'No heart. No understanding': During coronavirus, renters face eviction uncertainty

In February, Kristina Jameson moved into one side of a double shotgun home in Treme, a historically black neighborhood of New Orleans, paying $875 a month in rent, including utilities. She had a day job at a cafe in the Seventh Ward that she loved and a side gig as a community organizer.© Marka Image: New Orleans

But the coronavirus outbreak has upended her life: She filed for unemployment Monday and realized she'll collect about $64 a week while subsisting on her small amount of savings.


On Wednesday, her real estate management company, MetroWide Apartments, sent her and other tenants a letter warning that the rent is still due on the first of the month, that late fees will still be applied if they are delinquent and that evictions will continue.

"No heart. No understanding," Jameson, 29, said of MetroWide, adding that it took more than a week for proper utilities to be hooked up after she moved in. "And that's how it's been."

After NBC News reached out for a response, MetroWide landlord Joshua Bruno said in an email that the contents of the initial letter to tenants were not what was intended and should have included community "resources for residents that may need temporary assistance." The company, which has legally tangled with the city in the past to the detriment of renters, is still urging tenants to pay on time.

"We sincerely apologize for any misunderstandings and unauthorized notice sent," management wrote.

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© Courtesy of Kristina Jameson Image: Kristina JamesonStill, Jameson's living situation remains fraught, and she stands with a countless number of tenants and homeowners nationwide who are walking financial tightropes when it comes to their economic security during the global pandemic. With the national unemployment rate potentially rising to 20 percent and high traffic crashing some states' unemployment benefits websites, the threat of soaring evictions across the country is real, housing advocates and researchers say.

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If city, state and federal governments don't step in now, they warn, at stake are people's homes and health if they're evicted and thrown out onto the street, which would only exacerbate a deepening public health crisis.

"We're in an unprecedented historic position," said Alieza Durana, a writer and spokeswoman for the Eviction Lab at Princeton University, which compiles nationwide eviction data. "I think the current moment in history is unique, but it's also giving us a moment to question what our human rights are and not take for granted: Do we really have to force people out of their homes?"






"We are hopeful that this is a moment that we can come together and look at community-oriented solutions," she added.

Each year, 3.6 million eviction filings work their way through U.S. courts, according to the Eviction Lab.

The pressure on officials now is to create a safety net. New Orleans has joined other major cities and some states that have begun enacting moratoriums on all evictions.

In some places, such as Philadelphia, the moratoriums also cover utility shut-offs, foreclosures and tax liens. While the Philadelphia Housing Authority suspended all evictions for 30 days, Philadelphia's municipal courts are halting all others for at least two weeks, said the office of City Council member Helen Gym, who helped call for an eviction stay.

San Francisco and San Jose, California, where there are shelter-in-place orders for residents, evictions are being halted for 30 days. North Carolina is also stopping evictions and foreclosure hearings for 30 days.

Boston is going a step further, instituting a moratorium for 90 days with a review every 30 days if needed, while a moratorium is in effect across New York state indefinitely, with housing courts closing except for limited instances in New York City.

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In New York, it is the most aggressive push yet to protect tenants after partial closings of housing courts became necessary in the wake of the terrorist attacks of Sept. 11, 2001, and Superstorm Sandy, said Susanna Blankley, the coalition coordinator for the Right to Counsel NYC Coalition, which is made up of tenant organizing groups and advocates.






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Slide 1 of 50: People stand in designated areas on the floor of an elevator as a social distancing effort to prevent the spread of the new coronavirus at a shopping mall in Surabaya, Indonesia, Thursday, March 19, 2020. The vast majority of people recover from the new coronavirus. According to the World Health Organization, most people recover in about two to six weeks, depending on the severity of the illness. (AP Photo/Trisnadi)Next Slide
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1/50 SLIDES © Trisnadi/AP Photo



The world is battling an outbreak of a new coronavirus called COVID-19, which started in the city of Wuhan, China, and has been spreading around the globe, killing thousands. The World Health Organization declared a global pandemic on March 11.

(Pictured) People stand in designated areas on the floor of an elevator as a social distancing effort to prevent the spread of the new coronavirus at a shopping mall in Surabaya, Indonesia, on March 19.

Slideshow by photo services

She added that the city's housing courts are crammed with thousands of tenants every day looking for relief and that it would be a public health concern to have those people, many of them elderly, waiting to get their cases heard.

Blankley said she'd also like to see rent freezes, particularly for renters who are in the service industry, which is being hammered by layoffs and furloughs because of restaurant and bar closings.

"The last thing we want is for people having to risk their health to save their homes," she added.

President Donald Trump said Wednesday at a news conference that he was asking Housing Secretary Ben Carson to suspend evictions and foreclosures through April, although the order would apply only to Housing and Urban Development-backed properties.

In Fulton County, Georgia, which includes Atlanta, the chief magistrate judge has suspended eviction hearings for 30 days. The county normally hears tens of thousands of cases a year.

Landlords, however, can still submit electronic filings if they have a case, but tenants are being given an extra 48 hours to respond once the judicial order is lifted, said Ayanna Jones-Lightsy, a staff attorney with the Atlanta Volunteer Lawyers Foundation.

She said she's most worried about what happens after one month, when people are either still not back on their feet or aren't getting paychecks right away.

"Atlanta was already in an affordable housing crisis before the pandemic," Jones-Lightsy said. "As time goes on and rents aren't paid, landlords are going to want to collect. Their bills are still due. What happens then?"

