Covid-19 Economic Impact

[Teo9969]

It really sucks for those nearing retirement.

They will not have very much time to recover from all the losses.

I would think most super near retirement have only seen a relatively minor dip unless they were not heavily allocated toward bonds like they're "supposed to be". If they were, they really were seeing substantial gains that went against conventional wisdom. (If they're not in bonds yet, that's a problem though).

This is my concern with staying closed beyond May (heck, even throughout May is a bit concerning). At some point, pensions are going to become substantially insolvent, and bonds will also suffer across the board.

[Pete]

https://www.cnn.com/2020/04/16/econo...rus/index.html

New York (CNN Business)As businesses remain closed during the coronavirus pandemic, an unrelenting jobs crisis continues to push Americans onto unemployment rolls.

Another 5.2 million workers filed for their first week of unemployment benefits last week, according to the US Department of Labor, bringing the total number of Americans who have filed initial jobless claims to around 22 million, or roughly 13.5% of the labor force, since March 14.

[Teo9969]

https://www.cnn.com/2020/04/16/econo...rus/index.html

New York (CNN Business)As businesses remain closed during the coronavirus pandemic, an unrelenting jobs crisis continues to push Americans onto unemployment rolls.

Another 5.2 million workers filed for their first week of unemployment benefits last week, according to the US Department of Labor, bringing the total number of Americans who have filed initial jobless claims to around 22 million, or roughly 13.5% of the labor force, since March 14.

Closure through May, especially if it's guaranteed to happen on both coasts, surely guarantees us well over 30% unemployment when final May numbers roll in, yes?

[Rover]

I would think most super near retirement have only seen a relatively minor dip unless they were not heavily allocated toward bonds like they're "supposed to be". If they were, they really were seeing substantial gains that went against conventional wisdom. (If they're not in bonds yet, that's a problem though).

This is my concern with staying closed beyond May (heck, even throughout May is a bit concerning). At some point, pensions are going to become substantially insolvent, and bonds will also suffer across the board.

There are way more investment strategies than just bonds.

This loss will be substantial for many and especially for those with no time to recover. The younger group who just shrugs it off is pretty unaware of what the last major recessions and depression did.

[jerrywall]

Small divergence...

Anyone else having issues with the IRS tool for the Covid-19 Relief payments? It's not a big deal to me as I'm not in a hurry or really need it, but I tried yesterday and today to get into the system to setup my bank account information (I haven't gotten a return in over a decade). Yesterday I tried a few times and then got locked out for 24 hours. I've tried twice today with no luck. I haven't been locked out yet for another 24 hours but I'm still getting the generic ‘Payment Status Not Available’ message when I try, which I guess is happening to other folks as well. Anyone here in the same boat?

I also wonder how widespread this is. Between this and the delay for the checks, by the time folks get this, the ones who need it will need additional payments.

[FighttheGoodFight]

Small divergence...

Anyone else having issues with the IRS tool for the Covid-19 Relief payments? It's not a big deal to me as I'm not in a hurry or really need it, but I tried yesterday and today to get into the system to setup my bank account information (I haven't gotten a return in over a decade). Yesterday I tried a few times and then got locked out for 24 hours. I've tried twice today with no luck. I haven't been locked out yet for another 24 hours but I'm still getting the generic ‘Payment Status Not Available’ message when I try, which I guess is happening to other folks as well. Anyone here in the same boat?

I also wonder how widespread this is. Between this and the delay for the checks, by the time folks get this, the ones who need it will need additional payments.

Based on what I have seen from others (friends and other online forums) it is the same thing you are experiencing. Timeouts and not showing information.

[Teo9969]

There are way more investment strategies than just bonds.

This loss will be substantial for many and especially for those with no time to recover. The younger group who just shrugs it off is pretty unaware of what the last major recessions and depression did.

Of course there are tons of strategies. The point being, that if you're 60 plus, your investments should generally be in (and have been in motion toward) far more stable assets that the overall stock market. In fact, if an already retired person were entirely in bonds and in the right bonds, you may have seen, at least for now, an unexpected uptick in your portfolio.

Obviously not everyone follows a conservative model, and given that we're a country of 330+M with almost 30% of that being people over 55, there are going to be millions who suffer unexpected losses. But if people follow fairly standardized financial guidance, those over 60 really should not be looking at anywhere near a 20% drop in their retirement accounts.

All of this is out the door if we're still closed up 2 months from now.

