Post-Corona Economy

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GORDON
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Post-Corona Economy

Post by GORDON »

I think the previous "Bad Economy" thread is sort of defunct, because of the wildcard plague. Whether the lockdown was a good idea or not, the economy going forward is going to be in shades of what we're doing to it today, for a long time.

So post all the direct economic effects from the corona lockdown.

Here's one! All 261 Logan's Roadhouses closing.
https://wcrz.com/logans-roadhouse-closi ... efinitely/

Unemployment expected to be 15% by July:
https://tradingeconomics.com/united-sta ... yment-rate

If those personal stimulus checks don't keep coming every month (or some other bailout), we'll be looking at that "Great Depression 2" timeline, again. If they do keep coming out, national debt will... what... quadruple in a year?
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Leisher
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Post by Leisher »

I don't agree that this thread was needed. There's plenty of coronavirus related links in the current economy thread.
GORDON wrote: Here's one! All 261 Logan's Roadhouses closing.
https://wcrz.com/logans-roadhouse-closi ... efinitely/
I've been in more states than not. How the hell have I never heard of a chain with 261 locations? I'm guessing they weren't exactly kicking ass in the first place.

How long do you think before all 261 locations are replaced by new restaurants?

A question raised by Catt in the other economy thread applies here: "If we're expected to save 6 months or more of emergency funds, why aren't corporations?" This situation may completely alter how industries are run. Kind of like how the FAA changes all the rules every time a plane crashes. If you're not in manufacturing, you might have missed it, but the tornado that hit Joplin, Missouri a few years back completely altered the manufacturing industry. See, there were a few companies that were the only ones of their kind that got wiped out. Some never came back and their customers were left scrambling. That led to those customers demanding their existing vendors and new vendors have backup facilities. This was a major reason my company built a second plant in SC rather than expanding the production capabilities of the one in OH.

Someone is going to come out of this and win popularity by demanding a change to prevent it from happening again. I don't know if the rules for corporations will change or there will be a new insurance policy for companies to purchase or some other method, but changes are going to come.
GORDON wrote: If those personal stimulus checks don't keep coming every month (or some other bailout), we'll be looking at that "Great Depression 2" timeline, again. If they do keep coming out, national debt will... what... quadruple in a year?
It's going to suck no matter what.

The question I ask is whether or not there is a true silver lining to it? Will we see prices drop, particularly on unnecessary items, to reflect the lowered demand? Will we see wages rise for people with actual skills? Will companies see the drop in their markets and realize they need to actually employ and pay people so those people can buy their products? And so on.

Who knows?
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Cakedaddy
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Post-Corona Economy

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National debt is taking a hit. ALL of my employees are being well taken care of by the government. They are in no hurry to go back to work. With the $600 fed money, they are at 90% normal take home anyway. They are not feeling this. And being that a HUGE number of people are in their same tax bracket, there are a HUGE number of people who see this as a government mandated paid vacation. Most people I know are planning on spending the stimulus check on luxury items because it's extra money. Go up some levels, and you are now talking about people who are financially able to ride this out because they have some wiggle room. Many of them are still working (is anyone else besides me right now not working and/or not getting their paychecks?) or between their own financial intelligence plus the free government money, they can ride this out for a while. From a small business standpoint, there is a bunch of money we have access to. Much of it forgivable in the right circumstance. For instance, if I didn't want my employees on unemployment because I don't want them looking for a new job, I could decide to keep paying them while they stay home. Anything under $100k is forgiven. So I could pay up to 500 employees up to $100k per year and it doesn't cost me a dime. That entire loan would be forgiven. Oh, not to mention I can pay interest on loans, and other business expenses, and those are forgiven. The only thing I can figure isn't written off would be new capital expenditures. Given that unemployment plus the fed money pretty much equals what my employees get paid anyway, I didn't see the benefit of applying for the forgivable loans to keep them on the payroll. I DID however apply for two grants that I can use to continue to pay interest, insurance, etc with. General monthly business expenses. As a small business owner on complete shut down, we are not feeling this. Well, very much. Sure, I'm not making my normal income, but we could live like this for quite a while with no hardship. I can't buy all of the luxury items and impulse buys I normally would, but we can certainly pay all of our bills. Speaking of which, I have options to defer ALL of my loan payments. I can even defer payroll taxes if I want to. Granted, that all has to be caught up and paid (they are not forgiving taxes), but it would put no hardship on me right now. I would have, I believe, three years to catch up. I don't know all of the details on this one because I don't need it.

