How bad are things at easyJet? Well, the backward-looking numbers are dreadful, obviously. An airline that has previously always made annual profits now expects a “headline” loss of £815m-£845m in the financial year to September, even before counting the whack from bad fuel hedges and redundancy and restructuring costs.



a man standing in front of a plane: Photograph: Peter Cziborra/Reuters


© Provided by The Guardian
Photograph: Peter Cziborra/Reuters

Yet it’s the forward-looking indicators that matter now, and easyJet is sending confused signals. The only simple part to understand was the familiar call by the chief executive, Johan Lundgren, for the government to “step up with a bespoke package of measures” for the aviation industry. He has a point: it’s shocking that it was only this week that ministers announced a “travel task force” to construct a decent Covid-testing system at airports.



a man standing in front of a plane: Johan Lundgren, CEO of easyJet. He has a point with his now familiar calls for government assistance.


© Photograph: Peter Cziborra/Reuters
Johan Lundgren, CEO of easyJet. He has a point with his now familiar calls for government assistance.

But what about easyJet’s direct financial strain? The airline said it will fly at only 25% capacity in the current quarter, but when does that become a crisis? Does easyJet mean it could soon want more financial aid from the state, on top of the £600m already secured from the big-company coronavirus borrowing facility? It’s hard to tell.

If Rishi Sunak, the chancellor, scanned easyJet’s trading update, he would be forgiven for concluding there’s little to worry about. Removing costs has put easyJet in a position “to emerge from the pandemic in an even more competitive position”, the statement declared. While £700m of cash was burned in the last quarter and net debt reached £1.1bn, there was £2.3bn of liquidity at the end of last month.

Behind the scenes, one suspects the message is starker about financial risks if quarantine rules remain at their current settings for months on

It may be postponed for now, but what happens to the Treasury market if and when the next COVID-19 bailout bill passes? If President Trump is reelected, it will likely go through in November. If Joe Biden wins, then we could have an even bigger bailout in January when he takes power.

Mark Cabana, head of US Rates Strategy at Bank of America, as quoted by Zero Hedge, believes that if and when it happens, issuance at the long end of the curve will be increased. He’s right. The question I’ll deal with here is, by how much?

Here I’ll bring you through the math precisely, step by step, and show why the answer is between three and six times the issuance rate of the past six years. The exact rate depends on how fast the Treasury needs to raise the money, and that depends on how fast Congress proposes to spend it all. If recent history is any guide, then the answer is pretty fast.

The end point I want to make here is that a 3-6x rate of increase in Treasury note supply going forward would be unprecedented and could trigger foreigners to sell their holdings, triggering a spike in long-term rates, a big fall in the dollar index (UUP) on foreign exchanges, and a spike in the price of gold to new all time highs and beyond. No – rising long-term rates would not bring down gold’s dollar price, not if it’s being spurred by international bond selling and inflation fears. It didn’t in the late 1970’s, and it won’t now.

Where We Are Now

In the ZeroHedge piece, Cabana is quoted directly as follows:

“The limited supply impact (in Treasury bills) is due to the very large existing UST cash balance and recent coupon supply increases

By contrast, about a fifth, $884 billion, went to help workers and families. And even less aimed at the health crisis itself, with 16 percent of the total going toward testing and tracing, vaccine development, and helping states provide care, among other health-related needs.

The division of the funds, laid out in a deeply reported Washington Post investigation into the federal pandemic response, shines a light on the origin of the K-shaped economic recovery. 

It continues to cushion the blow for the well-off while leaving millions of low and middle-income Americans struggling.

“The legislation bestowed billions in benefits on companies and wealthy individuals largely unscathed by the pandemic,” Peter Whoriskey, Douglas MacMillan and Jonathan O’Connell report, “while at the same time allowing special aid for unemployed workers to expire over the summer and leaving some local public health efforts struggling for money to conduct testing and other prevention efforts.”

They point to $651 billion in business tax breaks that “often went to companies unaffected by the pandemic and others that laid off thousands of workers.” That’s in part because the breaks weren’t targeted to sectors that suffered the most acutely during the pandemic shutdowns. And the legislation offered breaks for operating losses dating all the way back to 2018, making companies eligible for relief for setbacks from well before the pandemic struck.

The Cheesecake Factory, for one, said it will claim a tax break for $50 million despite furloughing 41,000 workers. And United Natural Foods, an organic grocer that saw its revenue surge by $1 billion this year, applied for a $28 million refund, the Post team found.

Another source of aid for larger companies came in the form of $454 billion that went to support lending by the Federal Reserve. 

That pot of money helped “stabilize markets, and those

A judge says Ohio’s attorney general can’t block the state’s nuclear plants from collecting fees on electricity bills even though the law that authorized the bailout money is at the center of a $60 million federal bribery probe

COLUMBUS, Ohio — Ohio’s attorney general can’t block the state’s nuclear plants from collecting fees on electricity bills even though the law that authorized the bailout money is at the center of a $60 million federal bribery probe, a judge ruled Friday.

A Franklin County judge denied Attorney General Dave Yost’s attempt to stop Energy Harbor from receiving payments to the company’s two nuclear plants near Cleveland and Toledo that were bailed out through the now-tainted legislation.

The bailout is funded by a fee that will be added to every electricity bill in the state starting Jan. 1 — directing over $150 million a year, through 2026, to the two nuclear plants.

Energy Harbor is the former FirstEnergy Solutions, a onetime subsidiary of FirstEnergy Corp. The company said in a statement last week that the state’s lawsuit “unjustly targets the company for lawfully participating in the political process and advocating for policy that is consistent with our interests.”

The lawsuit also sought to freeze the assets of former House Speaker Larry Householder’s $1 million campaign fund and dissolve the dark money groups involved in the bribery scheme.

But Franklin County Common Pleas Court Judge Chris Brown noted in his ruling that blocking donations and other speech would be an infringement of the companies’ and individuals’ First Amendment rights.

“I don’t know that there’s any way, absent a judicial determination of criminal conduct, that I can prohibit future speech,” Brown wrote.

Yost said while he was disappointed

  • As of Tuesday, roughly 3.6 million homeowners remain in pandemic-related forbearance plans. That’s 6.8% of all active mortgages, representing $751 billion in unpaid principal.
  •  The government and private sector forbearance programs, initiated at the start of the pandemic, allow borrowers to delay their monthly payments for at least three months and for up to a year.



a car parked in front of a house: Homes in the North Park neighborhood of San Diego, California, U.S., on Wednesday, Sept. 2, 2020. U.S. sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market that's proving a key source of strength for the economic recovery.


© Provided by CNBC
Homes in the North Park neighborhood of San Diego, California, U.S., on Wednesday, Sept. 2, 2020. U.S. sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market that’s proving a key source of strength for the economic recovery.

The number of mortgages in active pandemic-related bailout plans rose by 21,000 in the past week after declining for six straight weeks, according to Black Knight, a mortgage technology and analytics firm. 

The increase was not across all mortgage types but among bank-held and private-labeled security loans (28,000), and, to a lesser extent, among FHA/VA loans (2,000). Those increases were offset by a decline of 9,000 Fannie Mae and Freddie Mac loans in forbearance.

The government and private sector forbearance programs, initiated at the start of the pandemic, allow borrowers to delay their monthly payments for at least three months and for up to a year. Forbearance is granted in three-month terms, and so far more than 75% of borrowers in bailouts are on extensions since March.

Video: How stimulus checks can lead to your money being worth less in the future (CNBC)

How stimulus checks can lead to your money being worth less in the future

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“As of the 29th [of September], nearly 800,000 forbearance plans were still set to expire in September, down from 2 million at the start of