U.S. Economy Contracting “At Its Sharpest Pace Since World War Two” And “The Worst Is Yet To Come”

Fear of COVID-19 has unleashed economic chaos on a scale that has already surpassed anything that we witnessed during the last recession, and as you will see below, we are now being warned that “the worst is yet to come”.  Many Americans are hoping that things can start to return to normal as the U.S. economy “reopens” in the weeks ahead, but the truth is that we are still in the very early chapters of this crisis.  In fact, it is being estimated that we are only one-tenth of the way through this pandemic, and by “flattening the curve” we have actually extended the economic pain.  You see, the truth is that most Americans are going to end up catching this virus one way or another.  All of the “shelter-in-place” orders have temporarily slowed down the spread of this coronavirus, but once they are lifted it is inevitable that we will see new waves of people becoming infected.  And if you think that a vaccine will be the golden ticket that gets us out of this mess, you might want to reconsider that belief, because there has never been a successful vaccine for any coronavirus.  Of course it is possible that scientists could come up with something this time around, but if the virus mutates significantly that could render any potential vaccine absolutely useless.

In the days ahead, there will be a tremendous amount of debate about the correct way to fight this virus, but meanwhile the U.S. economy will continue to deteriorate.

In fact, Reuters is reporting that economists are now projecting that the U.S. economy is contracting “at its sharpest pace since World War Two”…

The deepening economic slump was also amplified by other data on Thursday showing manufacturing activity in the mid-Atlantic region plunged to levels last seen in 1980 and homebuilding tumbling by the most in 36 years in March.

The reports followed dismal reports on Wednesday of a record drop in retail sales in March and the biggest decline in factory output since 1946. Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since World War Two.

Yesterday, I documented the fact that we are in the midst of the largest tsunami of job losses in U.S. history by a very wide margin.

In fact, we are absolutely obliterating the old records, and that truly puts us in unchartered territory.  And as bad as things have already gotten, one prominent expert told Reuters that “the worst is yet to come”…

Economists are estimating the economy contracted as much as 10.8% in the first quarter, which would be the steepest drop in gross domestic product since 1947. They say the massive fiscal package will likely provide little cushion for the economy.

“The economy is in a downward spiral where job losses beget job losses and the federal government emergency relief checks will not be enough to turn the tide,” said Chris Rupkey, chief economist at MUFG in New York. “The recovery is looking less V-shaped by the day as the deeper we fall, the harder it will be for the nation to climb back out of this deep hole the pandemic has dug for the economy. The worst is yet to come.”

As areas around the country start “reopening for business”, some of the jobs that were lost will come back.

But the truth is that millions of those jobs are gone permanently, and large numbers of the businesses that were closed down will never open again.

For the foreseeable future, a lot of Americans are going to avoid going to restaurants, bars, movie theaters, shopping malls and other businesses that require close human interaction.  One expert that was interviewed by the Los Angeles Times says that for the next few years we need to accept the fact that the world “will be totally different than what we are used to”…

“The world that we are going to live in for at least the next two to three years will be totally different than what we are used to,” said Sung Won Sohn, president of SS Economics and professor at Loyola Marymount University.

“Because of the psychological shock that we have experienced, we are going to be more cautious, and we will probably spend less and save more, and we will have fewer contacts with other individuals,” he said. “We are going to be suspicious about things, [such as] whether people we are meeting have the virus and will the economy fall back down again.”

The fear that this pandemic has created is going to be with us for a very long time, and it is going to cause enormous shifts in economic behavior even after the U.S. starts “reopening”.

In an environment like this, very few people are buying vehicles, the housing market is already imploding all over the nation, and retailers are having a very difficult time envisioning any sort of a positive future for their industry at this point.

But at least we will all be getting big, fat socialist bailout checks from the government, right?

Actually, they won’t be that big, and for most Americans the checks will only get them through about one month.

So once that money is gone, will the federal government send us another round of “universal basic income” checks?

Now that they have gone down this rabbit hole, the federal government is in danger of sparking civil unrest if they don’t keep the checks coming.  In fact, Jim Rickards is entirely convinced that large scale “social disorder” is on the way…

Looting, burglary and violence in the midst of a state of emergency are the shape of things to come.

The veneer of civilization is paper-thin and easily torn. Most people don’t realize how fragile it is. But they’re going to learn that lesson, I’m afraid.

Expect social disorder to get worse long before it gets better.

Unfortunately, Rickards is right on point, and I have also been warning about “great civil unrest” for a very long time.  The delicately balanced debt-fueled prosperity that we had been enjoying for so many years has now been shattered, and things are going to get really ugly in this country.

And this coronavirus pandemic is not going away any time soon.  Over the last 24 hours, the number of confirmed cases in the U.S. has jumped by more than 30,000 and the death toll has risen by more than 2,400 even though most of the nation is currently shut down.

Ending the lockdowns will give a boost to the economy, but it will also cause the virus to start spreading faster, and once that happens we could see another round of lockdowns.

