Business Uncertainty About Sales Goes Haywire

These Charts Show What Mess Businesses Face Going Forward.

By Wolf Richter for WOLF STREET.

I’m going to show you a chart based on data that the Atlanta Fed released today. We’ll dissect it in a moment. The chart would be funny, if it weren’t so serious. At first, just look at the chart superficially. These results are based on surveys of businesses of a wide variety of sizes, spread across all sectors of the economy (except agriculture and government), in all regions of the US. They’re asked about their own businesses, in terms of sales, employment, and capital investment over the next 12 months. And the chart also shows how uncertain the participants are about their own expectations.

So this is about expectations for their own businesses, and about the uncertainty of their own expectations. For now, just look at the chart without analyzing it: It shows better than just about anything else what mess businesses face going forward: Their world has gone haywire.

The pandemic has hit businesses differently. Some businesses have reported booms in demand because of the shifts cause by the lockdowns and other factors, and they have trouble keeping up. Other businesses are in a state of collapse or have filed for bankruptcy. And then there’s every business in between. And these results are the averages of the pandemic’s winners and losers combined.

Expectations of Growth and the Uncertainty of those Expectations.

There are two factors here in the Atlanta Fed/Chicago Booth/Stanford Survey of Business Uncertainty: These companies’ expectations; and their uncertainty about their own expectations.

Business expectations.

Expectations of sales growth over the next 12 months (red line in the chart below has been trending down since November 2018 (high of 128.5). This was later borne out by the slowing economy. Those expectations were already low before the pandemic hit in December 2019 (86.7), indicating a further slowdown of the economy for 2020, and remained roughly in that range in January and February.

The collapse of those expectations commenced in March (53.6), and carried through April (0) and May (-36.6). In June, they ticked up but remained terribly low (-28.9).

Expectations about growth for capital investment (green line) and employment (black line) over the next 12 months declined in March, April, and May, but didn’t collapse. And both ticked up in June.

Each of the indices captures the direction and magnitude of how these companies expect sales, employment, and capital investment to change over the next 12 months. The indices have been set with a mean of 100 from January 2015 through December 2018.

Uncertainty about of those expectations.

But businesses face a wall of uncertainty, and consequently, have become very uncertain about their own expectations – particularly about their expectations of sales growth. The uncertainty index tracks the gap between each company’s “lowest” and “highest” sales growth scenarios, or when the company assigns a higher probability to their “lowest” and “highest” case scenarios.

The uncertainty index for sales expectations (red line in the chart below) began spiking in March, but unlike sales expectations, the uncertainty about them continued to spike in June.

In comparison, the uncertainty about their employment expectations remained relatively low, but nevertheless ticked up in June the highest level in the data series. Uncertainty about investment remained range-bound:

So, plotting on the same chart the businesses’ expectations of sales growth and their uncertainty about their own expectations of sales growth shows the environment that companies find themselves in. While expectations of sales growth for this coming year plunged, the businesses are totally uncertain about those expectations, and they assign high probabilities to both extreme scenarios – a strong recovery in their sales or continued misery in their sales.

What these businesses are saying is this: They took a big hit in sales and in June still expected those sales to remain at low levels for the next 12 months, but they have no visibility over those 12 months, and have no clue how this will turn out, and lack any kind of confidence in their own expectations of where sales might go.

Practically by definition, a business decision maker has to expect sales growth, and has to figure out how to make it happen. That’s part of the job.

But unless visibility increases and certainty about their own expectations increases, it’s going to be tough to plan and make long-term decisions with confidence. From a business point of view, this is a mess.

The entire market of 3,451 stocks minus the “Giant 5” is down 1% from Jan 2018. But wow, the volatility! You would have been better off with a despicable freaking savings account. Read… Wild Ride to Nowhere Since Jan 2018: What the US Stock Market Looks Like Minus APPL, MSFT, AMZN, GOOG, FB

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  90 comments for “Business Uncertainty About Sales Goes Haywire

  1. Sporkfed says:

    For once, I believe the survey.

  2. ChrisBern says:

    I think the main outcomes from this state of uncertainty are and will continue to be lack of hiring for companies that are doing OK, and trimming of payrolls for those that aren’t.

    • Inno says:

      Interesting that investment and employment have been kept in-line (possibly by Fed pump), but sales is cratered, or at least certainty of sales has been, which is the same thing, once factored.

      Looks like a great scenario for return on investment…social corporatism, anyone?

      • phathalo says:

        That puzzled me as well, but I think the reason why expectations about investment/hiring growth didn’t crater is exactly because of the uncertainty. Business decision makers are so unsure about what’s going to happen they just basically uncertain about decisions they can control (capital investments and hiring): should I invest more for the rebound, fire people for the second wave? I don’t know, so just don’t make any decisions and keep the status quo.

