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Economic point of no return is March 30, back to work or damage irreversible
Strategos
Against Dystopia
User ID: 455233
03-26-2020 06:19 AM

Posts: 5,347




Post: #106
RE: Economic point of no return is March 30, back to work or damage irreversible
Advertisement
https://www.zerohedge.com/economics/25-m...s-tomorrow

2.5 Million Initial Jobless Claims Tomorrow?

Last week's initial claims print, which surged to 281K from a recent baseline of about 220K, while bad was nowhere near the apocalyptic prints some strategists had predicted in light of the massive closures of restaurants, retailers, lodgings, and virtually all other service establishments which have shuttered for the duration of the coronavirus pandemic.

Indeed, many now think that last week's print was "low" only because the real hit was deferred to tomorrow due to processing delays and other logistical issues (countless labor department websites are only sporadically online amid the surge in traffic).

And while looking at tomorrow's initial claims report reveals a historic surge in Wall Street expectations, with consensus now expecting up to 750K newly laid-off workers seeking benefits, according to Southbay, historically one of the most accurate labor market forecasters, tomorrow's print will be a whopper at no less than 2.5 million!

Prior Week Initial Claims (Actual): 281K

Current Week Claims Forecast (Consensus): 750K

Current Week Claims Forecast (SouthBay): 2,351K



00:06 / 00:37
Here is SouthBay Research answering the question "How many people have been laid off?"

Consider theme parks: Disneyland shut last week and they employ ~25K. Disney World the same.

Or restaurants: There are 660K restaurants in the US. Of which 300K+ are full service restaurants (FSR): wait staff, host staff, bussers, dishwashers. According to the BLS, FSRs employ ~5.5M workers.

Basically it's hard not to see 1M+ layoffs in dining & drinking establishments. (Barely 8% of the total Food & Drinking labor base). If each FSR lays off 1 waiter and 1 support staff, that alone is 600K.

Michigan reported 55k claims in the 1st 3 days of the week; that's 15x the normal week total.

SouthBay's Model

The SouthBay data shows a 66% y/y drop in hiring (-44% week-over-week), with the heaviest concentration in...restaurants. In 2009, when Jobless Claims were surging at a comparable rate, they were running at 600K Initial Claims per week. But we didn't have complete shutdowns then.

The number will be slightly lower than actual because of late filings and government processing (the scale will be more than can be handled).

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17:17
reborn on 12/21/2010
User ID: 539940
03-26-2020 07:20 AM

Posts: 211




Post: #107
RE: Economic point of no return is March 30, back to work or damage irreversible
Strategos  Wrote: (03-26-2020 06:19 AM)
https://www.zerohedge.com/economics/25-m...s-tomorrow

2.5 Million Initial Jobless Claims Tomorrow?

Last week's initial claims print, which surged to 281K from a recent baseline of about 220K, while bad was nowhere near the apocalyptic prints some strategists had predicted in light of the massive closures of restaurants, retailers, lodgings, and virtually all other service establishments which have shuttered for the duration of the coronavirus pandemic.

Indeed, many now think that last week's print was "low" only because the real hit was deferred to tomorrow due to processing delays and other logistical issues (countless labor department websites are only sporadically online amid the surge in traffic).

And while looking at tomorrow's initial claims report reveals a historic surge in Wall Street expectations, with consensus now expecting up to 750K newly laid-off workers seeking benefits, according to Southbay, historically one of the most accurate labor market forecasters, tomorrow's print will be a whopper at no less than 2.5 million!

Prior Week Initial Claims (Actual): 281K

Current Week Claims Forecast (Consensus): 750K

Current Week Claims Forecast (SouthBay): 2,351K



00:06 / 00:37
Here is SouthBay Research answering the question "How many people have been laid off?"

Consider theme parks: Disneyland shut last week and they employ ~25K. Disney World the same.

Or restaurants: There are 660K restaurants in the US. Of which 300K+ are full service restaurants (FSR): wait staff, host staff, bussers, dishwashers. According to the BLS, FSRs employ ~5.5M workers.

