Comments by "Jeremy Barlow" (@jeremybarlow2291) on "Uneducated Economist" channel.

  1.  @Goodtimes4100  anyone waiting for a bottom is going to be disappointed, because it will not come. The average landlord can cut rents enough to keep their properties competitive and the people who are out of work for the most part are renters. Do you think the average Walmart worker owns their home? What percentage of those who do are married to someone else who is the primary breadwinner who is in an essential job or one that easily became work from home. Remember the Walmart worker still has a job, so does the McDonald's worker. What percentage of people working at Hot Topic lost their job? What percentage of those people owned a home? All of them lost their job, maybe one in 10k owned a home and they were the trophy bride of some middle aged lawyer who is still working as a DA. Who is still working? Homeowners. Who is out of work? Service workers at amusements and sit down restaurants, the cleaning staff at office buildings. There are maybe a million small business owners who were forced to close for good and those are the sellers in this market and a bunch of them will be renting their house before they go broke and moving in with their adult kids who are employed or their elderly parents to regroup. Some of them will move into a van while renting their house out. Some of them will keep their house as rental and take a crap job to pay rent somewhere else. There are a handful of mom and pop landlords who are overextended and there is mountain of REIT money waiting to buy them out. The people with a job who own a home, which is more likely than not 98% of homeowners are not seller's anymore. The homeowners who aren't working are on social security and this hasn't phased them at all. Their houses are off the market. Anyone who thinks this market is going down is wrong. There will be a market contraction. There will be less properties on the market. Market rents will go down, but sale prices are not going anywhere there is too much cash and credit is too easy for major players to consolidate against mom and pop landlords. Homeowners are not sellers in this market because it will be impossible to get top dollar, so market contraction is coming.
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  10. I just apply the Walmart parking lot test. In February my local Walmart parking lot was full up from about 6am to about 8pm most days. Now it is about 1/3 or 1/4 full even at the noon rush and it is the only store open for the most part. I also apply the Texas Roadhouse/Olive Garden test. In February you had a 30 to 50 minute wait to get a table at either restaurant all the time. Even at 50% seating capacity today I can get right in at either place and about 1/10th of the 50% capacity seating is empty. There is no demand in the economy. I also apply the Lowes test and it's parking lot was usually at about 80% capacity most days. Now when I go there at best it is at 50% capacity and mind you people have a lot of time on their hands to do yard work and to fix the problems in their house, but there is still very low demand. There is zero demand in the economy right now and even though most people are sick and tired of being cooped up, they are fearful to some degree of getting sick or getting a family member sick and causing their demise. They also in large numbers have serious economic concerns because they are unemployed or a family member is unemployed, or they have a job that they fear will be eliminated. This even includes people like my sister who is a tenured public school French teacher and the only French teacher in her school. She wonders if the school will re-open at all in September and this is a rural school without 100% internet access for it's students. Online and distance learning was not working for their district very well. She is also concerned that with the dried up tax revenue that the French language program may be eliminated and only Spanish will be offered as a foreign language. She is fairly certain that the Mandarin language offered at her school through an extension program with the Board of Cooperative Educational Services will be eliminated because it has the smallest number of students and it will save a lot of money for the school if it is eliminated. If tenured public school teachers are worried about the potential for unemployment, there are plenty of factory workers worried. Hell the local hospital laid off staff in the middle of a pandemic because the lack of elective surgeries put them tits up, so you tell me.
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  12. Nobody has any fucking money. The last time that happened was in the 1930s. That was deflation. It's gonna happen in a big way following this mess. If you are the CEO of a company that produced more with it's telecommuting workforce how are you going to justify $100k a month in office space rent and overhead to your board? You are not and your workforce will remain telecommuters. There goes the commercial real estate prices. Oh so those office workers who now work from home aren't out to lunch with co-workers at the restaurant anymore so the restaurants aren't making any money and they closed up shop. Hmm, commercial real estate takes another hit. The loss of servers hurt the already struggling retailers and the mall closed along with a whole bunch of other stores. Oh, so commerical real estate takes another hit. What do you mean you are not renewing your $3000 a month lease here in San Francisco or New York City? You are moving to West Podunk Nowhere because you are afraid you could get sick in the next pandemic if you live in the city and you can buy a house in the country fro $75k. The house was $150k before all of the foreclosures brought on by the pandemic. Oh, seven of your other co-tennants in this apartment building who all telecommute are doing the same thing? Shit, I'm gonna have to lower the rent. Housing costs are gonna drop through the floor in cities around the country because of telecommuting and the loss of service work and retail and restaurants. Nobody went out to the new Avenger's movie because they are afraid they would get sick. They will pay $25 to watch it at home on their big screen, but they aren't going out to the theater even though it re-opened? Shit, AMC was already bankrupt now you are telling me 500 small indie theaters and Regal are in bankruptcy too. What do you mean no one is buying new shirts and we need to close down the line in our new Vietnam facility. Nobody is spending any money because 30 million people are out of work. What do you mean that government workers had to take a 15% paycut because the city doesn't have enough sales tax revenue to pay it's workforce. That is literally the headline from my local paper today! Deflation is gonna hit in a big frigging way!
