Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Archive for the category “Economics”

More big businesses failing. Revised budget forecast for state of California shows even governments are going to have a hard time when the economy is frozen. Maybe it is time to restart the economy.

Even the state government in California may be starting to realize that putting the economy in a deep freezer for an extended and unknown period of time might have some adverse consequences.

Just a few of the business casualties over the last few days:

  • Neiman Marcus (bankruptcy filed)
  • Souplanation/Sweet Tomatoes restaurants (all 97 stores permanently closing)
  • Lord & Taylor (likely BK)
  • J. Crew (bankruptcy filed)
  • J. C. Penney (likely BK)

This discussion will be posted on several of my blogs.

California budget deficit

5/7/20 – ABC news – California doom: Staggering $54 billion budget deficit looms 

Read more…

3.2 million new claims for unemployment last week. Running out of negative words to describe the severity of job losses.

Unemployment by Sean MacEntee is licensed under CC BY 2.0

New unemployment claims for week ending 5/2/20 are 3,169,000, seasonally adjusted.

The tally of new claims is 33.48 million since the economy was put in an induced coma.

That means about 1 out of every 5 people in the civilian labor force back in February are out of a job today.

I’m running out of words to describe how horribly the economy has been hit. Seem to have exhausted the adjectives that apply. We have a terrible mess and it is going to take a long time to fully recover from the lost jobs and even longer to recover consumer and business confidence.

This discussion will be posted across several of my blogs.

Data:

Expectations from economists interviewed by the WSJ, or perhaps we should say their wild guesses, are the flood of new claims will taper off in May. Will likely be months before the new jobs exceed the new unemployment claims. Will likely be years before new jobs offset the tidal waves of job losses in March, April, and May.

Summary of new claims and running total

I have prepared a running tally of the new unemployment claims, which is shown below.

Read more…

Economic devastation from shutdown spreads. Signs showing of deteriorating health and increased deaths caused by shutdown.

Indications of damage caused by the shutdown are getting stronger. First articles are appearing to describe the harm to health from the shutdown.

Comments today:

  • Estimated 35 deaths from not getting cardiac care in Ontario, Canada
  • Indications people are not seeing doctors and not getting meds they need
  • Harsh impact on Jewish owned businesses
  • New vehicle sales collapsing
  • Temp layoffs transition to permanent
  • More students suing more universities, now claiming discount on tuition for missing out on the on-campus experience

Damage to health from shutdown

5/5/20 – Daily Wire – Dozens Dead After Lockdown Measures Delayed Their Heart Surgeries; Health Official: “Certainly Was Not Intended” – Count this as the first in what I predict will be an exquisitely long list of unintended consequences from putting the economy into an induced coma. The sad part is these unintended consequences were predictable and expected.

Thousands upon thousands of needed health procedures were canceled in Ontario, Canada in order to make room for the massive surge of coronavirus patients which never arrived.

New study in Ontario estimates that 35 people are dead because their heart surgeries were postponed. There were 12,200 surgeries and other procedures postponed each week.

Read more…

California starts first few steps to start opening up the stalled economy.

Economic doors will start to open on Friday – Opening or closing? by Paolo Gamba is licensed under CC BY 2.0

Friday of this week, 5/8, California will take the first baby steps to revive the state’s economy. Some retail stores will be able to provide curb-side delivery of products.

I don’t quite know how many people will order clothes online in order to pick them up at a store’s curb, but that is a first step.

At least half the value of a bookstore is browsing the shelves to see what book you really have to read right but that you previously didn’t even know existed.

Well, it’s a baby step.

Several articles describe the beginning here in the state. First article describes that government officials better start opening up quick or they will find the everyone already has done so.

5/1/20 – Forbes – Apple Data Shows Shelter-In-Place Is Ending, Whether Governments Want It To Or Not – Apple and Foursquare are tracking data that show people are getting out more.

Read more…

Three states tighten the shutdown while others start to revive their economy.

Green line is the unemployment rate in every state of the country. Red line is the financial health of universities, restaurants, airlines, and every small business.  Sinkender roter und steigender grüner Pfeil symbolisieren das Auf und Ab des Aktienmarktes by Marco Verch is licensed under CC BY 2.0.

