THE WOLF STREET REPORT: “Creative Destruction” or Just “Destruction”?

Under the effects of the Pandemic, consumers and businesses grapple with their own “Reset.” (You can also download THE WOLF STREET REPORT wherever you get your podcasts).

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  109 comments for “THE WOLF STREET REPORT: “Creative Destruction” or Just “Destruction”?

  1. Island teal says:

    Well said….thank you for all you do.

  2. LifeSupportSystem4aVote says:

    Regarding the coffee filter shortage – a good part of that is due to coffee filters being used to make face masks. Certain types of HVAC filters are also being used as face mask components, if you can find them.

    • jeffrey durrance says:

      Buy a permanent metal coffee filter..and a bidet ..avoid future shortages

      • Lou Mannheim says:

        Forgive my ignorance, but does a bidet really do the whole job?

        • lenert says:

          Just the paperwork. The rest is still up to you.

        • Horor says:

          Uh, yes, if used properly. Only need a single paper towel to dry your bottom, but don’t flush that!

        • Cashboy says:

          Arabian Dush is more hygenic than toilet paper and cheaper and don’t have to worry about toilet paper running out in shops.

    • Wolf Richter says:

      I heard about the coffee-filter-as-face-mask thing, and it seems Melita was behind it and proposed it early on in the Pandemic.

      Since then, tests have shown that coffee filters are the worst possible face mask: they’re DESIGNED to let small coffee particles go through because that’s where the flavor is. A face mask needs to block those particles, or at least some of them.

      Also, I have never encountered them as face masks anywhere. It just doesn’t seem practical — a fragile paper filter that gets moist and disintegrates after a short while. So I think this meme of coffee filters as face mask died months ago.

      You can get cute looking cotton masks anywhere now, they’re cheap, they last for a long time, and they do a much better job than coffee filters.

      • LifeSupportSystem4aVote says:

        I won’t dispute the effectiveness, but the filters are used as a disposable insert between layers of cloth. The intent is to use the face mask one time, then remove and dispose the filter material from the layered mask, wash and dry the cloth portion and then insert new filter material. This started back in Mar-Apr time frame when premade masks were very hard to obtain and morphed into an urban legend that still carries on.

        • Lee says:

          Here in Oz we still have the mask mandate in Victoria.

          That was, of course, after the government and medical people here were telling us that masks for the general population don’t do any good. Still remember the big sign in the pharmacy telling us so.

          Once masks were made mandatory here the sewing shops that were still able to service customers via ‘click and collect’ sold out of a lot of cloth material and other shops sold out of material for filters.

          The better half was able to buy the material for filters from a patchwork quilt shop.

          So now we each have one mask for each day and if we go to the shops we put in a resuable, washable filter which is thrown in the wash after each use.

          We still have that asinine mask mandate even we are walking around at 10:00pm on a deserted street, but people jogging and riding their bikes don’t have to wear a mask.

          (Now who puts out more volume of air and potentially more virus particles: the person walking or the person jogging?)

          Masks in stores: good idea.

          Masks on a deserted street at 10:00pm: dumb, ridiculous, stupid idea.

          No masks on joggers and cyclists: really dumb idea.

          I can just wait until summer hits and people get funny tans from wearing those masks during the day when they are outside.

          At least one ‘benefit’ from wearing those masks during the bright, sunny Oz summer will be the fall in cases of melanoma of the nose and part of the face!!!

          And given my personal health situation no doubt I’ll still be wearing them in the stores for a long time even the mandate is lifted.

          On the lighter side I’m still waiting for the inept government here to mandate masks while swimming!!!

        • Anthony says:

          Sorry Lee but you don’t catch viruses outside, that’s why we call it fresh air, if you did, we would all be dead from every virus……….science 101

      • Michael Grace says:

        Inhalation of atomic coffee fragments can be dangerous
        Come on boy! How much more of this idiocy can there be?

      • Robert says:

        Coffee filter shortage? I personally use paper towels when I run out of filters. You’ll find they work fine.

        • Dave says:

          Except the coffee filters are designed with the purpose of human consumption. Paper towels are made for cleaning so the chemicals treating the base product used to make paper towels are NOT designed for human consumption. I would use paper towels for filters myself.

          I use a french press, never need a filter

    • Seneca’s Cliff says:

      I think the coffee filter shortage is caused by the same dynamics as the flour shortage. Before ,many people purchased pre-made coffee and baked goods on the way to work. These were distributed in a different supply chain and different packaging than consumer versions. Now people are baking and making coffee at home and the supply chains have not fully adjusted.

    • 2banana says:

      Wolf doesn’t need coffee filters.

      Buys the last one on the shelf anyways.

      Wonders why there is a shortage.

  3. Doubting Thomas says:

    Yes, thank you, Wolf, for an essay that captures spirit of the times. I share your optimism about this “Reset” offering an opportunity to unleash creative energy and to bring us new ways of living and earning a living. On the other hand, as you and others have pointed out, governments around the world have gone to great lengths, at great taxpayer expense, to intervene and subvert the cycle of bankruptcy and rebirth that so many “old normal” industries desperately need (airlines, travel, restaurants, real estate, on and on). Anyway, thanks for another great podcast.

