Social Impact of Wuhan Virus

[1stindoor]

Originally Posted by Pete

Looking at a problem that is a month out but needs to be addressed now.

"Coronavirus economic threat -- A mortgage industry calamity is looming"

https://www.foxbusiness.com/real-est...ustry-calamity

And what your house is only worth what somebody is willing to pay for it.

I foresee another problem within this problem, that's when the local municipalities decide to raise your property taxes to offset the loss in sales tax that their budgets took. Will those govenrnment entities maintain the value of your home despite market fluctuations...or raise the value to maintain their revenue stream?

[Box]

Just two things I'd like for folks to keep fresh in their collective memory...

1) The Government of China did this.

Whether it came about from poor starving Asians eating raw bats, or incompetent disposal of biohazards from the Wuhan Bio Research Facility, or an intentional "leak" as an attempt to equalize the world economy so China could reset the economic playing field
...because China is not above murdering their own citizens. They have a 100 year history of demonstrating their habitual practice of sacrificing Chinese citizens to "further" the governments agenda.
No matter what flavor of kool-aid people like to drink - the government of China did this.


2) Jeffery Epstein's death successfully protected countless global elites from being outed as taxpayer funded sexual predators.



...brought to you by Carl's Jr.

[tonyz]

Originally Posted by 1stindoor

I foresee another problem within this problem, that's when the local municipalities decide to raise your property taxes to offset the loss in sales tax that their budgets took. Will those govenrnment entities maintain the value of your home despite market fluctuations...or raise the value to maintain their revenue stream?

IMHO too soon to tell.

If we experience a V-shaped recovery then this pandemic may just be a relative blip - minimal change in values. No change in assessed values.

If this is a U-shaped recovery - that is, it takes some months for jobs and real estate sales to improve - then actual real estate values may dip - but property assessors will not voluntarily lower assessed values.

The length of the “U” really matters here with respect to jobs, real estate values, mortgage accessibility, etc. then, what if there is a second wave in the Fall/Winter? And, where are we with respect to testing, treatments, and vaccines? Time will tell.

Of course if this is an L-shaped “recovery” then all bets are off on increasing property values or assessments - you can’t get blood out of a stone.

Personally, it is looking more like a U than a V recovery - but who really knows.

What we do know is that we face at least three crises simultaneously:

1). Healthcare
2). Economy
3). Supply chains

We do know that this pandemic should be the catalyst for rather substantial realignment in each of these areas.

There should be an explosion of telework, distance learning, etc., concurrently many business will close physical sites.

Nations will bring supply chains home - no more “just in time” as regards critical people, supplies and equipment - and what is considered “critical” should expand.

The need for and value of our medical professionals, researchers, testing, ICU capacity, pharmaceutical integration, relocation back home of critical manufacturing etc., etc., should be sea-change...but we are slow to learn.

[Ret10Echo]

Originally Posted by Box

Just two things I'd like for folks to keep fresh in their collective memory...

1) The Government of China did this.

...brought to you by Carl's Jr.

But did they do this with U.S. funding?

But then again we move infectious disease labs into the very heart of the American Bread Basket....

[Pete]

On property tax by cities and counties.

State law usually requires a revaluation of property values every so many years.

The county/city uses past sales and computer models to figure your new value.

After that the county/city can go revenue neutral or keep the tax rate stable.

Revenue neutral means they lower the tax rate so they bring in the same amount of money that they did before.

Keep the tax rate the same means they bring in a ton of new money and can go on a spending spree.

You can guess which one usually wins.

[1stindoor]

Originally Posted by tonyz

IMHO too soon to tell.
Your whole post...V, L, U shaped recoveries....

Thanks. More "new" things to read up on. (I seriously love this site).

[Badger52]

Originally Posted by tonyz

Nations will bring supply chains home - no more “just in time” as regards critical people, supplies and equipment - and what is considered “critical” should expand.

