edward B. Blau it's called a dead cat bounce. Too many real events involving supply chains, event cancellation, stresses to health care sector, etc.
This doesn't even account for obvious incompetence of republicans writ large to deal with anything resembling factual evidence on anything life threatening like say, national security, global warming, budget deficits, etc. (evidence....we don't need no stinking evidence....we know he's a corrupt racist ignoramus but he's our dear leader and we will worship him to our graves).
8
No offense Professor Stein. However, economists have been warning about our vulnerability for years.
Monetary policy is bankrupt in an external crisis and we already blew our fiscal stimulus in a time of prosperity. You can't solve this crisis with a payroll tax cut. If I'm out of work or hospitalized with unpaid leave, an extra 50 cents on my paycheck isn't going to make a difference. All you're doing is expanding the deficit.
Not a bad idea necessarily. We should have expanded the deficit more in the 2010s. That would have pushed interest rates up earlier. We could use the cushion. However, now it's too late. Both fiscal and monetary policy are exhausted and the programs we needed to fight a virus were gutted years ago. We're in free fall. This is a moment where you hate being right.
21
Stimulus spending can help avert or mitigate an economic downturn. The virus gives us an important opportunity for stimulus spending. Buy testing kits, grant money to hospitals for improvements, hire more nurses, look for any opportunity to spend in order to limit the impact of the virus and at the same time stimulate the economy. Giving workers a payroll tax cut isn't going to do it.
7
Some sobering news about COVID: it materially affects people with compromised lung activity. There are at least 15 and probably up to 40 million, people who have COPD in the country alone, mainly over 50 and largely elderly. This is the group most dangerously at risk. Most others not so much. This goes a long way towards explaining the apparent high mortality rate in Chinas where 350 million adults, mainly men, smoke. Smoking and poor air main causes of COPD.
1
While not wanting to trivialize the Coronavirus issue with mere financials, I do think it's a good thing for the markets in that it is creating a stress test that may eliminate bad actors and bring about a brief recession that will ultimately contribute positively to many elements of the economy...offices may figure out that health and working from home are doable and correlate even when the virus is no longer the issue. China and the US will realize just how symbiotic the health of their economies are. Trump and his defunct laissez-faire tactics for "stimulating" the economy will be shown to be a stupid decision sooner. And on the healthcare front, the lack of synchronicity in the American response vs. the response of other developed Western economies will perhaps usher in Medicare for All sooner rather than later.
1
Payroll tax cut won't help the gig economy players.
Also, we failed the stress test in 2008. Do you remember?
2
Trump’s 7th bankruptcy. America.
12
@Rod,
tRump Savings Time, much like Daylight Savings Time, cuts an hour off the clock towards the end, and tries to stitch it back on at the beginning of the day, thus saving time.
Hmmm. "financial help for hourly workers". Sounds kinda like Socialism to me.
4
It will be interesting to see if the partial roll-back of Dodd-Frank left any banks without their shorts on as the tide went out. If so, we know which party to blame.
2
I don't think that Daddy can bail Trump out this time.
4
The would be Emperor has no clothes. Yes the tide has gone out. Thanks Emperor Drumfe, for the cuts to CDC budget, for being the purveyor of fake news. Just go and play golf while a health and financial crisis reigns. Good pres, good pres, give him a treat.
3
Trump’s policy of not testing for Coronavirus is not just about keeping the numbers artificially low. It’s a policy of deliberately killing off the poor.
5
@Rod poor and elderly
I’m with the professor here that I’m most worried about the heavy debt load that has financed the fracking boom possibly being the spark that lights the fuse of financial contagion. Americans just don’t understand the oil market and where and how all the additional oil and gas have come from let alone the cost of extracting that resource.
Simply put Saudi Arabia and Russia have cheap oil the US not so much. So while $30 a barrel oil sounds great to consumers that may very well set off a cascade of bankruptcy in the oil patch that the extends out to all those investors who loaned the money to drill and frack those wells. Another ticking time bomb is the rate of depletion of many of those wells is double what was predicted and what loans are based on. Since I spend 2 hours a day on my train commute reading the NYT and work in world trade I put all of my money on the side lines back In January when I saw the writing on the wall.
1
As a senior citizen on Social Security, I’m less afraid of the coronavirus outbreak then I am about what will happen to my monthly Social Security check if the idiots running the government really, really mess up the economy. They aren’t depending upon that money to buy food, rent, utilities, and health insurance. At my age I’ve survived many winters of bad flu outbreaks, measles scares, etc. by practicing all the advice about hand washing, etc. The only thing to my advantage is I have no underlying medical conditions. But if my Social Security check goes bye bye not all the hand sanitizer on this planet will keep me or thousands of other seniors alive. But then, why should Trump worry about that, even though he’s a senior he has enough money to never have to depend upon a lousy Social Security check!
14
So let me get this straight. The FDA will no longer inspect medicines that come in from overseas because of the coronavirus, but almost all of our medications are now made overseas. This means, I assume, no more drugs coming in for a while? Oh, yes, that's really going to play out well in a society where a lot of our insurers only allow you a 30 day supply at a time and won't let you refill even a week early. And one particular yet unnamed medication is already in short supply. If coronavirus doesn't kill us, our own government - utterly unprepared for this - will.
8
@Brookhawk Wonderful smuggling opportunity though.
Fentanyl all round!!
The Covid-19 virus is the best argument for a national heath care system. Issues of coordination, co-pays, deductible costs would mostly disappear under Medicare for All.
The United States is also alone among western industrial democracies in that we have no mandatory sick leave for workers, no universal unemployment system, no universal child care and no universal periods of paid vacations.
Every time these issues are raised we are told that "we can't afford them". But somehow other nations with much smaller economies than ours can afford them.
Our political leadership has simply made choices. And as this crisis unfolds many are looking like very bad choices.
10
@Drspock You may recall Mitch McConnell saying the reason the R were against single payer was that they didn't want the D to have a win. They knew it would be a powerful reason why voters would vote D. There aren't enough bad things that can happen to Mitch for his lack of concern for his fellow Americans health.
7
For years, the GOP has claimed that payroll taxes are not "really taxes" (Thus the claim that 47% of Americans don't pay "taxes".)
So exactly how is this a "tax cut", Republicans? Does the definition simply change from one day to the next?
2
One more time, with gusto:
Republicans tank the economy, and then blame Democrats.
When the Democrats fix the economy, the Republicans claim credit.
How many times do we have to prove that laissez faire capitalism is a prescription for failure, and allows the most unprincipled and rapacious among us to rip off the system? It is not rocket science.
18
@Joe From Boston
By saying that "Republicans tank the economy," it seems to me like you're implying that Republicans are behind the economic issues we are facing right now.
While I understand the impulse to put the blame on the republicans, it's my view that this virus would have a negative economic impact no matter who controlled the white house, senate, or house. The article specifically mentions that Italy is having issues, I don't think that Republicans are behind that.
Though, given that our president currently seems unconcerned with the virus, I think it's pretty clear that we would be better off right now with a Democrat in office.
1
The fear is due to lack of information and leadership. States and local communities are struggling to deal with this because they are making it up as they go. Markets fear uncertainty and that is what we have.
Clearly the person currently occupying the Office of the President is most concerned about not being blamed, about the financial market reactions, and the effect on the economy. He is not concerned about your elderly parent in a nursing facility or people who have to serve others in close contact every day.
We will get through this and the market is over-reacting, but it is doing so because of the vacuum at the top of our nations leaders.
As the Captain of the Titanic found out, how you react, and how the folks doing all the heavy lifting react to a crisis makes all the difference.
9
There are silver linings if we know where to look. What Buffet said about the low tide is especially true in mainland China, Hong Kong and Taiwan.
I suspect and hope that bio research labs everywhere are reassessing bio safety and bio security procedures, architecture, structures, triple-redundancy systems and training. These labs’ compliance with anti-contamination protocols must be perfect - no errors, none. Even one error or lapse can spell disaster for the rest of the world. We are all stakeholders in making sure risks are zero wherever the lab is located. ‘Gain-of-Function’ research (where pathogens are engineered to be deadlier and more contagious) must stop entirely.
2
Fundmentally, now days... individual investors have no sway over the market one way or the other. The individual investor is simply in it for the ride.
It is the large institutional investors, and their programmed trading mechanics that move markets up and down. Sometimes, by design... to force short term gaps to make profits from.
Right now, we are more than a decade in on a bull market, and it had to end sometime so the market could recess, and prepare for the next bull market. This is all normal.
The two factors compounding the flux in the market right now is:
1) the virus moving across the world and creating uncertainty (which always triggers lots of large block programmed trading)
2) the current oil price war between OPEC and Russia. Everytime there is any kind of supply/demand imbalance in the oil markets... something like this happens.. and as a commodity Oil is coupled to stocks via the large institutions who are always speculating in both commodities and stocks/bonds. So when one goes bonkers for any reason.. the rest of the markets follow in the short term.