For the next 30 days, sheriff's deputies in Cook County, Illinois, which includes Chicago, won't carry out court-ordered evictions, Sheriff Tom Dart said. Part of the reason, he said, is to protect deputies from coming into contact with people who may have the coronavirus.


Chicago lawyer Michael Griffin, whose firm, Sanford Kahn, files thousands of eviction cases every year, said his landlord clients are being understanding at this time.


"People are in the same boat, and they're weathering this storm together," Griffin said. "It's usually an us-versus-them mentality — not in this case."

In Philadelphia, where eviction rates as high as 15 percent in some areas disproportionately affect low-income neighborhoods of colors, tenant advocate Barry Thompson said he's hearing from the city's working-class renters that they're bracing for the worst in the coming months. The city has one of the largest income disparities in the country, with some neighborhoods' median household incomes in the six figures and some as low as $18,722 per household.

"We're hoping that landlords embrace [a moratorium] with compassion," Thompson said. "If you're already struggling today just to make ends meet, you're going to be thinking down the road, 'Are they going to take me to court?'"

That's exactly the nagging feeling that's already consuming service industry workers across Philadelphia, according to union organizers with UNITE HERE, whose local chapters represent hotel, stadium and airport workers.

"It's a lot of pressure on you, especially when you have kids," said Robyn Thornton, 35, a mother of one who lost her housekeeping position at a Hilton hotel last week after more than five years on the job. "Whatever you have, you've got to exhaust all your resources now."

With rent for her South Philadelphia apartment at $1,200 a month, she believes she has enough to last her three months.

Michael Scriber, 32, who lives in the Philadelphia suburb of Chester, said he's going to ask his landlord to help restructure his $600-a-month rent after he lost his concessions job at the Wells Fargo Center, which has been mothballed as sports events and concerts are suspended. The work was steady, and his pay had risen to $15.88 an hour.

Now, he can't help but think of whether he should take advantage of his local food bank.

"If it's offered to you, take it," Scriber said. "Don't worry about what your pride says."

America Needed Coronavirus Tests. The Government Failed.


When cases of the new coronavirus began emerging several weeks ago in California, Washington state and other pockets of the country, U.S. public-health officials worried this might be The Big One, emails and interviews show.

The testing program they rolled out to combat it, though, was a small one.

Limited testing has blinded Americans to the scale of the outbreak so far, impeding the nation’s ability to fight the virus through isolating the sick and their contacts, public-health officials say. As of early Wednesday, about 6,500 people in the U.S. had tested positive, data compiled by Johns Hopkins University show, but the Centers for Disease Control and Prevention had reported only about 32,000 tests conducted at its facilities and other public-health labs.


Limited testing is also keeping patients like Justin LaBor in the dark, despite recent improvements. Mr. LaBor, 36 years old, said he went to the emergency room at AtlantiCare Regional Medical Center in Pomona, N.J., Monday with a fever and dry cough, symptoms typical in a coronavirus infection. Doctors admitted him, but he hasn’t been tested for the virus, he said Tuesday, gasping for breath over the phone.

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“Everyone just told me there were no tests and I didn’t check all the boxes for the state,” said Mr. LaBor, a social-media marketer from Elwood, N.J., referring to the criteria that state labs require patients to meet before running tests. A New Jersey health-department spokeswoman said the state “has sufficient lab capacity to test those who meet the testing criteria.” An AtlantiCare spokeswoman said the hospital system “is not testing patients in a widespread manner for coronavirus.”

While the virus was quietly spreading within the U.S., the CDC had told state and local officials its “testing capacity is more than adequate to meet current testing demands,” according to a Feb. 26 agency email viewed by The Wall Street Journal, part of a cache of agency communications reviewed by the Journal that sheds light on the early response. The agency’s data show it tested fewer than 100 patients that day.

When the CDC first dispersed test kits in early February, it shipped them to a network of state and local government labs and restricted testing to people with virus symptoms who had recently traveled to China, where the virus first emerged, or had been exposed to a known case. Federal officials hoped the virus could be contained—even as they disputed alarms from those on the front lines that the CDC’s guidelines weren’t keeping up with the outbreak’s spread, emails between the U.S. agency and local officials show. The government left other laboratories on the sidelines for crucial weeks.

The narrow effort is “a failing,” said Anthony Fauci , a government doctor who has become the de facto face of the Trump administration’s coronavirus response, in congressional testimony last week that for many in Washington was a wake-up call.

While problems still clearly persist, more labs are beginning to do tests and manufacturers are ramping up production. “We can expect to see a marked acceleration of the availability and implementation of testing,” Dr. Fauci said in an interview Friday.

CDC officials botched an initial test kit developed in an agency lab, retracting many tests. They resisted calls from state officials and medical providers to broaden testing, and health officials failed to coordinate with outside companies to ensure needed test-kit supplies, such as nasal swabs and chemical reagents, would be available, according to suppliers and health officials.

When the U.S. Food and Drug Administration, also involved in the response, finally opened testing to more outside labs, a run on limited stocks of some supplies needed for the CDC-developed test quickly depleted stores, lab operators and suppliers said. Hospital and commercial lab operators said the government didn’t reach out to enlist their help until it was too late.

“This was kind of a perfect storm of three separate failures,” said Tom Frieden, who directed the CDC from 2009 to 2017, citing the botched test, overstrict FDA rules and sidelined private labs. He cautioned he didn’t have direct knowledge of details.

Now, the U.S. is testing far fewer patients than public-health and infectious-disease experts say is necessary and just a fraction as many as other countries that rolled out wide-reaching diagnostic programs. South Korea as of Tuesday was testing up to 20,000 patients a day, more than half the total of U.S. patients who have been tested since the outbreak began.