    • M says:

      That is true but does not capture the full story. The main outcome of the sinking of the Titanic was that some people were forced to go into the water, while others were able to go on lifeboats. Moreover, the Titanic was probably also “repairable.” :-)

      Unfortunately, it was under so many feet of water that salvage was impractical. Like the Titanic, our economy is now also a disaster. I love the denial in which so many have decided to find refuge.

      However, while I hate to say I told you so, “I told you so.” The economy is a rollercoaster going down as the infections will get out of control again in more states.

      Good luck to the wise governors in enforcing the tristate quarantine or other quarantines with our porous, state borders — with their limited powers. If you succeed, governors, try walking on water for your next trick.

      I am looking into the availability of long term put options: I am not courageous enough to short a Fed-manipulated market, but all businesses and ultimately the economies of the states are going down faster and faster — some not as fast.

      • M says:

        A few more points of concern: ven N95 masks are only approximately 95% effective at protecting you from this coronavirus; other commonly used masks are less effective. A 5% risk seems tiny, until you factor in the number of exposures that you will get over the time that this pandemic will continue.

        We do not even have enough N95 masks now for all essential workers. Imagine if you are a public transportation or supermarket or healthcare worker, how many times you can get exposed to a virus carrier before you get infected.

        Professor Steve Keene has pointed out the massive, Damocles’ sword, overdose of debt in our economic system and how that will affect demand, etc. His results are distressing, to put it mildly– even without a pandemic.

        A continued pandemic will interfere with the ability of a huge number of debtors to service their debts, even aside from the economic effects of having thousands/millions in hiding or exposed and many needing treatments. A huge number will become de facto insolvent.

        Now, it has been reported that a new virus strain of this coronavirus has appeared that is supposedly even more infectious. Hence, we are in for very, very bad, economic times unless a cure, or at least an effective, widely available treatment, is found very soon.

        If I did not worry about market manipulation by the “Fed,” shorting the market would seem logical. The uncertainty will thus continue: it is hope plus denial versus unpleasant facts.

        • Nicholas says:

          There are already very effective treatments available. But when you have vaccine nazis running the CDC and the White House task force and an absolutely corrupt medical industry/pharma/FDA industry what do you expect? This virus is a huge nothing burger on so many levels for 99% of the population. The fear mongering and hysteria is making A LOT of people at the top extremely wealthy. I will never take a fast tracked vaccine. Whether you’re pro or con vaccination in general most fast tracked vaccines have horrible track records in these viral outbreaks. Plus, SARS and MERS don’t have a single effective vaccine.

        • Morty Mc Mort says:

          Simple Answer: Use the Virus, as the Excuse for a “Collapse” and Power Grab, with a Total Economic Reset… Classic Formula.. Historically.. it works.. Rinse and Repeat.. The Economic System has been a Ponzi Scheme of increasing proportions “Incline” for years… This is just the Excuse to bring the final phase together…

        • Jdog says:

          Exposure to virus is like many things dependent on the dose.
          Your body takes some time to begin building antibodies, therefore the dose of the virus you are exposed to has a big effect on how fast the virus replicated in your system.
          If you are only exposed to a small dose, it will take longer to replicate, giving your immune system a better chance of beating the virus.
          If you are exposed to a large dose, those beginning viruses will multiply faster and may overwhelm your immune system. As you have no control over your exposure, it is wise to take any precaution that will limit the overall amount of the virus you are exposed to. If you can limit that exposure to 5% or even 50% of what you would have been exposed to without protection, it is very beneficial, and increases your chances to limit the severity of the infection.

      • Willy Winky says:

        Recalling a discussion with one of the epidemiologists behind ‘Plan B’ in NZ (they opposed the lockdown) and he said ‘lockdowns are futile… yes they will slow the spread of the virus, but the virus cannot be eliminated without a vaccine or herd immunity.

        If lockdowns are lifted the virus will quickly spike (re-fatten the curve!) and we will be back to square one. Meanwhile the economy will be shattered’

        Well here we are — lockdowns are being lifted and the virus is getting a second wind — Germany, Japan, the US, China, Australia, etc…

        Again – lockdowns will flatten the curve… but the lockdowns MUST stay in place until there is a vaccine — the virus burns out — or we get herd immunity (and lockdowns rule our herd immunity).

        Of course there is also the issue of so long as the virus is in play nobody returns to normal.

        Fear of the Plague is not economic aphrodisiac.

    • Thomas Roberts says:


      Probably most companies that are doing well, will layoff people as well. There are a lot of redundant/unproductive workers out there. Recessions are a low consequence time to fire people. Especially, if many companies permanently work from home. Alot of automation will follow.

      Also, many companies will layoff older more expensive employees, in favour of less expensive younger workers. Hiring will continue. Right now, it’s mainly that nobody knows the timetable for how CCP-19 is going to be handled. Uncertainty can have a major impact, regardless of net profit.

  3. Paulo says:

    And here’s the solution. Let’s just impose more tariffs on the US biggest allies and trading partners.

    Can’t fix stupid.

    This is a time for steady decision making and a freaking PLAN. A real plan, with reasoned steps and ways to measure progress, or lack thereof. Then, adjust details as necessary. It’s a nightmare for business and citizens. Oh well, at least Larry Kudlow is now working as the new Task Force spokesman. It’s probably safer for the economy. And Peter Navarro has a hunting trip booked with Dick Cheney. And this weekend looks good for golfing at Bedminster. All good.

    Think about it. Until the virus is licked there isn’t a hope in hell for most businesses. The opening was premature, goofs refuse to wear masks, and the infection rates are exploding in southern states. There isn’t a hope for business under this incompetence. It’s going down with no end in sight.

    • roddy6667 says:

      In America the only plan is the Four plan to get elected or re-elected. This seldom coincides with anything beneficial to the nation or its 95% of its citizens.

    • KGC says:

      The ability to plan is totally beyond those who live by their reaction to media who expect instantaneous responses to minuscule issues. FB, Twitter, and the like have accustomed the public to expect answers ASAP, and like fools, those who should know better attempt to meet that expectation over careful and deliberate thought and planning.

  4. Jake H says:

    Good article,

    Inflation or deflation, either way, is going to put alot of these businesses under…

  5. Mr Wake Up says:

    It’s absolutely a mess.

    Streets of NYC survey says…

    1. Construction equipment rental company down 75%.

    2. Bakery distributor (corporate, schools, etc) down
    75% –

    3. Ecommerce hardware company up

    4. Local THC dealer – business is great!

    5. Local gold dealer – what u see is what you get… otherwise minimum order “100” pieces!

    6. Fireworks companies – no survey taken but by the sounds of it best 4th of July in the memory sound bank!

    7. Local politicians- old guard bankrupt!
    Green horns – business is booming!

    8. Nursing homes – we got screwed

    9. Manhattan retail Landlords – we got screwed

    10. NYC dept of finance – we just keep raising real estate taxes!

    11. Outdoor dining – what happens when it rains?

    12. Outdoor dining – what happens when it’s cold again?

    13. Gyms – NYC parks took all the clients.

    14. Basketball courts with no hoops – people still playing basketball with no hoops??

    15. Police – AWOL

    16. Small business owners – at least in a few weeks I wont have to compete with fed unemployment.

    17. And the list goes on and on….

    18. Worst part too much hope out the mouth too much fear in the eyes.

    19. Fill in the blank ____________.

    20. Ok I shut up now

  6. timbers says:

    Barnes and Noble might soon go bankrupt. Just a bunch based on…a feeling…

  7. Phoenix_Ikki says:

    You know Wolfe, you’re not looking at this chart correctly. If you turn it 90 degree you’ll see it’s a V shape after all. I think you finally found that V shape unicorn WS , daytraders and CNBC bulls have been looking for all along.

    Better watch out high earning white collars..sentiment like this will surely translate to headcount trim come AOP time.

    • Wisdom Seeker says:

      When I turn the chart 90 degrees CW, what I see is a giant “dead cat splat”.

  8. timbers says:

    “Uncertainty”…. something Wall Street never has to face thanks to Jeronamo.

  9. GotCollateral says:

    And we all know “uncertainty” means downside uncertainty :P

    Except for those whose buy signal is when a company files for chapter 11

    • timbers says:

      Uncertainty means you’re not part of the club.

      The Club being stock onwing Jerome and his fabulistic stock owning Fedster members of the Faboulous Fedster.

      • GotCollateral says:

        I know, little ol me just hopes i can sell some WireFraud bonds to Jerome and Taxpayers in a ETF! :P

  10. OutWest says:

    I was raised in a small town outside of Detroit in the 80’s so I’m used to bad news. The theme has always been that this is the end of the US. Perhaps one day. This is th he big one…I agree but I’ve heard that before.

  11. Demagogue says:

    Predictions about the future are hard. For once the empty MBA suits get to earn their keep instead of prophetizing about 5% YoY growth divined from their PowerPoints and excels, the only product of their fake labor.

    • WT Frogg says:

      Demagogue :
      I was always of the mind that MBA stood for Masters in Bullshit Allocation.
      Was I wrong ? ????

