A fool and his money

Interesting post about how Joe Rogan got ripped off by accepting what would appear to be a no-brainer, $100 million deal with Spotify:

Daniel Ek, the CEO of Spotify, who just closed an exclusive deal with Rogan to move his show (audio and video) to the Spotify platform.

If the numbers are to be believed, it’s a steal of a deal for Spotify: for $100-$200mm they secured the largest podcast audience in the world.

I’m not exaggerating. Spotify’s market cap jumped by $3 billion in the 24h after the news of this deal broke.

The market saw what Rogan missed: Spotify took his oil. […]

By doing this deal, Rogan gives up control over his subscriber relationship. Any new audience he builds from here on out, he loses. His existing podcast feed will likely die as most people eventually unsubscribe due to inactivity.

If he goes back to being independent and ditches Spotify in 3 years, he has lost all of his new subscribers during that time, and some of his original subscribers as well.

It’s like Disney licensing their Disney+ content to Netflix. It might net a big one-time payout, but it completely erodes the business value that would otherwise accrue to them.

There’s more detailed analysis in the post. Worth reading if you are a “content creator.”

The famines cometh

You thought WuFlu was bad? WuFlu is nothing. The global death toll as of this writing is 258,295. LOL. Tuberculosis kills 1.5 million people every year.

Hunger, though. That’s going to be a bitch:

Major world disasters produce multiple ripple effects. Like a powerful tsunami, they trigger one shock wave after another, each producing injury and mayhem. In the case of Covid-19, the first wave was the global health crisis, still spreading around the world. Next came the stay-at-home requirements and the resulting shutdown of the world economy, resulting in massive job layoffs everywhere. These, in turn, are producing a third wave, possibly even more catastrophic in its outcome: the collapse of global food-supply systems and widespread human starvation.

Who could have predicted this? Well, here is what I wrote on March 30:

We don’t know if the repressive measures that are being taken to “flatten the curve” in the West, such as turning Britain into an Orwellian dystopia where you are only permitted to walk your dog once a day, will be beneficial overall, given the speculative nature of the epidemiological models used to justify them and the (unaccounted-for) public health costs of putting hundreds of millions of people under de facto house arrest. But it seems obvious that if these mega-interventions continue for the duration that is apparently required for them to be effective, then they will trigger a violent collapse of the global economy, and with it, widespread immiseration, political chaos and a truly Biblical scale of human suffering and death.

Guess shutting down the global economy and confining billions of people to their homes was a pretty dumb idea, after all.

The lockdowns will continue until morale improves

The state of Connecticut (population 3.6 million) has had a grand total of 2,436 WuFlu deaths.

Hospitalizations (a lagging indicator of infections) declined for 11 straight days as of May 3.

Nursing homes account for some 55% of WuFlu deaths in Connecticut.

Yet the state must remain on full lockdown until May 20, at which point a phased easing will commence. Another brutal 16 days of little to no revenue until restaurants with outdoor dining areas, hair salons and nail salons will be permitted to open their doors again. If certain conditions are met.

None of this makes any sense.

The reset

In a couple of important blog posts, energy and economics researcher Gail Tverberg explains how the corona crisis has pushed an already strained global economy to the brink of collapse:

Economies won’t be able to recover after shutdowns

Citizens seem to be clamoring for shutdowns to prevent the spread of COVID-19. There is one major difficulty, however. Once an economy has been shut down, it is extremely difficult for the economy to recover back to the level it had reached previously. In fact, the longer the shutdown lasts, the more critical the problem is likely to be. China can shut down its economy for two weeks over the Chinese New Year, each year, without much damage. But, if the outage is longer and more widespread, damaging effects are likely.

A major reason why economies around the world will have difficulty restarting is because the world economy was in very poor shape before COVID-19 hit; shutting down major parts of the economy for a time leads to even more people with low wages or without any job. It will be very difficult and time-consuming to replace the failed businesses that provided these jobs.

