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04 May 2020


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Californians have had a gut full of abuse by their Governor and overzealous Law Enforcement.

A former Marine who is a doctor spoke up against thug tactics that was used on a pastor by baton carrying police.


Barbara Ann


There is a lot of talk about the Fed's actions causing inflation, or even hyperinflation. Economists disagree, but I am more persuaded by the likes of Dr Lacy Hunt (who Jack linked to in a previous thread) who believe mild deflation is the short term consequence of the US' chronic over indebtedness - i.e a Japanese scenario. Dr Hunt makes the point that (hyper)inflation can only occur if the Federal Reserve act is changed to allow out and out money printing. I would bet there will be efforts to do just this within the next 12 months. Why? Because the deflation & austerity route out of debt simply doesn't win votes.

Here is an interview with Dr Hunt which covers the issue, it is well worth listening to IMO. Interview starts at 22:45.



Eric Newhill,

The original Santa Clara study was replicated in LA, but it used the same unapproved antibody test that is known to give false positives. I don’t know the other studies. But it seems to me the key questions are - what antibody test was used; how was the sampling done; what are the assumptions within the statistical model and are those assumptions public.

There’s a lot of junk science out there, as Ioannides himself has been good at pointing out in the past. To filter out junk science, you need transparency and peer review.

Ted Buila


"...How, in fact, is this one materially different."

Stay with me for a line or two. Trump's management of C-19 will pretty much sink his 2020 election. His two 'sure re-election bets" (sic) are #1 a 30,000 plus market, and #2 a serious overseas military action, read: war.

There is a #3 strategy: hammer home that the C-19 virus is NOT materially different from the flu we've been with for the past decades. #3 is about the only strategy that will put Americans back in stores and on planes in a matter of weeks/short a quarter...and has the advantage of geting Trump re-elected short of more Wall Street monkey business or a war.


David Solomon,

I think Roubini is biased towards pessimism. He correctly called the 2008 crash - but he spectacularly failed to call the recovery (it happened much earlier than he predicted). Barry Ritholtz on the other hand called both the crash ... and more impressively, called the recovery with better timing than anyone else who I was tracking. My money is on Ritholtz.

ST Harris

I would say deflation is still the biggest (certainly most toxic) downside risk right now for us economy and currency in 2020.

ST Harris

The US real estate market is now officially 'a hot bag of garbage' and shortly will be 'set on fire' and 'kicked off a cliff':


I read awhile back that after the last mortgage crisis, since banks can't do the collaterization of these mortgages the market doing the packaging and leveraging is a lot more opaque, up until now that is. It will be interesting to peek under that rock now that it will all need be deleveraged post haste.




Inflation is going to go through the roof, which is going to screw a lot of people on the bottom just like last time around.


"Beijing faces Tiananmen-like global backlash..."
That backlash was - being granted most favored nation trading status with the US, then entry into the WTO. That must have them shaking in their boots.I believe the honorable Deborah Dingell spent a couple of decades as a lobbyist at GM while they were moving most of its US based manufacturing out of the US all while her wonderful husband, who she succeeded in office, was busy helping defend the American worker! BTW France extended their quarantine for visitors, which means those Chinese tourists interested in seeing the sights better plan on a month long tour with the first two weeks being quarantine; and the French tourism industry, previously 10% of GDP, is in for a big fat zero all summer long. That's bound to do wonders for Macron's budget plans.

ST Harris,

So banks are refusing to offer home equity lines of credit when housing is not going to rise in value and people are forbidden to work by multiple state governments? That's not a bubble popping but a very resonable move by a bank. The "bubble" that is going to pop is the higher education indoctrination mill bubble that is going to lose all those Chinese students, as well as other foreign students, as well as up to 20% of in residence American students. Those exorbitantly paid people running the accredited diploma mills will be right there in line with the local school systems, city and state pension plans and various others trying to convince the left to bail them out - all while explaining that half the population of the republic are "non essentials" and should be forbidden to work, for their own safety of course. That's going to create a giant tear in the fabric of credibility for lefty ideology and leadership. Biden to the rescue! Not.


"...will people stop walking out into the roadway in faux deference to my advanced age as I pass by, from our deliciously virtue signaling "progressive" population in blue state California."