In the end, our battle with COVID-19 will not be over until the virus has swept through most of the population, and we are not going to reach that point for quite a while.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

This Is The Worst Employment Collapse In U.S. History By A Very Wide Margin

We have never seen an “employment apocalypse” in the United States like we are witnessing right now, and it is not going to end any time soon.  Over the past several days, “coronavirus shutdowns” have officially been extended all over the nation, and the longer these shutdowns last the more jobs our economy is going to lose.  And because most Americans were living paycheck to paycheck before this pandemic hit us, many unemployed workers are already unable to pay their bills.  Yes, our authorities may be slowing down the spread of the virus, but in the process they have absolutely killed the economy.  On Thursday, I was stunned to learn that another 5.2 million Americans filed initial claims for unemployment benefits last week.  That brings the grand total for the last four weekly reports “to a staggering 22 million”

About 5.2 million people filed for unemployment benefits last week, the Labor Department said Thursday.  Jobless claims provide the best measure of layoffs across the country. Economists surveyed by Bloomberg had estimated that 5.5 million Americans would file initial applications for unemployment insurance last week.

That brings the total claims over the past four weeks to a staggering 22 million. By comparison, the labor market added 21.5 million jobs since the Great Recession.

Just think about that.

22 million jobs wiped out in one month.

And the true number of jobs lost is actually even higher, because not everyone that loses a job files for unemployment benefits.

Prior to this year, the highest number of initial claims for unemployment benefits during any four week period that we had ever witnessed was 2.7 million during the fall of 1982.

So 22 million in four weeks truly puts us in uncharted territory.  Just look at this chart.

We aren’t just beating the old records, we are absolutely obliterating them.

You know that things are really, really bad when even NBC News sounds just like The Economic Collapse Blog…

“The labor market is obviously very, very important, and has a high correlation with what is going on in the economy,” Jay Bryson, the acting chief economist at Wells Fargo, told NBC News. “It is showing us what I think we all know, that the economy is falling off a cliff at an unprecedented rate.”

In other words, the chief economist at Wells Fargo is saying that the U.S. economy is completely and utterly collapsing.

According to Zero Hedge, “we have lost 710 jobs for every confirmed US death from COVID-19 (30,985).”  Our politicians have prioritized saving lives over saving the economy, and many people out there seem convinced that was the right choice, but the economic devastation has been immense.

The socialist “stimulus payments” and unemployment benefits will help all of these unemployed workers temporarily, but the payments from the federal government are supposedly just a one time deal, and it won’t be too long before many states start running out of unemployment money

Six states — including New York, which has the highest number of cases in the US — can only fund up to 10 weeks of unemployment benefits from their state coffers before money runs out and they have to turn to the federal government for additional funding, according to a recent estimate from the Tax Foundation.

Another 15 state trust funds don’t meet the federal Department of Labor’s recommended minimum solvency standard, which requires being able to pay benefits for a year in an economic downturn similar to the Great Recession.

So what will the federal government do once we get to that point?

I imagine that Congress will eventually want to borrow and spend trillions more dollars that we don’t have, and it is likely that “conservatives” and “liberals” will both be quite eager to vote for another pork-filled bill.

But it is probably going to take some time for Congress to get through the process of passing another crazy spending package, and meanwhile deep economic suffering is erupting all over the nation.

On Thursday, vehicles were lined up for two miles in Miramar, Florida as needy individuals waited for hours to get handouts from a local food bank.  We are starting to see food lines like this all over the country, and if things are this bad already, what will things look like a few months from now?

The chief economist at Grant Thornton in Chicago is calling this “the deepest, fastest, most broad-based recession we’ve ever seen”, and I can’t argue with that assessment one bit.

For a moment, I would like for you to consider just a few of the economic news items that we have seen over the past few days…

-United Airlines has reduced its schedule of flights for May and June “by about 90%” as demand for air travel has absolutely plummeted.

-U.S. retail sales were down 8.7 percent in March.

-J.C. Penney is “considering bankruptcy”.

-Housing starts just collapsed by the most that we have seen in 36 years.

-The mayor of Los Angeles says that large gatherings in his city will likely be banned until 2021.

-Facebook has canceled all large events until June 2021.

-Chinese GDP just experienced the largest drop ever recorded.

Of course nearly every nation will soon report absolutely staggering declines in GDP.  The shutdowns have brought economic activity to a standstill all over the globe, and no region is immune.

The following is how the Daily Mail is describing the current state of global trade…

The coronavirus pandemic is crippling global trade because crews on transport ships have been stranded at sea for months and food processing plants have been forced to close, threatening to bring the world’s supply chain to a grinding halt.

Shipping workers at sea are denied entry into ports, truckers can’t get to work in some countries or are confronted with complications at borders, food plants are closing and farm harvests going to waste in the crisis.

Does that sound like a “perfect storm” to you?

Well, the truth is that it is just getting started.

Eventually this pandemic will subside, but now that all of the economic dominoes are starting to tumble it will be exceedingly difficult to reverse that momentum.

And as I pointed out the other day, most Americans are not likely to resume all of their normal daily activities once the restrictions are finally lifted, and fear of this virus is going to be a dominant economic force for the foreseeable future.

What all of this means is that we are facing incredible economic pain for the short-term, the mid-term and for a long time to come.

At this point, we should no longer speak of “economic collapse” as something that will happen in the future.

It is here.

It is now.

And it is going to get a lot worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Will You Resume Normal Daily Activities Once The Coronavirus Restrictions Are Finally Lifted?