Not being a business owner I am curious as to how the US tax code might need to be restructured to facilitate this. I'm under the impression (50/50 mistaken) that some businesses use JIT inventory because they are otherwise penalized by being taxed for inventory on-hand that they've already paid for, in essence, being taxed twice for the same stuff. (The concept itself is, to me, thievery, but we're talking about the government here...)

I understand that some may use such a concept because the very nature of the inventory would create unrealistic storage requirements, but the first consideration is intriguing to me.

Someone smarter than I can possibly 'splain it to me.

[tonyz]

Originally Posted by 1stindoor

Thanks. More "new" things to read up on. (I seriously love this site).

Hope it helped.

I generally learn something new here every day - I try to incorporate the “learn something new every day” philosophy into my daily grind...means you are never bored...sometimes we get real lucky and Box holds class...

[tonyz]

Originally Posted by Badger52

Not being a business owner I am curious as to how the US tax code might need to be restructured to facilitate this. I'm under the impression (50/50 mistaken) that some businesses use JIT inventory because they are otherwise penalized by being taxed for inventory on-hand that they've already paid for, in essence, being taxed twice for the same stuff. (The concept itself is, to me, thievery, but we're talking about the government here...)

I understand that some may use such a concept because the very nature of the inventory would create unrealistic storage requirements, but the first consideration is intriguing to me.

Someone smarter than I can possibly 'splain it to me.

“Smarter” ha ha...you funny guy...you know that the IRC code has almost always been used to incentivize some behavior and penalize other behaviors. Personally, I believe that carrot/stick use of the IRC as a policy tool can be problematic depending on who is in office - but that horse is long out of the barn.

Simply stated, if you want less of one behavior you generally tax it and if you want to increase other behavior - then you reward it- there are many ways...lower rates, exclusions, credits, deductions, accelerate depreciation, depletion, create no tax or low tax jurisdictions, etc., etc.,

ETA response more specific to JIT inventory (to which the fundamentals of tax policy apply):

As regards my understanding of JIT inventory - many businesses try to time the purchase of supplies/inventory to coincide with the production process (JIT) and this precise timing really helps conserve cash, avoid excess borrowing costs and facility costs (since they are not storing tons of inventory).

I’m relatively certain (but don’t know specifically) that there may be some complex tax, accounting or state tax specific treatment (or all of the above) of some inventories that might benefit from more favorable tax treatment. The fundamentals still apply to tax policy and JIT...you want more inventory...reward it...or at least don’t penalize it.

[PSM]

All By Myself (video - not YT):

https://www.nrk.no/kultur/all-by-mys...ork-1.14972805

[JJ_BPK]

Originally Posted by PSM

All By Myself (video - not YT):

https://www.nrk.no/kultur/all-by-mys...ork-1.14972805

Thanks, some of the outfits are wild :]

[Penn]

imho, based on lots of conversation with other restauranteurs and chefs, the consensus is the business as we known it is over, absent a vaccine. eg., for our petit boîte to survive, we have to remove 3 tables, 1/3 of the seating capacity to accommodate the new/not enforced rules. 6' between tables. Lets look at other adapt and overcome situations the industry has incurred, living in challenging times, lets recount...77-79 gas crises, Iran hostage, the 1980's were bank city, 1990 crash, then the .com kick in the ass, followed by 2001 WTC, then the 2008 banking crises,
now cover-19. Looking back, I am convinced we will find a way forward and thrive.

[WarriorDiplomat]

Originally Posted by Penn

imho, based on lots of conversation with other restauranteurs and chefs, the consensus is the business as we known it is over, absent a vaccine. eg., for our petit boîte to survive, we have to remove 3 tables, 1/3 of the seating capacity to accommodate the new/not enforced rules. 6' between tables. Lets look at other adapt and overcome situations the industry has incurred, living in challenging times, lets recount...77-79 gas crises, Iran hostage, the 1980's were bank city, 1990 crash, then the .com kick in the ass, followed by 2001 WTC, then the 2008 banking crises,
now cover-19. Looking back, I am convinced we will find a way forward and thrive.

