Climate change: what Antarctica’s ‘doomsday glacier’ means for the planet

Thwaites Glacier is melting at an alarming rate, triggering fears over rising sea levels

Leslie Hook on the Antarctic Peninsula, Steven Bernard and Ian Bott in London




Even by the standards of Antarctica, there are few places as remote and hostile as Thwaites Glacier.

More than 1,000 miles from the nearest research base, battered by storms that can last for weeks, with temperatures that hit -40C in winter, working on the glacier is sometimes compared to working on the moon.

Dubbed the “doomsday” glacier, Thwaites, perhaps more than any other place in the world, holds crucial clues about the future of the planet.

Only a handful of people had ever set foot on Thwaites before last year. Now it is the focus of a major research project, led by British and American teams, as scientists race to understand how the glacier — which is the size of Britain and melting very quickly — is changing, and what that means for how much sea levels rise during our lifetimes.

Map of Thwaites Glacier in Antarctica


“It is the most vulnerable place in Antarctica,” says Rob Larter, a marine geophysicist and UK principal investigator for the Thwaites Glacier Project at the British Antarctic Survey. He takes a map and points to parts of the deteriorating glacier that have already broken off. “A lot of this is no longer there,” he says.

The scientists studying Thwaites go to extreme lengths to carry out their research. Geologist Joanne Johnson spent eight weeks sharing a tent with just one other person in the Thwaites area earlier this year.

“If something goes wrong, you are a very, very long way from help,” says Ms Johnson, a geologist at the British Antarctic Survey. Getting along with your colleague is crucial for survival. “Although you are in isolation, you are actually not very isolated at all, because you have this person who is with you 24 hours a day.”

The extreme version of lockdown, she says, was not too bad. “I really enjoy that kind of world, I enjoy the isolation, and feeling like you are at one with the landscape,” she says. But the situation of Thwaites Glacier is more alarming. “The glacier is changing so fast at present, that we are very concerned that it will drain a lot of ice into the sea,” says Ms Johnson. “It is quite unstable, and you can see that when you fly over it, with loads of crevassing.”

Before and after Landsat images showing how Thwaites glacier contributes to sea-level rise as icebergs break off


Ms Johnson is studying the rocks underneath the glacier, which will help to reveal its history. Knowing more about how Thwaites behaved in the past, she explains, should help scientists predict how it will respond to a warmer climate in the future. Her research is part of the International Thwaites Glacier Collaboration, a £20m effort by British and American scientists that is one of the most ambitious Antarctic research projects ever undertaken.

But understanding the Thwaites Glacier is not just academic — it is crucial for predicting how sea level rises will impact on cities, and how we should prepare for a radically different world. If Thwaites continues to deteriorate, then by the end of the century the glacier could be responsible for centimetres or tens of centimetres of sea level rise.

“That doesn’t sound like much, but it is,” says David Vaughan, director of science at the British Antarctic Survey. “It is not about the sea coming up the beach slowly over 100 years — it is about one morning you wake up, and an area that has never been flooded in history is flooded.”

Melting ice threatens US

Antarctica holds around 90 per cent of the ice on the planet. It is equivalent to a continent the size of Europe, covered in a blanket of ice 2km thick. And as the planet heats up due to climate change, it doesn’t warm evenly everywhere: the polar regions warm much faster. It puts the icy continent of Antarctica and Greenland, the smaller Arctic region, right at the forefront of global warming. The South Pole has warmed at three times the global rate since 1989, according to a paper published last month.

As Antarctic ice melts and the glaciers slide toward the ocean, Thwaites has a central position, that governs how the other glaciers behave. Right now, Thwaites is like a stopper holding back a lot of the other glaciers in West Antarctica. But scientists are worried that could change.

Map of Antarctica showing bedrock underneath the ice


“It is a keystone for the other glaciers around it in West Antarctica . . . If you remove it, other ice will potentially start draining into the ocean too,” says Paul Cutler, programme director for Antarctic glaciology at the National Science Foundation in the US.

