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Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO

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Via Zero Hedge - Article at By Daphne Howland of RetailDive

https://www.retaildive.com/news/retail-on-pace-for-the-most-bankruptcies-and-store-closures-ever-in-one-yea/586074/

https://www.zerohedge.com/markets/retail-pace-most-bankruptcies-and-store-closures-ever-one-year-bdo

BDO delivers assurance, tax, and financial advisory services to clients throughout the country and around the globe.

Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO

EXCERPTS

Summary:

  • The pandemic — with its temporary store closures, social distancing requirements, e-commerce boom and supply chain disruption — in the first six months of this year fueled uncertainty for retailers and accelerated existing trends, according to BDO's biannual bankruptcy update.

  • BDO counts 18 retailers that headed to bankruptcy court in the first half of the year and another 11 in July through mid-August. Retail Dive's bankruptcy tracker similarly lists 27 so far this year, compared to 17 in 2019. (BDO counts some businesses, like Gold's Gym, as retailers.)

  • The industry's bankruptcy record so far put it on pace with 2010, following the Great Recession, when there were 48 bankruptcy filings by retailers, according to BDO's report.

The COVID-19 pandemic has essentially interfered with what is normally a cyclical pattern for retailers and set up the industry for yet more bankruptcies in 2020's second half, according to BDO researchers.

RCP_Retail-In-The-Red-1H2020_table1.png?

In the first six months of 2020, 18 retailers filed for Chapter 11 bankruptcy, with an additional 11 filing in July through mid-August. These defaults were concentrated in apparel and footwear, home furnishings, food and department stores, with many prominent retailers filing during this time period, including Pier 1, J. Crew, Neiman Marcus, Stage Stores, J.C. Penney, Tuesday Morning, GNC, Lucky Brand, RTW Retailwinds (New York & Co.), Brooks Brothers, Ascena (Ann Taylor, LOFT, Lane Bryant, Justice, Catherines), Le Tote (Lord & Taylor), Tailored Brands (Men’s Wearhouse, Jos. A. Bank, Moores Clothing, K&G) and Stein Mart.

With 29 filings in 2020 to date, this year is on-pace to rival 2010, following the Great Recession, that resulted in 48 total filings.

RCP_Retail-In-The-Red-1H2020_table2.png

"In short, 2020 is on track to set the record for the highest number of retail bankruptcies and store closings in a single year," they wrote. "Based on the trends set through mid-August, our expectation is that more retailers will struggle to navigate the effects of the pandemic — particularly those that are highly levered and mall-based." 

But it's not just Chapter 11 filings or liquidations. Brick-and-mortar store fleets, which were already being closely scrutinized as more consumers shopped online and avoided malls, are also being slashed by retailers in turnaround, BDO noted....

 

 

 

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(edited)

6 hours ago, Tom Nolan said:

"In short, 2020 is on track to set the record for the highest number of retail bankruptcies and store closings in a single year"

 

Trumps is setting economic records all right.

 

Note the rest of the world has covid too, but things are not nearly as bad.  Most nations didn't add failed multi-front trade wars and massive domestic unrest to the problem.

 

1, 2, 3 strikes you're out.

 

Edited by Enthalpic
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Actually, these business closures are not due to Federal mandates. 

However, Dr. Fauci (Bill Gates and he communicate weekly), the FDA and the CDC have played a major role in issuing guidelines.  And that is only what they are:  Guidelines.  Nothing more than suggestions. 

These Federal Agencies, however, deliberately prevented important information from reaching the public.  The have also placed sudden arbitrary rules against available treatments for respiratory infections.  These rules have never been in place before Covid, but suddenly were implemented likely causing many people to die.

Each state has had the autonomy of issuing their own mandates for masks, social distancing, business closures and school reopenings.

This is the primary source of business and employment hardship. 

The state mandates.are the reasons that companies are going out of business.  They are the reason that unemployment exists.