[ctchandler]

JerryWall,
I have several friends that have received the money (I don't qualify) and haven't heard of any problems personally but like anything the government does, there are bound to be some problems.
C. T.

[mugofbeer]

https://www.cnn.com/2020/04/16/econo...rus/index.html

New York (CNN Business)As businesses remain closed during the coronavirus pandemic, an unrelenting jobs crisis continues to push Americans onto unemployment rolls.

Another 5.2 million workers filed for their first week of unemployment benefits last week, according to the US Department of Labor, bringing the total number of Americans who have filed initial jobless claims to around 22 million, or roughly 13.5% of the labor force, since March 14.

It's not going to slow down a lot anytime soon. This is why things need to slowly start reopening ASAP in areas where the virus is rare.

[RedDollar]

If you have any doubts that the restaurant business will have a tough road back to normal, here's what's happening in China. Can't go in a restaurant without passing two bar scans. This will never fly here and even with those stringent controls, its not coming back in China

https://twitter.com/SquawkCNBC/statu...633733633?s=19

[AP]

Regardless of when the government decides to reopen the economy, there is very little appetite by CEOs from large companies to return to normal anytime soon.

https://www.cnbc.com/2020/04/16/a-lo...l&utm_content=

[RedDollar]

Regardless of when the government decides to reopen the economy, there is very little appetite by CEOs from large companies to return to normal anytime soon.

https://www.cnbc.com/2020/04/16/a-lo...l&utm_content=

Yeah, but that's the safe thing to say, these guys would get skewered if they said anything else. Gotta take it with a grain of salt.

[Teo9969]

Yeah, but that's the safe thing to say, these guys would get skewered if they said anything else. Gotta take it with a grain of salt.

I imagine CEOs at these levels of corporate America would prefer to extend the shutdown just far enough to eliminate small/medium sized competition but not enough to ruin the whole economy for the next half decade. That precipice is probably some time in June. They've got the cash and resources to wade this out several more months and when the dust "settles", they're going to be the only options on the table in their market segments.

[AP]

I mean whatever their motivation, a lot of people work for those companies so their lives will not be returning to normal any time soon.

[TheTravellers]

I imagine CEOs at these levels of corporate America would prefer to extend the shutdown just far enough to eliminate small/medium sized competition but not enough to ruin the whole economy for the next half decade. That precipice is probably some time in June. They've got the cash and resources to wade this out several more months and when the dust "settles", they're going to be the only options on the table in their market segments.

I have heard this sentiment too. So many small businesses of every sort (restaurants, bookstores, coffee shops, bakeries, ice cream shops, hipster clothing boutiques, bars, whatever) will be dead soon and a wave of corporatization will follow (either by corporations buying up all the shells of the gone-under businesses or just opening up new locations of their existing businesses now that they won't have to worry about competition from "the locals"). Sad, if true, and I'll bet there's more than just a small kernel of truth to that scenario (never underestimate the voracity and appetite for corporations to make more money by whatever means necessary).

[catch22]

I would really doubt if many companies are thinking of this is an opportunity to squash anyone. Everyone is susceptible to being squashed at the moment. Seems like every business is just in survival mode, not preparing for a feast.

[Pete]

As of yesterday, the SBA is out of money for the Payroll Protection Plan.

I never did get mine so now have to wait and hope more money is approved by congress.

It goes to show you the depths of the problem and it seems many still haven't grasped how devastated our economy has already become. (Not advocating for opening everything up; it's just that even if we did that tomorrow we have an incomprehensible economic mess on our hands.)

[TheTravellers]

I would really doubt if many companies are thinking of this is an opportunity to squash anyone. Everyone is susceptible to being squashed at the moment. Seems like every business is just in survival mode, not preparing for a feast.

As I said - never underestimate the voracity and appetite for corporations to make more money by whatever means necessary. There are some responsible, decent large corporations out there, but I'm also guessing Bezos is thinking "Hmmm, wonder how much of a bump I'm going to get when all the indie booksellers that I've been trying to put out of business for years finally go out of business?" along with "How can I fix the most glaring bad aspects of how I've been handling COVID-19?" and "Hope things pick back up to the multizillion dollar level I was making before COVID-19 hit?".

[RedDollar]

I would really doubt if many companies are thinking of this is an opportunity to squash anyone. Everyone is susceptible to being squashed at the moment. Seems like every business is just in survival mode, not preparing for a feast.