Thwaites is getting thinner and smaller, losing ice at an accelerating rate. “The big question is how quickly it becomes unstable,” Mr Cutler adds. “It seems to be teetering at the edge.”

By itself, Thwaites could raise sea levels about 65cm as it melts. But if Thwaites goes, the knock-on effect across the western half of Antarctica would lead to between 2m and 3m of sea level rise, says Mr Cutler, a rise that would be catastrophic for most coastal cities.

Map of Thwaites Glacier showing ice flow speed and elevation change

Right now climate modellers say sea levels will rise between 61cm and 110cm by the end of the century, assuming the world keeps emitting carbon dioxide at current levels. But if Thwaites collapses faster than expected, then the amount of sea level rise caused by Antarctica could be double what is in the models.

The influence of gravity on the ocean means that sea levels will rise more in certain places. And an increase of that order would leave some cities more exposed than others, particularly the east coast of North America.

Impact of warming oceans

The good news is that the Antarctic continent is not melting that much, yet. It currently contributes about 1mm per year to the sea level rise, a third of the annual global increase. But the pace of change at glaciers like Thwaites has accelerated at an alarming rate, even though it would take thousands of years for Antarctica itself to melt.

As concentrations of carbon dioxide in the atmosphere increase to levels never before experienced by humans, researchers are trying to understand how the planet is changing. Antarctica is central to that task.

“Antarctica is by far the biggest risk,” in terms of extreme sea level rise, says Anders Levermann, a professor at the Potsdam Institute for Climate Impact Research, and the author of several papers on the Antarctic ice sheet.

Diagram explaining the factors affecting Thwaites Glacier


The big question is not whether, but how quickly, sea levels will rise. Ice takes time to melt and heat takes time to distribute through the climate system. Little is known about the physical properties of ice sheets and how they deteriorate over time, which is why understanding

Thwaites is so critical.

Mr Levermann explains that the physics involved is similar to putting an ice cube on a plate and watching it melt. “It is very difficult to say how fast sea level is rising, but it is not very difficult to say how much ice can survive on a planet that is 1C or 2C or 3C warmer, and how much the ocean will expand,” he says.

Even though emissions of carbon dioxide have fallen significantly during worldwide lockdowns, the long-term prognosis is not good. Carbon dioxide can stay in the atmosphere for a century or longer, its levels are still increasing and the planet is still warming. Recent months have seen a series of grim new milestones: last month was the hottest June on record. And in July, a heatwave in the Russian Arctic near Siberia reached a record 38C, triggering a series of devastating wildfires.

Many of the warming processes taking place on the planet are already “locked in” — like the disappearance of summer Arctic sea ice or the melting permafrost of Siberia — meaning that we may not be able to stop or reverse them. All we can do is research them, and understand what they mean for our lives.

One of the more unlikely tools helping scientists in that quest is a long yellow robot named Icefin. Designed to look for alien life on Europa, one of the moons of Jupiter, it was trialled at Thwaites Glacier in December and January. Shaped like a cylinder so that it can be lowered down through a narrow hole in the ice, the robot has cameras, chemical sensors and sonar scanners. Its mission has been to reach the bottom of the glacier, where the ice meets the bedrock and most of the melting takes place.

Diagram explaining how the submarine Icefin robot works


“[This] vehicle can get into places that nothing else can really get to,” says Britney Schmidt, leader of the Icefin team and associate professor at the Georgia Institute of Technology.

Icefin and other research teams have discovered that it is the ocean, not the air, that is the real culprit behind the melting of Thwaites Glacier. As the planet warms up due to climate change, the ocean is absorbing most of the extra heat.