South Dakota was one of the states with the least amount of restrictions.  Their economy is back on track for the most part.

~~~~~~~~~~~~~~~~~~~~~

We are only just beginning to see some major devastation across America because Authoritarians think that they "know best" and like to dictate how people should live and interact.

Most of the Blue states are having the worst economic fall-out as opposed to the Red states.  Not that I am for either party.

 

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(edited)

On 10/1/2020 at 9:26 AM, Tom Nolan said:

Actually, these business closures are not due to Federal mandates. 

However, Dr. Fauci (Bill Gates and he communicate weekly), the FDA and the CDC have played a major role in issuing guidelines.  And that is only what they are:  Guidelines.  Nothing more than suggestions. 

These Federal Agencies, however, deliberately prevented important information from reaching the public.  The have also placed sudden arbitrary rules against available treatments for respiratory infections.  These rules have never been in place before Covid, but suddenly were implemented likely causing many people to die.

Each state has had the autonomy of issuing their own mandates for masks, social distancing, business closures and school reopenings.

This is the primary source of business and employment hardship. 

The state mandates.are the reasons that companies are going out of business.  They are the reason that unemployment exists.

South Dakota was one of the states with the least amount of restrictions.  Their economy is back on track for the most part.

~~~~~~~~~~~~~~~~~~~~~

We are only just beginning to see some major devastation across America because Authoritarians think that they "know best" and like to dictate how people should live and interact.

Most of the Blue states are having the worst economic fall-out as opposed to the Red states.  Not that I am for either party.

 

Agreed.

On that note, the beauty of the US system is that each state is its own experiment. The People's Republic of California can screw up their economy with zero negative impact to me. In fact, their stupidity benefits me as those jobs are driven to the more sensible states I prefer. See Elon Musk's comments on coronavirus lockdowns for more details.

Which leads to another interesting point: never interrupt your enemy when they're making a mistake. I thought about arguing coronavirus restrictions with liberals, but then I realized I'd only be shooting myself in the foot. Why invest that effort and suffer their abuse when I can enjoy watching them destroy themselves? Leftists are a self-correcting problem, provided we leave them alone.

Of course, people will argue that leftists are a large demographic that cannot be ignored.  Yes, but actually no:
1) Their birth rate is around 1.3 - far below replacement. In a couple generations, they'll die out.
2) Absent a birth rate, they attempted to bolster their numbers with public school indoctrination. This model is failing as competent students flee universities, businesses refuse to fund those universities, taxpayers withdraw public funding, and the universities eventually go bankrupt. We are on the cusp of this. Conservative private schools, trade schools, and cheap (read: "too cheap to fund stupidity") online degrees are rising to replace them.
3) Absent both a birth rate and a public indoctrination system, they attempted to bolster their numbers with immigration. This works until 2nd generation immigrants realize they're competing with 1st generation immigrants and suddenly discover conservatism. See Black and Hispanic support for Trump for more details. It also works until automation and economic distress destroy the job market, forcing US citizens into desperate circumstances and removing the incentive to immigrate to America.

Liberals will disappear. We need only ignore them.

Edited by BenFranklin'sSpectacles
Left out a couple words. No change to meaning.
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Two noteworthy details:
1) Retail tends to be full of liberal workers demanding government handouts. Good riddance.
2) Suppliers sometimes avoid selling online because they already have lucrative deals with retailers. Those suppliers will now be forced to get creative.  I'm looking forward to having greater selection of quality goods from the comfort of my own home. 

I.e. this is what progress looks like. 

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On 9/30/2020 at 5:17 PM, Tom Nolan said:

 

Via Zero Hedge - Article at By Daphne Howland of RetailDive

https://www.retaildive.com/news/retail-on-pace-for-the-most-bankruptcies-and-store-closures-ever-in-one-yea/586074/

https://www.zerohedge.com/markets/retail-pace-most-bankruptcies-and-store-closures-ever-one-year-bdo

BDO delivers assurance, tax, and financial advisory services to clients throughout the country and around the globe.

Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO

EXCERPTS

Summary:

  • The pandemic — with its temporary store closures, social distancing requirements, e-commerce boom and supply chain disruption — in the first six months of this year fueled uncertainty for retailers and accelerated existing trends, according to BDO's biannual bankruptcy update.

  • BDO counts 18 retailers that headed to bankruptcy court in the first half of the year and another 11 in July through mid-August. Retail Dive's bankruptcy tracker similarly lists 27 so far this year, compared to 17 in 2019. (BDO counts some businesses, like Gold's Gym, as retailers.)

  • The industry's bankruptcy record so far put it on pace with 2010, following the Great Recession, when there were 48 bankruptcy filings by retailers, according to BDO's report.

The COVID-19 pandemic has essentially interfered with what is normally a cyclical pattern for retailers and set up the industry for yet more bankruptcies in 2020's second half, according to BDO researchers.

RCP_Retail-In-The-Red-1H2020_table1.png?

In the first six months of 2020, 18 retailers filed for Chapter 11 bankruptcy, with an additional 11 filing in July through mid-August. These defaults were concentrated in apparel and footwear, home furnishings, food and department stores, with many prominent retailers filing during this time period, including Pier 1, J. Crew, Neiman Marcus, Stage Stores, J.C. Penney, Tuesday Morning, GNC, Lucky Brand, RTW Retailwinds (New York & Co.), Brooks Brothers, Ascena (Ann Taylor, LOFT, Lane Bryant, Justice, Catherines), Le Tote (Lord & Taylor), Tailored Brands (Men’s Wearhouse, Jos. A. Bank, Moores Clothing, K&G) and Stein Mart.

With 29 filings in 2020 to date, this year is on-pace to rival 2010, following the Great Recession, that resulted in 48 total filings.

 

RCP_Retail-In-The-Red-1H2020_table2.png

"In short, 2020 is on track to set the record for the highest number of retail bankruptcies and store closings in a single year," they wrote. "Based on the trends set through mid-August, our expectation is that more retailers will struggle to navigate the effects of the pandemic — particularly those that are highly levered and mall-based." 

 

But it's not just Chapter 11 filings or liquidations. Brick-and-mortar store fleets, which were already being closely scrutinized as more consumers shopped online and avoided malls, are also being slashed by retailers in turnaround, BDO noted....

 

 

 

 

 

 

 

RCP_Retail-In-The-Red-1H2020_table2.png

"In short, 2020 is on track to set the record for the highest number of retail bankruptcies and store closings in a single year," they wrote. "Based on the trends set through mid-August, our expectation is that more retailers will struggle to navigate the effects of the pandemic — particularly those that are highly levered and mall-based." 

 

But it's not just Chapter 11 filings or liquidations. Brick-and-mortar store fleets, which were already being closely scrutinized as more consumers shopped online and avoided malls, are also being slashed by retailers in turnaround, BDO noted....

 

 

 

 

 

 

 

Holiday sales from brick and mortar stores will be interesting to watch. We no buy almost everything from Amazon or other online sources. It saves gasoline and shopping time etc. Plus we do not want to get COVID 19. I predict that we will have a lot more unused buildings. They need to be transformed into apartments with handy shops for the residents as well as remaining stores. 

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(edited)

On 10/3/2020 at 10:15 AM, BenFranklin'sSpectacles said:

The People's Republic of California can screw up their economy with zero negative impact to me. In fact, their stupidity benefits me as those jobs are driven to the more sensible states I prefer.

Not really.  California produces a surprisingly large amount - huge - of the nation's fresh fruits and vegetables.  The ideologues out there are now causing huge problems in water use, and the result is and will be desertification of growing areas.  I don't see those vegetables being replaced any time soon from other growing areas.  I do see much larger investments in greenhouses in other States, that will be an expanding business. 

