By Jack Kelly
We made it through another week! Well, I’m reasonably sure that it’s Friday, but can’t be too certain as I’ve lost all track of time lately. One day blurs into another. Here in New York and New Jersey, it’s been grey, cold and rainy, so at least we don’t feel as if we’re missing out on too much fun being locked up inside all day long.
But back to reality. Just like the coronavirus seems to affect people differently, the economic cost of this annoying, pain-in-the-a$$ virus (Is it too late to change it to this new and better name?) impacts certain groups harder than others.
This week, the Federal Reserve Bank took a little break from printing out trillions of dollars for the stimulus programs that bailed out airlines and other mismanaged companies with our tax paying dollars to report that people on the lower end of the salary spectrum are getting slammed. Nearly 40% of those with a household income below $40,000 reported a job loss in March, according to the Federal Reserve Bank. Hmmm, do you think that Jerome Powell, the head honcho over at the Fed, Princeton grad with a Georgetown law degree, and previously acted as a private equity/investment banking guy actually ever met someone on a personal level in the $40k salary bracket?
It’s a double whammy for this group (I’m not referring to the Princeton, private equity, investment banking bros, but the $40k types), since according to studies, they lack at least three months of emergency money. It also seems, according to good ol’ Jerry, that black and Hispanic people are disproportionately bearing the brunt of the outbreak’s financial fallout too.
Department of Labor statistics state that these groups are more likely to work in sectors that are laying off or furloughing workers, such as restaurants, hotels, retail stores and within the gig economy. A staggering one-in-five Americans have filed initial jobless claims since mid-March when the pandemic went full throttle.
There’s worries about what will happen to people who are still out of work when their unemployment benefits run out. With roughly 40 million people out of work, it will be hard for job seekers to find a new job due to the massive amount of competition. Companies, if they aren’t on firm financial standing, may not even hire for a long while.
Homelessness in America could rise by an alarming 45%, according to a new study from an economics professor at Columbia University. The report also suggests that over 800,000 people could potentially become homeless by the summer. Right now, the official unemployment rate in the US is about 14.7%, a number not seen since the Great Depression. Many economists (which is code word for my own two-cents opinion) contend that the unemployment rate is way, way higher. The government conveniently leaves out a lot of people from their data—such as people who have finished collecting benefits, but couldn’t find a job— as it would inconveniently make things look worse.
President Donald Trump proudly announced a couple of years ago the creation of the 6th major division of the United States Armed Forces. Space Force has now officially launched its first cool commercial on its recruiting YouTube page.
The advertisement shows a guy staring up at the stars with a voiceover, “Some people look to the stars and ask, ‘What if?’ Our job is to have an answer.” The narrator then gives the money shot— “Maybe your purpose on this planet isn’t on this planet.”
I’m not sure what the Space Farce will actually do. It does sound cool though. I guess we f’d up our planet, so it’s time we mess up the rest of the galaxy? It’s curious that the Space Force is literally asking for malcontents and weirdos who self-identify with not belonging on earth. I’m sure nothing will go wrong with staffing up rocket ships with folks who hate their lives so much that they want to be shot into space.
Goldman Sachs is on the hunt for a takeover target. The investment bank seeks to continue its diversification plan, so as not to be as concentrated on M&A, investment banking and trading activities and build out a more reliable flow of income. Goldman is rumored to be checking out Wells Fargo and some other big banks in their hunt for an acquisition in the banking sector.
A marriage between Goldman, who was embroiled with the 1MDB scandal (which has to be the worst ever name for a multi billions dollar scandal), and Wells Fargo (which has its own personal seat in Congress as the bank’s executives are constantly called down there to atone for their unrelenting sins committed against customers) doesn’t look like it would get the needed approvals from government regulators.
Speaking of changes on Wall Street, the rumors are flying that the big banks are going to be flying out of New York City. Why do banks need the headaches and costs associated with stacking throngs of people into tight quarters, which could reignite the virus, when they could alternatively let everyone keep working from home?
If they still need a base of operations, it’s been reported that the banks are eyeing lower-density urban locations, such as Denver, Jacksonville, Nashville, Austin and Charlotte.
There will be many economic losers in the battle with coronavirus. Real estate looks like it will be the biggest loser, as almost everyone is in agreement that working in pajamas, not having to endure a soul-sucking, two-hour, round-trip commute makes for a better work/life balance.
Have a great weekend! Hopefully, I got it right and we are indeed heading into the weekend…