      Stay solvent my friends.

      • joe2 says:

        As in everything, it depends on the individual. But in general you are right.
        Part of the problem as grouping and tribeing everyone goes wild.

      • El Katz says:


        BS = Bull Sh*t
        MS = More Sh*t
        PhD = Piled Higher and Deeper

        It’s funny that someone mentioned the Power Points and spreadsheets. The best part of retirement is not having to view Power Points, which are fake work. One of my ex direct reports told me that since she has been working at home, she gets far more done without having to sit through mind (and behind) numbing meetings where the only decision made is that they have to have another meeting.

    • Lance Manly says:

      “It’s tough to make predictions, especially about the future.”

  12. DR DOOM says:

    As a chemist and manufacturer of custom analytical devices I have never been certain or confident of anything . During the up cycles I held my breath and started planning for the down cycle. This cyclical purgatory became much worse as a result of De-Industrialization where I had to evolve toward Enviromental and lower margins vs Manufacuring with higher margins. Enviromental Compliance especially NPDES and RCRA compliance is dead weight on a company bottom line. It is a shame that it came to be that way.This is one reason they left to go to China. Funny thing is that Industry left and the regulator bureaucrats increased in numbers as they found other things to regulate such as storm water run-off coming off the roofs of buildings. The cost of an IPhone would be a big multiple in price if it was produced in the USA. I say it should be produced in the USA and we pay the multiple and make it repairable and expandable and take pride in cleaning up the mess to make it. We are going to wear out welcome or get in a big shooting war looking around the world for places to pollute and cheap labor. Our people also need purpose . Getting paid enough to participate economically with the rest of the country looks really smart now considering what’s happening.Cheap at any cost ain’t workable long term.

    • MCH says:

      Spot on, Doc.

      Remember Leader Tim’s argument about how the US doesn’t have enough manufacturing engineers to fill a stadium, or a conference center (or some such thing). So Apple can’t possibly bring manufacturing back to the US. Well, he isn’t wrong.

      But we also shouldn’t forget that Leader Tim led the effort at Apple to outsource all of those manufacturing to China during his tenure under Jobs before he became CEO. Thereby reducing the need for those capabilities in manufacturing in the US. But he wants people to forget about that kind of history.

      And you are absolutely right in that a lot of this is because of the lax environmental laws in places like China that has taken advantage of this to boost its economy. Just take a look at how they mine rare earth as an example. Never mind the sweat shops that Apple is running relentlessly all the while claiming they are socially responsible.

      But remember, as long as we have leaders like Leader Tim, there will always be a relentless focus on cheap, competitive advantage, if it’s not China, it’s Vietnam, or Malaysia, or India, or wherever. They will say all the right things on TV, but these are also the guys who will slide a knife into the kidneys while wearing a perfectly charming southern smile on their faces.

      • roddy6667 says:

        I wonder what a phone or TV or laptop would cost if it were made entirely from American made parts in America. Could any company stay in business trying to sell American made products with American made components?

        • Al Loco says:

          Roddy, remember when a fridge lasted 30 years, or a TV 25? It would be easily offset without planned obsolescence. What’s crazy is all of our engineering goes into high tech distribution centers like Amazon. Yaya, Americans are great at take a box and putting into another box then driving it to a box in a box with wheels. I agree with Dr Doom, cost shouldn’t matter, Americans need purpose.

        • Dan Romig says:

          Yes, there is a company that designs and manufactures audio components in Valencia, California. The name? Schiit – pronounced like it looks. I have one of their preamps in my main system.

          The centerpiece of the system are the loudspeakers made in White Bear Lake, Minnesota by Magnepan.

          On the other end of the spectrum, there’s Outlaw Audio in Easton, MA. They design high-end audio components in the USA, but they make them in China.

        • Brant Lee says:

          Right, Al Loco,
          In the U.S., you have to be pretty smart to get around the corporate strangleholds to do any type of business yourself. But I think the opportunity may be here to do some localized business if one is willing to work at it. So many people DO want home delivery of food and goods, especially produce, dairy, frozen, meat, etc. Older people especially aren’t comfortable ordering online from any corporate, then receiving questionable quailty fresh goods from a new face with each delivery.

        • MCH says:

          And there is the excuse any good Leader Tim’s will use to outsource to the cheapest location.

          “Look, I need to outsource so my company can survive in order to keep good American jobs.”

          What they see, but won’t or can’t do anything about is how those jobs will become fewer and require less skilled labor over time. Companies like Apple are the exceptions, and they get there by having near monopolistic market power. But the monopolies aren’t like what you’d have in the Standard Oil era.