Look up the CARES act. Sure, tons of pork. But look at what they are actually doing for everyone. It's insane. I don't know how we ever get the debt paid down after this. But do we need to? Where we ever really going to? Dunno. But I'm not afraid of the economic recovery. I predict a very fast one. Sure there will be losses. But I expect them to be minimal and those gaps quickly filled by other businesses. All of the wait staff from Logans are making more money right now than they were when they were working. Logans is gone, but everyone is still getting paid. I'd rather have people laid off and some businesses close than a bunch of extra people die to save jobs.

Unemployment numbers are irrelevant too. SOOOOOOOOOOO many are temporary shut down. Their jobs aren't gone. They are just on hold.

Again, I predict a very fast recovery. I look forward to dumping a TON of money into the market later this summer or early fall. (I sound like Trump. It will be like a miracle. It will just recover. Fall will be a good date to look forward to.)
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Leisher wrote: I don't agree that this thread was needed. There's plenty of coronavirus related links in the current economy thread.
I disagree with your disagree. Old economy paradigms are kaput, there's only what corona lock down is doing, now, and in the middle future.

If things normalize in 2020, I predict we'll still be seeing fallout from this in 2030.
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GORDON wrote: I predict we'll still be seeing fallout from this in 2030.
Oh good lord. Quote me, remind me, etc. Other than still having a national debt, at most, we'll still be arguing if staying home saved millions of lives, or if millions of lives were never going to be lost because it was just a cold. We will NOT be talking about how the economy is still affected. 12 months from now, Trump will be trying to take credit for the strong economy, even if he's not in the White House.

I guess there is also, in spite of our best efforts, millions of people died and and the virus is still killing us in 2030.
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Post by GORDON »

Cakedaddy wrote: a lot of words that i actually read
My takeaway from what you said is, "There are so many aid programs right now, everyone is fine... for now." This is correct, yes?

I see lock downs happening until at least July 1. Just my personal wild-ass guess. I know of two restaurant chains that have closed. I don't know the total number of them. Why didn't they take the aid programs and keep their people on the payroll? Serious question, not being sarcastic. What you said doesn't reflect what they did.

When it's over, and X% of jobs have disappeared because they no longer exist, it's not an instant recovery. New jobs have to be created, or something. And as I've been showing, we're in Great Depression unemployment numbers. That can't be insignificant.

I don't personally know the effect of the money printing presses going 24/7 for the next 6 months. Maybe debt doesn't matter. Maybe we'll be borrowing $1 Trillion dollar bills from Zimbabwe in order to buy a loaf of bread. My natural instinct is "things that aren't in the best interest of a healthy economy are unhealthy for the economy."

I stand by my "ripples for at least 10 years" prediction. #remindme2030
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Post by Cakedaddy »

GORDON wrote: Why didn't they take the aid programs and keep their people on the payroll?
Because they were failing before all of this started. They fired their CEO for paying bills without permission? That implies SERIOUS cash flow issues. That didn't just pop up. Honestly, a lot of restaurants in our area are failing. There's one particular spot where there were 4 empty building were they failed. I've been under the impression that restaurants have been having problems for a while. The area is booming. LOTS of commercial businesses around. Large retail businesses filling any available spot out there. But the food industry is dying. Maybe not close enough to non-commercial buildings? As in office buildings and such? No clue. I just see them empty all over the place. I see this as the camel that broke their back. I guess they had per-existing issues and COVID killed them!