When an outbreak of COVID-19 hit, epidemiologists recommended social distancing approaches that seemed to be helpful back in 1918-1919. The issue, however, is that the world economy has changed. Social distancing rules have a much more adverse impact on today’s economy than on the economy of 100 years ago. […]

If a large number of businesses are closed for an extended period, this will have many adverse impacts on the economy:

  • Fewer goods and services, in total, will be made for the economy during the period of the shutdown.
  • Many workers will be laid off, either temporarily or permanently. Goods and services will suddenly be less affordable for these former workers. Many will fall behind on their rent and other obligations.
  • The laid off workers will be unable to pay much in taxes. In the US, state and local governments will need to cut back the size of their programs to match lower revenue because they cannot borrow to offset the deficit.
  • If fewer goods and services are made, demand for commodities will fall. This will push the prices of commodities, such as oil and copper, very low.
    Commodity producers, airlines and the travel industry are likely to head toward permanent contraction, further adding to layoffs.
  • Broken supply lines become problems. For example:
    A lack of parts from China has led to the closing of many automobile factories around the world.
    There is not enough cargo capacity on airplanes because much cargo was carried on passenger flights previously, and passenger flights have been cut back.

These adverse impacts become increasingly destabilizing for the economy, the longer the shutdowns go on. It is as if a huge number of deletions are made simultaneously in Figure 1. Temporary margins, such as storage of spare parts in warehouses, can provide only a temporary buffer. The remaining portions of the economy become less and less able to support themselves. If the economy was already in poor shape, the economy may collapse. (…)

COVID-19 and oil at $1: Is there a way forward?

(…)

We seem to be reaching the limit of making our current global economic system work any longer. The only hope of partial salvation would seem to be if core parts of the world economy can be made to work in a more separate fashion for at least a few more years. In fact, oil and other fossil fuel production may continue, but for each country’s own use, with very limited trade.

There are likely to be big differences among economies around the world. For example, hunter-gathering may work for a few people, with the right skills, in some parts of the world. At the same time, more modern economies may exist elsewhere.

The new economy will have far fewer people and far less complexity. Each country can be expected to have its own currency, but this currency will likely be used only on a limited range of locally produced goods. Speculation in asset prices will no longer be a source of wealth.

It will be a very different world!

Speaking of which:

Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter.
The unemployment rate is expected to average close to 14 percent during the second quarter.
Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average 0.1 percent and 0.6 percent, respectively, during that quarter.

For fiscal year 2020, CBO’s early look at the fiscal outlook shows the following:

The federal budget deficit is projected to be $3.7 trillion.
Federal debt held by the public is projected to be 101 percent of GDP by the end of the fiscal year.

Greatest act of societal and economic self-destruction in history.

Wall Street always wins

The American Economic Liberties Project explains (PDF) why Wall Street loves the CARES Act, the galactic economic bailout signed into law at the end of March. In short, while it’s not an explicit bank bailout, the benefits are massively lopsided in favor of big business and big finance… again:

The Treasury and Federal Reserve programs — more commonly referred to as bailouts — were a controversial part of the legislation that the American Economic Liberties Project opposed as part of the immediate legislative response. While much of the discussion of the legislation focused on the $1,200 payout to workers, the $4 trillion of credit in this bill that will go to big business and Wall Street is equivalent to a $13,000 loan to every single man, woman, and child in America.

Now that the bailouts are law, these provisions represent a massive, enduring transfer of power to billionaires and big businesses. It’s critical to seek opportunities to blunt this power transfer and be clear-eyed about the economic and social implications for workers, small businesses, communities, and society over the longer term. […]

The Fed has, accordingly, opened a variety of new lending programs. Last week, it opened seven new ones, on top of what it had already put out. The Fed can make up to $2.3 trillion in additional loans through these seven programs. Some of the programs are meant to help cities, states, small businesses, and so on. But they will also bail out private equity funds, which invest in riskier companies in search of bigger profits for rich and powerful investors. […]

WHO EXACTLY WILL GET MONEY THROUGH THE FED’S NEW LOAN PROGRAMS?