The test shortage hurt U.S. efforts to contain the virus, said Neil Fishman, chief medical officer at the Hospital of the University of Pennsylvania and an infectious-disease specialist.

“If we would have had a true understanding of the extent of disease several weeks ago, implementation of social-distancing measures could have prevented the escalation of the disease,” Dr. Fishman said, and demand for the test is now huge.

Health-care officials say the current state of testing reflects both technical and planning failures, as well as a broader failure of imagination. Leaders including President Trump and Health and Human Services Secretary Alex Azar early in the outbreak appeared unable or unwilling to envision a crisis of the scale that has now emerged, and no one stepped up to effectively coordinate among federal agencies or the private-sector labs, medical providers and manufacturers needed for a large-scale testing push, they say.

An HHS spokeswoman said Brett Giroir, a deputy Mr. Azar put in charge of testing last week, would assume that role. She said the FDA began working with private test developers in January by sharing information about the process for approving tests.

The CDC said in an email to the Journal on Monday that its work with public-health labs is meant to fill “the short-term gap until experienced commercial diagnostic manufacturers come to market.”

Mr. Trump repeatedly dismissed the threat of a broad U.S. outbreak, saying in late February, “One day it’s like a miracle, it will disappear.” The next day, the first reported American death tied to Covid-19, the disease caused by the coronavirus, occurred in Washington state.

Some White House aides learned of complaints about the availability of testing from the media, not the public-health officials in their own government, an administration official familiar with the matter said. Only in the first week of March did discussions in a White House coronavirus task force about the testing shortfall take on a sense of urgency, the person said.

Even then, Mr. Azar, defended the testing program in television interviews including twice on ABC News that week, citing the low number of confirmed cases—at a time when almost no tests were available to detect them.

The White House didn’t respond to requests for comment. The HHS spokeswoman said health officials are focused on efforts to increase test accessibility and pointed to a series of recent statements on the topic.

At the CDC, the tone was more dire. “While leaning forward aggressively with the hope that we will be able to prevent community spread, we also are preparing for the worst,” the agency told state public-health officials in a Feb. 20 email.

The Government Accountability Office had warned federal officials in early January that its readiness for something like a pandemic fell short, a GAO official said. GAO investigators found crisis plans didn’t fully account for the huge role the private sector would have to play, documents show.

The HHS spokeswoman said the agency’s coronavirus response was guided by other “well-practiced” operational plans, and not the strategic one the GAO reviewed. An HHS official told the GAO, in a letter dated Jan. 31, that the agency had addressed their concerns and put in place policies that would “prevent early implementation challenges from becoming institutionalized.”

In the weeks ahead, however, those very challenges did become institutionalized. The FDA first announced labs seeking to perform testing would have to submit a special application to get permission to start on Feb. 4. That initially deterred some hospitals and other lab operators—which normally aren’t required to submit any application—from developing tests, experts say.

“We had considered developing a test but had been in communication with the CDC and FDA and had been told that the federal and state authorities would be able to handle everything,” Alan Wells, the medical director for the University of Pittsburgh Medical Center’s clinical laboratories, told reporters over the weekend. He said in an interview on Monday that it later became clear the CDC and states were overwhelmed.

Once the CDC launched its initial test in the first week of February, the response was quickly stymied by setbacks, including flaws that forced the CDC to claw back many of the kits it had already sent out to state public-health laboratories, according to the agency and public-health officials.

An email to state public-health-lab officials later in February gives the fullest account from the CDC to emerge yet of what happened: The agency said some labs had encountered “sporadic reactivity in the negative control of one of the three assay components.” That means the test in some cases wrongly indicated it had detected coronavirus in samples of laboratory-grade water.

“It is unclear why quality control did not detect this issue before the kits were sent out to states,” said the email.

The CDC on Monday said it “has not yet determined if the problem involves the assay design or contamination. It could have been either.”

At one critical juncture, just before the CDC opened up testing to more state laboratories in February, its officials clashed with state epidemiologists on the front lines of the response to the epidemic over the scale of testing.

Despite news and official reports heralding the rapid spread of the virus in Japan and Hong Kong, on Feb. 22 CDC officials told state officials to refer for testing only patients showing symptoms who had travel histories in mainland China.

When a top Minnesota epidemiologist pointed out in an email to CDC officials that agency director Robert Redfield had recently tweeted that doctors treating patients who had visited Hong Kong and Japan should consider “#COVID19,” the CDC’s deputy incident commander responded: “This tweet is being taken down.” And, in fact, it was.

The CDC hasn’t responded to requests for comment on why the tweet was deleted.

Hawaii’s top epidemiologist, Sarah Park, chimed in on the thread, saying the bar for testing should be lowered. Dr. Park pointed out that the CDC’s own travel website said travelers from Japan with symptoms should be considered for coronavirus even though the guidelines precluded testing.

Rather than expand testing, the CDC replied that it was considering changes to its travel notices.

The epidemiologists, too, recognized the current testing program wouldn’t meet the widening need. As they debated expanding testing to more people, Marcelle Layton, a top official with the New York City Department of Health and Mental Hygiene, expressed the worry that too many returning travelers would expect to be screened as the list of affected countries expanded.

“We all know this is not sustainable,” Dr. Layton said in a Feb. 25 email to other public-health officials. She and Dr. Park didn’t respond to requests for comment.

