Morning Briefing
Summaries of health policy coverage from major news organizations
Some Economists Worry That U.S. Might Slip Into Depression Rather Than A Short-Lived Recession
Politico: Fears Mount Of A Coronavirus-Induced Depression
Forecasts of doom for the American economy are quickly turning from gray to pitch black. As Congress haggles over a multitrillion-dollar coronavirus rescue package, analysts are warning the U.S. could be facing a prolonged depression rather than the kind of short recession and swift bounce back that President Donald Trump and his top aides expect. And they’re raising questions about whether current government efforts to cushion the economy from the damage will be anywhere near enough. (White, 3/23)
The Wall Street Journal: Coronavirus Could Trigger Global Recession, Says IMF
Europe saw a record fall in business activity during March as government measures and behavioral changes designed to contain the novel coronavirus intensified, while Japan saw sharp falls that similarly hit service providers hardest. Surveys of purchasing managers released Tuesday that have a good record of measuring economic activity point to large drops in output and big job losses in some of the world’s largest economies, suggesting a global recession is possible. The surveys are the first globally comparable measures of activity to be released since widespread lockdowns by countries began. (Hannon and Fujikawa, 3/24)
The New York Times: Whatever It Takes: How The Fed Aims To Rescue The Economy
The Federal Reserve on Monday pledged to do, in essence, whatever it takes to keep the economy from collapsing under the weight of the coronavirus pandemic. The Fed’s announcement had lots of bureaucratic jargon and an alphabet soup of acronyms. But at its core, the central bank was making a simple promise, summed up in the first sentence of its news release: The Fed is “committed to using its full range of tools to support households, businesses and the U.S. economy overall.” Here’s a guide to understanding the Fed’s actions. (Casselman, 3/23)
The Associated Press: Fed Makes Strongest Bid Yet To Protect Firms And Governments
With lending in Treasury and mortgage markets threatening to shut down, the Fed announced an aggressive set of programs Monday to try to smooth out those markets. To do so, it committed to buy as much government-backed debt as it deems necessary. And for the first time ever, the Fed said it plans to buy corporate debt, too.Its intervention is intended to ensure that households, companies, banks and governments can get the loans they need at a time when their own revenue is fast drying up as the economy stalls. (Rugaber, 3/24)
The Hill: Fed Rewrites Crisis Playbook
The Federal Reserve is rewriting its crisis playbook as the central bank takes unprecedented steps to prevent a historic downturn. As the coronavirus pandemic unleashes economic turmoil across the U.S., the Fed is approaching the limits of its legal authority to keep credit flowing to American households and businesses facing financial peril. “The coronavirus pandemic is causing tremendous hardship across the United States and around the world,” the Fed said in a statement Monday. “Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.” (Lane, 3/23)
The Wall Street Journal: Global Stocks Rise Following Turbulent Start To Week
U.S. stock-index futures and global equities rose after the Federal Reserve stepped up its assistance to the American economy, saying it would back lending to businesses and buy essentially unlimited amounts of government debt. S&P 500 futures gained 4.9%, suggesting U.S. shares could rise later in the day. (Chiu, 3/24)
Politico: The Unthinkable: Is It Time To Shut Down The Stock Market?
Wall Street is facing a grim question as stock prices plunge on most days with no end in sight: Is it time to shut the market down for a while? The debate over whether to pause market trading has intensified over the last two weeks, as much of the economy has ground to a halt to prevent the spread of the coronavirus. (Warmbrodt, 3/24)
The Associated Press: Buddy, Can You Spare A Dime? Echoes Of '30s In Viral Crisis?
The imagery floats in sepia-colored photographs, faintly recalled images of bedraggled people lined up for bread or soup. Shacks in Appalachian hollows. Ruined investors taking their lives in the face of stock market crashes. Desperation etched on the faces of a generation that would soon face a world war. By now, it’s hard to find someone whose grandparents are old enough to recall the suffering of the Great Depression or the stream of rescue programs the government unleashed in response to it. All but gone, too, are memories of President Franklin Roosevelt’s “fireside chats,” his attempts to console an anxious populace and quell the “fake news” rumors of the day. (Gordon, 3/24)
The New York Times: Bankers Pledge Mortgage Help, But Want Billions
In just days, tens of millions of people across the United States will have to make fresh payments on their mortgages. Their lenders have come up with a plan to help borrowers who can’t pay because of the economic fallout from the coronavirus — and they want the federal government to backstop it. Such help would cost tens of billions of dollars, and groups representing the mortgage industry warned that their efforts to help homeowners could cause the entire industry to collapse without the government’s help. (Flitter and Goldstein, 3/23)
The Wall Street Journal: Mortgage Firms Brace For Wave Of Missed Payments As Coronavirus Slams Homeowners
Mortgage companies are bracing for a severe cash crunch when Americans who lose jobs and income because of the coronavirus pandemic stop making payments on their home loans. The companies, such as Quicken Loans Inc. and Mr. Cooper Group Inc., expect a wave of missed payments from borrowers as early as next month that will force them to come up with tens of billions of dollars on short notice. (Ackerman, 3/23)
Los Angeles Times: Coronavirus Forces Workers To Choose Between Health And Paycheck
Teresa Trejo has spent the last two decades shuttling between jobs at the L.A. Convention Center and Dodger Stadium. Her work as a barista and a bartender serves as the main source of income for her family, which includes her 7-year-old son, whose fears around the coronavirus have steadily grown. For Trejo, 46, the effects of the outbreak hit swiftly two weeks ago, when both her workplaces shuttered and her hours were cut indefinitely, forcing her to file for unemployment. Like other Americans who don’t have the luxury of a work-from-home option, Trejo is finding that the virus will disproportionately affect those whose livelihoods depend on daily human interaction. (Shalby, 3/24)
NBC News: Las Vegas' Neon Lights Go Dark As Coronavirus Outbreak Leaves Thousands Unemployed
Roshy Rivera was hiking at the Grand Canyon with two of her co-workers last week when she found out they'd all just lost their jobs. As the sun turned the mountains golden that Tuesday afternoon, she and her co-workers received a text message from the owners of Casa Di Amore, the Las Vegas restaurant where Rivera, 37, had worked as a bartender for 12 years. The message said that Nevada's governor had just ordered the closure of all nonessential businesses, such as casinos, dine-in restaurants and bars, for 30 days amid the growing coronavirus outbreak. Casa Di Amore was going to shut down. (Hassan, 3/23)
Bloomberg: Landlords Will Be Granted U.S. Mortgage Relief If They Delay Evictions
Many landlords may be allowed to fall behind on their mortgage payments amid the coronavirus outbreak in return for not kicking renters out of their apartments. The Federal Housing Finance Agency said Monday that Fannie Mae and Freddie Mac will grant mortgage forbearance to owners of multifamily properties in exchange for suspending evictions. The move applies to all Fannie- and Freddie-backed mortgages in situations where renters can’t afford to make their monthly payments due to the outbreak. (Westbrook, 3/23)
The Wall Street Journal: U.S. Domestic Passenger Flights Could Virtually Shut Down, Voluntarily Or By Government Order
Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S., according to industry and federal officials, as government agencies also consider ordering such a move and the nation’s air-traffic control system continues to be ravaged by the coronavirus contagion. No final decisions have been made by the carriers or the White House, these officials said. As airlines struggle to keep aircraft flying with minimal passengers, various options are under consideration, these people said. (Pasztor and Sider, 3/23)