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  23. Asset appreciation is gone. Cars are worth less, houses are worth less, automation and productivity increases have made most consumer goods cheaper and cheaper. Demand destruction has crippled the energy markets. Oil storage facilities are at capacity and idled plants and office space has reduced the demand for coal fired power. The negative interest rates caused by the Fed makes borrowing money cheap, but the consumer is maxed out and jobs are scarce, so they are not taking on more debt. Without consumers businesses have no reason to take on debt risks even if money is cheap. I mean would you buy a new 737 for your airline right now? Hell no! So what do you do with cash on hand? You hold onto it. Market disruptions from a lack of available labor because of the health risks and government regulations as well as stockpiling of food for the lean times is artificially inflating food prices and naturally inflating food prices all at the same time, but food is relatively abundant. Because of demand destruction in restaurants and packing plants crippled by illness food costs are inflating, but that is relatively temporary. Of course the velocity of money has slowed to a crawl. No one will invest in this environment because consumers know they can buy more car with the money in their pockets two months from now than they can buy today because inventory is only going up because there are no buyers. The same is true for houses. Businesses know that they can buy more office computers in six months than they can buy today for less money because there are no buyers. They also know in six months they will be able to get better workers for half their current rates, so why hire now when their money will get better people in six months. Deflation is inevitable for those reasons alone, but when you add in the fact that six months from now there may still be lockdowns because there is no cure, we could have yet another virus emerge as a pandemic too because of the interconnected supply chain, and all of those risks to normal consumption, no one is going to spend. The smart move is to keep your cash in a safe hedge against inflation, deflation, and otherwise. Why do you think Bitcoin and gold are both rising, they are both good hedges against the money printing spurring inflation which the average thinker believes will happen, but they are a good hedge against deflation too because they are more finite than dollars and are essentially a currency in and of themselves both historically and literally today. I mean 70% of the biggest e-commerce sites accept Bitcoin and other altcoins for purchases. A lot of international transactions when not payable in dollars are payable in gold. As the reserve currency of the day, the US dollar is probably the next safest currency aside from gold and Bitcoin to hold right now, but what if the Saudis stop pricing oil sales in US dollars? What happens to the dollar then. Hedging against that with gold or Bitcoin is a smart move right now, but it doesn't change the deflationary pressure on most of the stable world currencies. There is a reason Bitcoin has gone up $2400 in the last month and gold has gone up $200 an ounce in the last month while the dollar to euro conversion rate is essentially flat during the same period.
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  28. Blue states typically pay more into the federal government in taxes than they get back and typically have a higher GDP workforce per capita. The highest per capita GDP is NY at about $95k followed by California and New Jersey. The blue states are the most productive and pay the most taxes. The "dependent" states with the highest percentage of poverty, lowest per capita GDP and highest instance of people on welfare are typically red states like Mississippi and Kentucky. The problem is that the hardest hit states are these highly productive states. When you shutter a company that makes $20 million a month and pays out $15 million a month in wages, that crushes the states income and sales tax base. I mean California and New York's payrolls from film and television production alone are probably higher than the GDP of Montana for example and those industries are shuttered. The sales and income tax revenue lost from that shuttering is crushing for municipal governments in those states not to mention the state government. A city in my region is asking it's workers to take a 15% paycut because of the loss of sales tax revenue. During the 2008 recession my friend who is a local government attorney in a county in Northern California had to take a 15% paycut and just got back to his 2005 salary from before the cut last year and the pay raises scheduled for the next 3 years would have brought them back to similar pay rates for other government lawyers in California. They are already talking about asking for another paycut there. He will literally have had no pay increase for 20 years in all likelihood before this is done.
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  30. I can only tell you about the slow rolled re-opening by region here in NY. We have 7 criteria. 30 case tracers per 100k people -so we can do what South Korea has done with testing to slow the spread with follow up tests for those exposed and quarantining potentially infected individuals. 14 day average declining hospitalizations or 3 days with less than 15 new hospital admissions, 14 day average declining deaths or 3 days with less than 5 deaths total, an average infection rate per new case of less than 1.1, at least 30% available ICU bed capacity, at least 30% of all hospital beds available for COVID-19 patients, and at least 30 tests per month per thousand people available which in my region with about 700k people translates to 419 tests per day on average for 7 days to mean we have the testing capacity to do South Korean styled tracing and testing to prevent the spread. There are 4 of 10 regions in NY state that have met re-opening criteria. A fifth region is likely to meet the requirements tomorrow because they have ramped up testing which is the only thing they lacked. 4 out of 10 regions have met 5 of 7 criteria with hospitalizations and deaths being the area where they are lacking. For NYC region they have met only 4 of 7 criteria. These criteria being met after Friday will allow construction projects, curbside retail, wholesale sales, and manufacturing businesses and drive-in movie theaters to reopen for 2 weeks during phase 1 in a region. If any of those criteria fail, but particularly the case infection rate rising over 1.1 new cases for each person who tests positive, lockdown begins again. Phase 2 starts two weeks later if that first phase is successful. During phase 2 in office professional services like accountants and lawyers will be allowed to reopen. Phase 2 allows retail to reopen their stores for more than curbside pickup. It also reopens realtors, insurers, and administrative offices. A lot of small retailers are unlikely to reopen during this phase despite the go ahead because the costs of outsourcing a cleaning if there were a case in store would be prohibitively expensive as it will likely need to be outsourced. Professional services reopening in phase two in NY will likely include barbers and dentists too. Phase 3 will start two to four weeks after Phase 2 in NY regions and that will allow restaurants to reopen with social distancing rules, but it will also allow hotels to reopen gyms and pools, and in house dining and other common area facilities. While rooms have been available as essential services, most of these aspects of hotels have been closed. Phase 3 will allow public gyms to reopen. Phase 4 which will come two weeks to a month later will allow arts and entertainment venues and schools to re-open with distancing rules in place and all of this assumes masking which I don't understand how masks work in a bar or restaurant, I mean how do you eat through a mask, but anyway, big events and possibly big attractions like the state fair or a live concert or a major amusement park like Darien Lake or the Great Escape, the biggest amusement parks in the state are unlikely to be able to re-open unless the entire state has entered phase four. Now there are 7 counties in my region of the state and it is one of the regions that will be allowed to start phase 1 reopening on Saturday. It already is home to the largest single employer in the state the Fort Drum military base which employs more than 20k soldiers and civilians which has been open the entire time. The county with that base is my home county. It has had 68 total cases in the last two months with more than 110k residents. There are currently 3 active cases. The county next door with 26k people had 11 total cases in the last 2 months and is home to the largest farm in NY state which had remained open with several hundred employees and a Kraft plant where most of the Philadelphia Cream Cheese for the US market is made which has also remained open with several hundred employees. There is currently 1 active case in that county. The other county next door has 110k people and it's home to Alcoa's largest plant in the US which was essential and has remained open with a couple thousand employees. The region is also home to multiple paper mills which have been deemed essential and remained open throughout. There was a major outbreak in a nursing home in that county. About 185 total cases in that county and it has less than 30 active cases with the rest recovered. In these 3 of 7 counties only 2 people died during the last 2 months. The county with 185 cases was the worst of the seven. One of the seven counties only had 3 cases and it only has 4k people. No other county amongst the 7 had more than 70 cases total. Similar numbers are true for the Southern Tier region. There are bigger numbers in the Mohawk Valley region and Finger Lakes regions of the state which will also reopen, but only because Utica and Rochester are larger cities which out them at higher case counts, but still low per capita. The Central NY region which is also likely to be able to open on Saturday has higher numbers because of Syracuse and an outbreak amongst migrant workers at a large scale Greenhouse. This didn't happen at work, but rather because they were sleeping 4 to a motel room at 4 hotels in the area outside of their job. The cleanup for the hotels was exceptionally costly. I guess what I would say is that some states are taking a slow and cautious approach, but honestly, the numbers from Sweden which never shuttered tell me the entire exercise was a complete waste of effort. The death rate is marginally higher, but the infection rate is not overwhelming just by practicing distancing. If case tracing and follow-up testing is part of the re-opening regime, South Korea has shown that can be an effective way to stop the spread.
