Real World Anecdotes

[BG2008]

The goal here is to share real world anecdotes as I have picked up a few in this thread that would paint us a good picture of the overall economy

 

1) NYC renters are asking for a lot of rent deferrals.  I have relatives where 1/2 of their tenants have asked for rent deferrals. 

 

2) On Instagram, famous chefs like Thomas Keller, David Chang, Jean George, etc have banded together and been very vocal about the stay in place orders and what that is doing to the restaurant business.  I am very afraid that we come out of this with no mom and pop restaurants.  Although, I would not own a restaurant, I do appreciate what they do and where my family and I can go and find a good meal. 

 

3) Most banks are offering deferrals.  I have heard that First Republic has offered up to 6 months deferral if you submit a statement saying how Covid 19 has affected your income.  TD Bank is terrible.  Chase is fairly easy to do via an online interface.  Would love to hear more. 

 

4) Hotels and retail real estate are actually losing money.  All the RE investors that I talk to have mentioned that they tend to underwrite to a 20% drop in NOI for retail and maybe 50% for hotels during a recession.  But they don't underwrite to a negative NOI.  This is different.  How long it last is very distressing.

 

5) I personally believe that the Fed and the government will allow for a temporary 3-6 months deferral on rent and mortgage payments across the board in the US.  If they don't , the consequences are dire.  Politically, it is very difficult for 80% of the homes to be foreclosed on.  It is probably the same for 80% of retail and hotels to be foreclosed on.  It is not any of the owners' fault that they were put in this situation. 

 

6) Grocery and warehouses are the only two areas where they are still hiring people.  My wife is a champ and has been on top of this.  She bought us face mask, sanitizers, formula, etc a couple months ago and people thought we were nuts.  I have done 2-3 runs to restaurant depot and Costco early on to stock up on 10 pounds of shrimps and 30 pounds of oxtail etc.  You gotta eat well even during times of quarantine.  My wife told me that it is about the only thing keeping everyone from tearing into each other at this moment, nice dinners on Saturday and Sunday night.  We have decided to not go grocery shopping and have people bring it to us.  Placing orders through Instacart is really stressful.  There aren't any windows open.  Within the Chinese WeChat, there are now people specializing in running errands for you for $40-$100.  Frankly, we will gladly pay that.

 

7) A few of my high school friends have mentioned that staying home means they have been munching on food and gaining weight 

 

8) This one is obvious, we all started using Zoom

 

If you have stories from industries that you work in, please share.  I would love to hear them. 

[LongHaul]

good idea for a thread.

 

50% of renters seeking deferral- that is nuts - but I'll bet many are taking advantage of the situation though. 

 

A few things.

 

1.  High end guitars seller said sales are down 75%.  Very wealthy clients not even buying.

 

2.  I am hearing about people cutting all non-essential expenses to zero.

 

3.  Heard of one real estate advertising firm that laid off 75% of employees as real estate ads dried up.

 

4.  I looked at my credit card spend since March 10th - and was almost nothing on it until the 28th.  I wasn't even trying to cut back but

we just have not been going out.  Probably distracted too.  Curious of other people credit card spend?

[Jurgis]

1. Yearly travel spend gonna be down $XK - two or three international trips cancelled.

2. Best Buy stopped appliance installations at home. They deliver to the door, after that it's your problem. We got a dryer installed last day of full installations - pure luck. Appliance breaks - tough luck try to find someone who will fix it...

3. Not very essential services are spotty. Pest control - unreachable.

4. Groceries - we got what we needed in a store. I can't Instacart for groceries for the life of me. Toilet paper is the only elusive staple so far.

5. Local meadow/forest/dog walking place was swamped on Saturday. Cars parked half mile+ before the parking lot illegally on highway side. We got there late afternoon, so we got parking. Lots of people walking/etc.

6. I think I mentioned we waited for 2 hours for Chinese delivery on Sunday week ago. Presumably lots of restaurants closed, so this one was swamped and only had one delivery guy.

7. Some local restaurants do pickup/delivery but with half or quarter menu. I understand why, but it sucks - we pretty much could not order anything.

8. Some online services are borked. The restaurant may be closed, but they don't say it and just silently fail. Double check before ordering or getting mad that the website does not work.