Basically it's hard not to see 1M+ layoffs in dining & drinking establishments. (Barely 8% of the total Food & Drinking labor base). If each FSR lays off 1 waiter and 1 support staff, that alone is 600K.

Michigan reported 55k claims in the 1st 3 days of the week; that's 15x the normal week total.

SouthBay's Model

The SouthBay data shows a 66% y/y drop in hiring (-44% week-over-week), with the heaviest concentration in...restaurants. In 2009, when Jobless Claims were surging at a comparable rate, they were running at 600K Initial Claims per week. But we didn't have complete shutdowns then.

The number will be slightly lower than actual because of late filings and government processing (the scale will be more than can be handled).

this is what it looks like in comparison to 2008-2009...
Even 1 Million would be unprecedented

[Image: jegJO1l.jpg]

DON'T PANIC!
(This post was last modified: 03-26-2020 07:21 AM by 17:17.) Quote this message in a reply
Strategos
Against Dystopia
User ID: 455233
03-26-2020 04:07 PM

Posts: 5,347




Post: #108
RE: Economic point of no return is March 30, back to work or damage irreversible
https://www.zerohedge.com/economics/tota...aying-rent

So what has taken place in the retail sector in just the past few weeks is straight out of the the 9th circle of hell.

With cash flows dwindling, and their survival in question every day, the total collapse in revenue has meant that firms such as (recently reorganized) Mattress Firm and Subway are among some of the major U.S. retail and restaurant chains telling landlords they will withhold or slash rent in the coming months after closing stores to slow the coronavirus, Bloomberg reports citing sources.

Aware that one way (out of bankruptcy) or another (in bankruptcy), they will end up renegtiating their leases, retail chains are proactively calling for rent reductions through lease amendments and other measures starting in April.

Mattress Firm, with about 2,400 stores, sent landlords a letter last week saying it would cut rent in exchange for longer leases and offering two options to do so. This week, it sent a more urgent note revoking its earlier offer.

“The decline in revenue and forced store closures across the nation are more drastic, compressed and immediate than we originally anticipated,” the company wrote in a letter reviewed by Bloomberg. “Our need is now more severe,” the firm said, invoking the virus as a force majeure event that “will prevent or prohibit us” from paying rent.

After being contacted by Bloomberg, Mattress Firm confirmed that it has requested a temporary suspension of rent.

“We appreciate our landlord partners, and the responses have been encouraging so far,” Randy Carlin, chief real estate officer for Mattress Firm, said in a statement. “We will continue to do everything we can to maintain business continuity and to ensure there are jobs available for our people to return to when this crisis ends.”

Subway Restaurants, which has more than 20,000 U.S. locations, sent out a letter to landlords last week saying that it might cut or postpone rental payments due to the virus, according a person with knowledge of the situation. The Real Deal, a real estate trade publication, reported on the communication earlier.

Virtually every other US retailer has also told their landlords the same, and if not, they will soon.




These moves, as Bloomberg notes, mark the next phase in virus fallout: what happens to billions in rent owed for businesses that have been closed? The stakes are high. Retail has a slew of big chains in turnaround mode. And if they do withhold payments, there would be a ripple effect. Landlords can’t afford to stop collecting rent for long, with many property owners sitting on loads of debt.

Worse, if landlords refuse to budge, it's unclear how this mutually assured destruction will conclude in anyone's favor. The fiscal stimulus packages being considered don’t directly address rents. But the Federal Reserve’s actions may give banks the leeway to defer mortgage payments, allowing property owners to delay rent. Some retailers may also declare a “force majeure,” a contract clause that covers highly unusual events, although whether or not landlords or banks accept this is a different question.

“The court system is just going to get flooded with a million of these disputes between tenants and landlords,” said Vince Tibone, an analyst at Green Street Advisors. “If the government doesn’t step in in any form or fashion, it could get ugly. They need to respond quickly.”

In short: this will be the biggest in court mess ever, and whether it involves in court bankruptcy or not, will not matter one bit, as there is simply no money.