1. Private equity investors. One of the Fed’s new programs provides $750 billion, or $2,500 for every man, woman, and child in the U.S., to a junk bond-buying program, which the Fed calls the Secondary Market Corporate Credit Facility. Junk bonds, or “high-yield corporate bonds,” are risky loans that powerful financiers known as private equity funds use to take over corporations. The Fed can also use this program to lend to safer, well-managed corporations.

2. Big corporations and businesses. The Fed will also provide up to $750 billion, or $2,500 for every man, woman, and child in the U.S., to corporations through a program called the Primary Market Corporate Credit Facility. Specifically, the Fed will lend money to large businesses by buying bonds from corporations.

Etc.

As Matt Stoller has written:

Large banks, private equity corporations, and foreign central banks get dollars through the capital markets, by trading bonds and stocks. It turns out that the Federal Reserve is very good at working in these markets, and can move trillions of dollars relatively quickly. So that’s why the real estate arms of the largest private equity funds in the world are skyrocketing today. They know that the Fed turned the spigot on, and that spigot is instant and functional.

However, the Small Business Administration, unlike institutions in the 1930s and 1940s, does not have the workforce or ability to make direct loans to businesses. They have to guarantee loans made by banks, who in turn are supposed to make loans. Or that’s the theory, but in America, commercial lending institutions have hollowed out dramatically. Neither the banks nor SBA nor anyone else have the people to originate loans. We can’t do it. And our unemployment offices aren’t much better. The only functional bureaucracy that touches business and people is the IRS.

Never let a virus go to waste.

Hunger games

Walking around town this weekend, finding restaurant upon restaurant closed and dark – including, of all things, McDonald’s when I stopped by on Sunday – I found myself a little bit unnerved by the scale of the economic disaster unfolding before us, as well as angry at the callousness and stupidity of the people who shoved this avoidable calamity down our throats.

Running short on frozen meats at home, and unable to find sustenance at any of the restaurants I normally visit, I decided to walk to Target, which is the closest thing to a grocery store in my neighborhood. But my trip to the retailer brought another unpleasant surprise, because the friendly red doors facing the street were locked. What was happening? It turned out that the store was still open, but customers had to enter via a different door within the parking garage – and there was a line. As I rounded the corner, I saw a small group of people standing apart from each other at socially responsible intervals, while at the door stood a Target employee with a surgical mask hanging around his neck, raising a gloved hand while he told the crowd that another group of 10 would be allowed in shortly.

I didn’t want any part of that, so I made a beeline to an Italian restaurant that I have ordered takeout from several times during this era of madness. I brought home a chicken parm sandwich, and it was good. But the whole episode got me thinking about hunger. My eating options have been significantly curtailed by the “lockdown,” to the point of serious inconvenience. I am able to cope, as are most people, but that is obviously not going to be the case for a certain percentage of my city’s population of 130,000 people. I repeat: McDonald’s was closed.

Extrapolate over the nation’s population of 330 million, add several weeks (or months), and things could get ugly much faster than most people realize. We’re already seeing massive breadlines across the country as jobless claims pile up (22 million and counting), with vehicular lines exceeding a mile in length at food banks in Pittsburgh and Dallas. There is also the issue of the food supply chain, which is being thrown into chaos by the mass closures of restaurants, hotels and schools. The Times had a piece earlier this month about how farmers are destroying tens of millions of pounds of fresh food as their usual buyers have shut down.

How these factors will interact – widespread impoverishment, supply chain disruption and the narrowing of available sources of food – is beyond me, but I think the damage will be far more severe than is generally understood, because of the complex, nonlinear nature of the systems being messed with. Even if lockdown restrictions were lifted tomorrow, it is possible that the damage already done to the economy could lead to cascading industrial and logistical failures that will continue and even accelerate after things return to “normal.” Our economy is not designed to stop in its tracks for a week, a month or two months, any more than a refrigerator is designed to be powered off for a day. The food will spoil.