Individual investors should already be invested in relatively safe and sustainable equities, with come percentage in safe sidelines like bonds or other money fluid investments... such that they can ride out any recession or market correction without real harm. It's not a loss, unless you sell when the markets are in correction. Ride it out, and come out the other side.
3
Sorry , as a human being , I am fed up about this continuous reference to the market losses .
Let’s start talking about fear, sense of personal loss , being afraid for what could happen to our families and friends , being sick and losing someone we love .
This Coronavirus crisis , having been handled so poorly and with the suspicion of censorship, can wreck havoc our society.
Solidarity , concern , care , feeling for the unlucky ones should prevail , let Wall Street go to sleep for a while .
We can live with less and better if we are united and caring for each other .
12
@inter nos
Only Republicans and Wall Street executives had a place at the table for Trump's meeting to come up with solutions to the pending economic crash.
Because, you know, those are the people who really understand the needs of the working man....
7
Now that CV19 is out, the best course is a two week self quarantine for everybody. Call it a vacation. Shut the markets down and reset. Else this drags on....and on.
3
@zzyx
Serous question; What is to keep it from dragging on? Even if we self quarantine (which is unlikely to happen), what is to prevent it from popping up again in a month? 2months? Especially since we aren't testing for it, & it can have few symptoms.
1
@JJ Not to mention, this is no one-off. New diseases will come along over and over again in the future, and there seems to be no interest in preparing for those.
1
@zzyx Excellent suggestion.
But during that two weeks:
Make test kits available.
Set up specific testing centers.
Set up quarantine locations.
Maintain a national database of infected people, outcomes etc.
Train personnel and set aside a task force to play whack a mole with every new case.
Like ten thousand tests a day...same as England, or Germany. Or Italy...
Desperately buy time because at current rates a million elderly Americans are going to die in the next three months.
3
Why are we politicizing something so dangerous? This is NOT a Democrat or Republican issue! This is outrageous! This is a time in America where we need to COME TOGETHER, not DIVIDE! Shameful!
8
@Mark
Trump has repeatedly cut the CDC's budget and fired the entire Infectious Disease Prevention team in 2018.
If that is not politicizing health, I don't know what qualifies.
6
You can tank small oil producers, buy them at bankruptcy prices, then collude with Putie and MBS to strangle the market and production. Double the price.
American trucking is in the same perilous condition, Independents owing their souls to the lessors or note holders. Off to wage peonage they go.
With no pay,break the dock workers unions, always a Republican value.
Once again owners of houses, short on payments, are doomed to be renters.
An opportunity to rape rob and plunder the lesser beings on this earth, praise Mammon.
7
What good does a payroll tax do if you're missing paychecks? Last I checked, you only pay taxes on paychecks you receive. You can't save on taxes you aren't paying!
13
Most folks don't realize that if the economy falters Trump cannot get re-elected so this is major emergency of vital importance to Trump who faces dire consequences if he loses re-election so every foreign leader will be called upon to find dirt on the Bidens.
4
If only our coronavirus response had been as quick as Republican’s whipping out another tax cut for the rich fake solution.
Trump likes to say he wants a tax cut for the “worker” but he’s lying.
12
Good for you in pointing out the credit risk in this downturn. I wonder about the credit risk in China. An expert I know says that the communists can just print as much money as they need to prevent bankruptcy of the state owned banks. But the history of chinese paper money says that it works only until the soldiers and police no longer believe in said paper money. Then that 'state' crashes. As for M. Miliken 20% of men over 50 in the US have incident, occult, prostate cancer. Only 1 of 380 dies of it. See my book for details.
I am not a big fan of this article. This is not the first time since 2008-2009 that the U.S. stock market has dropped into bear market territory. From Nov 2018-Jan2019, the S&P 500 lost 20% of its value. The market also dropped nearly as much in 2016 (Brexit).
The Harvard Prof cited in the article is essentially saying it is possible to time the stock market and that he has the ability to tell when the market is overvalued. The Efficient Markets Hypothesis and Random Walk Theory suggest otherwise. Gene Fama may have a different perspective.
The professor is also guilty of anchoring (tying market returns to the March 2009 market low). If he instead anchored to the 2007 market high (14,000), the so-called "bull market" actually produced lower than average returns.
It is also misleading to suggest that the market has been roaring for the last 11 years. The S&P was down 4% in 2018 and was flat in 2015 and 2011. The Dow crossed 10,000 in 1999. At just a 7% return it should have tripled by now. It is not even close. The truth is that market returns over the past two decades have been far lower than the historical mean.
A bet that the disruption caused by the Coronavirus has the potential to permanently alter our capital markets is a bet that has failed 100% of the time in the past. While the causes of market downturns are always different, investors' responses (i.e., to not sell into the face of a falling market) should be the same.
8
I'm now thoroughly convinced that Trump's promise to "Drain The Swamp" means money.
10
Since the start of ot this outbreak, my staet has only had 300 test kits available. As of yesterday, those were down to 30 - enough to test 2 people for the required 2 times for a valid test.
I have been sick for 2 1/2 weeks, and got a flu test and chest x-ray 2 weeks ago. The flu test was negative, but the chest x-ray got me a diagnosis of "acute bronchitis". Despite the fact that I spent the weekend before I got sick in Seattle, I have been told by my doctors and every state agency I've contacted that there is no way to be tested for coronavirus unless I'm hospitalized because I haven't been to China.
On the radio this morning, Oregon Health Authority announced they'd found no new COVID-19 cases in the last 24 hours. I wonder how many, like me, are just walking around untested? How can they even release "case numbers" if no one is being tested?
19
@J Anders Agree, seems like there are discrepancies between what is said about tests vs. actual availability and what they’ll cost.
4
Didn’t donald trump tell the whole world that whoever needed a test could get it? Or was that just another “beautiful,” “perfect” utterance?
2
@J Anders - Two people who work at the same company in a large Downton PDX office building have tested positive. The company sent an internal email yesterday. No names were provided, so nobody knows whether or not they've been elbow-to-elbow with these folks in a meeting room for a week. I haven't (yet) seen these two cases reported publicly. There are no directives or suggestions as to what the employees are supposed to do. Many are working from home today...
1
We are mixing apples and oranges and Trump is about to perform another three card monte trick with his proposed tax cut.
Everyone knows the market is way over valued and the main reason is unsustainable debt at all levels. Personal debt is at record highs. But business debt is off the charts and many loans are non-performing.
Companies took advantage of the "free money" from the Fed and borrowed heavily. Much of their "investments weren't in real capital or productive capacities. They instead invested in stock buy backs. They made boat loads of money but now still have the debt.
The federal deficit hasn't helped. With a strong economy paying the deficit is not a problem. But with a slow down, and a slow down is inevitable, and if government spending is curtailed that will contribute to an even further slow down.
Then there's the oil crisis. Prices are low, too low for much of our heavily leveraged oil and gas industry which is facing lay offs and bankruptcies.
The Covid-19 virus is going to add to these woes. But the real cause is the economy's underlying weakness, not the impact of the virus.
The government's clumsy response can make things worse. But even a competent response to the virus won't cure the basic economic ailments.
We are due for a slow down and it may turn into a recession. Payroll tax cuts, long a conservative target will have no bearing on the problem, but they will score political points.
But those are points we will all have to pay for later.
11
@Drspock
Watch for the GOP to claim they absolutely have to cut Social Security and Medicare benefits because those programs are "bankrupt" after their tax cut.
They've already floated those cuts, but pulled back because they weren't politically viable and could cost them their majority and presidency in November. Looks like they've simply found another way down the rabbit hole by claiming COVID-19 as the means.
11
And the average American is supposed to understand even 5% of this piece? Does it matter?
What if....
This oil crash is a collusion between Putin, MBS and Trump?
They do this fake snit, the USA oil and gas industry tanks, and like a miracle, Trump announces he called both of them and now it's settled?
The Oil and Gas states supported Trump ( I'm here in PA).
MBS and Putin WANT Trump to be re-elected. He let Saudi Arabia slide on the murder of that journalist, and he wink winked to Putin about how inept out Intelligence agencies are, and that he didn't believe they meddled in the elections.
Just watch. Right before the elections, gas prices are low, don't need oil to heat in winter in all these countries, and magically, Trump announces that they will drop thier fight. Oil price surges, companies that Trump is about to bail out will get richer. PA and Ohio and Texas are saved!!!
Possible?
6
@Ignatz
My thoughts exactly.
Doesn't Trump claim to be great friends with MBS and Putin? Either they are helping him out (most likelyi) or he is one of those kids who think the people who stick "Kick Me" signs on their back are their friends.
4
@Ignatz
The Manchurian Candidate is delivering on all fronts.
Tweeting ridiculous memes of himself fiddling whilst the country begs for testing (metaphor for Rome burning)!
7
@Ignatz
Can we spread this theory?
3
When 40% of all US households have less than $400 in savings in their accounts to cover a medical emergency, they can't afford to be tested for the coronavirus, which can cost several thousands of dollars.
Welcome to the country of the not so free at the bottom of the economic ladder.
Italy has quarantined itself, yet everyone of their residents has universal healthcare, as have the rest of the all other advanced nations as well.
