Week in Review

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Week in Review

05/02/2020

For the week 4/27-5/1

[Posted: 10:00 P.M., Friday]

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Edition 1,098

Two weeks ago as I posted this column, the U.S. death toll from Covid-19 was 37,135 and President Trump was saying he would keep it under 50,000 to 60,000, which would be a “great job.”  At the end of April it was 63,856.  Tonight it is 65,711.  [58,220 died in Vietnam.] The 50-60,000 target was for August.

So today President Trump told a White House event he hopes for less than 100,000 fatalities.

At the same time as the pandemic has been raging, the global death toll nearly 240,000, U.S. jobless claims the last six weeks are now over 30 million, 18.6 percent of the nation’s workforce, while many states and local governments are collectively hemorrhaging $10s of $billions in lost tax revenue, with drastic cuts in state and local government employment, including police and fire, seemingly inevitable.

At least for two days, the stock market finally seemed to get it.  There won’t be any “V-shaped” recovery.  Many states are now gradually reopening, which is good, and the FDA did approve for emergency use Gilead’s remdesivir, a coronavirus treatment that in a clinical trial appeared to reduce the average hospital stay for a Covid patient to 11 days from 15, and that is also good.

But the damage to the economy is severe and the real pain for tens of millions is now being felt.  It’s so sad and tragic.

So now, as I get into in detail below, we have another tussle between Washington and Beijing.  There are fears of a renewed trade war, with President Trump threatening new tariffs because of China’s mishandling of the coronavirus in the early days.

White House economic adviser Larry Kudlow told CNBC on Friday morning, “They are going to be held accountable for it. There’s no question about that.  How, when, where, and why – I’m going to leave that to the president.”

I posted an editorial from the Chinese Communist Party mouthpiece Global Times on my “Hot Spots” link the other day.

In part: “It is time for China to withstand challenges. Washington from now on would say nothing positive about China, but constantly condemn us.  It has a few followers like Australia.  But these countries can barely influence us.  China only needs to manage its own business well and fix its own shortcomings….

“China’s continuous development will eventually work to reshape the pattern of world public opinion.  Time is on our side.”

Meanwhile, I prepared my remarks on North Korea and the disappearance of leader Kim Jong-un down below earlier today, but I just knew we would get something from the Korean state news agency tonight, only I thought it would come after I had posted.

KCNA then reported earlier this evening that Kim attended a ribbon cutting ceremony at a fertilizer plant in a region north of Pyongyang, in the first report of his public activity since April 11.  No photos have been supplied as of yet.  But those in attendance at the ceremony “burst into thunderous cheers of ‘hurrah!’ for the Supreme Leader who is commanding the all-people general march for accomplishing the great cause of prosperity,” according to KCNA.

I’m kind of getting choked up.

Oh look…we just saw a blurry picture of Kim!  And there are three more!

Covid Bytes

--According to a report from the Center for Infectious Disease Research and Policy at the University of Minnesota, headed by Dr. Michael Osterholm, the coronavirus pandemic is likely to last as long as two years and won’t be controlled until about two-thirds of the world’s population is immune.

Because of its ability to spread from people who don’t appear to be ill, the virus may be harder to control than influenza.

“Risk communication messaging from government officials should incorporate the concept that this pandemic will not be over soon,” they said, “and that people need to be prepared for possible periodic resurgences of disease over the next two years.”

Last Saturday, the WHO said that there was currently “no evidence” that people who have recovered from Covid-19 and have antibodies are protected from a second coronavirus infection.

--French President Emmanuel Macron warned his nation that ending the national lockdown on May 11 would be only a first step for France to pull out of the crisis, for which his handling faces mounting criticism.

Today is May Day (Labor Day in France).  I’ve been to Paris twice on this day to march (as a reporter, I hasten to add), with Marine Le Pen, just to get a sense of her movement, as this was a big day for the former National Front at the time.  No crowds today in Paris, though Le Pen pressed ahead with her tradition of honoring medieval heroine Joan of Arc by laying a wreath at the golden statue of the 15th century warrior (near the Louvre).  Last year it was all about the “yellow vest” protests.  Le Pen, wearing a mask, said, “A successful end to the lockdown is with tests for everybody, masks for everybody and I’m against schools opening before September.”

It turns out her poll numbers have been falling because she was too critical of Macron, in the eyes of the public, and she appears to be softening her tone.

Macron said: “May 11 will not be the passage to normal life. There will be a recovery that will need to be organized.”

--Britain has lost at least 100 healthcare workers from the virus.  The government is paying each family 60,000 pounds, or about $75,000 as part of a new program.

The UK finally began to catch up with its record keeping and is including those who died of Covid in nursing homes, so the death toll skyrocketed on Wednesday and is now 27,510, just behind Italy’s 28,236.

--The good news is the death toll in Italy, Spain and France has gradually been coming down.

--Kind of depressing that New York Gov. Andrew Cuomo said all state schools including colleges would remain closed for the remainder of the academic year.

--New Jersey’s gruesome death toll topped 7,500 this week; far more than died in World War I, Korea, Vietnam, the Gulf wars, Iraq, Afghanistan and 9/11 combined.

My town of Summit now has 10 fatalities.  Next door New Providence has 22.

Trump World

--The White House is blocking Dr. Anthony Fauci from testifying next week to a congressional committee examining the administration’s response to the pandemic.

--President Trump said on Thursday that his former national security adviser, Michael Flynn, was tormented by “dirty cops” as part of the probe into whether Russia helped Trump win the White House in 2016.  There seems little doubt the president is going to pardon Flynn.

Flynn pleaded guilty in December 2017 to making false statements in a charge brought by then-Special Counsel Robert Mueller.  He now insists he did not lie and wants to back out of the plea.

Kimberley A. Strassel / Wall Street Journal

“The newest Federal Bureau of Investigation documents in the case of former White House national security adviser Mike Flynn are stunning in themselves.  But the totality of Mr. Flynn’s treatment shocks the conscience.

“Mr. Flynn in 2017 pleaded guilty to a single count of lying to FBI agents about conversations he had with Sergey Kislyak, Russia’s ambassador to the U.S.  Thanks to new documents the feds belatedly turned over to his attorneys, we know the FBI engineered this ‘crime.’  Handwritten notes from former FBI counterintelligence head Bill Priestap, made before the bureau’s interview of Mr. Flynn, ask the following: ‘What is our goal? Truth/Admission, or to get him to lie, so we can prosecute him or get him fired?’

“One of the frustrations of the Trump-Russia ‘collusion’ narrative is that the evidence of law enforcement’s abuse of power keeps emerging in dribs and drabs.  To grasp the outrageous conduct fully, the Flynn documents need to be added to what we already know.  The overall evidence paints a scandalous picture: Having labored and abysmally failed in 2016 to build a case that Mr. Flynn was an agent of the Russians, the FBI and Justice Department changed gears – rifling through his communications, inventing a fake crime, and entrapping him on a ‘lying’ charge.

“The latest documents reveal the FBI was officially closing its Flynn case on Jan. 4, 2017.  The FBI’s Crossfire Hurricane team spent 2016 checking ‘databases’ for ‘derogatory’ information on him, running down accusations that he had ties to Russians.  They struck out, and the closing document admits Mr. Flynn ‘was no longer a viable candidate’ for investigation.  Then, suddenly, also on Jan. 4, FBI agent Peter Strzok sends a text saying: ‘Hey, if you haven’t closed [the Flynn case], don’t do so yet.’  Mr. Strzok explained: ‘seventh floor involved’ – a reference to FBI top brass.

“What changed?  In late December, Mr. Flynn spoke to Mr. Kislyak.  Federal law gives investigators the authority to wiretap foreigners but also requires strict privacy protections for U.S. citizens with whom they speak.  The Obama administration superseded those protections and ‘unmasked’ Mr. Flynn in the days following his discussions.  They later leaked the classified contents of the call to the press.

“The snooping gained them nothing substantive.  Mr. Flynn’s conversations were lawful and routine.  So Justice Department and FBI officials instead manufactured the absurd theory that Mr. Flynn had violated the Logan Act of 1799, which bars citizens from engaging in unauthorized negotiations in disputes between the U.S. and foreign governments.  No one has ever been convicted of violating the act. This week’s handwritten notes show that among the FBI’s hopes in interviewing Mr. Flynn was to ‘get him to admit to breaking the Logan Act.’

“The real goal was to trap him….

“Perhaps the most important aspect of this week’s documents is what isn’t in them.  The FBI expresses no concern that Mr. Flynn was ‘colluding’ with Russia or otherwise threatening national security – supposedly the rationale for the FBI’s intrusive investigation.  By this point, it just wanted a scalp, a means to keep its broader narrative rolling.

“The FBI exists to investigate crimes, not to create them. Some might add this shameful behavior to the long list of the FBI’s ‘collusion’ malfeasance: the surveillance-court abuse, the Steele dossier, the leaks.  But the Flynn case is something different. This isn’t the FBI playing fast and loose with sources or the courts.  This is law enforcement abusing its most tyrannical power – to strip citizens of their reputations, their livelihoods and their liberty.

“The FBI’s treatment of Mr. Flynn lives up to Americans’ worst fears. Attorney General William Barr was right to order a review of the case.  Now someone must be held to account.”

--Editorial / Washington Post

“President Trump has been careful – some would say timid – in his use of the Defense Production Act as the country battles the spread of the novel coronavirus. He hesitated to invoke it when there was a clamor to increase the supply of badly needed face masks and other personal protective equipment. He used it to increase the stocks of swabs, but not for the reagent chemicals that are required for widespread diagnostic testing.

“Yet when it came to beef burgers and chicken nuggets, Mr. Trump made his priorities clear in his unsettling rush to invoke federal emergency powers to keep open meat-processing plants – even as these facilities have become hot spots for the deadly virus.

