Long term effects of virus shutdown

Discussion in 'Business, Investing & Finance' started by ChiefGator, Mar 24, 2020 at 7:27 AM.

  1. ChiefGator

    ChiefGator A Chief and a Gator, Master of the Ignore list!!!!

    Joined:
    Nov 9, 2015
    Messages:
    6,940
    Oxbucks:
    $2,610
    Ratings:
    +3,875 / -336
    This might be unpopular but I have been thinking (probably too much) about the longer term effects of our response to the virus. Both personally and for the local and national economy.

    Some thoughts follow:

    Personally I have lost a lot of my wealth on paper and probably will lose some of my income as well. This, for me, means pulling back on most spending that is not essential. The stress from daily updates is not really helping some of my medical issues.

    In our area tourists are a large part of our economy in the season. I would suspect that some of them who don't own property will in the future stay home more and travel less. Some who own homes might have to sell them, others that might have bought them won't. Developments that previously seemed very good might be not so good or canceled. We have a resort under construction by an airline, it is already suspended and I suspect might be canceled.

    In the larger picture consider the travel industry:

    I believe strongly that air travel will be reduced for at least the near term (six months to a year) and probably longer. This will mean that some airlines will go bankrupt and others merged. It will also mean layoffs through the system as business is less. Direct employees as well as indirect ones will impact the economy negatively.

    Hotels and restaurants will also be negatively affected. Some smaller ones won't survive even the current conditions, and many are closed with layoffs of their employees. This will resonate with other portions of the economy especially tax revenues.

    I could go on but I wanted this post to get others opinions, so comment as you desire.

    We could have a thread on what might have happened if we took other less impactful actions (that politics won't allow) and one for the potential impact of that 2T stimulus bill that somehow our servants can't get done.

    Thanks
     
  2. Taco Gratis

    Taco Gratis Clear eyes. Full hearts.

    Joined:
    Jun 2, 2016
    Messages:
    4,006
    Ratings:
    +3,027 / -197
    We're in non-linear land.
     
  3. BMF

    BMF Bad Mother....
    Lifetime Member

    Joined:
    Sep 8, 2014
    Messages:
    13,570
    Oxbucks:
    $14,585
    Ratings:
    +20,275 / -277
    I'm curious to see how this impacts the housing market. It's going to have a trickle effect. Several people - mostly in the lower end, blue collar market...which will lead to white collar impacts - will end up jobless and this will lead to foreclosures, and a slow down in the real estate market.

    I live in DC, so I think (I hope) I'm mostly protected. I'm planning to move back to Florida within 12-24 months. I'm hoping if there's a dip I can sell here and make out when I move to Florida. We'll see. I could end up losing my ass.
     
    • FireFoley

      FireFoley Senior Member
      Lifetime Member

      Joined:
      Nov 19, 2014
      Messages:
      3,267
      Oxbucks:
      $2,957
      Ratings:
      +4,262 / -299
      I am in the same boat in a way as I am casually looking for a place, but think prices are way too high in the areas I am looking. Fortunately I am not in a rush. And I never want to see people lose a home for the reasons that are going on now. 10-15 years ago was different b/c people were buying multiple homes at a time or they were clearly buying homes they could not afford. They then blamed the banks and lenders, etc. instead of blaming themselves. In this situation, the banks/lenders will be more accomodating in allowing some missed payments b/c job losses and layoffs were done by mother nature so to speak. But when things like this happen whether it be our fault or not, it often times forces people to take a look inwardly and many will adopt a policy that I have lived by forever, which is live beneath one's means. So you might find a property that you like. Or on the other hand, if many people say they are never going anywhere again, they might invest more than they should in a home thinking they are never leaving their house again, LOL. Could go either way.

      Also mortgage rates have gone up quite a bit lately on a % basis. Nothing that would prohibit a qualified borrower, but might hurt the first time buyer's b/c they are stretched anyway b/c of home price increases. The mortgage rates have increased not b/c interest rates have increased very much, but b/c the secondary mortgage market is frozen and is not functioning properly. Companies that borrow money cheaply to invest in mortgages of all types are getting CRUSHED. Take a look at BXMT, NRZ, TWO, NLY, etc. etc. etc. All of them are down 50-80% in a matter of less than 2 weeks. That is the problem with the mnortgage market right now.
       
      #4 FireFoley, Mar 24, 2020 at 6:45 PM
      Last edited: Mar 24, 2020 at 6:50 PM
    • Zambo

      Zambo Poo Flinger
      Lifetime Member

      Joined:
      Jun 12, 2014
      Messages:
      8,795
      Oxbucks:
      $9,596
      Ratings:
      +17,986 / -237
      The way to take advantage of any market is buy low and sell high. You can't take advantage of anything by selling your current home and buying a new one in the same market (timewise). In a down market people still need to live somewhere so they rent instead of buy. Increase in demand makes rent go up. So you rent out your current home and use the money to buy a new home when you think there is a good value to be had. There is no rush unless the market is skyrocketing back up, the rentals will still be in demand. After you're in your new home, wait until the market comes back in a few years and then when the renters move out sell the old place. My wife and I have done this several times over the years.
       