In Antarctica the ice cap that covers the continent is stable right now, the melting is primarily occurring around the edges, where the ice meets the sea. This warming ocean is having an outsized impact on Thwaites Glacier, because much of it sits on bedrock that is below sea level. The lower part of the glacier, closer to the ocean, acts like a champagne cork, preventing the rest of the ice from flowing into the sea.

“If that ice is removed,” says Mr Vaughan, “that is the cork, there is the pop, and what follows is a big rush of ice that comes behind it.”

Building defences

Infrastructure planners around the world are grappling with the challenge of rising sea levels, which is complicated by the uncertainty involved. Should they be preparing for 50cm of sea level rise, or for twice that level? Finding out more about Thwaites will help to answer that question — but the answers may not arrive in time.

Coastal cities are already spending hundreds of millions of dollars to prepare. San Francisco is building defences around its airport, which sits just 10ft above sea level. In London officials are deciding when to increase the height of the Thames Barrier. Meanwhile, Jakarta has been building a string of sea walls to protect itself, although this has not yet been enough to stave off government plans to relocate Indonesia’s entire capital city.

The economic cost of rising seas is vast: as much as 4 per cent of global gross domestic product by the end of the century, according to a study published earlier this year in Environmental Research Communications. Higher seas mean more coastal flooding, damaged infrastructure, more storm surges during typhoons, and the destruction of low-lying agricultural land, as it gets infiltrated by salty seawater.

It’s much more cost-effective to prepare ahead of time for rising seas rather than wait to deal with the aftermath, says Thomas Schinko, the author of the study and a researcher at the International Institute for Applied Systems Analysis. “If we don’t adapt we will experience huge losses,” he adds.

But that preparation is hard if planners don’t know what to expect. “It is really about giving society a more accurate sense of how much, how fast,” says Mr Cutler of the US National Science Foundation. “How urgent is this challenge — what are we already in store for, based on the inertia in the whole global climate system?”

With coronavirus spreading across the world, the next research season in Antarctica — normally December to February — has been reduced to a skeleton staff. Antarctica is the only continent with zero cases of coronavirus, and the research teams are determined to keep it that way.

For Thwaites Glacier, that means the research teams and Ms Johnson will have to wait a bit longer to have all the answers. “We still don’t know that much about Thwaites,” says the geologist who is adamant that she will return to the glacier one day. “Most of our discoveries are yet to come.”

The safe-asset shortage after Covid-19

Demand has outstripped supply since 2009 but the latest crisis may help to redress the balance

Gavyn Davies

A Lehman Brothers employee leaving the bank in New York in 2008 as it collapsed in the financial crash
A Lehman Brothers employee leaving the bank in New York in 2008 as it collapsed in the financial crash © Joshua Lott/Reuters


One of the long-term consequences of the 2008 financial crisis was a lack of safe assets that could be used by institutions to store their wealth, meet regulatory requirements and provide collateral to borrow additional funds.

This problem has been identified as an important reason for low capital investment and the slow growth rate in the global economy in the past decade. It was also a prime cause of the European sovereign debt crisis, which peaked in 2012.

But a silver lining from the Covid-19 shock is that the policy response may actually alleviate the safe-asset shortage, according to new research by Fulcrum economists (see table). That’s because it will leave a legacy of much higher government debt in the most advanced economies, including the US, which is the main global source of these assets.

A safe asset is usually defined as a financial instrument that is unlikely to experience a big increase in default risk, even at the darkest times in the economic cycle. It is therefore a reliable source of liquidity when riskier assets suddenly lose value. It will often face inflation and interest rate risk, but usually not default risk.

Before 2008, the supply of high-grade government bonds in the advanced economies was restricted because budget deficits were declining. To meet demand, the private sector created AAA-rated tranches of mortgage and other credit products. But these products proved to be anything but safe, prompting a stampede into government bonds, especially US treasuries and German bonds, which were deemed immune from default risk. New banking regulations requiring them to increase their capital and liquidity buffers later made this outcome more permanent.




