All Forum Posts by: Nick Gann

@Nick Gann what bureau did they use to pull? When did you first apply? thanks

There is a recession happening right now, that much is undeniable to even the most bullish investor.  The real question is; how long will this recession last, and will it become a depression?  Given the unprecedented scale of mass unemployment, close to 17 million initial cases of unemployment claims in 3 weeks I have no idea how people think this will simply blow over come Q3 or Q4 2020.

Here is a hypothetical removed from the coronavirus.  The world economy comes to a screeching halt for months, and the US economy will likely continue to be completely or partially closed in April and May with re-opening not happening until summer.  Close to 17 million initial unemployment claims in 3 weeks, historic by any nature and more on the way.  A 2.2 trillion stimulus package passed, far short of the 10 trillion called for by some economists to prevent a recession and has been plagued by delays to implement it.  Businesses failing due to lack of income, and will likely not return to normal operation even after the economy re-opens due to falling consumer confidence if they remain solvent at all.  People now making more on unemployment than they did at their jobs in many places.  The average weekly income was $936/week ($48,672/year) in 2019 so I figure many people will not return to work on purpose for at least until unemployment benefits drop in 3 months, possibly longer if those benefits get extended.  Remaining on unemployment keeps the economy from roaring back as most would remain on unemployment.  Max unemployment in Texas is now $1105 pre tax per week ($505 max benefit and $600 stimulus), that's more than many people made before this crisis so likely they will seriously consider remaining on that benefit for as long as possible instead of working their job which pays less.  

With all of that above (and more) going on without including anything coronavirus-realted things sound bleak financially and they get even worse with the virus included.  So I'm amazed that anyone thinks this will somehow be a 'V' shaped recovery given those factors and more.  That's not even doom-saying, those are verifiable facts (and a few opinions based upon those same facts).  Which is all the more confusing with that stock market rally lately.  EPS dropped, earnings plummeted, and somehow the market increases in a record-shattering week?  No, something is brewing in the economy and it's not good.  That shouldn't happen given those metrics so a 2nd market crash is on the horizon.  Real estate lags the economy by 3-6 months so I wouldn't be surprised that the real estate starts to slide by summer.

My concern is where will we go from here?  Re-opening the economy in May will likely cause reinfections and thus an even longer 2nd shutdown.  The other option would be to continue this shutdown for months more to contain it, and that also comes with some serious economic issues.  Even if Trump re-opens the economy consumer confidence is dropping, and dropping fast.  No amount of wishful thinking will change that and only a vaccine will improve consumer confidence enough to start the full recovery.  Our economy is a consumer based economy by-and-large so it is wishful thinking to consider the economy will recover in a 'V' shape without improving consumer confidence first and foremost.  That, I believe will not improve without a vaccine or empirically-proven treatment to the virus.  Not baseless claims as some in the media claim, a proven treatment or vaccine only.  IMO that is what I think is going on, but as for how long things will last?  No clue.

TL;DR: The economy will not be a 'V' shaped recovery as some have stated it will be, and we are certainly in a recession now.

Your Comment: "Do you mean spike down? There's no lack of USD in the markets..."

There actually is a USD shortgage. They "Issued" $2,200,000,000,000 (two $trillion $200 hundred billion) in debt (dollars) without actually printing anything but an IOU. It takes over a year to print $1,000,000,000,000 (one $trillion) let alone $2,000,000,000,000

Here is 2 trillion dollars on pallets stacked 2 pallets high in $100 dollar bills. That little red dot on the left corner is you.

https://methodshop.com/2009/04...

Will Covid-19 cause a Resession?  Yes, obviously.

The question you should be asking is "Will this cause a Depression"?

@Adiel Gorel

A friend wants to lose weight, 35 lbs. If he tries he can let that weight out in 12 - 18 months in a healthy fashion, not 6 days or 6 weeks. Odds are he may only lose 10 lbs or 15 lbs and give up. I’d give him better odds if he had only 15 lbs to lose. I think the wounds of Covid to the economy are the same. They are sharp and deep. Nothing is going to recover overnight. The economy will take 6 - 12 months of recovery time and recession is already happening.

Will it cause a Depression? That's the question I've been asking. 

Taking into account a global economic shock, a coinciding drop in energy prices, many small businesses that won't recover, unemployment, the possibility for a run on US Dollars which could cause the USD to spike, plus municipalities and retirement funds who were already on financial thin ice – there's a great deal of risk and the combined headwinds are enormous.