20
@Sarah
And watch today as Americans vote for the guy who says he would veto medicare for all, if it passed Congress.
3
@Sarah
Don't tell Republican voters that Italy is a "Socialist" country. They've been brainwashed from the time they're old enough to vote to go hysterical any time they hear that word on the assumption that Russia can be the only example of Socialism. While there's no criteria for becoming a socialist country, all Republicans think socialism HAS to be based on the Marxist-Lenin model.
3
@Sarah
And paid sick leave so they can afford to stay home.
3
Two main reasons of the decade long US market rally while the rest of the world stagnates, (a) America has monopoly in printing trade currency/money. (US dollar as the only world trade currency) Think QEs (b) US corporations make products overseas cheaply and then sell them back overseas the same price as they sell them in America, hence profitable corporations especially in Tech (innovative and a healthy Tech sector is something we should all be very proud of). Think Apple, all clothing lines, and almost all consumer goods.
To put it simply, China is one of the few main reasons US stock market has been up for so long. Now America can (a) Keep printing money and drop them off the helicopter for the rest of the world to absorb. (b) Stop trade wars/or many other wars and halt inflicting pain on the tech sector (Amazon and the like) which is the only great thing US can claim as a leader in the world. (c) Find an honest and respectable president.
Or, sell all stocks and stock up food and toilet paper real fast, the winter is coming.
9
This is all net educational.
Consider how many US citizens now know a ton more about how democracy works or can work.
Consider how much we will finally see that our excessive consumerism and debt-ridden existence will burden our children with a wrecked and wracked society.
Consider how this pandemic will weaken our ability to properly respond to the impending climate disaster.
Consider how much the present-day challenges will clearly demonstrate the ineptness of Trump and his administration.
This is all net educational.
I welcome the level of "wake-up" that is happening.
Let us live and learn, for once.
Our children hope that we may drop the greed and be so wise.
11
“It’s only when the tide goes out that you learn who’s been swimming naked.” ~ Warren Buffett
8
w* told us to go to Disney World after 9/11. trump* tells his followers that this virus is a hoax.
I teach 100 students in the 8th grade. I tell them to think for themselves. I tell them to question the government and never take anything republicans do at face value. I am teaching them survival tools.
I show them the NYT corona virus map every day. I tell them to keep their hands clean and to stay home if sick. I also tell them they don't have to listen to me if they don't want to. They are headed to high school and need to be independent thinkers who trust, but verify.
Just doing my part.
*(electoral college winner)
13
@Scott Franklin I'm concerned that you are only telling your students to never take anything "Republicans" do at face value.
You should always do your own homework. When I was little my Dad used to tell me "the sky is green" just so that I would look outside, see that the sky was blue and confront him about his error. We should all, as citizens, always question and not accept whatever we're told, from anyone, not **Just** from Republicans.
1
The American response to the virus is what would be expected. First concern, especially for Trump, is to try to stabilize frightened markets. They are the real victims, the companies forced to lay off workers, needy for ready cash, worried about meeting quarterly earnings goals. Relying on the his business genius, Trump is giving tax dollars to friendly constituencies to prop up the economy at least until the election. As far as preparing the nation for this or future pandemics, that is unnecessary because Trump believes it’s another hoax created to derail his presidency. If the pandemic does show up, it can be blamed on Never Trumpers and old people don’t vote Republican
5
The Trump administration has been cutting taxes and increasing the annual deficit to $1 Trillion for the last three years and the US public debt is at record highs as a result.
The Republicans bungled things by cutting taxes and increasing the deficit when the economy was actually good ... it makes financial sense to tax when the economy is good and put some money aside so that there is something in the kitty to deal with a crisis like this.
As a result of their mismanagement, they have nothing in their tool kit except even higher deficits at a time when the whole world is already over-extended. Sooner or later, somebody has to pay for that. I guess they figure it's the problem of the next administration.
13
@Wendy
Reducing Social Security, Medicare and Medicaid is just another give-away to business in disguise, not a solution for workers.
COVID-19 is now being politicized by trump and soon, by the GOP as cover to reduce programs they don't like. If they enact this "emergency plan" they will never return to the deduction levels of today.
5
The 2008-2009 financial crisis should not even have happened, had proper regulatory measures been in place.
But they were not and still are not.
Therefore whatever economic downturn happens for whatever reason, you can only blame yourself and whichever administration and congress you elected to govern, none having the guts to do something.
5
@waldo
2008 wouldn't had happened in the US as badly if Dubya "believed" in regulators on the beat, he and Greenspan and the entire GOP didn't/don't.
Plenty of laws could have stopped the WORLD WIDE CREDIT BUBBLE of the 2000's, all on the books, as well as regulatory processes, but when ALL you have are tax cuts (for the wealthy) and a subprime ponzi scheme to rev up the markets, 2008 happens
Wait until Trump's consequences happen!
5
Whatever Trump does, I don't trust. That's a more adequate statement than any I could offer in analysis.
21
@PATRICK
And whatever Trump does, the republican Senate jumps up and down in excitement, even when they know it's a fool's errand. Because that's how they show their undying loyalty to Dear Leader.
Vald Putin has assessed the prospects of trump winning the next election and has decided he, Putin, needs to cut trump loose. Better for Russia to regain market share by squeezing the US Fracking Industry than to prop up a losing candidate. Joe Biden will be no friend and so it will be better to try to negotiate with Joe from a position of increased market share.
8
USA must find a way to protect its oil industry against this calamity. Perhaps not right now but it is absolutely foolish to let (and it is plainly idiotic to glee at) the shalers massively go under.
Not only that economically that is seriously bad and will ripple all across, it also touches on the national interests that the foreign powers, one of which a dubious medieval kingdom, tailor a significant part of industry in USA (or kill it, in this case). Just as those governments do not play by the market rules, so the US government should not play it that way, more or less regardless of the patent stupidity of the shale oil business. A little bit of helping hand, nothing else.
2
@ss
I would love to see the entire fracking sector and the Alberta tar sands sector go out of business, period. Both are incredibly bad for the environment, their products are dirty and expensive and can only break even, let alone make money, if the speculators drive oil prices sky high (in Alberta's case, tha break even point is at about $80/bbl).
And if you look a little further ahead, the global demand for fossil fuels will decrease immensely, as renewable energy sources take over.
Mark my words.
17
@waldo
Good luck using wind to heat your house when it's 10 below zero.
1
@ss
Use the money he stole for the wall to bail them out.
So witch doctor Navarro has charmed Trump into stealing from the Social Security funds to pay for his re-election! No way. If the GOP wants to use a stupid tax break that doesn't solve the problem for many of the people who need the help (those who don't earn income while sick), while handing out $$ to workers like they did with their stupid tariff-offset farm relief programs, then the Dems need to require a pay-for, to keep Social Security and Medicare trust funds whole for this scam. Therefore, a Millionaire surtax of 5 or 10% on 2020 adjusted gross income over $500K. That's a payfor, and is fiscally responsible. Let the rich pay for his election -year handouts, not future retirees.
18
@GCM
Options:
1. Divert socialist aid to farmers to offset the payroll tax break.
2. Divert funds stolen from defense budget for the wall to offset said payroll tax break
3. Start payroll tax for earners of more than$400K/year
4. Medicare for Gig workers
2
Trump true to form attacked the FED by tweet blaming them for market crashing not him it is never anything he is guilty of perfect calls and perfect decisions by a genius. Only his mindless cult and FOX NEWS sycophants believe every word he tweets and as the world is seeing our emperor has no clothes.
5
“President Trump blamed the ‘fake news media’ for inflaming the sense of crisis.”
To counter act the sense of crisis Trump spin the news with a misleading alternative-fact: “Good for consumer, gasoline prices [are] coming down!”
2
@I Gadfly
"“Good for consumer, gasoline prices coming down!”
And that's the best trump can do to praise the disaster occurring on his watch.
1
We'll survive the virus much better than the hysteria constantly being triggered by the media---especially The NYTimes once upon a time a classic and trusted media resource. At 80 years of age this spring I can look back the decades taking measurements of the decline and fall of "all the news that's fit to print."
2
The deregulation of the financial sector, that was only partially repaired after the 2008 panic, began with Reagan and continued under Clinton. Right of center, center-right, and centrist politicians sought all contributions from Wall Street and then did their bidding. The 2008 panic and recession were predictable, predicted, and preventable.
So, here we are again. So much global capital is tied up in finance rather than invested in education, research, and infrastructure that we lack the tools to deal with the immediate problem—a deadly virus out of control. We lack the beds, vaccines, and trained healthcare workers worldwide—WHO calculations of the shortage clocks in at 15 Million workers—to help keep this pandemic and those that will follow at bay.
When will we awaken to the fact that we keep putting our wealth and best minds on the wrong problems? We don’t need a new form of collateralized this or that to help rich people to get richer. Our schools, hospitals, research institutes, and infrastructure all beg for scraps that fall from the banquet table. Well, the bounty is evaporating before our eyes. Will we act in time to salvage enough of it to matter to future generations?