COVID-19 has turned all of our lives upside down, and most people are quite eager for a return to normalcy.  But as you will see below, fear of the coronavirus is going to prevent the vast majority of Americans from immediately resuming all of their normal daily activities once the coronavirus restrictions have been lifted.  Every day there are more stories in the news about prominent individuals that have died from the virus, and the chilling testimonies of those that have wrestled with the virus and survived are extremely sobering.  Yes, most people that catch this virus will ultimately recover, but the fact that tens of thousands of Americans are dying is seriously scaring a lot of people.  And even though the “shelter-in-place” orders appear to be slowing the spread of the virus to a certain extent, the official U.S. death toll has actually doubled over the past week

U.S. deaths from the novel coronavirus topped 25,000 on Tuesday, doubling in one week, according to a Reuters tally, as officials debated how to reopen the economy without reigniting the outbreak.

The United States, with the world’s third-largest population, has recorded more fatalities from COVID-19 than any other country. There were a total of nearly 597,000 U.S. cases – three times more than any other country – with nearly 2 million reported cases globally.

And according to Worldometers.info, more than 2,200 Americans have died over the last 24 hours, and that would make this the deadliest day of this pandemic so far.

So it is easy to understand why so many people out there are deeply afraid of this virus.  Most of us don’t want to die, and COVID-19 can kill you.

In recent days, there has been a whole lot of talk about “reopening America”, and many are assuming that life will start to look somewhat normal once that happens.

But Gallup just conducted a survey in which they asked people if they would be “resuming their normal daily activities” once the restrictions are lifted, and these were the results

Americans remain hesitant about resuming their normal daily activities amid the COVID-19 outbreak according to a Gallup question first asked in late March and repeated in early April.

When asked how quickly they will return to their normal activities once the government lifts restrictions and businesses and schools start to reopen, the vast majority of Americans say they would wait and see what happens with the spread of the virus (71%) and another 10% would wait indefinitely. Just 20% say they would return to their normal activities immediately.

In other words, about 80 percent of the country is going to take a hesitant approach, and that has huge implications for our economy moving forward.

Of course all of the coronavirus restrictions are not going to be lifted any time soon anyway, and this is something that I discussed yesterday.

Today, California Governor Gavin Newsom set forth six specific conditions which must be met before the restrictions will be lifted in his state…

  1. The ability to monitor and protect our communities through testing, contact tracing, isolating, and supporting those who are positive or exposed.
  2. The ability to prevent infection in people who are at risk for more severe COVID-19.
  3. The ability of the hospital and health systems to handle surges.
  4. The ability to develop therapeutics to meet the demand.
  5. The ability for businesses, schools, and child care facilities to support physical distancing.
  6. The ability to determine when to reinstitute certain measures, such as the stay-at-home orders, if necessary.

Needless to say, California may continue to be locked down for an extended period of time to come.

But the longer that these shutdowns persist, the more impatient many Americans are going to become.

Already, we are starting to see protests pop up all over the nation.  For example, just check out what is happening in Michigan

At least 15,000 cars and trucks are expected to descend on Michigan’s state capital on Wednesday to protest what they’re calling Gov. Gretchen Whitmer’s tyrannical new guidelines to slow the spread of the novel coronavirus in the state.

The so-called “drive-by” demonstration – in order to maintain social distancing — aims to bring traffic to a gridlock in Lansing and protest the “Stay Home, Stay Safe” executive order by Whitmer, a Democrat, mandating what businesses could stay home, what some businesses could sell and ordering people in her state against any gatherings – no matter the size or family ties.

I am seeing a lot of anger out there right now.  Business owners, workers and entrepreneurs are not being allowed to make a living and provide for their families, and I can certainly understand their frustration.

And the longer that things are shut down, the worse this economic downturn is going to become.  At this point, the IMF is projecting the worst performance for the global economy since the Great Depression of the 1930s

The global economy will this year likely suffer the worst financial crisis since the Great Depression, the International Monetary Fund said Tuesday, as governments worldwide grapple with the Covid-19 pandemic.

The Washington-based organization now expects the global economy to contract by 3% in 2020. By contrast, in January it had forecast a global GDP (gross domestic product) expansion of 3.3% for this year.

Actually, I believe that the IMF’s projection is way too optimistic.

If global GDP only declines by 3 percent in 2020, that should be considered a rip-roaring success.

Now that the U.S. has become the epicenter for this pandemic, our nation is being hit particularly hard economically, and we are being warned that more than 2,000 cities “are anticipating major budget shortfalls this year”

More than 2,100 U.S. cities are anticipating major budget shortfalls this year and many are planning to slash programs and cut staff in response, according to a new survey of local officials released Tuesday, illustrating the widespread financial havoc threatened by the coronavirus pandemic.

The bleak outlook — shared by local governments representing roughly 93 million people nationwide — led some top mayors and other leaders to call for greater federal aid to protect cities now forced to choose between balancing their cash-strapped ledgers and sustaining the public services that residents need most.

Of course this is just only the beginning of the end.  All of the economic and financial bubbles are bursting, and this is going to cause severe distress on the national, state, local and community levels.

And as long as COVID-19 is still spreading somewhere, fear of the coronavirus is going to cause a lot of people to greatly alter their normal economic patterns.