As the CDC sought to get the network of state labs up and running, it finally turned to an outside manufacturer, Integrated DNA Technologies Inc., to order a run of custom reagents—substances used in a chemical reaction—needed to identify the genetic imprint of coronavirus in late February, according to the company and a timeline provided by the CDC. IDT said in a statement that it shipped the CDC’s first order on Feb. 26.

The CDC said it signed a contract with IDT to supply reagents on Feb. 20. Contracting records show one IDT order from that day, for only about $90,000 of testing supplies. The CDC said that contract was for coronavirus-test material. IDT denied that contract was related to the coronavirus tests.

With IDT creating special coronavirus test kits, the federal government abruptly began to make moves that would open the door to more and broader testing, including expanding its criteria for whom to test. On Feb. 26, Nancy Messonnier, a top CDC official, promised in a call with reporters that commercial labs would “be coming online soon,” and a couple of days later, the FDA allowed some labs seeking to use the CDC’s testing method or developing their own to jump through fewer hoops.

IDT would produce millions of tests worth of its coronavirus-detecting reagent over the next couple of weeks, according to the company’s statement.

Even still, the wave of private labs joining the fight against the virus didn’t arrive on schedule. One reason was that many of the off-the-shelf supplies used in the CDC’s testing method weren’t readily available on the scale needed, the Journal found. That included both the simple products like synthetic swabs—cotton interferes with readings—used to collect mucus samples, and complex ones. Because labs copying the CDC’s test method have to use its exact chemical recipe, there has been a run on manufacturer Qiagen NV’s reagent for separating viral RNA from human mucus, one of the products used by the agency.

“We have heard concerns from labs who have questions about the availability of certain supplies,” said the HHS spokeswoman. The agency was providing labs with “information on alternative sources of reagents, extraction kits, swabs and more,” she said.

“Everyone in the world is going to want to get swabbed at one point or another,” said Iyda Antony a lab director at UC Davis Health, a large California health system that is ramping up its own testing program and worries its stores of swabs might not be sufficient.

A small lab owned by lab-manager Clinical Lab Consulting, in Dayton, Ohio, paid $2 per unit—six times its usual rate—for swabs from a Pittsburgh-based vendor on Sunday, email records show. On Tuesday, the vendor told the lab’s owners it was actually out of stock.

The U.S. government “could have just got out in front of it,” said Greg Ingle, one of the Dayton lab’s owners and an industry consultant. Rather, “we watched it play out in the rest of the world before getting into the market.”

Through mid-March, Qiagen spokesman Thomas Theuringer said the Dutch biotech has shipped more than twice as many units of the product in question as in the whole of 2019 to U.S. clients.

“It’s like queuing up in line to buy toilet paper at the grocery store,” said Richard Scanlan, the medical director of the Oregon Health and Sciences University Hospital laboratory, comparing the lab’s predicament to the empty shelves consumers are facing around the country. “Everyone is trying to buy it at the same time,” he said.

Qiagen said it was rationing test kits to its “most critical customers” and acknowledged the company was struggling to meet demand. Dr. Theuringer said the factories producing the kits had ramped up to “three shifts working seven days a week.”

Virus researcher Scott Weaver, at the University of Texas Medical Branch at Galveston, said a group he directs has sent out coronavirus RNA samples needed to do the validation studies to around 50 labs. Nonetheless, he said, some of those labs, including one at his own institution, were delayed as they waited for Qiagen to fill orders in order to begin testing. The Galveston lab is now able to perform tests, he said, but supplies remain limited.

On Wednesday, Mr. Trump said in a briefing that, “in case we need it,” he would invoke a Korean War-era law called the Defense Production Act that allows the federal government to force U.S. companies to produce needed supplies.

In recent days, the FDA has tried to confront the testing shortage by approving new test designs by manufacturers such as Thermo Fisher Scientific Inc. and testing firms like Laboratory Corporation of America Holdings Inc., and relaxing requirements for labs to prove their tests actually work and stick strictly to the CDC recipe. Thermo said Tuesday it has 1.5 million tests ready to ship.

FDA Commissioner Stephen Hahn maintained the agency’s insistence on test accuracy has been vital. “If you don’t have that check on the test findings,” he said, “you run the risk of inaccurate test results which means you aren’t truly assessing the full scope of the outbreak.”

Now, in a concession to demand, the agency is letting labs run tests first and prove they are accurate later—within about two weeks.

After hearing news reports saying more tests had become available, Nathan Conder, a 30-year-old in Salt Lake City, called Utah’s coronavirus hotline Monday to ask about getting tested. He’d been sick with a fever, dry cough and fatigue for a week—all coronavirus symptoms, although also of other maladies.

“They told me all my symptoms match, but they don’t have enough tests so they’re only testing people who were in contact with someone who already tested positive,” said Mr. Conder, a regulatory specialist at a microbiology lab. Public-health officials said “that I should act like I had it, but they can’t test,” he recalled.

On Tuesday, a doctor prescribed a coronavirus test for Mr. Conder after extensive screening and sent him to a nearby hospital lab. From there, he said, he was diverted to a new drive-in testing facility, where workers requested an additional form that took hours to obtain. After an ordeal of nearly six hours in total, he said, he got the test and was told he would get results within three days.

Write to Christopher Weaver at christopher.weaver@wsj.com, Betsy McKay at betsy.mckay@wsj.com and Brianna Abbott at brianna.abbott@wsj.com

Biggest maker of medical face masks in U.S. is warning of an outbreak ... of fraud

Swindlers posing as Prestige Ameritech employees are targeting consumers with scam offers, Texas-based company says

Published: March 19, 2020 By Ciara Linnane

Getty Images


The biggest maker of medical face masks in the U.S. is warning consumers that the surge in demand for masks during the COVID-19 pandemic has led to a flurry of criminal activity.