11
Last time Trump’s tax cut was to help the “worker” ended up in the portfolios of the rich. You cannot trust this man. This is just another tax heist sugar coated as an aid to the common person.
15
Why is this special meeting only with Republican legislators? Don't duly-elected Democrats have an interest in this situation that affects the constituents who elected them? It seems that even caring about "bad optics" has been relegated to quaint nostalgia.
12
With limited resources and knowing that the virus is fatal to a small percentage of our population wouldn't it make sense to focus on testing and guaranteeing this subset of population that is in the high risk category and let everyone else go about their normal business and let this virus run it's course. The testing and training should include all heath professionals that take care of this population and it should start immediately.
6
Now that we have some experience of the trajectory of this disease in China and Korea, each of of which are now seeing this disease threat waning and pursued slightly different policies, one wonders why one cannot create risk models for the economy based on different scenarios. That would inform sensible public policy options, though it might not matter for this particular presidency more intent on appearances than public good.
1
Live by the Market, LIE by the Market. Trump will find a way to blame Obama, Clinton, and Biden. NOT Kidding.
Sad.
8
Trump has built a shaky real estate empire on bad debts and dodgy loans. No one knows for certain what he owes but the number is probably frightening. Any actions he takes will be aimed at propping up his hotel chain; everyone else is just "collateral damage".
It is ironic: Russia almost certainly assisted Trump into the White House; by picking a fight with Saudi Arabia Russia may crash the US economy and bring down their puppet.
9
If the "stable genious" had a brain, he would WELCOME the press hammering home numbers of new cases every day.
It will anesthetize people against fear. We will hear daily that cases WILL rise as more tests go out, the will be more deaths. The idea is to keep reinforcing those facts in order to quell the frantic and panicky selling. Inure people to the news. Keep repeating it.
And..that this WILL pass. There WILL be more deaths. There WILL be more cases, closures, disruptions...
Just remember the 2008-2009 crisis.... Now, we look back and say "I wish I had invested MORE instead of selling at a loss"...
We have that time again right now.
Do your Traditional to Roth Conversion for the year. I never hear the talking financial heads mention this. They rattle on about nonsense when they could point out that conversions are golden opportunity right now. Yes you will owe tax, but you will owe it anyway if your plan included converting to Roth before you take Social Security or if you can do it.
You will convert MANY more shares with the dollars you convert. And you will be thrilled when the market goes back up and now you have all those extra shares working for you, making dividends, all tax free to you!!!!
I am actually thinking of converting to the next bracket ( 22% from current 12%.) This is a once in a decades opportunity, and tax rates reset in 2025, just a few years from now.....
Think about it.
The Times should make all of its coverage and news on Coronavirus freely accessible to the public. Non-subscribers should be able to get vital information.
11
Let's bottom line it. While this virus thing is a crisis, history has shown it is most likely temporary like SARS, MERS etc and will only affect the economy for a short period. Of course if it turns into the Black Plague of the Middle Ages all bets are off in that very unlikely event.
The big crisis is the coming crash of the market due to an insane trade war against friend and foe alike, massive consumer, corporate, national, student debt and a moronic ego maniac demagogue like Trump in the WH.
This crash will come if history is any guide. The question is when and how bad. It may follow the virus scare or may be longer off but it will come.
5
The biggest test on everything USA, is the unstable genius that's leading it.
2
The Fed is running the biggest Ponzi game in history human kind. Does anyone really believe the US government will ever be able to pay back its loans? The talks of negative interest rate and 100 year bond means drastic devaluation of the US dollar or hyperinflation. Same thing happened during pre war Germany. Let's not even get there.
Why is virtually no one, no one, talking about the US debt. With the annual deficit exploding to one TRILLION dollars notwithstanding a boom in employment, the stock market and the economy generally, what happens when the inevitable downturn occurs?
How much money can the Treasury print and how much can the Fed lower interest rates (or engage in the newest sleight-of-hand of "quantitative easing") before we have to start taking wheelbarrows full of cash to buy bread?
Even Stewart, for whom I have some respect, not only fails to mention the debt he gives voice to those who are urging we go into more debt through fiscal spending and/or tax cuts.
Can this really go on? We're not only bequeathing a fevered planet to our kids, we're bequeathing a fevered economy. How fitting it seems that we are at the beginning stage of a viral epidemic.
8
@J. Cornelio The reality is that some debt is good for the economy if it produces a desired result. The truth is that we got nothing from this last huge spike but stock buybacks and a temporary sugar rush designed to make the market look good with Trump in command. The sad fact is that Republicans and centrists only care about big deficits when they want to limit the power of progressives in office. To raise the subject is to expose the con, so no, almost nobody in the Establishment likes to talk about it. The sadder fact is that when austerity comes back into fashion, say, with a Biden or a Sanders administration, cuts to Medicare and Social Security will be foisted on us as a necessary evil.
5
If a cat has 9 lives, how many bounces can a dead cat do ?
We must be up to 7 or 8 by now.
@Allan B
Mine is died in 2008
The financial system does have a real stress test now, not only because of the panic pandemic due to the Corona virus fears which is the worst export out of China, the second largest economy in the world; but also because the too big to fail did not learn a single lesson from the 2008 financial crisis and the stupid bailouts and selected stimulus.
The best lesson is to ignore the out stretched begging bowl of the big corporations for government hand outs and let the tax payers keep some of their own hard earned money and let them decide whether they should be buying the goods or their stocks, from these corporations or let them die a slow death. Corporations like Boeing should never have given a diamond studded golden parachute to its CEO who oversaw the crashes of its Boeing 737 MAX. He should have been charged with crimes just like the owners of the company of a compounding lab in Massachusetts, from which fungal meningitis contamination caused dozens of deaths and over 2,000 hospitalizations in 16 states.
Ridiculously high executive salaries should have been clipped by corporations and corporations have been failing in this regard since the 2008 financial crisis even with the Warren regulations on paper.
7
Hard to imagine him swimming, per se, but I can definitely confirm that the POTUS wears no clothes.
9
"As the market was plunging Monday, President Trump blamed the “fake news media” for inflaming the sense of crisis and added, incorrectly, that “nothing is shut down, life and the economy go on.”
Life will not go on for many who die from the Coronavirus but Trump only cares about the economy. It is time to start mitigation procedures to protect the nation's already weakened health care systems so hospitals, doctors and nurses are not overwhelmed.
We already know from the 1918 flu that quarantine works. What are we waiting for?
3
"That kind of complacency is exactly what breeds overconfidence, unsustainable valuations, and, finally, bear markets. They tend to begin when investors least expect them, with causes that at the time are unforeseeable — like the emergence of the coronavirus."
Spare us. This has nothing to do with investor complacency in a bull market. The coronavirus and its accompanying hysteria would have cratered any market, bull or bear.
Financial fears are understandable, but panic ought to be stopped at it's root, especially when the coronavirus crisis is ongoing and, likely, spreading. Just don't expect any rational thoughts from our liar in-chief, who has no credibility left. Let's hope the health specialists have the last say...without being muzzled by Trump's politicking the issue for self-gain and praise.
1
According to Politico: "In 2015, scientists from HHS, CDC and the FDA warned that resources would be squeezed during a large scale public health emergency."
Since then the number of staffed beds in the United States has declined, dozens of hospitals in rural communities across the country have closed and President Trump, in his most recent budget, called for an $18 million cut to the hospital preparedness program."
So here we are in 2020 with a huge national health crisis on our hands with cuts to all the programs that could have saved lives.
22
I pay my credit card bill in full each month thereby avoiding any interest charges and in effect giving myself an interest free 30-day "loan." I've done this my whole adult life and I'm 63. I've never missed a month. My point is that with this "stellar" record, my card company (and I've been with this card for 28 years) would still charge me an annual interest rate of 14.99% on outstanding balances as well as 24.99% on cash advances. And this is with interest rates at rock bottom levels. I can't imagine the rates for those with less than stellar records and those who always carry a balance. The Fed can lower rates to zero once again. But none of that "trickles down" to the millions upon millions who barely survive week to week in a supposedly "strong" economy. The Fed's ZiRP policies and QE's were always designed for Wall St....and now that the tide has gone out once again, the little guy will once more be the lemming who takes the brunt of the destruction.
27
@marty Your credit can't be as stellar as you claim it is with a 13% interest rate.
@Monsp
Actually it is...my interest rate would be 22.9% otherwise, as it is for most people who never, ever get out from under their credit card debt. Please show me a better deal (other than those teaser intros).
2
I implore Congressional Democrats to personally or by proxy, conduct surveillance in the meeting with the heads of the banks with the White House to assure an honest discourse as there is the matter of Trump and Mnuchin both being of the Wall Street way of life.
Unlike 2008 with the direct bailout of the banks, this time any bailout should include reducing bank customers debt to those banks. After all, bailout money would be from citizens, customers, tax proceeds. It is imperative the meetings be publicly monitored.