Why did this create a serious problem? In theory, since the price of government bonds is determined in a free market, a supply shortage would be expected to be eliminated by higher bond prices and therefore lower yields. This, indeed, happened, and after 2015 the US currency also appreciated, choking off excess demand for dollar-based assets.

The trouble for the world economy arose when bond yields in many economies approached zero, making it all but impossible to achieve the further decline in yields needed to rein in demand for safe assets. Economists including Ricardo Caballero and Emmanuel Farhi say that in some models this can result in a “safety trap” that affects the global economy. This is a close cousin of the “liquidity trap” that appears in many New Keynesian models.

Because interest rates cannot fall enough to balance the supply and demand for safe assets, national income and wealth shrink to eliminate the excess demand for them. Messrs Caballero and Farhi, along with Pierre-Olivier Gourinchas, suggest that the flight to safety increases the equity risk premium relative to safe assets, accounting for part of the weakness of capital expenditure in the advanced economies since 2009.

Given the potentially serious consequences of the safety trap, it would be alarming if the Covid-19 shock replicated the financial crisis by making the imbalance even worse — but this seems unlikely to happen. The rise in public debt, and so the supply of safe assets, will this time be both quicker and larger. In addition, the financial system has so far been more insulated from the shock, so it is less likely that the highest rated credit tranches in the US mortgage market will fall out of the category of safe assets.

Direct purchases of corporate credit and loans by the US Federal Reserve may protect the asset-backed securities market from widespread default.

In the eurozone, the steps taken towards an EU-backed recovery bond should add to safe assets, instead of wiping them out.

This growing supply of safe assets could, however, be offset by rising demand. Central bank asset-purchase programmes will remove government bonds and the safest tranches of securitised credit products from the hands of the private sector.

In the longer term, the overall effects on bond yields will also be influenced by the impact of the Covid-19 shock on net private savings. According to research by Oxford Economics, which warned about the worrying trend in safe-asset supply just before the pandemic, a possible shift towards excess private savings and reduced investment after this recession could offset the initial improvements in safe-asset supply.

These longer-term effects are very hard to predict. The good news is that the Covid-19 recession will almost certainly increase the supply of safe assets in the immediate future, alleviating the problem as the global economy starts to recover.


The writer is chairman of Fulcrum Asset Management

miércoles, julio 15, 2020

WAZE FOR VIRUSES / PROJECT SYNDICATE

Waze for Viruses

It is now clear that combating the COVID-19 pandemic will be a long-term battle. One of the best weapons may be a system analogous to Waze (the popular information-sharing app for road traffic), which would provide everyone with real-time actionable intelligence regarding where the virus lies in wait.

Simon Johnson

johnson129_Quinn RooneyGetty Images_coronavirusapp


WASHINGTON, DC – COVID-19 infection rates are rising in much of the United States. Even if the US can prevent outbreaks in the South and Southwest from worsening during the summer, experience with other coronaviruses counsels preparation for a potentially major onslaught during the fall. We know what to expect across the Northern Hemisphere: many people can become infected, but it is older people and those in poor health who are most at risk of death.

To make all vulnerable people significantly safer requires sustainable testing strategies, increased willingness to wear masks when necessary and adhere to social-distancing rules, and rapid scaling-up of relevant technology. That includes a system analogous to Waze (the popular information-sharing app for road traffic), which would provide everyone with real-time actionable intelligence regarding where the virus lies in wait.

The malign power of this virus is that people can be infective without showing symptoms. As a result, even parts of the world where prevalence is currently low must remain continually on guard.

One proposal is to test everyone for live virus at a very high frequency – some employers may do this twice a week. If this is done with anterior nares swabs (rather like a Q-tip, used to swab the front part of your nose), high frequency testing with self-sampling becomes feasible. (Swab your own nose and an efficient lab can run the tests.)

But this is still costly. A national market for testing has yet to emerge, but prices in New England range from $25 to over $100 per test. Pooled testing is one way to increase efficiency and lower the cost, but the efficiency depends on having a low probability of infection.

