Great Depression imageWhen I wrote the first post about the Dow hitting 8000 many people wished to ignore it or laugh at it. In that post I had a heading “Phase V – Too Soon and Too Often.” In that section I said that China would bow to economic pressure (pride really) and open factories too soon. Sure enough China announced they were reopening factories. Guess what UPI reports today? China reports asymptomatic cases nearly 150 for first time. That’s right, the second wave of Coronavirus has started in China. It will require just as draconian of measures to tamp down as before.

Sad bit of news. People returned to the cities to start work in the factories. Chinese New Year saved China from the worst of the blow. The cities around factories weren’t as densely populated as they are the rest of the year. Social distancing will be almost impossible. Migrant workers tend to bunch up as many as they can in a tiny apartment so they can save 40% of their meager wages.

Coronavirus Could Be Seasonal

The other half of that section, “too often” warned the Coronavirus could be seasonal. Now that it is a full blow pandemic we are seeing articles stating the CDC hopes it is seasonal. That’s right. It is so out of hand they hope it ends with summer. That really doesn’t explain South Korea though. I don’t recall ever seeing photos of kids sledding in snow coming from South Korea. Until now I didn’t know they had ski resorts. It must snow somewhere there so they must have some kind of winter. Right now that is the best case scenario. That summer will put it in check and we will be locked down for six months of winter. Yes, six months. It will have to start around Thanksgiving and run until mid-June. No more family holiday gatherings. Won’t be able to attend church for six months out of the year either.

Remember Andrew Yang?

Andrew Yang image

Andrew Yang

He was that guy none of you voted for in the primary because you were all too busy following “establishment” candidates. He wanted the federal government to pay ever person $1000/month. It’s not enough to live on, most of us pay more than that for health insurance. None of you voted for him, but Congress is actually going to have to pass that bill now. Someone has to write the bill first though.

We as a nation could survive having to shelter in place for six months out of each year if we had Andrew’s “Freedom Dividend” and Bernie’s “Medicare for All.” If we had “Medicare for All” the Freedom Dividend could then be lowered.

All businesses not providing direct physical service would have to allow workers to be remote.

Most workers can’t work remote.

Here’s a sad little reality for you.  I do it from time to time. I try not to take long remote contracts though. There are two reasons for this.

  1. Clients who want me to work remotely tend to pay absolutely nothing and expect me to work 24 hours per day.
  2. Family takes advantage.

That second one used to be really bad when dad was still doing much of the farming. He would be off driving his semi and call saying “Hey! Fertilizer company is bringing some chemicals by, go out and run the forklift for them.” “Hey, there’s a pile of brush down at one of the farms. Go out and burn that this afternoon.”

In his mind, if I wasn’t driving a truck, I wasn’t working. My office is out in a separate building. It’s deliberate, so I can remain isolated. When I’m here though, people assume I’m available for errands.

For others the problem is they will spend all day on Slack, Snap, Facebook, Twitter, insert-trendy-Internet-thing-here and most will claim they are working. The physical act of going into an office where all of that trendy Internet shit is blocked is required. AGILE companies who use these “chat” tools to keep workers connected are losing about 70% of their worker productivity. Closer to 80% with those chat utilities that delete the messages after a few minutes/hours. I’ve been to clients and watched it happen. People chat all day. When you are writing good software, you can’t be interrupted every 15 minutes by chat messages. You need hours of uninterrupted deep thought, otherwise you take shortcuts and produce a hand polished turd. AGILE shops don’t turn out good software.

Where does the Dow go when we can only physically work six months out of the year?

It goes down below 8000. You guys are all ignoring “the other shoe.” Bankruptcies are going to skyrocket. Too many people don’t save any money. Marketing companies have told us for years “you have to have it now.” Credit card companies have told us for years “just put it on your card.” Too many people were living paycheck to paycheck before this happened. Most of them had a bunch of credit card debt financing their life at 20+%.

Car title loan places are going to shred the bottom.

These scams have been out their for years. They’ve been growing because they can generate an obscene amount of income for their owners. It won’t take months for victims to be lined up outside of their doors because they are out of work. You always lie to yourself in that situation. “I’ll find a job next week.” “I might find a job tomorrow.” “That lottery ticket I bought is going to hit.”

When you are tapped out it is a hard reality. When everyone you know is also tapped out and looking to you, there is nobody to lean on. When you can’t buy groceries yet have an iPhone, you never learned to manage money.

The second shoe drops in another few months. Courts are only hearing emergency cases now. When the shelter in place is lifted they are going to be flooded by divorce and bankruptcy cases. All of these companies told they had to wait will be knocking on doors trying to collect. Banks will be foreclosing on homes. Cars will be repossessed.

What people are failing to realize is that it takes eight months of good steady more than you spend income to get back to “even” once you’ve been off long enough to build up debt. Most people don’t have the discipline. If they did, nobody would buy an iPhone.