Peak Oil News and Message Boards

So separate and apart from a stock market crash is what happens in real life economy.

“What a recession from something like this should look like is a sudden stop and recovery,” said R. Glenn Hubbard, a Columbia University economist who was a top White House economist for President George W. Bush. “What could happen, though, is a doom loop.”

The “doom loop” that Mr. Hubbard and many other economists fear describes a situation in which an even moderately protracted shutdown of economic activity permanently kills waves of small businesses — and possibly entire industries, like airlines — that cannot survive very long without customers.

A typical small business in the United States does not have enough cash on hand to cover even a month of expenses if its revenues are completely disrupted, according to research by the JPMorgan Chase Institute. In minority communities, where profit margins are often narrower, the typical cash reserve is even smaller.
https://www.nytimes.com/2020/03/22/us/p ... e=Homepage

Read about a lady in Seattle who had just spent her savings opening a little gift shop a few months ago. Things had been going well until the covid shut her down, now she says bankruptcy is just a matter of time.

Most small biz has limited cash to weather a complete income goose egg for more than a short while I'm thinking. A bridge loan might help stay afloat for a short while but adding debt on top of loss, when unlike the stock market you are on the hook for everything instead of just your bet, is pretty risky.

Anyway, if shutdowns and bug-ins last for more than a few weeks lots will go under. Not sure how many left here still work but this could be a much bigger deal on the ground than the 1% loosing some virtual profit.

So anyway, this is for stories of the Doom Loop...
.

I have friend here in Alaska who is just opening up a "running" shop specializing in cold weather running....special insulated jackets and running tights and winter shoes with ice studs on the bottom, headlamps and reflective gear for running when there's no daylight in the winter, booties for dogs who run in the winter with their human companions....stuff like that.



I haven't seen her in a few weeks because we haven't been having the regular weekly run since run the governor decreed we must all be socially isolated here in Alaska, but I can't think of a worse time to be trying to start a new business.

I'm still stopping by my favorite restaurant once in a while to get "take-out" and I go to the craft brewery and get growlers of beer, but business is way way down---- they've gone from having a couple hundred people packed in the bar area every night to essentially one person every 10-15 minutes or so coming by to buy a growler.

Cheers!

On the other hand, there's a reason the vast majority of small business startups fail.

LACK OF CAPITAL (implying lack of planning, allowing things to go wrong, needing to change tacks, etc).

It's not like that's anything new.

But sure, if this goes on long enough and deep enough, then a global depression occurs. At that point, far more than just small businesses are at risk.

Pops wrote:Most small biz has limited cash to weather a complete income goose egg for more than a short while I'm thinking. A bridge loan might help stay afloat for a short while but adding debt on top of loss, when unlike the stock market you are on the hook for everything instead of just your bet, is pretty risky.

Disagree.
Small business as long as not funded by debt can simply be suspended until more favourable situation is back.
Meantime owner can do something else or just have a break.
I know it - I run small tourism and rental based business so I expect to have coming summer season ruined.
Because I live in secluded place I have offered a COVID refuge to 3 old foxes (all anglers which was coming in the past) and they can stay here as long as they want.
This way I will still have tenants. No one else is going to be admitted but still there will be a small income.
On the top of it I have reserves.
Can carry on for year or two without excessive struggling.
Small businesses may prove more resilient than many of you suspect.

EnergyUnlimited wrote:

Pops wrote:Most small biz has limited cash to weather a complete income goose egg for more than a short while I'm thinking. A bridge loan might help stay afloat for a short while but adding debt on top of loss, when unlike the stock market you are on the hook for everything instead of just your bet, is pretty risky.

Disagree.
Small business as long as not funded by debt can simply be suspended until more favourable situation is back.
Meantime owner can do something else or just have a break.
I know it - I run small tourism and rental based business so I expect to have coming summer season ruined.
Because I live in secluded place I have offered a COVID refuge to 3 old foxes (all anglers which was coming in the past) and they can stay here as long as they want.
This way I will still have tenants. No one else is going to be admitted but still there will be a small income.
On the top of it I have reserves.
Can carry on for year or two without excessive struggling.
Small businesses may prove more resilient than many of you suspect.

Maybe, in some cases. In your case, you're substituting renting the place out, so you still have income -- (which sounds smart, and kudos). But even if a business isn't funded with significant debt, if one doesn't own the building it's in, then there's often significant ongoing rent, for example. I have a friend who considers himself a "serial enterpreneur", who has failed in about half a dozen businesses over time, but done well in one. In each failure, the rent over time was the killer.

So I think it depends. All I know is I've had an accountant friend of mine ask my opinion re several business start-ups clients wanted advice on. I just thought about pros, cons, risks, etc. for a few minutes (given my cautious nature) and listed 4 or 5 things I'd be cautious about that might require meaningful cash until things settled down a bit (for several months or so). In EACH case, they had negligible leeway if something went wrong, claimed they understood that, but were all hot and bothered about cranking the thing up right way, did it anyway, and crashed and burned within a few months, IMO, as predictably as robins arriving in spring, given how seldomly things just go fine from day one.

It's not just randomness and bad luck. And the current BIG piece of bad luck re the economy isn't going to help any, re the 65% failure rate within 10 years, that's for sure.

https://www.investopedia.com/financial- ... -fail.aspx

Unemployment rate will be near 30% within a week. My company is going down. Wow, can't believe how fast this happened. Instant communism.

This isn't a recession This is collapse.

Outcast_Searcher wrote:Maybe, in some cases. In your case, you're substituting renting the place out, so you still have income -- (which sounds smart, and kudos). But even if a business isn't funded with significant debt, if one doesn't own the building it's in, then there's often significant ongoing rent, for example. I have a friend who considers himself a "serial enterpreneur", who has failed in about half a dozen businesses over time, but done well in one. In each failure, the rent over time was the killer.

Yes - rents can be very damaging.
Being a landlord as is my case may cause one overlooking it. You are just looking from different perspective.
But again, if you are renting then the all important question is *who* is your landlord.
If big corpo you are probably screwed.
But you see - I have also trader tenants who have shops on my land.
They always pay rent in July, August and September as activity is seasonal.
I have already decided not to ruin them with rents (albeit I am not vocal about it so they don't get too cheeky).
Will observe how season is progressing and what sort of turnover they have (if at all).
Then I will reset rent accordingly. Can give up to 90% discount if needed (they will only need to cover local taxes and maintenance expenses) but of course if they can pay more I will happily accept it.
They are good tenants and don't want to lose or destroy them. They were paying well for many years and this deserves some credit.

The end result will be to save the economy and let whoever is going to die to do exactly that. I expect by April 1st that decision will be made. The older and retired will have to continue to self isolate as best they can.

Trump has alluded to this in his latest tweet about the cure being worse than the disease. He isn't wrong.

Cog wrote:The end result will be to save the economy and let whoever is going to die to do exactly that. I expect by April 1st that decision will be made. The older and retired will have to continue to self isolate as best they can.

Trump has alluded to this in his latest tweet about the cure being worse than the disease. He isn't wrong.

I agree. that's weird. I agree with Cog.

Ibon wrote:

Cog wrote:The end result will be to save the economy and let whoever is going to die to do exactly that. I expect by April 1st that decision will be made. The older and retired will have to continue to self isolate as best they can.

Trump has alluded to this in his latest tweet about the cure being worse than the disease. He isn't wrong.

I agree. that's weird. I agree with Cog.

Well, I don't know if this qualifies as doom haha, but I still cannot find toilet paper in the supermarket

Ibon wrote:

Cog wrote:The end result will be to save the economy and let whoever is going to die to do exactly that. I expect by April 1st that decision will be made. The older and retired will have to continue to self isolate as best they can.
Trump has alluded to this in his latest tweet about the cure being worse than the disease. He isn't wrong.

I agree. that's weird. I agree with Cog.

Its not clear to me that it will make much difference either way....the self-isolation and quarantine orders in New York and California and Florida and other areas are being ignored by large numbers of people.

The Mayors and Governors who order self-isolation are unwilling to order the police to enforce the stay at home orders, so large numbers of people are out on the streets and beaches and parks and as a result the China virus continues to spread rapidly.

In some ways we have the worst of both options in the US now----the economy is collapsing AND we are failing to self isolate and not doing much to slow the spread China virus.

CHEERS!

The latest case fatality rate for the CIA Virus is 15%! What that means is that of all the closed cases in the world, 85% have recovered and been discharged while 15% have resulted in death. This number is up from 9% only a week ago! When combined with the fact that testing is increasing daily (including testing of non symptomatic people) this means that the lethality of this disease is significantly higher than we thought before. For now, every aspect of the CIA Virus Global Pandemic keeps getting worse on a daily basis. This virus will wipe out many, many people over 60 all over the world, maybe a majority of them, particularly those with pre existing medical conditions.

The USA is already the country with the highest number of daily new infections. It is extremely likely that the USA will become the country with the highest number of active cases this week, and the largest amount of deaths next month, according to the latest reports.
https://www.worldometers.info/coronavirus/

JuanP wrote:The latest case fatality rate for the CIA Virus is 15%! What that means is that of all the closed cases in the world, 85% have recovered and been discharged while 15% have resulted in death. This number is up from 9% only a week ago! When combined with the fact that testing is increasing daily (including testing of non symptomatic people) this means that the lethality of this disease is significantly higher than we thought before. For now, every aspect of the CIA Virus Global Pandemic keeps getting worse on a daily basis. This virus will wipe out many, many people over 60 all over the world, maybe a majority of them, particularly those with pre existing medical conditions.

