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When this surfaces out, do you believe this will turn out worse than 08?
This is very difficult to analyze. On the one hand, you have horrible impacts to the travel industry (hotels, airlines, car rental companies, restaurants, bars, casinos, theme parks) and you also have low oil prices (O&G industry mainly). On the flip side grocery stores, convenience stores, home improvement stores will see a boon.
Yes there are teachers that are working from home but they still have a job. Yes entire companies are working from home but they still have a job.
At the local level, Austin is a high tech city so is well positioned to handle this downturn. The government still has to run, UT will hold classes remotely, and tech people will work from home. The biggest impact will be musicians, they are going to be hurting big time, as well as all the restaurant owners, especially the trailer owners. There will be a lot of restaurants going out of business, I predict. From what I understand SxSW wasn't cancelled, just delayed until the Fall so the net impact for the year is zero (that's the desired impact, but it may be less attended as it will be competing against ACL and F1).
At the state level, In Texas I would expect San Antonio to be hurt the most as they have places like Six Flags, Sea World, and the Riverwalk. Tourism is big in San Antonio. Also Houston will be hurt because oil prices are down, but they are somewhat protected because they are the corporate offices and they have up, mid, and down stream companies. Downstream processing companies like cheap crude. Upstream well diggers don't. Places like Midland will see horrible recessions that they may never overcome.
At the national level, the big winners will be Seattle (Amazon), the Bay Area (High Tech, people are using their devices more), & LA (people are downloading music/movies galore so profits there). Northwest Arkansas (Walmart) and Minneapolis (Target) will also benefit as people make a run on the shelves. So will places like Dollar General and budget stores like that, where people need to stock up on cheap food. Other satellite cities in the grocery store industries, movies (online like netflix not theaters, theaters will be going out of business), electronic and digital media, telecommunications, and high tech will see net benefits out of this. That means Austin, Boston, Nashville, and NYC will return to normalcy.
The big losers will be Las Vegas, New Orleans, and Orlando. For some cities like Detroit, this may be the final nail in the coffin as people won't be buying cars during this pandemic. Las Vegas is going to be hurting worse than 2008, its economy is based on large casinos filled with people. New Orleans is going to be hurting worse than Katrina. Its economy is based on large festivals filled with people.
Worldwide I see this as a recession. Some countries like Italy and Spain will not be able to recover. I predict Greece style collapse. Also those countries have just lost a large part of their population so you may see a shift in policies towards letting in more immigrants. Somebodies got to do the jobs, the towns in Northern Italy are like ghost towns now, everyone's dead.
China will benefit from this greatly. They are already lending a hand to other countries and the fact they came out relatively unscathed means that they have gained leverage that they didn't have before.
Some countries that seemed to have managed the pandemic well like Australia or Brazil will be seen as more attractive places to do business. You might see greater economic growth there.
The big picture I see recession for 6-9 months, partial recovery 9-18 months, and then a reckoning after that, where you'll see great migration from service based economies to information based economies. A weakness has been exposed in service based economies. Austin may end up having one of the highest growth rates in the country again as the sectors that Austin has (government, college, high tech) are immune to disease (pardon the pun).
This is very difficult to analyze. On the one hand, you have horrible impacts to the travel industry (hotels, airlines, car rental companies, restaurants, bars, casinos, theme parks) and you also have low oil prices (O&G industry mainly). On the flip side grocery stores, convenience stores, home improvement stores will see a boon.
Yes there are teachers that are working from home but they still have a job. Yes entire companies are working from home but they still have a job.
At the local level, Austin is a high tech city so is well positioned to handle this downturn. The government still has to run, UT will hold classes remotely, and tech people will work from home. The biggest impact will be musicians, they are going to be hurting big time, as well as all the restaurant owners, especially the trailer owners. There will be a lot of restaurants going out of business, I predict. From what I understand SxSW wasn't cancelled, just delayed until the Fall so the net impact for the year is zero (that's the desired impact, but it may be less attended as it will be competing against ACL and F1).