Fortunately, frequent testing keeps infection rates low and therefore boosts the efficiency of group testing.

For example, Ned Augenblick, Jonathan Kolstad, Ziad Obermeyer, and Ao Wang (all UC Berkeley) have shown that frequent group testing can discount testing prices by 95% or more.

When pooling will be offered at scale by commercial labs remains to be seen, but support for the idea from Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases and a leading member of the White House Coronavirus Task Force, certainly should help.
 Still, given the speed with which this coronavirus moves across the population, testing for live virus is very hit or miss. Eventually, of course, enough people display symptoms and need hospitalization that a large-scale outbreak becomes unmistakable.

This is the current situation in Arizona and Texas. But what about in Florida, where the number of reported infections is rising sharply but the governor says this is largely due to increased availability of testing?

As Michael Mina, at the Harvard T.H. Chan School of Public Health, has emphasized, widespread use of serology (antibody testing) can provide low-cost outbreak detection. Antibodies stay in our blood even after a pathogen has been defeated, so they are relatively easy to detect.

For example, antibody testing could help inform everyone about what is really going on in Florida. Unfortunately, questions have been raised about the tests being used in Florida and how the data are reported there.

Gigi Gronvall and her colleagues at Johns Hopkins University have proposed a National Strategy for Serology, which would be a valuable tool. Widespread availability of inexpensive and accurate dried blood spot serology would complement this approach. (I am working on this with Mina, Galit Alter of the Ragon Institute, and Tess Cameron of RA Capital as part of our Immunological Observatory project.)

But how should we use these data? We know, for example, that masks reduce transmission of the virus by about 90%. But we also know that many Americans will not wear masks, even when this would definitely protect their own health and lower the risk to others (for example, inside stores).

One use of better data would be to tell people where the virus is now – and when it is heading their way. Even Americans who are deeply skeptical of government generally pay attention when the authorities issue a tornado or hurricane warning.

Alerting people to be more careful – for example, when it is essential to protect their children with masks – can help keep schools open, as part of a broader policy package along the lines proposed by Johns Hopkins’ Joshua Sharfstein and Christopher Morphew.

This is where a Waze for viruses comes in. Like drivers reporting road accidents or broken traffic lights, in such a system, companies, universities, and other organizations would share data – based on their test results – but with “differential privacy,” so that individual identities are effectively disguised.

Just as in the traffic app, by sharing information, you gain access to a better picture of what is going on around you at the moment. If this data system includes results from highly reliable antibody tests on the same set of people over time, the effect could be transformative.

Such a system is not about the government telling you what to do. It is about sharing information with those around you – to help you, to protect your family, and to enable normal life to resume when and where it can.


Simon Johnson, a former chief economist at the International Monetary Fund, is a professor at MIT's Sloan School of Management and a co-chair of the COVID-19 Policy Alliance. He is the co-author, with Jonathan Gruber, of Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream.

Money-Market Shifts Are Bad News for Profit-Starved Global Banks

Fidelity’s closure of some prime money-market funds is a negative omen for non-U.S. Banks

By Mike Bird


For Japan’s banks, lending in dollars has been far more profitable than lending in yen.
Photo: philip fong/Agence France-Presse/Getty Images .


Last week, Fidelity Investments said it would close two institutional prime money-market funds with a total of around $14 billion in net assets. That’s an ominous portent for some non-U.S. banks, which have increasingly come to rely on such funds to raise dollars they can’t easily acquire at home.

Fidelity cited volatile outflows from the funds—which invest in short-term commercial paper and certificates of deposit issued by companies—and into government money-market funds during moments of market stress. Fidelity’s retail prime money-market funds, whose assets run into the hundreds of billions, will remain open.

But non-U.S. banks will feel the loss: 20% of the Prime Reserves Portfolio, the larger of the two funds being closed, is invested in certificates of deposit, all issued by Canadian, Japanese and European banks. Many have increasingly strayed into dollar-denominated lending in recent years.