The good news is that some landlords have recognized they need to help smaller tenants. For example, California's Irvine Company Retail Properties, is allowing rent to be deferred for 90 days and then paid back with no interest over a year starting in January. The firm confirmed the practice without further comment. Bedrock, a Detroit developer, said it will waive rent and other fees for three months for its smaller retail and restaurant tenants.

However, for many other landlords, who themselves are highly levered, forbearing on rent is simply not an auction as the lack of even a few months of liquidity could mean the different between life and death. Indeed, it may also be the tipping point for America's malls, many of which should have shuttered long ago yet subsisted as zombie creatures kept alive by cheap money.

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Strategos
Against Dystopia
User ID: 455233
03-26-2020 04:22 PM

Posts: 5,347




Post: #109
RE: Economic point of no return is March 30, back to work or damage irreversible
https://www.zerohedge.com/markets/why-di...tely-crazy

Why Did Hundreds Of CEOs Resign Just Before The World Started Going Absolutely Crazy?

In the months prior to the most ferocious stock market crash in history and the eruption of the biggest public health crisis of our generation, we witnessed the biggest exodus of corporate CEOs that we have ever seen. And as you will see below, corporate insiders also sold off billions of dollars worth of shares in their own companies just before the stock market imploded. In life, timing can be everything, and sometimes people simply get lucky. But it does seem odd that so many among the corporate elite would be so exceedingly “lucky” all at the same time. In this article I am not claiming to know the motivations of any of these individuals, but I am pointing out certain patterns that I believe are worth investigating.



One financial publication is using the phrase “the great CEO exodus” to describe the phenomenon that we have been witnessing. It all started last year when chief executives started resigning in numbers unlike anything that we have ever seen before. The following was published by NBC News last November…





Message From Macy's CEO
Chief executives are leaving in record numbers this year, with more than 1,332 stepping aside in the period from January through the end of October, according to new data released on Wednesday. While it’s not unusual to see CEOs fleeing in the middle of a recession, it is noteworthy to see such a rash of executive exits amid robust corporate earnings and record stock market highs.

Last month, 172 chief executives left their jobs, according to executive placement firm Challenger, Gray & Christmas. It’s the highest monthly number on record, and the year-to-date total outpaces even the wave of executive exits during the financial crisis.

By the end of the year, an all-time record high 1,480 CEOs had left their posts.

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Strategos
Against Dystopia
User ID: 455233
03-27-2020 10:52 PM

Posts: 5,347




Post: #110
RE: Economic point of no return is March 30, back to work or damage irreversible
Canadian crude is only $5 a barrel? Prepare for wave of bankruptcies in the oil industry in 3..2..1..

https://finance.yahoo.com/news/oil-hits-...04653.html

Quote:A barrel of Canadian oil is now worth less than a nice latte or a fast food combo, falling to about US$5 on Friday. With no relief in sight from the impacts of COVID-19 and the Saudi-Russian oil war, negative prices could be on the horizon.

Western Canadian Select (WCS) crude, the main grade produced in Canada’s energy patch, fell to a record low of US$5.03 on Friday, according to Bloomberg data going back to 2008. The steep decline has energy experts considering another unpleasant rarity for oil.

“There is no reason to think that oil prices couldn’t go negative for a period of time,” Raymond James analyst Jeremy McCrea told Yahoo Finance Canada. “I would have never considered it before. But in the current context, it’s not out of the realm of possibilities now.”

The cost of shipping for some heavy crude producers already outweighs the commodity price.

Meanwhile, production isn’t expected to slow down much. While 2020 spending expectations for North American exploration and production companies have fallen more than 20 per cent amid the historic downturn for oil prices, production expectations have only been reduced by two percent. That’s because shutting in production is a costly decision that cannot be quickly reversed.

“The big guys who supply a lot of this heavy oil, a lot of that is in SAGD-type operations. It can take years to reheat the reservoirs. You can’t shut these things down immediately. You will continue to have this production flow,” McCrea said. “You could get to a point where you do see negative prices.”

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whatreallyhappened.com
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