At the state level, In Texas I would expect San Antonio to be hurt the most as they have places like Six Flags, Sea World, and the Riverwalk. Tourism is big in San Antonio. Also Houston will be hurt because oil prices are down, but they are somewhat protected because they are the corporate offices and they have up, mid, and down stream companies. Downstream processing companies like cheap crude. Upstream well diggers don't. Places like Midland will see horrible recessions that they may never overcome.
At the national level, the big winners will be Seattle (Amazon), the Bay Area (High Tech, people are using their devices more), & LA (people are downloading music/movies galore so profits there). Northwest Arkansas (Walmart) and Minneapolis (Target) will also benefit as people make a run on the shelves. So will places like Dollar General and budget stores like that, where people need to stock up on cheap food. Other satellite cities in the grocery store industries, movies (online like netflix not theaters, theaters will be going out of business), electronic and digital media, telecommunications, and high tech will see net benefits out of this. That means Austin, Boston, Nashville, and NYC will return to normalcy.
The big losers will be Las Vegas, New Orleans, and Orlando. For some cities like Detroit, this may be the final nail in the coffin as people won't be buying cars during this pandemic. Las Vegas is going to be hurting worse than 2008, it's economy is based on large casinos filled with people. New Orleans is going to be hurting worse than Katrina. It's economy is based on large festivals filled with people.
Worldwide I see this as a recession. Some countries like Italy and Spain will not be able to recover. I predict Greece style collapse. Also those countries have just lost a large part of their population so you may see a shift in policies towards letting in more immigrants. Somebodies got to do the jobs, the towns in Northern Italy are like ghost towns now, everyone's dead.
China will benefit from this greatly. They are already lending a hand to other countries and the fact they came out relatively unscathed means that they have gained leverage that they didn't have before.
Some countries that seemed to have managed the pandemic well like Australia or Brazil will be seen as more attractive places to do business. You might see greater economic growth there.
The big picture I see recession for 6-9 months, partial recovery 9-18 months, and then a reckoning after that, where you'll see great migration from service based economies to information based economies. A weakness has been exposed in service based economies. Austin may end up having one of the highest growth rates in the country again as the sectors that Austin has (government, college, high tech) are immune to disease (pardon the pun).
I knew Italy got hit pretty bad by this disease but had no idea it killed off large populations of entire smaller towns.
At the national level, the big winners will be Seattle (Amazon), the Bay Area (High Tech, people are using their devices more), & LA (people are downloading music/movies galore so profits there).
Great post overall, thanks for the write up!
While I do agree that the tech industry will fare better than others during this downturn, I wonder how some of the start-ups will perform. I was already feeling like this was a sector of the market that was oversaturated, so I'm thinking that this will 'shake out' some of the weaker startups, so to speak.
While I do agree that the tech industry will fare better than others during this downturn, I wonder how some of the start-ups will perform. I was already feeling like this was a sector of the market that was oversaturated, so I'm thinking that this will 'shake out' some of the weaker startups, so to speak.
If you are referring to the surplus of apps then I'd probably say yes. A lot of those apps are just excuses for VC funding. There has been a lot of extra money in Silicon Valley and SV unfortunately always seeks out the "unicorn" although they don't exist. Most of these VC investors are hurting now, they have lost big time in the stock market. They will be turning to bonds and safer investments, look to real estate and more traditional investments. Yes some will fold but the big players (google, facebook, microsoft, apple) will fare quite nicely.
If you are referring to the surplus of apps then I'd probably say yes. A lot of those apps are just excuses for VC funding. There has been a lot of extra money in Silicon Valley and SV unfortunately always seeks out the "unicorn" although they don't exist. Most of these VC investors are hurting now, they have lost big time in the stock market. They will be turning to bonds and safer investments, look to real estate and more traditional investments. Yes some will fold but the big players (google, facebook, microsoft, apple) will fare quite nicely.
Not just apps, but startups in general. It just really felt like the market was being oversaturated with startups and some of them were raising ridiculous amounts of money from VC investors, which I think will all come to a halt now that the economy has stalled.
The big players will be fine, but places like the Bay Area and Austin also have a decent number of startups, and I'm guessing that is a sector where a lot of startups will just go bellyup.
