The Heisenberg Currencies, macro, commodities, geopolitics
The Heisenberg ReportApr. 26, 2020 11:49 AM ET
SNIPPET:
The bottom line is as follows. There is no economy currently. Not in major, western nations anyway. The manufacturing sector hasn't completely rolled over yet, but the services sector simply ceased to exist starting late last month.
To help illustrate the point, I’ve updated a visual I frequently use to help capture the scope of the malaise for America’s small businesses. For those who don't follow my work elsewhere, a quick explainer is in order. The data I tap into for this comes from
Homebase, a scheduling and time tracking tool used by more than 100,000 local businesses covering 1 million hourly employees.
According to numbers current through April 21, hourly employees working at local businesses are still down around 60% (and more, on weekends). Hours worked fell as much as 75% on April 12.
(Heisenberg, Homebase)
The data compares a given day to the median for that day of the week for the period January 4 to January 31. That’s how Homebase captures the effect of COVID-19.
According to the company, Homebase’s customers in the US consist mostly of restaurant, food & beverage, retail and services and are largely individual owned/operator managed. That makes this data particularly well-suited to this situation, given the pain is concentrated in the services sector, and particularly in food & beverage.
The message is clear: Main Street isn't just hurting, it is disappearing in a very literal sense. As Atlanta Fed boss Raphael Bostic warned earlier this month, "May is going to loom large, in terms of the transition of concern from this being a liquidity issue… to this perhaps translating and transferring into a solvency issue, and whether companies can exist at all."
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