6
I believe that investors are finally realizing that regardless of gains in recent years, the current administration's policies are having negative domestic and international impact for companies as well as human beings. The deficit is building due to cutting taxes for the wealthy while investments are not being made in infrastructure, education or social improvements. The other factor is the bubble of boomers who have left their investments in the market since there has been so little interest to be earned on savings elsewhere. The market has been artificially inflated and is due for a significant downard adjustment given the current leadership of this country. I took everything out of the market when Trump was elected, his administration is not interested in the health and growth of the country, just building wealth for a limited group of people and enacting their narrow-minded vision of the world on the rest of us.
7
The major problem is - saying it very simplistic:
That EVERYTHING is interconnected.
Or as a Venetian Gondoliere -(who owns US Stocks)
once told US -
I see in my business if the US - or better said - the worlds economy is... healthy.
And with the lockdown of Italy - and no Chinese coming in anymore to buy Gucci Bags - THE economy -
and thusly
Trump - is... what does WE like to say ''French Toast''?
5
It’s not the Corona virus, it’s that we finally have something happening that gets through to the truth about how much people actually trust Trump. Trump supporters can yell “fake news” all day long when it comes to things where they can’t connect the dots to the impact on them and their families, but this is different. They may still be screaming “fake news” but their actions and fright say otherwise.
Is this virus something to be concerned about? Of course, but the response of a pre-Trump USA would have and has been VERY different. Mr Diapers in the WH needs to stop saying “this isn’t my fault” and get out of the way so the grown ups can start cleaning up.
16
Question: If a few dozen folks have been verified as “tested positive” nation-wide but, according to extensive research by investigative journalists (as opposed to official government sources that decline to provide estimates), there have been less than 5000 tests actually conducted out of a population of 320 million because of, among other reasons, they are asymptomatic carriers, unavailable test kits, reluctant sick people, ignorant folks, homeless, et al, how many people actually have the virus NOW? We are flying blind, and when the tests start in full, the numbers will explode.
4
The “economy” has only been robust on paper. Most Americans have been stretched too thin for too long. In Buffetts terms, most small businesses and everyday Americans have been skinny dipping.
Keeping Covid-19 from pandemic proportions is not a high tide, but a 40-foot wave. A full-on pandemic, on the other hand, is a tsunami.
Everyone, put on your life jackets. This economic boat were all in is headed for very choppy water.
6
Time to actually face the facts. CEOs actually have sold their leadership skills for a bonus. Instead of planning for growth and capturing market share they make plan by cutting costs (like jobs) and playing "buyback roulette" to capture outsized bonuses so they can join the financial oligarch club. Why isn't the addiction to borrowing called out as the actual source if wealth inequality.
These CEOs have gotten lazy and irresponsible. If they stopped the borrowing of easy money and lost their outsized bonuses which of them could achieve results through management of the actual business? Financial engineering isn't a skill, it is a symptom of ego addiction and sucker punching shareholders and employees.
Look for bankruptcies and perp walks- the margin and loan call are going out. Our genius CEOs have their excuses written up, their personal money offshore and their bags packed. You get what you pay for.
5
@Marty Milner
Exactly right, Marty.
1
@Paul Dutch We keep seeing the same kind of mismanagement getting called out ethically, legally and financially. Time to call it what it is, Paul. Many are dishonest frauds.
Not to be a spoiler, but when the Panagram for your Spelling Bee puzzle today is "liquidity" I sense worlds are converging.
3
The banking sector was also particularly hard hit—again.
“It’s only when the tide goes out that you learn who’s been swimming naked.”
By that measure it is arguable that the current Global Economic System has been swimming naked.
It is also important to point out swimmers in the deep end of the capitalism pool always swim naked and have done so for going on 300 plus years.
STOP comparing the Coronavirus to the economic recession of 2008! One involved dollars and cents, and this one involves human lives! Add to that the total incompetence of our gangster-president and there is NO comparison to ANY other threat in our country's history, it's a perfect storm brewing for disaster. Don't believe it? Tell it to the people who were trapped on a cruise ship, prohibited from returning home because a criminal didn't want to see "the numbers go up."
7
The leveraging between Saudi Arabian and Russian petroleum assets and its capacity to exacerbate the existing financial turmoil is a distrubing reminder of the degree to which the world is captive to carbon-loaded energy sources.
Our atmosphere is utterly indifferent to our human actions; short sighted, self serving, intelligent, foolish, or wise. The physics will prevail.
There should’ve no need to assist any industry , yes Corona Virus is not their fault but every decently run company has a risk mitigation plan.
Sadly many Companies are over leveraged, indulging in high risk business propositions, borrowing to buy back shares pay extra dividends , pay extreme bonuses.
The American taxpayer must not bail out these companies or any sector other than the individual American directly impacted by the virus or indirectly.
3
If ever a moment called for a vast infrastructure package, that moment is now.
If ever the times called for a Sanders presidency, that moment is now. Apparently, Mr. Biden is looking to the likes of Big Wall Street types to run his treasury while Senator Sanders will probably choose Elizabeth Warren.
In my humble opinion, the latter choice would be worth a try.
9
@EB You gotta be an Olympic jumper to make the leaps you did. None of this will be solved by an infrastructure package, which, at this point, has only become an alternative phrase for "bipartisanship" and means nothing in terms of policy. And this doesn't mean Bernie should be the President, you're projecting your own biases and preferences where they don't belong.
2
@EB Your "vast infrastructure package" money ($1T) was given away in the tax cut. Are you saying let's bump up the deficit to $2T+? Sure, what could go wrong?
1
@Jeff We could just refuse to pay the debt, like Trump does. It's just paper, anyway. It's not real.
It's debt incurred by capitalists for capitalists.
1
The Repubs hate regulations and love capitalism until they want socialism for a bail out.
Maybe it is time for the Repubs that corporations/businesses over a certain size be required to carry Business Interruption insurance. I work at a corporation that has Business Interruption insurance.
Do not steal from SS to cut payroll taxes. Increase taxes on 1% by a quarter percent.
18
@Lisa We need a much higher tax on the rich -- more like 75%. It should be retroactive to the beginning of the Trump administration.
2
"Leveraged loans, which are private loans to already heavily indebted borrowers, could now emerge as the mortgage-backed securities "
That's maybe the key to the magnitude of the current crisis, or its accelerant.
We don't know to what extent the private sector has made newfangled derivatives out of debt. A head of an investment bank recently said the situation is totally different than 2008.
Is it? Or have madcap traders simply make tranches of bond offerings out of something different than subprime mortgages?
And just how leveraged up are entities like hedge funds? How much debt are the companies owned by M&A firms (corporate raiders) holding?
There could be a ton of unknown debt in the system during the Trump era, and things could go very bad on the way down.
A friend bought equity at the near the top of the cycle. I said, "Now is the time for short-selling." He replied with cynicism, "Oh, short selling, you could lose everything. Very risky."
I don't think that plan was as risky as buying into the irrational exuberance born of a less-than-rational person in the White House.
10
Would the omniscient market and its investors have behaved differently if the virus had been properly handled along infectious disease guidelines and had been a leadership model for other countries?
2
I believe several important issue were overlooked. The "trade" wars for one. This did not put us on a good footing having to bail out farmers. Like it or not, trade wars always hurt someone, be it China, Mexico, Canada or US.
On top of that an unfunded tax cut gave an incentive for companies to not invest but to hoard dollars at an alarming rate.
Finally I can't be the only one that finds our government lacking in confidence as I watch even our top people can't start a briefing with out giving homage to the president.
8
There are symptoms from an issue, like the economy, and then there are root cause issues, like a pandemic or an oil price war. Haven’t heard any Republican mention healthcare for the pandemic and can one possibly expect Trump to say anything bad about Russia or Saudi Arabia? Working on symptoms won’t solve these underlying issues.
7
Notably missing from this damage assessment is the prospect that American workers - the majority of whom live paycheck to paycheck - will be unable to pay their mortgages.
It's increasingly likely many will be going without those paychecks for an indeterminate time. Schoolteachers, service workers, employees in transportation and events, restaurants, etc. Here in California, where the virus is already spreading, folks are recalculating going to the store, and church, and fundraisers. People's jobs will be affected.
Hopefully Mr. Stewart will expand on this prospect and it's potential effects. From the bleachers, it seems like widespread homeowner defaults and the resulting fallout may not by itself be enough to swamp banks. But it may be the straw that breaks the camel's back.
8
@Neander...notably absent was the biggest stress test of 2000-2008: W and Cheney.
In addition, as a school teacher I signed a contract for next year already. Can you elaborate on how I will go without a paycheck?
Who lives paycheck to paycheck? I thought the economy was amazing under trump?
Run to the hills now sir, the sky is falling.
6
@Scott Franklin Federal surveys last year found nearly one third of Americans couldn't meet a $400 emergency with cash or credit. Nearly half of the population over 60 believes they have retirement funded. Service jobs, part time, gig economy and other employment account for a huge segment of the economy - and offer zero paid leave, zero sick pay, and no job security. I'm happy this apparently doesn't affect you. My daughter, a schoolteacher, doesn't have those protections in her contract, and when they close the doors next week, she'll be looking for some way to earn an income.
