JT, I agree w/ you that is why based on my quick monkey math the Russell 2000 (smaller companies but larger than ones you are talking about) is down something like 38% from peak while Dow is down about 27% from peak.
Unfortunately, corporate consolidation is just going to get worse.
Furniture retailers to short 
As you said, playoffs for NHL/NBA are boom times for bars. Theatres will get crushed by no new movies opening.
I think one of the key factors in terms of the markets is that if you know the exact timeline, that certainty reduces fear and it makes it easier for the government to help protect sectors of the market that are going to get hammered.
Like, we basically have a reasonable expectation right now that there will be ~2 months of restaurants, bars, theatres, etc getting crushed by this. They may not pop all the way back right away, but they’ll be profitable again in 3-4 months. So if the government gives them zero interest loans with slow repayment timelines to get them over the hump, they should be fine long-term.
So when you get into the long-term shutdowns and crowdless games/events in the sports/entertainment industry it’s essentially a longer-term problem, but in a specific sector, and again we can be confident that it’ll be like one year. Also, the leagues aren’t going to need to be bailed out or anything.
We might see a lot of bars/restaurants right around stadiums either go under or lay everyone off for a year. Ultimately, they’ll be replaced by new ones in a year, and it’s a matter of taking care of the unemployed.
So like, I think that stuff is a little more easily contained and unlikely to cause broad economic damage. I could obviously be wrong, and there’s obviously a non-zero risk there, but I think we can get through that part of it okay.
What I’d be curious to know is what would be considered a “reasonable” drop for the S&P if we factored in several months of estimated revenue losses across the board while assuming we won’t be heading towards the end of civilization.
Sure, but I think we can all agree that this is one of those times where those businesses will just need to lift themselves up by their bootstraps.
Are you factoring in how incompetent and evil the people in charge of our government right now?
Fuck it, I’m going to go see The Hunt tonight. I’ll get the theater all to myself.
Ultimately it’s going to suck for current small businesses, and I’m not trying to downplay the importance of that. But this is more of a human suffering and moral problem than a long-term economic problem.
People will still be buying furniture in 6-12 months, it’s just a matter of where they’re buying it from. There will be faster consolidation, which I don’t like, but again that goes to like a political/structural thing, not an economic thing.
Older small furniture businesses (let’s call them OSFB) run by older people that aren’t innovating will go under. New small furniture businesses (NSFB) that are innovating them will pop up and some will succeed. I don’t know the ratio, but it’s going to be like X OSFB = Y NSFB + Z consolidation. Sadly, Y will only get a small chunk of it, but the overall economy won’t hurt as much.
What the NSFB will need to do is be more innovative in advertising and marketing. All the OSFB have the same business model in my experience: fliers in newspapers, sales every holiday weekend, pushy salespeople, limited inventory, pushing hard on the insurance plans, and being franchised to a bigger company that runs shitty ads OR being the really gimmicky dude running local ads yelling into the camera like a used car salesman.
Wayfair and Overstock and all those are using Facebook ads and IG ads, but they’re selling a lot of shitty and poorly made furniture being imported from China. If you look for 15 minutes you’ll be able to find the exact same piece under 3-4 different brands, sometimes at wildly different prices. As consumers begin to realize this, there will be opportunities for NSFB to grab back some business by advertising on digital and social media platforms… especially as millennials start getting to the age where we’re not only buying homes (happening more and more now) but furnishing them nicer, doing home improvement projects, etc.
Wow, Dow might be negative again before noon after the huge gain in futures and at the open.
Nah, businesses don’t bootstrap. Individuals bootstrap.
Yeah, but I’m also factoring in that they want to keep the markets up more than anything else, and it’ll be fairly evident how to do that. I mean, if they’re fucking it up, Wall Street will pick up the red phone and tell Trump what to do. He’ll do it and give a rambling street about how he knows finance and markets because he’s a genius businessman and he learned it from his uncle who went to Harvard, which is good but not as good as Penn and Wharton but, you know, we can’t all be Donald John Trump unfortunately.
So vulture capitalists not only loot unhealthy companies but perfectly healthy profitable ones too? How the hell does that work?
Yeah IMO we’re just in for a ton of volatility in between pieces of terrible news that send it plummeting due to mostly fear-based selloffs.
Also it’s going to drop almost every time Trump talks or announces he’s talking.
The biggest concern imo is that an extended downturn in stocks exposes a much bigger debt crisis or some other super smart guy exposure risk 2.0 vehicle like MBSs and CDSs that most of us don’t even know about because it’s all dark market - and banks start failing again.
The fed $1.5T liquidity thing piques my concern on this. Someone told Trump that was needed pronto.
Take huge loan
Buy company with loan money
tranfer loan obligations to company you now own
borrow as much as you can with new company as collateral
sell all assets
fire all workers to “cut costs”
pay it all in a huge dividend to the owners (you)
declare bankruptcy
look for new company to disrupt innovatively in a synergistic manner
So how do they pick which companies to raid?
Working hard, thank you!
I’m not against seeing movies right now, think it would be cool to watch Blade runner or some random older movie with 10 people as they will be an absolute ghost town for ~2 months.
I think they’re just working through them one by one.
NBC reporting that he will declare a national emergency