The economic depression comes into focus

The economic collapse from the covid-19 lockdown is so enormous it boggles the mind.
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Roughly 41% of working-age adults say their families have experienced a job loss, a decrease in work hours or other employment-related declines in income in recent weeks, according to a new analysis by the Urban Institute.

Underscoring the jump in financial distress around the country: More than 4 in 10 of Americans whose work was affected by the pandemic said they weren't able to pay the rent, mortgage or utility bills; skipped medical care; or were at risk of going hungry.

31% of survey respondents reported their families cut spending on food.
28% were forced to use savings or take on credit card debt to pay their bills.
69% of those whose family incomes were below the poverty level were unable to pay for their housing, were food insecure or were unable to seek needed medical care.

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Nearly a third of US apartment renters did not pay their rent within the first week of April.
The coming tsunami of evictions will be brutal.

“Landlords are waiting to pounce; they’re salivating right now. This situation is ideal for landlords because they aren’t getting much money from these rent-stabilized apartments anyway,” Hanzal said. “They have an opportunity to sit by, lose some months’ rent, pay some legal fees to get people out, pay maybe $5,000 to renovate these long-neglected apartments, and drastically raise the rent.”

San Bernardino County has seen a 28.6 percent increase in first time homeless.
Sacramento residents noticed the downtown homeless population shot up nearly 50 percent.
And then there is this.

The City of Hollywood Park is trying to figure out how to clean-up an underground town of homeless people uncovered this week.
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CB's picture

are very fortunate at this time as our incomes have not been reduced.

BTW, I found an unexpected bonus. I'm a ravenous keto carnivore at heart and I found I could buy top grades of beef at considerably reduced prices - sometimes less than half. It must be due to restaurant closures.

I cut the meat into portions, vacuum pack and freeze. My big freezer is now full of meat that in normal times I could only purchase for special occasions.

My SO's daughter and grandchildren are not as well off so we are keeping them supplied with food and stuff to keep them busy. One of things that bothers me is the daughter's ex is a rabid anti-vaxer and does not like to follow quarantining. As such, the middle teenage granddaughter wants to visit him and stay overnight often. I personally don't go there and my SO tries her best to protect herself when she visits so as to not bring something back with her.

Teenagers!!! I remember way back in the day when I was also invincible.

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22 users have voted.

@CB
I wonder if all this Beyond Meat hoopla is because they knew what was coming.

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12 users have voted.

We are so screwed.

@The Voice In the Wilderness
boneless, skinless chicken thighs have disappeared. even whole thighs have gotten scarce. yet there's lots of boneless, skinless breasts.

so i don't know what that's all about, but it's kinda strange.

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8 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

Hawkfish's picture

@UntimelyRippd

The diary said people were buying cheaper food.

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9 users have voted.

We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

CB's picture

@The Voice In the Wilderness
other than for milk, eggs and veggies at the local store so I haven't checked current pricing at big box stores. Maybe they had too much fresh cut meat and were dumping it. It was Choice beef, lots of marbling, very tasty.

I always take advantage of a good sale. I still have enough 2019 TP to last until late fall. Leaving money in the bank gets you one and a half percent at most so I invest in commodities (literally). I can readily get returns over 30% on bulk purchases of non-perishables.

I have never tasted Beyond Meat. I don't see how they can make a nice rare steak or roast out of the stuff unless they print it. My great grandchildren will most likely never taste a real one unless they get to be a millionaire.

It looks like it is being introduced to China this spring:

Starbucks to debut Beyond Meat products in China as part of coffee chain’s sustainability push
Apr 20 2020

Starbucks will debut Beyond Meat products on its menu in China on Wednesday.
...
The global coffee chain created three dishes made with Beyond’s beef alternative and two made with a pork alternative from Hong Kong-based Omnipork as part of a far-reaching goal to become “resource positive.” Starbucks will also offer Oatly’s oat milk as a non-dairy substitute for Chinese consumers.
...
Starbucks has reopened more than 95% of its cafes in China after temporarily shuttering them to slow the spread of the coronavirus pandemic.

