Some say the U.S. economy should be reopened and this is happening in many states beginning this week. Others say keep the economy on lockdown as cases of Covid-19 continue to rise.

It is difficult to reopen the economy with stress in the banking systems. U.S.’ biggest bank, JPMorgan Chase
JPM
, has increased its reserve for losses as bad loans rise.

Here in Florida we have a partial reopening as southeast counties around Miami still on lockdown. I live in Pasco County Florida, which is just north of Hillsborough county where Tampa is located. This county remains on lockdown.

In Pasco, the number of Covid-19 cases continue to rise. Since the middle of April, the number of cases have gone up from 96 to 290, rising every day.

Why did we totally close the economy?

I don’t think we should have. The lockdown should have been limited to senior citizens aged 65 and older. This is the demographic where most of the deaths have occurred and this should be the case with the reopening.

If a senior citizen has prescription drug for high blood pressure, elevated cholesterol, or diabetes, they should be on mandatory at home lockdown except for urgent needs.

Many needs can be delivered directly to your front door like groceries and liquor. Did you know that tequila is the most popular blend? Sales are up 54% year-over- year.

If we activated a partial shutdown instead of a total shutdown, the U.S. economy would not be collapsing as badly has it has. Households are saddled with record debt and credit. The chart below is the New York Fed’s Quarterly Report on household debt and credit for the first quarter of 2020.

. Overall debt is up $155 billion to $14.3 trillion.

. Mortgages are up $156 billion to $9.71 trillion.

. Home equity lines of credit (HELOC) are down $4 billion to $386 billion. This category has declined in every quarter since the end of 2007.

. Student loans are up $27 billion.

. Auto loans are up $15 billion.

. Households are stressed and credit card debt is down $34 billion.

. The unemployment rate is at a record high of 14.7%.

These statistics do not favor a V-shaped, U-shaped or W-shaped recovery. It will look more like a hockey stick stretching out at least two years.

JPMorgan is involved with most of these loans. They are not involved with student loans of HELOCs (home equity lines of credit). The bank has tightened its standard for mortgage lending. The typical standard calls for a credit score of at least 620. JPMorgan’s standard is 700. In addition, it requires a 20% down payment.

The stock closed last week at $92.70, down 33.5% year-to-date. It is 34.3% below its all-time intraday high of $141.10 set on January 2. The stock is 20.5% above its 52-week low of $76.91 set on March 19. Its weekly value level is $79.54 with a quarterly pivot at $104.44.

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