MORTGAGE CREDIT NEWS BY LOUIS S BARNES - April 17, 2020

Where are we, really?
Charlie Munger, the 96-year-old genius and vice chairman of Berkshire Hathaway today told the WSJ, “Everybody’s just frozen.” True for parts of the investment world, but with all respect not so for the economy or the society.
We are running out of time.
Each component of our economy sits at a parking meter. A running meter. We get to stay until we run out of quarters. Some of us have more quarters than others, even plenty; some are inadequately replenished by government, but many are nearing the end of the bag. When it’s empty, our productive economic component gets towed. Some may be redeemed from the tow yard, but every day more will go to the chop shop.
The good news and foundation for optimism has been and still is that our economy was very healthy, well-structured and free of excessive risk before Covid-19. In every way more healthy than entering any recession in the last century. This time we have stopped the economy on purpose.
Unlike the Depression, we will not have 9,000 bank failures wiping out savings, even bank-issued currency in tills and wallets. We are not in a fight with inflation, real or imagined, the cause of every recession since the Depression except one. That one was 2008, caused by Wall Street corruption and allowed by comatose regulators. Mercifully, today we get the benefit of the repairs from that one.
This time... we have had a little time to live while shut. Had. We can feed quarters for a while -- a month or two -- but even during that survivable pause, more and more damage becomes permanent in a slow-motion collapse. Recovery later not “V” or “U” but struggling to hold “L.”
We are running out of time, and we will not have adequate testing before it is too late. Maybe we will, in some astounding aggregate achievement by local efforts, but we cannot count on that.
National leadership is a bust. Both parties. Joe Biden might a month ago have begun daily hammering at testing. Where is it? Who is in charge? A month before that, his colleagues in their silly debates might have raised the alarm but did not. Trump makes everything harder, especially by driving competence away.
Individual heroes abound, the medics and first responders. The grocery checkers who never signed up for this, facing a parade of us all day while unprotected at three-foot distance. Some local leaders, governors especially have grown under fire.
Others who might lead have failed us all: Jamie Dimon, the nation’s top banker, grand poohbah of Chase. The worst thing a bank can do in a crisis like this is to withhold credit, choose stockholders ahead of society even though too big for the Fed to let it fail. Dimon has given orders to constrict credit. Need a home equity loan? Big equity in your house? No. Chase comes first. In a re-make of “Saving Private Ryan,” cast Dimon as captain Miller. As the LCVP approaches the beach, Dimon will turn and yell at the coxswain, “Turn around and get us out of here!!”
On Tuesday, Dimon’s view of going back to work: “It won’t be May. We’re talking about June, July, August, something like that.”
Sir, we do not have that long, especially if you will not loan some quarters. And “we” is the world, dependent upon the US consumer.
We is also just us. In our long national history, bad times have brought us together. This time, before the virus we were more separated into disagreeable camps than ever since the Civil War. Post-virus we are worse. Locked-down, shut-down, sheltered in place, we are confined in the worst imaginable silos of misinformation, bad thinking, and un-shared sacrifice.
Heroes excepted, this is not our finest hour. Too many of us are overtaken by either fearful hysteria or the stupefying arrogance of those who will neither cover nor keep a distance.
Here in Boulder, in the same meeting in which the City laid off 40% of its workers, as rich as we are unable to make a German-style plan for half-time and shared sacrifice, a group of bicycle mercenaries demanded tens of thousands of dollars to close streets. Hit those cars when they’re down. Boulder’s Whole Foods draws an affluent crowd, at the moment discombobulated by aisles re-aligned in the name of distance, but so tangled that contact has been increased, and despite the energetic staff outnumbering customers and barking orders. Across town at Safeway, an older and un-trendy clientele is still a good one-third uncovered, and the brave clerks just last weekend got masks. One-way aisles there are mostly ignored in favor of speed, special hours for seniors, no bossy proctors.
The experience of those grocery stores tells us what to do. Not one checker or employee at that Safeway has contracted the virus. Nor any worker at the Starbucks inside. Social distance works, but to work does not need to be overdone. We can get the virus from pass-by contact, but the odds are too low to worry about. We have been running that experiment all over the US, and the results are in.
To get the virus, most of us need a big snoot-full quickly, or sustained close-range contact. If you have never visited a meat-packing plant, don’t go, now or ever. The hot-spot plants in CO and SD involve standing one foot apart for eight hours, and criminally indifferent management (the SD plant is staffed by recent immigrants, one report saying 80 languages spoken there). Prisons and jails are cruise ships, sometimes with okay views but no trips to shore.
The worst: nursing homes. Colorado’s count is now 72 facilities infected. Boulder County has had 15 deaths so far, all but 3 in care facilities -- and no non-care deaths in two weeks.
Colorado’s governor has done reasonably well, but among “non-essential” businesses shut down: we are forbidden to sell or to buy homes -- can’t show them, can’t photograph the inside, even if vacant. On a risk-adjusted basis, that’s social distance run amok.
The best: except for close-distance traps, social distance has worked. The damage/risk balance has shifted from shut-down to opening. We shut down in mid-March, infections crested on the 30th, and excepting traps our new cases are limited to numbskulls or the very unlucky.
The data from the last five weeks show how to re-open. Analysts all over the country see the same opportunity. One of the best plans is from Ohio State (thank you, Neil Palmer): open all businesses which can maintain social distance. Release from shelter alone to social distance all people aged under 60, and under 70 if in good health -- older only at your own risk, with the understanding that medical heroics may be limited.
Speaking of heroics, ICU clinicians in NYC and elsewhere are learning how to deal with the virus, and ventilators are no longer the crisis point, here. Hospitals are now rarely overloaded anywhere in the US, except in the close-distance trap-cities.
How dare we base reopening on age? Because that’s what the data says to do. Protect the vulnerable, do not sacrifice everyone else at risk of nothing worse than flu numbers.
The BBC this week gave us this bit of phlegmatic carry-on wisdom, while recommending age-sorting: “Unsurprisingly, the risk of dying increases with age.”

Colorado data, below could not be more clear, despite the missing undetected cases in February and March. The deaths were detected. The top chart is by day, the bottom two are cumulative. Testing here as elsewhere is pathetic, the total cumulative tests in a state of 5.8 million: 43,000.