Web Version [link removed] | Update Preferences [link removed] CBRT in the News Riggs Report: California's Business Climate Hits The Shock Stage

It was an abrupt and unexpected turnabout; from a California economy that continued to hum just a few weeks ago to a situation of coronavirus-related shutdowns that has brought most commerce, education and travel to a halt.

On Tuesday, Sacramento County issued a directive that all residents stay at home and away from others, except for essential business like grocery shopping or medical appointments. That followed a shelter-in-place order for six Bay Area counties. Hospital leaders huddled at the Capitol with Gov. Gavin Newsom to assess their readiness in the event of a large-scale outbreak of patients with the coronavirus. Jobs are disappearing as business owners seek to protect their viability.

Rob Lapsley, president of the influential California Business Roundtable, drew comparisons to 9/11, and said business groups and major employers are carefully tracking the economic stimulus packages being crafted in Washington, D.C., and in Sacramento. Those packages will determine whether a recovery is short or long term.

Read More [[link removed]] Business Climate and Job Creation Fed Includes Municipal Debt In Money-Market Lending Backstop

The Federal Reserve on Friday expanded a lending operation that will accept municipal debt as collateral amid funding strains that could intensify as cities and states combat the coronavirus pandemic.

The changes apply to a lending facility to backstop the $3.8 trillion money-market mutual-fund industry unveiled on Wednesday. The Fed originally limited the program to the $800 billion in prime money-market funds, which invest in very short-term corporate debt, but on Friday extended it to certain municipal money-market mutual funds. Municipal bond money-market funds contain $134 billion, according to the Fed.

The Fed said it will also accept highly-rated municipal debt of less than 12 months as collateral for the facility. While that might help alleviate some strains in muni-debt markets, the bulk of stresses have been in longer-dated securities that aren’t eligible for the facility.

Read More [[link removed]] U.S. Extends Individual Tax Filing Deadline From April 15 To July 15

The U.S. is extending the April 15 tax-filing deadline to July 15, giving people more time to prepare and pay their taxes during the coronavirus outbreak, Treasury Secretary Steven Mnuchin said Friday.

“All taxpayers and businesses will have this additional time to file and make payments without interest or penalties,” Mr. Mnuchin said on Twitter.

Earlier this week, the Internal Revenue Service said that most taxpayers could defer payments until July but would still have to file their tax returns or seek extensions by April 15. That announcement drew quick criticism from lawmakers and tax preparers, who warned that they couldn’t get those filings done or would have to risk their safety and health to do it.

Read More [[link removed]] Senate Republicans Unveil $1 Trillion Economic Stimulus Package To Address Coronavirus Fallout

Senate Republicans on Thursday formally rolled out a $1 trillion economic stimulus plan intended to deliver critical aid to US businesses and the American public.

It's a move that sets the stage for negotiations to begin in earnest between Republicans and Democrats in an effort to reach a bipartisan deal to help an economy hit hard by the rapid spread of the novel coronavirus.

Senate Majority Leader Mitch McConnell called the plan "a bold legislative proposal" in remarks on the Senate floor, saying that he was "officially introducing the Coronavirus Aid, Relief and Economic Security Act."

The Kentucky Republican described the major contours of the proposal by saying that it will deliver "direct financial help for the American people," as well as "rapid relief for small businesses and their employees." He said that the plan includes "significant steps to stabilize our economy and protect jobs" and "more support for the brave health care professionals and their patients who are fighting the coronavirus on the front lines."

Read More [[link removed]] Dollar Slides Most Since 2016, Ending Imperious Rally For Now

The U.S. dollar tumbled from a record high, suffering its worst fall in more than four years, after a California stay-in-place order curbed greenback buying amid fears the world’s largest economy is headed for a recession.

The Bloomberg Dollar Spot Index slipped as much as 1.8%, pushed lower by California Governor Gavin Newsom ordering all of the state’s 40 million residents to go into home isolation starting Thursday evening. That marked the most stringent U.S. effort yet to curb the spread of the coronavirus, raising the likelihood of an economic shutdown akin to those seen in Asia and Europe.

It comes on the back of repeated efforts by global policy makers to stem the previously rampant dollar’s advance, with options pricing still indicating bullish sentiment among traders for the currency. The Federal Reserve established temporary liquidity-swap lines with nine additional central banks, including Australia’s and South Korea’s, to ease the dash for dollars.

Read More [[link removed]] Banks Continue To Seek Less Funding Than Fed Offers

Wall Street’s biggest banks on Friday continued to seek far less temporary liquidity from the Federal Reserve than the central bank was willing to provide.

