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  • March 20, 2020 at 8:48 AM #22818
    zk
    Participant

    I would like to hear some opinions and ideas on the effect of all this social distancing on the economy and the stock market.

    In California, we basically just shut down the economy. Right? Am I wrong about that? Basically you can’t even commute to your job unless it’s in one of…

    16 critical infrastructure sectors whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation…[blah blah blah]

    In most of the rest of the country, most businesses are suffering terribly just by virtue of people staying home.

    When has an economy been shut down this suddenly and to this degree before?

    In my completely-uninformed and probably-wrong opinion, it seems like the stock market should be down more than 30% from the overvalued-to-start-with (in my uninformed opinion) highs of a few weeks ago.

    I get that the social distancing should only last a month or four or five. But does that mean the effects on the economy won’t be long-lasting and drastic?

    The stock market seems to have settled for this brief time at around 30% down.

    Who thinks it’ll go up or down from here and why?

    Will there be a recession? If there is, will it be severe?

    March 20, 2020 at 9:18 AM #815804
    sdduuuude
    Participant

    A pigg posted this. It mentions industries that are not shut down, outside of the 16 identified by the fed as critical. But I don’t see reference to those in the actual order.

    Still, I’m going by this so I can go to Home Depot, if they are open, and continue my remodel project to get my Mom’s house sold.

    https://covid19.ca.gov/stay-home-except-for-essential-needs/

    March 20, 2020 at 9:49 AM #815805
    The-Shoveler
    Participant

    Home Depot should still be open,

    You can go out to exercise (so I am thinking walks on the beach still an option), build homes, eat drive through etc…

    I am starting to think, give it another week people will just start figuring out how to work around this.

    March 20, 2020 at 10:08 AM #815807
    sdduuuude
    Participant

    That is the billion dollar question. Not sure the governor asked it before instituting the SAH order.

    Flatten the curve not the economy !

    I think it will be more than a blip but not sure if it will be entirely recessionary since the economy was in decent shape to begin. The gubmint will start the money pump, too. I think the stock market will be undecided (long-term flat but volatile) for several months before coming back.

    Interesting to note, I have a car loan I have been paying off for 3 years. The bank sent an email saying there would be no payments, no interest for 60 days. Things like that can help the general economy significantly. It make this more of a pause than a crash.

    Two things I believe about the human race.

    1) When left to be free, we are incredibly adaptable. I believe we can flex around this. That being said, I think the SAH order will hamper that significantly. If that doesn’t lift soon, could be recessionary.

    2) People are social animals social distancing is not a sustainable solution. I get that we need to flatten the curve but I wasn’t joking when I said the cure is worse than the disease. People will eventually choose to be social (especially if the threat is seen only in the news and they don’t personally know people dying) either by explicit demands to get the rules reversed or by disobeying the rules, and let the virus run its course.

    In the US, some 2.8 million people die every year (2017 figure). Worst case estimates, without social distancing, are that 50K – 200K people will die in the US from the virus. I am not sure what the economic repercussions are of an extra 50k – 200K dying would be but it doesn’t seem significant.

    Don’t take that to mean that I think the economy is more important than people dying. Keep in mind, being economically strong helps fight the virus. Also, Recessions and depressions kill people, too.

    Put all that together and I think people will get back to a pretty normal life, economically speaking, in a couple months and the economy will be a bit scarred but in-tact.

    March 20, 2020 at 10:10 AM #815808
    sdduuuude
    Participant

    [quote=The-Shoveler]Home Depot should still be open.[/quote]

    Their website say that people rely on them in times of crisis for critical things – fixing the heater or plumbing problems, for example. So I am hoping they stay open, or at least deliver.

    March 20, 2020 at 10:16 AM #815810
    The-Shoveler
    Participant

    I think I read on the ca.gov website that hardware stores and home building are exempt. (biz that can remain open).

    On the plus side after being shut in a few weeks people will be ready to go out and spend.

    March 20, 2020 at 10:20 AM #815811
    Coronita
    Participant

    Apparently gamestop thinks they are mission critical retailer too. Lol

    https://www.slashgear.com/gamestop-considers-itself-essential-retail-orders-stores-to-stay-open-19613848/

    I guess people NEED to have video games.

    March 20, 2020 at 10:37 AM #815815
    FlyerInHi
    Guest

    [quote=zk]Will there be a recession? If there is, will it be severe?[/quote]
    The recession is already here.

    March 20, 2020 at 10:40 AM #815816
    svelte
    Participant

    [quote=The-Shoveler]I think I read on the ca.gov website that hardware stores and home building are exempt. (biz that can remain open).
    [/quote]

    I hope so! I have about a half-dozen spring yard projects that are in various states of completion that I’d like to wrap up! I can’t do anything without at least one Home Depot run though…

    March 20, 2020 at 10:42 AM #815812
    The-Shoveler
    Participant

    Cannabis Too.

    So is Jack in the Box Drive-through.

    Amazon is trying to hire 100K people.

    https://abcnews.go.com/Health/cannabis-shops-thrive-essential-businesses-coronavirus-pandemic/story?id=69662619

    March 20, 2020 at 10:49 AM #815818
    Coronita
    Participant

    Well Las Vegas moved to a drive thru stripper peep show. lol

    Las Vegas strip club to offer drive-through peep show

    March 20, 2020 at 10:52 AM #815819
    FlyerInHi
    Guest

    Marijuana dispensaries are considered essential services — haha. Americans gotta have their drugs.

    March 20, 2020 at 10:53 AM #815820
    The-Shoveler
    Participant

    Apparently My company (as we deal in communication products), is exempt (just got company email), so our manufacturing people can still go into the office.

    March 20, 2020 at 11:08 AM #815821
    Coronita
    Participant

    A Chinese Pandemic Flu is all so predictable every 50+ years lol

    Trump and Biden both saying stock buyback prohibited from 2020 Chinese Flu relief effort. Good.

    Time to go out to get a cup of coffee and enjoy the sun that just came out in San Diego. Beautiful Day.

    March 20, 2020 at 11:09 AM #815824
    svelte
    Participant

    [quote=zk]

    The stock market seems to have settled for this brief time at around 30% down.

    Who thinks it’ll go up or down from here and why?

    Will there be a recession? If there is, will it be severe?[/quote]

    I’ve been thinking about this. All total, I had about 30% of my money on the sideline. When is the right time to move some of it in?

    I’m not sure if what the govt is doing will influence it much. I think what will have more of an effect is (1) if groceries remain available, (2) the number of deaths, (3) the rate of death escalation, and (4) whether Italy deaths peak and start receding.

    If any one of those goes terribly wrong, watch out!

    There will be a recession…it could be quick and brief, or it could kill the rest of the year. I don’t think it will be clear which one until about May.

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