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  31. Georgia reopened restaurants and nobody came. What is more when the CEOs start running numbers and they find out that a ton of office workers were more productive at home, they won't be able to justify $100s of thousands of dollars a year in commercial rents and real estate expenses to their boards. When that happens the commerical office space market is going to crater. A large part of the workforce will work from home from here on out. That long term will kill the lunch business at a lot of restaurants. Office workers travel in packs to casual dining at lunch and fast feeders. The end of office life is going to kill that and a lot of restaurants will die because of it. This disruption will have long term impacts most people aren't thinking about. I mean what percentage of coders who will soon be telecommuting all of the time, or telemarketers who will work from home, or debt collectors who will work from home, or even secretaries who will work from home in the near future because companies will eliminate office expenses, are going to move from places like NYC and San Fran with high rents to West Podunk Nowhere when they can get 5x the space for 1/4 the price and their job no longer cares where they live? What percentage of them will make that move not only because it is cheaper, but because they do not want to be in a zone like a major city with it's risk factors in a future pandemic? A lot and that is going to deflate real estate prices in cities as much as the loss of commerical rents from offices and restaurants. When those workers leave it is going to crush retailers who are already hurting even more. The changes this will cause will be so massive most people haven't even begun to think about the rsl long term effects.
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  38. You can create all the money you want. If it isn't in the hands of consumers/workers ie purchasers, that money is not going to create new demand for products. The problem is that despite all of this money, the demand for everything from oil, to housing, to food, clothing, electronics and even films has dried up. That means we are overproducing. Milk isn't being dumped without cause, it is being dumped because there is no demand for milk or dairy products. Oil isn't filling storage tanks to capacity and filling tankers without port for no reason, it is happening because there is no demand. There are some supply shortages due to the illness, but they are the exception, not the rule. The reason people are protesting to reopen the economy is because a lot of small businesses that employ them will be gone if they are not reopened immediately, and even if they reopen a lot of them will still be gone within two weeks because consumers have no money, or if they do have money, they have no desire to put their health at risk to spend that money. Georgia reopened restaurants and nobody came. There will be plenty of people ready to go get s haircut because they really need one if they or a family member weren't able to cut their hair, but there are plenty of people who won't spend that money today when they don't know if they will have the rent, mortgage, or car payment tomorrow, let alone money for food. Even with unemployment. Even if they are actually employed in what should be a safe secure job, like a firefighter, or a cop, a prison guard, or a teacher, or even the fucking post office. The local city government is asking it's workforce to take a 15% paycut to avoid layoffs due to the loss of tax revenue. My friend who was a public defender took such a cut in the 2008 recession and he finally got back to his old wage last year and they voted in a new pay hike on their negotiated contact which over the next 5 years would bring them back to normal for lawyers in their region. That pay raise is gonna be gone and they are gonna get another cut and he is going to be back to the payrate where he started at 15 years ago. My sister is the only French teacher in her school district and she is worried that in addition to Chinese which is outsourced to BOCES a unified School resource for vocational and other education for multiple districts we have in NY, that because there are about 2/3 as many French students as Spanish that her job is going to go away because of the decline in state aid due to a lost of income and sales tax revenue. She just hopes it doesn't happen before November because in November she is supposed to be eligible for loan forgiveness. Despite paying her student loans for 12 years, the first two the loan forgiveness program wasn't made available to her, she owes as much as she borrowed still, which means she has been working for nearly free for 12 years. She has paid the interest and paid for the reliable car she needs to get back and forth to work. She has lived at our parents home because she can't afford her own place and if the loan forgiveness goes away, she is ready to riot because this system has screwed her over so badly. I mention that because this is why we have deflation. No one is going to spend anything with these daggers hanging over their heads. This means we have and will continue to have overproduction. Everyone was already overextended on credit BEFORE THIS HAPPENED. We had massive default rates on commercial mortgages, auto loans, student loans, mortgages, and credit cards. This has exacerbated defaults on small business loans, commercial mortgages, commercial rents, mortgages, rents, credit cards, student loans, and all debts. That means it doesn't matter how much money the Fed pumps into the banks, there are very few people, even those with strong balance sheets willing to take on new debts right now because we have an oversupply of most goods, commercial property, and housing in terms of the ability for that housing or commercial property to generate revenue anyway. The big problem in commercial real estate at least office space is going to be that a ton of companies as a result of this are going to examine the expense of commerical office space and conclude it is an expense to eliminate because their work force was as productive if not more productive from home. I mean would you spend $50k or more a month for office space, insurance, and utilities for that space when renting 3 servers in a data center and setting up a VPN for $600 a month allows your