‘2nd wave’ forming offshore.

[rayinpenn]

I don’t know if you are watching but there’s a economic ‘2nd wave’ forming offshore. In nearby Philadelphia in response to diminished tax revenues the city is starting some cuts to balance its budget. I have no reason to believe it will not be repeated in countless cities, towns etc across America. My buddies in ‘Mega Company’ corporate world see the same thing happening. We are reminded how our society/economy is chock full of dependencies. Those who have been out of work and many of those who suffered losses likely won’t be on a spending spree anytime soon. We all know our economy depends on spending on cars, vacations etc. I’m inclined to say don’t take that dead count bounce too seriously. Yeah I know doom and gloom but I think we all need to put on our big boy pants and deal with it.

The question then is as an individual what can you do?
Continue in your quest for frugality
Don’t stress but plan for rough times ahead

https://www.washingtonpost.com/business/2020/04/29/cities-states-layoffs-furloughs-coronavirus/

 

[Time2]

I have some serious concerns about our 1 to 4 year economic situation.
When the media starts hammering on the double digit downturn daily, I think it might have a negative effect on the stock market, even though it is so called, baked into the market price.
I have already deviated from my buy and hold strategy and got lucky. I sold a about 25%of my stock funds some in late December (for 2020 expenses) and the rest on Feb 28, I then bought it all back on 3-25 at a 17% discount and more on the DEC sale.
I know I got lucky and I don't want that to affect my actions in the future. But, I am very concerned. We fully retired on OCT 10 2018.

 

[gwraigty]

The article is behind a paywall.

 

[pb4uski]

Try this one: https://www.msn.com/en-us/news/us/m...tion-sanitation-health-and-safety/ar-BB13mJH3

I agree with Ray's concern and doom and gloom. I was watching a show the other day and the projected revenue impact for the state of Vermont is 23% of their annual budget. There is going to be a lot of pain.... probably more than the Great Recession but not as bad as the Great Depression... I saw where recently someone called it the Great Repression.

I am in capital preservation mode. Totally out of equities for the first time since I was in my 20s. I wish I had done it earlier but c'est la vie. This recent rise has a bit of a FOMO aspect to it but I think the market will fall again and further.

 

[target2019]

Paywall article probably re-stating the obvious...

Individuals can set their asset allocation to a proportion that is acceptable in a deep recession. Have 2-3 years in cash so you can pay bills. Cut expenses where it makes sense. Always measure and review your inputs and outputs on a monthly schedule.

 

[frayne]

There are going to be all kind of downstream and peripheral issues related to the covid-19 shutdown that no one has even thought about yet. I was thinking about crude oil refining and the downstream impact for a plethora of hydrocarbon based products that may be affected from, plastics, to fertilizers, pesticides, pharmaceuticals, etc., etc. We may be seeing just the tip of the iceberg.

 

[COcheesehead]

In anything there is also opportunity.

We are already seeing some things getting a lot less expensive for our house build. I think there will be deals to be had here soon in many areas.

Investments are already stressful enough now without having to guess as to when to get out or worse, back in.

Have some cash, some income investments and some long term assets and ride it out.

 

[LRDave]

There are going to be all kind of downstream and peripheral issues related to the covid-19 shutdown that no one has even thought about yet. I was thinking about crude oil refining and the downstream impact for a plethora of hydrocarbon based products that may be affected from, plastics, to fertilizers, pesticides, pharmaceuticals, etc., etc. We may be seeing just the tip of the iceberg.

But we are charging towards a much closer look!

 

[LOL!]

The text under the headline tells us that Washington will intervene. I think that's a given.

There is certainly going to be a reset of what we call "Society" and some people are not going to be happy about that, but others will be happy about that.

 

[mystang52]

I'm not at all worried about myself. But notwithstanding that my kids are currently doing fine, I am concerned about long term financial impact on them.

 

[gwraigty]

There are going to be all kind of downstream and peripheral issues related to the covid-19 shutdown that no one has even thought about yet. I was thinking about crude oil refining and the downstream impact for a plethora of hydrocarbon based products that may be affected from, plastics, to fertilizers, pesticides, pharmaceuticals, etc., etc. We may be seeing just the tip of the iceberg.