“Mr. Trump on Tuesday signed an executive order that classifies meat plants as essential infrastructure under the Defense Production Act, which allows the president to control the production and distribution of products and supplies during a national emergency….

“Over the past several weeks, at least 20 major meat suppliers have closed down as increasing numbers of workers have fallen ill with Covid-19… The United Food and Commercial Workers International Union on Tuesday estimated that at least 20 workers have died and at least 5,000 have been directly affected by the virus.

“There is the promise…of additional protections for workers in the way of protective gear and workplace guidelines.  But given the realities of these giant meat-processing plants…the industry’s poor track record in looking out for its workers, and lax regulation from the Trump administration, there is reason for concern.”

--The loathsome, slimy, sleazy Jared Kushner improbably trumpeted the bungled coronavirus response as a “great success story.”

“This is a great success story, and I think that’s really what needs to be told,” the presidential son-in-law and White House adviser told Fox News.

“We’ve achieved all the milestones that have been needed,” he said.

The White House was AWOL in February.

Kushner praised President Trump for leading the nation during the pandemic.

When asked about Kushner’s remarks, the president returned the favor: “He may be my son-in-law, but he is a brilliant person.”

I think Ivanka is a decent person…and I’ll never understand how she ended up with this creep.

--Kayleigh McEnany made her debut before the White House press corps this afternoon, the first time in 417 days a White House press secretary had done so.  She did fine.

--Trump tweets:

“What happened to General Michael Flynn, a war hero, should never be allowed to happen to a citizen of the United States again!”

“Despite reports to the contrary, Sweden is paying heavily for its decision not to lockdown. As of today, 2462 people have died there, a much higher number than the neighboring countries of Norway (207), Finland (206) or Denmark (443). The United States made the correct decision!”

“The only reason the U.S. has reported one million cases of CoronaVirus is that our Testing is sooo much better than any other country in the World. Other countries are way behind us in Testing, and therefore show far fewer cases!”

“Cryin’ Chuck Schumer, compared to what other Senators have brought home to their states, has brought very little back to N.Y.  A totally overrated loser, the one thing he has given them is SALT.  He never even called me to stop it.  No wonder Cuomo & most others can’t stand him. AOC!”

“Cryin’ Chuck Schumer was on a late night show using a false talking point over & over again.  ‘We don’t have enough testing,’ he would repeat, when he knows we have done a great job on Testing, just like we have on Ventilators and everything else. He lied, gave NY SALT. Run AOC!”

“We can’t let the Fake News, and their partner, the Radical Left, Do Nothing Democrats, get away with stealing the Election.  They tried that in 2016. How did that work out?”

“Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?”

“There has never been, in the history of our Country, a more vicious or hostile Lamestream Media than there is right now, even in the midst of a National Emergency, the Invisible Enemy!”

“The people that know me and know the history of our Country say that I am the hardest working President in history. I don’t know about that, but I am a hard worker and have probably gotten more done in the first 3 ½ years than any President in history.  The Fake News hates it!”

And there was this classic chain…that the president then deleted….

“When will all of the ‘reporters’ who have received Noble Prizes for their work on Russia, Russia, Russia, only to have been proven totally wrong (and, in fact, it was the other side who committed the crimes), be turning back their cherished ‘Nobles’ so that they can be given….

“….to the REAL REPORTERS & JOURNALISTS  who got it right. I can give the Committee a very comprehensive list. When will the Noble Committee DEMAND the Prizes back, especially since they were gotten under fraud?  The reporters and Lamestream Media knew the truth all along….

“….Lawsuits should be brought against all, including the Fake News Organizations, to rectify this terrible injustice.  For all of the great lawyers out there, do we have any takers? When will the Noble Committee Act? Better be fast!”

Wall Street

Stocks fell sharply today as investors feared a possible new trade war with China, coming on top of the pandemic.

We had our initial reading on first-quarter GDP and it was uglier than expected, -4.8% (worst since Q4 2008).  The personal consumption component was -7.6% (worst since Q2 1980). But the second-quarter is going to be far worse.

The Federal Reserve’s Open Market Committee met this week and unanimously voted to leave its federal funds target rate at zero to 0.25% after determining the Covid-19 pandemic will continue to negatively affect the economy.

“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” the FOMC said in a statement.  “The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

But in an interview with journalists via videoconference, Fed Chair Jerome Powell offered no sanguine words about how fast the country might return – if ever – to the near-record low unemployment and solid growth of just a few weeks ago.  A first phase of a recovery may actually happen soon as some states allow stores and even restaurants to reopen under tightened rules, but even if that takes hold by late summer, “that’s the period as well that creates the risks of new outbreaks of the virus,” Powell said.

As the easing of social distancing rules proceeds, “people will come out of their homes, start to spend again, we will see unemployment go down, we will see economic activity pick up.  That could be a large increase… (but) it is unlikely it will bring us quickly back to pre-crisis levels.”

Treasury Secretary Steven Mnuchin believes the U.S. economy will swiftly “bounce back” over the summer.

“This is not the financial crisis,” Mnuchin told Fox News’ Chris Wallace last Sunday.  “This is a scenario where we’ve closed the economy.  And we are going to open the economy.”

Mnuchin pointed toward expanded unemployment benefits that include part-time workers, the Paycheck Protection Program which encourages employers to rehire employees and the $1,200 checks aimed at most taxpayers.

“We’re very sympathetic to the people that are out of work, but there is enhanced unemployment. There’s the PPP. There’s direct deposits,” Mnuchin said.  “As businesses begin to open you’re going to see (the) demand side of the economy rebound.”

On the other hand, President Trump’s economic adviser Kevin Hassett said on ABC’s “This Week” that the shuttering of the economy is a shock of historic proportions that will likely push the national unemployment rate to 16% or higher in April and require more stimulus to ensure a strong rebound.

“It’s a really grave situation,” Hassett said. “This is the biggest negative shock that our economy, I think, has ever seen. We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression.”

The nonpartisan Congressional Budget Office predicts the U.S. GDP will contract at nearly a 40% annual rate in the second quarter, with unemployment cresting at 16% in the third quarter.  But even next year, the CBO sees the jobless rate still averaging above 10 percent.

The April jobs report comes out next Friday, May 8.

A recent Harris Poll found that Americans are wary of getting back to normal too soon.  30% said they will wait at least four months after the virus spread flattens before going out for dinner, while 44% say it will take that long for them to go to the movies.

Meanwhile, we had other economic data this week.  March personal income was down 2.0%, with consumption off a whopping 7.5%.  April’s figures will obviously be worse.

The Chicago manufacturing PMI for April came in at a worse-than-expected 35.4 (50 being the dividing line between growth and contraction).  The national April ISM manufacturing figure, however, was a better-than-forecast 41.5, but still a huge drop from March’s 49.1.

A rather useless S&P CoreLogic Case-Shiller figure on the 20-city home price index for February was up 3.5% over a year ago, but this will be changing drastically.

The Atlanta Fed’s GDPNow’s first look at second-quarter GDP is -12.1%.  Yuck.

As for the all the debt the federal government is taking on….

Editorial / Wall Street Journal

“The U.S. Congress has appropriated an astonishing $2.9 trillion in a mere six weeks to counter the coronavirus, and Democrats and some Republicans want trillions more.  President Trump talks as if he’s eager to go along, but if he does he may have a Senate Republican revolt on his hands.  The better strategy is to pause, see how the country’s reopening goes, and then decide where the money is needed if it still is.

“To put $2.9 trillion in perspective, that’s 60% of what the feds had expected to spend for all of fiscal 2021. The Congressional Budget Office says the federal deficit this year is now expected to quadruple to $3.7 trillion, or a stunning 17.9% of GDP. Even after the $800 billion Obam-Pelosi spending bill in 2009, the deficit reached only 9.8% of GDP. The 2008 TARP money was repaid; most Cares Act spending and loans won’t be.

“Not since the end of World War II has debt as a share of the economy risen so fast. In 1946 the debt held by the public stood at 106.1% of GDP.  Slowly but surely the postwar growth boom worked the debt down to a low of 23.2% in 1974.  The response to the recession of 2008-09 set debt climbing again, and both parties have kept it rising during the Trump era.  Debt was expected to be 79% of GDP this year, but CBO now says it will rise to 101% by September 30.

“We’ve never been deficit scolds as long as policies promote economic growth, and the U.S. has the advantage of paying off its debts in its own currency.  Treasury Secretary Steven Mnuchin likes to say the debt is no problem because interest rates are near zero.  He’s right, at least for the near term, but he overlooks that so much federal borrowing makes an outside claim on the world’s limited capital….

“If Mr. Trump sends Mr. Mnuchin to negotiate another trillion-dollar spending deal with Democrats, he runs the risk of dividing his own party in Congress.  A divided GOP will make his re-election chances well-nigh impossible.

“Mr. Trump doesn’t have to rule out all new spending.  He can say let’s spend what Congress has already appropriated, including $150 billion for the states, see how the Federal Reserve lending programs work, and how well the economic reopening goes.  Then we can see what the urgent needs are and respond.  Our guess is that millions of taxpayers would applaud.”

Europe and Asia

We had a preliminary flash estimate for first quarter GDP in the eurozone (EA19) and it was -3.8% compared with the fourth quarter, as published by Eurostat, or -14.4% on an annualized basis.

Compared with the same quarter of the previous year, GDP was -3.3%.  These were the sharpest declines in the series since it started in 1995.  GDP grew at a 1.0% annualized pace in Q4.

European Central Bank President Christine Lagarde said Thursday, “The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime.”

The ECB said the eurozone economy could shrink as much as 12% this year and might fail to regain its previous output level through the end of 2022.  The official forecast is for the economy to shrink anywhere between 5% and 12% in 2020 and grow between 4% and 6% next year.