With extremely short notice, governors of Arizona and Tennessee extended the lockdown and economic shutdown in their states. California governor orders beaches closed in the county with lowest infection rate, leaving open beaches in county with three times higher rate.

Meanwhile, many other states are trying to allow their economies to re-start.

Arizona extends lockdown

4/29/20 – Fox 10 Phoenix – Gov. Doug Ducey extends Arizona’s stay-at-home order to May 15 – The shutdown and lock-in for Arizona was scheduled to expire in one day as the governor extended the economic catastrophe by 15 more days.

Read more…

Economic stats show rapid disintegration of economy. Collapse in physical and emotional health won’t be this easy to calculate.

The economic statistics are rolling out to show the initial impact of the shutdown of the economy.

The collateral effect the shutdown and isolation will have on deteriorating emotional and mental health along with increased mortality due to postponed or canceled medical treatment will take years to quantify.

New stats in last few days:

  • 3.8 million new unemployment claims this week
  • New unemployment claims in six weeks are now equal to 18% of the people who were working in February
  • CBO expects unemployment rate to average 11% for 2020
  • 4.8% annualized drop in GDP for first quarter

New claims for unemployment

4/30/20 – Department of Labor – Unemployment insurance weekly claims – Another 3,839,000 people filed an initial claim for unemployment in the week ending April 25.

Read more…

Massive hit to the aviation industry from the pandemic.

Pictures in February 2016 at Minneapolis airport. Photo by James Ulvog.

The entire aviation industry, including airlines, plane manufacturers, engine producers, and maintenance, will be devastated from the pandemic and shutting down the economy.

4/27/20 – Wall Street Journal – ‘Welcome to Your Flight, Nathan.’ Traveling During a Pandemic Means Having the Plane to Yourself – My first, second, and third reaction was to chuckle when reading an article describing multiple commercial flights with only one passenger. The description of pilots making the standard welcoming announcement that greets the sole passenger by name is funny.

Then I shuddered in fear at the absolute devastation to the entire economy from most fights being almost empty. The financial destruction will require years of recovery.

Untold numbers of airline, ground transportation, hotel, restaurant, and food vendor companies are being shattered. Incalculable numbers of companies will not survive.

A lovely sight not many of us will get to see in the near future. Photo by James Ulvog.

Work that collapse back to the airplane manufacturers…

Read more…

Plans for California economy to slowly, gradually revive over the next year or more.

It will be months before you can visit one of these places in California. Image courtesy of Adobe Stock.

The California governor has laid out some general plans on how the state eventually will be taken off lockdown. There are four overall phases stretched over the next year or more. Highlights include:

  • Curb side pickup from retail stores will be allowed perhaps in weeks.
  • In-person worship services and getting a haircut will be allowed months from now.
  • Stay-at-home orders will not be lifted for a year or more.

Schools may start early, perhaps even in July. That will be conditioned upon schools having the ability to maintain safe distances between students.

This discussion will be posted on several of my blogs.

The graphic provided by the state describes the four stages:

Read more…

Damage from the shutdown is growing day by day.

Image courtesy of Adobe Stock.

Damage from the shutdown is getting more visible; it is growing, spreading every day.

Hospitals and surgeons have been devastated by stopping what is considered ‘non-essential’ care. Many hospitals may go under. Going under is what farmers are starting to do with their crops. After a panic like we are in, who has liability if anyone gets sick and thinks they caught the bug in a store, restaurant, or business?

Devastation in health care industry

4/23/20 – The Federalist – Instead Of “Flattening The Curve,” We Flattened Hospitals, Doctors, And The US Health Care System – Outside of New York city, hospitals have not been overwhelmed. That means it is time to open up the medical system to allow “non-essential” services.

Example cited include Florida which was projected to have 465,000 hospitalized patients by April 24 only having 2,000 on April 22.

Read more…

This shutdown is damaging our health, collapsing the economy, and shredding our freedoms. What will be the tally from ‘avoidable deaths?’

Will the Grim Reaper get more business from the coronavirus or the shutdown?

Every additional day of the shutdown is causing horrible damage. Not only is the economy suffering with record high unemployment, soon-to-be record high bankruptcies and shuttered businesses, but also there is now and will continue to be a decline in overall health. We will see increased mortality from other causes because of the shutdown. The damage to our freedoms is widespread and immeasurable.

