MORTGAGE CREDIT NEWS BY LOUIS S BARNES - April 10, 2020

Mortgages first, then put on the lab coat again, and finish with chicken feathers.
Please continue to ignore economic data, partly in preparation for ignoring the equally wild data when the economy reopens. Stick with the best barometer of overall panic, stocks: from the all-tome Dow high 29,551 on February 21 down 37% by March 23, now recovered halfway, only 20% from the top. Our economy will reopen and do better than feared, just as we have and will with the virus.
The Covid financial panic is far more widespread than in 2008, but fundamental damage far less -- in 2008 exposing more than $5 trillion in trash IOUs arranged by Wall Street pirates. The beneficial legacy of that disaster: today our banks and systemic IOUs are the most sound in sixty years.
The Fed’s overriding job is to stop runs: convince the panicked sprinters that running is pointless. The runners have one thought in mind: sell everything and get to cash. Sell everything because nobody knows what anything is worth, not until the economy begins to reopen. Bankers running from lending think, what will my collateral be worth when my borrower defaults?
The Fed’s answer: your investments and collateral already are cash, because we’ll pay cash for them. Stop your racing and flapping. You’ll get tired and look stupid long before we run out of cash, because we never run out.
Panic is fading already. Mortgages are recovering. Fannie-Freddie “conventional” loans are properly priced for the first time in weeks, down near 3.25%. However, not for investors, or “high balance” loans for expensive counties. Fixed-rate Jumbo loans are scarce to non-existent, but will be back.
In moments like this, people in lifeboats with spare room try to settle old scores with competitors in the water. Banks today are having a wonderful time whacking mortgage banks with oars, trying to push them under. Bankers forget their status as public utilities with a duty to look after all by continuing to make loans.
Current events have spared us for a while the lecturing by privatizers, Libertarians, swamp haters, anti-Fedders, and especially the demented No Bailouters. Only one lifeboat captain is in the wrong place at the wrong time: Mark Calabria, at the FHFA the regulator of Fannie and Freddie, who sees this as his chance to kill them.
Enough of money. Where is my lab coat...?
The central Covid question now: when and how to open up? Two open-up theories are compelling and a third will impoverish us.
The first, thinker and thinking here: when we re-open we will of course have new Covid hot spots. So calibrate opening and re-closing and opening and re-closing by working backwards from the number of available ICU beds. Good idea. Clinicians are learning quickly better ways to treat the virus, and with a few local exceptions and NYC the fear of an overwhelmed system has been overdone.
The second line of thought is exhaustive, but a big-pharma pal says that Scott Gottlieb is the smartest guy in the room. His proposals are here, the key one testing-centric. To open, Gottlieb says that a given state must be able to test all symptomatic people, and conduct active monitoring of confirmed cases and their contacts.
These two approaches bracket the early-late reopening guesses: a few weeks to a couple of months. I like the first, disorderly as it is, because it would condition us to behave. Reopen with discipline and we get to stay open. Reopen and fail to behave, back to iso.
As it is community pressure is increasing. Two idiots without masks yesterday demanded entry to the legendary McGuckin’s hardware in Boulder, blocking the door for the rest of us while arguing beside huge signs, MASK REQUIRED. They had no idea how near death they were, and not from the virus.
The third theory is widely held: Don’t reopen until it’s SAFE. Completely safe. In particular, safe for the health care system. But that’s where we started, before the virus, locked into an unaffordable healthcare system. Now we must lock ourselves into economic catastrophe to preserve it? Not its adequacy, but absolute salvation for everyone on demand? Shoot, not even Christians believe in that.
Data intrudes. Protect the system and ourselves from what, exactly? The virus, but who gets it, and at what mortality risk? We know now that 60% of the infected and deceased will be male -- all the way to pediatric patients. We still don’t know within a big range how many are infected, but we have a good idea who has died. Below is a chart from Michigan, 78% of total mortality has been among those aged over 60, 34% of over 80. Narrow further: among people over age 85 only 35% of us males are left -- and we are 60% of deaths.
Here in Boulder County, 320,000 residents, we have lost eight people, sex-balanced in a small-sample oddity. The ages: 68, 71, 77, 81, 85, 94, 96, and 98. Three were in “non-hospital residential care facilities.” Our state government is doing all it can to maintain hysteria so that pea-brains will behave. Yesterday, “We have pushed the infection crest forward to May.” Horsefeathers: we have crested now. Be honest or we will misbehave. In CO we have 54 nursing homes involved. Fifty-four, but on grounds of privacy the state will not say which or where, or how many of the demised fell ill in... those places.
We lost John Prine, 73, a great light of music. To the virus, which he had, or to his twenty years of neck and lung cancers? New word for me this week: comorbidity.
Why not focus on protecting the groups most at risk, and reopen the economy? The media are filled with sad stories about young people who have not survived, but we cannot save everyone from everything -- right there is the Big Argument in the US, but not so much elsewhere. A French physician at a nursing home there gave this alternate view to the WSJ: “Those already in poor health are unlikely to survive intubation with a ventilator or other invasive procedures that life-support units perform. He says he’s focused on providing the care he can at the nursing home. Nine of his patients died at the nursing home.”
Shift to something positive: when surrounded by piles of chicken feathers, make chicken salad. In this strange interval -- time and habits suspended -- elders of all ages can do something useful for themselves and offspring.
I have invoked my dad repeatedly in the last weeks, as in Amistad Cinque and then John Quincy Adams called upon their ancestors. Dad had early heart disease, a quintuple bypass at age 59 in 1977 when such things were new and unreliable miracles. He outfoxed everybody and made it to 87, along the way many near-ends and procedures, but with good life-quality. We said goodbye to each other in ERs and ICUs a dozen times or more, which became a joke between us (“Is it time again for me to say what a good son you’ve been?”), which we thought would make the end easier.
It didn’t. But this did: each of my four parents (divorce and remarriages) made repeatedly clear to me and siblings how they wanted the end to play out. Dad again: “There are lots worse things than dying. One is partway.”
Do you have a living will? A medical directive? Have you thought through DNR? Who will decide if you are partway and unable to? As we learn about this virus, consider the benefits of a ventilator, and if you survive the virus, the quality of partway afterwards?

This Michigan data is a week old, but no different than accounts from all over the world. https://www.mlive.com/public-interest/2020/04/new-coronavirus-cases-in-michigan-take-a-dip-deaths-climb-to-540.html

After golf and football, dad’s primary pastime was writing poetry. In the breast pocket of his tweed jacket always were a few sheets of yellow legal ruled paper smudged with #2 pencil, the drafts of his new work. This one soon after his first bypasses may be useful to any loved one in or near an ICU:

At our ends, many of us return to the beginning. This the last from Donald E. Barnes: