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HoarfrostHubb

Coronavirus Economic/Financial/Jobs thread

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On 3/26/2020 at 9:38 AM, ORH_wxman said:

For comparison, the worst week we saw during the Great Recession was around 650k and those numbers didn't happen until well into the crisis....spring 2009. During the bloodbath in fall of 2008, we typically saw weekly unemployment claims in the 400-500k range.

Just the restaurant industry alone has 15 million employees in the United States and that has been completely shut down except for a few folks doing take-out and fast food restaurants still open but not allowing in-store dining.

I think that's the 2nd biggest employed group in the US....the food/beverage service industry.

Shutting that down on its own should put unemployment above anything we've ever seen before.   Then toss in the associated hospitality industry and it's massive.

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1 hour ago, Drop the Trough said:

AGI has nothing to do with social security taxes, that make no sense, sorry.

The only time your federal wages are reduced on your w-2 is if you have pre-tax deductions say for heathcare, pension or 401k deductions. In these cases, your social security wages (and often state wages)would be higher, but your actual FICA payments do not redue your wages for your tax return.

if they are using AGI for the check, it is calculated using your federal taxable wages on your w-2, then adds taxable, interest, dividends, capital gains ( or subtracts losses up to 3k) etc, then adds or subtracts rental real estate income/losses then a host of other small items, this is your AGI for tax purposes. some people still itemize, so it would net that out too.

Yeah you are correct....I was being an idiot. Really, I should have just said "don't pay attention to the line that says SS wages", you want to pay attention to the line above it as your starting point before the above-line deductions kick in....that line above is your SS wages minus the 401k contributions, health insurance, etc.

Or to make life easier...just check the 1040 form for AGI. They changed lines on it between 2018 and 2019 though IIRC. I think it's line 7 on the 2018 form and line 8b on the 2019 form...so depending on which one the IRS is using for you, that's the number they'll go on for income threshold.

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23 minutes ago, Whineminster said:

Sooooo how we paying for this 2T bill?

Probably in higher prices for everything a few years down the road.

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12 minutes ago, butterfish55 said:
41 minutes ago, Whineminster said:
Sooooo how we paying for this 2T bill?

Probably with more tax cuts for the rich

Gas tax

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41 minutes ago, Hoth said:

Probably in higher prices for everything a few years down the road.

Yeah this is the correct answer plus probably restricted growth for the next generation. Eventually inflation will rear its ugly head. But at least for now it remains low. 

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14 minutes ago, ORH_wxman said:

Yeah this is the correct answer plus probably restricted growth for the next generation. Eventually inflation will rear its ugly head. But at least for now it remains low. 

Not saying it WON’T happen, but a gigantic rise in core inflation was predicted after actions to staunch the Great Recession. I don’t think it really ever showed up since we have stayed near or below 2% since. 

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59 minutes ago, Lexclone said:

Not saying it WON’T happen, but a gigantic rise in core inflation was predicted after actions to staunch the Great Recession. I don’t think it really ever showed up since we have stayed near or below 2% since. 

Yeah we’ve been fortunate that it hasn’t yet. But it always does come back...even if it stays low for a 2-3 decades. 

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10 hours ago, powderfreak said:

Just the restaurant industry alone has $15 million employees in the United States and that has been completely shut down except for a few folks doing take-out and fast food restaurants still open but not allowing in-store dining.

I think that's the 2nd biggest employed group in the US, food/beverage service industry.

Shutting that down on its own should put unemployment above anything we've ever seen before.   Then toss in the associated hospitality industry and it's massive.

Ding 

Then a sprinkle of everything else where you can’t work from home 

malls , and most retail employees , construction . 

Unprecedented and unparalleled in a developed world and its going on in several countries 

25-30 Annualized drop in GDP 2’nd Q seems like a moderate guess

You know it’s bigger than anything bc we have 1200$ checks on the way (there will be more of em announced ) and a whopping 600$ extra every week for everyone collecting unemployment. Impressed ...now I’m wondering what more they can do to ensure their is a fairly decent private sector by the time we are restarting. 

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6 minutes ago, STILL N OF PIKE said:

Ding

Retail stores 

Then a sprinkle of everything else where you can’t work from home 

The unemployment aspect of it is truly crazy to really think about.  The scale of it... the highest employment number industries in the United States have just been stopped. Then like you said, throw in all of the small businesses that are also trying to save themselves in all industries and can't work from home... its something that this country has never seen.  Even if for a relatively short duration of a month or two, this is insane.  But residually, higher unemployment is going to last for a very long time after it comes back, if and when it does.

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11 minutes ago, STILL N OF PIKE said:

Ding 

Then a sprinkle of everything else where you can’t work from home 

malls , and most retail employees , construction . 

Unprecedented and unparalleled in a developed world and its going on in several countries 

25-30 Annualized drop in GDP 2’nd Q seems like a moderate guess

You know it’s bigger than anything bc we have 1200$ checks on the way (there will be more of em announced ) and a whopping 600$ extra every week for everyone collecting unemployment. Impressed ...now I’m wondering what more they can do to ensure their is a fairly decent private sector by the time we are restarting. 

You’ll have to spend another trillion on unemployment expansion after the 4 months is up. The current unemployment is already gonna cost them between 300-400 billion most likely. 

Then you have to worry about propping up small businesses who are getting no revenue but have to pay rent and outstanding loans that finance their operations. If you just let all those go bust, then you are looking at the commercial real estate version of 2008 except at a much faster speed. 

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20 minutes ago, STILL N OF PIKE said:

Ding 

Then a sprinkle of everything else where you can’t work from home 

malls , and most retail employees , construction . 

Unprecedented and unparalleled in a developed world and its going on in several countries 

25-30 Annualized drop in GDP 2’nd Q seems like a moderate guess

You know it’s bigger than anything bc we have 1200$ checks on the way (there will be more of em announced ) and a whopping 600$ extra every week for everyone collecting unemployment. Impressed ...now I’m wondering what more they can do to ensure their is a fairly decent private sector by the time we are restarting. 

If anyone’s unemployment ever gets approved. My wife and her 20ish coworkers haven’t gotten a penny yet and most of them can’t even complete the process.

My wife finally got someone on the phone Saturday and after all of that, the person she spoke to didn’t even make the correct amendments to the application, so she’s been in limbo again all this week waiting for another call back. 
 

With the influx of people, I wouldn’t be surprised if it’s weeks or even months before most people see a benefit 

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Those banks with huge derivative exposure are in big trouble again , gotta believe Mr. Mnuchin knows this well.

Hasn’t been mentioned but his record prior to Treasury as the CEO of one West Bank  was “spotty” to say the least. Anyhow Mnuchin is nothing new and not the real issue at this time .. Those AIG “like “companies about to become destabilizing corpses maybe an issue 

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When figuring how man are unemployed and what it will cost...how is the percentage of unemployed calculated? Is it based on the amount of people we know who are employed, or is it based on the potential workforce number? 

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2 hours ago, CoastalWx said:

When figuring how man are unemployed and what it will cost...how is the percentage of unemployed calculated? Is it based on the amount of people we know who are employed, or is it based on the potential workforce number? 

Unemployed = how many people are looking for work but not employed....so they don’t count retired folks, disabled, home makers, or even the 24 year old stoner who plays video games in his parents’ basement but doesn’t look for work. 

Then to get unemployment as a percent you divide unemployed number by total workforce (employed plus unemployed).

During bad times, the potential workforce can go down because frustrated unemployed workers might stop looking for work and decide being the home maker is a better option, etc...so the workforce actually shrinks. That happened after the Great Recession for a while. They track that through “Labor Participation Rate”. It’s the percent of people who either have a job or are looking for one. 

 

 

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Ahh ok. Thanks Will. I remember reading that awhile back. Good point about the shrinking work force throwing off the numbers during bad times. 

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We underemployed this week.  Putting in 20hrs max.  Boss is playing this week by week as the workload for some projects is still there and we are getting paid for past work.  He’s gone to COD right now so we don’t get stiffed.  There will be some clients who will and there is basically no recourse to recoup that lost revenue. See how my claim goes.  I need to provide some backing information on dependent but other then that the online application was pretty simple.

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20 hours ago, CoastalWx said:

Ahh ok. Thanks Will. I remember reading that awhile back. Good point about the shrinking work force throwing off the numbers during bad times. 