9. RCN called and offered 2x speed for 1/2 price for 2 years. The guy did not say that this is uncancellable contract (early termination is like $600), but still... pretty nifty deal IMO. Unless I missed something else and they borked me.

10. Had door-to-door free energy assessment sales a week or so ago. I think MA put a freeze on that for now though.

11. Non-essential products from China are still being delivered and pretty fast. Bought custom shades, got in a week+. Go Amazon, go China! ;)

12. I mentioned buying home sewn masks on Etsy on other thread.

13. Bunch of activities I am involved in moved to virtual on Zoom. Tai Chi, Zen, etc. Even non-technical people are all Zooming.

14. MIT CSAIL mailing list is pretty active on community stuff like making masks for people/healthcare workers, making ventilators (I'm not sure how realistic this is), some Covid 19 related software projects.

 

[meiroy]

1. Friends lost jobs. At home, unsure if they will have these jobs back once everything is over. For some, it's unlikely.

2. Some subscriptions of YouTubers that I follow went up by a lot

3. An artist friend had all his shows canceled so he fired his manager.  The manager has no other clients.

4. A relocation company that deals with the relocation of Europeans coming to the USA has 0 business now.

5. Everyone using Zoom.

6. A few companies started to use Microsoft tools to coordinate work from home.

 

[drzola]

Just posted from associate from India

 

Sachin Bansal

 

Converting Indian railway coaches into hospital wards has to be one of the best ideas ever. We may have thousands of movable “hospital beds” which can be sent to where they are needed within hours.

[SharperDingaan]

good idea for a thread.

 

50% of renters seeking deferral- that is nuts - but I'll bet many are taking advantage of the situation though. 

 

A few things.

 

1.  High end guitars seller said sales are down 75%.  Very wealthy clients not even buying.

 

2.  I am hearing about people cutting all non-essential expenses to zero.

 

3.  Heard of one real estate advertising firm that laid off 75% of employees as real estate ads dried up.

 

4.  I looked at my credit card spend since March 10th - and was almost nothing on it until the 28th.  I wasn't even trying to cut back but

we just have not been going out.  Probably distracted too.  Curious of other people credit card spend?

 

Our credit-card and cash spend, across all family units, is similar. Down 50-75%.

We're just not eating out, buying entertainment, or just buying things period. Subscription services pretty much cost the same every month, no matter how much you use them.

 

Volume levels are down everywhere, but there is still a lot of work going around the essential services. Supply chain, trucking, packaging, farming, etc. Nobody can work 24/7, food still has to move, we still have to pack it, farm migrant labour is still required, etc.

 

Lot more people doing daily 2 hr hikes just for the exercise and mental sanitation. Starting to notice the improved fitness, and a couple of pounds come off the waste line!

 

SD

 

[KJP]

 

4.  I looked at my credit card spend since March 10th - and was almost nothing on it until the 28th.  I wasn't even trying to cut back but

we just have not been going out.  Probably distracted too.  Curious of other people credit card spend?

 

Mine is probably down 75% to just groceries and cell/broadband/streaming service bills.

 

Other anecdotes:

 

1.  Various Facebook debates about whether you should continue to pay people who regularly provided you with various services, e.g., cleaned your house, but are no longer able to do so.  These people likely have no other income and their ability to claim unemployment is unclear to me.

2.  Some daycares/private pre-schools still expecting full payment even though no in-person classes (the stated reason is to continue paying teachers), some asking for half-pay, some not asking for any payment.  Many pre-schools/daycares are having virtual classes via Zoom

3.  The weather has been quite poor the last few days (cold rain), but otherwise the local public outdoor tennis courts have been quite busy

4.  No longer any expectation that K-12 public schools will reopen this year

5.  Local universities are starting to prepare for the possibility of online classes for the 2020-21 academic year

6.  People remain quite orderly and polite, despite having to stand in line six feed apart outside in the rain to wait their turn to enter Trader Joes

7.  National and regional law firms are cutting partner pay/draws, eliminating 401(k) match, etc. to avoid layoffs of staff, but I doubt that will last for months

[rolling]

1- I've noticed war time mobilization of skilled personal. Our small 10M people country  lacks pretty much all industrial capacity to respond to coronavirus: face masks, ventilators, protective glasses/all face protection, reagents for the PCR coronavirus test, just name it. Now, in just 2 weeks:

- textile industries have received guidelines for mask production

- 3 ventilator prototypes have now reached the industry

- a substitute for a critical imported PCR reagent has apparently been found and homologated and apparently testing will now stop being rationed

- in the meanwhile companies have been donating medical clothing and masks they are importing, individuals have been doing homemade protective gear for health care friends/family, etc

 

2- most of the country is closed and people are afraid, fear is our friend now and case growth rate declined sharply before de healthcare system collpased (it will collapse anyway though, but by a lesser margin)

 

3- schools closed, kids at home, some people working from home, housewifes dispensed: mental ilnesses are going up sharply.