I can’t predict how and to what extent things will go haywire in the US, but my ramblings through the dead zone that used to be a thriving town give me the dreadful impression that the pain has only begun. Our economic and societal system has been fundamentally broken. Whether it can ever be repaired, I don’t know. I certainly hope it can be. In the immediate future, though, I expect more hunger, more breadlines, and ever-more urgent demands for intervention and salvation from the same authorities that inflicted this nightmare on us in the first place.

Never go full commie

Matt Stoller has a disturbing thread on the new political order that is being born before our eyes. Perhaps this situation will be temporary and we will revert back to some semblance of a free economy when the present crisis blows over. But there is no particular reason to believe that the government, having gathered unprecedented powers unto itself, will easily let them go:

1. A thread on our new #PlannedEconomy.

One conceptual problem during this #coronavirus is understanding what is happening politically. Consider that Democrats are angry at Trump for not taking over private corporations. They demand he seize power and the means of production!

2. Hundreds of billions for families, $349B for small businesses, $150B for hospitals, and $4.5T in credit for banks and big business. That’s an inconceivable amount of money. It is in fact a takeover of our commerce by the government.

3. In other words what Congress passed was not just a series of bailouts. We just turned ourselves into a planned economy. Now Donald Trump will choose which businesses live and die.

4. Labor Secretary Eugene Scalia will design the rules for unemployment, Fed Chair Jay Powell and Treasury chief Steve Mnuchin will hand out trillions, and SBA Administrator Jovita Carranza will decide if loans go to churches or businesses or private equity, and on what terms.

5. We have been here before. Every war is to some extent a planned economy. World War II was highly planned, and so was Korea. The Defense Production Act comes out of the Korean War era. But we are not used to what planning means. So here are a few pointers.

6. In a planned economy, political choices are everything. The private financial system is no longer in control. If a corporation that’s making masks needs a loan, its creditworthiness shouldn’t matter—the government should make sure it gets that money.

7. Similarly, the various private equity funds licking their chops at the prospect of buying distressed assets – well the answer should be hell no. Money spent to buy private jets for financiers is money not spent on ventilators. We can see this in Philly.

8. Keeping an eye on corruption is essential. There is nothing more demoralizing than lobbying for private favors in a time which demands shared sacrifice. Price gouging, profiteering, etc. We must have no tolerance.

9. We must make things here again. Our borders and global supply chains are shut. The 30-year period of globalization, in which we consolidated and offshored production to lower costs, is over. Don’t fall for the endless bullshit from free traders. See:

10. Resilience is in, monopolies are out. This 2012 merger that killed a cheap fleet of ventilators is going to restructure antitrust thinking. Diversity and competition work, concentration creates fragility.

10. To restart our economy we must strengthen our public health infrastructure and social safety net to give workers the means to not infect others. Business requires social density. When we restart our economy, sick people need to know they will be fine if they don’t go to work.

11. That means a robust public health infrastructure and a social safety net, even if it’s only temporary.

12. Most importantly, we are now choosing what kind of world we will live in after this pandemic. Will it be, as @jimcramer fears, a world with just three retailers, Amazon, Costco, and Walmart?

13. Pay cuts and layoffs are rife across newspapers. Will an advertising depression combined with the monopolization of ad revenue in the hands of Facebook and Google end the free press? Or will we choose to restructure big tech and enable journalism?

14. These are the choices that Donald Trump and his cabinet will make. That is what Nancy Pelosi, Mitch McConnell, Chuck Schumer, and every other member of Congress decided. We are in a planned economy, and Trump is the planner.

15. I realize this will be taken unpleasantly by many out there. Donald Trump is not the leader I would have chosen. But he is a politician, and he does respond to public sentiment. We do have power. We can expose what is working and what is not.