So the truth is that we have a very long and very painful road ahead of us, and the months to come are going to make the last recession look like a Sunday picnic.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Now They Are Telling Us That Life In America Will Definitely Not Be Returning To Normal “For The Foreseeable Future”

If you thought that this pandemic would pass quickly and that life in America would soon return to “normal”, I am afraid that you are in for quite a shock.  Some of the restrictions currently in place will eventually be lifted, and efforts will be made to get people back to work, but life is still going to be radically different from what we had become accustomed to before COVID-19 started sweeping across the globe.  Authorities are telling us that there may be “rolling shutdowns” for up to 18 months, that social distancing guidelines will be necessary for a long time to come, and that this crisis will not ultimately be resolved until they can inject everyone with a vaccine.  If all of this greatly alarms you, please be assured that you are not alone.

In recent days there has been a tremendous amount of debate about when to “reopen the U.S. economy”, and organizations all along the political spectrum have drafted plans for how to do that.

Ezra Klein actually read quite a few of those plans, and he discovered that none of them would return our lives to normal “for the foreseeable future”

Over the past few days, I’ve been reading the major plans for what comes after social distancing. You can read them, too. There’s one from the right-leaning American Enterprise Institute, the left-leaning Center for American Progress, Harvard University’s Safra Center for Ethics, and Nobel Prize-winning economist Paul Romer.

I thought, perhaps naively, that reading them would be a comfort — at least then I’d be able to imagine the path back to normal. But it wasn’t. In different ways, all these plans say the same thing: Even if you can imagine the herculean political, social, and economic changes necessary to manage our way through this crisis effectively, there is no normal for the foreseeable future. Until there’s a vaccine, the United States either needs economically ruinous levels of social distancing, a digital surveillance state of shocking size and scope, or a mass testing apparatus of even more shocking size and intrusiveness.

Over and over again, a “vaccine” is being touted as the golden ticket that will get us out of this mess.

The head of the Federal Reserve Bank of Minneapolis, Neel Kashkari, is another prominent voice that is warning that there won’t be a return to normalcy until a vaccine comes along.  And until that time comes, he believes that we are potentially facing “an 18-month strategy of rolling shutdowns”

Kashkari, while acknowledging the downside of what a prolonged shutdown could mean for the economy, said the U.S., “barring some health-care miracle,” is looking at an 18-month strategy of rolling shutdowns based on what has happened in other countries.

“We could have these waves of flare-ups, controls, flare-ups and controls, until we actually get a therapy or a vaccine,” he said. “We need to find ways of getting the people who are healthy, who are at lower risk, back to work and then providing the assistance to those who are most at risk, who are going to need to be quarantined or isolated for the foreseeable future.”

In other words, Kashkari believes that all or part of the nation will be shut down over and over again whenever the number of coronavirus cases starts to spike too high.

Of course the WHO is eagerly looking forward to global vaccination as well, and the head of the WHO just told the media that he believes that this virus is ten times deadlier than the swine flu pandemic of 2009…

Coronavirus is ten times deadlier than the 2009 swine flu pandemic and a vaccine will be needed to halt it, the World Health Organisation has said.

WHO chief Tedros Adhanom Ghebreyesus told a virtual briefing from Geneva the organisation was constantly learning about the bug sweeping the globe.

Over and over again, officials are telling us that we are facing an 18 month timeframe until a vaccine will be ready.  Just check out what New York Governor Andrew Cuomo said during his press conference earlier today…

On Monday, governor Cuomo was joined on a conference call by the other Northeast governors. The recovery must be careful, incremental and guided by experts rather than politics, Cuomo said, and the pandemic won’t be truly “over” until a vaccine is available, which could take as long as 18 months. Ideally, a plan would also involve widespread testing, he said, to allow those without the virus – and those who have recovered and may now be resistant to it – to return to work first.

By the time 18 months goes by, most of the general population will be so desperate to feel safe from this virus that they will race out to get the vaccine as fast as they possibly can.

And until then, we can expect economic conditions to steadily deteriorate.

Yes, hopefully most businesses in the country will be allowed to reopen in a matter of weeks, but that doesn’t mean that the customers will come back.

Prior to this pandemic, we were already witnessing the worst “retail apocalypse” in U.S. history, and now one research firm is warning that an all-time record 15,000 stores could be permanently shuttered in 2020

Coresight Research predicts that 15,000 U.S. stores will permanently close this year, setting a new record and nearly doubling its earlier forecast of 8,000 store closings.

‘Retail has hung a closed sign on the door literally and metaphorically,’ Neil Saunders, managing director of GlobalData Retail, said.

Pretty soon, our communities are going to be absolutely littered with abandoned buildings, and “space available” signs will start popping up everywhere.

Meanwhile, millions upon millions of U.S. consumers will be falling on very hard times.  We are in the midst of the greatest spike in unemployment in all of American history, and the number of people taking advantage of the federal government’s mortgage forbearance program has gone through the roof

With unemployment claims hitting nearly 17 million over the last three weeks, the number of Americans applying for the government’s mortgage forbearance program under the COVID-19 relief plan spiked 73% for the week ending April 5 vs. the previous week – jumping from 2.73% to 3.74%, according to new data from the Mortgage Bankers Association.

For context, the total number of loans in forbearance was just 0.25% for the week of March 2 – an increase of 1,496% in just six weeks, with the number of borrowers in forbearance now topping 2 million according to CNBC.