company's staff to work from home and make just as much money and do just as much work as it always has during this pandemic? Hell no, your board of directors won't allow you to waste money like that going forward. Commercial rents are gonna fall through the floor. That is not discounting for the loss of retailers that will be liquidated as a result of this shuttering. Are you really gonna risk your life to go to Best Buy for a USB charging cable for your phone when you can get one to your house tomorrow or the next day from Amazon even if those stores reopen tomorrow? Hell no, because you are rational. There were thousands of stores at risk of bankruptcy BEFORE this happened, they are not coming back from this mess. That is millions of jobs that will be lost. This is only going to accelerate R&D for trucking companies and car services looking to have self-driving fleets of vehicles. It is also going to lead to a massive migration of work from home office workers to rural America. Do you really want to live in a city which had a higher likelihood of contagion during this event, knowing that another one IS VERY LIKELY TOO HAPPEN SOON, because of the interconnected nature of the world economy today? The shocks this is going to cause to the system will be felt for at least two decades as the shakeout continues. Think about this too, I mean if you are making $40k, $50k, $200k living in San Francisco or New York City, or Chicago, or Austin and paying outrageous rents or a high mortgage and you can move to West Podunk Nowhere and buy a house for $150k two months ago, but buy it for $95k in six months following the coming foreclosure wave and your job is now entirely remote from home because the business has gotten rid of the commercial office expense, are you going to keep paying high rents when you can own a nice house in the middle of nowhere that puts you at lower risk of getting sick? Now discount for the people who have family in those small towns. Brain drain from rural America to the cities has been massive during the last two decades. This is going to change politics in a big way in the near future too as demographics are going to shift. Think about the knock on effect from millions of square feet of office space going vacant and office workers working from home will have on the restaurant business. Are you going to drive to McDonalds for lunch when you are working from home as an office worker and you can have a good meal in your kitchen? Are you going to go to the sit down restaurant with a bunch of co-workers you don't go into an office with anymore? No! Even if you don't discount the restaurant business for the illness, I've had 3 take out restaurant meals in the last month and a half and I usually have at least 3 meals a week at a restaurant or more, so they are crushed in general right now and one of those meals was an Easter dinner deal that the restaurant provided a prime rib meal to be cooked at home at a massive discount on acting a grocery because they had too much meat. Point being, the illness is going to crush restaurants for the next several months at least and the change from commerical office space to work from home is going to be permanent for a lot of businesses as a cost saving measure which will hurt restaurants even more. If movie theaters reopen they won't get new product until they can all reopen. Let's be honest, they are not going to reopen anytime soon. Even if they were to re-open I don't know that Hollywood will be producing content anytime soon because it is going to be hard to convince millionaire actors and directors to risk their lives to produce a movie. There will be a glut of animation because that can be made on home computers and via remote render farms in data centers with VPNs for studios and with voice actors recoding themselves on a computer in a closet turned into a vocal booth in their home, but there are not going to be a lot of live action films made in the next year or more unless it incorporates face masks and the current state of the world. There may be some TV shows like cop dramas that do that, but family sitcoms are out. Are you wearing a mask in your house with family? Hospital shows would be cool with masks always on the characters, but it will end all of the steamy love triangles. Anyway, the bigger point is that we are in massive oversupply mode and the dollar in hand is king right now. No one wants to borrow the money being printed. Cash is king and the dollar in your hand today will be worth what cost you $10 today in six months, so you are going to keep that dollar and make it go further tomorrow if you are smart.
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  49. I'm glad that during all of this my neighbors and I have not been building a fence, but well I take that back, we did put up a fence, around the garden we tilled and planted together to keep the critters out. Of course that fence is wire and steel post though. We also cleaned up each other's yards and helped put a new walkway in for one neighbor. I mean a koi pond that one neighbor hasn't had time to maintain since the family member who maintained it died now has a nice lawn they can maintain in its place thanks to the work we've done to help each other. We will have carrots, potatoes, beans, radishes and plenty of other veggies thanks to that garden. We should have enough potatoes to keep a lot of us fed all winter even if things get worse and there should be enough beans to give us all a lot of meals too. Oh, and here in Upstate NY we have a fairly big logging community -my uncle was a logger and a couple of my father's friends owned substantial logging companies. We have a lumber Mill here too that is locally owned. It has been idle since March and it has the same product sitting in it's yard that hasn't moved. There may be price demand, but the genuine demand isn't enough for the local Mill owners to re-open and this is a mill that has always paid minimum wage. My cousin's neighbor had worked at that Mill for years making peanuts and when he finally found a better job it was one of the happiest days of his life. What I am telling you is you have called this correctly sir. It is entirely market manipulation and it is worse than that because they won't pay what they are getting for their futures contracts to the actual suppliers.
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