16. Nothing is inevitable. We can choose to order post-pandemic America so it is more resilient and democratic. Or we can consolidate power in unimaginable ways. It is up to a small group in Washington, DC, and up to us citizens who pay attention.

In other news:

The Federal Reserve unleashed a new series of moves Thursday to try to make loans available to states, localities and companies that have been hard hit by the coronavirus.

In doing so, the Fed will pump an additional $2.3 trillion into the U.S. economy. The central bank, in part, is drawing on money made available in Congress’ new economic relief package to buy municipal bonds as well as debt that did not previously qualify for federal backing.

The extraordinary rescue package comes on top of efforts the Fed has already made to bolster the economy, including cutting its benchmark interest rate to near zero and supplying more than $1 trillion to purchase Treasury and mortgage-backed securities to help keep credit flowing.

Forever lockdowns

Open for takeoutCoronavirus appears to be forcing some US troops out of Iraq, a sign that America’s “forever war” in that country may be winding down after just 17 years of destructive and pointless conflict. Ironically, though, SARS 2.0 has inspired the launch of a new type of forever war: the indefinite suspension of society and commerce in the name of defeating a microbe. Call it the forever lockdown.

As with America’s misadventures in Afghanistan and Iraq, there is no clear end date for this gargantuan effort because the victory conditions are vague. On the one hand, we are told that the goal is to “flatten the curve.” But then Dr. Fauci, the immunologist who apparently believes he has been placed in charge of the United States, informs us that “social distancing” must continue until the virus is no more – which presumably means well into 2021 at the earliest:

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said that the novel coronavirus “might keep coming back” year after year. Speaking to the White House press corps on Wednesday, he said that the ultimate hope is a vaccine. That, Fauci added, may not be ready for a year to a year and a half, although other experts say even that timeline is optimistic.

“I was on the weekly conference call with the WHO-sponsored group of all the health leaders in the world who are dealing with this, and we all came to the agreement that we may have cycling with another season,” Fauci told the press conference. “We’ll be much better prepared. We’ll likely have interventions, but the ultimate game changer in this will be a vaccine.”

“If we get to the part of the curve where it goes down to essentially no new cases, no deaths for a period of time, I think it makes sense that you have to relax social distancing,” he added. “The one thing we hope to have in place, and I believe we will have in place, is a much more robust system to be able to identify someone who is infected, isolate them, and then do contact tracing.”

Fauci called for a national lockdown in a CNN interview:

Dr Anthony Fauci, the chief infectious disease expert leading the US response, echoed Mr Gates’s claims and said he doesn’t understand why states aren’t working together to tackle the virus.

Dr Fauci told CNN: “You know, the tension between federally mandated versus states’ rights to do what they want is something I don’t want to get into … But if you look at what’s going on in this country, I just don’t understand why we’re not doing that.”

Did someone mention Bill Gates? America’s wealthiest man, like Fauci, is calling for a complete national lockdown in almost comical language:

First, we need a consistent nationwide approach to shutting down. Despite urging from public health experts, some states and counties haven’t shut down completely. In some states, beaches are still open; in others, restaurants still serve sit-down meals.

This is a recipe for disaster. Because people can travel freely across state lines, so can the virus. The country’s leaders need to be clear: Shutdown anywhere means shutdown everywhere. Until the case numbers start to go down across America — which could take 10 weeks or more — no one can continue business as usual or relax the shutdown. Any confusion about this point will only extend the economic pain, raise the odds that the virus will return, and cause more deaths.

Gates is more generous with the expected timeline in an interview with the Khan Academy guy:

Even then, there will have to be limits. “It’s not normal. They don’t do sports events or big gatherings. That will wait until [we have] the vaccine, but we’d like — if things go well, and the numbers will drive it — we’d like to see that ability to open up somewhat by ideally early summer,” Gates said.

