Anybody buying on this downturn?

[LivingAlmostLarge]

I might put JETS on watchlist. But right now I want to see how 1Q ends up. Tomorrow unemployment numbers might cause a shock

[Scallywag]

I think the unemployment numbers are going to be really bad. I am staying on the sidelines because my nest egg is very small and because I suspect this is unfortunately just the beginning.

[~bs]

I think the unemployment numbers are going to be really bad. I am staying on the sidelines because my nest egg is very small and because I suspect this is unfortunately just the beginning.

Going from 250k prior to the epidemic to 3-4million right after is insane. In my state, leading economists expect official unemployment numbers to reach over 25% before starting to decline. Crime is already starting to jump upwards.

[Scallywag]

6 million unemployment claims made last week, more than double that of the previous week, taking total claims to 10 million????? That number does not include contractors and hourly workers - it's just awful. Yet the Dow surged 400 points? Makes no sense.

[disneysteve]

6 million unemployment claims made last week, more than double that of the previous week, taking total claims to 10 million????? That number does not include contractors and hourly workers - it's just awful. Yet the Dow surged 400 points? Makes no sense.

I think it makes some sense.

A. It was expected.
B. Laying off workers slashes costs for employers letting them preserve cash. The longer employers try to keep paying their employees, the worse it is for their businesses. Getting folks off the payroll is good for the business.

[Scallywag]

I think it makes some sense.

A. It was expected.
B. Laying off workers slashes costs for employers letting them preserve cash. The longer employers try to keep paying their employees, the worse it is for their businesses. Getting folks off the payroll is good for the business.

Laying off people also means that businesses to not be able to restart operations once the pandemic is "under control", plus the loss in sales / revenue as consumers are either too broke or too nervous to spend.

Too many people are spooked and piling up cash, and even folks who were previously spendthrifts are paring down. Payroll reductions may provide temporary relief but the overall domino effect will devastate every business as a whole in the long run.

This will likely not end well.

[disneysteve]

Laying off people also means that businesses to not be able to restart operations once the pandemic is "under control", plus the loss in sales / revenue as consumers are either too broke or too nervous to spend.

Too many people are spooked and piling up cash, and even folks who were previously spendthrifts are paring down. Payroll reductions may provide temporary relief but the overall domino effect will devastate every business as a whole in the long run.

This will likely not end well.

I don't disagree with any of that. I was just saying why at least a short term bump in the market makes sense.

There are a lot of businesses that are trying to look good and keep paying their employees. Great optics but lousy financial move.

As for restarting, I'm sure we will have some kind of heads up before the restrictions are lifted so they'll have time to call back the staff. Maybe it will just be a few days but that's long enough to reach out to your staff and get them lined up to return. The vast majority of people want to get back to work. They're anxiously awaiting that call back. At least that's true of everyone I know who has been laid off and is collecting unemployment right now. They can't wait for this to be over.

[disneysteve]

Yet the Dow surged 400 points? Makes no sense.

Apparently Trump tweeted that oil production will be cut and prices shot up.

[Scallywag]

What truly concerns me is if the pandemic just revealed a pre-existing underlying economic mess? I can understand Mom & Pop small businesses operating on low margins forced to lay people off to stay afloat but for larger companies to also do this? Something is rotten in the state of Denmark!

Regarding oil, I am sorry but POTUS has no control over the SA - Russia spat. I think he's making statements that aren't necessarily accurate and more than likely just speculation or even just what he wants / hopes will happen, at this point.

[disneysteve]

What truly concerns me is if the pandemic just revealed a pre-existing underlying economic mess? I can understand Mom & Pop small businesses operating on low margins forced to lay people off to stay afloat but for larger companies to also do this? Something is rotten in the state of Denmark!

Regarding oil, I am sorry but POTUS has no control over the SA - Russia spat. I think he's making statements that aren't necessarily accurate and more than likely just speculation or even just what he wants / hopes will happen, at this point.

Businesses small and large depend heavily on debt. That's nothing new. It works, until it doesn't. I can only imagine that Dave Ramsey is sitting in his paid off home or paid off office building having the biggest "I told you so" moment in history. Small businesses have thousands in debt. Big businesses have millions.

As for POTUS, I'll refrain from saying much there other than yes, every word that he speaks or tweets is 100% suspect as to it's truth until it is confirmed by independent sources.

[LivingAlmostLarge]

It makes sense to cut costs and preserve business. But no one can predict right now how long unemployment will last and how much will rebound asap. That I bet can't be priced in right now because we had such a long bull market that I wonder if inherently this recession will extend because it was also overdue? And the cuts now are easy ones. But what about all these startups, tech companies, etc who haven't done the white collar layoffs? Is it coming? And if it comes do we end up like the 2000 dot.com burst? Will a lot of these small companies go out of business and those workers will also be in line? And for how long? Will VC and investor money still be easy in 6 months?

Questions that I don't think economist have any clue. I mean look at weworks, uber, and lyft. I see unprofitable business models and I wonder will we finally crack them because of it? Will investors no longer tolerate sinking more and more money in?

[Scallywag]

It makes sense to cut costs and preserve business. But no one can predict right now how long unemployment will last and how much will rebound asap. That I bet can't be priced in right now because we had such a long bull market that I wonder if inherently this recession will extend because it was also overdue? And the cuts now are easy ones. But what about all these startups, tech companies, etc who haven't done the white collar layoffs? Is it coming? And if it comes do we end up like the 2000 dot.com burst? Will a lot of these small companies go out of business and those workers will also be in line? And for how long? Will VC and investor money still be easy in 6 months?

Questions that I don't think economist have any clue. I mean look at weworks, uber, and lyft. I see unprofitable business models and I wonder will we finally crack them because of it? Will investors no longer tolerate sinking more and more money in?

I think leverage / debt & the long bull market run made even unprofitable businesses stay afloat. When the tide came in, they've been caught skinny dipping and I expect things to go rapidly downhill from here. Funding will likely disappear for new ventures and many unprofitable businesses will go under when money evaporates. States will struggle to pay unemployment benefits and may even declare insolvency. This is going to get really ugly really soon, unfortunately. I expect the student loan "bubble" & household consumer debt "bubble" to also burst and at least one too-large-to-fail bank to go under as defaults rise and liquidity dries up. The Feds have been pouring BILLIONS of dollars into the repo market since September, and *that* was already a warning sign, even before the pandemic was even a thing!

I am very very very afraid.

As Steve says, Dave Ramsey is probably saying, "I told you so", with every breath he takes. I am going to continue to DCA (as I only put in small amounts, anyway) but I am afraid that we may be in a Greater Depression soon.

[LivingAlmostLarge]

We are going to probably add student loans to bankruptcy. Right now they aren't dischargable. but soon I wonder if we'll have to. I also think that a lot of businesses were running on loans and this could trigger serious closures.

[disneysteve]

We are going to probably add student loans to bankruptcy.

Just Federal ones or private ones, too? I imagine the banking industry lobby would fight tooth and nail against allowing it for private loans.

[Scallywag]

We are going to probably add student loans to bankruptcy. Right now they aren't dischargable. but soon I wonder if we'll have to. I also think that a lot of businesses were running on loans and this could trigger serious closures.

On another forum where this is just being discussed, those who DID pay off their students are furious that those who didn't are "going getting a fee ride".

My concern is different. If student loans are forgiven or dischargeable in bankrupcy, then the bad debt will simply be passed on to the tax payer as we, the people, guarantee these loans. Sorry, I don't want to pay for someone else's schooling.