i think it will be years before we are back to the employment levels we had a few weeks ago. There are a ton of businesses that are marginal that won't come back. Just think if you owned 5 local coffee shops that did not have drive thru. 2 were money makers 3 were barely breaking even. You shutdown the 3 marginal shops now and do takeout only with the 2 good stores and scrape by. I suspect the 3marginal stores never open again, so there's 20 people without a job. Then think about much larger companies that are marginal. Say a company that competes with China and supplies the airlines or auto industry. Their customers are shutdown and they were marginal before. That's 500 people that won't have a job in the future.
How Long before the economy comes back to normal
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Last: 4 yr ago by Stat Monitor Repairman
i wonder how leisure industries such as sports cars, boats etc... will prevail ?
I'm not a fan of some of the SBA loans that will continue to prop up companies that were way over leveraged...
Debt was the disease, and they will pile up more.
Contagion is what I'm worried about because when those dominoes start to fall, they could fall quickly... This shut down has exposed how leveraged American businesses had become.
Debt was the disease, and they will pile up more.
Contagion is what I'm worried about because when those dominoes start to fall, they could fall quickly... This shut down has exposed how leveraged American businesses had become.
Optimistic: Q4 - Quarantines end in April and cooped up Americans hit the streets spending money, looking for jobs, with entrepreneurs finding opportunities to fill in the void where others folded. By Q4 holiday season we're back to work and people are ready to celebrate putting a stake in 2020.
Best Guess: 7-10 years. The significant supply chain disruptions, demand destruction, and government responses (printing money) will take several years to shake off and fill in the voids.
Pessimistic: A generation(s) from now. This event causes permanent structural changes to the way employment works in America. Similar to how WWII labor relationships tied health insurance to employment this event will permanently ingrain "work from home" and by the end of 2020 management actions to reduce costs will furlough back office white collar jobs (esp. accounting and cyclical processing jobs). Automation grows by leaps and bounds. This will lead to an increase in gig type work and a "disaffected" labor pool that wants the government to provide what they lost resulting in a shift in the electorate far to the left which is never good for business. We don't reach similar unemployment levels to 2019 until some structural change that I can't even contemplate occurs.
Best Guess: 7-10 years. The significant supply chain disruptions, demand destruction, and government responses (printing money) will take several years to shake off and fill in the voids.
Pessimistic: A generation(s) from now. This event causes permanent structural changes to the way employment works in America. Similar to how WWII labor relationships tied health insurance to employment this event will permanently ingrain "work from home" and by the end of 2020 management actions to reduce costs will furlough back office white collar jobs (esp. accounting and cyclical processing jobs). Automation grows by leaps and bounds. This will lead to an increase in gig type work and a "disaffected" labor pool that wants the government to provide what they lost resulting in a shift in the electorate far to the left which is never good for business. We don't reach similar unemployment levels to 2019 until some structural change that I can't even contemplate occurs.
I think we will slowly regain over the next couple of years. I do not think we will see a surge back to what we were a couple months ago like some but do believe we will be higher by end of year. The damage done to our services industry will have a lasting impact as I see folks slowly going back to spending on these areas. Plus with companies like oil laying off or furloughed there will be less disposable income for a while unless oil shoots well above $50 a barrel in miraculous fashion.
They wonthedge_zer0 said:
i wonder how leisure industries such as sports cars, boats etc... will prevail ?
All animals are equal, but some animals are more equal than others
This is a bad take. Yes, it will prop up some companies that shouldn't but the loans are stacked specifically to keep pay rolls going. Most of the loans will get paid back, plenty of companies wont. What we couldn't handle right now was 15 M layoffs instead of 6M. Also, I think the banks are going to screen out a lot of the worst companies, because they don't want bad assets on the balance sheets.Ag92NGranbury said:
I'm not a fan of some of the SBA loans that will continue to prop up companies that were way over leveraged...
Debt was the disease, and they will pile up more.
Contagion is what I'm worried about because when those dominoes start to fall, they could fall quickly... This shut down has exposed how leveraged American businesses had become.
All animals are equal, but some animals are more equal than others
Most loans will get paid back? Really? We Americans are the Kings and Queens of taking on debt and not paying it back. Before all this happened, 15% of the S&P 1500 could not even afford the interest payments on their debt.. let alone the principle payments. The virus was the pin that popped the debt bubble. But don't worry, the Fed will backstop all the losses.
sounds like a good time to be a buyer for one of these items... maybe not now, but 5 months from now when they are really hungry...Mtn_Guide said:They wonthedge_zer0 said:
i wonder how leisure industries such as sports cars, boats etc... will prevail ?
