Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My opinion is we are somewhere in-between those two assessments.
My heart is leaning toward believing USA Today, but my gut is leaning more to VTE's comments.
USA-T lost me when they claim most Americans are saving 8% of their salaries. I have seen other assessments that claim otherwise, especially with the Asheville area heavily dependent upon food service and delivery jobs.
I did take note of the other differences in the economy since 2008 and I think they are spot on.
Here's a Q&A with a Duke economist who studies recessions:
"The important thing here is to realize that this economic predicament was triggered by a health crisis. The economic part is not a structural problem. In 2007, there was a structural problem. Banks were levered 40-1 and using our FDIC insured accounts as collateral. That structural problem caused great damage to our economy. Going into this, we didn’t have a structural economic problem. The economy was healthy. We were struggling to get to 3 percent growth, but we were on a good track."
"I see a very sharp contraction in the second and third quarter of 2020. Then we’ll start to see a rebound in the fourth quarter and then an enormous jump in the first quarter of 2021."
For what its worth, the US personal savings rate in February of this year was 8.2%:
ET, I agree with the evolution of the issues being different, but my gut (same as my opinion, but gives the connotation of less involved brain function, LOL) says when restaurants are going to have new lower maximum capacity numbers and grocery store aisles may have to be restructured, where does it end?
The cost of goods and services may have to increase to maintain the desired profit margins. Small businesses impacted by the new (still to be determined) rules of play will suffer.
*disclaimer: I haven't read you recent links yet. not enough time at the moment. I will return later. thanks!*
Remember though that being triggered by a health crisis and potentially losing 100k or more lives (just in the U.S.) was something never seen in 2008. The world economy has forever been altered by this event, and optimistic projections are saying a possible soft reopening of our economy by May / June with an unemployment rate well into the teens.
As we’re still unsure if this is best case scenario, what’s worst case then? Opening our economy by June just so tens of thousands of people die monthly in order for paychecks to start flowing again? That would be irresponsible IMO, and a true indication of just how desperate things are becoming.
Either way, employers will be wary putting themselves out there to be sued for spreading or exposing their employees to Covid-19, and meanwhile the average American savings (if any) won’t be able to withstand a hit like this. Discretionary spending will (already has) started to dry up and we’re still 18 months away by many projections from having a true vaccine for Covid-19.
IMO people thinking this event coming to an end will be as quick as it started is irresponsibly optimistic as it’s clearly not the case. In the meantime many savings and retirement accounts (again, if any) are quickly being drained.
Last edited by VinceTheExplorer; 04-15-2020 at 07:41 AM..
And with many potential buyers now dealing with job losses, unemployment, foreclosures, repossessions and BK’s on their credit reports, reduced incomes and savings, plunging credit scores and loss of job security combined with known lender issues and stricter guidelines going forward for those who can actually still get a loan, the pool of qualified applicants and buyers will shrink considerably and force sellers to make drastic moves.
And these types of buyers were the ones who have typically been flooding the market over the last decade buying up homes on borrowed and remortgaged money resulting from a prosperous economy. In doing so they were driving up prices with their over asking and “sold in a week” offers, hence why the builders of $500+ sq ft homes in the area WERE NEVER selling homes worth their price to begin with if it weren't for the high demand / low supply market created by these same buyers.
You wont see drastic price reductions just yet as the economy is still shell shocked and people are still scrambling thinking a face mask and stimulus check will solve their issues. Give it 3 to 6 months when homes are going foreclosure / pre-foreclosure from homeowners and sellers falling behind on their payments and trying to quickly get out from under their homes. It’s unfortunate but inevitable, even here in TN and much more in AVL.
At some point, there's going to have to be some sort of grace offered by lenders and landlords.
What good does it do to foreclose on a third of the town? There won't be any buyers anyway. Sure, a landlord could evict someone, but with practically everyone sheltered in place and employment in the toilet, how many people are going to be looking for a new place to rent? Many prospective tenants are going to have similar financial blemishes once this is all over.
Quote:
Originally Posted by VinceTheExplorer
Remember though that being triggered by a health crisis and potentially losing 100k or more lives (just in the U.S.) was something never seen in 2008. The world economy has forever been altered by this event, and optimistic projections are saying a possible soft reopening of our economy by May / June with an unemployment rate well into the teens.
As we’re still unsure if this is best case scenario, what’s worst case then? Opening the economy by June just so tens of thousands of people die monthly in order for paychecks to start flowing again? That would be irresponsible IMO, and a true indication of just how desperate things are becoming.
Either way, employers will be wary putting themselves out there to be sued for spreading or exposing their employees to Covid-19, and meanwhile the average American savings won’t be able to withstand a hit like this. Discretionary spending will (already has) started to dry up and we’re still 18 months away by many projections from having a vaccine for Covid-19.
IMO people think this event coming to an end will be as fast as it started. Not going to be the case at all, and in the meantime many savings and retirement accounts (if any) are quickly being drained.
There is going to have to be a balance.
This level of shutdown cannot continue much longer - there are simply too many jobs being lost and too many people being plunged into poverty. It will be a standard/partial reopening, but it's got to happen. There will end up being some sort of balance between "acceptable casualties vs. the economy."
