I personally, dont think that theory is right, at least on a large scale. Its too easy for too many positions or entire depts to simply work from home (billing/finance for one)… but as an anecdote, my soon to be BIL was saying that due to working from home his group has been having trouble hitting (already aggressive) deadlines at his (FANG) company. And tech relies on hitting deadlines and being first to launch, and they have never been shy about spending money on their employees in return for efficient workers. Whether they are still on a learning curve (he says not really), or the inefficiency is just baked into the work at home model, time will tell.
I think the theory holds more water post-recession when things are on the upswing, but the pandemic is still fresh in our minds.
I dunno, this whole pandemic induced crisis is strange. One could opt for a left disbalanced core-satellite approach, place some outrageous bets through satellites, sit back and see what happens.
You are way too reasonable Chris, I appreciate it. Reasonable restrictions implemented temporarily are fine with me. Indefinitely is problematic. When the suicide rate exceeds the death rate from the dreaded disease, one should pause and evaluate.
God forbid we take a step back and analyze on the basis of data we do now know. Or forget where it came from and the fact that it could have been contained if China used a foreign concept called honesty.
The riots were my bottom line. When local governments declared riots were ok, but going to church was not, I lost all faith in the so called experts. I will do what I want if I am able. I don’t believe political preferences should determine who is more or less free.
The suicide rate has been rising for a while unfortunately. But Covid is exponentially killing more people than suicide. And some of the people committing suicide have been health workers dealing with it. So hardly deaths we could tie to shutdowns. If anything we could say that the more cases we have the more at risk those people would be.
But of course reactions to Covid are going to have a host of effects. But it’s silly to say look at the amount of suicides we be doing Covid wrong when Covid is on pace to kill over 6 times as many in a year.
Historically, cities rebounded very quickly from pandemics (after “great plague of” add Venice, London, Marseille…) but the existence of technology to conduct business remotely could be a game changer this time.
Upstairs, floors are mostly empty, as companies reassess their need for office space, raising serious questions about the future of the city’s commercial real estate market. Downstairs, streets were lined with the creature comforts that made working in Midtown not only bearable, but even fun. They are vanishing, and with them, the men and women who fed, clothed, poured drinks for and drove the people in those tall buildings.
In jeopardy of extinction, at least in its known state, is the corporate office culture at large — its corner suites and cubicles, water-cooler movie reviews, coffee breaks, office crushes, shoeshines, black cars. Happy hour, “Mad Men.”
Full disclosure I manage a portfolio of financial services companies for a fund
I think a lot of people have some pretty odd views on what will cause a “financial crisis”. There’s a pretty good amount of folks that think a repeat of 2008-2009 is coming and they couldn’t be more wrong.
The issues in credit currently are primarily outside the banking system. Leveraged loans and consumer credit are pretty rare in US banks, the former are mostly prohibited from leveraged lending guidelines/capital charges and the latter are just viewed as crap (rightfully so) by investors and have been pushed into non-bank specialty finance companies.
For the most part, US banks are well capitalized and have adequate reserves, low levels of classified/criticized assets to tier 1 capital, and have really ample liquidity (deposits have outpaced loan growth significantly). So, for the people waiting for the banking system to cave in, I have no idea what they’re looking at.
If you’re talking about broadly shorting an equity index, I would advise against it. There’s what, $16+ trillion in negative yielding debt around the world? And you want to short equity as opportunities in debt have become non-existent? The capital has to flow somewhere, there is immense pressure on all flavors of asset managers to perform, and if you want to bet it doesn’t go into equity, well, good luck to you. Targeted shorts of companies that are total garbage work well, but just shorting SPY or IWM is bat shit.
I don’t mean at all to sound complacent, there WILL BE a financial crisis eventually, but it’s more likely to be a currency crisis from concerns over the insane sovereign debt/unfunded liabilities. However, the USD will likely outlast the euro and yen, and I’d expect if anything the USD will appreciate as the Euro likely won’t exist within five years for both political and economic reasons.
Probably. But if you add up all other shutdown-related factors that led to numerous deaths (like cancelled surgeries and medical treatments) then how does does it compare? I’m not aware of any actual statistics on that and I wouldn’t doubt that COVID is still killing more people in many places, but the issue is that maybe the outcome would be better if the situation was handled differently. It’s not just the economy that is suffering as a result.
Not probably. It’s on pace to kill 6 or 7 times as many this year. It’s already killed about 3 times as many as suicide does yearly. Probably is already out.
Cancelled surgeries were electives but statistically we are now taking about stuff I doubt we could find anything on.
There was a story in news (I linked it in another thread a while back) about a guy in his 30’s with a heart condition who was supposed to have a defibrillator implanted, it wasn’t considered urgent enough and was cancelled and he died of a heart attack. Other people had chemotherapy cancelled. A lot of people died from preventable causes that were left untreated.
True, there isn’t any data to show one way or another. All I’m saying is that some of the shutdown measures went too far and caused a lot of other shit, not that it was undoubtedly worse than the virus.
Except not all the people who died or got permanently fucked up due to their medical treatments getting cancelled were old or terminally ill, plenty of people live decades with heart conditions or after getting cancer.
So it seems, but it’s not just those calling themselves liberals. The Ontario government is run by the Progressive Conservative party and they did the same shit.
I know. I’m just pointing out that both sides are pointing at each other for doing the same thing.
It’s actually funny watching these colored flag waving assholes point their fingers at each other and screech about principles that they are both willing to disregard at any given point for any arbitrary reason.
And actually, the real irony is that either side calling themselves conservative or liberal is a complete sodomization of two terms which actually used to mean something.
Now it’s nothing more than red team/blue team myopic assholes that are much closer to prison gangs than political parties which are supposed to embody a set of principles.
They (and that’s just about everybody) hide behind “the greater good” in order to throw tantrums and try to exact their own will against the other.
Great post and very interesting to hear from a financial guy who is in the midst of things. What shape do you think the currency crisis will take? Foreign exchange rates, bonds, T bills, all of them, something different? I am out of my depth on these matters, but always interested in learning.
And I have to ask–it seems TO ME that the Dow et al. are at risk specifically because basic economic elements like unemployment are going crazy. How robust do you think the market will be to more shutdown troubles?