The partnership with Starbucks marks Beyond’s entry into the Chinese market. The maker of plant-based meats plans to expand its manufacturing to Asia by the end of 2020, despite the pandemic, as part of its strategy to sell its meatless meats to Chinese consumers.
...

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8 users have voted.
Hawkfish's picture

@CB

A lot of meat seems too heavy these days. One trick I picked up (NYT food section a few weeks back) with the BM stuff is the fat renders out more quickly than regular meat so you have to reduce the cooking time to compensate. This is especially important if you are cooking for a vegan and a carnivore at the same time (ain’t lockdown fun?!)

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9 users have voted.

We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

CB's picture

@Hawkfish
like regular meat to get that grilled flavor? Or is that an artificial flavor/coloring they add? In my mind I think it would be like eating a hamburger made with extra lean beef - not particularly tasty.

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6 users have voted.
Hawkfish's picture

@CB

I can get cross hatching too.

I think the burgers work better fried, though, but I like their brats better on the grill.

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1 user has voted.

We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

@Hawkfish
Sorry. I couldn't resist.

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7 users have voted.

We are so screwed.

Hawkfish's picture

@The Voice In the Wilderness

Although I always liked a Lake Wobegon bit where Keillor is walking past the town vegetarian restaurant and thinks to himself “If I really wanted, I could sneak in the back and pick one of them off.”

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4 users have voted.

We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

CB's picture

@The Voice In the Wilderness
But if you mix them with bit of fatback they do make a very fine sausage that is not only tasty but healthy and nutritious.

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3 users have voted.

@CB

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4 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

CB's picture

@UntimelyRippd

I got my recipes from Johnny Verbek.

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3 users have voted.

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2 users have voted.

We are so screwed.

@CB @CB

Leaving money in the bank gets you one and a half percent at most so

That's what I'm making on my IRA money market fund. $100,000 gets you eighty cents a month. Don't spend it all in one place.

For a while the zero coupon T-bill was negative. Price was slightly over one hund so that you pay $10,100 for a T-bill that pays no on-going interest and the $10,000 face value at maturity. It's maturing in 13 days, an no I didn't pay that much 99.98 IIRC. The idea was that MM funds can break the buck but Uncle Sam will always pay off. It might be play money but US Treasury will pay the face value in "Lawful money".

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6 users have voted.

We are so screwed.

CB's picture

@The Voice In the Wilderness
in a Credit Union. I made about $180.00 in interest last year - approx. $15.00/mo That's only .9%.

Just checked this year's interest. It was $8.80/mo last Jan. This month it is down to $4.50/mo. WTF is going on????? Maybe next month I will get a bill for storage?

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12 users have voted.

@CB you guys about 2% on regular savings, 4% on high yield savings with a 30 day maturity, and 8.5% on the 2 year CDs securing my wife’s and son’s residency visas. Although the question of security is suddenly less certain than it was two months ago. With INF and World Bank sinking their fangs deeper into Ecuador as this emergency continues I think almost anything can happen.

The banks suddenly put a $100 limit per day on cash withdrawals by ATM last week. They cited a cash shortage.

I was about to make my quarterly wire transfer for expenses but I think I want more information first. There have been too many surprises on too many fronts lately making decisions more opaque.

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13 users have voted.
yellopig's picture

@vtcc73 @vtcc73 I'd be so happy with those rates!

Plus, they might give you a bonus for a new customer! Who? Who is it?

(I'm getting 1.2% on the "high yield" savings.)

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6 users have voted.

“We may not be able to change the system, but we can make the system irrelevant in our lives and in the lives of those around us.”—John Beckett

@yellopig Juventud Ecuatoriana Progresista. JEP for short. It's a big national credit union in Ecuador and my main bank here. I'm a bit concerned about its health although it was on very solid ground until the pandemic. I would think it is still better off than the commercial banks but everyone is beginning to hurt.