Oh great. Now the giant bugs are going to get us! Oh wait. Before they get big enough to squash us, maybe we can start using them for food. You know, with the imminent meat shortage and all...

 

[RobLJ]

Nevada

I'm also pretty pessimistic, at least for the next year to two.
Nevada is a bit of an exception but is an example of sales tax revenue states: with Las Vegas as more than half of the population and almost all service industry, I'm not sure how the state survives on its revenue of sales tax and casino taxes. I don't see a V-shaped recovery with every packing into flights to get back into the casinos, anytime soon.

We moved to Reno from Houston; half of the Permian will probably be shut-in in six months to a year; admittedly, the Houston economy is more diversified than Nevada, but Texas will be looking at serious second order effects.

I have some closed end muni bond funds in the taxable brokerage account that I may mostly sell next week (3 out of 4 have gains over the last 3-5 years); since I already took some losses in some other CEFs in February I don't think there will be much if any capital gains tax. I'm looking further into their holdings to see how much is revenue supported versus general obligation.

 

[Dtail]

Oh great. Now the giant bugs are going to get us! Oh wait. Before they get big enough to squash us, maybe we can start using them for food. You know, with the imminent meat shortage and all...

Perhaps @Brewer is already doing this.
@Brewer has always been ahead of the curve.

 

[Chuckanut]

I have a neighbor who works for a large retail company that has shutdown most of its stores since mid-March. She works from home supervising a staff of about 8 people who do accounting type work. I don't want to spook her, but I really would like to ask her how long she thinks the company will keep her on the payroll when they are barely selling anything through their online store and nothing in their mall stores. At some point they are doing to cut those work-at-home staff also.

Me? I have not yet taken SS as I have been waiting to reach 70. It's really nice knowing I can turn it on earlier if I need to do so. Very nice. I am also recalculating my income assuming a 20% cut in my pension. Overall I should survive, but no more First Class flights to Paris for a weekend dinner at the Le Jules Verne restaurant ($300 each).

 

[Lsbcal]

Try this one: https://www.msn.com/en-us/news/us/m...tion-sanitation-health-and-safety/ar-BB13mJH3

I agree with Ray's concern and doom and gloom. I was watching a show the other day and the projected revenue impact for the state of Vermont is 23% of their annual budget. There is going to be a lot of pain.... probably more than the Great Recession but not as bad as the Great Depression... I saw where recently someone called it the Great Repression.

I am in capital preservation mode. Totally out of equities for the first time since I was in my 20s. I wish I had done it earlier but c'est la vie. This recent rise has a bit of a FOMO aspect to it but I think the market will fall again and further.

+1 Me too (on the red text).

Plenty of people will reduce spending out of necessity or fear or both. I'm not looking to reduce spending but what is there going to be to spend on in the next year except a bit nicer food to take home?

We won't be buying that new car we planned on as there is no place to drive it.
We won't be taking the European vacation we planned on this summer because of the obvious issues.
We won't be redesigning our backyard as it would drive us crazy workers with out there and us forced back into our house.

I expect the markets to do really badly going forward but I was dead wrong for April.

 

[Lsbcal]

I have a neighbor who works for a large retail company that has shutdown most of its stores since mid-March. She works from home supervising a staff of about 8 people who do accounting type work. I don't want to spook her, but I really would like to ask her how long she thinks the company will keep her on the payroll when they are barely selling anything through their online store and nothing in their mall stores. At some point they are doing to cut those work-at-home staff also.

Me? I have not yet taken SS as I have been waiting to reach 70. It's really nice knowing I can turn it on earlier if I need to do so. Very nice. I am also recalculating my income assuming a 20% cut in my pension. Overall I should survive, but no more First Class flights to Paris for a weekend dinner at the Le Jules Verne restaurant ($300 each).

Our son and his fiancee still have good jobs. But his very small company laid off half of the people. He is in digital advertising and the ad industry is apparently being hit very hard. Both of them can work from their home.

They had to delay their March wedding and I don't know when that will happen. Another example of people who have spending power but are not spending like they were in January. Their honeymoon is obviously far in the future.

 

[brewer12345]

Perhaps @Brewer is already doing this.
@Brewer has always been ahead of the curve.

Ordered a worm farm yesterday as a matter of fact.