          The rest gets taken down by the Haier and the Hisense of the world.

        • joe2 says:

          I’ve got a pair of Dahlquist speakers that are still great. Back in the day American firms made quality products and some still do. It’s a question or the underlying technology and the management of the company. Some technologies are pretty fixed and some evolve and advance constantly. But the key is the management. Are they engineers or MBAs? Is the point of the company to build the best product possible and push the state of the art — or make money?

        • nick kelly says:

          The US was out of TV before either China or SK were in. Last US TV Zenith 1995. Taken out by Japan with better engineering as well as price. (With analog /tube it’s tougher)
          Now Toshiba out with only Sony in with giant screen only.
          When the flat screen is supplied to the assembler of the 32 inch, the profit is about the same as on a Starbucks latte.

        • VintageVNvet says:

          Gotta stay with loco on this sub category of this very important subject!
          I DO remember fridges that lasted far longer than anyone wanted them to, and ran just fine the entire time with no visits from repair personnel, BECAUSE THEY WERE MADE RIGHT THE FIRST TIME!
          Sorry for the caps, but it’s about damn time the manufacturing of ALL essential tools of modern life in USA are once again MADE in USA!!
          Just a little anecdote re domestic appliances: we purchased a funky old house near my new employment that had an ”old” KA dishwasher, made in USA, that worked perfectly every time with no prewash,etc.; when we had to move and I wanted to buy all new, the same dw was at least 3 times the new ones made outside USA;;; the new one from asia, has been ”repaired” 3 times in 5 years, luckily with a 5 year svc contract, because my bil had warned me…
          I won’t go into detail about finding out how defective the ”A325” bolts made in asia were when they first arrived!

        • Ethan in NoVA says:

          I think a big issue is things like the EPA. Some of the chemicals aren’t so nice so a lot of work has to be done to meet EPA requirements. It can all be handled, but it takes extra work.

          IIRC a bunch of people got really sick from a process used to make the iPhone glass screens.

          We make CPUs and RAM ICs in the USA (Intel, Micron.) Apple assembles their top end computers here but unsure if the PCBs are made here. There are American companies that make circuit boards and run pick and place machines to populate them, but even as a hobbyist it’s way cheaper to go to China.

        • rhodium says:

          Lol oh man. I can’t believe someone mentioned schiit. Yes, that is a goofy market though. Designing things for efficient manufacturing, I’d guess it still costs them 10-40% more to manufacture in the U.S, but that’s not so bad.

          Not long ago I was at a hardware store shocked at some cheap tools that were made in the U.S. so I bought some that I needed and the quality was actually pretty good. It seemed impossible so I researched it and found out they had recently built a highly automated factory in the U.S. that allowed them to build them so cheaply. Manufactured goods will be affordable in the future, but nothing else.

      • Brant Lee says:

        Yeah, we can’t even ramp up to make cloth facemasks at home USA. I haven’t seen any available at retailers. Maybe it’s political and patriotic to ignore the need. I suppose we’re waiting for the first shipment from China who started this mess in the first place.

        • Wisdom Seeker says:

          Brant: is your friend for locally-made facemasks, shipped directly to you within a couple of days. You can also get N95-equivalent HEPA filter material that’s cut to size and tucks into the pocket on the facemask.

          If you want to order from Asia and wait weeks, offers those, but then you’re feeding the Great Vampire Squid.

        • MCH says:

          Cause it’s expensive, and we’re addicted to cheap stuff. Originally because it saved money (that was 30 years or so ago). Now it’s because we can’t do without the cheap stuff since our income is too small for anything else.

        • cesqy says:

          I was at Harbor Freight yesterday. $4.99 for 10…lots of supply but not n95.

        • El Katz says:

          Try American Giant for your masks. Made in USA clothing (and they switched over some production to masks). Based in SFO. Cotton grown in USA. Fabric woven in USA. Sewn down South and in LA.

          Each mask is $5, sold in packages of 5.

          They make all kinds of sport clothing….. I have a bunch of their sweatshirts and long and short sleeve t-shirts. The only shirts that don’t shrink above your naval after the first time you wash them. No, they’re not 4 for $20….. but I’ve had their sweatshirts for 5 years and they still look new.

    • Shiloh1 says:

      Questions about theoretical i-phone made in USA?

      What is the current labor component cost for each phone?

      What is the current environmental savings on each phone with no OSHA and EPA regulations?

      • MCH says:

        That’s a hard question to answer because it depends on the level you are looking at.

        The iPhone is truly a miracle of outsourcing. Foxconn just does the final assembly. There are various levels of module intergrators, suppliers, and subcons between Apple and Foxconn. Take the camera module for example, there are at least a dozen different component manufacturers in China who supplies basic materials.