Not entirely virus related, but Exxon and Chevron are sitting back with a balance sheet full of cash ready to feast on domestic shale producer assets. They've already bought enough Permian property to become the largest Permian producers. They will expand on that.

[TheTravellers]

https://www.huffpost.com/entry/paych...b63639081bf038

"The construction industry, which lost 29,000 jobs in March, according to payroll data from the Bureau of Labor Statistics, received the most money ― 13.7% of the $247 billion in approved loans. The accommodation and food services industry, with 15 times as many job losses, got only 9.1% of the pie. "

[Teo9969]

I have heard this sentiment too. So many small businesses of every sort (restaurants, bookstores, coffee shops, bakeries, ice cream shops, hipster clothing boutiques, bars, whatever) will be dead soon and a wave of corporatization will follow (either by corporations buying up all the shells of the gone-under businesses or just opening up new locations of their existing businesses now that they won't have to worry about competition from "the locals"). Sad, if true, and I'll bet there's more than just a small kernel of truth to that scenario (never underestimate the voracity and appetite for corporations to make more money by whatever means necessary).

Fortunately, the food and beverage area is one place where local businesses will come back in and fill the gap as opposed to chains since those supply chains are substantially more local than most other supply chains which originate in China or other places abroad.

I would really doubt if many companies are thinking of this is an opportunity to squash anyone. Everyone is susceptible to being squashed at the moment. Seems like every business is just in survival mode, not preparing for a feast.

I think you're saying this from the perspective of an employee of an airline, and not the host of other sectors of the economy. Wall Street is up almost 30% from recent March 23rd lows. Small and Medium sized businesses prospects have gone from grim to calamitous. Big businesses are in a holding pattern more so than survival. Most are still spending money. Some will take the opportunity for layoffs to get rid of underperforming workers and prepare for onslaught of applications 6 to 12 months from now when better talent previously working for smaller operations are now in the pool, and others will layoff and not rehire because they can automate or were overweight to begin with.

Not saying every big business is in a good position, and they're all at risk in as much as the US economy is pushed every day closer to the cliff. Some will fail, but many more will come out of this with substantially more market share and relatively little possibility that they lose that market share for 3+ years while would be small business owners are just trying to find their bearings and medium sized businesses come out of survive at all costs mode. To say nothing of the supply chain nightmares that are going to exist and be harder for smaller operations to navigate effectively.

[TheTravellers]

Fortunately, the food and beverage area is one place where local businesses may come back in and fill the gap as opposed to chains since those supply chains are substantially more local than most other supply chains which originate in China or other places abroad. ...

FIFY. Appreciate your optimism, but there are most likely *a lot* of local restaurants and bars that will just never re-open, due to the revenue losses, lack of savings, lack of capital, lack of ability (for whatever reason) to get a loan, etc. Nothing to do with supply chains, just basic money-management facts - owner loses all his revenue for too long and just can't re-open due to not having enough money (for whatever reason), done and dusted. As I've mentioned before, look at Lipsmackers for a perfect storm of how to go under and not re-open (most likely never again, but would be nice if they could).

[AP]

^Other people will take their places. You won't have the same restaurants, but there will be new ones opening.

[Teo9969]

FIFY. Appreciate your optimism, but there are most likely *a lot* of local restaurants and bars that will just never re-open, due to the revenue losses, lack of savings, lack of capital, lack of ability (for whatever reason) to get a loan, etc. Nothing to do with supply chains, just basic money-management facts - owner loses all his revenue for too long and just can't re-open due to not having enough money (for whatever reason), done and dusted. As I've mentioned before, look at Lipsmackers for a perfect storm of how to go under and not re-open (most likely never again, but would be nice if they could).

What AP said below....people always want to get into the restaurant game for some reason. Probably the alcohol

That being said, it won't be anytime soon...the industry across the board is going to have to figure out how to manage a new paradigm.

[mkjeeves]

I just listened to Holt's press conference and he mirrored Trump's requirements as being sound "at first blush" before beginning a reopening plan. Trump's guidelines are in this story:

It also recommends that states and regions see a decline in documented cases over a period of 14 days, ensure that hospitals can treat all patients without crisis care, and have a robust testing program in place including antibody tests for at-risk health care workers before moving to the phased reopening.

https://thehill.com/homenews/adminis...final-decision

Holt said and AFAIK we haven't started the 14 day countdown yet. I'm not sure we have leveled. I also think we have work to do before we have something resembling a robust testing plan but what do I know.