I see the same thing here in Florida though I don't even have grey hair. They can't give up their reusable bags either, and really, really don't like being asked how they steriziled the thing before they brought it into the store for the cashier to handle while loading their groceries.


I'd say deflation for a few things, cars and oil come to mind. Inflation for homes (in the South and Southwest), stocks, precious metals. My realtor friends are expecting a serious Fall buying season here in Florida as the virus will be the straw that finally broke the camel's back. We did go out for lunch, it's a very pleasant day here by the water and all the tables where we went were full (operating at 25% capacity).


Background on how the two Ioannides group studies in Santa Clara and Los Angeles counties suffer from the same problems.


Eric Newhill

And the completed New York City study?

And the studies being conducted in Michigan and Ohio?

IMO, Some people will delve into deep levels of hair splitting to keep the panic going.

blue peacock

"I would say deflation is still the biggest (certainly most toxic) downside risk.."

ST Harris,

Does your standard of living increase when the price of all you buy goes up? Was it so "toxic" when your TV and computer prices declined and you could get more for an hour of your labor?

I know I feel poorer as my health insurance premiums keep going UP, my kid's tuitions and rents keep increasing, when a burger that used to cost $5 now costs $12.

Eric Newhill

BTW, thanks for the explanation of how science works. How are you unaware of the European studies that also confirm Ionide's results?


So what is wrong with the German, Swiss and Swedish studies?



I hypothesize that there are a glut of goods in the marketplace that can help soak up the excess cash in the economy. Also, low oil prices translate to lower prices for any goods that rely on petroleum products to be produced in any fashion. But yes, what you speak of is inflationary, as an independent variable.


The words, digital and currency might take out the word inflation rather quickly.


Eric Newhall,

The European studies in the link you shared do nothing to confirm the Ioannides work. Different geographic areas will because of uneven dispersal of COVID will have different levels of prevalence and they can as well have different levels of COVID lethality because of demographic and environmental factors.

More importantly, the link you shared had this key sentence referring to the Ioannides studies – “Other studies, including one from California, delivered more promising results, but that was likely the result of imperfect testing.”

The California Ioannides work is being used to promote reopening and given that it is entirely reasonable that it be subject to strict scrutiny and that scrutiny by many scientists has found the Ioannides work deeply flawed.

Two of the critical flaws are. One, an unapproved antibody teat that was known to give false positives was used. Thus, given an unknown level of false positives and an extrapolation from a 4% sample to the entire population of Santa Clara and Los Angeles counties, you could have a mammoth error.

Two, they did not perform a random sample to get the 4%. Rather they advertised on Facebook and solicited volunteers from the parents at a school of a co-author’s son. That is not how you obtain a valid sample.



I guess that, like it or not, America is reinforcing its position as a giant experiment. We are seeing how well “we the people” can govern themselves in the face of a confusing and perhaps deadly pandemic.

Where I am, in Victoria, Australia, we are in lockdown. We are not as tightly sealed as France and perhaps other countries, but it is annoying enough. I don’t buy the libertarian crap about big government attempting to subjugate anyone, although we will surely hear a chorus of leftists referring to some measures, for example the ban on hunting here, and saying “let’s make this permanent!.”

What I do buy is the common problem of public servants engaging in backside covering. Do you think Fauci, Birx or anyone with actual responsibility is going to want to end the lockdown without a vaccine? I don’t and I don’t blame them. Let politicians make that one and if it turns out to be wrong then they can shoulder the responsibility for the next wave of deaths.

It’s an easy call - ending lockdown, when you have no skin in the game. We will watch and hope you succeed.



If the US economy is kept shut down until a vaccine is widely available the US will be a shattered husk. The Democrat globalists can them proceed to use it as a building block for a world state.

Keith Harbaugh

There has been vast media coverage of the scale of the pandemic in New York,
with the unstated implication that
the problems NY has been experiencing will be replicated in other places
unless draconian restrictions are imposed in those places.

However, NY has some unique demographic and social conditions
which have enhanced both the rate of transmission of the virus and its lethality.
To wit, a significant population in NY, its Hasidic Jewish community,
maintains social practices of close social contact,
and also has a high incidence of obesity (which increases the lethality of the virus).
Further, this demographic has, hardly surprisingly, been hit very hard by the pandemic.
In the words of someone quoted by the NYT,
it is experiencing a "Plague on a Biblical Scale". See:


Quoting the NYT:
"The coronavirus has hit the Hasidic Jewish community in the New York area
with devastating force ..."
One may wonder how many of the problems of that hospital in Brooklyn that was "under siege" were due to the situation so described.