        Apple has outsourced nearly all of the subsidiary manufacturing out to Asia. And if your company isn’t in Asia, they will use their market power to push you into Asia, or source your stuff elsewhere. Then there is shipping cost.

        I would guess that if it was just Foxconn alone doing manufacturing in the US instead of China, the costs would probably rise by about 50% to 80% on the labor side. But that’ll be still cheap if everything else is done in China. But this ignores the costs of shipping all of the components stuff back and forth.

        I would guess if it’s just assembled in the US, the cost of the iPhone goes up probably by about $200 or so, this allows Apple to squeeze in some more margin. But if you had to do soup to nuts, then the pricing would probably triple.

        • El Katz says:

          Foxconn has an “advanced manufacturing facility” under construction in Racine, WI….

        • MCH says:

          Yeah, and I’m going to shit out a unicorn who will in turn shit out rainbow.

          Terry is very many things, but he ain’t stupid. There is no way he is going to put a real factory in Wisconsin, I mean seriously, what’s it going to do. That factory will not have any established supply chain up there. It’s nothing more than a showpiece.

          I’d be more inclined to believe that the factory is Terry’s own personal bordello, I believe he is quite virile for a man of his age. Probably more than capable of getting some hedonic improvements out of the place and the local populace.

    • Willy Winky says:

      ‘I say it should be produced in the USA and we pay the multiple and make it repairable and expandable and take pride in cleaning up the mess to make it.’

      So a $3000 phone? That lasts for say 10 years? When that happens remind me as I will need to get short Apple.

      As for cleaning up the toxic mess associated with high tech, one of the reasons tech migrated to China is because Americans were screaming NIMBY!!!!

      China was willing to accept our environmental nightmare so that we could all feel like environmentalists when be purchase our shiny new devices (replacing them like clockwork when the new model came out) ignoring the fact that this all connected back to toxic waste dumps in south China….

      The cost to ‘clean up the mess’ would add even more to the $3000 phone. Let’s add another $500 toxic cleanup fee to the price.

      • Top-GUN says:

        10yrs,,, technology moves way faster than that….
        New phones are out moded before they get to the store!!!
        Then there are the parts that wear out,,, especially the charging plug connection,,, and then there are all those cracked screens,,,, often better to just by a newer unit…

  13. JWB says:

    “A confused mind says no.“

  14. Petunia says:

    In my small world I can already see who survives in business and who doesn’t. The plandemic has become an excuse to force customers into not using cash by refusing to accept it. The business owners who accept cash will keep and expand their customer base and the others will contract and be none the wiser. I can’t believe how these businesses don’t realize how discriminatory this practice really is in America.

    The other issue is working around ridiculous govt regulations. A local barber has had to expand his hours from very early morning until 11pm just to be able to deal with the spacing requirements. He accepts cash too, so has manage to stay open.

    I don’t expect to be eating out anytime soon, even though, I really don’t care about the plandemic. It feels like an ordeal just to deal with all the regulations and payment issues. I hear a lot of resentment from local restaurant owners who are sorry they bothered to open at all.

    • MiTurn says:

      Similarly, I like to hear from some realtors, but I’m sure it’s a great time to buy a house!

    • joe2 says:

      Funny but after the reopen, we see more cash now and less credit cards. I don’t know how to read this.

      • Petunia says:

        If your credit card is in forbearance, you might not be able to keep using it. Very unlikely they will keep extending credit when you’re not paying the bill.

      • cesqy says:

        If a company won’t take cash, I think they should be required to install an automated self-sterilizing cash machine. Good for business and save on counterfeiting marker pens.

  15. breamrod says:

    people are going to have to make up their minds about this virus. Kind of like a snake climbs in your boat and you freak out and start shooting missing the snake and sinking your boat. Now you’re in the water with the snake and all of his friends. In our fear we have shot this economy full of holes and what do we have to show for it?

    • sierra7 says:

      “In our fear we have shot this economy full of holes and what do we have to show for it?”
      The American Dream!

    • VintageVNvet says:

      Maybe a boat full of snakes?? Or, around here, ”snarks”?
      Snakes can be a good source of protein,,, and the back of a black or rattle snake tastes very similar to chicken I am told…
      Never eaten either in spite of many suggestions from the ”olde timers” where I grew up urging it,,, along with very clear mandates to drink the ”sulfur water” so it would add lead to a very important component of a young man’s anatomy…

      • 728huey says:

        A boat full of snakes? I thought it was snakes on a plane. ? I can hear Samuel L. Jackson describing the pandemic situation now. “I have had it with this m#$%&* f#@$%+ virus on this m%$#&@ f@#%&$ plane!”