Prestige Ameritech, a privately held company based near Dallas, says its name is being used in scams that include fake websites and email addresses with swindlers posing as the company or its employees.

“One in particular has a salesperson named Greg Kelsey with prestige-ameritech.com — this is a scam,” the company says on its website.

The only URLs that can be trusted, according to Prestige Ameritech, are these: prestigeameritech.com, prestigeam.com, progearmasks.com and progearhealth.com.

“Any other website that contains the name ‘Prestige Ameritech’ or ‘ProGear Health’ is fake and needs to be reported to us,” reads a warning on the Prestige Ameritech site’s home page.

A further note of caution: Masks listed as made by Prestige Ameritech that are available on websites including eBay US:EBAY and Amazon US:AMZN “are most likely very old masks that have been discontinued.”

Prestige Ameritech has been deluged with orders for its products, which include N95 respirators, surgical masks, dental masks and medical face shields, according to a report by Wired magazine.

N95 masks are tighter-fitting than surgical masks and protect against small particles and large droplets, according to the Centers for Disease Control and Prevention. The company makes N95 masks under the ProGear brand that are approved by the Food and Drug Administration for protecting medical workers from the transfer of microorganisms and airborne particulate materials.

To keep up with demand, the company’s management team is working 80-hour weeks, it has brought idled equipment back on line, and is hiring and training dozens of new employees to expand its staff of around 100, Wired reported.

The company’s co-owner and executive vice president, Mike Bowen, reportedly told the magazine that the company is producing up to 1 million masks a day, up from about 250,00 a day before the ongoing coronavirus outbreak.

The requests are coming from hospitals, doctor’s office, and medical distributors, as well as from elderly people and the parents of children with compromised immune systems, anxious for protection from the illness.

“Since Feb. 1, we’ve had to turn down orders for 100 million masks or more a day, on average,” Bowen said, according to Wired. “Sometimes, we turn down 200 million or 300 million [masks] a day. It’s kind of surreal.”

Prestige Ameritech is not the only one boosting production of face masks. Dow Jones Industrial Average US:DJIA component 3M Co. US:MMM has been increasing its production in recent months, initially in response to high demand from China, which reported the first cases of COVID-19 late last year. On the company’s fourth-quarter earnings call in January, Chief Executive Mike Roman said demand in China had spiked as more cases emerged.

“Now, coronavirus, it’s kind of changing things as we go, and we’re seeing what you’re seeing,” Roman said in 3M’s post-earnings-report call, according to a transcript provided by FactSet. “We’re seeing increased demand for our respiratory protection products, and we’re ramping up our production worldwide ... to meet that demand.”

In March, Vice President Mike Pence said the U.S. government had contracted with 3M for the manufacture of 35 million more masks a month in response to the virus.

The government and agencies including the Centers for Disease Control and Prevention, the U.S. Department of Health and Human Services, and the U.S. surgeon general have told Americans not to buy face masks, which are not effective in containing the virus but are crucial for health-care providers coming in close contact with patients.

Read now: U.S. health officials say Americans shouldn’t wear face masks to prevent coronavirus — here are 3 other reasons not to wear them

On Wednesday, Pence said the government is stepping up its push for more masks for health-care workers. A day earlier, Pence had asked construction companies to donate their inventories of N95 face masks to local hospitals and to stop ordering new ones.


Coronavirus Boosts Some Medical-Supply Makers' Shares

This COVID-19 pandemic era is not the first time Prestige Ameritech has faced a sudden surge in demand for its products. The company faced a similar rush during the H1N1 outbreak in 2009 and hired hundreds of additional workers to cope. But as soon as that outbreak was over, its U.S. customers shifted back to Chinese suppliers, who can produce protective equipment at a fraction of the company’s costs, according to Wired.

3M shares have fallen 36% in the last 12 months, while the ProShares Ultra Industrials ETF US:UXI has fallen 51% and the S&P 500 US:SPX has fallen 16%.

For daily virus coverage: Coronavirus update: 204,255 cases, 8,243 deaths, Trump to share FDA news

Dismal oil demand outlook, Saudi-Russian price war lead to ‘atomic bomb’-like environment for oil

U.S. benchmark oil futures at 18-year low

Published: March 18, 2020 By Myra P. Saefong

Weak oil demand outlook, Saudi-Russian price war lead

 to “atomic bomb equivalent in the oil markets,”

 said Louise Dickson of Rystad Energy 

MarketWatch photo illustration/iStockphoto


Oil futures trade near their lowest levels in 20 years with the plunge in prices expected to continue, fed by a weak oil demand outlook tied to the spread of COVID-19 and a price war between two of the biggest crude producers in the world.

“The most recent modern bottom low was about $18 a barrel for West Texas Intermediate crude, on an inflation adjusted basis, and “we could test that now, as long as neither Russia nor Saudi Arabia blinks,” said Michael Lynch, president of Strategic Energy & Economic Research. He referred to the oil market situation as “the worst I’ve ever seen.”

“The problem is that distressed companies might feel the need to dump at any price, which will create pain throughout the industry unlike anything seen before,” he told MarketWatch.


Long-term chart of inflation-adjusted front-month Nymex WTI

 oil futures Dow Jones Market Data

On Wednesday, the front-month April West Texas Intermediate crude contract CLJ20, 7.609%, the U.S. benchmark, lost $6.58, or more than 24%, to settle at $20.37 a barrel on the New York Mercantile Exchange, for the lowest finish since Feb. 20, 2002. Adjusted for inflation, oil is trading around the lowest level since March 1999, according to Dow Jones Market Data.