9
@Neander...Making good financial decisions will always lead to a healthy financial outlook without the help of an outside entity right?
I'm sorry but if someone can't meet a 400 dollar emergency fund that's not my problem. However I would lend 400 dollars to someone if they needed it.
I've been without before and had to scrap on my military retirement check and a temp job. I blamed that situation on nobody but myself.
With the sound decision to use my GI Bill benefits, I earned a degree from ASU and now have steady employment. I now live very comfortably and am on spring break with a paycheck today.
I get the service industry part...but usually...and I say usually...these were reserved for teenagers/those in college? You know, those who don't get as sick as say, me, who just went over the 50 year mark.
Where does your daughter teach? What protections are you talking about in her contract? Have her come to Arizona, where teachers are desperately needed...and a contract is a contract.
With that being said, we are 1:1 laptop to child in my grade so I can teach from home if needed. So far the district is taking it easy but making the community aware of the steps to take. Thanks for the reply and take care.
Always count on these disruptions when the GOP is in power.
It ain't rocket science.
33
If Trump and others in position of power don't act swiftly about lock-downs, we have not seen anything yet when everything comes to a full stop due to the number of people infected and dying. So Trump and others should not wait to see how much worse the economy gets before they act to contain the spread of the infection.
8
Sewer, water, bridge, etc Stimulus spending can normally help (Keynsian spending) and tax cuts and monetary policy almost always have limited positive effect on growth.
But because the economy and markets are so out of sync with normal workings, there eventually will be a lot of pain before normalcy returns.
12
Anxiety. There's good reasoning for anxiety of all sorts now that we have a situation where spin, from anyone or anywhere, cannot prop up the unease that so, so many are feeling right now. This was certainly exasperated during this past weekend when Trump, surrounded by th higher echelon of th CDC, made false statements like, "anyone who needs to be tested can get tested... we have test-kits in th millions that are perfect..." No one standing there with him said a word in correction about this lie!
And why? They were afraid to.
17
As this tide continues to go out, the real swimming naked moment will be when Trump and his administration are revealed for what they are.
Cutting taxes will not save lives. Rescinding Trump's massive tax cuts for the rich so the nation can invest in our healthcare system and provide coverage to all Americans just might.
The president has no clothes.
31
Specific Traders on Wall Street are making plenty of money just like they did with the 2008 meltdown. They will bet against the country and help the pension systems implode. The Trump family and the rest of the Wall Street elites who fund the GOP will continue to do well. Business companies will be bailed out and refuse to hire Americans full time with pensions, benefits because that is the business pattern we have seen for decades ,nothing new is this same old tired destruction of the working class
If Ms. Warren would of been the nominee she would of gone after Wall Street and made them all pay for destroying the American people once again. The white women refused to listen to her brilliance and now we have a 2008 nightmare again with no President Obama to right the ship.
20
@Tony
And Biden, who has floated the idea of a Jamie Dimon to head treasury and a whole host of other who are lining up for jobs, sure isn't going to do it either. It will be business as usual either way.
11
@Tony
Don’t blame White women. The majority of Warren’s supporters were young White women. Young White men like Bernie. Old White people and Black people of all ages like Biden.
But I agree, it’s a real shame that Warren lost. She would have made an amazing president! The saddest part is that most of the people who voted for Biden, both Black and White; actually preferred Warren, but somehow they assumed that everyone else would only vote against Trump if Biden were the nominee.
Quite frankly, I don’t think these hundreds of thousands of Democrats who won’t for anyone but Biden against Trump even exist. There may be a few, but not enough to affect the election.
2
How about enrolling everyone in Medicare until the crisis is past? How about ramping up production of breathing equipment and getting sufficient numbers of them in place to meet prospective demand? We are hearing from China and Italy that it is the lack of breathing equipment that is forcing caregivers into moral dilemma. In our messed-up country, it would be the increase in UNCOMPENSATED CARE that would force hospitals into moral dilemma at the brink of financial distress. Why am I continually astonished by how out of touch NY and DC elites are?
8
@Walter Heath Triage, they call it. Sorting out. Not pretty. They just do not care about us, do they?
We're about to learn that there are economic costs to having a huge un- or under-insured population. Even people who have medical insurance will avoid testing and treatment because of our copays and deductibles, to say nothing of the risk of out-of-network charges or simply being told, later, that the test or treatment they had was not covered.
Between disincentives to seeing a doctor, the absence of paid sick leave--and politicians' unwillingness to impose Italian-style measures to reduce the rate of transmission--it will be worse here than in Europe. And that's before the second wave of medical bankruptcies and evictions.
We've wiped out $ trillions in stock market value but that's nothing to the cost of a recession. Shame we can't 'afford' health care for everyone.
49
The markets are the closest thing we have to an independent confidence vote in the administration and the economy.
11
'Swimming Naked' applies to our government too. But we already knew who that referred to.
With a competent Administration the Markets might not be so exposed.
24
@KEF
Why hasn't Trump called MBS or Putin?
I thought they were best buds and wuvvved each other?
1
Why are people in Seattle Metro having such a hard time getting tested. Half of the UW lab testing capacity is going unused. It is now offering its tests to other states. Even the employees of the Kirkland nursing home with all the cases have not yet all been tested. The region is rife with people who have been exposed to the virus and who have suffered mind-boggling barriers to getting tested.
According to the UW lab, the problem is getting a doctor to approve the test. Evidently, doctors are not approving the test, according to a nurse who did not want to be named, because they do not want infected people to come to their hospitals. They do not have the capacity to treat people who are infected. They do not have enough masks. (NPR/KUOW report this morning)
Sounds like Seattle is destined for 1) people spreading the virus unknowingly wider and wider, and 2) people dying at home, evidently.
It remains to be seen how the US hospital system's decision not to test for the virus reverberates throughout the economy.
10
@Sherry while it is not any consolation at all, expert estimates put Seattle at about the point in the spread that Wuhan was when the Chinese New Year helped with social isolation, i.e. every one went home for the holiday...most were told to stay at home after the holiday or not return to Wuhan if they had traveled.
Facts are we are in mitigation territory not containment.
This is a repeat of republican response to say, opioid induced HIV infection. Or as the article intimates, republican response to say, a global financial meltdown caused by republican policies in 2008.
10
@Sherry Thank you, this story needs to be told. They won’t test my step mom who visited LifeCenter and it is pretty clear she has covid19. Now I know why.
2
Buffett has also said that lower stock prices are good for value investors.
That is true because those lower prices let long-term investors buy an income stream (dividends) more cheaply.
Odd that more investors don't think that way.
1
@vbering
most "investors" aren't investors.
11
Perhaps memory fails me, but I cannot think of another instance when a new bug from China caused such economic havoc. Am I misremembering, or is there really something different about this outbreak? Other comments have noted that Trump and the Republicans were already running a trillion dollar deficit with historic low interest rates in a good economy to keep things artificially hyped. Maybe it's the realization that we don't have many arrows left in our quiver that has investors spooked. It would be a big mistake, however, for Democrats to allow Trump to cut payroll withholding. For years now, Republicans led by Mitch McConnell have been claiming that Social Security and Medicare were responsible for our deficits--obvious economic nonsense--in order to set the table for cutting those programs. Bad idea to make their claims a reality. I think Democrats should play the same game Republicans played when Obama was trying to lead a recovery from the meltdown of 2007-08. Oppose everything.
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@rawebb1
Love your idea! Sadly, we all know that Democrats are too decent to do that...unlike the other side.
1
This ain’t just because of a virus, folks. You can chalk it up to short-sighted supply side economic policies, all of which have been invalidated time and time again and serve no other purpose than to buy some votes on the taxpayer’s dime. Time for a regime change. At both ends of Pennsylvania Avenue.
31
@Julio Wong
Tend to agree with you. Think the corollary is the decades of outsourcing manufacturing to much cheaper labor markets, and then not paying taxes on the huge profits. Thanks to all the senators, representatives and lobbyists and investment bankers for promoting this lethal dose of capitalism on already struggling Americans. The 1% are surely still comfortable; most of us are alternating between fetal positions, anguished wails and endless pacing.
Brokers, bankers and realtors make the profits; the rest of us feel like punching bags. Thank you elected leaders. Hyper-vigilant for yourselves, asleep at the wheel for the rest of us.
7
@Jimd "Lethal dose of capitalism" is the perfect description for so much.
1
I have yet to hear anyone call this a black swan event. But that's exactly what it is. It came out of nowhere and disrupted the markets, causing chaos, disrupting business and tanking the price of stocks.
It is also a test run for a more sustainable world where we consume fewer things, fly fewer airplanes, and don't drive as much. We don't have to live in caves, but we can't keep doing like we are doing and have any hope of sustainability. Eventually we should also have fewer people.
The ability of the economy to remain robust under those conditions has a always been an big question. If we can't figure out how to prevent this from tanking the economy, at least we will know a bit more for the next round when we try to do it intentionally, without it being driven by contagion and sickness.
