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US weekly jobless claims jump by 6.6M

cnbc.com

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Re: US weekly jobless claims jump by 6.6M

#101

Post by throwanem »

chasd00 wrote: post #95
throwanem wrote: post #70

Earlier quoted context omitted.

This concept of an economy as some sort of Platonic ideal, disconnected from the processes of the polity in which it exists, is very odd to me. It seems like having your heart stop and saying it isn't a "real" emergency, because the organs are all still there and ready to get back to work as soon as oxygenated blood starts arriving again. Sure, that's true for a minute or so, maybe two if you're young and healthy. Af…

well take the analogy further, in this case to save the patient's life you have to stop the heart from beating for a time but that doesn't imply the patient has suffered a heart attack.

In that case, the analogy is to open-heart surgery, which typically results in significantly reduced capacity for a long time at best, and often permanently. It's certainly not something you bounce back from quickly or easily, and even if you're young and in perfect physical health, you have to be pretty lucky to come back all the way.

Staying within the increasingly strained analogy, I don't think it is reasonable to describe the US economy as "young" or "in perfect physical health", or indeed even as anywhere close to either of those. This is more like doing an emergency sextuple bypass on an obese 70-year-old with a lifelong pack-a-day habit - even if the patient comes off the table alive, it's going to take a long and careful period of physical therapy and recovery to keep him that way, and he's almost certainly never going to recover all of even the limited capacity he had before the crisis.

Re: US weekly jobless claims jump by 6.6M

#102

Post by ModernMech »

_curious_ wrote: post #89
rixrax wrote: post #33

Earlier quoted context omitted.

Assume you are small business. Now try to find where / how / when You will get stimulus money? To cover what? I sure can’t.

It's literally the gov just giving out money so these companies can keep the doors open and lights on under the guise of 'being in business'. The point is more of a psychological one - to create impression that things are going ok (or not as bad as it seems) at scale across the country.

That's the theory, but in practice it's turning out harder than expected to acquire said money. The government isn't just "giving it out" in the sense you can just walk up to a bank and leave with a bag of cash. You have to apply for it and then be approved and then wait for it to show up. This process takes time, and it's not clear how much time.

Another poster noted that Wells Fargo was capped at what they can distribute and BOA was refusing loans to people who were not already customers. So if you're a small business with Wells Fargo and get denied there after an unknown period of time it takes to process that application, then you turn to another large bank and get denied there, this is time wasted while a clock is ticking (rent is still due for your employees and yourself at the end of the month).

So what do you do? Do you lay off your employees because they can apply for unemployment right away? Or do you hold out and hope that the third bank you apply to for a loan will be a success? What if it's not?

It's very easy for Congress to say "We are giving out money. The businesses are saved!" It's quite another in the implementation of that, and to some degree I feel they were so eager to pass something that they didn't think these things through fully.

Re: US weekly jobless claims jump by 6.6M

#103

Post by notyourday »

chasd00 wrote: post #72
notyourday wrote: post #29

Earlier quoted context omitted.

The plan is a death spiral financing which puts a small business into a worse position after taking it than before. They have no revenue due to a government action, loan is based on the value of their payroll with the revenue and the the small business is required to spend 75% of the loan for payroll while being closed . The fact that banks claimed that 0.5% interest is not enough for them to make it worth it so the…

isn't the loan forgiven if it's spent on payroll during the shelter-in-place orders?

Only the part that went into the payroll. So a business owner with no revenue borrowed money he did not need and got saddled with the payments.

Oh, and as the vast majority of the loans it is personally guaranteed.

Compare this with:

Don't get the loan. Shut it down. Not owe more money than the owner would owe already.

Re: US weekly jobless claims jump by 6.6M

#104

Post by ModernMech »

_curious_ wrote: post #90
techntoke wrote: post #27

Earlier quoted context omitted.

That's really not that much. Won't pay for a 1 bedroom apartment in San Francisco, especially after gas and groceries.

Maybe SF is not a tenable place to live anymore for ___%? Maybe they will be inconvenienced by forced relocation? Maybe no-one is entitled to continue living today the way they did yesterday?

Maybe some people can neither afford to move nor live in their apartment and will end up homeless. The people having the hardest time living in SF are the people we now call "essential workers" and "heroes" for doing the jobs we all depend on to survive. What exactly do you think happens to the city of San Francisco when all the "essential workers" are forced to move away or are homeless?

Re: US weekly jobless claims jump by 6.6M

#105

Post by save_ferris »

_curious_ wrote: post #75
save_ferris wrote: post #60

Earlier quoted context omitted.

Getting an economy back on track is somewhat of a chicken-and-egg problem: consumers need jobs to obtain income, but companies need sales from said consumers to generate profits, some of which in turn fund jobs. If the economy were to just magically turn back on at its prior capacity whenever this all ends, so many consumer-facing business would die because it's going to take years for everyone who had jobs to get th…

"There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance." = fully agreed, and further wondering: what KPIs would you use?

