- “Several million Americans have already been laid off or furloughed because of the coronavirus crisis — and millions more may lose their jobs in the weeks ahead,” reads one of the early morning business news stories.
- “Millions of Americans lost jobs last week as the coronavirus ripped through the U.S. economy,” is the lead of another.
- A third declares, “The great American job machine just ground to a halt.”
- Lest there be any remaining doubt, a fourth article this am starts, “About 1 million to 4 million people may have filed for unemployment benefits last week, the largest number ever in such a short time.”
Here’s a link to first reports of the actual jobless claims release. Here’s a link to the Department of Labor release.
Home builders, their lenders and investors, and their developer partners have seen, endured, and survived moments in time that share some of the characteristics of today’s concurrent health and economic pandemics. Never before, however, have they faced the order of magnitude of uncertainty, doubt, and risk they must navigate in the days, weeks, and months ahead.
A trillion-dollar business whose lifeline is credit and debt, extended, committed, and invested with timelines mapped–at best–for tolerance of cyclical peaks and valleys, is wildly conspicuous now at an instant when “cash is king.”
“It’s like we’re out in the garden, knowing a Category 5 hurricane is heading in, not really knowing what to put away, anchor down, board-up, sand-bag, or evacuate,” the chief financial officer of one of the nation’s top 20 home building firms told me at the end of last week, as the health crisis news got scarier and the economic meltdown reached a peak panic point. “People are still buying houses, but we don’t know how long that will continue [per an NAHB survey, traffic is plummeting]. This will hit young buyers directly in their pocketbooks and crush downpayment savings, and has already damaged many of our older buyers’ investment portfolios. It’s just so hard for us to read into the future of what to be prepared for.”
And that conversation was at the end of last week.
Since, we’ve had a new “shock and awe,” $2 trillion-plus law advance to the House that’s helped somewhat stanch hemorrhaging confidence among Wall Street investors. One can only hope the “green shoots” of hope in the investment community make their way across the confidence abyss to Main Streets around the country. Now the House has its shot at the legislation, before it heads to the White House, and there’s still ways to make the rescue plan more scale-able, simpler, and more sustainable.
Some of our nation’s Main Streets–the COVID-19 “hotspot” cities and states–are fighting a dispiriting battle for life and livelihood, as fully-stretched and stress healthcare systems struggle to sustain 24/7 “stat” measures to triage, save lives, calm the panic, and soothe the mourning. They’re having to quell nauseous feelings that the unrelenting emergency and swelling numbers of sick force them into having to “play God” as they attempt to understand where treatment, scarce equipment, and human capacity might serve “the greater good.”
We’ve all been thrust into uncharted territory, suddenly, unwillingly, almost totally.
Consider, if you will, an all-out pause in operational activities to reset focus on people and process. How might we look at the moment as a unique opportunity, not just to shrink balance sheets but to do some of those things we’ve been talking about doing in the area of streamlining, getting to the core, focusing on what matters most in every way, locking into the essential? Can you take heart in looking at the hard now as a moment for a reset?
Also, because “needless to say” no longer carries meaning, we need to say [quoting Bill McBride’s Calculated Risk]:
Every day:
- “Remind people about shelter-in-place, hygiene, and minimizing contact with others.
- Ask people to keep a record of where they go, and the people they have contact with. This will be important once test-and-trace starts.
After Cases-per-day peak:
- Continue to manufacture PPE, especially surgical masks – there will be another need for these masks.
- Start test-and-trace and quarantine program as soon as possible after cases-per-day peak. This will identify asymptomatic people that will need to self-quarantine.
About 40 days from now (maybe sooner in some areas). Note: This will require an operational test-and-trace program, and sufficient masks for anyone who needs one.
- Start easing shelter-in-place rules.
- Require anyone in close contact with others to wear a mask (this is why surgical mask production must continue at high levels, even after the number of cases slows0. People need to wear masks, not to protect themselves, but to protect other people. This will help slow the spread.
- Remind everyone daily about hygiene and minimizing contacts and staying home when sick (even as restrictions ease).
- Anyone with even mild symptoms should be tested. Wide spread testing – and following up with test-and-trace will keep the spread minimal.
Decisions that come after record-breaking unemployment claims releases set off a freshly-intensified domino-effect of margin calls, liquidity events, solvency challenges will no doubt keep us tossing and turning at night as we prepare to take them and live with having made them.
Never forget, though.
Three-hundred plus million young children, older brothers and sisters, young parents, middle-aged households, retirees, and wiser, older men and women never miss a beat nor skip a stride in their need for what you do. The capital investment markets and lenders may do so. But your livelihoods and your lives are both essential and perpetual.
So, as brutal as the decisions, the choices, the judgment you must call on and carry out among your team members and partners and customers, do your best to be true to yourself, your values, your essential purpose–to give us people a place where we feel we belong, a place we treasure and experience the meaningful times of our lives, our homes.
We never stop needing what you do for an instant. Remember that if you can as the storm hits.