Honestly, I predict unemployment will go above 15% as more people stop working, or companies use up all 2.2 trillion of the free payroll money being offered. Many companies won't get all they want (because there isn't enough to go around) and they will layoff because they can't afford to just pay them. I'm surprised it's only 4.4% right now. Given that it took me over 3 hours on hold Thursday to register for unemployment, I know there are a LOT of people still trying. That was after trying for about 2 hours the day before. Over 450 calls trying to get through. When I did, I'm told all agents are busy and they hung up. The next day, I started dialing 10 minutes before they opened. Got through and in the queue 7 minutes after they opened (my wife was rapid dialing as well. Her call got through, mine did not). I got in line 7 minutes after they opened, I was on hold for 3 hours 8 minutes. I talked to an agent for 7 minutes. Ya. There are a LOT of people clamoring to get paid. Unemployment easily hits 15 and I say more.
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Post by GORDON »

Cakedaddy wrote: As in office buildings and such? No clue. I just see them empty all over the place. I see this as the camel that broke their back. I guess they had per-existing issues and COVID killed them!
Ha, good comparison. I'll take that as the best theory I've heard so far, since I have no other data to say otherwise.

Personally, last went to a Logan's about 5 years ago. Ordered some hot wings as an app, and they came out without sauce. I said, "Hey, no sauce." Waiter person said, "Yeah, see the grease on the plate? That's sauce." I'm not joking, that actually happened.
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GORDON wrote: If those personal stimulus checks don't keep coming every month (or some other bailout), we'll be looking at that "Great Depression 2" timeline, again.
The CARES Act provides an additional $600/week in unemployment on top of existing state benefits rights? Even for self employed people (who normally do not qualify). The checks are large and will be coming for a while.
GORDON wrote:If they do keep coming out, national debt will... what... quadruple in a year?
Right now, $2T has been allocated to pay for the current provisions which should last several months. US GDP is around $22T, and if 80% of people keep their job, I'm not sure of a multiplier between GDP + Payroll, but let's say 75%. 16.5*.2 = 3.3T / 12 = $275Bn per month needed.

Those are rough numbers. Our national debt is already $23T... We will increase it significantly, but I'd be stunned if it went above $30T.

$10M filed for unemployment in the past two weeks, that means our current unemployment rate is ~ 10%, as of 4/3. Many economists are predicting a peak around 20% +/-5
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Post by TheCatt »

I feel that Gordon is being a bit alarmist. But, there is a real risk of stagflation, inflation or other long term economic ills as a result of this. Getting back to normal may be hard. Don't buy the administration line. But don't be chicken little either.

Btw, China owns $1.1T of US debt. That should be forgiven.
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Post by GORDON »

TheCatt wrote: I feel that Gordon is being a bit alarmist. But, there is a real disk of stagflation, inflation or other long term economic ills as a result of this. Getting back to normal may be hard. Don't buy the administration line. But don't be chicken little either.

Btw, China owns $1.1T of US debt. That should be forgiven.
You just gave me a lot of new information I didn't have, and was too lazy to research all of. Yes, in light of that information, I would say my speculations were on the alarmist-side.

I thought our debt was still in the single-digit trillions, heh.

I almost put "Catt will set me straight" in one of those earlier posts.

THAT BEING SAID.... I still submit that old economic trends are dead, and a new thread is legitimate, as for the near future It's All About That COVID-19.
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GORDON wrote: I thought our debt was still in the single-digit trillions, heh.
*laughs* and *cries*

I'm fine with a new thread, this is disruptive. I think post-virus will be normalcy, more or less, but there's always a chance this is a catalyst for Sanders-like government.
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Post by GORDON »

I will happily close this thread when the ripples end. Not like I'm rooting for bad shit, but I can tell when a rock has been thrown in still water.
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GORDON wrote: I will happily close this thread when the ripples end. Not like I'm rooting for bad shit, but I can tell when a rock has been thrown in still water.
A lot of people thought the world would end in 2008/early 2009. This is bigger, imho, but government's have responded much more quickly. So... who knows.
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Post by GORDON »

Was thinking last night, this is bigger than the 9/11 economic fallout.
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GORDON wrote: Was thinking last night, this is bigger than the 9/11 economic fallout.
2008/2009 was much bigger than 9/11, so yes.
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Post by TheCatt »

30% of the economy, about $7trillion per year, is offline right now due to shutdowns
Estimated, of course.

That's 500+bn per month. Aka 3.5 months of stimulus money
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Post by TheCatt »

Stocks up 5-6% today, apparently the virus is over.
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Post by Leisher »

“Every record been destroyed or falsified, books rewritten, pictures repainted, statues, street building renamed, every date altered. The process is continuing day by day. History stops. Nothing exists except endless present in which the Party is right.”
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