What Keeps Me Up At Night – Coronavirus & The Economy

What a crazy time we are living in. Coronavirus is spreading, the Fed is cutting rates to zero, people are panic buying toilet paper. There is a lot going on and honestly, I just need this blog post to put my thoughts on paper.

Before I even start word vomiting all over this blog post, I want to let you know this is basically all opinion and speculation. I have a few thoughts about the way things are going to progress from here and I’m going to share them with you.

Will I be right? Probably not.

But there are things that I think people aren’t considering the consequences of and are going to be problems in the near future. They’ll think they just popped up out of nowhere when in reality they are the process of a chain reaction of events.

In addition, there are hundreds of different stories, statistics, and other information that is all totally bogus. I do believe that the people who share this type of stuff are doing so with good intentions, for the most part. But it’s not productive or helpful when you do it to push an agenda or let your emotions run away with you. I enjoy social media and believe it brings so much value to society but lately it has been a cesspool of terrible information coupled with high-emotion panic.

Edit: I have read a ton of content surrounding COVID-19 and everything that comes with it. This article by Aaron Ginn is easily the best thing I’ve come across. Presenting the statistics for what they are in a fair and honest way. Give it a read if you have a chance: Evidence over hysteria — COVID-19

Coronavirus

COVID-19 has opened my eyes to how bad and easy the spread of misinformation is. I don’t want to put this person on blast but I have to tell this story. I received an email about the closure of a facility due to the virus. That email was sent to every member of the facility (at least a few hundred people).

In the email, the sender added some *tips* to help you know if you had coronavirus and said that the list was from Stanford Medical. All of the “facts” were outrageous, including one suggesting not to drink ice water to control the spread. My girlfriend, who is a nurse, was disgusted. It turned out the list was completely wrong and 5 minutes later they sent out another email explaining they never fact-checked it. Now obviously this person’s intent was good and I appreciated them thinking about my health but wow.

We will get coronavirus under control. Other countries have shown how to do it and even the worst-hit places like China are starting to level out in new cases. Some items worth noting though:

Our healthcare system in the U.S. is broken. It’s tragic that it has taken a global pandemic for people to start waking up but here we are. I like to be optimistic but I don’t think things will change even after this. It’s all about making money and health can take a back seat.
Our hospitals can and still may be overrun with patients. People getting angry about society overreacting by closing schools and enacting social distancing need to get a reality check.
If you’re rich/famous you always get priority. Reading reports that some cities can’t get any COVID-19 testing kits yet professional athletes and movie stars can at will really angers me. We are all people and if you are a professional athlete who is in great health why do you get priority over an 80-year old that is at a higher risk of serious health effects?

From everything I’ve read, the chances of contracting the virus are high. To be frank, I’ve accepted that I’m going to get it but my symptoms, like most people, will be mild. Thankfully I’m a 25-year-old healthy adult.

What I’m going to try to actively do is stay away from elderly people or people that have young children. Basically, if you have a baby I don’t want to talk to you. I’d rather see their cute, healthy, smiling face through my phone on Facebook.

I do believe this virus ends but it will end the same way the Flu has. That means hundreds of thousands of cases every year and a fraction of those people won’t make it. You’ll get a vaccine for it but even then (just like the flu shot) it won’t always be effective.

The Economy

I’m going to put this simply.

I think the U.S. and the global economy are in trouble.

We have had amazing economic growth over the last 12 years and it has all come to a screeching halt. Like fall off a 30,000-foot cliff halt. Frankly, I think this is just the beginning of what is to come. If you think any single individual or group is to blame (Trump, China, The Democrats) I just want to tell you that you’re wrong.

This is a combination of 1000’s of different people, groups, countries, bad policies, bureaucracy, etc.

Here is a small sample of things I blame:

Public corporations being allowed to use all of their free-cash-flow to buy back stock instead of keeping a cash reserve.
China for holding back information about COVID-19.
Trump for not issuing a national emergency earlier and making testing every single person with symptoms a priority.
The government letting major corporations know that a bailout will always be there.
The Fed for not doing their job.
Every single American that doesn’t have a 12-month emergency fund (if that’s you, then you are guilty as well).
So much bad information that it makes it almost impossible to get the facts and make rational choices.
Greed. Greed from corporations, governments, individuals, greed everywhere.

Just scrolling through social media feeds today, I’m seeing many people talk about how they have been laid off. Others are posting their resumes asking for help from anyone. It’s a terrible sight and I feel awful for these people. But I think this is just the tip of the iceberg.

As I edit this article one of the largest employers in my city has furloughed over 7,000 workers. Most of which are from here.

It’s a domino effect that is slowly starting to fall. Most people (myself included) need to work to get paid. We need to be physically at the job site or we don’t get paid. Sure, there are thousands of people able to work from home but that is just until the virus passes. Once that is all said and done there will still be many more shockwaves.

All I can say is that I would suggest you hoard cash as much as you can. Work any and all overtime. Do whatever needs to be done to keep your job and keep working because you never know. Someday your boss may come in and say we are shutting down for a month. Worse yet they may say they are shutting down for good.

Either way, take care of yourself and save as much as possible.

The Long-Term Effects

You’re going to see people lose their jobs. Actually we are already seeing that.

You’re going to see small businesses go out of business. The lack of customers will destroy their cash flow resulting in bankruptcy.

You’re going to see some huge corporate bailouts that taxpayers will foot the bill for. We are talking billions, if not hundreds of billions of dollars.

I honestly believe this is going to be a historical event that I will tell my kids about someday. Personally, I was too young to really remember the recession of 2008/2009. I was a freshman in high school with no 401(k) and no huge financial obligations. Things are different now.

I have a career, I have investments, I have skin in the game and you probably do as well.

If this gets as bad as it can, then things are going to take time to recover. Yes, we’ll probably be free from the coronavirus by the summer which will allow you to take that trip to Hawaii but will you be able to afford it?

I think our world is about to change more than it has in 50+ years. You are going to start seeing more and more people working from home. This results in less pollution, higher productivity, and more fulfilling life (in my opinion).

Universal Basic Income which was originally brought to the public’s eye by Andrew Yang may become a thing. Corporations are (hopefully) going to be help more accountable and not make every decision for the stock price instead of humanity.

The long-term effects will be crazy and this will all take years to recover from. Obviously, change is needed and I can’t wait to come back to this article and read how off I was.

The Bottom Line

First and foremost, thank you for reading this blog post. These are scary times and the future is more uncertain than ever. On a happier note, I have seen people, organizations, and corporations step up to support their fellow humans.

Fully paid leave to people who can’t come into work because a business is closed, or a younger person going to get supplies and food for an elderly person. There are good deeds happening every day. Unfortunately, it has taken a global pandemic for people to show their good sides. Nothing unites us quite like a tragedy.

On the other side of things, I have seen the worst in people come out. A pandemic mixed with emotions and a falling investment account balance leads to craziness. I’m not your counselor, financial advisor, or your parent but all I can say is stay calm. Make calm, logical decisions and put your energy towards positive productive tasks.

Negatively solves nothing and only leads to more negativity.

I’m going to continue to believe that better days are ahead. And even if it takes us a while to get there, we’ll continue to persevere. There’s nothing to it but to do it.

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