On 10/3/2020 at 10:15 AM, BenFranklin'sSpectacles said:

Liberals will disappear. We need only ignore them.

Probably not.  The need for certain mental groups for Armageddon ideologies seems to always be there, just waiting for the right factors to set them off.  The other problem is that the Leftists will take you with them.  Doom then becomes an equal-opportunity result; everybody can participate.  Ugh. 

Edited by Jan van Eck
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17 hours ago, ronwagn said:

We no buy almost everything from Amazon or other online sources

As long as you recognize that Bezos, the big beneficiary of your shopping approach, is single-handedly destroying America. 

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2 hours ago, Jan van Eck said:

Not really.  California produces a surprisingly large amount - huge - of the nation's fresh fruits and vegetables.  The ideologues out there are now causing huge problems in water use, and the result is and will be desertification of growing areas.  I don't see those vegetables being replaced any time soon from other growing areas.  I do see much larger investments in greenhouses in other States, that will be an expanding business.

As a practicing carnivore, this doesn't affect me.

That does raise an interesting question though: how did people obtain fruits and vegetables prior to rail, refrigeration, and CA's dominance in the market?  They produced elsewhere. I have friends in the Midwest who buy from local farms while it's in season, and I see plenty of produce coming out of Mexico and the American South. When I do buy fruits and vegetables, they're frozen. That means they can be produced where ever is convenient and delivered when it's convenient. Or I can store a Winter's supply in my deep freezer. 

Plenty of options. I don't see CA as essential.

3 hours ago, Jan van Eck said:

Probably not.  The need for certain mental groups for Armageddon ideologies seems to always be there, just waiting for the right factors to set them off.  The other problem is that the Leftists will take you with them.  Doom then becomes an equal-opportunity result; everybody can participate.  Ugh. 

Sometimes leftists do take the whole country with them. The 20th century's failed attempts at socialism are sufficient proof of that. I suppose my point is that I think the US will avoid the worst of it and eventually swing back in a sensible direction.

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3 hours ago, Jan van Eck said:

As long as you recognize that Bezos, the big beneficiary of your shopping approach, is single-handedly destroying America. 

How so?

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3 hours ago, Jan van Eck said:

As long as you recognize that Bezos, the big beneficiary of your shopping approach, is single-handedly destroying America. 

Please explain. Plenty of people are making money delivering. Walmart can compete and is doing fairly well. Just about every major company, and thousands of small companies sell online, including with Amazon. It seems to me that the losers are those that charge too much for their merchandise in stores. I am addicted to getting everything delivered since years before COVID. I don't believe in sustaining companies that charge me more and don't supply as many products. Amazon has a great return policy also. We feel that we save a lot of time and gasoline. The convenience is awesome. Others are free to compete.

There is a big problem with all retailers and large corporations though. They have too many products manufactured in China and sold online or in stores. Walmart used to pride themselves in carrying American products. Then Sam Walton died. 

We buy most food in person. Most Big Box Stores have a lot of Chinese and other foreign goods. I did get a great product from Canada on a lot of nice plastic shelving for my garages. 

Unless corporations decrease dealing with China they make it very hard to buy American, whether they have China make their products or buy them to sell in America. That has to change. We need clearer markings on products including percentages of American made and assembly costs etc. I hear we American companies are switching manufacturing to other countries, but don't know what is really going on. Tariffs need to be used to balance trade deficits. 

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Days after I posted “Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO”, the retail sector ETFs rose.

 

Here is why retail suddenly was shining…

QUOTE

“record earnings from large retailers - Walmart, Amazon, Home Depot - were responsible for the gains.”

Bizarro Recession: Q2 Retail Trade Profits Surge To Record High

Thu, 10/01/2020

https://www.zerohedge.com/markets/bizarro-recession-q2-retail-trade-profits-surge-record-high

As Joseph Carson, former chief economist of AllianceBernstein, writes every recession has unique features, but this is one for the record books (no pun intended).

