Posted on 04/15/2020 5:40:16 AM PDT by MeneMeneTekelUpharsin
With all due respect, (really) how is that going to change with an “everything is open” again.
I have a family vacation in scheduled in July for FL (Yeah, I know FL in July is not optimum). I am expecting to go. But I doubt if we will do anything but sleep in the villa and eat from the grocery store—if we are allowed to go without quarantining. I understand all that.
I’ve tried to explain my point, but I am not sure its been clear. I will try again and keep it short.
When thing swing open, there will be little manufactured because parts and raw materials will not be available for months.
People will still be self quarantining (my wife is on Chemo—she isn’t going ANYWHERE except the infusion center—and that is like entering Cheyenne Mountain!)
Retail will be weak. 1/2 the folks out of work will be out of work, or not paid for a while. Volume will need to ramp up. But again, supply will not be here. Little summer and fall inventory has shipped (or been manufactured.)
Sure the court systems will restart. Dining places will restart. Insurance companies will re-start.
However, the little things that run the small business economy are going to be hard hit because all of the incremental savings have been hit.
I can attest to this because my wife and I were living off my savings and her “disability” payments. During that time we went about six months with no incoming cash—going from STD to LTD, and the from LTD back to work. And we are on our second month of half pay.
I understand what its like to see your vacation fund, fun fund, and emergency fund hit.
So, now we have hustle to get our bills paid and savings stuffed back up for the next issue (there is always a next issue.)
Many households that went into this without savings are going to redouble their efforts to create a cushion. That will come out of small business.
The places that are getting hit hard are not going to “pop” back. Americans are resilient, but MOST Americans were not financially prepared for this.
One of the big financial houses suggested a 32% GDP bounce back in Q4,after 22% in Q3.
I step back and look at the world. In the countries just going into this: India, Southeast Asia, etc...they are not going to emerge until the middle of the summer.
Europe is screwed until Mid Summer.
At the first “sniff” that there is going to be a second wave...every thing shuts down again.
The entire supply chain system in the US needs to be adjusted. Locally sourced is going to be a big thing. That is OK is you are near food production or industrial production.
The country is capable. The people are capable. But this transformation is going to take time and a shitload of money.
The national debt will be pushing $40 Trillion when we are done with this transformation.
I appreciate the frustration with the Liberty restrictions (which is what they are.). The restrictions and the recovery are only marginally related.
I will try again and keep it short.
And then I ramble.
Sorry about that. I am trying to be respectful, but explain my position. If I pissed anyone off, I am truly sorry, Not mt intent.
What I don’t understand is why the government(s) did not declare a modified debt jubilee.
By that I mean just announce and that all debts, public and private are suspended for 90 days, So, your mortgage is just frozen for three months.
I have fifteen months on a mortgage. It is just as if the next three months don’t happen. It just starts up again.
This applies to the payment of the banks to their shareholders. So the pain is not carried by anyone.
I know that is an oversimplification, but who did not see this coming months ago?
That sums it up nicely. Our economy is like a giant ship, it does not turn on a dime. I have no doubt the economy will be strong again if Trump is re-elected. But in the meanwhile there is lots of heartburn coming, which people may be under-estimating.
I’d add another element. If the economy fails to snap back, and many do expect it to do just that, the prospects for President Trump’s re-election will look bleaker and bleaker as we head into November.
So, on top of what you see, consider that if you’re right we could have the Democrats in complete control of Congress and the Presidency by January, 2021.
If that starts to look like a possibility, the markets aren’t going to wait around for November to begin factoring it in. We could go from a mini-depression to having Democrats in charge of getting us out of it. I have a hard time figuring out a safe investment if that happens:
Cash: Inflation could take it away
Stocks: Green New Deal?
Bonds: at zero %? And when they mature you get cash after inflation has done its work
Real Estate: Maybe, but only after it’s fallen a lot from today’s levels
Gold: Maybe, if inflation gets going.
I don’t see deflation as the risk. What you’re going to have is people trying to buy stuff that isn’t being produced. Plus supply chains are changing and that will raise costs of production. So, both costs and demand up with supply down. That means rising prices and if inflation ever does get going in this country, the Fed is in no position to stop it. Venezuela is in a depression, but their money has been inflated to worthlessness. That’s a risk here now too.
I ramble too. More on prices and demand, since you’re arguing that demand will be weak.
But people who have been laid off will be getting an augmented unemployment check for the next four months. And most people didn’t get laid off, but have bought little or nothing for over two months now. All the stuff we need for spring and summer will be in backed-up demand, but supply will be short.
Furthermore, businesses will have trouble getting people on unemployment back to work in stores and offices until their unemployment runs down. They’ll have to offer higher wages, so to compensate they’ll raise prices. Stores and restaurants might well raise prices and put right on the window, we’re charging more because we have to, or we’ll be closed by the end of the month. People will understand that, but everyone will be doing it, so again, higher prices everywhere. Restaurants will end up serving the wealthiest half of their previous customers because they’ll only be able to seat, say, 40 instead of 80 at a time.
How’s that for a ramble? I might be wrong, but I think the above is worth at least considering. There’s more money out there than we think, but a lot less to spend it on.
More: If places do raise prices, many customers will bitch. Dems will start campaigning on the need for price controls. They might even win with that argument. By the way, I’m an optimist and think we’ll get through this, but all of what I wrote is certainly possible.
Stock futures up 500+ yesterday a yoyo market the reacts like a dog in a thunder storm.
Great time to invest.
Women and minorities hardest hit!!! /liberal media spin
I should have gone with municipal bonds 20 years ago lol
Gate 14, Gate 15, Gate 16...
I made money trading today. Offered to help a couple of folks, but they didn’t PM me, so they weren’t interested.
My science mind was making fun of the headline: “down minus 500” would be like multiplying a negative number (down) with another negative number (-590) which would make it a positive. Math humor. Except it wasn’t funny. Oh well. ;)
No, I got it. I was just concentrating on trading stocks at the time. Had to stay focused.
“If the economy fails to snap back, and many do expect it to do just that, the prospects for President Trump’s re-election will look bleaker and bleaker as we head into November.”
Biden will be a better alternative??
I don’t think so.
Were you day trading?
More likely that state compact crap.
Haircut? We’re getting scalped.
The market and everyone with a market invested retirement plan WILL LOSE ANOTHER 50% if we do not get the economy opened in the next two weeks or so.
Cuomo and Whitmer and the other folks drawing a public taxpayer funded pension will not be affected, they should be kicked, with a foot, out of office today.
We're all held hostage, the market will collapse another 50%, meaning anyone over 55 will never recover in time for retirement, thanks to the a*shole governors refusing to open the economy.
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