  16. RodB says:

    Let’s see how those charts look when the next Global Lockdown takes place because it’s coming. A monkey could probably figure it out faster than a politician, that shutting down a highly leveraged, highly complex and interconnected Global economy wasn’t a good idea.

  17. JC says:

    Wearing face masks saves lives and business. Turn in the ignorant.

    • BuySome says:

      I couldn’t remember if his name was Tuttle or Buttle. But I’ve forwarded a complaint to the Ministry of Funny Walks who will notify the Ministry of Population Expansion and then on to the Ministries of Social Cramping, Mind Control, Excess Taxation, etc. etc. etc., ad infinitum all in due course. We should have your plumbing repaired shortly. Need any more cameras in your bathroom this week? Left shoes will be ready one month after conversion from making right shoes.

    • TXRancher says:

      “Wearing face masks saves lives and business”

      That is not necessarily true. The N95 mask only stops 95% of the particulate matter (5% gets through) that is greater than 1 micron. The virus can be on the order of 0.001 micron (nano-particle). And that 95% is only possible if there is complete seal between the mask and the face which is impossible. And not to mention that the eyes are also an entry point. A mask is nothing more than a “feel good” device.

      Research recent technical studies for use of face mask for dentistry and surgery.

      • Yertrippin says:

        Ugh. Yea right, people in H.K. are so stupid. Texas is looking much better today. /s

      • Wolf Richter says:


        You should wear a face mask to protect OTHERS from you! They’re very effective in protecting others from you, and only somewhat effective in protecting yourself. So if everyone wears a mask, everyone is a lot safer. That’s how that works. In places where everyone wears a face mask out in public and at work, outbreaks have been well contained without lockdowns. See Hong Kong.

        • Willy Winky says:

          If you have a virus and you wear a face covering (no need for a medical mask – you cannot wash those…), and you cough or sneeze the droplets will not spread.

          If the droplets do not spread then when others touch surfaces such as railings, door handles, elevator buttons etc… and put there hands in their mouth/nose/eyes…. they will not catch the virus.

          And if one is wearing a face covering it is much more difficult to put your fingers in your mouth/nose after having touched an infected surface.

          An average 7 year old could be made to understand the value of face coverings.

          The CDC site has had an entire section on the effectiveness of face coverings on their pandemic contingency site since before Covid.

          Odd that governments have been stating ‘the jury is out on the effectiveness of face coverings in combating Covid’

          Odd that the PM of NZ recently said ‘face coverings may do more harm than good’

          Odd that we the world has not adopted this low cost strategy to fight a virus that is collapsing the global economy.

          Odd. Odd. Odd.

  18. joe2 says:

    Uncertainty in business sales is a niggling detail at this point. Positioning your business is subject to too many extinction events.
    Peak uncertainty is coming and not yet here. Not just the virus, but the political uncertainty of the upcoming election, the actual fiscal actions of the winner, the mob rule factor, and the response of the population, lead to at least four phased waves of unknown magnitude.
    If the democrats win, can they control their mob agents?
    If the republicans win, will they violently suppress the mob reaction?
    How will the population react to personal violence?
    Will either or both parties spend to exceed the elasticity of the dollar?
    Will the virus peak or dissipate?
    What other black swans are approaching over the horizon?
    Personally I’m just hedging both extremes – business does great and business dies. But I’m old.
    Fortune favors the bold. And failure isn’t so bad when you are young and can pick up and start again. I think that is something that is overlooked now – the passing of the flag from the old to the young. Something that I had hoped would be done in a more rational manner. But some just don’t want to give up anything.

    • VintageVNvet says:

      Couldn’t agree with your analysis more j2!
      Started all over again several times after extreme events, and IMO ”grew” a bit each time I had to walk to a job first, then get a bike, then either a car or motorized bike, etc.
      At middle of 8th decade, I really and truly wish all the present similar or close aged cohort of political puppets would shut up and go home once and for all…
      With another pres election looming of the ”hobson’s choice” type once again,,, I may not vote this time, for the first time since 1966,,, or, as suggested here on Wolf’s site by a commentor, vote, “none of the above” or write in my choice for pres and vp, etc…
      locally, many better clear choices, and I thank all the local folks willing to put up with the BS to run!

      • Anthony A. says:

        I’m in the middle of my 7th decade and I can clearly see that winning a political job is a ticket to obtaining a fortune, but maybe not fame. I don’t care to vote for any of them either.