Realizing that we are on the verge of another massive wave of mortgage defaults, mortgage lenders all over the nation are rapidly tightening standards.  JPMorgan is just one example

Over the weekend our skepticism was confirmed when Reuters reported that JPMorgan, the country’s largest lender by assets and which will kick off earnings season tomorrow, will raise borrowing standards this week for most new home loans as the bank “moves to mitigate lending risk stemming from the novel coronavirus disruption.”

Starting Tuesday, customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value (something which we thought was the norm after the last financial crisis, but apparently lending conditions had eased quite a bit in the past decade).

For a very long time I have been warning that the flow of credit would get really tight when the next crisis hit.

Now we are here, and Americans are going to have a much harder time getting loans to buy homes, vehicles or anything else.

Everything that I have been warning about in my books is beginning to transpire, and a tremendous amount of pain is ahead.

My hope is that all of the pain that is ahead will cause a mass awakening and America will turn in a more positive direction.

But to most people, the immediate future looks really bleak right now, and that is not going to change any time soon.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Deep Economic Suffering Has Erupted All Over America, But Guess Who The Federal Reserve Is Helping?

As millions upon millions of Americans lose their jobs in the greatest wave of unemployment in U.S. history, the Federal Reserve has decided that now is the time to spend trillions of newly created dollars in a desperate attempt to protect financial asset values.  In other words, as much of the country suddenly plunges into poverty, the Federal Reserve is working exceedingly hard to protect the wealth of the elite.  Approximately fifty percent of all stock market wealth is owned by the wealthiest one percent of all Americans, and the amount of stock market wealth owned by the poorest 50 percent of all Americans is so small that it really doesn’t matter.  And those running the Fed certainly understand that their reckless policies will create very painful inflation that will hit average American families extremely hard, but they don’t seem to care.  At this point, they figure that asset values must be protected at all costs, and that is going to continue to expand the absolutely massive gap between the rich and the poor in this country.

Over the past 3 weeks, more than 16 million Americans have filed new claims for unemployment benefits.

Prior to this year, the highest number that we had ever seen in any 3 week span in all of American history was about 2 million.

It is a collapse of unprecedented magnitude, and things have already gotten so bad that even “the Happiest Place on Earth” is conducting mass layoffs

Walt Disney World Resort will furlough 43,000 union workers while its theme parks remain closed as authorities restrict large gatherings due to the coronavirus pandemic, according to the Service Trades Council Union.

Because most U.S. workers live paycheck to paycheck, many of the newly unemployed have fallen on hard times very rapidly.  Food banks all over the nation are seeing an alarming surge in demand, and in many cities people are literally lining up before the sun rises in order to ensure that they will get some food

In many cities, lines outside food pantries have become glaring symbols of financial precarity, showing how quickly the pandemic has devastated working people’s finances.

In San Antonio, 10,000 families began arriving before dawn on Thursday at a now-shuttered swap meet hall to receive boxes of food. Normally, 200 to 400 families might show up during a normal food distribution.

For many other similar examples, please see my previous article entitled “America’s ‘Food Lines’ Are Being Measured In Miles As Desperation Sets In All Over The Country”.  Yes, things got bad during the last recession, but they were never as bad as we are witnessing now.  In fact, the CEO of Feeding America says that demand is already at the highest level that she has ever seen

‘I’ve never witnessed a system being more strained,’ Feeding America CEO Claire Babineaux-Fontenot said.

‘For the first time probably in our history, we’ve had to turn some people away,’ she said, not that ‘We don’t want to do that, ever.’

Unfortunately, this economic collapse is still in the very early chapters.  If you can believe it, JPMorgan is actually projecting that U.S. GDP “will fall by 40 percent” on an annualized basis during the second quarter

According to CNBC, JPMorgan economists are forecasting that the GDP will fall by 40 percent through the spring months. They also predict unemployment will reach 20 percent in April, with 25 million jobs lost overall.

Such a drop would be, by far, the worst in U.S. history. For context, according to Credit Suisse (via Business Insider), the worst quarterly drop of the 2008 crash was 8.4 percent.

And even once the “shelter-in-place” orders are finally lifted, that will not mean that things will go back to normal.  As Nobel-prize winning economist Robert Shiller has noted, fear of the coronavirus is going to cause many Americans to avoid restaurants, sporting events and other businesses where public interaction is required for a long time to come…

“The shortage of supplies is generating horrible news stories that put us all on edge,” said Shiller. “It may mean people won’t go to restaurants or sporting events in good numbers for years. You know the disease might not well be eradicated for several years from now.”

So the truth is that we are heading into a very deep economic depression, and the economic suffering in this country is going to be off the charts.

As events have begun to spiral out of control, the Federal Reserve has sprung into action on a scale unlike anything that we have ever seen before, and this has pushed the Fed’s balance sheet above 6 trillion dollars

The Federal Reserve’s balance sheet increased to a record $6.13 trillion this week as the central bank used its nearly unlimited buying power to soak up assets and keep markets functioning smoothly, even as efforts to contain the coronavirus pandemic cut deeply into employment and economic output.

In the four weeks since the Fed slashed interest rates to zero, restarted bond purchases and rolled out an unprecedented range of programs to limit the economic damage from the outbreak, the central bank’s balance sheet has jumped by about $1.7 trillion.

Let me try to put those numbers in perspective.