Or after the sickness passes, we can go back to doing what we were doing, and strip the Earth bare like a plague of locusts.
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@mlbex Fewer people is the key. Nobody will dare talk about that. So Mother Nature is doing it for us.
3
@mlbex
Wrong. I called it “ Trumps Black Swan “, in comments, WEEKS ago. But , the most popular cheerleaders with their old, repetitive remarks are “ published “ first, the rest of us must wait.
Sad.
1
@mlbex
Yes, a black swan event. But it really is a triple black swan.
1) Coronavirus
2) Leverage and debt in the system
3) Large shock in the oil market
You also might say this is a Black Swan of different color. It started with disruptions in supply, not demand.
1
We've been swimming naked since Reagan.
We hid the offshoring of jobs to China and recreated our parent's 1950's America by slashing interest rates for 30 years when things got real.
It was all a scam and an illusion.
The profits from everyone needing a washing machine tapped out long ago. But golfers gotta golf!
The MBAs figured out how to hook everyone on credit in the meantime, and rob them at the hospital and for a college education. And now everyone has an iPhone....
Coronavirus (and the coming world-wide depression) is a historical inflection point.
We are called to a New Reconstruction of America, and the world. There are blue skies in China, because the factories are turned off. We need a world that is clean and healthy.
A payroll tax cut is totally obscene and insane (the 137K cap should be removed for rich people!); rather: in the coming years world governments are going to have to flood us with MMT cash, and sanely plan our way FDR style into a Green New World.
But first, let the Republicans eat their own.
Then, we can get to work on a green future.
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@stjohner I thought the economy was booming in the 1950’s.
@stjohner
Payroll tax cuts are actually pretty good for helping the rank and file employee during tough financial times. It puts more money immediately into their paychecks each payroll interval.
Will it stem the slide in the markets? Not likely because investors in equities are not going to benefit directly from any payroll cuts.
The downside to temporary payroll tax cuts is that they can delay movement of funding to Social Security and Medicare, and unless that is caught up through other funding moves by the federal government.. it simply accelerates the day when both funds are no longer breaking even and must draw down on their trust funds.
Wow! People so much more concerned about $$$$ than pre-existing conditions.
Well $$$ would be personal and pre-existing would probably be about others, right? If people could have only come with me walking in the trenches of hospital corridors, seeing patients, during my working years. But maybe that would have zero impact, too.
Guess we are realizing true priorities in the US and why we have the president we have.....but not for long.
14
Payroll tax cuts will simply spread an increment of stimulus to a large pool of people. What is needed -- for two reasons -- is targeted relief for individuals hit by the virus who will miss work days. 1. They need to make up for whole weeks of lost paychecks, not just a few bucks each week over the next year. 2. They need an incentive and support to actually stay home from the onset of their symptoms so as to staunch the spread of the virus to us all.
The solution should be some kind of immediate relief in the form of paid sick days supported by the federal government for all -- including restaurant workers and others who need it the most and are most likely to infect others. One mechanism for this could be a modification of the unemployment insurance system to include coverage for paid sick days.
28
I guess that you have an advance copy of the financial plans Trump will announce. The only thing that I have read is a rumored tax cut for ordinary people. Maybe Trump will follow your advice where makes his plan public to the rest of us.
2
@Gray Cox: The people in charge have two tasks. The first is to give people on the margins a way to get treated and tested, and to stay away from work when they are sick. The second is to prevent the economy from tanking further.
Like you say, the payroll tax cut will help the latter but do nothing for the former. They need replacement wages in time to pay this months' rent, and they need a place to go when they need to be quarantined. Self quarantine won't work so many of them live in crowded conditions.
3
@Gray Cox
Won't argue a bit about direct help for those who are sick or are in danger of getting sick because of working conditions. that would help the relatively small number of people currently directly affected.
That does not mean that a payroll tax cut is not a good idea. It would put money in peoples checking accounts and provide an economic stimulus.
1
Our health care system is designed to make money first and treat people second. Call for appointment or show up in an ED and see what you get asked about first--insurance or condition. For profit hospitals had no incentive to build in surge capacity. Government under the Republicans isn't about to pay for something that might not be needed.
How many people with other emergencies that occur each day will have delayed care? Every Covid patient on a ventilator is one less machine available to post-op thoracic surgery and other patients, COPD patients, and a host of others, assuming there are even beds available. We lack sufficient protective gear, it takes time to don and remove it, and medical workers are going to be worried for themselves, infecting their families, and their own economic condition. Anybody in Washington thinking about this?
The country that used to innovate is way behind the power curve in developing a rapid bedside test for the virus the way other more squared away places have and to test without charge to the patient. This is what government should do, because we the people need to take care of we the people. There are so many ways we should be innovating and leading the way.
Instead, we have "pull yourself up by your bootstraps. Now, what insurance do you have?"
56
What can, does investing mean for individuals, and
individuals representing a range of systems, financial and
other ones, as they judge, make decisions which are implemented in a timely manner, or not, have not been adequately educated or informally acculturated to consider and “weigh,” as best as one can, realities’ ever-present, interacting dimensions: Uncertainties? Unpredictabilities? Randomness? Outliers? Impermanences? Lack of total control, notwithstanding one’s efforts, alone and with others? Timely, or not?
@S.Einstein.” Perhaps it's me, but I read your comment twice, and for the life of me, can't figure out/understand what you are trying to tell me by starting your sentence with "What can..."
To win re-election Trump has already exploited the basic tools for stabilizing the economy, cutting interest rates and stimulus through deficit spending. Interest rates can’t go much lower and we can’t add much more to the already mushrooming deficit. In essence Trump has put the country on the verge of one of his specialties...bankruptcy.
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@Robert Antall
Cutting interest rates has a very marginal effect for Americans outside of the investor class. A slight drop in mortgage rates. An even smaller cut in credit card rates. Most barely notice it.
The payroll tax cut. That would help those who are working to earn money. Rather than those who have so much money that it works for them.
It makes so much sense that I am surprised the Trump administration is even considering it.
9
@Concernicus: That would make sense if the money supply suddenly shrunk (i.e., people not having enough funds to purchase items). But, that is not the case right now (it could be later if a full recession occurs).
Right now, activity is slowing, if not stopping, because of the spread of the SARS-CoV-2 virus. People aren't traveling. If you give them more money, they still aren't going to travel until this virus recedes.
The best thing the Federal government could do right now is put a lot more money into public health and biotech R & D to produce both a short-term improvement in treatments for COVID-19 and an eventual vaccine. The public health component would involve both testing and education. The $8+ billion that Congress just passed will help, but a lot more is needed.
23
@Concernicus
Why not institute an immediate tax on the top 1% wealthy population. They control, reportedly, nearly 40% of all "wealth" in the USA. Shouldn't their tax percentages be, at least, in the 30+% range? Methinks this would be an excellent time for an executive order for same.
Another quick infusion would be putting an end to massive outsourcing, tax avoidance behavior by wildly successful US companies (Apple, and many many others). In the universe, change is constant. It is time we the people demand this change (among many others; are you listening for profit health care) to facilitate a more egalitarian society.
Wealth hoarding, avoiding fair share of taxes is nothing but disgusting. It is definitely time for a change. This really is financial racism of the 90+%
13
Never in American history has the stock market been making new highs while the unemployment rates are at historic lows
WHILE THE FEDERAL GOVERNMENT BUDGETS DEFICITS ARE EXPLODING .
This economy is and has been on steroids for decades since Reaganomics and Voodoo economics. Eventually, the liver and kidneys give out.
We are living in a "debt economy" that has lived for the moment. The moment is ending.
93
So your point is that the American economy needs a huge tax increase. It’s not something that I would expect from Republicans but maybe some Democrats will propose one before the next election.
4
@Roy
Thank you for pointing out what is so often overlooked because so many are blinded by TDS. This all started long before Trump.
The rich have been on the warpath ever since FDR. The first heavy artillery barrage lofted on working Americans began under Saint Ronnie. Trump is merely the culmination of a decades long fusillade against the middle and working class.
20
I do worry about folks who will be negatively impacted by the virus through no fault of their own. Not so sure any of this (fiscal stimulus) will matter in the short run as President Trump's ineffective economic policies have already shown even before the virus. Where was the capital investment injection into the economy after the Tax cut of 2017? GDP growth of 4%? Growing ourselves out of budget deficits (a trillion dollars and counting). Effective trade policies? Why are we having record number of farmers declaring bankruptcies? Return to manufacturing and coal jobs - nowhere in sight. And, soon to lose our shale Oil production jobs.
The only way I see a fundamental change is to get rid of Trump's and the Republican's economic policies. Tax cuts only work when people and businesses are over taxed. Given the results of the last major revenue giveaway, additional tax cuts will have negligible effects and will just add to future tax burdens. Yet this President and Republicans are determined to bankrupt this country. I hope they realize the US Government cannot declare bankruptcy. The debt last forever until paid.