    • M says:

      They are not subverting the “cycle of bankruptcy and rebirth” for philosophical or pure purposes: they are bailing out their cronies/politicians’ owners. To accomplish this, the IMF has reportedly called for renegotiation of the Bretton Woods Accords, which might mean that a World Bank digital currency might be created that can largely replace the US dollar as a world reserve currency. See

      The key thing to remember are who are the key individuals behind what is happening. You can talk about “persons,” which is what the ultra rich love for you to consider, because it enables the corporate and testamentary trust veils behind which they operate. However, ultimately, the IMF, the World Bank, the parasitic “Federal” Reserve banking cartel, and the remaining (often identically, parasitic) world banks, react to the wishes of the ultra-rich individuals and families who long since purchased most countries’ politicians with bribes and “contributions.”

      Right now, we are at a moment when those individuals and families whose wealth is so gigantic that they are the persons to whom the rest of the world owes its debts are terrified about protecting their wealth and world hegemony. The US will soon be unable to face the CCP while still paying its government’s debts and obligations. Desperation or bitterness over how they are still parasitising suffering countries’ populations may cause some governments to unmask those individuals’ vast wealth.

      These individuals desire that the burden of bailing out the US and the rest of the world, not be borne by them and that they also be bailed out. Thus, apparently, they may be seeking another world reserve currency that they can effectively create/”print out” through IMF/World Bank loans, etc., to bail out the world.

      Of course, this is not an altruistic goal. These individuals worry that their investments and the amount of taxes that they have to pay will be dramatically increased by desperate governments throughout the world clinging to power by raising taxes on the rich or newly taking power and seeking to raise funds for their goal.

      Thus, we are now again at the moment when the ultra-rich wish us to bend down, smile, and take it. The EU banksters, who are really, usually representing the same ultra rich individuals and families, need bailouts, and Germany seems reluctant to bail them all out, so they are looking to give out loans, so that the world’s population then has to pay those loans back over decades.

      What they did to the US, which was the creation of gigantic debts to burden the US population, while the ultra-rich paid little or few taxes, will now be done to the rest of the world. It will be called “relief” and “aid” but people in countries like Argentina, etc., will tell you that requiring the population of a country to be subject to heavy taxation on its middle and lower classes to repay huge international loans does not help them or their countries.

      It is merely another way in which the ultra-rich are gigantic parasites with their young living/gestating on the beaches of Thailand, Swiss resorts, etc., and making free use of prostitutes/drugs while living the life of the idle rich; at the same time, the majority in the world will slave away under high tax rates to unknowingly support them via a complex scheme of banksters frauds.

      It is time that the richest, who are the true owners of the massive debt in the world, who own more than $300 million in assets per person, be required to pay at least 10% of their wealth each year in windfall, imputed income taxes. They have been living mostly tax-free for too long while parasitising the rest of us and too many liabilities and debts must now be paid: to enable the world to recover from this pandemic and to prevent the growing threat from the CCP from metastizing into World War III. The world’s pensioners, elderly, working classes, etc., should not have to bear those burdens while the ultra-rich play.

  4. Paulo says:

    Very interesting presentation. Despite the upheaval, I have always been in the camp that this ‘destruction’ can be a good thing, a return to sanity. Back pedal about 20 years to a discussion I had with my future son-in-law. He and his brother had a habit of stopping in for a coffee and treat on the way to their summer job…as their breakfast. Meanwhile, both took on student loans. So ‘Dad’ had the back of napkin chat and explained that if he ate at home and packed his lunch, and saved the money he used to spend, it would end up being a down payment for a house. He did and it was.

    Simple habits that are not cheap or restrictive is just a smart way to live. Coffee out everyday? Meals bought? Pretentious clothes, (my favourite example are those acid washed jeans with the holes in the knees for cute girls to wear), are unbelievable. I buy good French Roast beans and have always made better coffee at home.

    It’s been a long time coming, this rediscovery of values and sense. Hell, if people have so much money to waste then save the coin and give it away to charities. Society has been nuts for a long long time.


    • Suzie Alcatrez says:

      Yes, that’s exactly how Jeff Bezos became a billionaire.

      • andy says:

        Soon to be a Trillionaire. I myself splurged on Amazon Prime Max Pro subscription. Love it.

      • ben happen says:

        No no no kids, he got that way by discounting independent booksellers much like the evil barnes noble. Only at a much destructive methodology.

    • M says:

      I love it when naive people (or covert representatives of the ultra rich?) try to put all of the blame on the poorest 80% in this country’s vast and growing wealth divide. Sure, being thrifty and not making foolish decisions will enable some wage-slaves to save more, which savings the ultra-rich can then syphon-off via hidden, miscalculated inflation (which the banksters’ “Federal” Reserve cartel loves to create), low returns on savings/bonds, and increases in taxes on the lower and middle classes.

      However, keep in mind that the average American in the early 1900s had a far greater chance of creating wealth, because they were not in the debt trap, low wage, low opportunity economic landscape that the banksters have created via their “Federal” Reserve and current, almost complete ownership of our politicians. With their creation of their “Federal” Reserve to give them aid and ultra-low interest rate loans that they can then lend to us at ultra-high interest rates, the ultra rich banksters can parasitize us safely and indefinitely.

      Sooner or later, your child will have to go to college and pay tens of thousands in tuition or you or your wife will become gravely sick and you will fall into one of their debt traps. The politicians want you to continue paying taxes to be paid to “investors” as government debt payments and imply that those “investors” are all pure-hearted, poor/middle class, good pension fund contributors relying on their hard-earned pension holdings to retire upon.

      Nothing could be further from the truth. All that the US and the rest of the EU countries have to do to pay their taxes is elect politicians that are now owned by the ultra-rich and who are willing to tax the richest among them: by those I mean those persons who own more than $300 million per person, who have devised so many ways for so many decades to avoid paying taxes.

      Search for the words Apple and taxes, for an easy example. Covert censorship is now wisely used by the ultra rich owners of search engines to prevent the public from being easily able to see their secrets. Thus, it may now take more and more searching than it used to take to check their many companies or identities.

      • Kurtismayfield says:

        I love how people blame the poor, when every example of a successful person in our society is someone who started on third base and thinks they hit a home run. Without access to connections and capital a poor person is not going to become Gates, Bezos, and Musk But their birth into a poor family is their fault.

    • Trinacria says:

      Last week, my wife went to a drive up coffee stand (Dutch Brothers in Portland OR) for the first time ever to buy for her niece and exotic “coffee” drink that is really a milk shake. The cost is $8.50….When she told me I about fell over ! My wife’s niece buys one every day…you can do the math. The niece does not have a “pot to piss in” as the saying goes, but she does not miss a day without that “coffee drink”. My wife reports that they made a mistake in the preparation and as a result gave her the coffee drink for free. The barista asked my wife if she wanted anything…to which she replied: no thank you. Also, my wife said that this was her first time buying coffee here. The barista asked, where she got her coffee – my wife replied, we make it at home. The barista gave my wife a look of utter confusion and disbelief.
      We pay $15 per pound for locally roasted organic coffee – we buy from a small business and happy to pay a couple of dollars more. It is truly excellent coffee !!! We drink one, sometimes two cups in the morning and 2 pounds usually lasts the entire month and it’s better coffee ! Go figure….our mortgage has been paid off since 2006. What freedom and flexibility. My wife and I are in our early 60’s.

      • Kurtismayfield says:

        I congratulate you for being born into a time period where 25% of your median wage could pay your mortgage.

        • Trinacria says:

          Kurtis: to a great degree the 25% thing was a little before my time. It’s not all a “one way street” as some people may think. We faced the 12% interest rate for a while and breathed a sigh of relief when we finally refinanced down several times all the way to 6 to 7 % or so. Made the payment pretty high.
          But, you might be missing the point of why I relayed the story of my wife buying the “coffee” drink for her niece’s birthday. The niece, like many, spends $250 per month on a fancy coffee drink. This is significant for most people, especially when one considers that this is post tax money. So, when you factor in Fed and state tax, it really costs her about $365 per month. This is very common today as it always comes down to choices.
          Speaking of my own situation, my wife and I – both a product of immigrant parents – learned the savings lessons they taught us. So we made the following choices instead:
          1. Drove average cars and kept them a long time
          2. Did not take much in the way of expensive vacations
          3. Put a premium on savings
          4. Did not go out to eat much, once in a while so it was truly a treat.
          5. Did as much as we could ourselves…meaning in the way of repairs etc.
          6. Did not go into credit card or consumer debt, so spending was controlled.
          7. Much of the savings was applied to the mortgage as extra payments .
          8. We did not refinance and pull cash out as we built cash along the way.
          We were the latter part of the baby boom, not as good a deal as the earlier boomers. But note that many boomers today are not mortgage free and, this is a huge problem for many as they try to retire…
          So, whether today or yesterday, there are always different circumstances and challenges and I believe that the choices made along the way have a huge impact on the outcome. Good luck to you.

    • FromKS says:

      Median home price in my city is 600k. A 20% downpayment would be 120k. They could save $100/day for three years and still come up short.

  5. wkevinw says:

    The economy has needed a cleansing recession since the mid 90’s(!). That’s when stock market value vs. real economy value went outside historical norms. So, let’s hope this episode/recession will offer that.

    However, I think this kind of event is just “very destructive” in some way. In this one, travel and hospitality businesses are suffering just plain destruction. They have to wait for demand to return.

    In addition, certain urban areas are going to suffer across a large range of businesses. The tax base is also going to be a disaster. This is also just plain destruction.

    Luck to all.

  6. Lou Mannheim says:

    I swear I was thinking the same phrase yesterday – this is just destruction, nothing creative about hollowing out the entire economy and leaving coding and waitstaff jobs as replacements.

    • Wolf Richter says:

      That’s not what I’m saying.

    • lenert says:

      Maybe what he’s saying is that while in the long term we are all dead, in the short and medium term, in an industrialized economy, shortages are no longer a problem as supply eventually adjusts and people adapt to new ways.

  7. Michael Engel says:

    1) The Fed Cytokine storm, fighting CV19, cause more damage
    to the economy than the virus itself. The strong reaction to the virus is the real cause of businesses death.
    2) There are new drugs developed in our labs, replacing the Keynesian drugs, that subdue the Cytokine storm, suppressing it, instead of promoting it, in order to give the US economy a chance to survival.

    • VintageVNvet says:

      Thanks ME,,, LOVE your extensive ”raps” on what is and is not,,, including this one..
      Please keep on keeping on with your raps and other insights, very helpful, especially in response or repose following the Wolfs great articles, especially his investigative reporting!!
      Don’t we all wish that the msm, so lacking these days, would at least try to get back to the days when to be a journalist was to be a fearless reporter of truth on the ground, with ”boots on the ground” being the only sources, as opposed to these days when the anonymous sources, (not really worth regarding IMHO, predominate.)

      • 91B20 1stCav (AUS) says:

        VNV-my take is that, for some time now (ref: suspension of the Fairness Doctrine on Reagan’s watch), ‘Muricans proclaim they want to see journalists as you describe (and they’re out there, though not in much demand) but would much rather consume entertaining/outraging/mirroring op-eds, pick yer slant & virulence.