During QE3, the Fed’s balance sheet increased by 1.7 trillion dollars over the course of an entire year, and now the Fed has achieved that same feat in just four weeks.

What the Fed is doing is completely and utterly insane, but to a certain extent it is working.

Even though we are in the midst of the most dramatic unemployment spike in American history, last week was the best week for the stock market in decades thanks to the Fed.

Isn’t that nuts?

I know that this also sounds incredibly absurd, but last week’s surge actually pushed P/E values back near record highs.

In other words, stock prices are incredibly overvalued at this moment.

And if everything that we have already witnessed was not enough, on Thursday the Fed announced that it will now be spending trillions of dollars to voraciously buy up bonds of all types

The Federal Reserve is not leaving any corner of the U.S. bond market behind in this crisis.

There’s no other way to interpret the central bank’s sweeping measures announced Thursday, which together provide as much as $2.3 trillion in loans to support the economy. It will wade into the $3.9 trillion U.S. municipal-bond market to an unprecedented degree, can now purchase “fallen angel” bonds from companies that have recently lost their investment-grade ratings, and has expanded its Term Asset-Backed Securities Loan Facility to include top-rated commercial mortgage-backed securities and collateralized loan obligations.

In other words, moving forward we will no longer have a “bond market”.  What we will have is a Fed-manipulated sham in which the Fed picks winners and losers.

Of course many believe that it is only a matter of time before the Fed starts buying stocks as well.

Those that love free markets should be absolutely disgusted by all of this, because the Fed is coming up with lots of new ways to give handouts to the very wealthy.

Meanwhile, the poor are rapidly getting poorer.

But don’t worry too much, because you will soon receive your $1,200 socialist handout from the federal government.

Try not to spend it all in one place.

Needless to say, $1,200 won’t last very long in the hands of most Americans, and one recent survey found that “63% of respondents said they will need another check within the next three months”.

Like I warned from the very beginning, these sorts of direct payments set a very dangerous precedent, and if a Democrat wins the presidency in November they may become permanent.

That may sound really good to you, but what are you going to do when it gets to the point where you have to spend 500 dollars a week just to feed your family?

At that point many of you will also be lining up at the crack of dawn to receive whatever the food banks have available to give you

Outside of Pittsburgh, Danielle Small pulled up 90 minutes early to a food distribution, but found two long rows of cars already ahead of her. Money was getting tight after her boyfriend had to take a pay cut, and she decided to make her first trip to a food bank this week.

She said the line moved efficiently as cars pulled ahead in clusters of 10. After Ms. Small, 32, received a box filled with chicken fajita strips, preserved peaches, fruit, nuts and juice, she mouthed, “Thank you,” to the volunteers and drove away.

Millions of Americans driving nice vehicles and wearing nice clothes are suddenly being forced to spend hours waiting in food lines because fear of the coronavirus has crashed our economy.

A day of reckoning has finally arrived, and a lot more pain is on the way.

Sadly, many Americans will just go along with whatever “solutions” are proposed as long as it looks like they may provide short-term relief.  What remains of our free markets is being obliterated, Congress is openly embracing socialism, and our rights are being stripped away at a staggering rate, but most people don’t seem concerned by any of this.

Most people just want the pain to end and for life to go back to normal, but that is simply not going to happen.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

They Shut Down America To Slow Down The Coronavirus, But In The Process They Killed The Economy

Will our economy ever be the same again?  At this moment, we are still in the midst of the most comprehensive nationwide shutdown in American history, and nobody knows when it will finally end.  The primary reason why governors all over the country issued “shelter-in-place” orders was because they wanted to “flatten the curve”, and this was done to keep millions of people from getting the virus all at once so that our hospitals would not be completely overwhelmed.  But these “shelter-in-place” orders are not going to completely end this pandemic.  In order to do that, a complete and total national “lockdown” would be needed, and that is not going to happen.  So the coronavirus is going to keep cycling through our population for an extended period of time until we get to the point where the vast majority of the population has built up immunity and the pandemic naturally burns itself out.  So in the end, the total number of people that will catch this virus will be about the same whether the “shelter-in-place” orders were issued or not.  But if the number of cases at any one time isn’t enough to overwhelm our medical resources, the overall death toll could potentially be less than it otherwise would have been.

In other words, these “shelter-in-place orders” are likely saving lives, but they are also killing the economy.

On April 3rd, it was announced that more than 6 million Americans had filed new claims for unemployment benefits the previous week, and I told my readers that we would probably never see a week like that ever again.

I was wrong.

This Thursday, it was announced that another 6.6 million Americans filed new claims for unemployment benefits during the previous week…

Another 6.6 million people filed for unemployment benefits last week, according to the US Department of Labor, as American workers continue to suffer from devastating job losses, furloughs and reduced hours during the coronavirus pandemic.

It was the second largest number of initial unemployment claims in history, since the Department of Labor started tracking the data in 1967.

Prior to this year, the all-time record for a single week was just 695,000.

So what we are witnessing right now is completely nuts.

Overall, a total of approximately 16.8 million Americans have filed new claims for unemployment benefits over the last 3 weeks

Altogether, about 16.8 million American workers, making up about 11% of the US labor force, have filed initial claims for jobless benefits in just the prior three weeks alone. About 7.5 million workers filed for their second week of benefits or more last week.