For the mild scenario to come true (-5%), that would mean lockdowns would end this month.

A flash reading on EA19 inflation in April came in at 0.4%, annualized; 1.1% ex-food and energy.  [Eurostat]

And euro area unemployment for March was 7.4%, up from 7.3% in February.  This number will begin rising sharply.

Germany 3.5%, France 8.4%, Italy 8.4%, Spain 14.5%, Ireland 5.4%, Greece 16.4% (Jan.). [Eurostat]

Separately, Germany’s Economy Ministry is forecasting a 6.3% fall in GDP for 2020.

And in the UK, the manufacturing PMI came in at 32.6 in April, a record low.

The euro area manufacturing PMIs will be released on Monday.

Brexit: With Prime Minister Boris Johnson back at 10 Downing Street, it’s time to get back to work on Brexit and the negotiations on the post-Brexit relationship with the European Union.

Zero progress has been made on the most contentious issues and lead EU negotiator Michel Barnier this week accused the British side of failing to engage seriously on some aspects, and said never before had such high-stakes talks had to take place under such time pressure, which was all the more difficult given the need to battle the pandemic and its severe economic fallout.

“In this context, the negotiation that has occupied us this week may appear out of touch. It has even been qualified as surreal,” Barnier said last weekend.

Both sides concede progress would have to seriously speed up in order for sufficient progress to be made, and an EU official said Mr. Barnier was seriously worried about the prospect of not reaching an agreement.

A senior EU official told the Irish Times, “They listen politely to us presenting our text, but they don’t engage in some of the areas where they don’t have an interest to reach an agreement,” a senior EU official said.

British sources insist that under no circumstances would they accept an extension of the transition period, which expires at the end of this year.

If no deal can be agreed to between the UK and the EU by then, they will automatically begin trading on default World Trade Organization terms, which is forecast to deliver a deep blow to the British economy and to its nearest neighbors, particularly Ireland.

Italy: Prime Minister Giuseppe Conte said on Thursday that some Italian regions might be able to unwind coronavirus restrictions more rapidly than others but warned local authorities against rushed, unilateral rollbacks.

Conte is worried that regions run by rightist parties, which are not part of the ruling government coalition, have kicked back against plans for a gradual, nationwide easing of curbs, saying the proposed schedule, due to kick off on Monday, is too timid.

Turning to Asia…China’s National Bureau of Statistics released its official PMIs for April, with the manufacturing number falling to 50.8 from 52 in March; non-manufacturing (services) rising to 53.2.

But a sub-index of export orders dived to 33.5 from 46.4 in March, with some factories even having their orders cancelled after reopening.  That’s a disturbing signal.  The reopening is a halting one.

Caixin’s private manufacturing PMI was 49.4 for April vs. 50.1 in March.

Japan’s April manufacturing PMI was 41.9, an 11-year low.  Separately, factory output in March fell 3.7% over February, while retail sales fell 4.6% year-over-year.

The Bank of Japan rolled out fresh steps to ease corporate funding strains this week, pledging to buy unlimited amounts of bonds to keep borrowing costs low.

Prime Minister Shinzo Abe addressed the issue of the now-2021 Tokyo Olympics, saying that with experts suggesting a vaccine is a long way off, there are doubts about holding the huge event next year.  “It would be impossible to hold the Games in such a complete form unless the coronavirus pandemic is contained.”

South Korea reported exports in April plunged 24.3% year-over-year, according to the Trade Ministry, the worst month since May 2009. 

Semiconductors fell 14.9%.  Exports to China fell 17.9% yoy.  Exports to the U.S. declined 13.5%, down 12.8% to the EU.

Street Bytes

--Stocks fell a second straight week, largely because of today’s swoon on the potential for more friction on the U.S.-China trade front.  On the week, however, the losses were minimal, with the Dow Jones and S&P 500 falling just 0.2% and Nasdaq 0.3%.

For the month of April, though, the S&P rose 13% and the Dow 11%, their best monthly percentage gain since Jan. 1987.

But today was the first of a new month. Is it “Sell in May and go away?” Well, I hardly expect a continuation of the rally.

--U.S. Treasury Yields

6-mo. 0.09%  2-yr. 0.19%  10-yr. 0.61%  30-yr. 1.25%

--Oil rallied some this week to $19.69 on West Texas Intermediate, but prices under $40 are the issue, let alone $30 or $20.  Baker Hughes’ weekly rig count revealed the number operating in the U.S. dropped another 53 to 325, the lowest level in almost four years.  A year ago, there were 807 oil rigs in operation.  The price of WTI then was $61.86.

The little rally was due to hope that with the reopening of some states, there will be clearly be a little more demand, but the world is still way, way oversupplied, despite the OPEC+ production cuts now being implemented.

Meanwhile, the big shutdown in the energy sector is well underway.  North Dakota, which for years was synonymous with the U.S. shale revolution, is witnessing a rapid retrenchment. Oil producers have already closed more than 6,000 wells, curtailing about 30% of the state’s total.

--The U.K.’s oil and gas industry could lose as many as 30,000 jobs over the next 12-18 months and see drilling levels plunge by a third.

--Exxon Mobil reported a $610 million loss during the first quarter that was capped the oil collapse and the pandemic.  Revenue fell nearly 12% to $56.2 billion, down from $63.6 billion in the first quarter of 2019.

“Covid-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” Exxon CEO Darren Woods said in a statement.  “While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business.  Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry.”

Exxon cut its 2020 capital budget by 30 percent to $23 billion, down from its previously announced plans to spend $33 billion on oil exploration and production.

--Chevron’s profits jumped nearly 40% in the first quarter, on the other hand, but this performance largely came before the crash.  The company posted earnings of $3.6 billion, though revenue fell by more than 10 percent to $31.5 billion, the company reported today.

Chevron warned future quarters are expected to be depressed as long as oil prices remain low.  It is cutting its capital budget by up to $2 billion, or 12.5%.  Operating expenses will decrease by $1 billion as it idles rigs and slows oil exploration and production projects.

--Royal Dutch Shell cut its dividend for the first time since World War II amid the steep drop in oil demand.

--Shares of tanker operators soared as the steep drop in crude prices and demand destruction further supported floating storage demand and tanker rates.  The images of all the tankers sitting off California’s shores, and off Singapore, are stunning.

--Southwest Airlines said it has agreed with Boeing Co. to sharply cut its 737 MAX delivery schedule through 2021 and is reviewing its order book as the pandemic caused its first quarterly loss in nine years.

Southwest, which only operates Boeing 737s and is the world’s largest customer of the grounded 737 MAX, will take no more than 48 new MAX jets before Dec. 2021, a fraction of the 123 it had originally scheduled.  However, it is not outright canceling orders, Southwest saying a fuel-efficient fleet “is still relevant and meaningful” even given current low oil prices and demand.

Southwest swung to a $94-million net loss in the first quarter from a $387 million profit a year earlier, and warned that operating revenues would fall by 90-95% in both April and May, when it does not expect load factors to surpass 10%.  Total operating revenue fell 17.8% to $4.23 billion in the quarter.

While Southwest has more bookings for June and July – albeit in a drastically reduced flight schedule, “We have no idea what kind of cancellations will come through before those travel dates; there’s no way to be comfortable with what will happen to those reservations,” Southwest CEO Gary Kelly told Reuters.

The airline is hoping to reduce its daily cash burn rate to between $30 million and $35 million in the second quarter.

Southwest has plenty of cash on hand, plus it is raising additional capital and will be receiving government support, but demand is not going to come roaring back in the summer and heaven forbid if there is a second wave in the fall.

Under the terms of government payroll support, airlines cannot lay off employees before Sept. 30, but if demand remains weak, Southwest will need to downsize.

[My friend, Bobby C., a pilot with Southwest, had a swing along the west coast and Phoenix this week, five legs, with 20-45 passengers on each plane (all in masks), which was good.  Three weeks ago his flights had just 8-10 passengers.  Southwest was getting the “short-term right-sizing closer to correct, while not overdoing it so that passengers could more slowly get used to increasing numbers on the airplane; confidence-building in the system that will be the cornerstone to rebuilding our business, and thousands of other businesses.”]

--American Airlines on Thursday posted a $2.2 billion net loss, its first quarterly loss since emerging from bankruptcy in 2013 and warned of a roughly $70 million per day cash burn in the second quarter.

“We all expect that recovery will be slow and demand for air travel will be suppressed for quite some time,” CEO Doug Parker told investors.  Over the corresponding period a year ago, American had a profit of $185 million.

Total operating revenue declined nearly 20% to $8.5 billion.

American has already reduced its passenger flight schedule by about 80% in both April and May and is running some cargo-only flights. Its June capacity will be down 70%, including a much-reduced international schedule.

--Scandinavia’s biggest network airline, SAS AB, is eliminating as many as 5,000 jobs, marking the first permanent staff cuts by a major European carrier in the face of collapsing travel demand. Previously, SAS had furloughed 90% of employees temporarily.  The permanent job cuts will be across its three home nations, with about 1,900 posts going in Sweden, 1,700 in Denmark and 1,300 in Norway.

Rival Norwegian Air Shuttle ASA said last week it had placed pilot and cabin-crew companies in Denmark and Sweden into bankruptcy protection, saying it was unable to pay salaries with its fleet grounded.  The move will affect about 1,500 pilots and more than 3,000 cabin crew at the carrier.

British Airways has sent home 30,000 of its employees after grounding almost all of its fleet, and it is preparing to lay off 12,000 of them, including 800 pilots.

BA is owned by International Airlines Group (IAG), which also owns Aer Lingus.  The Irish airline told unions it is seeking staff cuts of around 20%, or 800-900 staff.

Icelandair said it would cut 2,000 jobs across its entire operation to stop the outflow of cash primarily going to salaries, as the firm struggles to keep going during the coronavirus crisis.