Low as the returns are, they’re better than what they could earn at home. In Japan in particular, the spread between short- and long-term yen-denominated interest rates has been squeezed narrower and narrower over time, making dollar lending far more profitable. To fund that longer-term lending—in the absence of dollar deposits—foreign banks have used short-term CDs.


The closures don’t mean an imminent funding crunch. But they are still bad news for the banks, watching one of their limited avenues for profit in recent years slowly closed off.

Certificates of deposit simply may not be an attractive investment in a lower-for-longer interest-rate environment like today’s. Investors will always look for incremental additional returns, but for much of 2014, when conditions were similar, 3-month CDs offered a yield less than 0.1 percentage point higher than U.S. Treasury bills of the same maturity. That’s measly compensation for an asset class that carries at least some credit risk.

The spread surged beyond 2 percentage points during the most panicked days of March, but is now again below 0.1 percentage point, somewhat lower than for most of the past few years.

Of course, banks can always offer investors higher returns on their CDs, but that would undercut the gains from their dollar-denominated lending.

In March, the surge in borrowing costs for foreign entities trying to obtain dollars using cross-currency basis swaps was a result in no small part of investors pouring out of prime money-market funds, draining them of more than $150 billion. Issuance fell by than half from late February into March.

This time, the immediate risk isn’t that funding violently dries up again, but that the dollar business foreign banks have engaged in slowly comes to make less and less economic sense.

That source of earnings will be sorely missed, given how few other options are available.

Welcome to the Zombie Economy

By Bill Bonner

Monday, June 29, 2020 – Week 16 of the Quarantine


SALTA, ARGENTINA – When the government gets involved in a project, you expect corruption and incompetence. With no need to satisfy customers, no concern for the bottom line, and no worries about creditors or bankruptcies, the feds can pay off friends, punish enemies, squander resources, and double down on policies that don’t work.

But in their recent takeover of the whole U.S. economy, even we were surprised.

Zombie Policies

The big picture: The feds, state and federal, aimed to stifle the spread of COVID-19 by locking down the economy. But just last week, the U.S. reported a “record number” of new infections.

The infections are becoming more and more common, say the reports, among young people.

And testing has revealed that the virus is, or was, more widespread than previously thought.

But infections aren’t deaths. And they aren’t necessarily bad. If you can’t stop a disease, you’re better off when healthy people get it, and get over it, while the unhealthy people lay low. Then, with antibodies widespread, the virus finds fewer victims who can pass it on.

Why Did The Wall Street Journal Hide This From You?!

Reports from Europe tell us that nearly 80% of those who die are over 75 years of age. And in America – with more fat young people – the average age of a COVID corpse is 78.

But while the coronavirus rages in nursing homes, state governments close the beaches. From the Miami Herald:

Sunday’s move by Broward mirrored Miami-Dade’s response to leaps in COVID-19 case numbers and positive test rates over the last week and a half. On Friday, Miami-Dade announced closures of beaches, parks, parties, parades and all manner of usual Independence Day celebration that would bring together more than 50 people.

Dead Money

So now, although the lockdown approach hasn’t beaten the virus, it has flattened the economy. In the U.S., 47 million people applied for unemployment benefits after their jobs were terminated. An estimated 1 million businesses are expected to RIP. Permanently.

Globally, as much as $5 trillion of GDP has given up the ghost.

And it has opened the doors to corruption and incompetence on a scale never before seen in America.

USA Today reports that…

More than 1 million dead people got stimulus checks from the federal government under a new federal law designed to juice the economy during the coronavirus pandemic, a watchdog agency reported Thursday.

We recall that during the mortgage finance bubble of 2005-2007, you could get a mortgage “if you could fog a mirror.”

