In New York, the stock of PNM, the state’s largest electric utility and its only company listed on the NYSE, buckled. In another day of stunning and stomach-churning trading, PNM plummeted as low as $27 before finishing at $31 a share, down 15% in a single day and far below the yearly high of $56. The crash signaled the pain to come for the economy here. Adding insult to injury PNM announced one of its employees had contracted the coronavirus.

The sweeping, breathtaking state mandates, so foreign to a democratically ruled people, were announced by New Mexican Governor Michelle Lujan Grisham at a news conference at the state capital of Santa Fe where she repeatedly expressed chagrin over the economic calamity they would cause but sternly defended them as necessary to protect the public from the feared killer virus that has traveled rapidly across the globe.

She asserted, without offering examples, that "there are still far too many New Mexicans coming into contact with one another. We take that very seriously."

Panic has gripped much of the public. New Mexico, like other states, has been beset with the hoarding of groceries, a gun and ammunition buying spree and desperate motorists forming long lines outside of coronavirus test sites. 

As of today, 28 cases of the virus have been confirmed in NM but no deaths. However, one case is now thought to be unrelated to travel and the result of the feared "community spread" which could generate more cases.

The low mortality rate from the virus and the severe measures taken by the government to halt it has led some citizens on social media and talk radio to say it is an overreaction and unnecessarily panicking the public and wrecking the economy. 

"This is an overreaction. The mortality rate of this virus is one percent. We're jumping the shark," declared radio talker Eddy Aragon as he and his ABQ radio audience reacted to the announced restrictions.

Overall, criticism of the latest emergency order was muted. Carla Sonntag, head of the New Mexico Business Coalition, was restrained in assessing the events:

We don't need to live in fear. China hit its peak virus cases pretty quickly. The number of cases is not astronomical. I, like many others, question whether these restrictions are absolutely necessary, but we are not doctors or scientists. I will abide by the Governor's orders and urge others to do the same.

Sonntag predicted widespread business bankruptcies if the state restrictions are extended much beyond the initial end date of April 10 set by the state.

Previously the Governor ordered the closure of all public schools until April 6 but there is doubt surrounding their planned resumption this school year.

While the Governor and Dept. of Health have wielded unprecedented power in this crisis, it is so vast that the question arises of who would enforce violations. Also, punishing citizens could be seen as trying to enforce a form of martial law. Perilous territory. For now, most citizens appeared willing to follow this new world order, their concern over contracting the virus trumping any concerns over their government's powers.

DATELINE ALBUQUERQUE 

Mayor Keller wasted no time in exercising the freshly-minted emergency powers given to him this week by the ABQ city council. He quickly declared a "public health emergency." (video here)

In making the announcement he addressed fears that the new legislation would allow him to confiscate guns or halt alcohol sales. It does neither, he explained, saying the primary purpose for the declaration was to give him more flexibility in freeing up financial resources to address the coronavirus threat.

The mayor made the announcement via a video from city hall. That drew fire from journalists who felt Keller should have stood for questions over his unusual action. And the ACLU said the mayor and council misfired in adopting the legislation, saying it looked like an "overreach."

GETTING SPECIAL

Top finance officials in the New Mexico government are saying a special session of the Legislature this year appears "inevitable." State revenues are set to dramatically crumble because of the crash in oil prices and the coronavirus threat that is wreaking economic chaos. In a somber discussion conducted on background we were told:

--The state budget reserve is a robust $1.9 billon but only about $300 million of that can be tapped without legislative approval. The state expects to burn through that $300 million in short order.

--Only a very quick rebound in the price of oil will avert a special session. The state is counting on an oil price of $51 a barrel for the fiscal year that starts July 1. The current price is in the low 20's. Each dollar drop represents a loss of about $22 million to the $7.6 billion general fund budget.

--There is no timetable for the special session. Sometime in late summer or early fall is possible. The Governor will make the call on the timing.

--Any special session can also be expected to include discussion of possible tax relief, economic stimulus and possible budget cuts as New Mexico wrestles with yet another energy bust. Much would depend on the state of the economy when the session convenes.

Santa Fe has essentially given up on a "V"shaped recovery in the oil price, where it rebounds to previous high levels in a matter of weeks. They are expecting a classic bear market in which prices stay down for many months. That is the scenario threatening the budget.

In the last two years the state budget has gone from $6 billion to $7.6 billion, riding on the back of the oil boom. That increase came after 10 years of austerity brought about by the 2008 Great Recession. Now we are headed back down--unless the dynamic starts to turn. For example, Saudi Arabia and Russia could reach a deal to halt their oil price war, letting prices recover.

But even if the price increases the volume of production that has skyrocketed to make NM the third largest oil producing state in America is going to be cut. Low price and low volumes--another double whammy.

The oil boom is centered in the SE NM Permian Basin where drilling is already slowing as a result of the world economic calamity. Thousands are employed there. The job losses could be staggering.

MLG and the Legislature have been happily surfing the wave for two years. Now they are going to crash. The swim to shore will be long and hard.

NO BS

Erickson

When the times get tough, we get going--to our posse of "No Bull Shit Economists." Chris Erickson of NMSU is a charter member (what an honor!) and he comes with the no BS take:

With oil at $20 a barrel, the NM Fracking Boom is over. Fracking has resulted in a revolution in the oil patch. Frack wells both produce more oil and over a longer period of time. And the productivity of individual frack wells drilled in New Mexico has increased every year from 2005 to 2017. Geological factors significantly affect cost, but for new wells, $40 a barrel is a commonly cited rule-of-thumb for profitability. With oil in the 20's, we will see a dramatic drop in drilling, meaning rapid decline in oil patch employment. Of course, existing wells will continue to produce and will generate revenue for the state, probably at levels above the pre-fracking average, but well below the current record revenue generated during the last few years.

We'll play it by ear to see whether the news dictates we come out of our isolation bunker for a Friday blog. Meanwhile, REM takes us out of here because, at least for now, it really is "the end of the world as you know it."

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(c)NM POLITICS WITH JOE MONAHAN 2020