Large gatherings might have to be put on hold for as much as a year longer, to give time for adequate testing of a vaccine that can be administered worldwide. “It’ll take a while to get back into the ‘let’s go take a vacation, let’s go buy a new house’ type of mode,” Gates said.

Presumably, “large gatherings” include religious services, which have been banned in a number of states. Gates takes it for granted that the US will simply do what he is urging. We’ll see about that. In any case, he is smart enough to recognize and acknowledge what this would mean for American prosperity:

That more cautious mindset seems likely to lead to “the biggest shrinkage of GDP in any of our lifetimes,” Gates said. “We are in uncharted territory. … Eventually the economy will be bigger than it was before we got into this, but the shrinkage we’re seeing in these few months is completely unprecedented, and there are human lives behind that,” he said.

The federal government plans to maintain social distancing guidelines until the end of April. But some states are going beyond that: Virginia’s stay-at-home order extends until June 10, while similar edicts in California and Maryland are indefinite.

Abroad, Australia’s PM is talking about extending the country’s lockdown for at least six months:

Mr Morrison has previously said such measures could be in place for six months, but he admitted that the restrictions could last much longer.

‘I said at least six months, it could be longer,’ he said.

‘What I am trying to do is make it very clear to those who think this can all be done in a couple of weeks, with the lockdown, as they call it, that that is not true.

‘I am the only leader in the world at the moment talking about a much longer time frame.

‘I am trying to get Australians to understand there is no quick fix.

“There is no quick fix” is the message that is increasingly coming from our elites. They are preparing us for a long, miserable and ruinous battle against the microbe, one which our economy, society, and political order are not likely to survive. The forever wars weakened and demoralized America. The forever lockdown, if actualized, will finish us off. Buckle up!

Flatten the economy

Mad MaxNearly three months after the WuFlu outbreak was first reported to the World Health Organization, the total official global death toll of this once-in-a-century pandemic remains modest – even trivial, on the scale of the human population – notwithstanding relentless wall-to-wall media coverage, social media hysterics, and deliberately scary-looking “trackers” like that sinister map from Johns Hopkins. Although the death toll will certainly rise a great deal in the coming months as the virus spreads, it is currently a tiny fraction of the ~1 million global deaths from each of the influenza pandemics of 1957-58 and 1968; neither of which brought society and commerce to a screeching halt.

We don’t know if the repressive measures that are being taken to “flatten the curve” in the West, such as turning Britain into an Orwellian dystopia where you are only permitted to walk your dog once a day, will be beneficial overall, given the speculative nature of the epidemiological models used to justify them and the (unaccounted-for) public health costs of putting hundreds of millions of people under de facto house arrest. But it seems obvious that if these mega-interventions continue for the duration that is apparently required for them to be effective, then they will trigger a violent collapse of the global economy, and with it, widespread immiseration, political chaos and a truly Biblical scale of human suffering and death.

Yet that crazy, nation-wrecking strategy is precisely what is being rolled out around the world. The US is extending its “social distancing” guidelines to April 30, while the UK government is signaling that social distancing measures will be in place for three to six months; while similar measures are being taken in Europe, Australia, New Zealand, India (which has imposed a total ban on leaving the home for 21 days)…

It would appear that the epidemiologists have staged a global coup d’état. The Anglo-American policies are heavily influenced by Neil Ferguson’s team at Imperial College London, whose March 16 study recommended the adoption of Chinese-style “suppression” measures:

We therefore conclude that epidemic suppression is the only viable strategy at the current time. The social and economic effects of the measures which are needed to achieve this policy goal will be profound. Many countries have adopted such measures already, but even those countries at an earlier stage of their epidemic (such as the UK) will need to do so imminently.

Our analysis informs the evaluation of both the nature of the measures required to suppress COVID-19 and the likely duration that these measures will need to be in place. Results in this paper have informed policymaking in the UK and other countries in the last weeks. However, we emphasise that is not at all certain that suppression will succeed long term; no public health intervention with such disruptive effects on society has been previously attempted for such a long duration of time. How populations and societies will respond remains unclear.