I believe the way we collect data around the economy needs to be completely rethought. It's clear that the gig economy model is the future for many workers, but it's proliferated in a way that absolves companies of financial responsibility and has created massive inequality that our current system isn't able to effectively address.

We have to rethink the way we define and calculate employment, underemployment, and unemployment to more realistically align with how the labor market works today. It would be a very ambitious effort, no doubt.

Re: US weekly jobless claims jump by 6.6M

#106

Post by rmah »

daxorid wrote: post #85
chasd00 wrote: post #59

Earlier quoted context omitted.

what's happening is the result of a medical emergency and not the economy. There's no financial reason or economic reason the job losses are so high. It's still there, the demand is still there, we artificially halted the economy and that generated the job loss. It's certainly not an on/off situation but the job demand is still there and we can get back to work.

> the demand is still there Right. Common belief in 1930-1931, too. Psychology is malleable, and consumption patterns beyond food and shelter are driven largely by psychology. In the great depression, consumption behavior of an entire generation was permanently changed, no matter how much better the economy got. Those mental scars lasted forever. What percentage of the population will watch a parent, spouse, best fri…

Or the Great War, famines in Europe and 1918 flu pandemic? Which was followed by the roaring 20's. As to what % of the population will watched a loved one die and then retrench psychologically for an extended period of time? IMO, a very very small percentage. History has seen people suffer much much MUCH worse loss and then bounce back with a vengeance shortly afterwards.

People and societies are not as fragile as many people seem to imagine today. People and societies are, in fact, quite resilient. They can withstand the horrors of war, plague, famine and more. And then bounce back rapidly within a few years. I'm not trying to minimize the sorrow or severity of those that suffer from this pandemic. But relative to past mass trauma, there is little to suggest it's a major turning point in global culture.

Re: US weekly jobless claims jump by 6.6M

#107

Post by Balgair »

_curious_ wrote: post #81
daxfohl wrote: post #65

Earlier quoted context omitted.

I am afraid the big hit will come in the second wave, when we get used to the numbers, get cabin fever, things start opening up and say 0.1% of people still have it, versus the one in a million that had it when things started shutting down. When the contagion is out in 0.1%, and we reopen everything, suddenly 50% of people will have it in a month and that will be unlike anything we've seen yet.

"I am afraid the big hit will come in the second wave" Quite possible, yes, but do not live in fear, friend. This is a great time to eradicate fear and embrace the chaos :)

Now we're asking the real questions! But what facet of Chaos are we to embrace? The undivided power of it? Or to pray to one of the gods and seek their favor? Grandfather Nurgle may be good now, but in 6 months the skull throne may need skulls. Slaneesh seems to have been usurped recently.

Re: US weekly jobless claims jump by 6.6M

#108

Post by _curious_ »

ModernMech wrote: post #104
_curious_ wrote: post #90

Earlier quoted context omitted.

Maybe SF is not a tenable place to live anymore for ___%? Maybe they will be inconvenienced by forced relocation? Maybe no-one is entitled to continue living today the way they did yesterday?

Maybe some people can neither afford to move nor live in their apartment and will end up homeless. The people having the hardest time living in SF are the people we now call "essential workers" and "heroes" for doing the jobs we all depend on to survive. What exactly do you think happens to the city of San Francisco when all the "essential workers" are forced to move away or are homeless?

"What exactly do you think happens to the city of San Francisco when all the "essential workers" are forced to move away or are homeless?" It implodes!?

Re: US weekly jobless claims jump by 6.6M

#109

Post by _curious_ »

ModernMech wrote: post #102
_curious_ wrote: post #89

Earlier quoted context omitted.

It's literally the gov just giving out money so these companies can keep the doors open and lights on under the guise of 'being in business'. The point is more of a psychological one - to create impression that things are going ok (or not as bad as it seems) at scale across the country.

That's the theory, but in practice it's turning out harder than expected to acquire said money. The government isn't just "giving it out" in the sense you can just walk up to a bank and leave with a bag of cash. You have to apply for it and then be approved and then wait for it to show up. This process takes time, and it's not clear how much time. Another poster noted that Wells Fargo was capped at what they can dist…

"So what do you do? Do you lay off your employees because they can apply for unemployment right away? Or do you hold out and hope that the third bank you apply to for a loan will be a success? What if it's not?"

That's a case by case judgement call that only the owners/operators can answer given their situations and values. There is not universal or general advice answer here.

"It's very easy for Congress to say "We are giving out money. The businesses are saved!" It's quite another in the implementation of that, and to some degree I feel they were so eager to pass something that they didn't think these things through fully."

I fully agree and my comment above was to suggest their intent.

Re: US weekly jobless claims jump by 6.6M

#110

Post by daxfohl »

brink wrote: post #7
geerlingguy wrote: post #4

And yet, stocks continue their quick rebound.

The virus will peak soon, quarantine will start easing, and the economy will start to resume.

Why would we open the economy at "peak"? We need to wait at bare minimum until contagion goes back down below the level it was when we shut the economy down. That's a couple months off I'd imagine, and even then we'll just have to shut it back down again shortly after, once the contagion gets back up to the level where we shut the economy down initially.
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