See also:

"Hasidic communities are facing a unique challenge when it comes to controlling the spread of coronavirus.
I fear that in those places, highly communal lifestyles combined by [with] skepticism about the need for social distancing -- at times prompted by religious leaders -- are going to ost more lives."

And for obesity issues in this community, see
"Haredi sector suffers from obesity"
"the problem is seven times worse in the haredi sector than among seculars"

Another area in New York State that has a really exceptional rate of both cases and fatalities from COVID is Rockland County. Rockland also has one of the highest percentage of Jews in the nation.

The point is that some, perhaps many, of the dramatic and drastic problems that NY has been experiencing, and that have gotten so much play in the national media, are due to demographic and social conditions that are peculiar to NY.

To be clear, I am certainly not trying to blame one particular population for causing the pandemic.
What I am trying to say is that
to extrapolate the results of the pandemic to other regions, with populations having different social practices,
is almost surely an error.

ST Harris

monseiur peacock de azur,

as somebody paying overpriced rent in an overpriced city with an overpriced kid (ridiculous monthly insurance policy) i am all with you.

My comment was directed to the macro level of the us economy and currency - short term consumer collapse along with terrified restraining of credit by lenders can lead to deflationary cycle.

Unless you're looking for proletarian uprising in 2021, deflation is bad bad juju for the US economy, and so even though i feel there will be hell to pay for the Fed actions right now, they should keep on doing it.

ST Harris


The ed admin bubble is popping hard indeed, but so are many other bubbles. Real estate, oil/energy, financial services, professional business services - will diamond joe come to the rescue? obviously not since the fact is we are all well and truly screwed. You could have the damn ghost of abraham lincoln come down from heaven and do a little presidenting, and not sure it would matter all that much. So much garbage has to be waded through, on top of a pandemic.

Are we even talking about the now getting hotter cold war with China that looks to require a lot of time, money, and attention in the next couple years?



"Where I am..." On your private estate prepared long ago for a comfortable retirement. Like the fine people on Long Boat Key with the private marina, private pools and private beach. Lots of space for their kids to fly in from Boston, NY and Chicago to wait out the wise wisdom of "public servants engaging in backside covering" and probably some anti-Trump maneuvering and profiteering to boot. On a bright note at least no one outside of Flynn's attorneys and some deplorables are paying much attention to the recently released proof of the criminal conduct of the FBI and DOJ in framing the man.

Terence Gore

If I borrow 100k from the bank a new balance sheet entry is created representing new money and as I transfer the money to a new bank additional balance sheet entry is created. As I pay back the loan the money in the balance sheet entry is extinguished. The problem with bankruptcies is that the banks have go outside and borrow new money to repair their balance sheet. The trillions in new money created by the Fed is designed to stopgap the imploding bank balance sheets. On the whole the process suggest deflation as there is a scramble to repair the balance sheets of the banks.

In my fevered little mind the only thing that can create hyperinflation is the shortages of real goods. It would not matter if money is digital. The wealthy will be able to outbid the less wealthy for goods. People would catch on quickly what has more value. Money or goods. As quickly as toilet paper rapidly disappeared so would everything else. Shortages of goods could come from the destruction of real capital.


"Some sailors attempting to walk back on board the aircraft carrier USS Theodore Roosevelt are showing new signs of the virus that sidelined the ship more than a month ago, despite testing negative for Covid-19.

The Navy began moving hundreds of sailors back on to the ship last week after crew members spent more than a month in quarantine or isolation, but a small number have shown a fever or other symptoms of Covid-19 during pier-side checks before embarking, Navy spokesperson Lt. Rachel McMarr told POLITICO."


Col. Lang,

Perhaps that was China’s plan all along. They think that American society is not resilient enough to survive a pandemic. They saw the self absorbed snowflakes and extrapolated. We need to prove them wrong.

If America is experiencing anything like Australia at the moment, the Democrats are also wrong. A wave of new found nationalism and revulsion of anything Chinese has already kicked off here.


The age of Totalitarian bullying has arrived.

AG Barr needs to stop this snowball before it grows any bigger.


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