I was told that consumer loans for things like cars only became available to the average person in the country a little over 10 years ago. It's a mostly cash economy that appears to becoming as much barter at the moment. The 2020 standard monthly income is up to $394 so most people can't qualify for too much of a loan. JEP is what it is because nearly everyone who needs banking and has much savings is a client of JEP. Their financial health shouldn't be too vulnerable to bad loans but I could be wrong about that. Like every bank in Ecuador they're always looking for cash which explains their interest rates and why they get so many expat accounts.

I'm totally out of the stock market but almost all of that is tax advantaged retirement funds that I don't want to move until I have to. The last tax law gave me an extra 18 months so I have three years unless some advantage pops up.

I'd prefer to have as much of my money here as possible. Cost of living is so low that my pension and SS income greatly exceeds expenses. I love my US credit union that I've been with for 36 years but .5% on savings is only acceptable if it used for what I need to buy in the US and is safer. That is almost certainly the case right now but who knows for sure. My credit union will be more exposed to bad loans but starts far stronger than JEP on it's best day. Maybe I should be doing some research rather than what I'm doing.

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5 users have voted.
yellopig's picture

@vtcc73
I should have guessed it was outside the USA.

Good deal for you, & here's hoping JEP remains stable! Drinks

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2 users have voted.

“We may not be able to change the system, but we can make the system irrelevant in our lives and in the lives of those around us.”—John Beckett

@yellopig
So was I until April. Now "7-day yield 0.01%"
Thinking of taking cash out to pay off the last $12,000 of my 4% car loan. Maybe even to pay off my $56,000 remaining 4.25% mortgage. But the possibility exists of hyperinflation so that I could pay off in funny money. But them the IRA cash would be worthless anyway.

I thought of Europe but Brexit has screwed their Economy good and true.

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4 users have voted.

We are so screwed.

@The Voice In the Wilderness Just thinking out loud, I'm more inclined to pay off debt, even low interest debt, with money just sitting and not working. I don't see savings or safe fixed income earnings rising anytime soon. The FED is handing cash out hand over fist so banks don't need to pay you to let them use your money. To me, that's a rainy day fund or a way of reducing current expenses. This isn't a bad time to be without any debt but only if you have 6 to 12 months of expenses safely squirreled away.

I can't see too much immediate risk from inflation. Imported goods will become more expensive in the short term due to low supplies but that should be short lived as manufacturing ramps up and companies try to find a road to recovery. Low consumer demand due to people not having free cash will help hold down prices too. I know there's likely some surprises around the corner. I'd, personally, feel best with lowering expenses to a minimum if I could do so without eating the "seed corn". The value of my house changing is another serious consideration. People losing their homes will drive down values which wrecks equity leaving no way to recoup what was paid to eliminate debt. But at least there's so much uncertainty that there's no clear right answer. There's always that, huh?

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4 users have voted.
CB's picture

@vtcc73
Been that way for the last 25 years. If I have to go in debt then I can do without for a year or two. I remember getting in debt in my foolish youth. Up to my eyebrows after leaving school. Took years to get out. I said never again. I meant it.

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3 users have voted.
CB's picture

@vtcc73
that paid a lot better. I cashed it in about 2 years ago to have money for a home improvement project I was working on. I got colon cancer last year and had to get an operation in September. I'm OK now so I'll continue with the project. Luckily, I worked on it section by section so I was able to stop and not have the place unlivable. First on the list for summer is a new heat pump - the old one is about 17 years old. Still works fine but the bottom of the compressor housing has rusted out.

But I have to say that I was shocked at the interest they are now paying.

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11 users have voted.

@CB @CB my MIL asked me to see what I could do with about $20,000 that was sitting in an old savings account. She naturally thought CDs. She was shocked by the low rates. I managed to split it into two CDs, one for two years and one for one year. She didn't think she would need that money but having half mature each year might be useful for someone who was 84. I seem to remember I found 2.3% and 1.75%, respectively. She thought that losing .55%, the price of a dinner out (or 10-20 almuerzos - lunches - here), for one year was a good trade for better access. She only got 2% when she renewed the one year for two years. I bet she can't get that much now. It may also be safer in a mattress for a few years.

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6 users have voted.
GreatLakeSailor's picture

@CB

...we've seen the low prices on pork & chicken but not on beef. I suspect with the Cudahy plant closure the cheap pork will end.

