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Second-quarter GDP plunged by worst-ever -32.9% amid virus-induced shutdown

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22 hours ago, father-of-three said:

I will have to go to Rush's site to confirm this, but I am pretty sure I heard him on the radio yesterday saying that the -39%  GDP stastic is actually for the entire year projected on the second quarter, and assumes that quarters 3 and 4 will look like quarter 2. 

The dems will do everything in their power to make that a self-fulfilling prophecy. 

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Here's a prediction of the "New Normal" in NJ, from a medical expert at Rutgers. Not looking good for the near future:

....."Today, in July, everyone is griping about the misery of the past four months during the nation’s first pandemic in more than a century. They’re anxiously awaiting a world a few months from now, when life surely must be starting to return to normal.

But that life won’t be coming any time soon, experts say. Our new world of mass restrictions, social distancing mandates, and work and school disruptions is going to last through the end of 2020, if not much longer. People will be required to wear masks everywhere they go. Many of your favorite neighborhood restaurants, bars and small businesses will shutter. Sports teams will be playing before empty stadiums.

The state and national economies will continue tanking, dragging the United States deeper into a depression.

And that’s the best-case scenario, which includes finding a coronavirus vaccine and reliable therapeutics by the end of this year.

“There’s no way that our prior life returns in 2020,” said Brian L. Strom, the chancellor of Rutgers Biomedical and Health Sciences. “If we’re really lucky, it might return in mid- to late 2021. But for 2020, you can think of this as the new normal.”

Or as Julie Swann, a professor at N.C. State and an expert in health systems, infectious disease modeling and logistics, puts it: “This is the new abnormal, unfortunately.”

https://www.nj.com/coronavirus/2020/07/how-will-coronavirus-impact-nj-for-the-rest-of-2020-we-asked-the-experts.html

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The economy is by no means doing well.  But I don't believe we are in for another "great depression".

This is something to think about:

Some investors cautioned against reading too much into historic data. David Bahnsen, chief investment officer at Bahnsen Group, which has over $2.25bn in assets under management, said the rise in jobless claims showed the continued fragility of the US economy but he did not expect the number to rise again. “The stock market has to look forward and most economic data looks backwards. Investors should be prepared for a choppy process of data digestion, but not be surprised that the market feels the future is better than the present and that unprecedented stimulus and liquidity exist to drive valuations,” he said.

https://www.ft.com/content/7123bce9-2e62-4875-b4f7-89234362fc50

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The artificial repression of the economy is temporary.  It will end.  The sooner the better.  IMHO it's gone on too long already.

Once it does end, people will be swarming back to work, consumers will be purchasing more and produciton will increase.  Not immediately to pre-Covid numbers but it wont' take long.

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5 minutes ago, gleninjersey said:

The artificial repression of the economy is temporary.  It will end.  The sooner the better.  IMHO it's gone on too long already.

Once it does end, people will be swarming back to work, consumers will be purchasing more and produciton will increase.  Not immediately to pre-Covid numbers but it wont' take long.

100% - there is so much pent up demand. Businesses that can spend money and hire (eg have demand) are still hiring. It’s painful but we’ll get back to productivity once we build up some consistency and especially once vaccines and rapid, accurate testing become available. 
 

 

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2 hours ago, geekLa said:

100% - there is so much pent up demand. Businesses that can spend money and hire (eg have demand) are still hiring.

Where is this pent up demand coming from? There are currently like over 31+ million people still collecting unemployment (after a record 50+ million filing), and at this point, many of their jobs aren't coming back. This same time last year, there were a little over 1 million collecting.

And these same people just lost the additional $600 weekly kicker. Not sure what "stuff" they are planning on buying?

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6 minutes ago, Sniper said:

Where is this pent up demand coming from? There are currently like over 31+ million people still collecting unemployment (after a record 50+ million filing), and at this point, many of their jobs aren't coming back. This same time last year, there were a little over 1 million collecting.

And these same people just lost the additional $600 weekly kicker. Not sure what "stuff" they are planning on buying?

Most people are itching to get back to work.  Some jobs will be temporarily permanently lost.  Undoubtedly some service industries (bars, restaurants, etc).but they will eventually be replaced and will be hiring. 

If you are really convinced things will be as bad as you believe have you sold all your investments?   I highly doubt you've gone to all cash or precious metals.

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FWIW I don't think the amount of restaurant and bars permantly closing will be as bad as people think.  I see plenty of people ordering out and even eating outside at local places.  Even NYC bars are finding ways around restrictions of having to sell food in able to stay open.  They are selling "freedom chips" for $1.

And as a side note, when you do order out I HIGHLY encourage people to order from local restaurants rather than corporate chains.

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33 minutes ago, gleninjersey said:

Most people are itching to get back to work.  Some jobs will be temporarily permanently lost.  Undoubtedly some service industries (bars, restaurants, etc).but they will eventually be replaced and will be hiring. 