[Jurgis]

6.  People remain quite orderly and polite, despite having to stand in line six feed apart outside in the rain to wait their turn to enter Trader Joes

 

I've heard about outside lines at Trader Joe's. IMO this is just insane. More exposure waiting ages in line than in the store.

Anyway, not gonna go to TJs until the lines are gone.

 

 

 

In Soviet Union line stands you!

[Guest cherzeca]

"escape from New York" report

 

1. siblings/extended families sheltering in place at country/second houses of adult parents.  well, we cant say they never come to visit anymore.  wondering when/if they will leave.  my case and the case of two of our friends.

 

2.  full service rental apartment buildings firing doormen and staff.  if renters didnt ask for rent rebates by now, they will soon do so.

 

3. Berkshire area doctors being asked to care for chronic health issues usually cared for by NYC doctors.  there is a real quality/service difference.

 

4.  young professionals (business/law) doing just fine remotely and over zoom.  if anything, this is a proof of concept for greater reliance on remote work process.

 

5.  social distance/shelter in place rules the same for NYC and very sparse Columbia/Berksire Counties.  most people in latter area comply but think it is a bit much

 

6. as per friend who is senior nurse at large area hospital, there is really no good pulmonary/infectious disease professional capability at doctor/PA/nurse level.  winging it

[krazeenyc]

https://www.nytimes.com/2020/04/03/nyregion/coronavirus-nyc-landlord-mario-salerno.html

 

Landlord waives april rent for all his tenants!

[BG2008]

Just to add the obvious, my restaurant and travel spends has gone down about 90% this year. 

[flesh]

I'm part owner in a company selling custom built websites. I regularly speak with Joe public about their finances.

I speak with about 5-10 new people every day from around the country.

 

Every third person I speak with has lost their job or been furloughed. Half of them have stopped paying some of their bills, credit cards go first. Many are seeking unemployment but are so broke the gap in income will hurt them badly. People are pulling all or some money out of retirement accounts. In general, those who needs support are confused as to what they will receive and when or how to apply.

 

Many are only a month or two away from missing mortgage payments.

 

I usually show people how to do balance transfers with credit cards to get 0% for 15 plus months, the credit card companies aren't approving new applications anymore, except for perfect credit. I haven't heard from anyone that credit limits are being reduced yet like in 09 however inactive cards are being cancelled en masse.

 

Surprisingly, those working that are 60 plus years old think they will be going back to work by May.

 

The leads we buy as a company are not available in the same quantity and the quality is lower. Generated online.

 

 

 

 

 

 

[Casey]

Rural health center where my family member works has 3 doctors and a few days ago one was confirmed to have covid so now they are down to 2.

[cubsfan]

 

Every third person I speak with has lost their job or been furloughed. Half of them have stopped paying some of their bills, credit cards go first. Many are seeking unemployment but are so broke the gap in income will hurt them badly. People are pulling all or some money out of retirement accounts. In general, those who needs support are confused as to what they will receive and when or how to apply.

 

Many are only a month or two away from missing mortgage payments.

 

 

My experience has been very similar - this is a huge tragedy.

[TrashIsCash]

I sell apartment buildings owned by mom & pop investors in Orange & LA County, CA.  Rent collections so far in April are OK...  Down by 5% or so.  I will know more by next of next week. 

 

There are a few cases of slimey lawyers contacting tenants and telling them not to pay their rent, even if they can afford to do so.  According to the attorney, there is no downside for the tenant....  Our state has an eviction moratorium and courts are closed for at least 6 weeks.

 

Regarding apartment financing, JPMorgan Chase was one of the go-to lenders in our market.  As of late March, they are completely out of the market.  They miiiiight to do a loan for one of their best customers, but it will be 50% LTV. 