The New York Fed said Friday that it had done two repurchase agreement operations, or repos, both with $500 billion borrowing caps. The operation that expires Monday saw banks seek $22 billion while the operation expiring June 12 saw banks seek $31.25 billion.

The Fed will offer another $500 billion-cap repo later Friday.

Fed repo operations are effectively collateralized loans that take in Treasurys, mortgages, and agency securities. They are aimed at helping the central bank maintain control over the federal-funds rate target rate They also are intended to help the financial system navigate massive shocks from the coronavirus crisis.

Read More [[link removed]] ‘I Have Bills I Have To Pay.’ Low-Wage Workers Face Brunt Of Coronavirus Crisis

As coronavirus shutdowns halt commerce across the U.S., low-wage workers, many of whom live paycheck to paycheck, are being quickly stung.

The affected jobs, by their nature, often require broad personal contact, such as running a cash register or cleaning hotel rooms. That substantially raises the risk of infection.

Many such workers also hold positions most vulnerable to quick job cuts and pay cuts, especially in service industries.

That includes restaurant workers, hotel maids, dog walkers and child-care providers. In many cases, the cuts are tied to shutdowns and cancellations of events in sports stadiums, industry conventions, casinos, music festivals and other public gatherings.

Read More [[link removed]] Existing-Home Sales Jumped In February, But Economists Expect Slowdown

Sales of previously owned U.S. homes hit the highest monthly pace in 13 years in February, but economists and real-estate agents expect sales to plunge in the coming months as the coronavirus pandemic roils the economy.

Mortgage rates have been hovering at their lowest levels on record. Cheap borrowing costs have started luring more home buyers in recent months, after a long stretch when a shortage of affordable homes kept many on the sidelines despite low unemployment and a strong economy.

Now, the coronavirus is already causing unemployment to surge and economic activity looks poised to shrink in the week ahead. That deterioration is expected to sharply reverse the strong growth in the housing market just as the busy spring season for home sales gets under way, suffocating momentum that was building last month.

Home sales increased 6.5% in February compared with January at a seasonally adjusted annual rate of 5.77 million, the National Association of Realtors said Friday. Existing-home sales were up 7.2% in February from a year earlier, the eighth consecutive year-over-year rise.

Read More [[link removed]] Trump Administration Asks States To Keep Quiet About Jobless Figures

The Trump administration asked states to abstain from releasing unemployment-claims figures prior to the publication of a national compilation of weekly U.S. jobless claims, according to a state labor department official.

The official cited an email sent on Wednesday from Gay Gilbert, an administrator at the U.S. Labor Department. The message, sent as states across the nation started reporting surges in claims tied to the coronavirus pandemic, said jobless claims are closely watched by policy makers and financial markets during a time of fast-changing economic conditions. The emailed message asked states to keep the numbers embargoed until the national claims figures are released each Thursday, the state official said.

The number of Americans applying for first-time unemployment benefits jumped last week in a spike tied to the coronavirus pandemic, increasing by 70,000 to 281,000, the fourth-biggest weekly increase on record going back to 1967.

Read More [[link removed]] Coronavirus Triggers Wave Of U.S. Workers Filing For Jobless Benefits

The new coronavirus pandemic has triggered a wave of U.S. workers filing for state jobless benefits, with states across the nation receiving a sharp rise in applications as businesses shut down and out-of-work Americans hunt for a payment lifeline.

Ohio’s three-day total for jobless claims through Tuesday was 78,000, compared with about 3,000 for the same period last week. Connecticut filers have submitted more than 30,000 new claims since Monday, compared with just 2,500 all last week.

Michigan received about 5,400 initial claims on Monday compared with typical filings of between 1,300 and 1,600. And Kentucky processed more than 9,000 claims on Tuesday alone, though it normally receives 2,000 jobless claims a week.

Read More [[link removed]] Economic Downturn Catches State Unemployment Programs Unprepared

State unemployment insurance systems across the U.S. aren’t ready for the likely surge in worker claims from the U.S. economic downturn triggered by the new coronavirus pandemic.

States, which administer unemployment insurance programs, rely on employer taxes for trust-fund money that they use to pay unemployment benefits.

Despite a historically long economic expansion, 22 states and jurisdictions’ unemployment trust funds are unprepared to pay out enough in unemployment benefits in the event of a recession, according to Labor Department data. For a trust fund to be recession-ready, it must have enough to pay benefits through a yearlong recession.