Global benchmark May Brent crude BRNK20, 2.854% fell $3.85, or over 13%, to finish at $24.88 a barrel on ICE Futures Europe, for its lowest settlement since May 8, 2003.

Read:U.S. oil falls to 18-year low as rout continues on coronavirus fears, price war

Brent trading around $25 “confirms that the market is starting to appreciate the gross imbalance between supply and demand,” said Louise Dickson, analyst at Rystad Energy, in emailed commentary. “With each day, there seems to be yet another trapdoor lying beneath oil prices, and we expect to see prices continue to roil until a cost equilibrium is reached and production is shut in.”

In a recent report, analysts at IHS Markit said global oil demand in March and April could be down by as much as 10 million barrels a day, leading into an estimated world supply surplus ranging from 4 million barrels to 10 million barrels a day from February to May of this year.

“The last time that there was a global surplus of this magnitude was never,” said Jim Burkhard, vice president and head of oil markets at IHS Markit, in the report dated March 16.

Rystad Energy, meanwhile, sees a fall of 2.8%, or 2.8 million barrels per day year-on-year, in global oil demand to 97.1 million barrels per day this year. Oil demand in 2019 was at about 99.9 million barrels per day in 2019.

“The potential loss of demand in March-April may dwarf anything the world has ever seen”—a possible global oil demand decline of more than 10 million barrels per day from pre-coronavirus levels, Bjørnar Tonhaugen, head of oil markets at Rystad Energy, told MarketWatch earlier this week.

And as demand falls, production from major oil producers Saudi Arabia and Russia is set to increase after the Saudis, the de-facto leader of the Organization of the Petroleum Exporting Countries, and allies led by Russia failed to reach an agreement in early March to further curb oil production levels. The current output pact expires at the end of this month and the Saudis and Russians have vowed to boost production in what has become known as a price war.

Read: Why Russia wants to crush U.S. shale oil producers in price war

“Two million bpd is what OPEC+ countries are realistically able to add next month, based on their storage, spare capacity and ramp up capabilities,” said Tonhaugen, in a Wednesday report. “Another million bpd could come if a cease-fire is agreed upon in Libya and the country reaches pre shut-in levels.”

But the world has seen a “steep decline as flight cancellations, industrial shutdowns, quarantines and travel bans have further reduced the need for oil consumption by many more millions of bpd, widening the imbalance that already existed before the OPEC+ meeting,” he said.

Meanwhile, Dickson, also at Rystad, said she believes the “weak global economy was not ready for COVID-19, “which is why we are seeing escalated panic in the markets.”


‘What we are seeing here is essentially the atomic bomb equivalent in the oil markets.’— Louise Dickson, Rystad Energy

“This is the most dismal oil demand picture we have witnessed in a long time, with a simultaneous collapse in jet fuel, gasoline, shipping fuel, petrochemicals, and oil used for power generation,” she said. “And unlike structural economic collapses, we don’t know when the corona[virus] effect will ease up—markets could be wrestling with the virus well into 2021 in a worst case scenario.”

Read:Transportation fuels sink, with jet fuel ‘most susceptible’ to losses as COVID-19 tanks travel

Saudi Arabia and other OPEC member, and non-member Russia are not likely to step back from their promise to ramp up production,” said Dickson.

All told, “what we are seeing here is essentially the atomic bomb equivalent in the oil markets,” she said

ALBERTA OIL NOTE: WESTERN CANADIAN CRUDE PRICE IS $8-$12

Any airline bailout must have climate-change conditions attached, says group of Democrats

Taxpayer help for airlines and cruise ships should require these industries to cut greenhouse gas emissions over time, letter says

Published: March 18, 2020 By Rachel Koning Beals

The nation’s major airlines have asked for $50 billion in taxpayer aid as the COVID-19 pandemic hits flight demand. Getty Images

Airlines have their collective hand out for billions of dollars in emergency aid as the coronavirus crisis obliterates the travel sector, and now select Democrats see that as an opportunity to press the major carriers, as well as cruise ships, to be better champions of the environment in exchange for help.

The nation’s major airlines, no strangers to bankruptcies and consolidation over the decades, recently asked for $50 billion in government assistance as the COVID-19 pandemic hits flight demand. The carriers, along with aerospace giant Boeing BA, -17.92% , have warned that they could soon go bankrupt without a government lift.


Read:Global airlines urgently need up to $200 billion to survive as coronavirus pushes industry deeper into crisis

Talks on Capitol Hill are complicated and ongoing, but President Donald Trump said Tuesday that “we have to protect Boeing,” the largest U.S. exporter. Boeing has said $60 billion worth of access to public and private liquidity is needed for its industry. Critics of the aid have pointed to major stock buybacks rather than investment or savings by carriers, as well as other factors.

Related:Jim Cramer praises Mark Cuban’s bailout suggestions: ‘So tired of the rich profiting from every cataclysm’

On Wednesday, eight Senate Democrats signed a letter saying that any aid to airlines (and they included cruise ships) should come with conditions requiring them to reduce their greenhouse gas emissions over time.


Barron’s on MarketWatch: Airline stocks are in a nosedive. Government aid might not help

“If we give the airline and cruise industries assistance without requiring them to be better environmental stewards, we would miss a major opportunity to combat climate change and ocean dumping,” said co-signer Sen. Sheldon Whitehouse, a Democrat of Rhode Island.