We already have more unemployed workers than we did at any point during the last recession, and it is only going to get worse with each passing week.

Meanwhile, other economic numbers have been absolutely abysmal as well.  National demand for gasoline has declined to the lowest level since 1968, and U.S. vehicle sales have plunged to levels that are absolutely catastrophic

For the whole month of March, total new vehicle sales plunged 37.9% year-over-year, with fleet sales (rental, commercial, and government) down 27.6% and retail sales down 40.5%. In terms of daily retail sales volume, according to estimates by Cox Automotive, early March sales had been well above the sales on the same day of the week, same week last year.

But by March 13, they were below the year-ago-level and then plunged. By April 1, they were down 71% from a year ago.

I am having difficulty finding the words to describe how bad those numbers are.

If things are this horrific already, what will happen if the U.S. stays shut down for another month or two?

With millions upon millions of Americans out of work and businesses all over the nation currently shuttered, rent payments are not being made on a scale that is unlike anything we have ever seen before.  The following comes from Zero Hedge

Previously we described that over 30% of US renters didn’t pay their April apartment rent as the fallout of coronavirus-induced mass unemployment claims continues to ripple across various key sectors. Despite that some tenants will receive temporary protection from evictions “by a patchwork of federal and local laws” the reality is that as unpaid rents pile up, so will mortgage defaults as landlords struggle to satisfy their obligations – which will in turn affect fixed-income investments backed by said mortgages.

On the commercial side, Bloomberg estimates that about $81 billion in commercial rent comes due on average each month, but of course this is anything but a typical month, resulting in “The delay of a sizable portion of that will put an enormous strain on the complex systems for financing real estate and highlight how quickly the pain caused by social distancing has spread,” as Bloomberg observes.

Domino after domino is going to fall, and the economic pain is going to be off the charts.

And with each passing week, the economic forecasts by the big banks just continue to get even worse.

At this point, JPMorgan is projecting that U.S. GDP will plunge at a 40 percent annualized rate during the second quarter

JPMorgan economists issued an even more dire forecast, now foreseeing a 40% decline in the nation’s gross domestic product for the second quarter and a surge in April’s unemployment rate to 20% with 25 million jobs lost.

In an earlier forecast, they said second-quarter GDP would be down 25%.

The only period in all of U.S. history when we witnessed anything that even comes close to resembling this was during the Great Depression of the 1930s.

Of course Congress has tried to help by passing several relief bills, but in many instances they aren’t working quite as anticipated.

For example, a loan program for small businesses was originally supposed to provide up to 2 million dollars in emergency help for each business, but there has been so much demand that loans are now being capped at $15,000

A federal disaster loan program offering up to $2 million in relief is now capping out at $15,000 — and is leaving some borrowers wondering if they’ll even get that.

The Economic Injury Disaster Loan program, an offshoot of the Small Business Administration’s emergency funds system, has faced an unprecedented number of requests amid the COVID-19 pandemic, and is having trouble keeping up and following through with promised loan amounts, The New York Times reports.

As this pandemic stretches on, it is probably inevitable that Congress will pass even more emergency measures, and needless to say the Federal Reserve is going completely bonkers when it comes to flooding the system with money.

Ultimately, what they are doing will create inflation like we have never seen before, but most Americans aren’t worrying about that right now.

What most Americans really want is to get back to work, but Dr. Anthony Fauci and other medical “experts” are warning that may not happen for some time.

The longer the economy is shut down, the deeper this economic downturn is going to become.  And we certainly don’t want it to get too much deeper, because the IMF is already warning that it looks like this economic downturn will be the worst since the Great Depression

The International Monetary Fund sees the world economy suffering its worst recession since the Great Depression this year, with emerging markets and low-income nations in Africa, Latin America and Asia at particularly high risk.

With half of the IMF’s 189 member countries seeking aid, the executive board has agreed to double access to its emergency financing to meet expected demand of about $100 billion, Managing Director Kristalina Georgieva said in a speech on Thursday.

Needless to say, I have been warning of an economic crisis of this magnitude for a very long time.

Let us hope that the “shelter-in-place” orders will be lifted as soon as possible, because that would certainly give the economy some relief.

But things will not be going back to “normal”.  COVID-19 will start spreading faster once again once the restrictions are lifted, and a large percentage of the population will remain huddled in their homes because they will be extremely afraid of catching the virus.

So economic activity will remain depressed for an extended period of time no matter what else happens, and meanwhile Congress and the Federal Reserve are absolutely flooding the system with fresh money.

That is a recipe for an inflationary disaster, and our standard of living will experience a very painful adjustment as a result.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

These Very Alarming Numbers Show How People Are “Coping” With The Coronavirus Pandemic

It is during times of great crisis that we find out who we really are.  Now that strict “shelter-in-place” orders have been instituted all over the world, most people have a lot more free time than usual.  Of course some are using all of this extra free time for constructive purposes, but many others have decided that “self-medicating” is the best way to “cope” with this coronavirus pandemic.  When under great pressure, people tend to gravitate to whatever is most important to them, and that is why what we are witnessing during this pandemic is so alarming.  Just check out these new numbers

The virtual-sex trade has got a lift: Pornhub, the leading adult entertainment website, saw a near-12% increase in global traffic from Feb. 24 to March 17. British lingerie chain Ann Summers said sex toy sales were up 27% in the last week of March compared to the same period a year ago, with its quietest vibrator fast becoming its best seller.