This is very difficult to analyze. On the one hand, you have horrible impacts to the travel industry (hotels, airlines, car rental companies, restaurants, bars, casinos, theme parks) and you also have low oil prices (O&G industry mainly). On the flip side grocery stores, convenience stores, home improvement stores will see a boon.
Yes there are teachers that are working from home but they still have a job. Yes entire companies are working from home but they still have a job.
At the local level, Austin is a high tech city so is well positioned to handle this downturn. The government still has to run, UT will hold classes remotely, and tech people will work from home. The biggest impact will be musicians, they are going to be hurting big time, as well as all the restaurant owners, especially the trailer owners. There will be a lot of restaurants going out of business, I predict. From what I understand SxSW wasn't cancelled, just delayed until the Fall so the net impact for the year is zero (that's the desired impact, but it may be less attended as it will be competing against ACL and F1).
At the state level, In Texas I would expect San Antonio to be hurt the most as they have places like Six Flags, Sea World, and the Riverwalk. Tourism is big in San Antonio. Also Houston will be hurt because oil prices are down, but they are somewhat protected because they are the corporate offices and they have up, mid, and down stream companies. Downstream processing companies like cheap crude. Upstream well diggers don't. Places like Midland will see horrible recessions that they may never overcome.
At the national level, the big winners will be Seattle (Amazon), the Bay Area (High Tech, people are using their devices more), & LA (people are downloading music/movies galore so profits there). Northwest Arkansas (Walmart) and Minneapolis (Target) will also benefit as people make a run on the shelves. So will places like Dollar General and budget stores like that, where people need to stock up on cheap food. Other satellite cities in the grocery store industries, movies (online like netflix not theaters, theaters will be going out of business), electronic and digital media, telecommunications, and high tech will see net benefits out of this. That means Austin, Boston, Nashville, and NYC will return to normalcy.
The big losers will be Las Vegas, New Orleans, and Orlando. For some cities like Detroit, this may be the final nail in the coffin as people won't be buying cars during this pandemic. Las Vegas is going to be hurting worse than 2008, its economy is based on large casinos filled with people. New Orleans is going to be hurting worse than Katrina. Its economy is based on large festivals filled with people.
Worldwide I see this as a recession. Some countries like Italy and Spain will not be able to recover. I predict Greece style collapse. Also those countries have just lost a large part of their population so you may see a shift in policies towards letting in more immigrants. Somebodies got to do the jobs, the towns in Northern Italy are like ghost towns now, everyone's dead.
China will benefit from this greatly. They are already lending a hand to other countries and the fact they came out relatively unscathed means that they have gained leverage that they didn't have before.
Some countries that seemed to have managed the pandemic well like Australia or Brazil will be seen as more attractive places to do business. You might see greater economic growth there.
The big picture I see recession for 6-9 months, partial recovery 9-18 months, and then a reckoning after that, where you'll see great migration from service based economies to information based economies. A weakness has been exposed in service based economies. Austin may end up having one of the highest growth rates in the country again as the sectors that Austin has (government, college, high tech) are immune to disease (pardon the pun).
Interesting post. Lots of food for thought. Thank you for sharing.
Wrt Italy, I'm curious why you say Italy lost a large part of their population. As at today, the death toll from C-19 is about 12,500 people. A large number by any definition and I imagine for the affected loved ones, an unimaginable loss but Italy's population is over 60M. I wouldn't exactly say that the country as a whole lost a large part of their population mathematically speaking at the very least.
While I do agree that the tech industry will fare better than others during this downturn, I wonder how some of the start-ups will perform. I was already feeling like this was a sector of the market that was oversaturated, so I'm thinking that this will 'shake out' some of the weaker startups, so to speak.
A bit optimistic about China, IMO.
With its largest trade customers in severe recession/depression for several years, the Chinese economy isn’t going to rebound like gangbusters. And the major agricultural exporters will continue to feed them.
And again today: "out of stock". We better get used to it. Or should I say "I" better get used to it...There is a run on yeast.
I swear half the people I know have taken up bread making since the quarantine began. The other half are taking up woodworking. I'm in the latter half.
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