I'm sure many are itching to get back, but there needs to be a place of business to go back to. Keep tabs on business bankruptcies:

...."But as the coronavirus pandemic roils the industry, more major retailers and restaurant chains have now have now filed for bankruptcy in the first seven months of 2020 than all of 2019. "

https://www.businessinsider.com/retailers-filed-bankruptcy-liquidation-closing-stores-2020-2#the-entire-fleet-of-papyrus-stores-was-slated-to-shut-down-when-the-chains-parent-company-the-schurman-retail-group-filed-for-bankruptcy-in-january-1

And, the number of small business that have permanently closed:

...."But while temporary closures have dropped, the number of businesses that have permanently shuttered is rising. Of all the business closures since March 1, 55% (or 72,842 businesses) will never reopen again, which is up from the 41% that Yelp reported in its Local Economic Impact Report just last month."

https://www.marketwatch.com/story/41-of-businesses-listed-on-yelp-have-closed-for-good-during-the-pandemic-2020-06-25

33 minutes ago, gleninjersey said:

f you are really convinced things will be as bad as you believe have you sold all your investments?   I highly doubt you've gone to all cash or precious metals.

I actually started making major moves last Fall, when I saw the economy rolling over, and started playing "Prevent Defense". I'm down to a little over $250K active in the market, which I'm letting ride, because it's in areas that do well in downturns. If that $250K ends up getting vaporized, it really won't affect me. The bulk of my money is relatively protected (as long as a bunch of financial institutions don't go T.U.)

And the above business stats doesn't even touch on upcoming evictions in this state:

....."“We’re going to see a tsunami of evictions. It’s like when the water pulls back and it looks like it’s getting better, but then it comes full force,” said Maria Lopez of the Ironbound Community Corporation, a Newark-based advocacy group. “Our communities are hemorrhaging, and I’m horrified.”

Another 450,000 households across the state — 40% of renters — will be unable to afford August’s rent payment, adding to the $687 million in unpaid rent since March, according to the “COVID Economic Impact Report” released by consulting firm Stout, based on U.S. Census data.

New Jersey could see as many as 304,000 eviction filings in the next four months, an estimated 600% increase from pre-COVID filings, the study predicts."

https://www.nj.com/coronavirus/2020/08/15k-evictions-have-been-filed-despite-murphy-moratorium-renters-landlords-terrified-about-whats-next.html

28 minutes ago, gleninjersey said:

FWIW I don't think the amount of restaurant and bars permantly closing will be as bad as people think.

I guess that depends on your definition of "bad", is 60% a good or bad number?:

....."Restaurants and retailers remain especially hard-hit. Restaurants listed on Yelp have suffered 26,160 total closures as of July 10, and 60% (15,770) have permanently closed — which is up 23% from June 15. And it’s been last call for more than four in 10 bars and nightlife spots (44%) listed on Yelp, that will also never reopen.

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1 hour ago, Sniper said:

New Jersey could see as many as 304,000 eviction filings in the next four months, an estimated 600% increase from pre-COVID filings, the study predicts."

I agree that this is a big issue for us here in this state and to deal with all this taxes - local, county, state are inevitably going to go up (it’s our state pastime) and it’s going to be a mess for a while.  Might quicken the pace of folks that are thinking about leaving,  to go ahead and leave the state. We send so much more to feds and get very little in return there are so many great places to be especially if you are not able to keep up with the Joneses here. 
 

Overall I think work itself is restructuring and in some ways - and perhaps might balance out the above -  NJ can benefit with high paid telecommuting jobs for people who will not want to be living in the major cities to the east and west of us.  In our area and also where we have property upstate, real estate demand is huge right now. Homes and land are selling in no time at asking.

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While the list of companies closing or  filing for bankruptcy is concerncering they are mostly service companies, local chains, businesses that most have never heard of or come as no surprise (JC Penny).

Considering that in a good economy the failure rate of restaurants is generally around 60% in the the first  year and 80% after fiver years I have to say I'm not at all shocked at the 60% rate number.

"The restaurant business is not for the faint of heart ... or stomach. They have a high failure rate, but knowing why can help prospective owners avoid a similar fate.

Around 60 percent of new restaurants fail within the first year. And nearly 80 percent shutter before their fifth anniversary."

And that is from 2016, well before Covid19. 

https://www.cnbc.com/2016/01/20/heres-the-real-reason-why-most-restaurants-fail.html

As far as renters go, i don't see landlords actually evicting near that number.  Who are they going to replace them with?  More than likely landlords will file evictions to protect their interest.  Courts will be so back logged it will take several months before the cases come up.  By that time hopefully the economy is improving and landlords will work with tenents as to back rent.  As an ex-landlord if I had good renters prior to the outbreak I would be more inclined to give them a chance to catch up than eviciting them and rolling the dice on getting someone to replace them (which can take a few months evern in a good economy).

IMHO once Trump gets re-elected in November the economy will begin to recover.  So I hope you don't miss out on too much of the gains once that happens.

If Trump doesn't get elected, the economy will tank regardless of what is going on with Covi19.

 

 

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3 hours ago, gleninjersey said:

While the list of companies closing or  filing for bankruptcy is concerncering they are mostly service companies, local chains, businesses that most have never heard of or come as no surprise (JC Penny).