        In terms of broadcast/cyber journalism, unless the public regains the broadcast bandwidth that was virtually given away, and broadcast corporations again required to provide X-hours weekly of public-service programming (i.e. akin to the lamented, now-gone, TV news of yore, meaning a news departments that did not have to rely on ratings/viewership/opinion to survive) we will continue to receive highly-entertaining’reality-tv’ news because that is what we as a people wanted subsequent to surrendering ownership of the airwaves.

        Of course, if this ever happened, the entertainment value of the news would be highly-reduced, along with viewership.

        may we all find a better day.

  8. ft says:

    About a year ago, when it came up for sale, my stepson decided to buy the beauty shop where his mom works. The financial history looked good; seven years of success. He put in $40k of his own and borrowed another $40k from his cousin in order to get it done. My wife had about five wonderful months of being the boss, although Feb was really slow, then in Mar they got shut down by the pandemic.

    Opening up again has been gradual. My wife did haircuts outside on the sidewalk for a while. She’s back inside now but it’s just her, all alone, running a one chair shop and not making enough to pay the rent. I don’t know how she drags herself in there every day.

    The shop is in a small center of twenty or so stores in Fremont, CA – two beauty shops, a tea shop, pastry shop, bunch of restaurants, and a bank. Anchored by a 99 Ranch supermarket, it was a busy place. But the 99 Ranch moved to a larger building in a new shopping center a few blocks up the road. Another Asian market was slated to move in, but it hasn’t happened and, with the economy/pandemic, it probably won’t.

    So we have a dying shopping center here. Two beauty shops struggling, one restaurant, a bank and the pastry shop still open – everything else is closed. Almost empty parking lot where before you could hardly find a spot. I think that the whole place will fail soon because the landlord, let alone tenants, won’t be able to pay the bills. I see a bulldozer in the center’s future.

    There is no tidy way to get out from under this failing little business, one of many in the same predicament. These are bleak times. Dreams up in smoke takes many forms.

    • roddy6667 says:

      As sad as it is, this story is not something new caused by the pandemic. 4 out of 5 businesses fail in 5 years. Of those that survive, 4 out of fail in the next 5 years. Only 20% of 20% last more than 10 years. That’s 4 percent, a 96% failure rate. Seven good years followed by one fatal bad year is the norm for small businesses.
      Among the survivors after 10 years are the owners who are struggling to get by on a small income, hanging on just to say “I’m my own boss”. They don’t have paid sick days, paid vacation days, a pension, a 401K, or subsidized medical insurance.
      The “dream” of being a business owner is risky, a form of financial suicide for most who go the route.

      • lenert says:

        Also the typical new small business employs just 3 people and after year less than 3.

        Nationally, your local mileage may vary, the basic economic security for an individual in the US, the floor, no frills, just the basics like housing, healthcare, transport, utils, comms etc. requires an income of about $18 an hour. You have to get that after COGS.

      • VintageVNvet says:

        Not so Fast R2/3,,,:
        While I do not argue the statistics you offer, though I would like to see at least some references that Wolf will accept, not to say vet, the fact is that the back bone of biz in USA is and always has been the sole proprietor doing his and her best to make it, including to be sure many many 80+ hour weeks on the job.
        That ”the law” and laws and ordinances and rules and regulations against such individual effort have expanded HUGELY for the last 70 years, especially once our rulers understood how hugely the small biz folks prevailed, is very very clear.
        How some ever,,, IMHO, once clarity returns, all of those junk and self serving legislations will either go away,,, or be totally ignored until the next revolution of the wheel of evolution happens,,, and it happens to be coming fairly soon IMO, and also in the opinion of many others, including those younger folks doing their best to make sure it happens…
        May the Great Spirits help us all along on our path!

      • Dave says:

        Statistics are interesting until they affect YOU or your family and you become part of the Statistic! This so called pandemic hasn’t happened before in our lifetime with a coordinated shut down all over the world. So the business mentioned by FT above would probably have survived and done well.

        I think the tragedy is that many small business have been hammered and some large ones have thrived or received huge bailouts! What I see going on is a massive transfer of wealth. Many large business have gotten large taxpayer bailouts, many individuals have gotten some crumbs, the stock market and some other markets have gotten juiced up by the Fed BUT at the end of the day there will be a massive tax bill to pay!

        If you are a large enough business you will be able to manage your tax bill. If you are a regular working person, you’ll have a bigger tax bill coming and there is no way out. So the regular working person will pay for the bailouts. People that have pensions may pay for the bailout. Uncle ScAM can always change the tax rules and claw back some pension money. Ouch.

        There is no free lunch.

      • GREG says:

        > 4 out of 5 businesses fail in 5 years

        I see this factoid repeated ad nauseum, but I have never seen any solid basis for it, and I am skeptical. I had my own business for about 4 years. I satisfied my customers and paid all my bills—then decided it was time to move on to something else. Did this add to the “failure” statistics?

    • YuShan says:

      The sad thing is that many of these small businesses are people putting their heart in it trying to actually build something real, as opposed to people just buying real estate or stocks and see the prices going up by itself because of the Fed blowing another bubble.

      I often wonder why investors still invest in real businesses at all. It is so risky and likely to fail. Why not just buy existing stocks? That does nothing for the real economy, but if the market drops 10% the Fed will backstop it. However, if you are a real entrepreneur you are on your own.

      I really think that the Fed-put has made entrepreneurship less attractive relatively speaking, but that is where the wealth creation and job creation takes place in the economy.

