Economic conditions on the backside of Forbearance

The Heretic

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I have a neighbor that rents from another neighbor. She died so her kids were going to sell all of her homes and renal homes 4 total in our neighborhood. Soon as the non eviction thing came out the kids were forced not to sell the rentals and I know one of them (they guy that lives next to me) quit paying rent. 3 br 2 bath on 2 acres with a huge 8 bay shop zoned for a home business. The kids were asking $425k until they got screwed.
This could cause the real estate market to go up; less on the market, people having to take rentals off the market if they are occupied.

In the last 4 months I have started to get offers to refi my mortgage. One kind is a refi with cash. Another is a refi with no payments. I think the latter has to do with my retiring, at least partially. :rolleyes:
 

Angie

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Where ya goin'? I grew up in Tuscany on the beach near Pisa and up in the hills behind Livorno. Gorgeous place. Have returned many times since leaving there.
All over. It's our first trip, and probably our only, so we want to squeeze in as much as possible. Right now the plan is Venice, driving a loop to Terme di Saturnia then Florence (with a stop at Pisa to climb the tower), Positano, and then finish up in Rome. I looked into the beaches of Livorno and also Cinque Terre, but decided on the Amalfi Coast in the end.
 
Excellent! You'll love it! Yeah, the beaches of the Cinque Terre are really narrow and rocky, as the hills fall right into the sea. But very beautiful. Been there twice now.
Glad to hear you're headed to Pisa for the Torre Pendente. Wait to climb it until the last couple of trips of the day. The sunset from the top is stunning.
Venice is always nice, but be prepared for the crowds. And the smell. High tide is best, smell's not so bad. :s0140:
You'll love the Amalfi Coast. It's a lot like the coast at CT, but far more developed and cosmopolitan.
If you ever get another chance to go back, I'd make a point of getting up to Valle d'Aosta, on the NW border. Really, really beautiful up there with the Alps and all.
You're gonna have a blast!
Buon viaggio! :s0162:
 
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I was a little wise - in 2018 I paid two months ahead on my mortgage, so this summer I have been able to skip two payments. Mortgage is the only debt I have. I keep my CC paid off in full when it is due.

I feel sorry for those that have debt and live paycheck to paycheck. This isn't going to be pretty.
Paid off all my student loans years ago. All my rental and primary residence mortgages are paid ahead and I have cash on hand to pay them off. Or had, I'm cash out refinancing them all and taking on new debt to buy more.
 
OP
ATCclears

ATCclears

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WSJ article on the risk of a K-shaped recovery. Snippet:

For many professionals, technology has been a lifeline during the pandemic, enabling them to be productive while stuck at home. For many other workers, it is a new dividing line, corralling them further into the stagnant corners of the economy.

The pandemic has led to unemployment of workers in the service sector, retail and other fields at a scale and with a swiftness unprecedented in the historical record. They are cashiers and janitors, construction laborers and secretaries. For many, their prospects were already diminished by decades of technological progress. They are, disproportionately, women and minorities, precisely the groups that were already saddled with a spectrum of pay and wealth gaps even before Covid-19 hit.

What’s making things worse for these workers and their families is that the pandemic is also accelerating the arrival of remote work and automation. It is a turbo boost for adoption of technologies that, according to some economists, could further displace lower-wage workers. It could also help explain the “K” shaped recovery many pundits have observed, in which there are now two Americas: professionals who are largely back to work, with stock portfolios approaching new highs, and everyone else.


Covid-19 Is Dividing the American Worker


WSJ - K-shaped recovery.png
 
OP
ATCclears

ATCclears

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This may be paid content from the WSJ. Snippet:

A new wave of layoffs is washing over the U.S. as several big companies reassess staffing plans and settle in for a long period of uncertainty.

The outlook reflects an acceptance by corporate executives that they will have to contend with the pandemic and its economic fallout for a longer period than they had hoped. Some CEOs and other executives suggest more pain is ahead, said David Rubenstein, co-executive chairman of Carlyle Group, a private-equity firm with around $220 billion in assets under management.

“Privately, some of them may hint that they probably won’t need as many workers as they once thought,” Mr. Rubenstein said. “They’ll have to reinvent their businesses in ways that they hadn’t done before.”

The latest layoffs come as there have been glimmers of an economic recovery. Many employers have rehired some workers after cutting jobs this spring, pushing the U.S. unemployment rate down to 10.2% in July after it nearly touched 15% in April, according to federal data. Some salaried workers and executives are seeing their pandemic pay cuts restored. That has led some to theorize that the economy is increasingly proceeding on two tracks, as companies modifying operations or shutting down entire divisions determine that they need fewer people, especially lower-income workers.