      • BMF

        BMF Bad Mother....
        Lifetime Member

        Joined:
        Sep 8, 2014
        Messages:
        13,570
        Oxbucks:
        $14,585
        Ratings:
        +20,275 / -277
        I have a ton in AGNC and it CRASHED in - like you said - two weeks. It's down around 40+% after today's comeback.
         
        • BMF

          BMF Bad Mother....
          Lifetime Member

          Joined:
          Sep 8, 2014
          Messages:
          13,570
          Oxbucks:
          $14,585
          Ratings:
          +20,275 / -277
          Very good points. If I was moving and staying in the same market that's something I'd definitely consider. But since I'm moving several states away (Virginia/DC to Florida) I want to unload it...plus, like I said, the market here is OUT OF CONTROL (a house two doors down from me sold for $61K over asking w/ over 25 offers. There's literally no inventory in Arlington, VA. Amazon is buying up houses for their future employees. The house was bought by an investor who put a tenant in there at $3000/month (it doesn't make sense).

          Anyhow, I agree w/ your perspective - but since we are leaving DC for good I don't want to deal w/ renting it.
           
        • Zambo

          Zambo Poo Flinger
          Lifetime Member

          Joined:
          Jun 12, 2014
          Messages:
          8,795
          Oxbucks:
          $9,596
          Ratings:
          +17,986 / -237
          Well if you can get bank for your house and you think the market is going down, then obviously rent until you think its close to the bottom. Its certainly good to move from an inflated area to an area where you can get more for your buck. Best of luck!
           
        • FireFoley

          FireFoley Senior Member
          Lifetime Member

          Joined:
          Nov 19, 2014
          Messages:
          3,267
          Oxbucks:
          $2,957
          Ratings:
          +4,262 / -299
          Sorry to hear that but you are clearly aware of what is going on. I look at those Mortgage REITS and see those giant dividends but am not tempted b/c I have my own HUGE losers. Have you seen the MLP's? A complete nightmare that I wish I was not living. I think many of us are in a similar boat overall.
           
          • BMF

            BMF Bad Mother....
            Lifetime Member

            Joined:
            Sep 8, 2014
            Messages:
            13,570
            Oxbucks:
            $14,585
            Ratings:
            +20,275 / -277
            I've been in AGNC for years. I get almost $200/month in dividends. I actually added some more, since it dived so low. It's in my Roth, so I'm in no hurry to sell it. I've always hovered around even (on the stock price) w/ it, but it was actually up about 15-20% over the last 3 months (my dollar cost average) - and now it dropped (like you said) around 70%. UNBELIEVABLE!
             
          • FireFoley

            FireFoley Senior Member
            Lifetime Member

            Joined:
            Nov 19, 2014
            Messages:
            3,267
            Oxbucks:
            $2,957
            Ratings:
            +4,262 / -299
            Unfortunately it is believable. I was too damn dumb to pull the trigger on NRZ and TWO, and both went up 3 bux/share with good payouts. And now I am glad I was lucky. But it is believable. Just take a look at EPD, MPLX, KMI, ET, etc, etc. and so on and so on and so on. MLP's, aka the mortgage REITS of the energy sector. Always was told MLP's are basically toll roads for oil and gas and the actual price of the Commodity did not matter. Guess what? BullShyt!. Turns out in fact the commodity price does matter, LOL.
             
            • Detroitgator

              Detroitgator General Factotum
              Lifetime Member

              Joined:
              Jul 15, 2014
              Messages:
              15,698
              Oxbucks:
              $9,388
              Ratings:
              +16,015 / -89
              The Fed is going to completely own the mortgage sector, like student loans.
               
              • Taco Gratis

                Taco Gratis Clear eyes. Full hearts.

                Joined:
                Jun 2, 2016
                Messages:
                4,006
                Ratings:
                +3,027 / -197
                lof.jpg
                 
                • BMF

                  BMF Bad Mother....
                  Lifetime Member

                  Joined:
                  Sep 8, 2014
                  Messages:
                  13,570
                  Oxbucks:
                  $14,585
                  Ratings:
                  +20,275 / -277
                  I refinanced my 30 year mortgage from 3.25% to 2.75% yesterday - total cost is about $3100. I'm planning to move within 15 months or so, so I'm not saving a ton, but my mortgage is dropping more than $300/month. So the "missed" payment (in May) I plan to pay that towards the principal. Part of the $3100 is $1500 towards the VA funding fee (which they make you pay when you refinance a VA loan - although I have more than 50% equity).
                   

                  Share This Page

                  The Box

                  Help

                  You don't have the necessary permissions to use the chat.

                    1. There are currently no users chatting.
                      • About Us

                        Our community sprung up when the Gatorsports message board was shut down in the summer of 2014. We pride ourselves on offering Gator-biased, yet critical discussion among people of all different backgrounds. We are working every day to make sure our community is the best Gator message board you will find.
                      • Like us on Facebook

                      • Buy us a Zima!

                        The management works very hard to make sure the community is running the best software, best designs, and all the other bells and whistles. Care to buy us a non-alcoholic Zima? We'd really appreciate it! Just click the "Donate" tab at the top of the page.