According to the GDP report released on Wednesday, operating profits for the retail trade sector hit a record high in Q2.  BEA said record earnings from large retailers - Walmart, Amazon, Home Depot - were responsible for the gains.

Record profits in retail occurred even when store bankruptcies are the highest since the Great Financial Recession.  The record profits for the retail sector highlights the unusual nature of the recession.

That is, the pandemic has hit the consumer service sector unlike most recessions that impacts consumer spending on goods. Spending at many retail stores has actually increased more than normal as spending that would have been spent on services (i.e., travel, recreation and entertainment) has been directed towards goods.

odd%20recession.jpg?itok=mwThb3lS

This should probably not come as a surprise. As we wrote back in July when we brought readers a note from DB's Jim Reid in which he spotlighted the "strangest recession in history", while Recessions don’t usually result in personal income soaring, "this one has thanks to government support around the world." ....

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2 hours ago, ronwagn said:

There is a big problem with all retailers and large corporations though. They have too many products manufactured in China and sold online or in stores. Walmart used to pride themselves in carrying American products. Then Sam Walton died. 

On one hand, I don't like the dishonest, unfair practices many Chinese firms have engaged in with the active support of their government.

On the other hand, I've had to supervise US workers and fully understand why we're outsourcing...

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8 minutes ago, BenFranklin'sSpectacles said:

On one hand, I don't like the dishonest, unfair practices many Chinese firms have engaged in with the active support of their government.

On the other hand, I've had to supervise US workers and fully understand why we're outsourcing...

I can believe that they are very hard workers. We have such great welfare and benefits for those who don't work, our nonworkers probably live better than the average Chinese worker. They also have an unending number of rural poor who want to go to the cities but aren't allowed. Maybe the best we can do is move manufacturing to other poor countries. That would be better than building China up as they seek to rule the world together with their allies and the United Nations. 

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2 minutes ago, ronwagn said:

I can believe that they are very hard workers. We have such great welfare and benefits for those who don't work, our nonworkers probably live better than the average Chinese worker. They also have an unending number of rural poor who want to go to the cities but aren't allowed. Maybe the best we can do is move manufacturing to other poor countries. That would be better than building China up as they seek to rule the world together with their allies and the United Nations. 

Oddly enough, Chinese labor has become sufficiently expensive that manufacturers are moving to the rest of SE Asia. This conveniently builds those countries up so they can help us oppose China.

Also, due to their 1-child policy, China is about to have the worst demographic crisis in history, forcing them to automate to keep things running. 

Interesting times.

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6 minutes ago, BenFranklin'sSpectacles said:

Oddly enough, Chinese labor has become sufficiently expensive that manufacturers are moving to the rest of SE Asia. This conveniently builds those countries up so they can help us oppose China.

Also, due to their 1-child policy, China is about to have the worst demographic crisis in history, forcing them to automate to keep things running. 

Interesting times.

What about the rural poor? Hasn't China mechanized its agriculture. 

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6 minutes ago, ronwagn said:

What about the rural poor? Hasn't China mechanized its agriculture. 

I would guess they haven't mechanized to the extent we have. If their demographic crisis is bad enough, they'll have the opportunity.

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4 hours ago, ronwagn said:

Please explain. Plenty of people are making money delivering. Walmart can compete and is doing fairly well. Just about every major company, and thousands of small companies sell online, including with Amazon. It seems to me that the losers are those that charge too much for their merchandise in stores. I am addicted to getting everything delivered since years before COVID. I don't believe in sustaining companies that charge me more and don't supply as many products. Amazon has a great return policy also. We feel that we save a lot of time and gasoline. The convenience is awesome. Others are free to compete.

There is a big problem with all retailers and large corporations though. They have too many products manufactured in China and sold online or in stores. Walmart used to pride themselves in carrying American products. Then Sam Walton died. 