Point made by the author of the column linked below puts it this way:

This is not a trade-off between lives and the economy. It’s a trade-off between lives and lives.

In a series of articles over the last week I attempted, in my own feeble way, to describe the wide ranging damage we are watching grow every day.

The question our governors and mayors urgently need to consider is whether we have already passed the point at which there will be more damage (including deaths) from the shutdown than from the coronavirus.

This post will be published on several of my blogs.

Trading off lives for lives

4/17/20 – Colorado Politics – Opinion/It’s time to shift tack – and contain the virus while reopening Colorado’s economy – Author was sounding the alarm on a pending medical disaster well before others realized there was a problem. That danger is now past.

He draws the analogy to a hurricane expected to make landfall at category 5 but deteriorated to a bad thunderstorm the morning it landed. In that analogy the cat 5 which was expected to land on the entire country only hit New York, New Orleans, and Detroit.

Read more…

The horrid news just keeps on rolling.

Image courtesy of Adobe Stock.

The news feels like we are moving ever deeper into an over-the-top dystopian novel. Unfortunately this isn’t fiction.

Another 4 million unemployment claims last week and ongoing attacks on the First Amendment.

About the only job specialty in the country today with bright growth prospects in the near term is trial attorney.

(This post will cross-published on several of my blogs.)

New unemployment claims

4/23/20 – Department of Labor – Unemployment insurance weekly claims – an additional 4,427,000 people filed their initial claim for unemployment in the week ending April 18. Here is another article in case link is dynamic.

This is on top of the four previous weeks of horrible levels of new claims.

Here is a summary of the unreal news. Recap shows number of new claims for unemployment for the last five weeks with a subtotal. The number of people who were unemployed in March is then listed with my estimate of the total unemployment now.

Read more…

More entries on the list of economic sectors devastated by the shutdown.

Image courtesy of Adobe Stock.

Hat tip to Behind the Black for the legwork identifying additional sectors of the economy that are collapsing. Large segments of the economy I haven’t mentioned before:

  • Home sales
  • Housing construction
  • Apartment rentals
  • Clothing production
  • Flower trade

Damage to these sectors won’t immediately heal the moment state governors decide they will allow the economy to come back to life out of its induced coma.

Home sales

4/21/20 – Fox Business – US home sales plunge 8.5% in March, and it may grow worse – Sales of existing homes dropped 8.5% in March. Article use the word “cratered.”

Read more…

Magic of the price signal to change production levels.

Fourteen wells on one pad, located on the southeast side of Williston, N.D. Photo by James Ulvog.

The double black swan of COVID-19 pandemic from the demand side and Saudi Arabia flooding the market from the supply side is creating a sales problem and storage problem for the oil industry.

Regulators in Texas are thinking about about ordering a pro-rate reduction in production. In other words, they are considering giving each producer an order on how much to cut.

North Dakota has no such plans.

North Dakota is planning to rely on capitalism to rapidly adjust production.

Read more…

Economic damage from shutdown – 4/15.

Image courtesy of Adobe Stock.

A few more articles on damage we are seeing from the economic shutdown.

(Cross post from my other blog, Attestation Update.)

Guess on California unemployment rate

April 2020 – Eberhardt School of Business, University of Pacific – Initial Estimates of Employment Impacts of Covid-19 Pandemic – The school of business estimates an unemployment rate of 18.8% in California for the month of May 2020.

This is in contrast to 2010 rate of 12.2% and 2019 rate of 4.0%.

Likely increase in bankruptcies

4/13/20 – Washington Examiner – Pandemic likely to exceed Great Recession in number of bankruptcies – Economists from a leftist think tank and a conservative think tank both guess that the  number of bankruptcies from the current shutdown of the economy will exceed the number from the Great Recession.

Read more…

Economic news: Surge in new unemployment claims; unemployment rate starting to rise.

Image courtesy of Adobe Stock.

Another huge jump in new unemployment claims. The rise in count of people without work is barely starting to show in the unemployment rate.

It would be wise to start watching the economic stats more closely than usual.

(Cross-post from my other blog, Attestation Update.)

4/9/20 – CNBC – US weekly jobless claims jump by 6.6 million and we’ve now lost 10% of workforce in three weeks – Another surge in new unemployment claims announced today. Here is a recap:

Read more…

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