 

Fannie & Freddie are lending, but they are asking for 12 months of reserves for P&I, Taxes, Insurance, etc.

 

 

[Gregmal]

I sell apartment buildings owned by mom & pop investors in Orange & LA County, CA.  Rent collections so far in April are OK...  Down by 5% or so.  I will know more by next of next week. 

 

There are a few cases of slimey lawyers contacting tenants and telling them not to pay their rent, even if they can afford to do so.  According to the attorney, there is no downside for the tenant....  Our state has an eviction moratorium and courts are closed for at least 6 weeks.

 

Regarding apartment financing, JPMorgan Chase was one of the go-to lenders in our market.  As of late March, they are completely out of the market.  They miiiiight to do a loan for one of their best customers, but it will be 50% LTV. 

 

Fannie & Freddie are lending, but they are asking for 12 months of reserves for P&I, Taxes, Insurance, etc.

 

This just shows the importance of those institutions and what a mess it would be if they were shut down.

 

Personally, all my tenants paid April. One lost her job but still got rent in on time. Ive already reached out to her about creative solutions to the extent things dont improve. But all in all, bullets dodged this month. I have seen massive amounts of folks laid off and furloughed. Some sadly, ones that just left previous jobs of long standing for exceptionally better jobs.

[Spekulatius]

Kushner Co defaults:

https://www.bisnow.com/new-york/news/capital-markets/kushner-companies-mortgage-103550

[Dalal.Holdings]

Kushner Co defaults:

https://www.bisnow.com/new-york/news/capital-markets/kushner-companies-mortgage-103550

 

Just taking a bit longer than expected to funnel stimulus money to them. Don't worry, they're good for it.

[stahleyp]

Kushner Co defaults:

https://www.bisnow.com/new-york/news/capital-markets/kushner-companies-mortgage-103550

 

Just taking a bit longer than expected to funnel stimulus money to them. Don't worry, they're good for it.

 

"they were late on the payments for November, January and February"

 

This thing didn't start impacting the US until at least late Jan. Why did they miss November and January? I suppose all of us peons can chip in and help them.  ::)

[rb]

Yea, not Corona related. Just deadbeat company.

[Gregmal]

Yea and for every skunk like the Kushner's or probably a gazillion other Wall Street firms or corporations like Cheesecake, theres a hardworking citizen cutting expenses to the bone and scraping pennies together so they can make their rent/mortgage, simply because its the right thing to do.

[Spekulatius]

Kushner Co defaults:

https://www.bisnow.com/new-york/news/capital-markets/kushner-companies-mortgage-103550

 

Just taking a bit longer than expected to funnel stimulus money to them. Don't worry, they're good for it.

 

"they were late on the payments for November, January and February"

 

This thing didn't start impacting the US until at least late Jan. Why did they miss November and January? I suppose all of us peons can chip in and help them.  ::)

Yeah, they were rumored to be weak before this started, but the epidemic was probably the death knell. A lot of commercial RE players in NYC were already hurting before the crisis developed, especially those in retail (which got amazoned ).

 

[stahleyp]

That's why we need a huge meltdown. Pay back these guys. ;)

[matts]

I'm part owner in a company selling custom built websites. I regularly speak with Joe public about their finances.

I speak with about 5-10 new people every day from around the country.

 

Every third person I speak with has lost their job or been furloughed. Half of them have stopped paying some of their bills, credit cards go first. Many are seeking unemployment but are so broke the gap in income will hurt them badly. People are pulling all or some money out of retirement accounts. In general, those who needs support are confused as to what they will receive and when or how to apply.

 

Many are only a month or two away from missing mortgage payments.

 

I usually show people how to do balance transfers with credit cards to get 0% for 15 plus months, the credit card companies aren't approving new applications anymore, except for perfect credit. I haven't heard from anyone that credit limits are being reduced yet like in 09 however inactive cards are being cancelled en masse.

 

Surprisingly, those working that are 60 plus years old think they will be going back to work by May.

 

The leads we buy as a company are not available in the same quantity and the quality is lower. Generated online.

 

That's interesting. From what i read a lot of lower-income people losing their jobs right now, will actually have more money coming in than before (combination of unemployment and the check from Mnuchin). How fast do you get an unemployment check after you file in the US. There might be some cash flow mismatch, but my impression was that for a couple of months most people will be able to scrape by.