US stock futures are limit down. Oil dropped over 30%, before recovering, to -25%. That’s largely on the Saudis slashing prices to move product, but also pointing to something bigger afoot in the Kingdom, since the crown prince (and Jared Kushner’s pal) arrested several high-ranking cousins this week.
But perhaps the biggest news in the markets is:
- The 10 Yr US Treasury is at at 0.50% yield
- The 30 Yr US Treasury is at a 1.00% yield
That means the US government can borrow for 10 years at 0.50% and for 30 years at 1.00%. Neither rate has ever been seen before.
During normal periods, markets don’t expect rates to average 1%. Before 2008, the overnight Fed Funds rate, i.e. the rate to borrow for one day, hadn’t fallen below 1% for 50 years. Now, the 30 year rate is at 1%. The bond market is flashing every sign possible to indicate a very bad economic climate ahead. That signals a recession, perhaps a bad one.
The FX markets are about as wild as you can imagine, and both FX and bond markets are actually far larger, and more important, than stocks.
If we are headed into a recession, that means job losses. Since we also have a very serious viral disease (Coronavirus, COVID-19) spreading rapidly, that means people are getting seriously sick in a very visible way, as we go into a recession.
Both of these make the case for Medicare For All much stronger.
If we enter a recession, millions of people are going to lose their jobs. That employer-sponsored health insurance we’ve been told they love so much? It goes away. Of course, the newly unemployed can buy it individually, but they’ll pay full price for it. How do you pay $1,000 or $2,000 (or $4,000 as one of my friends was quoted) a month, if you’ve just lost your job?
But how do you not, if there’s a strain of Coronavirus going around that might kill you and seems to require hospitalization for 10-20% of people? In most of Europe, hospitalization costs are not a concern. In the US, an extended hospital stay will drive many people, including those with insurance, into severe financial distress, and even bankruptcy.
There are going to be a lot of “kitchen table” conversations about this, and the issues are going to become very stark for even middle class people with good jobs and healthcare.
On one hand, you have our current system: costs are unpredictable, millions are uninsured or underinsured, even if they are working. People who lose their jobs can’t afford insurance, and often do without.
And now, you have another option. You have the opportunity to vote for Medicare For All. A universal health insurance plan that is free at the point of service. You know it’s there, you know it won’t bankrupt you. You know it is guaranteed by the government. You pay for it with taxes, and it’s there when you need it. Every medically necessary procedure or service is covered.
Crises have a way of clarifying issues that have remind obscured or confused for a long time. Two crises are about to do that for our healthcare system.
There is one candidate left in the Democratic primary who is advocating for a universal, single payer system that can address the two crises we are facing today. Bernie Sanders.
— @subirgrewal