Air travel has grown as a contributor to man-made accelerated global warming. While aviation still accounts for less than 3% of global carbon dioxide emissions, those emissions are expected to triple by 2050 as tourism and travel expand, the lawmakers noted in their letter.

As such, “flight shaming” celebrities and other frequent flyers for their aviation carbon footprint has increasingly populated social media.

Airline stocks, including Southwest LUV, -8.10%, Delta Air Lines DAL, -25.99% , United Airlines UAL, -30.29% and American Airlines AAL, -25.22% , were all sharply lower Wednesday.

The cruise industry, including Royal Caribbean RCL, -19.27% and Carnival CCL, -26.82% , was not exempt from the Democrats’ attentions.

“The foreign-flagged cruise industry has a checkered environmental record and most passenger liners burn heavy fuel oil, one of the dirtiest fuels,” the senators said in the letter.

Trade group Cruise Lines International Association said in an emailed response that the pandemic poses “unprecedented times for our entire community, including the tens of thousands of small- and medium-sized businesses, many of them travel agents, who rely on the cruise industry for their livelihoods.”

They noted that the cruise industry was the first maritime sector to publicly commit, in December 2018, to reduce the rate of carbon emissions by 40% by 2030 compared to 2008. The industry has also spent $22 billion in ship upgrades to user cleaner fuels, the group said.

Project Syndicate
Opinion: A better and fairer bailout during the financial crisis was possible, Soros says

Owners, bondholders and managers of failed banks should have borne more of the cost of the financial crisis

Published: Sept. 29, 2018 By Rob Johnson and George Soros

Executives of Wall Street financial institutions that received federal bailout funds testify at House committee in February 2009. Chip Somodevilla/Getty Images

NEW YORK (Project Syndicate) — The recent exchange between Joe Stiglitz and Larry Summers about “secular stagnation” and its relation to the tepid economic recovery after the 2008-2009 financial crisis is an important one.

History does not repeat itself, but it rhymes, Mark Twain reportedly once said. But, to paraphrase Bob Dylan, in light of our recent economic history, history doesn’t rhyme, it swears.

A shift in the burden of adjustment would have imposed losses on the people who were responsible for the calamity, stimulated aggregate demand, and diminished the rising inequality that was demoralizing the vast majority of people.

Stiglitz and Summers appear to agree that policy was inadequate to address the structural challenges that the crisis revealed and intensified. Their debate addresses the size of the fiscal stimulus, the role of financial regulation, and the importance of income distribution. But additional issues need to be explored in depth.

We believe a critical opportunity was missed when the costs and benefits of the adjustment were tilted heavily in favor of creditors relative to debtors in the response to the crisis and that this contributed to the prolonged stagnation that followed the crisis. The long-term social and political ramifications of this missed opportunity have been profound.

Back in September 2008, when then-Secretary of the Treasury Hank Paulson introduced the $700 billion Troubled Asset Relief Program (TARP), he proposed using the funds to bail out the banks, but without acquiring any equity ownership in them.

See MarketWatch’s full coverage of the 10th anniversary of the Financial Crisis

At that time, we and our colleague Robert Dugger argued that a much more effective and fair use of taxpayers’ money would be to reduce the value of mortgages held by ordinary Americans to reflect the decline in home prices and to inject capital into the financial institutions that would become undercapitalized.

Because equity could support a balance sheet that would have been 20 times larger, $700 billion could have gone a long way toward restoring a healthy financial system.

The ability to use funds to inject equity into the banks was not part of the bill presented to the House of Representatives. So we organized for Rep. Jim Moran to ask House Financial Services Chairman Barney Frank in a pre-arranged question whether it was in the spirit of the TARP legislation to allow the Treasury to use taxpayers’ money in the form of equity injections. Frank replied in the affirmative on the House floor.

This was in fact a tool that Paulson used in the closing days of George W. Bush’s administration. But Paulson did it the wrong way: he summoned the heads of major banks and forced them to take the money he allocated to them. But by doing so he stigmatized the banks.

A few months later, when President Barack Obama’s administration arrived, one of us (Soros) repeatedly appealed to Summers to adopt a policy of equity injection into fragile financial institutions and to write down mortgages to a realistic market value in order to help the economy recover.

Summers objected that this would be politically unacceptable because it would mean nationalizing banks. Such a policy reeked of socialism and America is not a socialist country, he asserted.

We found his argument unconvincing — both then and now. By relieving financial institutions of their overvalued assets, the Bush and Obama administrations had already chosen to socialize the downside. Only the upside of sharing in the possible stock gains in the event of a recovery was still at issue!

Had our policy recommendation been adopted, stockholders and debt holders (who have a higher propensity to save) would have experienced greater losses than they did, whereas lower- and middle-income households (which have a higher propensity to consume) would have experienced relief from their mortgage debt.

This shift in the burden of adjustment would have imposed losses on the people who were responsible for the calamity, stimulated aggregate demand, and diminished the rising inequality that was demoralizing the vast majority of people.

We did recognize a problem with our proposal: providing relief to over-indebted mortgage holders would have encountered resistance from the many homeowners who had not taken out a mortgage. We were exploring ways to overcome this problem until it became moot: the Obama administration refused to accept our advice.

The approach of the Bush and Obama administrations stands in stark contrast both to the policy followed by the British government, and to earlier examples of successful financial bailouts in the United States.

In Great Britain, led by then-Prime Minister Gordon Brown, undercapitalized banks were told to raise additional capital. They were given the opportunity to go to the market themselves, but they were warned that the U.K. Treasury would inject funds into them if they failed to do so.