No doubt right now as we speak the entrepreneurial spirit lives and there are ambitious people who refuse to lay down and die and see this as yet another obstacle to overcome....there are determined problem solvers out there coming up with aha moments and coming up with ways to get around the restrictions. If a convict in the most secure prison in the most secure range possible in the world with everything they write being scrutinized diligently can identify, strategize and order murders that are carried out as ordered the entrepreneurs out there will find a way.....the human spirit will not be contained.

I said the same thing during the global warming/climate change frenzy it was clear to me that what was happening was a shift in how the economy functions from oil to green energy the entrepreneurs were not concerned they simply readjusted their strategies to reflect the ebb and flow of the markets needs

[Flagg]

Originally Posted by Penn

imho, based on lots of conversation with other restauranteurs and chefs, the consensus is the business as we known it is over, absent a vaccine. eg., for our petit boîte to survive, we have to remove 3 tables, 1/3 of the seating capacity to accommodate the new/not enforced rules. 6' between tables. Lets look at other adapt and overcome situations the industry has incurred, living in challenging times, lets recount...77-79 gas crises, Iran hostage, the 1980's were bank city, 1990 crash, then the .com kick in the ass, followed by 2001 WTC, then the 2008 banking crises,
now cover-19. Looking back, I am convinced we will find a way forward and thrive.

I absolutely agree with WarriorDiplomat.

Entrepreneurs will find the way forward.

Talking to restaurant tech folks in Australia, one thing I’m noticing is that while technology in aggregate is good, aspects of it are net negative for restaurants.

Prior to COVID-19, restaurants were in big trouble down here in Aus/NZ.

And the app based delivery services(UberEats, Deliveroo, DoorDash, Grubhub) were like a pack of hyenas eating restaurant margin and getting between customers and restaurants.

I reckon most of these apps will fail, and those that don’t will be beaten by platforms that benefit both customers AND restaurants, rather than raping one or both.

A classmate of mine raised $500m USD for app based food delivery in Brazil’s favelas.

It’s madness. The numbers don’t stack up.

If he didn’t take the VC deal(dominate with too much money) his next competitor would, but either way too much money is chasing too little likely return.

Those that make it out the back end will be better for it.

Historically, a high proportion of the world’s best value creators are forged and launch in tough times.

[Airbornelawyer]

Originally Posted by Penn

imho, based on lots of conversation with other restauranteurs and chefs, the consensus is the business as we known it is over, absent a vaccine. eg., for our petit boîte to survive, we have to remove 3 tables, 1/3 of the seating capacity to accommodate the new/not enforced rules. 6' between tables. Lets look at other adapt and overcome situations the industry has incurred, living in challenging times, lets recount...77-79 gas crises, Iran hostage, the 1980's were bank city, 1990 crash, then the .com kick in the ass, followed by 2001 WTC, then the 2008 banking crises,
now cover-19. Looking back, I am convinced we will find a way forward and thrive.

The Asian Flu (H2N2) pandemic of 1957-58 killed an estimated 116,000 people in the USA. The US population was 172 million in 1957 and 175 million in 1958, so that would be equivalent to about 219,000 deaths today, based on a U.S. population of 328 million.

The 1968 (H3N2) pandemic killed approximately 100,000. Like COVID-19, many, if not most of the deaths were among people older than 65, so it is hard to tell how many were excess deaths. The year 1968 is when the US population passed 200 million, so adjusting for population that would be equivalent to about 164,000 deaths today.

Does anyone recall these leading to any accommodations or adaptations to the way we lived our lives or organized our society, other than what-should-be-obvious individual adjustments like "don't forget to wash your hands"?

https://www.cdc.gov/flu/pandemic-res...-pandemic.html
https://www.cdc.gov/flu/pandemic-res...-pandemic.html