      • Tony22 says:

        Shut downs from on high in Sacramento purge communities of small businesses and conservative owners in order to allow new less conservative owners to step in.
        Another effect, is to hand more traffic to mega corporate franchisers, thus destroying whatever uniqueness the town or neighborhood once had.

      • taxpayer says:

        Nassim Taleb suggested a national holiday, akin to labor day, to honor the people who start businesses, even tho the likelihood of success is poor. We’re better off for their efforts.

      • RightNYer says:

        Exactly. Our current policy encourages us to do nothing productive, other than move money around and blow bubbles.

        Even the big tech companies won’t have to innovate anymore, because they’ll face no competition.

      • andy says:

        No one wants a real business because it will sell for 1×sales (2×sales if you’re lucky). Good stock businesses go for 100×sales now. Pretty simple really.

        • RightNYer says:

          Andy, exactly. Obviously, the low transaction costs and liquid nature of publicly traded securities does make some level of premium justified over other businesses, but nowhere near what we are seeing. We are seeing a massive (and ultimately, one that will be tragic) misallocation of capital, based on bad government policy.

    • Joe says:

      Should put that 40k into Nasdaq stocks .

    • Engin-ear says:


      Shocked that the economy is cyclic?

      You end your story too soon / too sad.

      The losses should be cut.
      The debt should be restructured.
      Life should continue.

  9. Candyman says:

    Refreshing to hear someone begin to discuss a positive for the future, and provide a pathway. As wkevinw notes, there is and will remain great destruction. As others are apt to opine how stupid folks are, or how their choice of politician is evil, and bolster how smart they are, as they have their slice of the pie, to remove the mask of doom, if you will, to promote a bright future is grand! Thank you Wolf! Discover the “old normal” in a new world. Onward!!

  10. Internet ad revenue is under evalution. (Be careful FANG stock owners!) I’ve always wanted a sub to the NYer, and this year maybe, but I want the hard copy, and that involves different ad revenue, (assuming I am not unique). Most people are too busy to read a magazine cover to cover, and the geriatric joke is only old men read books. We could just be in the final chapter of Fahrenheit 451, but I doubt it. My optimistic take.

    • Engin-ear says:

      Most of magazines do not deserve being read from cover to cover: at least some content is poor or irrelevant.

      Books reading lost most of audience: the entertainment seekers switched to Youtube & Co – free, visual, entertaining.

      The books are for the truth seekers – called philosophers in ancient times. Never was a mainstream. Too tiresome and irrelevant for materialistic success.

  11. Winston says:

    You’re cutting your own hair or your wife is cutting your hair? If it’s the former and considering the difficulty of doing that well from my own experience, what “YouTube video” did you watch?

    • lenert says:

      “Yes, I cut my own hair, can’t you tell?”

      • Tony22 says:

        At least up is still up in the mirror. In and out are reversed, is that why I look like a cratered Dalmation?

        Seriously, never cut your own hair. It’s actually not that hard to cut someone else’s, if you take an hour or so and constantly check your work by standing back and combing it out. Hair is as hard as copper wire, so learn how to sharpen your scissors, which can get dull faster with hair than with paper.

        • Zantetsu says:

          Whatever. I’ve been cutting my own hair since I was 16. I am good enough now (at 48) to not really need a mirror until the very end to do a final check and touch-up. I do most of it by feel. I have never done it to save money, haircuts are very inexpensive; I do it to save time.

          Caveats: I do have less hair than I had when I was 16 (although not bald). I do cut only with clippers, never scissors. I wear a short hair style. And finally, I don’t care that much what I look like.

        • Anthony A. says:

          My wife cut my hair for 20 years. I have lots of hair at 77 (hereditary). She no longer cuts it because her hands shake too much from her medications. I go to the barber. It’s a perk I enjoy now!

          It’s not to save $15/month, it’s a social event for me.

      • Dan Romig says:

        I like that lenert.

        My line is to try and channel Yogi: “I did it myself. It was free. You get what you pay for.”

    • Paulo says:

      Or, you could do the playoff beard thing. I’m at six months without a haircut and just passed the ‘it’s driving me nuts’ stage.

      Western countries are well within their means to fund CITIZENS enough to get by and move past this mess. There’s always enough money for everything else from war to sports stadiums and overpaid celebrities, but if anyone brings up temporary UBI it’s an abomination. Socialism. There are states without income taxes and states without sales taxes. The 1% skate and many pay no taxes, at all. What’ll take to force some change? Larry Summers said today on GPS that this pandemic will eventually degrade 90% of the US GDP. He believes it will cost the US close to 17 trillion in lost activity and extra expenses before it is over. Meanwhile , there is almost no will to change. Hell, people cannot even agree on wearing masks in public.

      The destruction will continue until people can’t take it anymore.

    • Wolf Richter says:


      I do it myself. I use electric clippers and various attachments. I don’t use scissors. It took a few tries. I’m actually happier with my cuts than with the barber’s cuts because now I have exactly the cut I had in mind, and not what the barber had in mind. The first two or three times, you’re going to mess up a little here and there, but fine. You’ll get the hang of it. Doing the back takes a little eye-hand reverse-coordination, but your brain eventually gets used to it. Cutting hair is not rocket science.

      You can google the videos. The tips are the same. Watch a few of them.

      • polecat says:

        I’ve been doing the marine cut for years now. No muss, no fuss – once it grows too long … say, 1/4 “.. it’s time to rake the buzzer once again – saved bukoo in $$$ AND angst from having had badly done, paid-for haircuts.

