MORTGAGE CREDIT NEWS BY LOUIS S BARNES - May 29, 2020

Several races are in progress. The big ones: will we, can we reopen fast enough? At the end, a medal or a debt bomb? And then the deadly and unmentionable contests, politics and race.
Each one matters in this nation -- confused, anxious, and relying on local leaders as never before. Split apart by Covid, not pulled together.
At the time of 9/11, a majority of Boomers still flinched at flag-waving, a reminder of the terrible time and division of Vietnam. Not after 9/11. Every home, window, auto, office -- flags everywhere. When football resumed two weeks later at Folsom Field here in Boulder, a dozen FDNY heroes on the sideline, and the band finished the alma mater, fans began to stand in the south stands and cheer wildly. The rest of us needed a minute to see the cause of the commotion. No aircraft had flown for two weeks, and out of the north came four F-16s on the deck, low over the stadium, stood on their tails and roared off. As the band swung into the national anthem, 55,000 people holding each other wept too hard to sing.
Not now.
This is tough. We’re on our own. And touchy. Bi-lateral mask rage. Unexpected belligerence in odd places, road-rage hot on nearly empty highways. Virus fear, virus contempt, and virus fatigue everywhere and often hostile. The only quiet aspect: economic fear carried in silence. Nobody has much to say in a mile-long line of cars, hoping the food holds out until their turn.
The economics. Housing is a very bright spot. The two-thirds of the country who own and buy are in far better shape than the rest who rent. New applications for forbearance of mortgage payments has stabilized below 10%, maybe half of those still making payments anyway.
IT is doing well, as are most businesses whose employees can work remotely. Also low-end businesses which can work outdoors, construction and landscaping.
And the brave, the indifferent, the had-enough worn-out-with-this, going back to work now, more every day. Enough, soon enough?
The race is on: can we open up, far enough and fast enough to prevent a spiral into the second stage of layoffs which will feed on itself into something too ugly to think about. IT is fine as long as the buyers of its software still have sales. State and local governments were mostly in good shape going into Covid, some reserve funds, but now the furloughs have begun, which means fewer customers for other businesses, fewer sales, lower tax revenue and more furloughs.
Painful surprises are landing in many households who thought themselves protected. The astonishment among major league baseball players would be funny if not so real to so many. “You mean... if we don’t play or people don’t watch, you’re not going to pay me my $37 million this year, just $8 million...?”
The finish line for one sprint is only one month away. Roughly 18 million college students will... or will not go back to school and campus, and support businesses and landlords in those communities. Moody’s calculates debt owed by universities, public and private at $240 billion. Not student debt, university debt. If tuition and grants fail, widespread default.
The national debt to bail out ourselves is the new darling of scare headlines, especially in publications with a well-off readership and nothing to worry about, except what a bad idea it is to give money to people who need some. Makes ‘em lazy. Then on the left side, the belief that money is infinite and free.
America needs one subject not to worry about. This is the one. Insist that bailout money be spent wisely, which means bridging to opening, not gifts, and not highjacked by other dreams -- additions to structural spending, and above all not “infrastructure” pork.
The scare-bears growl about inevitable inflation, cuts to Social Security and Medicare, tax increases, bankrupting future generations, and lousy interest rates for savers. Ignore all of that. The world moved from inflation to deflation in the 1990s, and central banks have shown ever since the need and capacity to embalm enormous quantities of government debt. There may be a limit somewhere, but not during an economic implosion.
The Virus. No government on Earth reacted well. A few in Asia had a head start, long histories wearing masks, and SARS preparation. A few small nations with ethnic or cultural uniformity have done okay. New Zealand, Holland, Norway.
It will be awhile before we or any nation locks down its economy. In retrospect, “dumb” is the most kind adjective.
Masks work. Really work. See Colorado data below. We were quick to shut down -- ski areas, schools, colleges, economy -- but did not adopt mask discipline until three weeks ago. Three weeks later, positive Covid test results have collapsed from 15% to below 5%, even though test kits are still in terribly short supply, tests are focused on our hot spots (300 nursing homes), and limited to those with symptoms.
The Covid hazard has always been in confined interior spaces and to old folks. Instead of focusing on the problem, we pitched a hysterical fit. Test kits aside, where is the all-out effort to retrofit offices, restaurants, bars, and stores -- ventilation, UV disinfection? Plexiglas may help, but you can hurt yourself running into it.
Politics. In our last economic crisis of this magnitude, FDR began fireside chats on the radio. He bonded the nation and soothed its fear. He didn’t know what to do (nor did the Fed), but he was by-damned going to do, every day new things, useful or not, experiment, find what would work, and along the way give hope to the nation. George Bush knew to stand on the Trade Center rubble with flag and megaphone, and it worked, even for political opponents.
Today our divide is deeper. At least one-third of America found Trump and still supports him, other leaders in his party afraid of that one-third. His supporters feel wronged, as does the one-third on the other side. Since March it’s been an open question who would be the first to boil over into violence. The winner in that race is not clear.
Protests are important (see Hong Kong), but a riot is not a protest. Burning down a police station is not a protest. Last night Minneapolis police approached two CNN TV reporters a couple of blocks apart. One was arrested, the other not. Which one was white, which brown? US Representative Val Demings, former Chief of Orlando Police, today: “My fellow brothers an sisters in blue, what the hell are you doing?”
In the absence of an FDR or even a Dubya, it’s all up to us. To get going again, to rise up we need every erg of good will toward each other. Get to it.

Colorado has at last released a sample of locations of Covid infection and casualties (one-third of the former, half of the latter). All of us in elementary math were taught: identify the problem, then work on a solution. We have done exactly the opposite, crippled the non-problem and ignored the obvious.

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Really good news: the huge drop in positive testing, three weeks after mandatory masks:

Questionable news: nobody likes the accuracy of serology tests for antibodies, nor the tendency to self-selection by suspect individuals. The consistent test results below either establish a 5%-8% rate of false positives, or total cases in Colorado near 300,000, not the 25,121 officially discovered: