Covid-19 Economic Impact

[bucktalk]

Can anyone help with this question? If unemployment stands where it is now, for any length of time, and people don't/can't pay into social security then how long can Social Security remain solvent??? From a practical standpoint I don't see how Social Security can withstand a duration of time where the income falls far below the outflow. Uh oh.

[gopokes88]

A long time. SS has plenty of money for a while. It’s solvency problem will be in the 2030s, this will just accelerate that.

[mkjeeves]

Here’s an interesting twist. I would have bet Insurors would have covered themselves.

Legal battles loom as businesses hit by virus sue insurers
BY MICHAEL TARM
Apr 23, 2020
CHICAGO (AP) — A once-bustling bar and grill tucked below a Michigan Avenue overpass famously inspired a “Saturday Night Live” skit starring John Belushi and Bill Murray. But the money the Billy Goat Tavern is losing during the coronavirus outbreak is no joke.

The tavern and millions of other shuttered businesses nationwide have turned to their insurers to help recoup their losses following state-mandated closures, which combined may exceed $300 billion a month. But insurers have widely rejected the claims, so the Billy Goat joined a growing line of businesses, including barbershops and casinos, suing insurers to force them to pay.
<snip>
Among dozens of lawsuits filed to date is one by the Choctaw Nation casinos in Oklahoma

https://apnews.com/fab123cc1a2181b93c38c082d955de98

[Questor]

Several months with 10-20% unemployment will only cause a blip. We saw I think 12% during part of the 1980s and it barely made a dint.

Don’t let talking heads fool you... there are enough Millennials around to make social security solvent essentially forever if we had the political will to do so. It will take a slight raise in the benefits age, or redistribution of existing tax allocations or collection of new ones, or a slight reduction in payout benefits, or a combination to a lesser extent of all of the above. It really is not a hard problem to solve, it’s just no one wants to solve it for various reasons.

[Teo9969]

SSC is infinitely more likely at this point to be expanded than to collapse.

[AP]

Another casualty.

https://www.cnbc.com/2020/04/30/coro...s-weekend.html

Clothing apparel company J. Crew is preparing for a bankruptcy filing that could come as soon as this weekend, people familiar with the matter tell CNBC.

Edit: updated Reuters article to source CNBC

[Edmond Hausfrau]

Another casualty.

https://www.cnbc.com/2020/04/30/coro...s-weekend.html



Edit: updated Reuters article to source CNBC

They have been circling the drain for a while post Jenna Lyons. The quality of the clothes has gone way down.

[gopokes88]

Buffet selling all his airline stocks will send the market into a panic tomorrow.

[EBAH]

Here’s an interesting twist. I would have bet Insurors would have covered themselves.

Legal battles loom as businesses hit by virus sue insurers
BY MICHAEL TARM
Apr 23, 2020
CHICAGO (AP) — A once-bustling bar and grill tucked below a Michigan Avenue overpass famously inspired a “Saturday Night Live” skit starring John Belushi and Bill Murray. But the money the Billy Goat Tavern is losing during the coronavirus outbreak is no joke.

The tavern and millions of other shuttered businesses nationwide have turned to their insurers to help recoup their losses following state-mandated closures, which combined may exceed $300 billion a month. But insurers have widely rejected the claims, so the Billy Goat joined a growing line of businesses, including barbershops and casinos, suing insurers to force them to pay.
<snip>
Among dozens of lawsuits filed to date is one by the Choctaw Nation casinos in Oklahoma

https://apnews.com/fab123cc1a2181b93c38c082d955de98

Yeah there has been a lot of talk about how all this opening back up nonsense has been in part an aid to give insurers an out in refusing claims to businesses shuttered through stay at home orders. I'm very interested to see how this all plays out.

[gopokes88]

Yeah there has been a lot of talk about how all this opening back up nonsense has been in part an aid to give insurers an out in refusing claims to businesses shuttered through stay at home orders. I'm very interested to see how this all plays out.

They have no chance of winning those lawsuits.

[mugofbeer]

Buffet selling all his airline stocks will send the market into a panic tomorrow.

Oh well, the Dow up 26, S&P up 12, NASDAQ up 105.

It's not all about Warren.

[BoulderSooner]

Several months with 10-20% unemployment will only cause a blip. We saw I think 12% during part of the 1980s and it barely made a dint.

Don’t let talking heads fool you... there are enough Millennials around to make social security solvent essentially forever if we had the political will to do so. It will take a slight raise in the benefits age, or redistribution of existing tax allocations or collection of new ones, or a slight reduction in payout benefits, or a combination to a lesser extent of all of the above. It really is not a hard problem to solve, it’s just no one wants to solve it for various reasons.

this is absolutely correct if they would just move the retirement age to 70 (but only for those under 50 (meaning you have 20 years + to adjust) ) that moves the SS can down the road like 50 more years

[Mr. Blue Sky]

this is absolutely correct if they would just move the retirement age to 70 (but only for those under 50 (meaning you have 20 years + to adjust) ) that moves the SS can down the road like 50 more years

Do you realize the USA has the oldest full retirement age in the developed world?
Well, OK, Libya is 70.
Take the UK for example, it went up to 65 in 2018, with graduated increases toward 67 in 2028 and 68 in 2037.

70? That’s living and working to die with little time to enjoy life in retirement. Our life expectancy has actually gone down the last two years.
https://en.m.wikipedia.org/wiki/Retirement_age

[jn1780]

Several months with 10-20% unemployment will only cause a blip. We saw I think 12% during part of the 1980s and it barely made a dint.

