Covid-19 Economic Impact

[gopokes88]

As everyone knows, I track the crap out of new construction projects, restaurants, retail stores, etc.

And as you would expect, things have slowed way, way down.

At the very minimum, this means the pipeline is running pretty dry and we'll really see that in the next few months where there is very little new starting up. We have a lot of things already in progress but most of them will be soon finishing up.

And another huge factor: Landlords and developers are not getting rent in a lot of cases or are just cutting way back so their tenants can make it through. This is going to have a big impact on their ability to do anything new.

We've had a ton of new construction and projects over the last decade, but we are going to see a hiccup in the near future and it's just a matter of how long that down period is going to last.

Especially since we were headed for at least a small local economic downturn before Covid-19.

100% true.

For the other that thinks this must mean stonks need to go down. Nah, that's old crony capitalism. This new crony capitalism with interest rates at 0 and govt subsidizing the losses for every major industry, stonks only go up.

[AP]

100% true.

For the other that thinks this must mean stonks need to go down. Nah, that's old crony capitalism. This new crony capitalism with interest rates at 0 and govt subsidizing the losses for every major industry, stonks only go up.

[Teo9969]

hahaha!!!

[Teo9969]

100% true.

For the other that thinks this must mean stonks need to go down. Nah, that's old crony capitalism. This new crony capitalism with interest rates at 0 and govt subsidizing the losses for every major industry, stonks only go up.

To be sure, what I read at the time was DJIA down almost another 200 points, and now it's back up almost 500.

It's just bananas. I get it not cratering like some would think, but down <15% when we don't have any assurance of a relative return to normalcy is insanity.

[TheTravellers]

To be sure, what I read at the time was DJIA down almost another 200 points, and now it's back up almost 500.

It's just bananas. I get it not cratering like some would think, but down <15% when we don't have any assurance of a relative return to normalcy is insanity.

https://goldco.com/stock-market-perf...-from-reality/

https://markets.businessinsider.com/...0-5-1029227416

[pw405]

The way I see it... markets have ignored the unemployment, thus far. However, as they say "Over the long run, things always tend to revert back to the average". We won't know the true effects of Q2 on public corp's until earnings season, typically 6 weeks after the close of the quarter. However, again... some could argue the bad Q2 is already priced in, and everybody expects Q3 to be MUCH better. That's justifiable, but sooner or later, if things don't improve, the markets will average back towards the long term P/E. It may be painful... but we certainly had plenty of time adjust and prepare at least. I will likely take some profits in my high high-flying stocks (MTCH, SHOP, FTNT), and adjust back towards boring, safe ETF's.

I guess I did pretty well for an OKC kid from the south side, all things considered. I feel so bad for all the people camped outside the unemployment office. My god, I never thought I'd see the day.

You suck, 2020.

Well, I say that, but my lawn is performing above expectations this year. So I got that going for me - which is nice.

[pw405]

As everyone knows, I track the crap out of new construction projects, restaurants, retail stores, etc.

And as you would expect, things have slowed way, way down.

At the very minimum, this means the pipeline is running pretty dry and we'll really see that in the next few months where there is very little new starting up. We have a lot of things already in progress but most of them will be soon finishing up.

And another huge factor: Landlords and developers are not getting rent in a lot of cases or are just cutting way back so their tenants can make it through. This is going to have a big impact on their ability to do anything new.

We've had a ton of new construction and projects over the last decade, but we are going to see a hiccup in the near future and it's just a matter of how long that down period is going to last.

Especially since we were headed for at least a small local economic downturn before Covid-19.

I may be jumping the gun a bit here... but part of me feels like we've entered a new era, where commercial & office construction will see a massive downturn. Work from home will likely start being viewed as a benefit, or norm. If you're a large company needing to build office facilities for ~500 staff, but you can leverage work from home tech correctly and only build for 100... why not? My brother works for a CA company here in OKC. He's never set foot on their property. Will this be the new normal? Will the "hot" thing for remodelers be spare bedroom to office conversions for next few years? Forever?