        But I’m a (mostly) cheap-n-frugal son-of-a-b!tch.

      • Redshift says:

        Actually I don’t find doing the back very difficult, just remove the comb from from the clipper and pull it horizontally. The problem area for me is around the top of the ears as you have to use the edge of the clipper blade and draw it in an arc.

    • DO says:

      Try the flow bee. It has been around for ever. It’s basically fool proof…

  12. Satya Mardelli says:

    I’m thinking the uptick in support puppies will probably be a boon to Chewy.

  13. Seneca’s Cliff says:

    One man’s creative destruction is another mans regular destruction.

    • lenert says:

      To paraphrase Truman – “It’s creative destruction when it happens to your neighbor…”

  14. BuySome says:

    Revenge of the “chief data” nerds? Please pass the wolfcorn.

  15. MonkeyBusiness says:

    It’s just like “disruption”. In the end it’s all just empty, zero calorie words.

  16. Michael Engel says:

    1) One of the many Fed fads in the early 2000 was a free standing stores with their own parking lots, near the malls, when mom&pops couldn’t take it anymore with the tyranny of the malls owners.
    2) Hit #1 came in 2008/09. Those who survived refinanced,
    because when rates are low price is high, close the max 10 years
    from now.
    3) The virus is a game changer. Free standing stores with empty
    parking lots, with no customers insight and a dime in the bank.
    4) For sale sign by the local RE brokers.
    5) The risk free 10Y is hugging zero from above, soon from below, with plenty risk assets momo buyers, while new buyers start to emerged with different type of interest rates of their own.
    6) They will demand a 17% to 20% risk premium, like the credit cards companies, because the commercial RE loans are in their first baby steps decline, before their Niagara Falls.
    7) They will hunt when there will be blood in the streets.
    7) (1.00:1.20)^10 = 0.16. // (1.00:1.17)^10 = 21 cents for one dollar in ten years. When the bankruptcy trustees and their liquidators come close to twenty cents/ dollar in mid 2022, investor#2 will click his lowest bid. Let the chips fall where ever they may.
    8) If the Keynesian drugs Martingale prevail, investor #2 will wail for hit #3
    in the late 2020’s.
    9) The media Cyto response is more deadly than the virus itself.

  17. Nat says:

    When I listen to these now I always start by saying “Okay” right after I push play to see if I can get the intro “Okay”‘s timing, emphasis and mood correct. I am always right about the intro “Okay” being there, and I am usually pretty good with the start-timung of it, but catching the per episode nuances in emphasis and mood I ned to work on. For instance this one was a quick “ok” but I went with the long seemingly exasperated “sigh”-style “OOOOoooohhhhhh-kaaaaayyyhhhh” that punctuated some earlier episodes.

    For the record I am not making fun. I find it charming. Its like Wolf’s “goodnight and good luck” seal-of-official-personal-production-and-endorsement-of-views-covered-guarentee but on the front end instead of the back.

    Thanks for another great pod cast Wolf.

    • Wolf Richter says:

      Mmm-kay. I put the OK there so that people realize the podcast is starting since there is no other warning that it’s starting. In the past, people missed the first few words because they weren’t ready to listen — they expected some kind of stuff that you tune out — and then the whole first sentence didn’t make sense because they missed the subject.

  18. Michael Engel says:

    Small business owner will always show low profit, have the smallest office, eat in the finest restaurants at business expense, drive a Benz, fly all over the world looking for customers, visiting trading shows, with a ski vacations in between, buying computers at business expense, taking an afternoon break to play soccer with their kids…or an afternoon nap, or open a nice bottle of wine, ==> because being small business owner is not as bad as many readers think.
    Small business can survive for decades, because they are connections and have a small cushion to dump during the slumps.
    They are not likely to forsake their freedom, despite the headaches and will never work for somebody else and become employee, unless they have too.

    • Seneca's cliff says:

      I have been a small business owner since I was 25 ( never worked for anyone else since) and I wish it was as plush as you describe. But the upside is that you have many options to avoid becoming a tax donkey like folks who make a good salaried income.

    • ft says:

      Michael, I don’t know what mountaintop you pontificate from, but I’m glad I don’t live under it. This comment really crosses the line.

      • Wisdom Seeker says:

        There are many different kinds of small business. Michael seems to be describing the taxpayer-subsidized, politically- or socially-connected, expert-technical-consultant sort of small business.

        Not the same part of the “service economy” (what a horrifically poor descriptor) as mom-and-pop storefront small business.

    • Paulo says:

      I know, and have also worked for many small business owners. Most owners work very hard and many times I have made more in wages than the owners pay themselves. In a service business it also means taking calls at home after hours. When I would sub into their work as a part timer I often took on the phone duties to give the owner a break, and so they could get away. (I had another regular full time gig)

      Shut down at Christmas or holidays? The phone still needs answering for emergencies. You know who does it? The owner. One reason why I never ran my own construction business is because I would never get away from it. I always knew that I would either work or think about projects 24/7.

      • 91B20 1stCav (AUS) says:

        Paulo-very well-said. My years as assistant GM/GM at an independent moto shop had me often correcting customers who thought I owned the business (the owner, prior to his divorce, was GM and VERY ‘hands-on’, had bought a 1 (owner) + 1/2time-employee business and built it successfully to 1 + 3 full + 6 1/2time). When they asked if i ever wanted to own my own shop, my answer was: ‘…nah, i like to sleep at night and just can’t do those 60/80-hour weeks…i like to go riding!”.

        may we all find a better day.