We buy most food in person. Most Big Box Stores have a lot of Chinese and other foreign goods. I did get a great product from Canada on a lot of nice plastic shelving for my garages. 

Unless corporations decrease dealing with China they make it very hard to buy American, whether they have China make their products or buy them to sell in America. That has to change. We need clearer markings on products including percentages of American made and assembly costs etc. I hear we American companies are switching manufacturing to other countries, but don't know what is really going on. Tariffs need to be used to balance trade deficits. 

I'm with you, Ron, on the convenience and the level of service.  And I love having real customer reviews to read before making decisions to purchase, wait for product improvements, or source from different designers/manufacturers.

The only part of the equation (brick and mortar vs online) that really troubles me is how I believe it is wiping out decent jobs, mainly for the young although there were always all ages of unskilled or otherwise unmarketable workers that seem to rely on those jobs year after year.

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9 hours ago, Jan van Eck said:

As long as you recognize that Bezos, the big beneficiary of your shopping approach, is single-handedly destroying America. 

Bang!

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12 hours ago, Dan Warnick said:

The only part of the equation (brick and mortar vs online) that really troubles me is how I believe it is wiping out decent jobs, mainly for the young although there were always all ages of unskilled or otherwise unmarketable workers that seem to rely on those jobs year after year.

Most of the people I see working retail are not people I want graduating to skilled or professional jobs - just as most of the people I see graduating from universities are not people I want to deal with in industry.

America once had a system that rewarded effort, conscientiousness, competence, etc. This ensured that those who started at the bottom could rise to the top - but it also ensured that those who rose to the top had good character. I.e. that they were capable of perpetuating an effective system.

The system that rewarded character has broken down. Most at the bottom are content to wallow at the bottom. Of those who show potential, most are infected with dangerous ideas that would destroy the country. I was discussing this with a cousin, who grew up in a rural area with one manufacturing employer. My uncle, who learned two skilled trades while running a farm, works at said factory. He is constantly outraged by the laziness and incompetence of younger workers. They even sabotage equipment to obtain 15-minute breaks. Consider that: they would render the factory uneconomical - taking everyone's jobs with it and destroying the community - for a 15 minute break. My experience in manufacturing was largely the same: line workers were mostly dangerous. These are not the earnest American youth of times past; they're detritus to be swept aside.

There are still good youth, but the old system, with its affirmative action, unions, and government interference, is not promoting them. We need a new way.

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23 hours ago, Jan van Eck said:

As long as you recognize that Bezos, the big beneficiary of your shopping approach, is single-handedly destroying America. 

Moving away from Amazon. Suppliers selling on Amazon are slowly taking their goods off of it and letting 3rd parties do Amazon sales while doing direct online sales cutting off Amazon. Amazon's inability to stick to the short delivery times eliminates one of their major advantages as the retail avenue of choice.

Walmart finally put on in store fulfillment without charging up for the items in the online order. They beat Amazon prices often and Amazon's move to sponsored placements and ads as well as fuzzy searches has made finding what you are looking for a serious time waste that makes driving to the store and browsing aisles a time saver.

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18 minutes ago, 0R0 said:

Amazon's move to sponsored placements and ads as well as fuzzy searches has made finding what you are looking for a serious time waste that makes driving to the store and browsing aisles a time saver.

You said it.

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20 hours ago, Dan Warnick said:

I'm with you, Ron, on the convenience and the level of service.  And I love having real customer reviews to read before making decisions to purchase, wait for product improvements, or source from different designers/manufacturers.

The only part of the equation (brick and mortar vs online) that really troubles me is how I believe it is wiping out decent jobs, mainly for the young although there were always all ages of unskilled or otherwise unmarketable workers that seem to rely on those jobs year after year.