76
We can’t borrow our way to prosperity! The policies of the Federal Reserve has favored debtors over savors for over a decade. They’ve incentivized people to put their retirement money into riskier investments and killed the interest rate on savings. Now, we’re “all in” the big casino as we are taken for a ride on cycles of boom & bust.
4
@Progers9 Trump's people are so unbelievably out of touch with reality, their solution is to give folks tax cuts to help with missing paychecks.
I'll sleep better knowing my kids will have to pay less tax on their zero income.
5
Is it correct to say that a global epidemic is straining US and global economies? Or is it more accurate to say that years of poor international relations and multilateral trade wars, started by Pres. Trump, have made the world's economies much less resilient to unforeseen events?
76
You make it sound as though it is the trade relations that President Trump has been working on that is the cause of the stock market turbulence due rather than the Corona virus outbreak.
His trade policies have little to due with the European Union’s “Open” border policies that have more impact on the virus outbreak which is impetus of the economic crisis now crippling Italy and trade in the EU.
1
@MDCooks8
Last time I checked the European Union didn't have an open border with China or Korea where the virus originated from. So these "open borders" has nothing to do with the spread of the virus in EU. However the trade instability created by Trump is one of the factors making the world economy (and stock markets) more vulnerable to shocks such as a pandemic.
9
@ MDCooks8 - So now immigrants are to blame for the market downturn?
6
As this virus spreads we are only healthy as the person with the least health care. In our for profit system of health care millions are left without insurance or with insurance that they cannot use such as with $5000 deductibles. People will fear going to the doctor for fear of joining the 500,000 that are bankrupt each year from medical debt. Instead of tax cuts for the wealthy how about a common sense approach of providing health care as part of our taxes to everyone.
The stock market has been on a sugar high since 2008 from the Fed injecting money into the economy and lowering interest rates. This is very much a bubble to pop. The FED has injected over $6 Trillion into Wall Street just since Sept 2019 to prop up the bubble
98
Tax and interest rate cuts will have minimal impact on the situation. They are effective only if there is sufficient economic activity to react to the stimuli. People with no jobs don't pay taxes. Businesses that cannot get supplies from China ddon't need low cost loans because they can't spend the money anyway.
Unemployed workers need health care, food and rent and income replacement. Businesses need debt forbearance until recovery resumes after the epidemic eases.
44
@John Hurley Trump talked about a payroll tax cut.
He should first address the Corona virus and how to prevent or mitigate people getting sick or dying.
While a payroll tax cut is often touted by economists as a quick way to get extra dollars into consumers' hands to stimulate the economy longer term, it won’t have any effect now.
I do not think even eliminating for a while all of the 7% payroll tax would accomplish much if a person is out of work because business is slow or no one is coming to the restaurant. And good luck to this administration to get any details right including quick implementation.
People have already engaged in some panic buying of household goods but that hasn't helped “ Wall Street.”
Wall Street does not need another bailout, neither does the cruise industry or the airlines. American citizens need help to protect them from medical bills and bankruptcy.
24
@RealityCheck
Unemployment is at a 50 year low. Lower even than under President Clinton. Even if it doubled because of coronavirus, which is all but impossible, the vast majority of Americans would still have a job.
Anything that puts money in the hands of working people is a good thing. A payroll tax cut would be a far more effective stimulus than another interest rate cut for wealthy corporations and rich people.
2
@Concernicus The important number is how many people have jobs. It's that nearly 50% of Americans have less than $400 in savings in the bank. How many paychecks can families afford to go without before they can't pay the mortgage? Payroll tax cuts won't arrive til next year, and won't replace lost income anyway. This government has no plans to help American workers, but they'll be standing by to bail out the banks, be sure.
6
Between this pandemic and this long-overdue correction of the markets, a huge vote of NO CONFIDENCE is being issued to Trump and his mis-Administration.
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@DinahMoeHum let’s hope this crisis makes Trump lose the election this November.
4
@DinahMoeHum
Here's hoping that is the case but I doubt he'll lose much support...I mean so what if people die and others lose their livelihood, Turnip is "fighting for them." Fighting to make them poor, sick and uneducated.
2
@DinahMoeHum
If we had a parliamentary systems on these shores, akin too other advanced nations, a person with the loss of the popular vote would not have become the leader of that country.
Even if he/she had won the popular vote, when they royally mess up akin to our dear Fuehrer, a simple majority of a non-confidence vote would catapult him/her out of office.
It's the antiquated Electoral College, one that doesn't function on one person = one vote.
2
Yes, be afraid, be very afraid. Europe’s banking system is very shaky and many of its largest banks are connected to our US TBTF banks. If a large EU bank fails it could be the first domino.
Add to that the trillion$ in derivatives our largest banks hold that are simply bets on oil prices, interest rates, foreign exchange currencies, etc.
Finally, we have a patch-work, for-profit health care system that doesn’t work well in good times and will be a disaster as the virus spreads. Who will pay for mass testing when 80 million are uninsured or underinsured? Who will pay for doctor visits, and hospitalization when needed for the folks who test positive? We have 330 million people in the US and roughly 100,000 ICU hospital beds.
We may see socialized medicine in this country much sooner than even Bernie Sanders suspected.
54
@Chris G you are correct.
As stated, it's all about the credit markets. individuals and institutions have been dipping heavily into leverage and now we begin seeing margin calls. Once folks default on margin calls, they get their car repossessed; the house is next. Could be a bloodbath. I'm getting hit, on paper. But mostly I'm on the sidelines for this one.
15
That paragraph on private lending and high interest collateral loan obligations is a real eye opener. That they’re bundled and sold in a one trillion dollar market to investors who don’t understand them is frightening. 2008 here we come. When do we ever learn?
126
@Rick Morris "When do we ever learn?"
Most of us don't because we're too busy working overtime at our full time jobs or working a 2nd or even 3rd job just to make ends meet along with taking care of a family and, maybe, if we're lucky, snatching a few minutes out of the week to do something we enjoy with our friends.
8
@Rick Morris
Let's see, the Republicans have been pushing trickle-down economics, tax cuts to the rich /big business, and deregulation since at least 1980 to the detriment of the middle class and the poverty stricken. They don't fund education in the states they run and keep doing the same things until there is major downturn in the economy. At this point, tge people vote to have the Dems clean it all up. Once they do, the people vote out the Dems because, well, they are Socialists!!!!!! The same people so angry today have been voting Republican their whole life. I'm guessing they will never learn and that's what the Republicans want...uneducated and uninformed minions.
9
@Lynn:
The folks working overtime & a second job aren't the ones investing and trading junk bonds and the CLOs into which they've been packaged.
No, it's large financial institutions, including municipal employees' pension funds, who hold these wads of toilet paper.
Take a look at back issues of _The Economist_ or listen to a podcast from the _Planet Money/This American Life_ collaboration entitled Giant Pool of Money for circa 2008 descriptions of the MBS/CDO/CDS gambling that nearly collapsed the entire global economy. The parallels to what Mr. Stewart describes are fairly close.
No, it's not ordinary people who didn't learn anything — because they didn't _have to._
It's Wall Street & Lombard Street that didn't learn from the 2008 Financial Crisis, largely because none of the banksters got perp-walked out of their fancy offices before being put on trial for their malfeasance.
4
I don't owe anybody any money. Should I be worried?
I've been told that by not being heavily in debt I'm HURTING the American economy. Tough!
Dear America: Pay attention. Save money for when you need it. The majority of you could not handle a $400 unexpected bill. That's unacceptable.
105
@James Thurber
Please explain how people making a fast 12-15 bucks an hour (or less) are supposed to be able to save squat.
The slave wages being paid to American workers so that the investor class can get even richer is what's unacceptable.
85
@James Thurber
I grew up in Mountain View. In fact I went to grade school there with some guy named Steve Jobs, THE Steve Jobs. Mountain View is in the heart of Silicon Valley. The average house price there is over one million dollars. Mr. Thurber, thanks for the lecture on thrift from a very rich person.
39
@James Thurber
Here is how old (and correct) the "save in good times, so you can cover the bad times" advice is.
Genesis 41:17-31
17 And Pharaoh said unto Joseph, In my dream, behold, I stood upon the bank of the river:
18 And, behold, there came up out of the river seven kine, fatfleshed and well favoured; and they fed in a meadow:
19 And, behold, seven other kine came up after them, poor and very ill favoured and leanfleshed, such as I never saw in all the land of Egypt for badness:
20 And the lean and the ill favoured kine did eat up the first seven fat kine:
21 And when they had eaten them up, it could not be known that they had eaten them; but they were still ill favoured, as at the beginning. So I awoke.
...
25 And Joseph said unto Pharaoh, The dream of Pharaoh is one: God hath shewed Pharaoh what he is about to do.
26 The seven good kine are seven years; and the seven good ears are seven years: the dream is one.
27 And the seven thin and ill favoured kine that came up after them are seven years; and the seven empty ears blasted with the east wind shall be seven years of famine.
...
29 Behold, there come seven years of great plenty throughout all the land of Egypt:
30 And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land;
31 And the plenty shall not be known in the land by reason of that famine following; for it shall be very grievous.
2