Ryanair announced it will cut 3,000 employees, mainly pilot and cabin crew jobs, implement pay cuts of up to 20 percent, and close a number of aircraft bases across Europe as it grapples with the effect of the pandemic.

The airline said the grounding of all flights from mid-March until at least July, as well as the “distorted state aid landscape in Europe,” meant the recovery of passenger demand and pricing will take at least two years, until summer 2022 “at the earliest.”

Ryanair currently employs about 17,000 people, of whom 5,500 are pilots, while another 9,000 are employed as cabin crew.

--JetBlue Airways became the first airline in the U.S. to require passengers to wear face masks during air travel starting this coming Monday.  Most of the other major airlines then followed
Thursday.

--Airbus CEO Guillaume Faury has told the European planemaker’s 135,000 staff to brace for potentially deeper job cuts after warning its survival is at stake without immediate action to save cash amid the pandemic.  In a letter to staff, Faury said Airbus was “bleeding cash at an unprecedented speed and that a recent drop of a third or more in production rates did not reflect the worst-case scenario and would be kept under review.”

--Boeing Co. said on Wednesday it would cut its 160,000-person workforce by about 10%, further reduce 787 Dreamliner production and try to boost liquidity as it prepares for a years-long industry recovery.

“Our industry is going to look very different as a result of this pandemic,” Boeing CEO Dave  Calhoun told investors. “We will be a smaller company for a while.”

Boeing burned through $4.7 billion in cash in the first quarter, but said it was confident of getting sufficient liquidity to fund its operations, and then on Thursday, the company indeed raised $25 billion in a massive bond sale, allowing it to avoid tapping a $17 billion coronavirus bailout fund meant to shore up businesses critical to national security.

As for the job cuts, they will be completed by the end of the year and will be at the company’s commercial aircraft division, where it was already dealing with a production freeze and the year-long grounding of the 737 MAX. Boeing expects to resume MAX deliveries in the third quarter following regulatory approvals.

Boeing reported revenue was down 26% from a year ago in the first quarter.

--The Boston Globe reported that Sky Chefs workers at Logan International Airport are getting infected and hospitalized at much higher rates than any other group of union members; specifically 74 members of national Unite Here, who work for LSG Sky Chefs and Gate Gourmet, the two largest airline catering companies in the country, who have tested positive for Covid-19, according to union estimates, with nine deaths.

These are low-paid subcontractors, primarily immigrants and people of color, who don’t have health insurance.

And because they are loading products on planes that fly around the world, the potential of spreading disease is great.

The point being, the airlines and their direct employees can say they are doing a great job in disinfecting the planes and having a much safer flying environment than before, but you still have others coming on board who may be spreaders.

--Brazil’s Embraer SA on Monday said it had begun an arbitration process against Boeing, after Boeing abruptly canceled a $4.2 billion deal over the weekend that was years in the making.  Embraer shares fell as much as 16% to an 8-year low on the news, suggesting investors had hoped until the last minute that the takeover agreement would not fall apart.

The sudden collapse, triggered by a deadline that Boeing refused to extend, drew an irate response from Embraer on Saturday.  But on Monday, when Embraer executives hosted a call with analysts, the angry rhetoric was largely absent.

Embraer is in a delicate situation, having bet the future of the company on Boeing only to find itself now in isolation and without a Plan B, all while the coronavirus crisis ravages the travel industry.

Embraer had hoped to sell 80% of its profitable commercial aviation unit to Boeing and benefit from the planemaker’s marketing power to scale up sales of its E2 regional jets, which have been lauded for their fuel efficiency.

Some analysts are speculating that Chinese companies might be interested in buying Embraer’s unit.

--As alluded to above, President Trump signed an executive order Tuesday night mandating that meat production plants remain open to head off a food supply shortage.

United Food and Commercial Workers President Marc Perrone said in a news release: “America’s meatpacking workers and our nation’s food supply are in greater danger every day that companies and leaders fail to act during this outbreak. It is clear that our food supply chain is threatened, and that is why our country’s elected and corporate leaders must act now.”

Last weekend, John H. Tyson, chairman of Tyson’s executive board, wrote in a full-page newspaper ad published in the Washington Post, the New York Times and at least one other publication, “The food supply chain is breaking… We have a responsibility to feed our country. It is as essential as healthcare…. Our plants must remain operational so that we can supply food to our families in America.”

But with Trump’s executive order, that runs the risk of undercutting local health officials’ power to make meat plants comply with newly issued federal guidance that would have limited workers’ exposure to Covid-19.  Sunday, the CDC had issued rules that said the workspace in plants should provide six feet of distance between workers and that they should no longer be facing one another.

The order, though, is also designed to give companies such as Tyson more liability protection in case employees catch the virus as a result of having to go to work.  But this is far from clear cut.

The pork industry typically slaughters around 510,000 pigs daily for bacon, hams and sausage, but the forced closures process about one-fifth of the daily total, or 105,000 pigs a day, leading to a backup on farms and raising the prospect of having to euthanize them.

--Related to the above, Nathan’s Famous said its primary manufacturer of hot dogs was among those that closed, the Smithfield Foods facility in Sioux Falls, S.D.

More broadly, the cattle slaughter for the week that ended April 24 was 25% lower than a year ago, according to the Dept. of Agriculture.  Pork production was 15% lower.

By the way, Covid-19 is leading, at least temporarily, to higher-quality hot dogs.  The reason? They are being made with meat that ordinarily would be sold to restaurants. 

--Microsoft reported better-than-expected fiscal third quarter results for the period ending March 31, the software giant reported revenue of $35 billion, up 15%, and ahead of the Street’s estimate.  Profits were $1.40 a share vs. expectations of $1.26.  The company said Covid-19 had “minimal net impact on total company revenue.”

Commercial Cloud revenue grew 39% to $13.3 billion.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” CEO Satya Nadella said in a statement. “Our durable business model, diversified portfolio, and differentiated technology stack position us well for what’s ahead.”

--Amazon.com posted mixed results for the first quarter, with revenue of $75.5 billion, up 26% and ahead of Wall Street’s consensus forecast, while profits fell short, $4 billion.

For the June quarter, the company sees revenue of $75bn to $81bn, but gave a wide range from a loss of $1.5bn to a $1.5bn profit.

CEO Jeff Bezos, in a statement, said the current crisis “is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced.”

Bezos said that under normal circumstances, the company would expect $4 billion or more in operating profit for the June quarter.  “But these aren’t normal circumstances,” he said.  “Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe.  This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own Covid-19 testing capabilities.”

Bezos added: “If you’re a shareowner  in Amazon, you may want to take a seat, because we’re not thinking small.”

The company said it has hired 175,000 additional employees since the start of the crisis.

Amazon said North American sales were $46.1 billion, up 29%.  International sales were $19.1 billion, up 18%.  AWS (cloud storage) sales were $10.2 billion, up 33%.

The shares fell 7.6% today.

--Apple Inc. reported better-than-expected results for its fiscal second quarter ended March 31, with revenue of $58.3 billion, up 1% from a year ago, better-than-expected.

Apple withdrew its guidance for the current quarter.

“Despite Covid-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables,” CEO Tim Cook said in a press release.

The company said its active installed base of devices reached an all-time high in all geographic segments and all major product categories.

Sales of iPhones were $29 billion, down 6.7%, while Mac sales were $5.4 billion, down slightly from a year ago, and iPad sales came in at $4.4 billion, down 10%.  Apple’s Services revenue was up 16.6% to $13.4bn, while Wearables, Home, and Accessories, which includes AirPods and the Apple Watch, among other things, were at $6.3bn, up 17%.

Sales in Greater China were $9.5 billion, down 7.5%. But as Tim Cook told Reuters, “As compared to February, we saw a nice improvement in March and a further improvement in April. China is headed in the right direction.”

The company reported it now has 550 million total subscriptions to its various services, including Apple TV Plus, Apple Music, and Apple Arcade, up 125 million from a year ago and up 35 million since the end of 2019.

--Samsung Electronics, the world’s biggest smartphone vendor, warned on Wednesday of a significant drop in mobile earnings in the second quarter, as recession fears dampen demand for high-end models and carriers in major markets delay the rollouts of fast 5G networks.

The Covid-19 crisis is hitting all vendors hard, but Samsung’s strategy of focusing on 5G in advanced markets like Europe and the U.S., plus dwindling market share in some emerging markets, puts it in a deeper quagmire.

China’s reopening has meant little for Samsung as the country accounts for a small fraction of its business (as opposed to Apple, where China represents about 15% of its revenues).

--Facebook Inc. beat analysts’ estimates for quarterly revenue on Wednesday and said it has seen “signs of stability” for sales in April after a plunge in March, in yet another signal that tech giants may weather the coronavirus-induced economic collapse better than other sectors.

Revenue growth was 18% in the first quarter, Facebook’s slowest ever by a wide margin, although it beat the Street.  Ad sales, which make up nearly all of Facebook’s revenue, rose 17% to $17.44 billion. Some businesses took advantage of bargain pricing to run a heavier volume of ads after the pandemic wiped out Facebook ad pricing over the course of the quarter, contributing to a 39% increase in total ad impressions, executives said.

Chief Operating Officer Sheryl Sandberg told analysts the company saw an increase in gaming ads and steady spending from technology and e-commerce players, which offset “significant declines” in ads from the travel and auto sectors.

But despite the positive news, the second quarter won’t be good.  Companies continue to cut back on ad spending.

Separately, Facebook said around 3 billion users interacted with at least one of its apps each month in the quarter, up from 2.9 billion last quarter, as social networks use surged during coronavirus lockdowns. And executives said FB will move forward with plans to hire 10,000 new employees this year, largely in product and engineering roles, but will pull back on hiring plans for business departments like ad sales, Facebook lowering its guidance for total expenses in 2020 to $52 billion-$56 billion, down from a prior range of $54 billion-$59 billion, citing the slower headcount growth and savings from canceled travel, events and marketing.