A survey of human-resources employees released by Randstad RiseSmart found nearly half of U.S. employers that furloughed or laid off staff because of Covid-19 are considering additional workplace cuts in the next 12 months.


 

The Heretic

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As I have said in other posts/threads:

1) About 40% of the layoffs are permanent - mine was, along with a significant percentage of the IT contractors I worked with (I heard from people who know, that it was at least 200 initially and that it was continuing for 100 or more beyond that - my teams were cut in half). Unemployment is not just hitting bottom at 10%, it is rising again - it will take months, probably years to get back to a "normal" job market like we had just 9 months ago.

2) The expanded benefits ($600) were cut. Even if restored completely (probably won't be), the impact of at least a month without the those benefits will start to be felt this next month as rent/mortgages/bills come due.

3) Bankruptcies are increasing, businesses are scaling back or closing down. GDP and other indicator recoveries are slowing down.

4) There will probably be a resurgence of CV-19.

Economists say there is a one in four chance of a double dip recession. I think it is more like 50/50.
 

Dinglenutz

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About 40% of the layoffs are permanent - mine was, along with a significant percentage of the IT contractors I worked with
With record high cybercrime, use of social media platforms to replace in person meetings, and many working from home ... how can IT staffing be reducing? We're trying to hire as fast as we can.
 

The Heretic

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With record high cybercrime, use of social media platforms to replace in person meetings, and many working from home ... how can IT staffing be reducing? We're trying to hire as fast as we can.
My "employer" (I was a contractor/perma-temp at DTNA - i use the word "perma-temp" because I was there for almost 10 years - the longest I have ever been at any job, but I was a contractor - my contract was renewed yearly) laid off a lot of IT staff to cut costs due to a recession and a severe reduction in profits.

This is typical of large global corps like Daimler; if one or multiple divisions are hurting enough, they will cut costs across the board in other divisions, whether they are profitable or not. DTNA had a good couple of years, but the truck market was saturated because fleets bought a bunch of new trucks, and sold/traded in their used trucks. As a result, the used truck market has a glut of trucks too.

Add on top of that the fact that euro car manufacturers were hurting globally for a few years, especially the German ones like Daimler, BMW and VAG (VW/Porsche/Audi), and you get layoffs.

Most of the IT staff for DTNA is/was contractors, so it is easy for DTNA to drop them as they are not "regular" employees - i.e., not on the payroll of DTNA, but rather on the payroll of the staffing agency. So DTNA didn't need to pay higher UI rates due to the layoff, and didn't need to notify the state of a large layoff, and it never made the news because it was a number of different staffing agencies, not DTNA itself.

DTNA does this every 10-15 years. In another 2-4 years they will slowly start hiring people back.
 
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OP
ATCclears

ATCclears

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This may be paid content from the WSJ. Snippet:

Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion, according to data from Moody’s Analytics, the economic analysis arm of Moody’s Corp. The estimates assume no additional fiscal stimulus from Washington, further coronavirus-fueled restrictions on business and travel, and extra costs for Medicaid amid high unemployment.

That’s greater than the 2019 K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure, according to the National Association of State Budget Officers.

Deficits have already prompted tax hikes and cuts to education, corrections and parks. State workers are being laid off and are taking pay cuts, and the retirement benefits for police, firefighters, teachers and other government workers are under more pressure.

Even after rainy day funds are used, Moody’s Analytics projects 46 states coming up short, with Nevada, Louisiana and Florida having the greatest gaps as a percentage of their 2019 budgets. Louisiana said it didn’t expect its shortfall to be as large as Moody’s projected.

“There is no real model for a crisis like this,” said New Jersey Treasurer Elizabeth Maher Muoio. “It’s going to be tough for the next couple years.”

Screen Shot 2020-10-29 at 5.27.42 AM.png


 
OP
ATCclears

ATCclears

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Everyone should financially prepare for a very long economic recovery.


The Economy’s Struggles Will Shape WSJ - Joe Biden’s Presidency chart.png


 

The Heretic

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...but the stock market!! ;)
What about it?

The stock market goes up and down - sometimes wildly - with the slightest rumor about anything, but especially CV-19, the election, employment and stimulus legislation - or so the headlines tell us.

I am still waiting for the next huge dip so I can jump back in with the rest of my $
 

jdub75

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What about it?

The stock market goes up and down - sometimes wildly - with the slightest rumor about anything, but especially CV-19, the election, employment and stimulus legislation - or so the headlines tell us.

I am still waiting for the next huge dip so I can jump back in with the rest of my $
I was making a sarcastic comment because some folks tie the stock market to the economy without completing the discussion with the fact about 45% of Americans hold no stocks or that the feds are pumping billions into it the last several months.
 

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