COVID Economy

[MU82]

And now Trump says the improved jobs numbers make today "a great day" for George Floyd.

Seriously, I am not making this up....

Trump calls improved jobs numbers 'great day' for George Floyd

https://abcnews.go.com/Politics/trump-calls-improved-jobs-numbers-great-day-george/story?id=71089946

Yes, the deceased Mr. Floyd is enjoying these numbers, for sure. I'm certain they are all his loved ones are thinking about, too.

[MU82]

Rich get richer, even when it comes to the stimulus packages for North Carolina hospitals ...

https://www.charlotteobserver.com/news/coronavirus/article243301846.html?

Hospitals in North Carolina got more than $600 million from the federal Provider Relief Fund. An Observer analysis found that the majority of it went to just four large hospital chains with billions in combined reserves: Atrium Health, Novant Health, Duke Health and UNC Health Care.

So far, relatively little of the federal grant money has gone to dozens of smaller hospitals, many of which are financially struggling as a result of the pandemic.

That's because the federal funding formulas were based largely on how much money hospitals received from Medicare and other sources last year.

"If you're going to base it on what you got last year, the rich will get richer – and the poor will get poorer," said Dr. Robert Berenson, an expert on health care finance with the Urban Institute, a Washington research group.

[pbiflyer]

https://www.nytimes.com/2020/06/05/business/jobs-report-stock-market-coronavirus.html


But there are millions of people who are not working and want a job that this rate leaves out, including those part-time because their hours were cut, as well as those not looking for work because of fears about getting sick or responsibilities like caring for children.Combining these and other groups results in a 27 percent expanded unemployment rate, which could more closely reflect the share of the labor force whose employment has been negatively affected by the pandemic.

[Frenns Liquor Depot]

PBI there is so much going on right now from PPP extensions to people leaving the workforce with voluntary retirement or other.  My guess is we've passed the trough.  Now where it normalizes is anyone's guess. 

[MU Fan in Connecticut]

My wife's school district is going through layoffs for next school year.  I know her district is not the the only town going through.  These won't show up in figures until July.

[MU82]

While the unemployment rate surprisingly fell last month, it actually rose for blacks and Latinos.

Overall, the jobs report was good news. But it wasn't great news. COVID-19 has disproportionately hurt communities of color, and it continues doing so.

[mu_hilltopper]

My wife's school district is going through layoffs for next school year.  I know her district is not the the only town going through.  These won't show up in figures until July.

Connecticut, I presume?

I'll be interested in what happens in Wisconsin.  WI's schools are funded by three things .. State revenue (income, sales taxes) .. Federal $ and local property taxes.

Clearly, WI state revenue is going to go down, although it remains to be seen what will get cut -- or if there'll be any federal money like there was in 2008.

Then there's school districts, who can increase their property tax levies -- but I think there's a limit on that.

So I have no idea what will happen, but much of it needs to be sorted out in the next ~90 days because .. school will start again in some capacity.

I .. hope?  .. that school districts will try temporary salary cuts before staffing cuts.  I mean .. tons of private industry is on 5-10-20-30% pay cuts right now, to stave off layoffs.

Reminder:  While teachers' unions exist in Wisconsin, they have no bargaining rights.  A Wisconsin school district can offer a teacher whatever salary they wish, year to year.  Understood that most states have unions who would likely  fight this (likely to their detriment.)

[forgetful]

So apparently the government misclassified 5M people, who should have been counted as unemployed, but were counted as employed in the previous unemployment report.

https://www.cnn.com/2020/06/06/politics/seth-harris-may-jobs-report-misclassification-error-cnntv/index.html

Happened 2-months in a row?

[pbiflyer]

So apparently the government misclassified 5M people, who should have been counted as unemployed, but were counted as employed in the previous unemployment report.

https://www.cnn.com/2020/06/06/politics/seth-harris-may-jobs-report-misclassification-error-cnntv/index.html

Happened 2-months in a row?

Oopsie!

[Hards Alumni]

Getcha popcorn ready.  Dow finally realizing what the rest of us see.

[JWags85]

Getcha popcorn ready.  Dow finally realizing what the rest of us see.

Nah, the Fed just didn't buy like crazy overnight into today. This has nothing to do with anything other than Powell and Company backstopping and pushing everything up. When they don't, the market falls. Been that way for weeks. Big money won't fight the trend and retail has been rising the coattails blissfully

[Hards Alumni]

Nah, the Fed just didn't buy like crazy overnight into today. This has nothing to do with anything other than Powell and Company backstopping and pushing everything up. When they don't, the market falls. Been that way for weeks. Big money won't fight the trend and retail has been rising the coattails blissfully

Or the unemployment numbers are about to get crazy now that the PPP is running out.