But for how long? Earlier, the study notes:

The main challenge of this approach is that NPIs [non-pharmaceutical interventions] (and drugs, if available) need to be maintained – at least intermittently – for as long as the virus is circulating in the human population, or until a vaccine becomes available. In the case of COVID-19, it will be at least a 12-18 months before a vaccine is available. Furthermore, there is no guarantee that initial vaccines will have high efficacy.

Elsewhere in the Discussion section, the authors write (emphasis mine):

However, there are very large uncertainties around the transmission of this virus, the likely effectiveness of different policies and the extent to which the population spontaneously adopts risk reducing behaviours. This means it is difficult to be definitive about the likely initial duration of measures which will be required, except that it will be several months. Future decisions on when and for how long to relax policies will need to be informed by ongoing surveillance.

The measures used to achieve suppression might also evolve over time. As case numbers fall, it becomes more feasible to adopt intensive testing, contact tracing and quarantine measures akin to the strategies being employed in South Korea today. Technology – such as mobile phone apps that track an individual’s interactions with other people in society – might allow such a policy to be more effective and scalable if the associated privacy concerns can be overcome. However, if intensive NPI packages aimed at suppression are not maintained, our analysis suggests that transmission will rapidly rebound, potentially producing an epidemic comparable in scale to what would have been seen had no interventions been adopted.

In his testimony last Wednesday, Ferguson seemed to offer another possibility:

Ferguson said the current strategy was intended to keep transmission of the virus at low levels until a vaccine was available. Experts say that could take 12 to 18 months and Ferguson acknowledged it was impractical to keep the UK in lockdown for so long, especially because of the impact on the economy. “We’ll be paying for this year for decades to come,” he said.

The UK government is aiming to relax restrictions on people’s movements only when the country has the ability to test more people for the virus, said Ferguson. Some have criticised the UK for not following the advice of the World Health Organization to “test, test, test”. But Ferguson said community testing and contact tracing wasn’t included as a possible strategy in the original modelling because not enough tests were available.

He said the UK should have the testing capacity “within a few weeks” to copy what South Korea has done and aggressively test and trace the general population.

But if the country’s deputy chief medical officer is to be believed, Britain is going to be on some form of lockdown for months. What most people don’t seem to understand is that the massively complex, interdependent nature of the world economy means that switching off large parts of it for an extended period of time is likely to bring the whole system crashing down. I don’t expect infectious disease experts to consider this, but then again, who put them in charge of the world?

Magic money machine

Money MakerThe US is plowing $6 trillion of imaginary money into a faltering economy to blunt the effects of the great WuFlu Panic. For context, that sum is larger than the annual GDP of Japan and way larger than US federal revenue in FY 2019 of $3.5 trillion:

An emergency stimulus package to bail out the US economy amid the coronavirus pandemic will total $6 trillion — a quarter of the entire country’s GDP, the White House said Tuesday.

Trump administration economist Larry Kudlow said the package would include $4 trillion in lending power for the Federal Reserve as well as a $2 trillion aid package currently being hammered out by Congress.

“This package will be the single largest Main Street assistance program in the history of the United States,” Kudlow said at the White House coronavirus task force briefing Tuesday evening.

Included in the package is Congress’ almost $2 trillion emergency bill, which, when passed, will issue direct checks for American families, bailouts for the airline industry and a $350 billion loan program for struggling small businesses.

The other $4 trillion will allow the Federal Reserve to make huge emergency bailouts of whatever entity it chooses — a measure that was used to prop up Wall Street firms from collapse during the 2008 financial crisis.

This raises interesting questions about the nature of money. What does it even mean at this point? What is a dollar actually worth, if the US can just conjure a quarter of its GDP out of thin air? Why even collect taxes? This mega-bailout may stabilize things for a while, but our fake economy seems to be on its last legs.