The cute thing about the most frequently cited  unemployment rate and the workforce participation rate is that if you are unemployed for more than 6 months they stop counting you as “unemployed “. Ya lol... you are no longer counted as being in the workforce after 6 months unemployed (it’s ASSUMED you stopped looking for work hahaha) so it’s extremely hard to keep the unemployment rate high for long ...bc if millions of unemployed  can’t find jobs after 6 months ..we just won’t count em. Which is why we had a wonderful recovery after 2009 recession but for some peculiar reason the work force participation rate fell significantly..cute . 

This sudden stop is gonna blow the freakin doors off unemployment % records bc everyone is losing jobs within a month of each other 

 

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Capital One had to be bailed out of a bad swap position on crude oil. 

Its not making much news right now for obvious reasons, but the domino effect of financial problems is going to outlast the virus scare by quite a bit. 

Overseas is going to be even worse...Europe’s horrendous economic situation could single handedly put the globe into a longer term recession. But they will have plenty of help...China is an obvious one. 

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One of the huge problems with the situation is trying to get the data. Leading economic indicators can give us a look at how healthy an economy or sectors were going into this. But it’s super hard trying to figure out how to price in the uncertainty.  

We all need current data at least to try to get a sense as to how much is being put on hold. Compiling and releasing data is probably pretty low on most organizations lists at the moment. We then look at lagging economic data but that doesn’t help anyone accurately predict now. It’ll help start to predict future weeks and quarters.

It’s like looking at the sky now and saying “It’s dark but I think it’s going to rain for a while.” 

Central bank watching will take on a whole new intensity.

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Any guesses about unemployment claims this week?  I read that PA is similar to last week and some areas more than last week.  Still long waits to file claims in overwhelmed offices.  Maybe breach 4M?

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If market can weather next 3 weeks ..we should have a nice Buying opportunity. I would hold off on saying amazing bc I am just not certain how traumatized the public spending and behaviors will be after the Virus numbers and deaths dramatically decline in x weeks/months 

Looks like daily new cases MAY have peaked in Italy and daily deaths look to peak in 3-4 days based On the worldometer.info site 

if USA follows a time frame where they peak in daily new cases in 2 weeks and daily deaths in 2.5 ...we will probably have less than 50,000 deaths .

The pace of the eventual daily death decline out of  Italy will also be very important to gauge general slope here and we should fair slightly better due to a younger population, a better corporate response to crowded hospitals , and likely Americans would prefer to social distance compared to Italians who are very “hands on “with each other .

Ive been more right than wrong on this for the last two weeks regarding economic severity , real positive case numbers(much much higher due to extreme lack of testing / only severe cases tested) and real death rate (much lower factoring in all mild and a symptomatic’s not tested ) . These are painfully obvious. People seem upset to hear this good news for some reason and revert back to the comfort of the worst case numbers always mentioned (so you take this serious and stay indoors ) (which we need to do ! ..primarily to protect the elderly and the ill prepared or equipped hospital system capacity)

The daily new case numbers  out of Italy plateauing  are very encouraging Very much so . There is always a chance Of another spike due to potential inconsistentcy’s in daily tests given (and thus daily new positives) but thats waning . This good news very likely  makes the “worst case scenario’s w death totals” using numbers over a million...appear borderline fear mongering in order to keep the public following guidelines that are rightly in place 

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On 3/28/2020 at 8:00 AM, STILL N OF PIKE said:

Those banks with huge derivative exposure are in big trouble again , gotta believe Mr. Mnuchin knows this well.

Hasn’t been mentioned but his record prior to Treasury as the CEO of one West Bank  was “spotty” to say the least. Anyhow Mnuchin is nothing new and not the real issue at this time .. Those AIG “like “companies about to become destabilizing corpses maybe an issue 

Mortgage industry has cracks in the hull. 

https://www.mbshighway.com/mortgage-crisis.html

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3 hours ago, TheCloser24 said:

Does anyone know how unemployment works under the new stimulus bill?

For payment, it works the same way as regular unemployment except you get an additional $600 per week on top on your regular unemployment through July I believe. I’m not sure when that extra benefit starts though. It will probably vary depending on state as they have to update their systems to produce the 600$ per week extra. 

The other difference is that more people will qualify for unemployment like independent contractors, etc. 

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4 hours ago, TheCloser24 said:

Does anyone know how unemployment works under the new stimulus bill?

At least in MA they've also waived the requirement of you submitting weekly evidence that you've been looking for work, if you've been laid off due to the virus.  You are supposed to be staying in touch with your former employer and be available to go back to work should they reopen.  They've not been requiring proof of either at this time.

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