What a long strange trip it’s been.
JUST 12 YEARS AGO, I reported “in the Spring of 2008, Las Vegas homeowners stopped paying their mortgage, and filed predatory lending lawsuits against their lenders alleging mortgage fraud including RESPA and TILA violations. Hundreds of those cases were filed in the Clark County State and Federal Courts. The year following those filings, testy Las Vegas judges dismissed 99% of those cases reasoning that no one, no matter what, should live for free in America.”
We are using statistics from Nevada and specifically Las Vegas as a microcosm of America’s economic fallout since Las Vegas often falls the hardest in recessions.
The unemployment rate for Las Vegas During the 2008-2010 Recession shows a sharp spike
Last week, the Nevada Department of Employment, Training and Rehabilitation saw the most unemployment insurance claims in state history. The department reported Friday that figure was 92,298 regular initial claims for the week ending March 21. The previous high was 8,945 for the week ending January 10, 2009. The U.S. Department of Labor reported Thursday that nearly 3.3 million Americans applied for unemployment benefits last week. March 27, Las Vegas Review Journal
Governor of Nevada, Sisolak issued an order that prohibits new lockouts, evictions filings and notices to pay. It also applies to commercial buildings, to protect small businesses closed by Sisolak’s previous order, March 29.
The 2008 Recession was driven by financial market failures causing free-falling real estate prices and record foreclosures.
The real estate market through beginning 2020 shows solid increases.
By comparison, here are some statements in March 2020 regarding the affect COVID-19 will have on some Americans in general:
“For the economy in general, the first quarter of 2020’s GDP doesn’t have the full impact of the virus. The second quarter will capture the beginnings of the full effect of the virus, which will show a dramatic shock to the economy. By the third quarter, I anticipate the numbers to improve,” March 17, 2020, By Logan Mohtashami.
“I think you’re gonna see institutional legal service providers overwhelmed, legal aid societies overwhelmed, with requests for legal services to handle claims by creditors and potential eviction proceedings and you name it,” March 29, Henry Greenberg New York Bar Assoc.
“You’ve already heard about the massive stock losses in Feb and March. This coincided with massive bond market gains. Mortgages are part of the bond market and gains typically mean lower rates.” March 27, Matthew Graham.
“SeaWorld Entertainment said in a Friday filing with the U.S. Securities and Exchange Commission that the company has temporarily furloughed more than 90 percent of its current employees as of April 1 due to its parks being closed.” March 27, Ryan Parker.
“Pay TV loses its most valuable content — sports — and sees an accelerated decline in subscriptions and ad revenue. Parks and movie theaters are ground to a halt, while gaming companies hit new highs in usage.” March 26, Rebecca Keegan.
“The NCAA will slash $375 million from its budgeted $600 million distribution of men’s basketball tournament revenue to Division I schools.” Andrea Beattie.
“New York City residents who do not follow social distancing policies will be subjected to a fine of between $250 to $500, according to the city’s Mayor Bill de Blasio.
CVS said it was hiring 50,000 to meet exploding demand at its stores. Pizza Hut announced plans to hire 30,000 permanent workers. Walmart announced it will hire about 150,000 temporary workers by the end of May for their stores, clubs, distribution centers and fulfillment centers.
Unlike the 2008 Recession, today there exits no underlying economic shortfall to perpetuate a drawn-out recovery. Once people are allowed to go back to work, the economy will recover rapidly.