Things will never be the same. Every consumption contraction will be met with larger and larger liquidity pumps. The market can not survive without it now. Wide swaths of the economy are being nationalized right now and it will only get worse over time.
When the dollar crashes they will be able to reset the debt bubble and start it again.
Amidst the USD crash and we will be put on digital coin held by the "private" Fed (which will be controlled by Treasury). Every transaction will be tracked and logged and added to all the other data they have on us, and used to manipulate behavior.
When the dollar crashes they will be able to reset the debt bubble and start it again.
Amidst the USD crash and we will be put on digital coin held by the "private" Fed (which will be controlled by Treasury). Every transaction will be tracked and logged and added to all the other data they have on us, and used to manipulate behavior.
what happened to them in 08?
Mtn_Guide said:This is a bad take. Yes, it will prop up some companies that shouldn't but the loans are stacked specifically to keep pay rolls going. Most of the loans will get paid back, plenty of companies wont. What we couldn't handle right now was 15 M layoffs instead of 6M. Also, I think the banks are going to screen out a lot of the worst companies, because they don't want bad assets on the balance sheets.Ag92NGranbury said:
I'm not a fan of some of the SBA loans that will continue to prop up companies that were way over leveraged...
Debt was the disease, and they will pile up more.
Contagion is what I'm worried about because when those dominoes start to fall, they could fall quickly... This shut down has exposed how leveraged American businesses had become.
Banks are incentivized to loan these funds out, handsomely. SBA will be bailed out bc many will take this loan, lay off, and never pay it back.
pretty sure that many of those SBA loans turn into grants...Mtn_Guide said:This is a bad take. Yes, it will prop up some companies that shouldn't but the loans are stacked specifically to keep pay rolls going. Most of the loans will get paid back, plenty of companies wont. What we couldn't handle right now was 15 M layoffs instead of 6M. Also, I think the banks are going to screen out a lot of the worst companies, because they don't want bad assets on the balance sheets.Ag92NGranbury said:
I'm not a fan of some of the SBA loans that will continue to prop up companies that were way over leveraged...
Debt was the disease, and they will pile up more.
Contagion is what I'm worried about because when those dominoes start to fall, they could fall quickly... This shut down has exposed how leveraged American businesses had become.
also, do the banks hold the paper?
Hold the paper but with the gubmit as the guarantor and not the borrower. So I guess in effect they do not own the paper.
I will monitor luxury sports car segment. My odd neighbor deals in them - we have lived in house 3+ months and have yet to be able to introduce.
Ferrari, BMW i8, McClaren, Masserati, and either another Ferrari or Lambo. And no, to my knowledge I am not neighbors with MF Barnes.
Edited to add: We have a Chevy Tahoe and Malibu.
Ferrari, BMW i8, McClaren, Masserati, and either another Ferrari or Lambo. And no, to my knowledge I am not neighbors with MF Barnes.
Edited to add: We have a Chevy Tahoe and Malibu.
5-7 years ... maybe.
Boomers and those close to retirement will make out ok. Folks in their prime earning years are ****ed. Won't ever recover.
Boomers and those close to retirement will make out ok. Folks in their prime earning years are ****ed. Won't ever recover.
Quote:
Just think if you owned 5 local coffee shops that did not have drive thru. 2 were money makers 3 were barely breaking even. You shutdown the 3 marginal shops now and do takeout only with the 2 good stores and scrape by. I suspect the 3marginal stores never open again, so there's 20 people without a job.
I know it's not your point, but this is Texags, so I will say it anyway:
Those 20 people were going to be out of a job anyway, because those 3 shops weren't going to make it.
If we're reasonably back to normal by June 15th we bounce back fairly quickly. If we miss that it snowballs quickly.
There will be opportunity for some I imagine.
If you can live a frugal life and not consume so much, it will be much easier to make it through the other side.
If you are laid off now, Cut spending to the bone. Scrimp and delete the extra entertainment stuff. Stop eating out. Make do with a tracfone. Etc.
If you can live a frugal life and not consume so much, it will be much easier to make it through the other side.
If you are laid off now, Cut spending to the bone. Scrimp and delete the extra entertainment stuff. Stop eating out. Make do with a tracfone. Etc.