  19. Together, big tech and government
    are destroying us little guys, punching
    a huge, gaping hole in the GDP,
    impoverishing the poorest.

    Amazon often doesn’t have basic goods.

    Amazon Fresh has only “organic” new potatoes;
    the cheaper, regular kind are sold out.

    My favorite sandwich crackers
    are no longer available.

    I want to buy 24 cans of ravioli;
    but I’m limited to 9.

    Safeway often has raw chicken
    thighs for $0.99 per pound;
    Amazon Fresh wants 5x that.

    The extra–large packs of paper towels
    either aren’t available or cost 5x
    the price, compared to Walmart.

    • andy says:

      To be limited to just 9 cans of organic Ravioli is a tough choice indeed. But if you sign up for Amazon Fresh Prime Go, the USPS will deliver a hundred freshest cans to your doorsteps for free. You’re welcome.

  20. David Hall says:

    There are paper basket coffee filters for sale in Google Shopping.

    Working from home in the National Parks might be a problem.

  21. Lee says:

    Here in Oz we have a mixed bag so I’ll comment on Victoria.

    Small business has been basically closed for something like 12 weeks now in Melbourne with another couple of weeks left to go (????????????).

    Some businesses have been able to stay afloat as a result of a combination of online sales and government handouts.

    The government handouts don’t fully cover expences and the for most the online sales are only a portion of normal sales. Government handouts won’t last forever and when that stops, well…………….

    Union related jobs and activity has been allowed to go ahead as have those big retail outlets that have the ability to move their product via online and click and collect.

    Small business here has been decimated and just walking down the main street of the village you can already see lots of vacant stores and “For Lease” signs up.

    Over the past 10 years or so prior to the virus hitting there was of course business turnover, but nothing like what has gone on so far. Most of the small outfits on the main drag have been there for a long time and the street hasn’t changed that much at all.

    The two travel agencies won’t be opening up again ever as those companies are closing lots of their shops and moving to more online. One of the four big banks actually shut their branch months ago and I wonder if they will open it again.

    Thinking about what has left over the past few years……………….one Indian restaurant went belly up and the place has been vacant for a couple of years. Another restaurant changed owners, changed menus, and went bust and that didn’t take 6 months!!!

    And just off the main drag there is a small shopping block with one shop on the corner that must have the worst luck in the world. Can’t recall what was in there initially, but every shop in there over the past five years has gone belly up: whatever was in there, then a couple of pizza shops, and then right before the virus hit a ‘Chinese massage parlor’ ( no not that kind either!!!).

    Now that has gone and one of the hairdressers from the main drag is moving in there. Wonder how long they will last?

    Finally, has anybody added up the total economic costs of the virus to date?

    Including government mandated shutdowns, loss of value of real estate, rent, earnings, and the pile up of government debt?

    Here in Oz we’ve had about 900 deaths which is unfortunate in that most of them could have been prevented as they were in aged and long term care.

    How much economic activity has been lost and how much has it cost?

    How much more has been lost as result of the state government here in Victoria closing down the economy for the past 12 weeks?

    I’d give a SWAG of least 1 TRILLON dollars, if not more…………………..

    • Anthony A. says:

      Lee, I keep reading your posts and know that you have a U.S.Passport (correct?) and wonder why you live there if it’s so bad? Do you have any thoughts of leaving and relocating?

      • MonkeyBusiness says:

        Because New Zealand is near and when the world goes to hell, it will be the last place standing.

        Silicon Valley Billionaires can’t be wrong right?

      • Lee says:

        Years and years ago I used to live in Japan and we were looking for a decent place to raise our kid away from the bs that is Japanese education system once they reach junior high school.

        We considered a number of places inlcuding the USA (Hawai’i and Florida – Marco Island) and Australia. New Zealand was out of the question as it is even smaller and further away from everything than Australia.

        We wanted a nice safe place with cheaper costs than Japan and one that we could travel back and forth to Japan when we wanted.

        The Australia that we visited over 30 years ago and moved to 25 years ago here no longer exists. The population of Melbourne has gone from a little over 3 million to well over 5 million before the virus hit.

        It costs more to live in Australia than Japan now!!!

        Is Australia bad?

        There are a lot of things wrong with the place, but there are a lot of things that are good.

        Right now Victoria is bad with people in Mebourne having endured the longest lockdown of all major cities in the world including curfews, 23 hours in your house ‘detension’, and 5 kilometer travel restrictions which have now moved to 25 kilometers.

        Compared to the USA with the stupidity going on with respect to BLM, riots, the idiotic MSM, crime, drugs, gangs, crap education in the big cities, and asinine politicians mostly on the democrat side of politics, this place is heaven.

        You won’t find a Baltimore, Chicago, Detroit or even the stuff going on in Portland or the crap on the streets like in SF either.

        Once travel to Oz is open again come visit us and see the country – it is quite different than the USA. Nice place to visit and if you have a lot of money a nice place to live too.

        • Anthony A. says:

          Thanks for the explanation, I didn’t know you have been there so long. I visited there in the mid 1980’s and it was a nicer place then, like all places (well, mostly all).

          What’s going on in the U.S. has to do with political corruption at all levels. I’m 77 and been here the whole time (U.S.) and I don’t worry too much about it because I’ll be dead when this country is totally gone to hell. My one living child, now 41, will be OK, and thankfully, I don’t have any grandchildren to worry about.

          We are in about the safest place you can be in the U.S. and that is Texas. Many people here are well protected (on a personal basis) and somewhat independent in thinking. We do have a migration of Californians coming here and that’s certainly to be worried about, especially if they get into power here.