Don’t let talking heads fool you... there are enough Millennials around to make social security solvent essentially forever if we had the political will to do so. It will take a slight raise in the benefits age, or redistribution of existing tax allocations or collection of new ones, or a slight reduction in payout benefits, or a combination to a lesser extent of all of the above. It really is not a hard problem to solve, it’s just no one wants to solve it for various reasons.

SS was never really a problem. At least not a difficult problem to solve. Medicare is a far bigger problem. At least spending on that probably went down significantly the past two months since hospitals have not really done anything else since Covid.

[BoulderSooner]

Do you realize the USA has the oldest full retirement age in the developed world?
Well, OK, Libya is 70.
Take the UK for example, it went up to 65 in 2018, with graduated increases toward 67 in 2028 and 68 in 2037.

70? That’s living and working to die with little time to enjoy life in retirement. Our life expectancy has actually gone down the last two years.
https://en.m.wikipedia.org/wiki/Retirement_age

i was just stating on how to quote "fix" social security

also if you can't retire well before SS max age that is an individual problem ... not a "state" problem

[mugofbeer]

Do you realize the USA has the oldest full retirement age in the developed world?
Well, OK, Libya is 70.
Take the UK for example, it went up to 65 in 2018, with graduated increases toward 67 in 2028 and 68 in 2037.

70? That’s living and working to die with little time to enjoy life in retirement. Our life expectancy has actually gone down the last two years.
https://en.m.wikipedia.org/wiki/Retirement_age

Our system was never set up to provide full living expenses when you retire. That's what retirement accounts do. Unfortunately, pension plans were to provide full retirement benefits but they were bankrupting companies that offered them so they are rare today.

[Edmond Hausfrau]

Our system was never set up to provide full living expenses when you retire. That's what retirement accounts do. Unfortunately, pension plans were to provide full retirement benefits but they were bankrupting companies that offered them so they are rare today.

This. Once we decided that we were the country where all benefits would flow through the employer, we set ourselves up. First pensions were shifted to 401k which are employee driven and at the whims of the market. Second, we tied our healthcare to our employer, used to have company physicians for coal towns, then got cheaper to just provide the insurance and let employee choose the provider. Now healthcare costs are above what most companies can afford, to say nothing of individual employee expenses.

[Jeepnokc]

Our system was never set up to provide full living expenses when you retire. That's what retirement accounts do. Unfortunately, pension plans were to provide full retirement benefits but they were bankrupting companies that offered them so they are rare today.

But...some people don't think ahead or take advantage of it. I offer a 401plan with 3% matching and I have several employees who do not take advantage of it. I have explained to each of them they should at least do the matching portion as it is extra money. These are some of my higher paid employees while my lowest paid employee who is a single mom with a child takes full advantage of it.

[Edmond Hausfrau]

But...some people don't think ahead or take advantage of it. I offer a 401plan with 3% matching and I have several employees who do not take advantage of it. I have explained to each of them they should at least do the matching portion as it is extra money. These are some of my higher paid employees while my lowest paid employee who is a single mom with a child takes full advantage of it.

There was big momentum a few years ago to change 401ks to Opt Out, instead of Opt in. Basically you are signed up automatically for at least the amount that gets you the company match.
Not sure what happened to that grand plan.

[mugofbeer]

But...some people don't think ahead or take advantage of it. I offer a 401plan with 3% matching and I have several employees who do not take advantage of it. I have explained to each of them they should at least do the matching portion as it is extra money. These are some of my higher paid employees while my lowest paid employee who is a single mom with a child takes full advantage of it.

And mark my words, they'll be the first ones to cry about why isn't the government giving them support when they find themselves out of work or retired and have nothing to use for retirement living.

The stupid thing is, if they did the 3 - 6 % withholding, they'd likely not even miss it.

[Teo9969]

Not sure about Jeep's employees specifically, but do keep in mind that some of these people got burned by the Great Recession and may have made the ill-advised choice to pull their funds near the end and never got back in.

Still, take the free money, especially if you're making more than you need to get by.

[catch22]

https://docs.google.com/spreadsheets...28M/edit#gid=0

According to these numbers, in my opinion, air travel has bottomed on April 12 or 20th, with a slow recovery beginning. A friend of mine working for American (in corporate) said advanced bookings are "taking off" for them.

Keep in mind, these numbers are TSA throughput and not official enplanements. TSA throughput included anyone who went through a checkpoint including employees (retail shops, etc.) and crewmembers. I am assuming employees and crewmembers are a relatively consistent and statistically insignificant number. Promising at least, we'll need a few more weeks of numbers to see if things are improving for air travel.

[mkjeeves]

I wonder two things about this, what the recovery will look like and what the depression looked like. I also wonder when and what the recession would have looked like had we not have had Covid 19. Longest bull market in history, it was coming at some point, but maybe not like this one.

[PhiAlpha]

I wonder two things about this, what the recovery will look like and what the depression looked like. I also wonder when and what the recession would have looked like had we not have had Covid 19. Longest bull market in history, it was coming at some point, but maybe not like this one.

I would change maybe to “definitely.” Many people were predicting a recession but a deep, prolonged one (or a recession at all) wasn’t a foregone conclusion. Covid definitely made any potential recession based on other factors about 1,000,000 times worse than it would’ve been.

[mkjeeves]

I would change maybe to “definitely.” Many people were predicting a recession but a deep, prolonged one (or a recession at all) wasn’t a foregone conclusion. Covid definitely made any potential recession based on other factors about 1,000,000 times worse than it would’ve been.

Definitely not forgone that we would have a deep recession like this. Pretty much forgone that the bull market was nearing the end. Oil crash alone would not have helped. My point with "maybe" though, is another day, another month, next year, it could have been something else. Big things sometimes happen, pandemics, nuclear accidents, terrorism, and conditions we haven't thought about. Hard to imagine as bad as this though.