 

[COcheesehead]

I'm also pretty pessimistic, at least for the next year to two.
Nevada is a bit of an exception but is an example of sales tax revenue states: with Las Vegas as more than half of the population and almost all service industry, I'm not sure how the state survives on its revenue of sales tax and casino taxes. I don't see a V-shaped recovery with every packing into flights to get back into the casinos, anytime soon.

We moved to Reno from Houston; half of the Permian will probably be shut-in in six months to a year; admittedly, the Houston economy is more diversified than Nevada, but Texas will be looking at serious second order effects.

I have some closed end muni bond funds in the taxable brokerage account that I may mostly sell next week (3 out of 4 have gains over the last 3-5 years); since I already took some losses in some other CEFs in February I don't think there will be much if any capital gains tax. I'm looking further into their holdings to see how much is revenue supported versus general obligation.

When bonds are buried in a fund, the visibility is somewhat hampered. I wouldn’t base my decision on just GO vs revenue. I own a bunch of individual muni’s and I have been going over them with a fine tooth comb lately.

Some GO bonds have lots of reserves, steady income streams outside of sales taxes, some are even prefunded and they will probably be fine. Some revenue bonds have taken a hit in odd ways. Hospitals for example get most of their margin from elective surgery. I had one revenue bond that I sold recently because it was down to less than 100 days of cash.

The one enlightening thing I have experienced with my muni’s is that the upgrades to downgrades is running about 10-1 so far. The down grades are where you would expect, transportation.

I fully expect some defaults in muni land which is very, very rare, but they need to be evaluated on a case by case basis.

 

[Shredder]

Ordered a worm farm yesterday as a matter of fact.

Ive had a worm farm for some years now. Garbage for compost is a good trade.

 

[RobbieB]

I'm glad I bought that new car last year. I'm continuing with the landscaping project, just have a dirt yard now. As soon as that's done and the lockdown ends I'm gonna start driving to vacations. Lot's here in CA.

No airplane rides, no cruise ships, lotsa driving!

 

[Lsbcal]

I'm glad I bought that new car last year. I'm continuing with the landscaping project, just have a dirt yard now. As soon as that's done and the lockdown ends I'm gonna start driving to vacations. Lot's here in CA.

No airplane rides, no cruise ships, lotsa driving!

Are you going to stay in hotels or cabins used by others? Are you going to eat out while on vacation? This sort of stuff will stop us for traveling.

 

[Brat]

We had a compost barrel at our home on Bainbridge Island. They ate well. Turn the barrel occasionally. Make sure that the vents in the barrel are small as mice love to dine on food scraps.

My DD and husband finished their back yard remodel last year, DD says she is really enjoying the BBQ.

 

[Redbugdave]

I have a neighbor who works for a large retail company that has shutdown most of its stores since mid-March. She works from home supervising a staff of about 8 people who do accounting type work. I don't want to spook her, but I really would like to ask her how long she thinks the company will keep her on the payroll when they are barely selling anything through their online store and nothing in their mall stores. At some point they are doing to cut those work-at-home staff also.

I can't help but wonder how long it will take for the bean counters to realize that it is cheaper for the home telework to be moved offshore for a fraction of the cost. I foresee a lot of this happening in the future since the door opened because of the virus.

 

[RobbieB]

Are you going to stay in hotels or cabins used by others? Are you going to eat out while on vacation? This sort of stuff will stop us for traveling.

Yup, hotels on the coast with ocean views, maybe a trip to the Redwoods. Soon it will be time to re-install the daughter at UCLA. Maybe do takeout and eat in room if restaurant crowded.

I dunno. I do know that I'll be wanting to hit the road to anywhere but here soon after lockdown ends.

 

[Lsbcal]

Yup, hotels on the coast with ocean views, maybe a trip to the Redwoods. Soon it will be time to re-install the daughter at UCLA. Maybe do takeout and eat in room if restaurant crowded.

I dunno. I do know that I'll be wanting to hit the road to anywhere but here soon after lockdown ends.

Well I applaud your optimism . But right now there are over 25000 new coronavirus cases each day in the USA. Chart is here: https://www.nytimes.com/interactive/2020/us/coronavirus-us-cases.html California is not out of the woods yet.