Facebook shares soared 9% in response to the positive report.

I do have to add that as opposed to Elon Musk’s comments below, CEO Mark Zuckerberg said on the call that he is very concerned that the pandemic will last longer than people expect.

--Alphabet Inc. beat analysts’ estimate for quarterly revenue as its Google unit experienced a smaller drop-off in advertiser spending than had been anticipated given economic concerns related to the novel coronavirus.

While a booming economy and rising internet usage have driven Google to record revenues, the virus has split those trends, with consumer spending plunging even though the reliance on internet services is surging.

Alphabet said performance was strong in January and February, but then in March there was a significant slowdown in ad revenues.

Alphabet’s overall revenue was up 13% to $33.71 billion, in the first quarter over last year, better than expected.

But Google’s ad business generated about 83% of Alphabet’s revenue last year.

Alphabet’s first-quarter profit was $6.8 billion, or $9.87 per share, less than the Street expected.

Alphabet shares soared 8% on the news.

--Twitter Inc. reported that its ad sales had slightly rebounded in Asia after a plunge due to the outbreak and that it had accelerated work on tools to attract key advertisers, Twitter yet another tech company that reported a lighter blow from the pandemic than forecast.

Twitter reported greater first-quarter revenue and a smaller loss than analysts expected, with the former at $808 million, up 3% from a year ago.  The company lost 48 million in the quarter, or a penny a share.

Daily users grew 24% to 166 million.

The company did not provide its usual guidance on sales for the current quarter nor any comment on whether U.S. ad sales had bounced back as well.

About 84% of Twitter’s revenue comes from ads on its service and partner apps, and those sales were 27% lower in the last three weeks of March than the same period in 2019, the company said on Thursday.

--General Electric Co. announced Wednesday first quarter revenues of $20.5 billion, a decrease of 8% as the company grapples with the pandemic.

Aviation revenue fell 13% to $6.89 billion in the quarter, while power also fell 13% to $4.03 billion.  Renewable energy revenue increased by 26% to $3.19 billion, driven by new deliveries of wind turbine units and repower kits.

The health care segment saw revenue rise slightly to $4.73 billion, as GE doubled its capacity of ventilators in Q1.

GE says the second quarter will bring more pain, as it’s the first full quarter with pressure from Covid-19.

--Rail traffic in the U.S. fell 22% year-over-year in the seven days ending April 25, according to the Association of American Railroads, as the pandemic choked the economy.

--Demand for Tesla’s electric cars held up in the first three months of the year, despite upheavals caused by the pandemic.  Quarterly revenues jumped 30% from last year to $5.9 billion, allowing the firm to turn a small profit of $16 million, the third quarterly profit in a row for the company.

Tesla delivered about 88,000 cars in the first quarter of 2020, after delivering 97,000 and 112,000 in the third and fourth quarters, respectively.

The company’s cash balance increased to $8.1 billion in the first quarter from $6.3 billion at the end of 2019

But Tesla said forced shutdowns and limits on deliveries clouded its outlook for coming months.

“Frankly I would call it forcibly imprisoning people in their homes against all their constitutional rights…that’s my opinion,” said the always outspoken Tesla boss Elon Musk, who has opposed the lockdown measures.

“It will cause great harm, not just to Tesla but to many firms.  While Tesla will weather the storm, there are many small companies that will not.

“And all of people’s – everything they’ve worked for their whole lives has been destroyed in real time.

“We’re going to have, and have many suppliers that are on super hard times, especially the small ones, and it’s causing a lot of strife to a lot of people.”

Musk added that Tesla was “a bit worried about not being able to resume production in the Bay area,” and said this should be considered “a key risk” because the firm only has two car factories – the one in Fremont, Calif., and one in Shanghai.

Musk stressed that he did not mind if people wanted to stay at home, but he was concerned that citizens were being forced to lose their livelihoods as the lockdown continued.

Musk has previously dismissed concerns about the coronavirus as being “dumb.”

So all the above was Wednesday.  Then Musk, out of nowhere, tweeted “Tesla stock price is too high.”  The shares, which hit $850 intraday on Thursday, closed today at $708, after hitting $684 in the morning. Stunning.

The Wall Street Journal reported that Musk had responded to an email asking whether he was joking or whether his tweet was vetted by saying, “No.”

This comes after Musk has had all kinds of issues with the SEC over his past tweets.

--Ford Motor Co. reported a larger pretax loss, adjusted for one-time items, than the company was expecting and said that number is expected to top $5 billion in the current quarter.

Ford also said Tuesday that it has about $35 billion in cash, enough to cushion it through the end of the year even if it were unable to resume factory output because of the new coronavirus outbreak.

Revenue was down 15% from a year earlier.

The company has bolstered its cash reserves by eliminating its dividend, tapping about $15 billion in credit lines and issuing $8 billion in unsecured debt.  Ford maintains its cash cushion will allow it to continue investing in vehicle-development programs.  But some projects will be delayed or canceled.  Regarding the latter, Ford shelved plans for a Lincoln-brand electric vehicle that was to be developed with startup truck maker Rivian Automotive.

Ford said on Tuesday it plans to restart “initial production” at most of its main continental European vehicle and engine plants from May 4, with manufacturing resuming in a phased manner in Germany, Spain, and Romania.

Ford, General Motors and Fiat Chrysler are all targeting May 18 for reopening some production at their U.S. factories after shutting them down in March.

--Hertz Global Holdings Inc. is preparing for a possible bankruptcy filing after the rental-car company failed to make lease payments to preserve cash amid the Covid-19 pandemic, various media outlets are reporting.

The rental-car company and its advisers are negotiating with senior lenders and certain holders of its vehicle finance subsidiary’s notes with the aim of temporarily reducing payments, the company said Wednesday in a filing.

While car rentals have fallen off a cliff with most Americans refraining from traveling, Hertz still faces monthly payments under its operating lease, which it uses to lease vehicles for its rental car fleet.

--Lyft said Wednesday it plans to cut its staff by 982 jobs, or about 17% of its employees, as it moves to reduce operating expenses and cash flows in light of the outbreak.

Both Lyft and rival Uber Technologies have seen sharp drops in ridership.

--United Parcel Service Inc. reported a 13% drop in first-quarter profit, to $965 million, as stay-at-home orders generated deliveries to people’s homes but not enough to offset the higher costs and a drop in business deliveries.

UPS Thursday that it couldn’t predict the depth or duration of “significant headwinds” caused by the coronavirus outbreak, so it withdrew forecasts about future revenue and profit.

Business deliveries will pick up as the economy slowly reopens, but as Chairman and CEO David Abney said on a call with analysts: “We just don’t know when, and we don’t know how far it’s going to bounce back.”

--McDonald’s on Thursday reported revenue fell to $4.71 billion in the first quarter, down from $5.02bn in the prior-year quarter, with comparable store sales dropping 3.4%, compared with growth of 5.4% a year ago.  U.S. same store sales were roughly stagnant while international operations declined 6.9%.

--3M topped first-quarter profit estimates, with net income of $1.29 billion, though the company suspended its 2020 outlook as the pandemic hammered parts of its business that aren’t connected to the production of N95 respiratory masks.

The company is the world’s biggest maker of the masks and has seen demand spiral amid the coronavirus outbreak, putting 3M at the heart of the tug-of-war over supplies for doctors, nurses and other exposed workers. In January the company said it was doubling its global output of the N95 to 1.1 billion.

But the pandemic and lockdowns are hammering other parts of its business and the company reported falls in revenue at all units except healthcare, which sells everything from surgical tape to sterilization products and accounted for about 29% of total sales.

--Merck reported that it expects a $2.1 billion hit to 2020 sales because two thirds of its revenue is made up of drugs that are administered at a doctor’s office, though the company posted better-than-expected first-quarter profit, helped by higher sales of its blockbuster drug, Keytruda. 

--Adidas AG said its first-quarter net profit dropped 95% as sales tumbled and it warned of an even bigger hit in the second quarter.  The sportswear maker said more than 70% of its stores world-wide remained closed, leading it to predict second-quarter sales would be 40% below the prior year level.

Adidas said the company was focused on doubling down on the recovery in China, where sales dropped 58% in the quarter.  Adidas said sales have been recovering in Greater China the first three weeks of April.

The company won’t provide full-year guidance as it remains uncertain how long lockdowns will last and how quickly demand normalizes after stores reopen.

--TripAdvisor said it will cut 900 jobs worldwide and close its offices in Boston and San Francisco as the coronavirus wreaks havoc on the travel industry.  600 of the jobs are being eliminated in the U.S. and Canada, and 300 more in other countries as part of a 25 percent reduction in its global workforce.

--Simon Property Group plans to reopen Indiana malls on Saturday.  An internal memo obtained by CNBC also lists reopening dates for 49 malls across 10 states that have started or are weighing reopening after their economies ground to a halt.  Simon plans to reopen malls between Friday and Monday in Texas, Oklahoma, Georgia, Indiana, Tennessee, Arkansas, Alaska, South Carolina and Missouri.

Hours will be limited, 11 a.m. to 7 p.m., to allow for overnight cleaning and sanitation.

--In line with the above, Macy’s said it plans to reopen 68 U.S. stores on Monday in states that have loosened coronavirus lockdowns, and then to reopen all of its roughly 775 stores in six weeks, if infection rates taper off as projected and state and local governments allow it.

But Macy’s admits the shopping experience will be greatly changed, with plexiglass at each cash register, signs alerting shoppers to keep six feet apart, the number of changing rooms greatly reduced and beauty consultants that will be “no-touch” only.