[jesmu84]

https://podcasts.google.com/?feed=aHR0cHM6Ly9yc3MuYXJ0MTkuY29tL2ZyZWFrb25vbWljcy1yYWRpbw&ep=14&episode=NDM4NDlkMGMtMDQ2Yi00NDBmLTk2NTAtYWJkNzAwMTRkNzIz

Freakonomics podcast on how to avoid a great depression at this point

[GooooMarquette]

Glad I moved much of my portfolio into fixed income securities a couple of months back. And of the part I kept in stock (mostly AT&T and Microsoft), I sold half late yesterday. Whew!

[MU82]

Glad I moved much of my portfolio into fixed income securities a couple of months back. And of the part I kept in stock (mostly AT&T and Microsoft), I sold half late yesterday. Whew!

Nice sell of MSFT and T yesterday. But really, even after this sell-off, most stocks are higher than they were a week ago.

Doesn't mean you were "wrong" to have sold your other stuff a couple months back. I mean, I sold some stuff last year that would be up now if I had held.

It's about comfort level, goals, building a diverse portfolio, etc.

[GooooMarquette]

Nice sell of MSFT and T yesterday. But really, even after this sell-off, most stocks are higher than they were a week ago.

Doesn't mean you were "wrong" to have sold your other stuff a couple months back. I mean, I sold some stuff last year that would be up now if I had held.

It's about comfort level, goals, building a diverse portfolio, etc.

Absolutely. The selloff of a couple months ago cost me some with the recent run-up, but I am fine with that because it gave me the peace of mind of having a secure nest egg that will allow me to live comfortably for a long time.

I just left my "extra" money in the market, figuring I could still survive if it goes down the drain, and play with the earnings of it doesn't. And my selloff from yesterday won't be a long – term move. I just had a gut feeling we could be near a peak, so I pulled the trigger when they were at high levels. There's a good chance I will put it back in sometime in the future after we tumble for a while.

And yeah - I realize I am very lucky to have this flexibility. I do not take that for granted.

[Lennys Tap]

Getcha popcorn ready.  Dow finally realizing what the rest of us see.

Hilarious.

[Lennys Tap]

Getcha popcorn ready.  Dow finally realizing what the rest of us see.

LOL.

See JWags for the real story.

[Hards Alumni]

LOL.

See JWags for the real story.

They're related.

[Chili]

They're related.

Yup - real story will start in July when companies that reported March report their latest quarter. It will show the real impact.

We'll see how much debt the fed will saddle every American with in their drunken buying spree which will continue to push the fed into riskier and riskier situations.

[MU82]

Mark Cuban encouraging CEOs and other company execs to cut their own compensation before hurting underlings.

https://twitter.com/mcuban/status/1271522167700754432?campaign_id=4&emc=edit_dk_20200615&instance_id=19398&nl=dealbook&regi_id=108420427&segment_id=30932&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

[The Sultan]

https://www.npr.org/2020/06/17/878946307/the-rich-have-stopped-spending-and-thats-tanked-the-economy?utm_medium=social&utm_campaign=npr&utm_term=nprnews&utm_source=twitter.com

"The Rich Have Stopped Spending And That Has Tanked The Economy"


This is really fascinating.  Higher income people are the ones holding up their spending.

[rocky_warrior]

It's an interesting headline, but a bit misleading.  In the body of the article:

before the pandemic were spending a significant chunk of that going to nice restaurants, the theater, or traveling and staying in nice hotels. Those are precisely the things that have been off-limits since the coronavirus hit.

I suspect a number of folks here fit that category.  They were talking about top 25% which is household income $72k and up. 

[Skatastrophy]

"The people so poor that 100% of their income goes to food, rent, and bills continues to spend 100% of their income despite there being a pandemic!"

[MU82]

I don't think it's especially surprising at all.

First, as rocky noted, they are including lots and lots of folks bringing in under $100K as "rich."

Second, lots of states either just recently re-opened or are still not allowing restaurants to re-open dine-in service, movies to re-open, concert halls, theaters, stadiums and other entertainment venues to re-open, etc. Here in NC, bars and most entertainment venues are not open. The last couple of months, in an awful lot of big cities, there haven't been a lot of places where folks can spend their money.

Third, a lot of people are still not thrilled about going out. My wife and I went 2 weeks ago, nobody was wearing masks, and she said she won't go out again to any restaurant that doesn't have stricter policy for staff. We are getting together with another couple this weekend, but the wife has an underlying condition, so we are doing take-out and eating at their place. That's what establishments are up against.

Indeed, I would have been surprised had more entertainment/dining money been spent.

And of course lower-income folks are kicking out all their $$$. That's what they always have to do. There are millions of Americans literally living paycheck-to-paycheck. It's why many economists think the single best stimulus is unemployment insurance. Unemployed people aren't sticking their money into the stock market. They're putting the $$$ right back into the economy by buying crazy stuff like food and shelter.