[chuck5815]

I may be jumping the gun a bit here... but part of me feels like we've entered a new era, where commercial & office construction will see a massive downturn. Work from home will likely start being viewed as a benefit, or norm. If you're a large company needing to build office facilities for ~500 staff, but you can leverage work from home tech correctly and only build for 100... why not? My brother works for a CA company here in OKC. He's never set foot on their property. Will this be the new normal? Will the "hot" thing for remodelers be spare bedroom to office conversions for next few years? Forever?

No, I don't think so. Upper Management ultimately doesn't trust the average Employee enough for WFH to work on a consistent basis. Only the stars of stars have the self-discipline to make it work. And there's only a handful of those people in each Company.

If anything, Companies will need to lease more office space going forward so the Employees can social distance. The open office is dead for the time being, but not the office itself.

[Teo9969]

No, I don't think so. Upper Management ultimately doesn't trust the average Employee enough for WFH to work on a consistent basis. Only the stars of stars have the self-discipline to make it work. And there's only a handful of those people in each Company.

If anything, Companies will need to lease more office space going forward so the Employees can social distance. The open office is dead for the time being, but not the office itself.

I've heard a lot of anecdotes about productivity being way up due to WFH. Of course, assuming that's true there could be a variety of reasons:

1. For this ecompanies who maintained their jobs, many of those markets got crushed for one reason or another, and anytime a million things get piled on your "desk" it motivates you to get moving.

2. In a world where you don't know if we're about to slip into a great depression, people are mostly not going to do anything to upend their work situation.

[pw405]

I've heard a lot of anecdotes about productivity being way up due to WFH. Of course, assuming that's true there could be a variety of reasons:

1. For this ecompanies who maintained their jobs, many of those markets got crushed for one reason or another, and anytime a million things get piled on your "desk" it motivates you to get moving.

2. In a world where you don't know if we're about to slip into a great depression, people are mostly not going to do anything to upend their work situation.

I did WFH for about 9 weeks... and while I admit it may be difficult long term, I really, really did well with it and got a ton of work done. I completed a project that required coordinating with people in other states that perform hardware repairs on remote (outside of office) electronics based on my analysis and determination of problem.

-Comfort. I'll spare you the details, but let's just say I have a health condition and dress pants really suck.

-Computer nerd. My home computer & setup is a few orders of magnitude better than the crap I have at work.

-Focus. At the office, there's always something: The Coworker I haven't seen in 9 months happened to be in my hall. The team wants to know if I'd like to go to lunch and discuss/debate lunch options, 8X over.
Goodbye's and casual small talk as everybody files home for the day. The boss stopped by. The meeting was late to start. The boss's boss stopped by. Some idiot is wandering around asking about the snack machine. A tornado drill. A fire drill. Some person on a different team decides to have an impromptu meeting while I go to the kitchen. Somebody flags me down and asks question on way to/from kitchen.

Time - coffee "break"? That'll take 18 seconds. BRB. Working late was easy - no shuffling around and planning my life around what roads may be busier than usual. Easily put in 10-11 hour days many times, and felt less exhausted doing so. Easier to start early and stay late.

Pets! - I love my animals, and having them by my side during the day was certainly a mood booster. Nothing like giving the puppy belly scratches while listening to that ONE guy in a meeting who always puts so much work in to the NUMBER OF WORDS he has to say during meetings. So many words. You know the guy. If you don't know the guy at YOUR work, you may be the guy!!

I'm not sure if I would like to work 100% from home.. it's a tough call. I love socializing with people and feeding off the "energy". I have a friend in Dallas who's schedule alternates 1 week in the office, 1 week out of the office. That seems legit.

[Edmond Hausfrau]

I've been doing WFH since March, and contract won't change until September. I agree with all the excellent points from pw405. For me the only downside is I get many more steps in my day at a hospital based job. More stairs, etc. It definitely makes it harder for me to stay physically active doing WFH.

[Pete]

At the Gazette, we've gone to being in the office only on M-W-F.

