Worst Quarter Ever - 7/31/20

The worst quarter ever was reported yesterday - with the US GDP shrinking by 32.9% annualized.

Before I go any further, we need to discuss President Trump's Tweet: 

Delay the election? If that doesn't scare you, you need to look in the mirror. The US has never delayed a Presidential election. This is him sewing the seeds for lawsuits he'll file WHEN he loses in November. He will refuse to accept the results - claim voter fraud - file lawsuits - and have to be dragged from the White House. If he wasn't already an embarrassment to our country, just wait.

Apple and Amazon had blowout quarters - macro picture be damned. Shares are higher. They're looking like juicy shorts after his last gasp up. The jobless are buying iPhones? Goodness.

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1) If you're a visual person, here's a chart of quarterly GDP going back to the 1940s. Yeah, not even close..

2) I shared a similar sentiment yesterday, but different asset classes are pricing in different futures. If anything, this divergence in opinion should lead to higher volatility.

3) Regarding elections, early voting and mail-in voting have been increasing for decades while in-person has been declining. 

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School plans for reopening (or not) have been something I'm watching closely. When LA and San Diego schools announced they were going 100% online to start the year, I was excited. My sister-in-law is a teacher in a rural district here in Northern Illinois and their plan was to basically act like normal - with mandatory masks, maybe. A few of my cousins, who are teachers in Iowa and southern Minnesota, are having their schools reopen with no mask requirements. 

My daughter is set to start Kindergarten, so we've been watching the various plans and trying to decide what to do about her education. We think the LA and San Diego plans are great and think any plan that looks like "normal" is insane. Our district is offering e-learning as a choice with a physical choice as well. For the physical choice, 1/2 of kids go to school 2 days a week with a deep cleaning on Wednesday and the 2nd half of kids going to school the final 2 days of the week. On days where they're not physically in school, kids are expected to video in to the lessons. I think. The school board failed to consider the preferences of the teachers in releasing their plan. I'm not always for teachers striking, especially in our district, about pay and hours. Teachers in our district are pretty well paid and striking over ~$1,000-2,000 a year seems like a lot of hullaballoo for not much gain. But striking over working conditions - like being forced to help spread the virus driving a pandemic? They've got my full support!

The city of Columbus, Ohio, released their plan yesterday. It's 100% online. 

I don't know how a school board or superintendent sleeps at night sending their teachers and staff into buildings loaded with kids during a pandemic. Teachers and staff will get sick and die. And not just from "life". 

I get it. Schools are important. Kids learn better in-person. We have to move on with life. "What about the mental toll of social distancing?" It's insane to "want" the pandemic to be over and just move on.

If it's not clear by now, my daughter is not going to physical school this year. At least to start. It just doesn't make any sense to us. And it pains us because she loves school. She loves making friends and being around new people. But we can't justify the risks - even if it's not a risk to her as a child. It's the risk to us, grandparents, and general spread that will happen when so many gather together inside.

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We need to rethink the role school plays. It's become a de facto daycare and place for kids to get food. Get taught life lessons, not just learn. Basically, it's replaced parents. That's sad. School is cheap when you get all of those benefits!

In my town, the average house is ~$175,000 and has real estate taxes of ~$6,000. 80% of that goes to schools - so ~$5,000. For $5,000 kids get day care, food, learning, sports, music, and friends. Have a 2nd kid and the cost gets cut in half! That's amazing! The preschool we sent our daughter to last year cost ~$2,400 for the year. For a half day! If we had another kid there, our cost would have doubled! Public school for the win!