Coronavirus Economics/Finance

gkantziper said:
I was thinking about our conversation from a week ago. Just wondering if you have changed your opinion?
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No, I repeat my questions to you:

1. So explain how we can "get back to our lives" by having a lockdown. What do you think will happen after the lockdown?
2. And why have "hurt" between quotes, the hurt from lockdowns is very real which even $6 trillion of funny money can't fix!

You still have not answered them!
 
Cary Knoop said:
No, I repeat my questions to you:

1. So explain how we can "get back to our lives" by having a lockdown. What do you think will happen after the lockdown?
2. And why have "hurt" between quotes, the hurt from lockdowns is very real which even $6 trillion of funny money can't fix!

You still have not answered them!
Click to expand...

I'll give you another couple weeks and get back to you. Did you watch the interview with the Dr.?
 
Does anybody have any idea how this US CARES act unemployment coverage is going to work for us freelancers is going to work? Frankly, I don't see how it doesn't become a complete mess. I work under a mix of W2's under my SSN and 1099's under my TIN, but all of the work is freelance videography that is cut off. Will I need my W2 employers to officially furlough me? Will the guidelines be based on gross income? Net income? I can't figure out how I would calculate my own loss of income, so I have no idea how the federal government would come up with an answer. Right now, I am holding off on filing my taxes until I figure out how that will affect how I qualify.
 
I’m in a similar boat as cpreston. I have a client that W2’s me, but I’ve been incorporated for a few years now and most of the income comes in to/through the company, so it’s all a mix and a mess between W2’s, 1099’s, the company and me. I called my accountant yesterday and found out I do pay unemployment tax, but he has no idea about any of this assistance/coverage for us, because I’m his only client that does this. He said he was going to have to do some checking and digging. I’m not holding my breath, but I don’t want to leave money on the table, especially with the nature of what I cover, because it’s not going to be “made up later”, the events, coverage and therefore money are gone forever.
 
Just file. Every freelancer, independent contractor I know has. What do you have to lose? Our EDD system in California is definitely NOT setup to deal with us freelancers and ICs so we had to get creative with the notes. We'll see what they will pay
but at this point, I had nothing to lose in filing and everything to gain. Also going to file for an SBA loan with forgiveness, have yearly things like equipment insurance due soon with no way to pay it.
 
I think I read somewhere that the unemployment comp is going to be based on your last years earnings, but it's also subject to different state laws.

I really doubt this is going to go smoothly for any freelancer, or in a timely fashion. If some people aren't going to even get their $1200 relief check until September, which you would think would be the easier thing to accomplish. Also given that banks are saying they are expected to give out small business loans next month, but they've received almost no guidance whatsoever about the rules or how/when they will be compensated for doing so.

As far as shutting down everything so we can flatten the curve, I'm all for it. But the truth is that half of everyone in the US is paycheck to paycheck or so leveraged that they can't go for more than a couple of months without serious economic consequences. So there will need to be more action from congress, including something preventing evictions and pausing mortgage payments, otherwise an extended lockdown can't work. And I predict that it won't, there's nothing about the current political dynamic that would suggest the whole country is going to suddenly unite to take the kind of measures we're seeing in some European countries to keep everybody afloat.
 
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mothmachine said:
I think I read somewhere that the unemployment comp is going to be based on your last years earnings, but it's also subject to different state laws.

I really doubt this is going to go smoothly for any freelancer, or in a timely fashion. If some people aren't going to even get their $1200 relief check until September, which you would think would be the easier thing to accomplish. Also given that banks are saying they are expected to give out small business loans next month, but they've received almost no guidance whatsoever about the rules or how/when they will be compensated for doing so.

As far as shutting down everything so we can flatten the curve, I'm all for it. But the truth is that half of everyone in the US is paycheck to paycheck or so leveraged that they can't go for more than a couple of months without serious economic consequences. So there will need to be more action from congress, including something preventing evictions and pausing mortgage payments, otherwise an extended lockdown can't work. And I predict that it won't, there's nothing about the current political dynamic that would suggest the whole country is going to suddenly unite to take the kind of measures we're seeing in some European countries to keep everybody afloat.
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Maybe we won't do what Europe is doing - but supposedly there is a 4th congressional rescue package in the works.

Please anyone who has success filing for unemployment let me know how it goes! I've been trying to file for the last few days in NY but the site is bogged down. Tuesday is the day for my last name letter of the alphabet, so I'll try again then...
 
puredrifting said:
Just file. Every freelancer, independent contractor I know has. What do you have to lose? Our EDD system in California is definitely NOT setup to deal with us freelancers and ICs so we had to get creative with the notes. We'll see what they will pay
but at this point, I had nothing to lose in filing and everything to gain. Also going to file for an SBA loan with forgiveness, have yearly things like equipment insurance due soon with no way to pay it.
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We can't file for self employed unemployment here in MA, yet. I think I heard that they were shooting for getting it online on April 10th. But the MA also said it was waiting for guidance from the fed on how to implement it. In any case, I am guessing it will take months to get implemented, approved, and see any money.
 
cpreston said:
We can't file for self employed unemployment here in MA, yet. I think I heard that they were shooting for getting it online on April 10th. But the MA also said it was waiting for guidance from the fed on how to implement it. In any case, I am guessing it will take months to get implemented, approved, and see any money.
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Sounds like a good time to call your congressmen and senators and raise a stink. Maybe they can get things moving
 
Thanks moth!

