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I read an article claiming there are thousands of businesses, some of them with high market caps, more that are small to mid-sized businesses, that do not have the cash or availability to credit needed to go much longer than 30d. That's somewhere around May 15th. After that, these companies will look for buyers and when there aren't any (more likely than not), they'll liquidate and declare.
I don't like to deal with the downsides of this thing but the elephant in the room is the potential collapse of the supply chain - and I mean that in the broadest sense of that term in the context of the global economy. Pretty frightening thing.
There's another sector that is terribly vulnerable to significant contraction, possibly collapse: Public and private colleges and universities. With tuition, room and board fees evaporating overnight, these institutions are hemorrhaging cash - I don't care how wonderfully endowed they are. We're talking about daily, general operating expenses associated with salaries and upkeep. You hae to wonder about tenured high end professors in the sciences and medicine pulling down quarter million or more annual salaries. There is going to have to be some serious lightening of the load. Jobs will be lost and won't be regained any time soon.
One other sector that is struggling: Hospitals and medical services (those not doing COVID related stuff). I know from one inside source that revenue in a relatively small hospital has lost and is loosing $16m a week in revenue. Will the Chief of Neurosergery in that hospital who's pulling down $2m/y be employed in a month? Probably not
The bottom line for me is that, from my perspective, we're looking at reopening too broadly. It is not you either do it state by state or you don't. I do agree with the national, state and county level gating measures. There has to be an indicator that the various rate measures are trending toward zero and, if the researchers are right about this, below 1.07 and preferably 1.03...... and those rates need to be sustained or if there is a surge, re-established before more easing occurs.
However, I think hospital services especially are in one of those unique niches where you have to risk a return to some level that produces income or hospitals and their employees, professional and administrative, will start dropping like flies. I'm quite certain there are other businesses that need to be viewed likewise, others, where the risk of re-opening is too high, the cruise industry is on my list of those, don't.
I don't like to deal with the downsides of this thing but the elephant in the room is the potential collapse of the supply chain - and I mean that in the broadest sense of that term in the context of the global economy. Pretty frightening thing.
There's another sector that is terribly vulnerable to significant contraction, possibly collapse: Public and private colleges and universities. With tuition, room and board fees evaporating overnight, these institutions are hemorrhaging cash - I don't care how wonderfully endowed they are. We're talking about daily, general operating expenses associated with salaries and upkeep. You hae to wonder about tenured high end professors in the sciences and medicine pulling down quarter million or more annual salaries. There is going to have to be some serious lightening of the load. Jobs will be lost and won't be regained any time soon.
One other sector that is struggling: Hospitals and medical services (those not doing COVID related stuff). I know from one inside source that revenue in a relatively small hospital has lost and is loosing $16m a week in revenue. Will the Chief of Neurosergery in that hospital who's pulling down $2m/y be employed in a month? Probably not
The bottom line for me is that, from my perspective, we're looking at reopening too broadly. It is not you either do it state by state or you don't. I do agree with the national, state and county level gating measures. There has to be an indicator that the various rate measures are trending toward zero and, if the researchers are right about this, below 1.07 and preferably 1.03...... and those rates need to be sustained or if there is a surge, re-established before more easing occurs.
However, I think hospital services especially are in one of those unique niches where you have to risk a return to some level that produces income or hospitals and their employees, professional and administrative, will start dropping like flies. I'm quite certain there are other businesses that need to be viewed likewise, others, where the risk of re-opening is too high, the cruise industry is on my list of those, don't.
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