The Royal Bank of Scotland and Lloyds TSB did require government support. The equity injections were accompanied by restrictions on executive pay and dividends. In contrast to Paulson’s method of injecting funds, banks were not stigmatized if they could borrow from the markets.

Similarly, during the Great Depression of the 1930s, the U.S. took ownership and recapitalized banks via the Reconstruction Finance Corp. (RFC) and managed mortgage restructuring through the Home Owners’ Loan Corp. (HOLC).

No doubt the Obama administration helped to alleviate the crisis by reassuring the public and downplaying the depth of the problems, but there was a heavy political price to pay. The administration’s policies failed to deal with the underlying problems, and by protecting the banks rather than mortgage holders, they exacerbated the gap between America’s haves and have-nots.

The electorate blamed the Obama administration and the Democratic Congress for the results.

The Tea Party was formed in early 2009 with large-scale financial support from the billionaire Koch brothers, Charles and David. In January 2010, Massachusetts held a special election for the late Ted Kennedy’s Senate seat, just after Wall Street paid extravagant bonuses, and elected the Republican Scott Brown. The Republicans subsequently took control of the House of Representatives in the 2010 midterm elections, gained control of the Senate in 2014, and nominated Donald Trump, who was elected in 2016.

It is essential that the Democratic Party recognize and correct its past mistakes. The 2018 midterm elections, which will set the stage for the 2020 presidential election, is an excellent opportunity to do so. The political and economic problems that confront the country are much deeper today than they were 10 years ago, and the public knows it.

The Democrats must recognize these problems, not downplay them. This year’s midterm elections will be a plebiscite on Trump, but the Democratic presidential candidate in 2020 must have a program that many Americans find inspiring. The electorate has seen where the Republicans’ demagogic populism leads, and a majority should reject it in 2018.

This article was published with permission of Project Syndicate — A Better Bailout Was Possible.

Rob Johnson is president of the Institute for New Economic Thinking and a senior fellow and director of the Global Finance Project at the Franklin and Eleanor Roosevelt Institute. George Soros is chairman of Soros Fund Management and of the Open Society Foundations.

Opinion: Any corporate bailouts should wipe out shareholders first

Companies taking taxpayer money should have to limit CEO pay

Published: March 18, 2020 By Dean Baker

Demand for airline travel has collapsed. Getty Images

It looks like we are seeing an effort to do a replay of 2008 where we were told that we had to give all the money to the banks or the world would end. Today the story is that we have to bail out the airline, cruise, hotel, and restaurant industries or tens of millions of workers will lose their jobs. Well, the disaster threats were not true in 2008 and they deserve even less credence today.

The story in 2008 was that all our major banks had effectively made themselves insolvent through their own greed and bad judgment. They had made hundreds of billions of dollars worth of mortgage and mortgage-related loans that suddenly went bad when the housing bubble burst.

If we let the market work its magic, they would have all gone bankrupt.

The banks got the government to lend the money they needed to stay in business, at way below market interest rates, by telling everyone that if they went under, we would be looking at a second Great Depression. There was literally no one who could explain why we would be prevented from doing the same thing that got us out of the first Great Depression (spend lots of money) if the banks went under.

Our payment system would have surely been disrupted in the immediate wake of a wave of bankruptcies, but unlike in the 1930s, we have the FDIC to insure most of our deposits and keep the wheels turning.

The initial downturn surely would have been somewhat worse had we gone the no bailout route, but there is no economic reason we could not have quickly lifted the economy out of a downturn with a massive stimulus following a collapse of the major banks. We held the cards and could have dictated the terms of any bailout for the banks.

Unfortunately, this argument was not heard at the time. I remember I wrote a column for the Guardian with the headline “the banks have a gun pointed to their heads and are threatening to pull the trigger.” The paper flipped the headline so that the guns were pointed to our heads.

Anyhow, we can’t let the same mistake happen twice. Congress can dictate terms of any bailout. I would suggest following the auto-industry model — wipe out shareholders first. And, bailout recipients have to commit to keeping workers on the payroll with current pay and benefits.

There also should be strict caps on executive compensation. Let’s make it $2 million in total compensation. (That includes insurance policies, health care, pensions, etc.) And to ensure that there are no silly mistakes, jail time for board members who sign contracts exceeding this figure.

If the airlines, cruise ships etc. don’t like it, let them go elsewhere for money.

Also read: Here are the industries that could get coronavirus aid from the U.S. government

This sort of restriction on CEO compensation is important because it can help to counteract the crazy upward trend in CEO pay we have seen in the last four decades. There really is no countervailing downward pressure. CEOs ask their friends on corporate boards for big pay increases year after year, and the board has no reason not to give them more of the company’s money. If major corporations can be effectively run by CEOs getting one tenth the going rate, it would set a valuable precedent.

This is not just a question of envy. More money for those at the top means less for everyone else. And to be clear, it is not just the CEO who is vastly overpaid. If the CEO is getting $20 million, the chief financial officer and other top execs might be getting $10 million, and the third tier could be getting $2 or $3 million. The world would look very different if the CEO were getting $2 million, which would be the case if we had the same ratios of CEO to worker pay as 50 years ago.

One more item; we should also require a full financial disclosure from President Donald Trump and family as a condition of any bailout so we know how much money we are giving him.

Anyhow, we have major corporations desperately in need of government support to stay afloat. Nancy Pelosi is in a position to dictate terms and tell these companies, as well as Trump and the Republican Senate, to take it or leave it.

This article was originally published at the Beat the Press blog.

Dean Baker is senior economist and co-founder of the Center for Economic Policy and Research.