Self-medicating is all the rage. U.S. states including California, Colorado, Oregon and Alaska where cannabis is legal have reported 50% sales increases from March 16 and March 22, according to Flowhub. Online booze sales in the United States rose 243% in the week ending March 21, according to market research firm Nielsen. Binge buying drove British alcohol sales up 22% in March, according to Kantar.

Of course some of the sales increases can be explained by the fact that people have been stocking up on just about everything in recent days.

At this point, most Americans have suddenly become “preppers”, and online grocery delivery services have been absolutely overwhelmed

As the crisis hit, delivery orders surged as millions of Americans stayed home. During the week of March 2, even before some cities and states imposed “stay at home” orders, Instacart, Amazon, and Walmart grocery delivery sales all jumped by at least two-thirds from the year before, according to Earnest Research. Instacart, a platform that partners with more than 25,000 stores in North America, says orders in more recent weeks have surged 150%.

As a result, customers in hard-hit New York City are waiting days to schedule deliveries that usually take just hours.

Needless to say, the law of supply and demand tells us that as demand for basic essentials goes up it is inevitable that prices will rise as well.

And we are already starting to see this.  In fact, it is being reported that the wholesale price of eggs has shot up 180 percent…

If you’re used to starting your day with coffee, orange juice, bacon, toast and some eggs, brace yourself – the price of wholesale eggs in the U.S. has skyrocketed to a shocking 180 percent from its regular price. And reports reveal that increased buying due to the coronavirus (COVID-19) pandemic is to blame.

As long as fear of the coronavirus persists there will continue to be more “panic buying”, and shortages will begin to emerge.

In fact, Johnson & Johnson is publicly admitting that there is already a serious shortage of Tylenol

A spokesperson for Johnson & Johnson, the makers of Tylenol, acknowledged the shortage and said the company is working to overcome it.

“We are experiencing record high demand for Tylenol, and despite our producing and shipping product at historic highs, we are experiencing a temporary shortage in some regions in the US,” said Kim Montagnino, Global Corporate Media Relations Senior Director. “We are committed to maintaining our increased production, including running lines up to 24/7 to maximize supply.”

And this may come as a surprise to many of you, but according to USA Today we are also facing a very serious shortage of webcams as well…

Logitech, the company that dominates webcam sales, is sold out of every one it makes. Amazon and Best Buy are out of stock. And price gougers on eBay are selling used models for as high as $420, or more than twice as much as the most expensive Logitech model, the $199 Brio.

“Global demand for webcams is needed from all remote workers, students and in the health care space,” notes analyst Jeremiah Owyang, who himself was able to snag a unit in early March, before they sold out.

With so many people working from home now, demand for webcams has spiked like never before, and it is unclear when they will be widely available again.

Now that most of the country has been locked down, economic activity has come to a standstill, and many Americans are starting to become very desperate for things to return to “normal”.

But even though most Americans are staying home, this virus continues to spread.

In New York City, nearly 20 percent of the entire police force was out sick on Monday…

On Monday, April 6, 2020, 6,974 uniformed members of the NYPD were on the department’s sick report which accounts for 19.3% of the uniformed workforce.

1,935 uniformed members and 293 civilian members of the NYPD have tested positive for the coronavirus.

And on Tuesday the death toll in New York City surged to the highest level yet even though a “shelter-in-place” order has been in place for quite some time now.

That is not good at all.

What makes this even more frightening is that the number of deaths in New York is actually being substantially undercounted because the only coronavirus victims that are included in the official death toll are those that were tested before they died

Only those tested before they die are counted as COVID-19 victims, a New York City councilman said Monday, sparking fears the actual death toll could be far higher than the 3,400 already recorded.

Mark Levine tweeted: ‘Now only those few who had a test confirmation *before* dying are marked as victims of coronavirus on their death certificate. This almost certainly means we are undercounting the total number of victims of this pandemic.’

So what is the true death toll?

We don’t really know, but what we do know is that the number of people “dying at home” in New York City is now close to 10 times higher than normal

But another 200 city residents are now dying at home each day, compared to 20 to 25 such deaths before the pandemic, said Aja Worthy-Davis, a spokeswoman for the medical examiner’s office. And an untold number of them are unconfirmed.

Overall, the number of confirmed deaths continues to rise all over the country at a very disturbing pace.

The very first confirmed death from the coronavirus in the United States was announced at the very end of February, and now just over a month later the numbers are really getting crazy

The number of Americans who have died from coronavirus has nearly doubled in the first week of April alone compared to last month’s entire death toll.

The death toll from the pandemic now stands at 11,000 with more than 368,000 confirmed infections across the United States.

Figures show the number of fatalities has increased drastically by 7,000 in the first six days of April.

Of course most people are assuming that this pandemic will eventually fade (true) and that life in America will soon return to normal (definitely not true at all).

We have entered a time when everything that can be shaken will be shaken, and our world will never be the same again.

Some will respond to adversity by becoming the best people that they can possibly become, while others will “cope” by wallowing in depression, despair and very self-destructive addictions.

You can’t control global events as they spin out of control, but you can control how you respond to them.

You were born for such a time as this, and I encourage all of you to embrace the great challenges that have now been put in front of us.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

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