  19. Fed lost policy direction during Yellen and began reacting to the news, rather than putting in place policies which would move the economy in a positive direction. The old Fed disdained headline inflation, read only Core, and had a policy of incrementalism and forward guidance. Curious when Powell said, business isn’t inhibited by interest rates, and then he promptly cut rates, in order to help business. Yellen was appointed to head a more accountable Fed, and Powell replaced her, (after she threw in with the global central bankers). Then he expanded CB powers, or usurped them, which is worse. Perhaps it’s FOMO, US Fed heads sitting outside and watching the glorious historical epoch of central banking reach it’s apex. The globalists are winning, and US business is not doing well with this, virus or no, while MULTINATIONAL corporations, like Apple, are benefiting, just not to our sovereign benefit, hence the massive corporate tax cut which really cut the cord.

  20. RD Blakeslee says:

    has there been a survey of savers and largely self-sufficient individuals? Sole proprietors in their micro-economies? How do they think their enterprise(s) will fare, going foreward?

    • sierra7 says:

      RD Blakeslee:
      Have mentioned this before on this site but will repeat. One part of family owns and operates (for more than 35 years) average 6-8 total people hi tech company in Santa Clara Valley. For the exception of the owners most qualified for unemployment + program; company did get PPE program advantages. 50% business so far is gone and the future is not clear at all.
      Some customers are “coming back” but not enough to support the continuation of site rental or maintenance of the “full crew”. At least 75% of this crew including owner principal are skilled people.
      Outlook now: grim.
      Multiply this by hundreds of thousands of small businesses all across the country that will not be able to continue if the present societal conditions prevail even thru the end of 2020.
      Many of these same businesses will take “early retirement” and close their doors anyway.
      Again: Outlook very grim.

  21. nick kelly says:

    I see WR’s piece on ZH about the huge overweight of the Big Five on the stock market.
    Just want to add that apart from Amazon who love them or not, actually move stuff besides electrons. the techs employ very few US workers per billion of market cap. To the extent that the Fed is concerned with their stock price it can’t be about jobs, it can only be about the wealth of the shareholders.

  22. SocalJim says:

    Looking at pendings in higher end zip codes, the housing market seems to have gone from decent to strong over the last few weeks. Hard to tell, but it is possible pendings are close to or above last years levels. These pendings won’t close till late July to early August. Will be interesting if this is a national trend or only limited to select higher end zips.

    • Just Some Random Guy says:

      Higher end zip code buyers haven’t been negatively affected by the lockdown since white collar work can be done remotely. It’s actually better for them. Income hasn’t changed, commuting costs have been eliminated as have costs for daily lunch, dry cleaning, etc. It’s a lot cheaper to work from home than work from an office, if you think about it.

      Also with 3% mortgages, people on the fence about buying are jumping in.

    • VintageVNvet says:

      ”In for a penny, in for a pound” old boy!
      Gotta think many folks at all levels are ”hedging” with RE for the long term inevitability of massive inflation similar to the late 70s/80s era.
      Will the next couple of decades be the same as it was back then?
      This time is different,,,
      as was the case in the next decades after the crash of ’56 and every crash since…
      try to keep in mind that a new house could be purchased in SoCal in the early 1950s era for less than $5K USD.

    • Willy Winky says:

      Ya must be those 30M unemployed people who are driving this market.

      Toss in many millions more who are fearful of losing their jobs, who are rushing out to buy a house, and you’ve got yourself a bull property market building.

      NOW is definitely the time to load up on a big fat mortgage because you can immediately apply for a mortgage holiday!!!!

      Prices are going up up up up!

  23. Chris says:

    No sales, loan defaults, bankruptcies, so what? Stockmarket is going up, that’s all that matters. Millions destitute, on the streets. Riots, debris, looted businesses, so what? Only thing that matters is stockmarket going up. MSM insists all is peaceful, politicians want to talk about “what they are doing.” Stockmarket is going up, people don’t matter, they are a redundant resource, like an old car that can be left to rot a n a barn under a dusty tarp. Stockmarket is going up all is good, the world still wants Dollars as well. And the stockmarket, don’t forget the stockmarket and the Dollar.

    By the way, stocks, stocks, stozzzzzzzzzzzz

  24. RoundAbout says:

    Almost the end of the month. Those Hertz cars must be dropping in price. Creditors are going to need to collect.

  25. roddy6667 says:

    I always doubt surveys of “consumer sentiment” and “business owner sentiment”. These are not dollars or widgets, these are emotions and beliefs. People who take the risk to go into business for themselves are delirious with overconfidence. The ten year survival rate for a business is 4%. Most fail. Homebuilders are among the most mentally ill. They go on building subdivisions while home prices plummet and foreclosures rage.
    Positive thinking and 5 bucks will get you a Starbucks coffee.

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