The USA is already the country with the highest number of daily new infections. It is extremely likely that the USA will become the country with the highest number of active cases this week, and the largest amount of deaths next month, according to the latest reports.
https://www.worldometers.info/coronavirus/

I really worry about the hospitals being overwhelmed and people not getting the proper care. Without access to ventilators, people will die.

JuanP, a large part of the numbers mess is to do with timing of tests, particularly in Europe where it's apparent until about a week ago people weren't tested until they were half dead.

This is more detailed data from Friday.

https://www.epicentro.iss.it/coronaviru ... ianza-dati

Dumb and dumber should be restricted to their own thread to discuss their CIA virus delusions.

Armageddon wrote:

JuanP wrote:The latest case fatality rate for the CIA Virus is 15%! What that means is that of all the closed cases in the world, 85% have recovered and been discharged while 15% have resulted in death. This number is up from 9% only a week ago! When combined with the fact that testing is increasing daily (including testing of non symptomatic people) this means that the lethality of this disease is significantly higher than we thought before. For now, every aspect of the CIA Virus Global Pandemic keeps getting worse on a daily basis. This virus will wipe out many, many people over 60 all over the world, maybe a majority of them, particularly those with pre existing medical conditions.

The USA is already the country with the highest number of daily new infections. It is extremely likely that the USA will become the country with the highest number of active cases this week, and the largest amount of deaths next month, according to the latest reports.
https://www.worldometers.info/coronavirus/

I really worry about the hospitals being overwhelmed and people not getting the proper care. Without access to ventilators, people will die.

Ventilators are pointless without staff to use them.

Shocking news from Thailand:

Elephants being let go from tourism industry and forced to beg for food.

https://www.nytimes.com/2020/03/24/world/asia/coronavirus-thailand-elephants.html?action=click&module=News&pgtype=Homepage

The tourism industry is obviously devastated by this illness. Definitely a middle class casualty of this virus. But it will bounce back.

Only problem is how to handle this in the interim. Can't have much trust in what politicians are doing. That's for certain.

jedrider wrote:Shocking news from Thailand:

Elephants being let go from tourism industry and forced to beg for food.

https://www.nytimes.com/2020/03/24/world/asia/coronavirus-thailand-elephants.html?action=click&module=News&pgtype=Homepage

The tourism industry is obviously devastated by this illness. Definitely a middle class casualty of this virus. But it will bounce back.

Only problem is how to handle this in the interim. Can't have much trust in what politicians are doing. That's for certain.

We have no tourists but still fill our hummingbird feeders everyday!

Plantagenet wrote:

Ibon wrote:

Cog wrote:The end result will be to save the economy and let whoever is going to die to do exactly that. I expect by April 1st that decision will be made. The older and retired will have to continue to self isolate as best they can.
Trump has alluded to this in his latest tweet about the cure being worse than the disease. He isn't wrong.

I agree. that's weird. I agree with Cog.

Its not clear to me that it will make much difference either way....the self-isolation and quarantine orders in New York and California and Florida and other areas are being ignored by large numbers of people.

The Mayors and Governors who order self-isolation are unwilling to order the police to enforce the stay at home orders, so large numbers of people are out on the streets and beaches and parks and as a result the China virus continues to spread rapidly.

In some ways we have the worst of both options in the US now----the economy is collapsing AND we are failing to self isolate and not doing much to slow the spread China virus.

CHEERS!

It's bizarre to me, to see all that. What the hell do people think distancing MEANS? I'm lucky, living in a quiet suburban neighborhood. I can walk for miles and hardly see anyone. And If I do, I make sure I never get close to them, taking to the street instead of the sidewalk, etc. So fresh air, exercise, sanity, and relative safety.

In crowded cities in India, poor people are probably just screwed if they are sickly. But why the hell are so many readily screwing THEMSELVES here in the US? And worse, by doing it en masse, they're screwing many others too.

The cure SHOULDN'T be worse than the disease, but doing it half-assed like we are, it may well be.

Maybe people in relatively isolated areas will be luckier -- or maybe they'll just get it later.

The cure worse than the disease? It's not a freakin cure. What it is is people have decided it's ok to throw Grandpa and Granny out the back of the bus to save an economy that's going down anyway and was never worthy of being saved. Cowards.

Until now I was absolutely clueless as to how far we have fallen.