For now I am fully stocked on ho'made brats, Italian fennel, pizza, medisterpølse, Hungarian, breakfast sausage (patties, links, bulk) & pork taco/burrito meat (seasoned, cooked, portioned, frozen).

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13 users have voted.

Compensated Spokes Model for Big Poor & Big Peace.

With jobs most Americans were living hand to mouth, had suffocating debt loads, no or unusable healthcare, no savings, and were at will employees. Work and risk infection or face almost certain homelessness and possibly starvation is a reality for so many. This looks like the blow that finishes off the lower middle class and slams the fickled fist of fate right up the wazoo of a lot of what's left from the middle and even the upper middle class. I know plenty of people with well above median family incomes who are, maybe were now, comfortable but without any slack in their financial lives. No savings and not enough available credit to make it through several months has to be scary to those who thought they were beyond the reach of disaster.

The cascade of potential secondary catastrophes probably hasn't even occurred to the otherwise comfortable. Job loss equals loss of healthcare insurance. They may keep their jobs but only by agreeing to lower wages and benefits. There will be a moderate downward pressure on compensation so companies can survive or, like a young friend's story from two days ago, so the CEO can buy a new yacht. Losing health insurance isn't the only scary prospect. What about the family who gets sick, survives, but now has lifelong damage to the cardiovascular system, kidneys, liver, brain, or some combination? Not being able to work or to no longer hold that decent job due to health is only slightly better than not surviving. The possible scenarios are endless.

Even the landlords salivating at raising rents after evicting current tenants are at risk. Sure they can raise rents but who do they rent to? Their windfall from convenient disaster may be a disguised personal train wreck instead. All those bills people can't pay are still not going to be paid by a high percentage of people. That reaches up the skirts of creditors as does small business and corporate defaults. People who can't afford housing and food, are homeless, and don't have jobs sure can't afford to keep a consumer's economy fueled. The loss of a strong middle class with its willingness and ability to carry heavy debt loads for average lives is the death of the American economy. The billionaire class is somewhat insulated. They know all about benefiting by trading their squirreled away cash and using armies of lawyers to process bankruptcy claims in exchange for real assets but they will not escape unscathed. They won't really notice but still may have to face an increasingly hostile population.

The question is how many of these folks will notice or learn the lessons that lead them to force a change in a rigged system? I'm not hopeful.

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28 users have voted.
gulfgal98's picture

@vtcc73

All those bills people can't pay are still not going to be paid by a high percentage of people. That reaches up the skirts of creditors as does small business and corporate defaults. People who can't afford housing and food, are homeless, and don't have jobs sure can't afford to keep a consumer's economy fueled. The loss of a strong middle class with its willingness and ability to carry heavy debt loads for average lives is the death of the American economy.

Our freaking Congress failed to bail out the people. Instead, they chose to bail out corporations and the oligarchs. They are the same people who determined that the US economy would be a consumer economy instead of a producer economy by shipping jobs to cheap overseas labor. So now, where are the consumers to support the US consumer economy? The extreme short sightedness of Congress has put the American people and the economy in this position. These people are criminals.

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12 users have voted.

"I don't want to run the empire, I want to bring it down!" ~ Dr. Cornel West

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

Lily O Lady's picture

@gulfgal98

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10 users have voted.

"The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

@gulfgal98 Answer that and we have an answer.

Money spent by people will multiply through the economy. That money will do everyone lots of good. The billionaire class and their enablers, banks for one, were in far too deep yet again because nothing changed from '07-'08. The exact same scams and horridly bad practices, but were incredibly profitable for a very few, that caused the Great Recession then fueled an avoidance of actually fixing the causes and prevented a full recover (win-win for who?) of more than the banks and the billionaire class. Money given to banks to cover speculation, bad loans, and and serves the purpose reserves were supposed to be serving. But reserves can't be gambled to improve earnings and boost bonuses. That's why Glass Steagle had to go and we're now about to pay for the second time in less than fifteen years for the Dems' and Slick Willy's greatest gift to our masters. Only this time the segment of the population that didn't recover are so weak that the pain will be delivered deeper into the remaining middle class.