As the pandemic shuts down businesses across the nation, economists are warning that the U.S. should brace for a recession, meaning unemployment insurance will be looked to as a key source of relief for workers laid off during the crisis. But states such as California, New York and Ohio haven’t fully replenished their unemployment trust funds since the 2007-09 recession.

Read More [[link removed]] California, World's Fifth-Largest Economy, Is In Lockdown As Governor Orders Residents To Stay Home

Democratic Governor Gavin Newsom of California announced a mandatory lockdown for all Californians Thursday evening due to the coronavirus.

Newsom said that over the next eight weeks, 56 percent of Californians could come down with COVID-19, the disease caused by the coronavirus. However, it was clarified that Newsom's estimation didn't take into account the efforts to slow the spread of the disease.

The order, which Newsom calls a "safer-at-home" order, is mandatory and will make the vast majority of the the state's almost 40 million residents stay self-isolated in their homes. Residents will be able to leave their homes for exercise and for essential needs.

Read More [[link removed]] Businesses Are Sheltering In Place. How Long Can The Economy Survive That?

We’ve all seen the unsettling images of what happens when the economy goes haywire.

Bread lines, farmers abandoning the Dust Bowl, drivers queued up to fill their gas tanks, houses with foreclosure notices pounded into their front lawns.

Add to that a rush-hour view of a Los Angeles freeway, typically jammed with commuters, but now more like a Sunday morning due to a virus that has wrecked the once-booming U.S economy just two months after the first confirmed domestic case of COVID-19, the disease caused by the novel coronavirus.

Stocks have collapsed, airlines haveshed routes and businesses have closed. Millions of workers are being sent home and cautioned to minimize their interactions with their friends, neighbors and even family members — a course of action the White House recommends Americans follow for 15 days.

Read More [[link removed]] Independent Contractors In California May Have Limited Options To Apply For Unemployment Due To Coronavirus

California has seen a surge in unemployment insurance claims this week as companies shut their doors to halt the spread of the coronavirus. Some workers have seen their hours reduced, others have lost their jobs altogether.

And while those classified as employees can apply for jobless benefits, the options for independent contractors or gig economy workers are more limited.

Speaking on Wednesday, Gov. Gavin Newsom said the state typically receives about 2,000 claims per day.

“Two, three days ago we saw about 40,000 ... then 70,000,” he said. “Yesterday, 80,000 applications. It doubled in a 48 hours period.”

Those classified as full- and part-time employees and who are affected by the coronavirus can apply for unemployment insurance through the state’s Employment Development Department [EDD]. The department set up a website to answer questions for affected workers.

Read More [[link removed]] California Also Faces Economic Hit

Gov. Gavin Newsom’s engaged, steady-hand-at the-tiller approach to managing California’s slice of the global coronavirus pandemic is winning well-deserved plaudits.

Newsom has slowly but steadily ramped up restrictions on Californians’ potentially dangerous social interactions in hopes of slowing the spread of the deadly virus, while dipping into the state’s financial reserves to cushion impacts.

As he called on lawmakers to act quickly, Newsom declared, “we must rise to the challenge facing our state with every tool at our disposal and without a second of delay. We cannot hesitate to meet this moment.”

The Legislature unanimously authorized Newsom to spend as much as $1.1 billion to fight the virus and its social and economic impacts.

Read More [[link removed]] Energy and Climate Change Lithium Startup Backed By Bill Gates Seeks A Breakthrough At The Salton Sea

David Snydacker knew going in that California’s Imperial Valley was a “graveyard for lithium-extraction technologies.”

For years, companies had tried and failed to find a cost-effective way to pull the valuable mineral — a key ingredient in the batteries that power electric cars — from the naturally heated fluid deep beneath the Salton Sea. One of the most recent busts was Simbol Materials, a much-hyped startup that collapsed in 2015 shortly after Elon Musk’s Tesla Inc. offered to buy the firm for $325 million.

But several deep-pocketed investors think Snydacker’s technology may finally launch a new domestic clean-energy industry.

His Oakland startup, Lilac Solutions, recently announced a $20-million funding round led by Breakthrough Energy Ventures, which funds startups working to reduce planet-warming emissions. Breakthrough’s investors include three of the world’s 10 richest people: Microsoft Corp. co-founder Gates, Amazon Chief Executive Jeff Bezos and former New York City Mayor Michael R. Bloomberg.

Read More [[link removed]] Coronavirus Shutdowns Are Lowering Greenhouse Gas Emissions; History Shows They'll Roar Back

The global struggle to slow the spread of the coronavirus has brought with it canceled flights, closed businesses and a quickly escalating economic slowdown that could be devastating to millions. It is also certain to shrink greenhouse gas emissions this year, according to climate scientists.

