Feel like a landslide hit your bank account? So does most everybody. My friend Kerry Getz does my favorite cover of that song, which I share whenever possible.
Right now- The bankruptcy wave just getting going. Last year saw Sears going bankrupt, the once stolid retail behemoth of the 20th century. Along with them went Gymboree, Payless Shoes, and several others. This year Pier 1 Imports, J. C. Penney, Neiman Marcus, J. Crew, Papyrus, and now Hertz are among the bankruptcies in the first 5 months of 2020. This article lists several others, and also has a link to a 2019 list of retail stores that went bankrupt. In March, right after the Covid-19 shutdown began, much of corporate America was functionally insolvent. They're alive now because the Federal Reserve created money, basically out of thin air, and bailed them out. We will see a huge wave of personal, small business, and major corporation bankruptcies in the coming months, and years.
June-Sept.- I think we'll see some other black swan (maybe another wave of Covid-19?) that will lead to another major stock market slide. The market's going up for only one reason, the trillions of dollars The Fed is creating out of nowhere. That is THE ONLY REASON stocks have gone up since the March bottom is the trillions of dollars The Fed pumped into the financial system. There is no fundamental reason. The Fed can't make trillions of $$ monthly forever with out destroying the the dollar. They'll do that eventually, but hopefully not for 2-3 years. Those trillions bypassed the real, everyday, real world economy, which is what needs to be rebuilt.
August/September/October- According to this CNN article, just over 30% of Americans didn't pay rent at the beginning of April, 2020. The Covid-19 shutdown hit a nation of people wallowing in historical amounts of debt, and living largely paycheck to paycheck. While th eWhite House says things are great, Americans are getting behind on rent. But it takes 3 to 4 months for the first people who don't pay rent to be evicted, with many more coming later on. The same goes for the people who stopped paying their mortgage in April or May. By late summer, we we begin to see the very first of a massive wave of evictions and foreclosures, both in residential real estate, and in many forms of commercial real estate. This huge wave of defaults will probably grow through the last half of 2020, and continue well into 2021, and beyond.
November- If Joe Biden wins the presidential election ( I still believe Trump will be removed from office before the election, as crazy as that sounds), then the stock market will drop again, since it'll mean fewer massive handouts to keep propping up the banking system, Wall street, and older, industrial era, multi-national corporations. Capitalism means that businesses that can't compete die off. We have the opposite of that right now. The U.S. is stuffed with the "zombie companies" Mohamed El Erian has been talking about. They need to go belly up if they can't hang. The longer the bailout of poorly run banks and major corporations goes on, the longer the depression (and it IS a depression, 10% drop in GDP is a textbook depression) will go on.
Early 2021- The College Apocalypse begins visibly (it's already going with small colleges). Think the Retail Apocalypse, but with colleges. In this economic downturn, Disruption hits the college and university world, and many will die, others will re-create the idea of what a college needs to be for the 21st century. This will go into high gear when the Student Loan Debt SLABS collapse, like the subprime CDO's did in 2008. Few people realize that student loan debt has become the new CDO's in the last 12 years. This will be real bad for many smaller cities and towns, dozens of "Eds & Meds" towns and cities, and a key reason why I think this is a 5-7 year downturn/stagnant economy, not just a 1-2 year recession.
OK, I'm homeless, working to get my own situation stable, and I just don't have the time to do the research now and blog very much on the economic picture. So this is my outlook from May 27, 2020.
Want a stable career for the Tumultuous 2020's? Become a bankruptcy auctioneer. I'm serious. We, as a society, have let the crazy people and morons run the show for decades, now it's time to pay the price. This is going to be rough for most people. But this decade also holds some of the greatest opportunities of our lifetimes.
If what you're doing doesn't make you a living (like me at the moment), step up your game, or take the time to learn something more viable for the 21st century, hyper-connected, Information Age world. There simply will not be enough high paying traditional jobs to build a new American Middle Class, millions will have to start their own small business, of some kind, for that to happen. You up for that?
Why have I been blogging about "the next big recession" for three years? Now. What's happening now, that's why. I could see a major economic shitstorm coming. I did not anticipate the Covid-19, aspect, at all. This pandemic shutdown has shifted the economic collapse into high gear. It's happening much faster than even I expected. Remember, with crisis comes opportunity, people.
You can read my thoughts on the Big Picture leading into the Tumultuous 2020's in my online book:
Welcome to Dystopia: The Future is Now (Book 1)