        • Zantetsu says:

          Anthony A., your us-vs-them mentality towards some of your fellow citizens is a big part of the problem in the USA.

        • 91B20 1stCav (AUS) says:

          Zan-double-check. The rest of the world is always watching, thinking and planning…

          may we all find a better day.

    • andy says:

      No worries mate, Oz will pull itself up by its own jackboots.

  22. Bobber says:

    A 65% rise in business registrations seems suspicious. I wonder if the new business registrations are somehow linked to the PPP program. People could be registering businesses to qualify for the giveaways or to somehow swindle the government. JP Morgan had to fire a whole bunch of people involved in PPP program fraud a couple weeks ago. It’s a swamp out there.

    I do expect a lot of people have started new “independent” businesses as Amazon truck drivers or other delivery agents. Amazon has been actively advertising its truck driver program because of the big rise in order volume.

    • MonkeyBusiness says:

      Amazon 3rd party sellers sold 3.5 billion worth of goods during Amazon Prime day, up 60% from the year before, and total spending rose 36% compared to Prime Day 2019.

      People have so much money now, it’s unbelievable. As I said before, this is the BEST “depression” ever. I pray every day for a new strain.

    • Dave says:

      Bobber, good point!

    • Wolf Richter says:


      “…linked to the PPP program. People could be registering businesses to qualify for…”

      I don’t think so. You have to have payroll records going back some time, in order to even apply for PPP. Also, The PPP loans were in the second quarter mostly. The program ended Aug 8. These applications came in the third quarter.

  23. Yort says:

    Participation trophies for everyone, no red ink or failing grades in early schooling years (even constant test retakes and extra credit in high school and college), and now right on time the society we have created is ZeRo failure allowed on any level, at any time, for any reason (of no fault of our own?). Anyone see a pattern over the last few decades? Sure it sounds amazing to extend and pretend perception is actual reality, just not sure we can avoid the less fantastic unintended consequences hinding in the shadows.

    For example, a CNBC article tonight showed that credit scores are increasing during this recession. With 35% of FICO determined by staying current on credit card payments, forbearance and deferment has created an unintended consequence of forging the data. With 30% of FICO determined on the ratio of credit available to credit used, $1,200 checks and other “Free Money” mechanisms has created a decrease of almost $900 per credit card balance. Be it intended or unintended consequences, such actions makes our credit scores fuzzy at best, and somewhat fraudulent to the edge of meaningless. At some point, once we falsify enough real life data, capitalism will be stretched to the limits and could revert to something very different, and very fast. Sometimes I wonder if this was the Fed plan all along as it could result in a the “Great Reset” in which even fewer people than today will have even more power over the other 99.99999999% than anyone thought possible before the digital revolution. The Fed acted so quickly with very complex plans that they most likely had been designed in advance. Could J-Pow really be the 9th dimension chess player who will deliver us to the next level of human enlightenment, or is the fate of world in he hands of simple dumb luck, be it good or bad???

  24. Lawefa says:

    Good report Wolf. Back in June, I was looking for an adult trike for my wife. No bike shop in the greater Phoenix area had one. Further, most told me their sales for 1 month of bikes equated to sales for the whole previous year. Given my experience, I believe them.

  25. Michael Engel says:

    1) When Mach 3 CV19 hit the world Amazon and the banks benefited
    from the gov Cytokine response. The Cyto response can kill Amazon.
    2) Amazon Prime for free delivery, by USPS trucks, from Mon to Sun might end, so Amazon started playing defense. Amazon is building a delivery network, because they want to rule their own ocean waves.
    3) They became a matchmakers, a market maker. They connect small
    contractors to the banks, who click credit in their account, to buy Ford delivery vans.
    4) The risk free 10Y @0.7 enable Amazon to do it for almost for free.
    5) But the risk free 10Y is very risky. We don’t if it will go NR, swimming in medusa infested water. We experienced a prolong disinflation, a 40Y recession drought, but never a chronic deflation.
    6) Viscosity forces might keep the risk free 10Y from rising above water for decades. Amazon small contractors will default in the process.
    7) Amazon 1H PnF (x3 reversal, box = 30) can send it down $1,600.

  26. Michael Engel says:

    1) Small business don’t die within five minutes as many readers imply. They can survive and function for decades, if they change and adapt.
    2) If the owner is devoted and treat his customers well , after they die, they will “thank” him from their grave. Trust me. During a slump, his suppliers will keep a good customer alive. His largest customers will send him few crumbs to keep him busy.
    3) When customers visit a trade show, send them a $200 a fancy restaurant
    gift card as promotion.
    4) Small business owner is a f..king slave, eating dirt, sweating 7 days a week, til 8MP – 9PM, taking a nap to keep going, no plush.
    5) Playing in the park every Wed afternoon with the kids is a good thing.
    6) Driving a Benz to reduce income is one of the few benefits he reward himself.
    7) A new small business in recession, it’s hard to predict when & how it will end, but u can try. And try and try again until it work, but try not to die in the first time. Keep it running as long as u can, because it’s a gift.

    • Xabier says:

      Wise words Mr Engel.

      When I hit serious trouble due to the 2008 crisis, those customers who could did everything in their power to keep me going, even coming up with things that obviously didn’t need doing.

      Needless to say, I look after them very well these days – but I did that before the crisis, too, which is why they helped.

      Human nature can be very decent indeed -something often forgotten by those in the public sector and corporate environment, for obvious reasons…….

      And may I add it’s very nice to see you back here regularly.

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