You might want to check this list. It contains some big companies, some that have never filed bankruptcy before who were major foundation companies, definitely not just local chains:

https://en.wikipedia.org/wiki/Category:Companies_that_filed_for_Chapter_11_bankruptcy_in_2020

Oh, and just tonight, add Jos. A. Banks, Men's Wearhouse and Lord and Taylor to that list.

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The testing numbers are all BS.  I can't tell you why (I do know why, but I can't post it), but I know for a fact, that an alarming number of CV19 tests are invalid.  False positive/negative results are the norm, mostly in the direction of false positives.

This is what happens when people with only a HS diploma (many just a GED) are the primary operators running medium to high complexity tests that they are not qualified to run.

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1 hour ago, W2MC said:

Just remember...all these numbers are generated by the same sort of numbskulls who told us there will be multiple millions dead from Covid right now.

I'm glad they were wrong.  

 

43 minutes ago, Scorpio64 said:

The testing numbers are all BS.  I can't tell you why (I do know why, but I can't post it), but I know for a fact, that an alarming number of CV19 tests are invalid.  False positive/negative results are the norm, mostly in the direction of false positives.

This is what happens when people with only a HS diploma (many just a GED) are the primary operators running medium to high complexity tests that they are not qualified to run.

Again, the incentive for positive cases is there as well.  

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16 hours ago, RUTGERS95 said:

slow down people, all will be fine

depression....lol

Just remember, we officially entered a Recession in February, which is normally a look back at the two previous quarters of economic activity. This was before all the additional Covid shutdowns, layoffs and stagnant economic activity and Fed money printing the past quarter or so.

What comes after a Recession?

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2 hours ago, Sniper said:

Just remember, we officially entered a Recession in February, which is normally a look back at the two previous quarters of economic activity. This was before all the additional Covid shutdowns, layoffs and stagnant economic activity and Fed money printing the past quarter or so.

What comes after a Recession?

stop

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17 minutes ago, Handyman said:

Why stop the charts in 2016? There were some good years after that. Certainly not a depression, if that is what you are getting at.

Seven years isn't enough to show the time line of a recovery after a recession?

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saupload_Worst_GDP_Recovery_Since_Great_

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On 8/3/2020 at 11:10 AM, Sniper said:

Just remember, we officially entered a Recession in February, which is normally a look back at the two previous quarters of economic activity. This was before all the additional Covid shutdowns, layoffs and stagnant economic activity and Fed money printing the past quarter or so.

What comes after a Recession?

Depressions don't automatically recessions.  I think you need to look up how many recessions there have been versus how many depressions there have been.  Recessions may be followed by periods of slower growth but it's fool hearty to assume every recession is followed by an intense depression.

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20 minutes ago, gleninjersey said:

Depressions don't automatically recessions.  I think you need to look up how many recessions there have been versus how many depressions there have been.  Recessions may be followed by periods of slower growth but it's fool hearty to assume every recession is followed by an intense depression.

So, we entered a Recession in February, and then all the Covid shutdowns happened. Which past Recession did you see this chart happen?

MW-IL948_jobles_20200806102918_ZG.jpg?uu

During the last Great Recession, the highest weekly number for unemployment was 675K.

So you feel that this slowdown is just minor and temporary, and the current number of people unemployed at 31 million will just blow over, and everyone will be back to work soon? And business will come roaring back?

 

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I'm sure this is just a minor bump in the road, and nothing to worry about.

According to S&P Global Market Intelligence, 424 companies had filed for bankruptcy as of Aug. 9.

This exceeds the number of bankruptcy filing for any comparable period since 2010.

S&P Global Market Intelligence’s bankruptcy analysis includes public companies or private companies with public debt. Public companies included in the list of companies with public debt must have at least $2 million in either assets or liabilities at the time of the bankruptcy filing. In comparison, private companies must include at least $10 million.

22563.jpeg

This doesn't factor in any small mom and pop business, local restaurants, etc.

Analysts say they expect the pace of bankruptcies to continue, with retail and small businesses facing the most pressure.

John Blank, chief equity strategist for Zacks Investment Research, told S&P Market Intelligence that “brick-and-mortar retail is not gonna work out,” adding that airlines and regional banks with overexposure to retail could “blow up” without government assistance.

This further undermines the narrative of a quick “v-shaped” economic recovery. Even with a cure for the coronavirus tomorrow, the economic impacts will likely drag on for months, if not years.

And yet, most of the mainstream still seems convinced that with a little more stimulus and a coronavirus vaccine, everything will be just fine. But as we’ve said over and over, curing the coronavirus won’t cure the economy. And the government “help” is only making things worse in the long-run.

bankruptcies.png?itok=WojPeKBM

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1 hour ago, Handyman said:

I'm sorry, but can you please make explicit the point of this thread?

Why? Isn't it clear?

It really doesn't matter, very few here even care about the economic and financial issues in the country. What's more important is what's being made for dinner tonight. It's all about priorities!  :popcorn:

On 8/4/2020 at 12:00 PM, JackDaWack said:

Why are you using a single recession as a data point? 

Interesting, I see multiple recession lines on those three charts I posted?  :scratchhead:

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