--Comcast Corp. made a decision not to postpone its scheduled release of its Universal Pictures’ “Trolls World Tour” on April 10, even though it wasn’t available in theaters, and in three weeks it has racked up nearly $100 million in rentals, making it available as a digital rental on platforms like Apple Inc.’s Apple TV for $19.99.

With nearly five million rentals in the U.S. and Canada, the digital release has in three weeks generated more revenue for Universal than the original “Trolls” did during its five-month domestic theatrical run.

So the performance has convinced Universal executives that digital releases can be a winning strategy, and may diminish the role of theaters even after the pandemic passes.

Theater companies are none too pleased by the move.

Meanwhile, the Academy of Motion Picture Arts and Sciences said it would allow movies released only via streaming to contend in the upcoming Oscars race.

--For the first time since moving to the 9 p.m. time slot in October 2017, Sean Hannity was beaten by “Tucker Carlson Tonight,” with an average nightly audience of 4.56 million viewers, outpacing the 4.39 million who tuned in for “Hannity,” Nielsen said on Tuesday.

But in April, Bret Baier’s 6 p.m. time slot drew a whopping 5.26 million due to President Trump’s daily briefings which were carried live on Fox.

CNN had its third-best ratings month since 2003 – and for the first time in three years, CNN topped MSNBC in average daily viewership.

Foreign Affairs

North Korea: I wrote the following Friday morning and am not editing it despite the news we learned later on regarding the status of Kim.

The United States has caught no sight of leader Kim Jong-un and is watching reports about his health closely, Secretary of State Mike Pompeo said on Wednesday, but added there is a real risk of famine in the country amid the coronavirus outbreak.

North Korean media has not reported on Kim’s whereabouts since he presided over a meeting April 11.  It’s been three weeks.  Nothing.  Kim has missed important anniversaries.

Some officials in South Korea and the U.S. believe Kim is staying at a coastal resort to avoid exposure to the coronavirus, but no one knows anything definitively.  Early in the week, a top aide to South Korean President Moon said the government’s position was “firm” – that “Kim Jong-un is alive and well.”

South Korea says it hasn’t seen anything unusual across the Demilitarized Zone.

In terms of famine, North Korea has a history of famines, with an estimated 1.1 million dying in the famines of the 1990s.

So what if Kim is indeed dead?

Daniel DePetris / Defense One

“Assume for a moment that the world wakes up to news of Kim Jong-un’s death.  How would the Workers Party and Kim’s inner circle react?  Outside of assembling a smooth transition to ensure continuity of government and jousting behind the scenes between competing power centers, North Korea’s foreign policy, its perception of its security environment, and the value it attaches to its nuclear deterrent are unlikely to change.

“North Korea post-Kim would be in the very same position as it was when Kim Jong-un was the center of authority.  The country will still be the metaphorical ‘shrimp among whales,’ an economic basket case hemmed in by far wealthier neighbors to the east and west and tightly limited by international sanctions.  The North Korean economy would still be struggling for air, looking paltry in comparison to South Korea, whose per capita GDP is 42 times larger than the North Koreans’.  The North Korean leadership will remain almost completely dependent on China for political cover, trade, and supply chains.

“The threat environment for Pyongyang will hardly be any different either.  The United States and the UN Security Council will continue to push and prod for North Korea’s complete, verifiable, and irreversible denuclearization regardless of whether Kim Jong-un is dead, alive, or incapacitated.  In fact, with Kim out of the picture, Washington may be even more insistent and aggressive on this demand.  Kim or no Kim, the U.S. and UN sanctions that have capped North Korea’s exports and negatively impacted practically every individual funding stream for the regime will remain intact – a development a future North Korean government will likely interpret as a continuation of a deliberate U.S. strategy to foment regime change….

“The conventional Washington paradigm on North Korea has been a systemic failure across the board.  This will remain the case regardless of whether Kim Jong-un, his sister, or a North Korean field marshal is the ultimate authority.  The sooner persistent but stale assumptions are discarded, the sooner the U.S. can settle on a policy that will safeguard U.S. interests and lessen the probability of conflict.”

China: President Trump has appeared to undercut his own intelligence agencies by suggesting he has seen evidence coronavirus originated in a Chinese laboratory in Wuhan.

Earlier in a statement from the Director of National Intelligence, the office said it was still investigating how the virus began, but the DNI had determined Covid-19 “was not manmade or genetically modified.”

But it confirmed that it was looking into “whether the outbreak began through contact with infected animals or if it was the result of an accident at a laboratory in Wuhan.”

At the White House on Thursday, Trump was asked by a reporter: “Have you seen anything at this point that gives you a high degree of confidence that the Wuhan Institute of Virology was the origin of this virus?”

“Yes, I have. Yes, I have,” said the president, without specifying.  “And I think the World Health Organization should be ashamed of themselves because they’re like the public relations agency for China.”

Asked later to clarify his comment, he said: “I can’t tell you that.  I’m not allowed to tell you that.”

Wednesday, Secretary of State Mike Pompeo accused Chinese officials of being shady about the virus’ origins and said U.S. officials haven’t been allowed to inspect the lab.

“We don’t know precisely where this virus originated form. There are multiple labs that are continuing to conduct work, we think – continue on contagious pathogens inside of China today and we don’t know if they are operating at a level of security to prevent this from happening again,” Pompeo told reporters.

No concrete evidence has emerged to support the lab theory, and the Chinese government has repeatedly denied it.

Arkansas Republican Sen. Tom Cotton, who sits on the Senate Intelligence Committee, for months has suggested a lab accident could have led to the pandemic.

Separately, on Wednesday President Trump said he believes China’s handling of the coronavirus is proof that Beijing “will do anything they can” to make him lose his re-election bid in November.

Monday, White House trade adviser Peter Navarro accused China of sending low-quality and even counterfeit coronavirus antibody testing kits to the United States and of “profiteering” from the pandemic.

[India cancelled an order for about half a million rapid testing kits from China after they were found to be “faulty.”]

Navarro also accused China of spreading the virus to the rest of the world after “they hid it for six weeks.”

“They could have contained it in Wuhan,” he said.  “They didn’t. They seeded the world with this, with hundreds of thousands of Chinese getting on aircraft to Milan, to New York and other places.”

Syria: A bomb detonated on an oil tanker in northern Syria, killing at least 10, Turkey’s state-run news agency reported on Tuesday.

Meanwhile, President Vladimir Putin is reportedly growing impatient with Syrian President Bashar al-Assad, who isn’t proving as grateful for being kept in power by Russian intervention as Putin needs him to be.

With the Kremlin leader having to deal with both a collapse in oil prices and the coronavirus epidemic, and eager to declare victory in Syria and depart, Putin is insisting Assad show more flexibility in talks with the Syrian opposition on a political settlement.

But Assad refuses to concede any power in return for greater international recognition and potentially $billions in reconstruction aid.

“The Kremlin needs to get rid of the Syrian headache,” said Alexander Shumilin, a former Russian diplomat who runs the state-financed Europe-Middle East Center in Moscow.  “The problem is with one person – Assad – and his entourage.”

UN-led talks in Geneva on redrafting the Syrian constitution to introduce some political competition finally started late last year and almost immediately became deadlocked when the government side “deliberately sabotaged” the negotiations, according to Alexander Aksenyonok, another former Russian diplomat.

Russia’s business community is also frustrated as they expected to gain entry into the Syrian economy.

Brazil: Brazilians are split on impeaching President Jair Bolsonaro despite a majority believing accusations by the former justice minister that Bolsonaro tried to interfere with the federal police’s work for political gain.  Pollster Datafolha found that 48% oppose impeaching Bolsonaro while 45% of those surveyed want to see him impeached.

Last week I wrote of the resignation of justice minister Sergio Moro, a popular figure because of his record fighting corruption as a federal judge.  Moro accused Bolsonaro of the above and 52% of those polled believe he was telling the truth and only 20% said they believed Bolsonaro’s account.

But while Brazilians are split on Congress removing the president by impeachment, the number that believe Bolsonaro should resign has risen to 46% from 37% in an early April poll.

45% consider his handling of the coronavirus epidemic bad or terrible against 27% who think he has done a good or excellent job.

Brazil’s coronavirus death toll tonight stands at 6,410, up another 509 today.

Meanwhile, Brazil’s unemployment rate rose to 12.2% through March.

On a totally different topic, Brazil plans to deploy its armed forces to fight deforestation and fires in the Amazon jungle.  From January to March, deforestation in the Brazilian Amazon rose 51% from a year ago, according to preliminary satellite data.

East Africa: If you thought the recent swarm of desert locusts the size of Manhattan that fanned out and destroyed a swath of farmland across eight East African nations as large as Oklahoma earlier this year was bad, now, aid agencies are warning, their offspring are threatening an historic infestation.  Like try a second wave of locusts, 20 times as large as the first, according to the UN.  They could chew their way through 2 million square miles of pastureland, farms and gardens, around half the size of Western Europe.

Random Musings

--Presidential tracking polls….

Gallup: 49% approve of President Trump’s job performance, 47% disapprove; 93% of Republicans approve, 47%! of independents (April 14-28). I’m frankly surprised by this. The April 1-14 survey had a 43-54 split, with independents at 39%. This was after a Mar. 13-22 survey revealed a 49-45, 92, 43 breakdown.
Rasmussen: 45% approve of Trump’s job performance, 53% disapprove (May 1).

--In a new NPR/PBS NewsHour/Marist poll, only 44% of Americans approve of the job President Trump is doing in handling the coronavirus, which roughly reflects his overall approval rating in past polls, but his disapproval rating jumped 6 points in the past month, from 49% to 55%.