But does that mean we are turning a corner in cutting planet-warming pollution?

If history is any indication, no. The slide in emissions will be temporary, experts say. What’s more, scientists and environmentalists worry the pandemic will at the same time undermine government and industry’s resolve to cut emissions in the long term.

Experts are predicting the health crisis will cause global emissions to drop for the first time since 2009, during the Great Recession. But a look back over the decades shows a steady rise in greenhouse gases punctuated by temporary dips caused by economic downturns, including the 2008 global financial crisis and the oil shocks of the 1970s. Pollution bounces back predictably once the economy starts improving again, with the resurgence in industrial activity, travel and consumption more than offsetting any short-lived benefits to the climate.

Read More [[link removed]] California Should Reset Its Ambition And Unleash The Next Wave Of Clean Energy To Combat Climate Change

California can readily and cost-effectively reach its goal to achieve climate neutrality by 2045 and begin to reverse climate change, according to a recent report led by Lawrence Livermore National Laboratory and authored by more than 20 researchers.

In fact, the report shows we can meet those targets much sooner.

Achieving climate neutrality and net-negative emissions requires not only continuing to reduce greenhouse gas emissions from all sources, but also pulling carbon dioxide out of the air, so eventually, we remove and store more greenhouse gases from the atmosphere than we put into it.

Many carbon removal strategies scrub carbon dioxide from the air and reduce emissions from sources on the ground, by generating renewable energy or supporting carbon capture from industrial facilities. For some strategies, these “avoided emissions” are of similar magnitude as the level of carbon removal – offering double climate benefit.

Read More [[link removed]] The Coronavirus Killed The Progressive Left

Covid-19 and the Democratic presidential primaries, the two biggest stories of the year so far, reflect a common theme: the death of the progressive left. Looking back, historians may well see late 2019 and very early 2020 as a kind of high-water mark for American progressivism.

It wasn’t so long ago that Bernie Sanders and Elizabeth Warren were commanding most of the attention in the presidential campaign, especially among intellectuals. Right before Super Tuesday, Sanders was a clear favorite in the prediction markets. Yet the actual voting showed the strength of Joe Biden, a (relative) centrist; Warren attracted very little support, and Sanders failed to reach the same vote totals he achieved four years ago.

And a big comeback for the left four years from now seems unlikely. Democratic Party success is likely to come from other directions. Covid-19 could well be a front-page story for the next year or two, possibly more. Over the span of less than a week, virtually every major institution in American life has been subject to radical changes to their daily operations, and it is not clear when things will return to normal. Covid-19 may well make a bigger impression on the national consciousness than 9/11 or the financial crisis of 2008.

Read More [[link removed]] How Power Companies Are Keeping Your Lights On During The Pandemic

The American power grid has been described as the world’s biggest machine — and the people who run that machine say they’re prepared to keep the lights on as the coronavirus pandemic spreads.

Disaster planning is baked into the DNA of electric and gas utilities, which regularly deal with hurricanes, earthquakes, cyberattacks and other disruptions that threaten to disable critical infrastructure.

That doesn’t mean responding to COVID-19 will be easy. But it does mean utilities have plans in place to keep supplying reliable electricity and gas while the crisis plays out.

“Say what you will about the utility industry — they’re pretty good about contingency planning,” said Stephen Berberich, president of the California Independent System Operator, which manages the electric grid for most of the state. “Things are changing quickly, and we’re doing our best to adapt to changing conditions. But I have every confidence in our people and our technology.”

Read More [[link removed]] Should Gasoline Come With A Climate Change Warning Label? These Cities Think So.

In one U.S. city, the routine action of filling up your car with gas may soon come with a warning.

In late January, Cambridge, Massachusetts, may have become the first city in the country to pass an ordinance that all gas station fuel pumps must bear a label telling consumers about the climate and health risks that come with burning diesel, ethanol and gasoline.

“I think there’s a certain pride in Cambridge to try to be a leader, to model policies that may seem somewhat radical and then become generally adopted,” said Jan Devereux, the former vice mayor who shepherded the bill until her retirement from the Cambridge City Council in late 2019.

Devereux’s victory in Cambridge was at least seven years in the making. It followed an unsuccessful effort to get climate labels on gas pumps in Berkeley, California; a limited measure in North Vancouver, British Columbia; and a soon-to-be-implemented law in Sweden.