I posted this in the Coronavirus Impact thread. Hope mods don't if I post it here, too, as it's Finance.


From Bloomberg, excellent article.
I guess this could bode well for skin cancer exposure, perhaps not so well for Outside magazine:

A Bull’s Conundrum: Rally In Stocks Is Built on Staying Inside

The S&P 500 surged Monday after New York coronavirus fatalities declined for the first time, while Italy and Spain reported the fewest deaths in more than two weeks.

To Peter Cecchini, investors aren’t thinking clearly enough about what it all means.

As the Cantor Fitzgerald strategist sees it, a lower death rate suggests self-isolation and staying indoors are working. While obviously the best possible news for society, its meaning for markets comes with important caveats, among them the economic cost of prolonging the lockdown.

“What the takeaway should be is that we need to continue this policy, perhaps for even longer than we originally thought,” Cecchini said. “I want to be as optimistic as the next guy about this, but I think we need to be realistic.”

Over and over during the outbreak it has been shown how relief in stocks reflects a different calculus than relief in the real world. Markets look forward and backward to a greater degree than most human minds, balancing guesses about a sometimes-distant future with all the pain already priced in. Both considerations can cause the actions of investors to seem cold blooded at times, particularly when viewed through narrow windows.

Right now, some worry, traders are getting ahead of themselves. Shelter-in-place guidelines have already wrecked havoc on retail spending and sparked the biggest plummet in U.S. employment since the last recession. Still to come is a reckoning for debt-laden corporate issuers with ratings at risk.

“The lock-down is economically ruinous -- make no mistake about it,” wrote Charles Dumas at the TS Lombard research shop. “We have a stock market in denial, very far from any sign of capitulation. The second leg down of this bear looks as if it will be worse than the first.”

Of course, confidently ascribing any reason for optimism, or pessimism for that matter, has been a fool’s errand in a stock market swinging 5% a day. Forceful sell-offs are met the next day with a strong rallies, and vice versa. Feedback loops are everywhere -- including the bullish possibility that successfully arresting the death rate will put an early end to the most drastic social-distancing protocols.

But with the S&P 500 extending its gain from the March 23 bottom to 17%, and many attributing the strength to signs of the virus’s spread slowing in hot spots around the globe, the bull case is coming under scrutiny. If virus cases are leveling off, it’s because social distancing is working. The longer people have to remain in their homes, the longer businesses remain shuttered. It’s a conundrum policy makers are speaking to.

A diminished fatality rate is “hopeful, but it’s also inconclusive, and it still depends on what we do,” said New York Governor Andrew Cuomo at his Monday news conference. “These models all have a coefficient of ‘what we do,’ and how successful we are at social distancing etc., and from our decision-making point of view, it doesn’t really matter if we hit a plateau or not, because you have to do the same thing. If we are plateauing, we are plateauing at a very high level.”


Efforts to interpret the rally were everywhere on Wall Street. Strategists at JPMorgan Chase & Co. recommended trading on what looks to be close to “a favorable inflection” for the spread of the coronavirus. Quantitative and derivatives strategists including Shawn Quigg and Marko Kolanovic suggested clients position for a “sharp short squeeze” in value stocks.

“With the COVID-19 spread now potentially at an inflection point, the beginning of an economic restart may be closer than anticipated, along with a market trough,” they wrote in a note to clients Monday.

Peter Tchir at Academy Securities says economic headlines are irrelevant when stacked up against the progression of the virus. To Evercore ISI’s Dennis Debusschere, there’s a possibility that positive stories and headlines -- “human ingenuity” as he calls is -- could extend the rally, possibly even sending the S&P 500 to 2,800 (a 25% advance from the March lows).

The impediment to the optimism? “At some point we will actually have to have a solution,” Debusschere said.

The stock market looks to be anticipating an end to social distancing policies in June and a trough in economic growth in the third quarter, according to Bloomberg Intelligence. Strategists led by Gina Martin Adams found that in the case of shorter-than-average recessions, stocks bottom a median 156 days before the end of the economic contraction.

The team has turned to monitoring coronavirus forecasting tools, including the University of Washington’s Institute for Health Metrics and Evaluation (IHME) model, for signals on when virus cases may peak and the economy be able to open back up. Social distancing practices likely won’t end until there’s an all clear for the spread of the virus in the U.S.

“Market volatility is likely here to stay, as news of increasing infections competes with government intervention to keep businesses and individuals solvent for longer,” wrote Martin Adams. “Health experts remain unsure if a second wave will emerge at some point, starting the whole social-distancing dance -- and market volatility -- all over again.”