--A new USA TODAY/Suffolk University Poll shows Joe Biden leading Trump nationwide by 6 points, 44% to 38%, a shift from Trump’s 3-point lead in the survey as he was being impeached by the House in December.  In a contest without a third-party contender, Biden’s margin jumps to 10 points, 50% to 40%.

Women support Biden 53% to 30%.

But among independents, Trump’s backing has plummeted 18 points since December, to 27% from 45%.  It’s not like Biden is winning that 18 percent difference.  One in three independents now say they are undecided or would vote for a third-party.

--So speaking of third-party candidates, Rep. Justin Amash of Michigan took another step toward running for president, saying he had formed an exploratory committee to look into his chances of winning the Libertarian Party’s nomination.

In a series of posts on Twitter Tuesday, Amash, an independent who left the Republican party last summer as he called for President Trump’s impeachment, said, “Americans are ready for practical approaches based in humility and trust of the people.”

“We’re ready for a presidency that will restore respect for our Constitution and bring people together,” he said in another post.  “I’m excited and honored to be taking these first steps toward serving Americans of every background as president.”

--Michael J. Stern / USA TODAY

“During 28 years as a state and federal prosecutor, I prosecuted a lot of sexual assault cases. The vast majority came early in my career, when I was a young attorney at a prosecutor’s office outside Detroit.

“A year ago, Tara Reade accused former Vice President Joe Biden of touching her shoulder and neck in a way that made her uncomfortable, when she worked for him as a staff assistant in 1993.  Then last month, Reade told an interviewer that Biden stuck his hand under her skirt and forcibly penetrated her with his fingers.  Biden denies the allegation.

“When women make allegations of sexual assault, my default response is to believe them. But as the news media have investigated Reade’s allegations, I’ve become increasingly skeptical.  Here are some of the reasons why:

“ –Delayed reporting…twice. Reade waited 27 years to publicly report her allegation that Biden sexually assaulted her.  I understand that victims of sexual assault often do not come forward immediately because recounting the most violent and degrading experience of their lives, to a bunch of strangers, is the proverbial insult to injury.  That so many women were willing to wait in my dreary government office, as I ran to the restroom to pull myself together after listening to their stories, is a testament to their fortitude.

“Even so, it is reasonable to consider a 27-year reporting delay when assessing the believability of any criminal allegation.  More significant perhaps, is Reade’s decision to sit down with a newspaper last year and accuse Biden of touching her in a sexual way that made her uncomfortable – but neglect to mention her claim that he forcibly penetrated her with his fingers.

“…Reade was better equipped than most to appreciate that dramatic changes in sexual assault allegations severely undercut an accuser’s credibility – especially when the change is from an uncomfortable shoulder touch to vaginal penetration.

“ –Implausible explanation for changing story.  When Reade went public with her sexual assault allegation in March, she said she wanted to do it in an interview with The Union newspaper in California last April.  She said the reporter’s tone made her feel uncomfortable and ‘I just really got shut down’ and didn’t tell the whole story.

“It is hard to believe a reporter would discourage this kind of scoop.  Regardless, it’s also hard to accept that it took Reade 12 months to find another reporter eager to break that bombshell story.  This unlikely explanation damages her credibility.

“…After the alleged assault, Reade said she complained about Biden’s harassment to Marianne Baker, Biden’s executive assistant, as well as to top aides Dennis Toner and Ted Kaufman. All three Biden staffers recently told The New York Times that she made no complaint to them.

“And they did not offer the standard, noncommittal ‘I don’t remember any such complaint.’  The denials were firm.  ‘She did not come to me. If she had, I would have remembered her,’ Kaufman said.  Toner made a similar statement.  And from Baker: ‘I never once witnessed, or heard of, or received, any reports of inappropriate conduct (by Biden), period.’  Baker said such a complaint, had Reade made it, ‘would have left a searing impression on me as a woman professional, and as a manager.’

“ –Missing formal complaint. Reade told The Times she filed a written complaint against Biden with the Senate personnel office.  But The Times could not find any complaint. When The Times asked Reade for a copy of the complaint, she said she did not have it.  Yet she maintained and provided a copy of her 1993 Senate employment records.

“It is odd that Reade kept a copy of her employment records but did not keep a copy of a complaint documenting criminal conduct by a man whose improprieties changed ‘the trajectory’ of her life.  It’s equally odd The Times was unable to find a copy of the alleged Senate complaint….

“ –The lie about losing her job.  Reade told The Union that Biden wanted her to serve drinks at an event. After she refused, ‘she felt pushed out and left Biden’s employ,’ the newspaper said last April.  But Reade claimed this month in her Times interview that after she filed a sexual harassment complaint with the Senate personnel office, she faced retaliation and was fired by Biden’s chief of staff.

“Leaving a job after refusing to serve drinks at a Biden fundraiser is vastly different than being fired as retaliation for filing a sexual harassment complaint with the Senate. The disparity raises questions about Reade’s credibility and account of events.

“ –Compliments for Biden. In the 1990s, Biden worked to pass the Violence Against Women Act.  In 2017, on multiple occasions, Reade retweeted or ‘liked’ praise for Biden and his work combating sexual assault.  In the same year, Reade tweeted other compliments of Biden, including: ‘My old boss speaks truth. Listen.’  It is bizarre that Reade would publicly laud Biden for combating the very thing she would later accuse him of doing to her.”

There is much about Tara Reade that is confusing.  As Michael Stern adds in his extensive piece, during 2017, she was praising Biden, and condemning Vladimir Putin’s efforts to hijack American democracy in the 2016 election. Then in November 2018, Reade started trashing the United States, while referring to Putin as a “genius,” such as “this gem: ‘President Putin has an alluring combination of strength with gentleness.  His sensuous image projects his love for life, the embodiment of grace while facing adversity.’” [Stern]

That’s sick.

And then there was the Larry King call from an anonymous woman that was recently revealed.  Reade said the call, 1993, was from her mother, now deceased.

“That Reade’s mother said nothing about her daughter being sexually assaulted would lead many reasonable people to conclude that sexual assault was not the problem that prompted the call to King.

“Reade’s mother also said her daughter did not go to the press with her problem ‘out of respect’ for the senator.  I’ve never met a woman who stayed silent out of ‘respect’ for the man who sexually assaulted her.  And it is inconceivable that a mother would learn of her daughter’s sexual assault and suggest that respect for the assailant is what stands between a life of painful silence and justice.

“The ‘out of respect’ explanation sounds more like an office squabble with staff that resulted in leaving the job.  Indeed, in last year’s interview with The Washington Post, Reade laid the blame on Biden’s staff for ‘bullying’ her. She also said, ‘I want to emphasize: It’s not him.  It’s the people around him.’….

“I know that ‘Believe Women’ is the mantra of the new decade.  It is a response to a century of ignoring and excusing men’s sexual assaults against women.  But men and women alike should not be forced to blindly accept every allegation of sexual assault for fear of being labeled a misogynist or enabler.

“We can support the #MeToo movement and not support allegations of sexual assault that do not ring true.  If these two positions cannot coexist, the movement is no more than a hit squad. That’s not how I see the #MeToo movement.  It’s too important, for too many victims of sexual assault and their allies, to be no more than that.”

Editorial / Washington Post

“Tara Reade deserves to be heard, and voters deserve to hear her.  They deserve to hear from Joe Biden, too.

“The former vice president and presumptive Democratic presidential nominee has yet to speak publicly about the allegation Ms. Reade has lodged against him: that when she was a member of his Senate staff in the 1990s, Mr. Biden pushed her against a wall and put his fingers up her skirt and then inside her.  Mr. Biden’s campaign says ‘this never happened.’  Contemporaneous accounts of Ms. Reade’s claim are counterweighted by the denials of her superiors at the time that she reported any misconduct, as well as inconsistencies in her retelling.

“There are, at the moment, no clear conclusions.  There may never be.  But that is no excuse for not searching.  One place to start is the records covering Mr. Biden’s 36-year Senate career, donated to the University of Delaware in 2012 and slated for release to the public two years after Mr. Biden ‘retires from public life.’ These could contain confirmation of any complaint Ms. Reade made, either through official congressional channels or to the three other employees she claims she informed not specifically of the alleged assault but more generally of harassment.  They could also contain nothing of the sort.  Insisting on an inventory doesn’t mean one believes Ms. Reade or doesn’t believe her. It signals only a desire for the public to know all that’s able to be known, which ought to be in everyone’s interest….

“Another place to look is at the source: the candidate himself.  Mr. Biden may have little to say besides what his campaign has already said – that he did not do this, and that this is not something he ever would do.  Yet the way to signal he takes Ms. Reade’s case seriously, and the cases of women like her seriously, is to go before the media and the public ready to listen and to reply.”

Well, today, Joe Biden appeared on “Morning Joe” and said, “No, it is not true.  I’m saying unequivocally it never, never happened.”

“This is an open book. There’s nothing for me to hide,” Biden said in the interview.

Biden has suggested in the past that women making accusations of sexual assault should be given the benefit of the doubt, and today he said he was not being hypocritical by rejecting Reade’s charges.

Biden then asked the Secretary of the Senate in a letter to find any documents tied to the allegation if they exist.

In an interview with conservative radio host Dan Bongino, President Trump said if the accusations were false, Biden should deny them.  “Just go out and fight it, it’s one of those things.  I’ve been a total victim of this nonsense, false accusations.”

So back on Oct. 6, 2018, I wrote in this space the following on the Kavanaugh hearings:

“I have been for Kavanaugh since day one, I just felt after his hearing and Dr. Ford’s allegations, that he may have stretched the truth a bit on his youthful experiences, but as I wrote last week, that didn’t mean he was involved in a sexual assault.  As for the FBI investigation, the others at the ‘party’ had no recollection of an event 36 years earlier.  The rest that’s out there is just ‘talk.’”

I’m going to be consistent.  I do not believe Joe Biden assaulted Tara Reade either.