Read More [[link removed]] California Is A Climate Leader. But Here's Why It Needs To Move Even Faster

California is aiming to slash planet-warming emissions faster than ever over the next decade — and critics say state officials aren’t acting with nearly enough urgency.

The Golden State reached its 2020 climate change goal four years early, bringing economy-wide emissions back down to 1990 levels without most Californians noticing that anything was different. But the state’s next target, a 40% reduction in climate pollution by 2030, will be a much bigger lift.

A recent report from the research firm Energy Innovation found that the state must cut emissions nearly twice as quickly over the coming decade as it did during the last one, and that current policies won’t get the job done. The think tank Next 10 reached a similar conclusion, finding that the state is on track to meet its 2030 target three decades late.

Despite those findings, the California Public Utilities Commission is considering a proposal to cut power-sector emissions by just 25% during the 2020s, a slower pace than during the previous decade. Commission staff also studied a plan that would aim to cut climate pollution in half, before recommending the less aggressive target.

Read More [[link removed]] Infrastructure and Housing COVID-19 And California's Housing Crisis: 5 Issues To Watch

Less than two weeks ago, Gov. Gavin Newsom and California lawmakers were in the throes of tackling the twin issues voters considered the state’s most urgent concerns: the more than 150,000 Californians without a home and the state’s sky-high housing costs.

Legislators were introducing controversial bills to make it easier for developers to build more housing, hoping to ease the crippling shortage economists say have made rents and home prices among the most expensive in the country. Newsom and local governments were about to square off over how to spend $1 billion in proposed help for the unhoused.

That feels like eons ago. As the COVID-19 pandemic forces millions of Californians to adjust to a new reality, the state’s “housing crisis” already means something different, provoking previously unthinkable questions:

Read More [[link removed]] L.A. Moratorium On Business Evictions Could Squeeze Landlords

A Los Angeles moratorium on evicting restaurant operators and other small businesses that are losing customers during the novel coronavirus pandemic may cause pain to landlords while offering relief to their struggling tenants.

Early reports, however, suggest that commercial property landlords are not eager to boot tenants who have fallen on hard times because they might not be able to find new renters any time soon.

The planned moratorium on evictions of small businesses was part of sweeping measures approved by the City Council on Tuesday to protect people from being forced out of their homes or apartments because they have lost income and can no longer afford rent or mortgage payments.

The plan, which could be adopted as early as next week, will temporarily ban evictions and late fees, require landlords and residential mortgage-holders to work out payment plans with affected residents, reduce city business taxes and create a citywide rental assistance fund.

Read More [[link removed]] Evictions Lawsuits Proceed In California Despite Relief For Some Tenants

Pandemic or no pandemic, landlords’ attorney Dennis Block is still trying to evict renters.

As public health authorities advise Californians to stay indoors to avoid contracting or spreading the coronavirus, Block says he is continuing to file eviction lawsuits in Southern California courts in cases not covered by local moratoriums like those recently imposed in Los Angeles.

“There’s no one person that I’m aware of, certainly in Southern California, that lost their job and couldn’t pay the March 1 rent,” said Block, who declined to say exactly how many eviction lawsuits he’s filed in recent days.

“So unless you just want to say okay, well there’s a pandemic, let’s just start throwing money around from other people’s pockets, then that’s what you got.”

Tenant-rights groups say the wheels of the eviction process — like Block’s lawsuits — are still turning in many parts of the state. They argue that’s partly because Gov. Gavin Newsom has so far resisted a blanket moratorium for California.

Read More [[link removed]] Homeless Mothers Occupy 12 Vacant Caltrans Houses Amidst Public Health And Housing Crises

A group of homeless mothers, their children and others have occupied a dozen vacant Caltrans-owned houses in El Sereno in an effort to call attention to the fact that the state transportation agency is sitting on more than 160 empty homes during an unprecedented public health and housing crisis.

The group, called Reclaiming Our Homes, includes Benito Flores, Ruby Gordillo, Martha Escudero and their five young children, who first occupied a Caltrans house located at 3135 Sheffield Ave., Los Angeles, on Saturday. Several others reclaimed other nearby vacant Caltrans houses in the following days. The group released a list of demands, including turning publicly-owned vacant properties into housing, freezing rents and other measures.

“With this health crisis and this housing crisis we need every vacant house to be a home for those who don’t have a safe and stable place to sleep in,” Gordillo said at a press conference in front of one of the houses on Wednesday.

Nearly 60,000 people in Los Angeles and nearly 550 in Pasadena are living in unsheltered locations or temporary shelters on any given night, according to the 2019 homeless counts. Numbers from the 2020 count have not yet been released.

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