I have, over the years, found it very expensive to get my one acre of lawn mowed so I do it myself. I have never had anyone come to my door to see if I wanted someone to do it, or approach me while I was mowing plus doing all the other garden tasks that we do. I lived on an acre for forty years. I have to seek people out for vacations coverage. Does that seem odd to anyone here? Any kind of simple work is expensive here in one of the lowest wage areas of the country. 

I think the people who do not want to work often live off of others, often their parents. I understand Italy has a similar problem even with young men. 

As far as deliveries, I think they are the future of shopping. If I was a Walmart big shot, I would insist on a great camera system going up and down virtual or real store isles wherever the customer wanted. Information on each item would be available immediately. 

Trying to get everyone to go to college for free is a terrible idea. It made more sense when a smaller number of people went to college for a four year degree. The smartest and most motivated should go for four year and advanced degrees. What we need to do is encourage people to study basic skills in many trades and to get actual work. They will often make a lot more money than someone with a four year degree. They can also start a small service business. A basic RN degree is only two years in most places and they are in high demand. That can lead to higher positions with further education. 

One thing that anyone needs to learn about is actual occupations in high demand. They should also be helped to assess their aptitudes and interests. 

There is an infinite amount of free education available. I have a topic on that.

https://docs.google.com/document/d/1nkAnzn9R7NH0LqihEeeq4be4ckBgk70YkGKbHsrnbTU/edit

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On 10/5/2020 at 9:18 AM, Tom Nolan said:

Days after I posted “Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO”, the retail sector ETFs rose.

 

 

 

Here is why retail suddenly was shining…

 

QUOTE

 

“record earnings from large retailers - Walmart, Amazon, Home Depot - were responsible for the gains.”

 

Bizarro Recession: Q2 Retail Trade Profits Surge To Record High

Thu, 10/01/2020

https://www.zerohedge.com/markets/bizarro-recession-q2-retail-trade-profits-surge-record-high

As Joseph Carson, former chief economist of AllianceBernstein, writes every recession has unique features, but this is one for the record books (no pun intended).

According to the GDP report released on Wednesday, operating profits for the retail trade sector hit a record high in Q2.  BEA said record earnings from large retailers - Walmart, Amazon, Home Depot - were responsible for the gains.

Record profits in retail occurred even when store bankruptcies are the highest since the Great Financial Recession.  The record profits for the retail sector highlights the unusual nature of the recession.

That is, the pandemic has hit the consumer service sector unlike most recessions that impacts consumer spending on goods. Spending at many retail stores has actually increased more than normal as spending that would have been spent on services (i.e., travel, recreation and entertainment) has been directed towards goods.

odd%20recession.jpg?itok=mwThb3lS

This should probably not come as a surprise. As we wrote back in July when we brought readers a note from DB's Jim Reid in which he spotlighted the "strangest recession in history", while Recessions don’t usually result in personal income soaring, "this one has thanks to government support around the world." ....

Same thing happened here in Australia. Like USA, govt support was too generous in Q2 and his since tapered, so Q3 and Q4 are likely to mark the "douple-dip" recession. In USA, perhaps due to Xmas and one last stimulus from the govt, the second leg of the recession will not occur until Q1 next year, but a "W" shaped recovery is still the most likely. 

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On 10/5/2020 at 12:13 PM, ronwagn said:

I can believe that they are very hard workers. We have such great welfare and benefits for those who don't work, our nonworkers probably live better than the average Chinese worker. They also have an unending number of rural poor who want to go to the cities but aren't allowed. Maybe the best we can do is move manufacturing to other poor countries. That would be better than building China up as they seek to rule the world together with their allies and the United Nations. 

Indeed Ron, that is the only mistake President Trump has made. He got rid of the TPP (which excluded China) because he falsely believed he could change the policies of the CCP and get a good trade deal from them. He actually believed they could be persuaded to play fair. Thankfully he has come around to reality (unlike the Dems), and hopefully he will win the election and resurrect the TPP. Already, Vietnam is set to import more LNG from the USA than China.

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