--New York Gov. Andrew Cuomo said on Thursday that he would need an “army” of between 6,400 and 17,000 people to trace the contacts of people who have tested positive for the coronavirus as part of a strategy to limit outbreaks. Former New York City mayor Michael Bloomberg would, in coordination with Johns Hopkins University, oversee the recruitment and training of these “contact tracers” and make the program available to governments worldwide.

--New York City Mayor Bill de Blasio had quite a situation to deal with Tuesday night as hundreds of people gathered in the streets of Williamsburg, a neighborhood in Brooklyn, for an Orthodox Jewish funeral, totally against the city’s guidelines.

When he caught wind of the atrocious scene, De Blasio showed up, with scores of police, and threatened mourners with arrest for ignoring social distancing.  Many of the folks weren’t even wearing masks.

De Blasio then slammed their actions as “absolutely unacceptable” on Twitter.

“Something absolutely unacceptable happened in Williamsburg tonite: a large funeral gathering in the middle of this pandemic,” he wrote. “When I heard, I went there myself to ensure the crowd was dispersed. And what I saw WILL NOT be tolerated so long as we are fighting the Coronavirus.”

The mayor went on: “My message to the Jewish community, and all communities, is this simple: the time for warnings has passed. I have instructed the NYPD to proceed immediately to summons or even arrest those who gather in large groups. This is about stopping this disease and saving lives. Period.”

So his comments sparked a backlash from some members of the Jewish community who said he was “singling out” the group.

Chaim Deutsch, a City Council member who represents a large Orthodox Jewish population, tweeted: “This has to be a joke. Did the Mayor of NYC really just single out one specific ethnic community (a community that has been the target of increasing hate crimes in HIS city) as being noncompliant?? Has he been to a park lately?”

“But singling out one community is ridiculous,” Deutsch added in another post. “Every neighborhood has people who are being non-compliant. To speak to an entire ethnic group as though we are all flagrantly violating precautions is offensive.  It’s stereotyping, and it’s inviting antisemitism. I’m truly stunned.”

John Podhoretz / New York Post

“Well, Bill de Blasio, you certainly showed us Jews, didn’t you, on Tuesday night?  Yep, you called us out, all 1.2 million of us New York City Jews, and I really hope you enjoyed it.  Because I know it’s not fun being mayor right now.

“There’s a pandemic, and no one is praising you for your leadership.

“You humiliated yourself with your ludicrous run for president last year, and every time you open your mouth now, Andrew Cuomo runs over and drops a stick of dynamite in it to remind you who’s boss.

“Ah, the frustration!

“So, as has been true with moral ciphers from time immemorial, you decided to seek your jollies by attacking Jews.

“There’s no way to read your tweet from Tuesday night in an exculpatory fashion….

“So let’s review.  On Tuesday night, there was a Hasidic funeral in Williamsburg. Your own NYPD helped arrange street closures for the funeral with the Satmar Hasidim. People came out to show their respects to the dead.  They were wearing masks.  [Ed. many were not!]

“Yes, they showed up in greater numbers than was safe.  That is clear.  But the very same police officers who set up the pylons closing the streets to car traffic could have limited the numbers, the way they do on New Year’s Eve around Times Square.

“What we saw here was therefore a failure of authority. Your authority.  Not a failure of ‘the Jewish community.’  And yet, when you announced you were going to the site personally to address this outrage, what you saw were…bad Jews.  Bad Jews!

“There are 1.2 million Jews in New York City. This means that something like 99.4 percent of New York’s ‘Jewish community’ did not attend that funeral.

“Under your watch, as mayor, there has been an anti-Jewish crime wave in this city. Last year alone, anti-Semitic hate crimes rose 29 percent, prominently featuring the random sucker-punch attacks we’ve all seen on video.

“After remaining shockingly silent about them for a very long time, you finally spoke out in December 2019.  In appointing a task force to look into the violent assaults on Jews in the five boroughs, you said, ‘An attack on the Jewish community is an attack on all New Yorkers.’

“Maybe you should appoint a task force to investigate yourself.

“You know, I used to think you were an idiot, the kind of idiot useful to totalitarians, the kind who subscribed to the official party newspaper of the Stalinist regime in Nicaragua back in the 1980s.

“I also used to think you were a feckless and thoughtless mayor who airily allowed the cleaned-up streets of the city to regress into an open-air dormitory for opioid addicts, in thrall to some demented principle of fairness and justice, not to mention a man intent on destroying the school system out of some equally demented ideas about how excellence is racist.

“What I didn’t think, after six years of your ghastly mayoralty, was that you had the capacity to surprise me.  But you have.

“Here’s what’s interesting: Unlike a lot of other people, I don’t think you should be blamed for what you said about the virus before you turned on a dime and decided to play New York City Hall Monitor. You may not have been prescient, but you were far from alone.

“No, how you defended yourself on Wednesday morning, how you reacted when others reacted so angrily to what you said – that reveals your true self.  Your tweet, you declared, ‘was said with love, but it was tough love.’

“Let me follow your example, and say something with love, but tough love:

“You’re a bad person.”

I’m sorry…for the first time ever I support Bill de Blasio for his initial reaction and he should not have apologized in the manner he did.

-- “Jerk of the Week”…Vice President Mike Pence for not wearing a mask on his visit to the Mayo Clinic, even though the clinic issued a rule April 13, requiring “all patients and visitors to wear a face covering or mask to help slow the spread of Covid-19.”

Pence did wear a mask Thursday while touring a GM facility.

--One thing I agree with President Trump on…we need to reopen schools if even for a week or two before the summer, assuming school districts otherwise will wait for the fall.  The kids need to get in front of their teachers to set up a ‘summer of learning.’  Especially through like grade 8.  Reading lists, math web sites, that kind of thing.

But they need to see their teachers…express their feelings in person, their experiences, their fears.  The teachers will express theirs.  I imagine it would get kind of emotional.  That’s good.

New York kids will now miss that.

--Coronavirus patients discharged from hospital could still carry the virus deep in their lungs, undetected by conventional testing methods, a Chinese study has found.

The discovery, published in a paper in peer-reviewed journal Cell Research on Tuesday, could explain why a growing number of recovered patients had tested positive again.

There was a need for the “improvement of clinical guidelines for virus containment and disease management,” they said.

The study was based on the postmortem examination of a 78-year-old woman who died after having had the coronavirus.  She was admitted to Three Gorges Central Hospital in Chongqing on January 27 after a fall.  She then also tested positive for Covid-19, the disease caused by the coronavirus, and subsequently developed its symptoms.

After receiving antiviral treatment, she was deemed ready to be discharged on February 13, having returned negative results in three rounds of testing, based on samples from the back of her nose and throat.

Her condition had improved significantly, backed up by a CT scan.  A day later, however, she suffered cardiac arrest and died.

The case showed “there is an urgent need to understand the pathogenesis of Sars-CoV-2 infection,” said Dr. Bian Xiuwu of the Army Medical University in Chongqing, southwest China.

The medical community has yet to establish how the virus can affect the bodies of recovered patients.

The postmortem of the woman found no trace of the coronavirus in her liver, heart, intestine, skin or bone marrow.

Instead, the researchers found complete strains of the virus in tissue deep in her lungs.  The coronavirus was enveloped in a crown-like shell.  That’s scary as hell.  [Stephen Chen / South China Morning Post]

--John Shiffman / Reuters:

“Commercial buildings shuttered for weeks to stem the spread of the coronavirus could fuel another grisly lung infection: Legionnaires’ disease.

“Public health experts are urging landlords across the globe to carefully reopen buildings to prevent outbreaks of the severe, sometimes lethal, form of pneumonia.  The sudden and sweeping closures of schools, factories, businesses and government offices have created an unprecedented decline in water use.  The lack of chlorinated water flowing through pipes, combined with irregular temperature changes, have created conditions ripe for the bacteria that causes Legionnaires’ disease, they said.”

Now if diagnosed early, this doesn’t pose the level of health risk Covid-19 does.  But you don’t want to be the one getting it, sports fans.

Those at risk include schools, gyms, factories, hotels, restaurants and outpatient surgical centers, according to Molly Scanlon, an Arizona environmental health scientist.

The big thing I think of, because it’s always been an issue in the New York City area, including Newark, is water cooling towers atop commercial and apartment buildings.

According to the CDC, about one in 10 who contract Legionnaires’ disease die.

New York had an outbreak in 2015 that killed 10.  The same year, 12 deaths in Flint, Michigan, were linked to an outbreak after officials switched the city’s water source from a lake to a river, without taking proper precautions.

There is a paper by Chinese doctors that found that 20 percent of coronavirus patients also had Legionnaires’ disease, a paper posted as a “preprint” with the respected The Lancet, though it has not been peer-reviewed and not actually published in the journal.

Small businesses in particular should be vigilant.  Any device dormant during the shutdown and connected to the water system should be flushed.  We’re talking ice machine, soda machine, per Steve Via of the American Water Works Association, which represents utilities, scientists and academics.

Oh brother.

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Pray for the men and women of our armed forces…and all the fallen.

We pray for our healthcare workers and first responders.

God bless America.

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Gold $1710
Oil $19.69

Returns for the week 4/27-5/1

Dow Jones  -0.2%  [23723]
S&P 500  -0.2%  [2830]
S&P MidCap  +2.6%
Russell 2000  +2.2%
Nasdaq  -0.3%  [8604]

Returns for the period 1/1/20-5/1/20

Dow Jones  -16.9%
S&P 500  -12.4%
S&P MidCap  -22.9%
Russell 2000  -24.5%
Nasdaq  -4.1%

Bulls 46.6
Bears 29.1…split was 43.3 / 30.8 the week before.

*Dr. Bortrum posted a new column!

Hang in there. Wash your hands.

Brian Trumbore

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