50% comes back immediately (within 2 quarters), the other half takes the next 8 quarters to return.
Elevators down, stairways back. We don't get back to <5% unemployment until 2023.
Elevators down, stairways back. We don't get back to <5% unemployment until 2023.
All A&M said:
I think it will take longer than the great recession. Most are still in the denial stage thinking that as soon as the government relaxes social distancing recommendations that the economy will rapidly return to what it was in February. This light switch metaphor turning back on the economy is delusional. In addition, the market was incredibly overvalued in February (the only higher valuation was the dotcom bubble) but most are thinking that is a fair price to rapidly return to. In summary...typical bear market... it takes time to bottom out and then slowly recover.
This is asinine
pretty sure that EVERYONE is frugal right now... forced frugality!insulator_king said:
There will be opportunity for some I imagine.
If you can live a frugal life and not consume so much, it will be much easier to make it through the other side.
If you are laid off now, Cut spending to the bone. Scrimp and delete the extra entertainment stuff. Stop eating out. Make do with a tracfone. Etc.
Haven't you heard? The liberals are saying they never want to return to anything normal. They want to use this event to create a new normal, whatever that means.
Not a political post, a reality B&I one based on actual words from those in power within the Democratic leadership. So unless enough people with a brain take the gloves off and realize we have two non-relatable ideologies at war then your return to normal is a pipe dream.
Not a political post, a reality B&I one based on actual words from those in power within the Democratic leadership. So unless enough people with a brain take the gloves off and realize we have two non-relatable ideologies at war then your return to normal is a pipe dream.
Stat Monitor Repairman said:
5-7 years ... maybe.
Boomers and those close to retirement will make out ok. Folks in their prime earning years are ****ed. Won't ever recover.
I'm in my prime earning years and I disagree. This hurts me a little but there is a lot of opportunity out of it. I'm confident in my financial advisor and our ability to take advantage of dips.
Our business is down, but we will make it through and have way less competition. We will be able to hire good people for a little less than before and wine more deals.
What this may do is normalize our economy instead of propping it up based on spending money people don't have. Maybe those who need a $1200 check to survive will learn to start saving something and not buying this shoes, purses and cars they have no business buying.
Q3 2021
If you want the doom and gloom version
https://apple.news/AAMtwoGFkTWmm2_5kj0vc0A
https://apple.news/AAMtwoGFkTWmm2_5kj0vc0A
Possibly never if County Judges and liberals get their way.
ORAggieFan said:Stat Monitor Repairman said:
5-7 years ... maybe.
Boomers and those close to retirement will make out ok. Folks in their prime earning years are ****ed. Won't ever recover.
Maybe those who need a $1200 check to survive will learn to start saving something and not buying this shoes, purses and cars they have no business buying.
Do you understand that our economy is dependent on people buying shoes, purses and cars they had no business buying?
People saving money ain't gonna fix this mess. The opposite is true my man.
Stat Monitor Repairman said:ORAggieFan said:Stat Monitor Repairman said:
5-7 years ... maybe.
Boomers and those close to retirement will make out ok. Folks in their prime earning years are ****ed. Won't ever recover.
Maybe those who need a $1200 check to survive will learn to start saving something and not buying this shoes, purses and cars they have no business buying.
Do you understand that our economy is dependent on people buying shoes, purses and cars they had no business buying?
People saving money ain't gonna fix this mess. The opposite is true my man.
Yes, our economy is based on irresponsibility, no doubt.
I think they are incentived to give out the PPP portion of the loans since those will be forgiven either way. Anything above that they will look more closely at the companies, because the banks can't afford to be stuck with lagging assets.
As evidence of this banks so far are only lending to companies who they have a previous relationship with and can see a history or previous cash flow. Are they going to get stuck with dogs? Absolutely, but I think they are going to act as a macro filter to the worst companies.
As evidence of this banks so far are only lending to companies who they have a previous relationship with and can see a history or previous cash flow. Are they going to get stuck with dogs? Absolutely, but I think they are going to act as a macro filter to the worst companies.
All animals are equal, but some animals are more equal than others
Longer we pretend that we will be able to beat the virus the worse it is going to get. People are going to get exposed whether it is 2 weeks, 2 months or a year from now. What's going to happen is the government with slowly start to lax on the quarantine. Then we will see a spike in cases again and we are back to square 1. Why delay the inevitable? How much economic value are we willing to lose to save a human life?
This is uncharted waters for everyone. No one knows what's going to happen with any certainty.
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