This level of shutdown cannot continue much longer - there are simply too many jobs being lost and too many people being plunged into poverty. It will be a standard/partial reopening, but it's got to happen. There will end up being some sort of balance between "acceptable casualties vs. the economy."
Saying this, if YOU were an employer and one of your employees after reopening caught Covid-19 and died, or spread it to a family with children and something unfortunately happened, how would you approach the situation and more than likely business ending lawsuit? Would becoming a statistic in the acceptable casualties list then matter to you once it hits home? Probably not.
This is what employers are ultimately thinking so forget paychecks as self preservation is king right now. Eventually a balance will come, but saying the economy will bounce right back or things have to be given to people is overly optimistic IMO. Plunging into poverty (aka living above ones means) was happening well before Covid-19 and this event simply brought it to the surface.
Last edited by VinceTheExplorer; 04-15-2020 at 08:42 AM..
"The important thing here is to realize that this economic predicament was triggered by a health crisis. The economic part is not a structural problem. In 2007, there was a structural problem. Banks were levered 40-1 and using our FDIC insured accounts as collateral. That structural problem caused great damage to our economy. Going into this, we didn’t have a structural economic problem. The economy was healthy. We were struggling to get to 3 percent growth, but we were on a good track."
"I see a very sharp contraction in the second and third quarter of 2020. Then we’ll start to see a rebound in the fourth quarter and then an enormous jump in the first quarter of 2021."
For what its worth, the US personal savings rate in February of this year was 8.2%:
Obviously that varies from household to household.
Let me preface my comments by saying that I'm someone who typically 'sees the glass half full'. Interesting Politico article, BUT the author makes several assumptions. First, that there will be a vaccine by early 2021 and second, that there will be a sharp economic rebound thereafter. I certainly hope there is a vaccine, treatment, cure, asap. Will there be a sharp economic rebound in WNC? I doubt it. The economy is tourism-based with many retirees and second homes. You can re-open businesses, but those businesses can't survive without a certain level of customers. Many small businesses operate on razor thin margins and even with some business pick-up will be unable to make it. Sadly, many will be unable to reopen. Retirees, especially, are likely to be slow to return to their pre-virus spending level. The second and higher-end housing market could be especially hard hit. Even if his assumption about a vaccine proves true, it's going to likely take a while for restaurants and tourism-based businesses to pick back up. Also, you have to remember where we were/are in the economic cycle. The real estate market in WNC, and particularly the Asheville area had gotten way too pricy, so even without the current issue, prices were due for a correction.
Let me preface my comments by saying that I'm someone who typically 'sees the glass half full'. Interesting Politico article, BUT the author makes several assumptions. First, that there will be a vaccine by early 2021 and second, that there will be a sharp economic rebound thereafter. I certainly hope there is a vaccine, treatment, cure, asap. Will there be a sharp economic rebound in WNC? I doubt it. The economy is tourism-based with many retirees and second homes. You can re-open businesses, but those businesses can't survive without a certain level of customers. Many small businesses operate on razor thin margins and even with some business pick-up will be unable to make it. Sadly, many will be unable to reopen. Retirees, especially, are likely to be slow to return to their pre-virus spending level. The second and higher-end housing market could be especially hard hit. Even if his assumption about a vaccine proves true, it's going to likely take a while for restaurants and tourism-based businesses to pick back up. Also, you have to remember where we were/are in the economic cycle. The real estate market in WNC, and particularly the Asheville area had gotten way too pricy, so even without the current issue, prices were due for a correction.
I think tourist areas like Asheville (along with NC beaches, etc.) will see a fairly quick rebound in tourist traffic. People have been cooped up for weeks and are longing to get away, but will be reluctant to get on an airplane. A place like western NC is well positioned to take advantage of that, imo. We'll see.
I think tourist areas like Asheville (along with NC beaches, etc.) will see a fairly quick rebound in tourist traffic. People have been cooped up for weeks and are longing to get away, but will be reluctant to get on an airplane. A place like western NC is well positioned to take advantage of that, imo. We'll see.
Do you really think so? I wonder. How many people will stand shoulder to should with a crowd for a music venue? Or sit in a restaurant where tables are tight or any one of a hundred other things we did BC (before covid) without much thought other than some people really need to bathe more I am anxious to get out but I know it's not going to look like the old normal and I really don't know what the new normal will look like or if I'll be comfortable going along right away. I don't have any answers but honestly nothing I've heard or read makes me think - aha! that's how we're going to do this.
Do you really think so? I wonder. How many people will stand shoulder to should with a crowd for a music venue? Or sit in a restaurant where tables are tight or any one of a hundred other things we did BC (before covid) without much thought other than some people really need to bathe more I am anxious to get out but I know it's not going to look like the old normal and I really don't know what the new normal will look like or if I'll be comfortable going along right away. I don't have any answers but honestly nothing I've heard or read makes me think - aha! that's how we're going to do this.
Hiking, camping, walking on the beach, taking in a great mountain or ocean view, fly fishing in a small trout stream, surf fishing, mountain biking, driving the BRP...lots of activities that can be enjoyed while practicing social distancing.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am anxious to get out but I know it's not going to look like the old normal and I really don't know what the new normal will look like or if I'll be comfortable going along right away. I don't have any answers but honestly nothing I've heard or read makes me think - aha! that's how we're going to do this.