We started that a while ago and I'm inclined to continue it, even though we are now back printing the paper.

That seems to be enough to facilitate some meetings and good communication but I don't think we need to be there physically every single business day.

At the same time, everyone is welcome to come in and work at any time, but they are not required to do so on Tuesday & Thursday.

[David]

What are you using for your out of office communication, Pete? Zoom? Microsoft Teams?

[Pete]

What are you using for your out of office communication, Pete? Zoom? Microsoft Teams?

Email and text. And then we meet in person as a group once a week and as needed.

[David]

Where I'm at we've moved to Microsoft Teams for running meetings and chat functionality, it has worked out quite brilliantly and has allowed us to continue to operate with what I feel has been no decrease in productivity. Maybe even an increase.

[AP]

I'm a little surprised to see no one is talking about this here.

https://www.cnbc.com/2020/07/02/jobs...june-2020.html

Nonfarm payrolls soared by 4.8 million in June and the unemployment rate fell to 11.1% as the U.S. continued its reopening from the coronavirus pandemic, the Labor Department said Thursday.

[Jersey Boss]

I'm a little surprised to see no one is talking about this here.

https://www.cnbc.com/2020/07/02/jobs...june-2020.html

Meh, you have to take this with a dose of the virus. These numbers were based on numbers from mid June. Why does this matter? Because many reclosings across the nation happened after. While the numbers are an improvement, you can't say it is a trend.

[catch22]

Seemed like most of the closings happened before June, and things started reopening halfway in June.

[Jersey Boss]

Seemed like most of the closings happened before June, and things started reopening halfway in June.

You might want to get back to me on that sentiment.
As Virus Roars Back, So Do Signs of a New Round of Layoffs - The New York Times
https://www.nytimes.com/aponline/202...sultPosition=7

[PoliSciGuy]

And now bars, restaurants and other things are closing again in many big states

[Cocaine]

So I suppose this means that Congress will say that there is no need for more stimulus checks or economic stimulus because the economy has recovered. Even though multiple states that have economies that would rank top 10 world are about to shutdown again, we will most likely hit 100,000 cases a day and deaths will skyrocket everything is okay and Congress can stay on recess for most of July. The biggest question is how can a country with the largest economy in the world sit back and willingly choose for their citizens to die and Congress spends 3 weeks on vacation as it's expected to get worse.

[Pete]

I can assure you, things are going to get much worse for our economy.

Just use common sense... Most small businesses (and 40% of all Americans are employed by companies with under 100 employees) reopened because of the Payroll Protection Plan, which gave applying companies no more than 2 months of wages.

That is starting to run out and there is no other immediate help in sight.

And of course, we are just now starting to see more closures in just the last week, with that trend accelerating.


I've been saying from the beginning that things are going to get much worse by the end of the summer and through the end of the year and beyond.

[TheTravellers]

https://www.alternet.org/2020/07/eco...yone-realizes/

[catch22]

The economic stimulus is really about to run out at the end of the month. The $600 a week extra unemployment is only until the end of July. So people who can afford their rent, bills, and occasionally spending money at retail is about to come to a screeching halt. Many will make less at their jobs once they return to work. If they want to keep any economic recovery momentum they need to seriously consider some extensions of the programs they put in place several months ago. Things may fall off a cliff without it.

[TheTravellers]

The economic stimulus is really about to run out at the end of the month. The $600 a week extra unemployment is only until the end of July. So people who can afford their rent, bills, and occasionally spending money at retail is about to come to a screeching halt. Many will make less at their jobs once they return to work. If they want to keep any economic recovery momentum they need to seriously consider some extensions of the programs they put in place several months ago. Things may fall off a cliff without it.

Yep, pretty much what the article I posted (and the WaPo article it has a link to) says, as well as possibly 20% of renters being evicted by 9/1, and Congress most likely not going to do anything about the looming catastrophe because "Look, unemployment's down!" As Pete (and me and others have) said, going to suck hard for a long time here in the US.