In the crash of 2020, though, you didn’t even have to draw breath to get $1,200 in free money from the feds. The Internal Revenue Service even acknowledged that it knew it was sending checks to dead people by printing “DECD” on the check itself.

Talk about “stimulus”!? The idea must be that the 1,200 bucks will be so stimulating, it will bring the dead back to life. A miracle, for sure.

Zombie Companies

In addition to being excessively generous, this raised questions. What would the shades buy?

Would the cadavers shop online to avoid frightening the Walmart clerks? And didn’t even one of the 74,454 IRS employees have the good sense to wonder what the hell they thought they were doing?

And not only do the feds – with their own good grace and humor (and other peoples’ money) – hand out the loot to those with no pulse… they also give it to dead companies… pumping the oxygen of free money (aka debt) into withered lungs.

Following the crisis of 2008-2009, business debt increased from $10 trillion to nearly $17 trillion, thanks to the Fed’s EZ money policies. This, of course, left businesses with comorbidities (too much debt)… on the eve of what was already shaping up to be the worst downturn since the Great Depression.

This top financial expert just returned from a private meeting with members of the Senate Financial Services Committee…

A year ago, it was estimated that about 10% of the world’s companies were already zombies, unable to earn enough money to pay the interest on their debt (but, thanks to the Federal Reserve and other global central banks, still able to buy back their own shares and pay generous bonuses to managers).

So… what to do when these companies face bankruptcy in the COVID Crisis? Lend them more money, of course! Corporations are borrowing at a faster pace than ever before.

Here’s Bloomberg:

Companies rushing to shore up cash during the Covid-19 pandemic are fueling the busiest June ever in the U.S. junk-bond market. Through Friday, companies have raised about $45.5 billion this month. That puts it on pace to be the busiest month since $46.4 billion was sold in September 2013, the former record since 2006, according to data compiled by Bloomberg.

Zombie Schemes

In addition to the fake money lent out by the Fed, there’s also the fake money lent out by the banks under the Paycheck Protection Program (PPP). This is money that few companies will ever have to repay… which is probably a good thing, since so many couldn’t repay it if they had to.

The scheme was intended to distribute $349 billion. But to whom? Secretary of the Treasury Steve Mnuchin says the public has no right to know where its money goes. So he won’t say.

But the folks at WallStreetonParade.com have done some digging:

…our search of filings at the Securities and Exchange Commission reveals that dozens of debt zombie companies that trade on Nasdaq got the loans. Dozens of publicly-traded companies with large credit lines from banks got the loans. Dozens of companies with a lot more than 500 employees got the loans. It’s beginning to look like tens of billions of dollars in PPP loans were simply funneled out the door rapidly with little oversight into who was getting the loans.

For example…

…Christopher & Banks Corporation, which trades on Nasdaq under the symbol CBKC. It’s a retailer of women’s clothes. According to its SEC filing, in early June it applied for and received a $10 million PPP loan. But the same filing also reveals that it has a $50 million revolving credit facility with Wells Fargo and a term loan facility with ALCC for $10 million.

Another publicly-traded company that has not returned its PPP loan is Senseonics Holdings Inc., a maker of an under-the-skin sensor to monitor glucose levels for people with diabetes. It writes in its SEC filing that it entered into two credit facilities providing immediate gross proceeds of $15 million and access to $5 million. But it still took $5.8 million from the PPP.

In other words, the zombie companies are using the fake money to pay their zombie creditors.

We remind readers that a “zombie” company – or any company that makes consistent losses – destroys wealth; it doesn’t create it.

Zombie Economy

So, welcome to the Zombie Economy. Giving COVID checks – to the quick and the dead… lending PPP money to zombie companies…

No distinction is made between the living and the dead… between real money and fake money… between the just and the unjust… between Heaven and Hell… between getting rich by flimflam or making an honest dollar…

People get fake money for not working. Companies get fake money for not turning a profit. The feds grow more powerful by making problems worse.

And we all get poorer.