Who thinks people will notice much less understand what's happened to them? Do you think they'll know who was behind their pain and suffering? Who thinks that Creepy Joe would change the trajectory like Obama did(n't)? How long until the rinse and repeat cycle runs again?

My only comfort, bad word but there is no actual comfort there's no suitable word I can come up with, is that the morans who worship trump and the neo-liberal/con Dems will get theirs right up the wazoo just like the rest of us. They're the willfully clueless.

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9 users have voted.

@vtcc73
He pushed the legislation that freed the credit cards from state usury laws. He is THE major sellout.

I think I would rather that Trump beat him like a red-headed stepchild, but then I fear Trump provoking a nuclear war with China. All it would take would be tak8ing out a Chinese warship in waters that they claim. (BTW: There are about four claimants to those godforsaken islands, so they are Chinese waters only in China's eyes. but that's all it takes for the nukes to fly.)

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7 users have voted.

We are so screwed.

longtalldrink's picture

"Landlords are waiting to pounce; they’re salivating right now. This situation is ideal for landlords because they aren’t getting much money from these rent-stabilized apartments anyway,” Hanzal said. “They have an opportunity to sit by, lose some months’ rent, pay some legal fees to get people out, pay maybe $5,000 to renovate these long-neglected apartments, and drastically raise the rent.”"

Um...listen closely...when the economy is THIS bad (some say Depression Era level bad) then NOBODY has any money. Sure the poorest amongst us will be the first to feel the effects of the economy and be washed away by it...but the waters keep rising...then the middle class starts feeling it...and on it goes. This is why the Depression was the uh...Depression. It was not called The Great Depression just because some poor people suffered. Everyone suffered.

The landlords are living in a fantasy if they believe their "long-neglected" apartments are going to be nabbed up by those who would be willing to pay a more inflated price. If the apartments were "long neglected" that means those apartments were in the poorer sections of the country. So if they evict...what poor person will step up to pay more?? OMG...the stupid hurts.

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27 users have voted.

Well done is better than well said-Ben Franklin

@longtalldrink
The pampered children of the 10% There is always someone.

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6 users have voted.

We are so screwed.

longtalldrink's picture

@The Voice In the Wilderness We are in a globalized economy. If we hurt you can best believe the world will hurt alongside us. "There is always someone"...until there isn't. That is what is meant by a Depression. The way I see, it the government HAS to step in and up...as of this writing, this option seems unlikely. They (the elites) love our misery as they believe this is culling out the herd. By culling out the herd, there will be more resources for "everyone else." I am assuming the "everyone else" is them. Many alive today have not experienced the Depression, so they are going head-long into unknown territory as they refuse to acknowledge history because of the goal for short-term profits. I am a history major and my mother survived the Depression, so I am aware of the total devastation they can cause. World War II supposedly helped to bring us out of the Depression...so what does that mean? World War III? Against China and their "pampered" children?

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8 users have voted.

Well done is better than well said-Ben Franklin

@longtalldrink
Chinese immigrants and pampered children of the elite. Apparently my sentence structure was not clear.

For example New York City. As a cabdriver told me in the 1970's, "You have to make $50,000 a year to be poor in New York City". Remember that's 1970's dollars. There is a long history there of evicting working people from rent controlled apartments and re-renting them at astronomical prices to the rich. Location? Even here in Chicago, one bedroom condos in or near the Loop costs more than mansions in the suburbs. And you can walk just a few blocks and be in gang territory.

It's nuts, but it's a fact.

Most people in "flyover country" consider both coasts as way to expensive to live on.
It seems like the South feels the same way about Chicago.

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8 users have voted.

We are so screwed.

is what I see coming.

The news reports 30 million Unemployed applying for benefits. But in some states, like New York, hundreds of thousands are still waiting, Uncounted, Unable to get through to the Unemployment offices and report. The final numbers will be Way larger that 30 million.

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31 users have voted.

NYCVG

these landlords see this option appear?

and drastically raise the rent.”