The sheer difficulty of re-opening economies with the risk of reintroducing a threat to human health has been on display in countries like Japan and Singapore, where case counts have accelerated after earlier success in containment. For strategists at Bespoke Investment Group, such instances suggest “a return to normalcy won’t be as easy as flicking a switch.” In a note to clients, they added, “the risk profile of re-opening is significantly more nuanced and fraught than the decision to close down.”

As the S&P 500 rose Monday to just about match the highest level in three weeks, the VIX fell for a third day to 44, the lowest since March 6 and roughly half its peak level of 85. Still, it’s in part due to this virtuous circle of economies remaining closed that volatility will persist, according to JJ Kinahan, the chief market strategist at TD Ameritrade.

“It’s the bad circle of life,” Kinahan said by phone. “We have these orders in place until the end of April for most areas of the country. Well, that could easily become the end of May really quickly.”
 
Bernanke Doesn’t See V-Shaped U.S. Recovery After Steep Fall

We will "probably have to restart activity fairly gradually and there may be subsequent periods of slower activity again.”

While he said the economy could contract at a 30% annualized rate or more in the second quarter, Bernanke brushed aside comparisons to the 12-year-long Great Depression. “If all goes well in a year or two we should be in a substantially better position,” he said.

He also said he suspected the Fed will hold the short-term interest rates it controls effectively at zero for “quite a while” as it seeks to lift inflation to its 2% target and return the labor market to full employment.

“At this point inflation is not a high risk,” he said. “If anything disinflation, low inflation will be more of a concern in the next year than too high inflation.”
 
This was recently posted on the MA page in regards to the CARE Act and self employed workers:

Self-employed individuals and contract employees
Currently, self-employed individuals and 1099 contract employees cannot apply.

Through the CARES Act's Pandemic Unemployment Assistance (PUA) Program, which DUA is working diligently to implement, eligibility for unemployment benefits would be extended to individuals who are:

self-employed, including gig workers, freelancers, and independent contractors;
seeking part-time employment;
have an insufficient work history to qualify for benefits;
have exhausted all rights to regular or extended benefits under state or federal law or to Pandemic Emergency Unemployment Compensation (PEUC);
have been laid off from churches and religious institutions and are not eligible for benefits under state law;
or otherwise would not qualify for regular or extended benefits or Pandemic Emergency Unemployment Compensation (PEUC).

https://www.mass.gov/info-details/m...-employed-individuals-and-contract-employees-
 
Cary Knoop said:
No, I repeat my questions to you:

1. So explain how we can "get back to our lives" by having a lockdown. What do you think will happen after the lockdown?
2. And why have "hurt" between quotes, the hurt from lockdowns is very real which even $6 trillion of funny money can't fix!

You still have not answered them!
Click to expand...

Here are answers for you:

https://www.aei.org/wp-content/uplo...virus-Response-a-Road-Map-to-Recovering-2.pdf

(Lifted from link in this article: https://www.nytimes.com/2020/04/06/...rgJq0SrTLsf4XEne3m_LLQat51lBsZyzfG6QQEGgKQR7I
 
gkantziper said:
Here are answers for you:

https://www.aei.org/wp-content/uplo...virus-Response-a-Road-Map-to-Recovering-2.pdf
Click to expand...
I actually shared that document a few days ago on this forum!

But calling that "back to our lives" is hardly the case and early reports of post-lockdown unofficial data from China (I would take the official data with a grain of salt) is not very encouraging. Hopefully, this virus is subject to seasonality so we at least can have a temporary breather.
With respect to "hurt" being between quotes, the longer this takes the more we are going to be really hurt economically and that will affect a lot of people for you will quickly "run out of other people's money" if you do not have enough economic activity.

Also, the immunity effect is now questionable, antibody count of recovered patients is very low, other elements of recovery (T cells and other mechanisms) might play a larger role. It's all up in the air for now, but certainly not very encouraging!
 
Cary Knoop said:
I actually shared that document a few days ago on this forum!

But calling that "back to our lives" is hardly the case and early reports of post-lockdown unofficial data from China (I would take the official data with a grain of salt) is not very encouraging. Hopefully, this virus is subject to seasonality so we at least can have a temporary breather.
With respect to "hurt" being between quotes, the longer this takes the more we are going to be really hurt economically and that will affect a lot of people for you will quickly "run out of other people's money" if you do not have enough economic activity.

Also, the immunity effect is now questionable, antibody count of recovered patients is very low, other elements of recovery (T cells and other mechanisms) might play a larger role. It's all up in the air for now, but certainly not very encouraging!
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I absolutely agree. "It's all up in the air for now, but certainly not very encouraging!" that is a great line! Yours?
 
cpreston said:
Self-employed individuals and contract employees
Currently, self-employed individuals and 1099 contract employees cannot apply.
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I managed to get my unemployment application in NY through this week on the day reserved for my last name alphabet section.

It asked me in the middle if the form if my last employer was the one client I have who W2s me. I said no, since that shoot was a while back. But I wonder if having a W2 on record made my application work in the system?

If so, they'll probably pay me right away but not my full amount and I'll have to work that out later...
 
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