Are the still-employed expecting huge wage increases, is it? More likely a new army of status quo rejectors will arise; rents will be pushed down if anything.

As it stands before the shutdown the pressure on rents, at least in business and luxury housing was downward. Never underestimate the stupidly of people playing for petty advantage.

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22 users have voted.

Orwell: Where's the omelette?

@jim p
trust fund babies

EDIT:
Workers have to move away from the city and close in suburbs and commute.

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12 users have voted.

We are so screwed.

expect to see a lot of people who speculated and bought additional property to put out as full-time AirBNB short-term rentals end up losing those often highly-leveraged properties.

Who will be traveling during a pandemic? Will they want to stay in a private place or go to a commercial hotel that has an actual cleaning staff? The hotels are going to be hurting from a drop-off in business, but they've probably got deeper pockets to ride out the slow times. I suspect a lot of people who bought a big house counting on the spare "M-I-L" apartment in the basement being rented out 80% of the year to make the mortgage are going to get yanked up pretty sharply. They may lose their primary residence, and those with higher aspirations who bought additional houses may see those going into foreclosure if they sit empty instead of bringing in income to pay the mortgage.

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20 users have voted.

@MichaelSF
On the opposite corner from the master bedroom, both with their own bathroom (three total in house). But not for rent or BnB. For family members down on their luck.

Originally intended from my wife's brother. I now think he will never leave the nursing home.

But there are grandchildren. One in particular is married but working for Walmart with variable hours. I don't regard that as a career.

Sort of a traditional Italian generational house. Unlike some people. I liked grandchildren and reading stories and teaching them things. Great-grandchildren would be a bonus.

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11 users have voted.

We are so screwed.

@The Voice In the Wilderness Not bad though. It took only about 15 years to lose all of the progress of the past century.

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6 users have voted.

The lockdowns..the self imprisonment..that's why the death toll is kept down.

It has nothing to do with class warfare. Nothing to do with all the debt slavery.

Nothing to do with conditioning us into a prisoner mentality...a slave mentality.

Better SAFE than sorry.

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8 users have voted.

and rent will have to be considered losses for the period of the lockdown, just like the losses to restaurants and hair cutters. People are not failing to pay their rent because they have the jitters or because they were afraid to go to work. They are locked down, they have been laid off, by orders of state governments. Their businesses are not allowed to operate. Their schools are closed. Their daycare centers are closed. They are under lockdown by order of the government.

Residents are not allowed to leave their apartments and houses, except to get food. So no one can be evicted for staying in their home, and no one can pay rent who has lost his or her job. It's a loss. I can't envision how any landlord, residential or commercial, could expect tenants to come up with the lost months of income-free lockdown. What are they thinking?

If what they are thinking is that we all have to be made whole, then fine, let's crank up the printing press and make everyone whole. But if they think they can come out ahead while their tenants are thrown into the abyss, I think they are sadly delusional.

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6 users have voted.

@Linda Wood
century says you are wrong. That the experience of the first 25 years is wrong and we are still peons and never will be anything else. Democracy is a fraud. Chicago electoral cheating is the norm not an aberration. War is Peace, Slavery is freedom. We have entered the world of George Orwell.

Hold your children tight. Teach them to not speak out lest they be disappeared. Do the five minute hate for the Republicans or the Democrats depending on which state you are in. Hate pale-skinned or dark-skinned people depending on what State you are in.
Teach them to survive.

We are peasants. We come from peasants and will never be anything but peasants.

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6 users have voted.

We are so screwed.

@The Voice In the Wilderness

I agree with you by and large, and I am likewise a peasant, in every generation, and on every side of my family, and proudly so. Dirt poor, farmers, caretakers of children, laborers, small business strugglers. I am disheartened and disgusted by the bailout mentality of the current so-called capitalists, who have been crapping out since 1929. But I take heart in the moratorium on evictions taken by California and the socialist measures taken by European countries in this unique but not unforseeable time.

https://www.gov.ca.gov/2020/03/27/governor-newsom-takes-executive-action...

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6 users have voted.