Now Is the Time to Focus on Making a Living… Not a Killing

Here’s the thing: 

The U.S. economy is going to spend about $2–3 TRILLION less this quarter than it normally does. That’s the largest downturn in history. In the history of any country ever. 

The U.S. has passed about $2.7 trillion in stimulus spending so far. If you want to know how they got that number, it’s because they figured that this was the amount of spending needed to balance out what was lost. (Listen to my podcast with Jim McKelvey, deputy chairman of the St. Louis Federal Reserve Bank, to get more details). 

The problem is: is it enough? And did they allocate it correctly? Should it all have gone to the workers? Should any have been used to bail out airlines and other industries? 

Who knows? What’s done is done. My guess is: we need more to truly balance out the spending, and also, things could be worse than they appear. We don’t know. 

Every day we get a little more clarity and can start making more deductions on what a new Abnormal will look like: 

My guesses of the day (and that’s the best we can do until we start narrowing in): 

  • 40–50% of restaurants will go out of business. That’s about 7 million workers. 
  • Most of the tourism industry is in trouble. Let’s say that’s another 4 million workers. 
  • Clothing retailers in trouble: I don’t know how many workers. Let’s say 4 million.  But here are some bankruptcies or bankruptcies-to-be: J. Crew, J. Hilburn, J. Jill, JCPenney (clearly not good to have a “J” as a first initial in the clothing business), Macy’s, Neiman Marcus, Brooks Brothers, and on and on. 

So we could be looking at 15 million of the 30 million unemployed that might be unemployed for longer than this lockdown. 

Which is a shame. Eight weeks of lockdown and it turns out we were a bit more fragile as an economy than we thought. 

Some of these people will instantly rotate to new jobs. Companies like Amazon, Walmart, and other retailers will be hiring. 

Since we know the money that was lost will hit the economy, it’s not like spending will be down much, so industries that survive will have to hire to keep up. 

So (and this is how super scientific models are constructed), let’s just cut the number in half: 7.5 million workers. 

That’s almost 6% of the 128 million workers in the U.S. Add that to the 3% unemployment rate we were already experiencing before this started and you have a 9% unemployment rate. 

So my prediction for the unemployment rate on August 1 or September 1 is about 9%. 

With so many unemployed, it’s not like interest rate cuts by the Federal Reserve will help so quickly (as I mentioned in a prior letter, this is the “long-term stimulus”), so we are still relying on the direct stimulus. 

A 9% unemployment rate seems high, and it IS high. BUT… unemployment and PPP loans and direct stimulus checks will buffer many of these people. In fact, some people on unemployment are right now making more than when they were employed. 

AND, factor in the fact that there is another $1 trillion or so ready to be spent by businesses as soon as the economy reopens and we might be able to stabilize but it will be a rough landing. 

A lot of people are going to find themselves going from a steady job to a very uncertain future. Eventually the unemployment runs out and we have to see which industries will survive. 

  • RETAIL will move almost entirely online. Storefront retail is basically mostly gone. 
  • RESTAURANTS: About half the restaurants will survive (more in some areas, less in others). Opportunity here lies in making virtual restaurants using “cloud kitchens.” Perhaps I will write more on this in the future. 
  • TOURISM / VACATIONS: I’m not so sure but it’s funny to me that Carnival Cruises says they are going to open up in August. 

First, are you kidding me? 22% of the cruises that were at sea in March ended up docking with almost everyone infected with the virus. 

But the one thing we can say about this country is our ability to get people back into buffett lines. We might be the best in the world at this. 

Japan has the philosophy of “Hara Hachi bun me,” which basically states, “Only eat 80% of what you need.”

That is the OPPOSITE of a buffett. Fortunately, Americans do not have that philosophy and cruise lines cater to that. 

Also, some of the deals Carnival Cruises are offering are just $28 a night!


If I were 22 years old and had $10,000, I would just get on a cruise for a year, travel all over the world, eat unlimited amounts of food for free, and maybe write a novel in between Turks and Caicos, Bali, and Alaska. LIfe would be great. 

Or if I were 80 years old maybe I’d move onto a Carnival Cruise ship instead of going into a retirement home. I’d be “Old Man and the Buffet.” 

Still, not sure I would bet on this. 

  • COMMERCIAL REAL ESTATE is dead, dead, dead. I’m calling my friends who rent a lot of office space. Big commercial owners are in a panic and are offering up to a year free if you sign a multi-year lease. Who knows what will happen but office space will be cheap and even then… who cares? Expect a bailout.
  • RESIDENTIAL REAL ESTATE in major cities (LA, SF, NYC, maybe more): DEAD. 

The benefits of living in NYC are: the deal flow for entrepreneurs, the restaurants, the culture, and, of course, the comedy clubs. All of these things will be dead as workers move remote, offices shut down, restaurants close, etc. 

Second-tier cities: BOOM! Maybe some touch and go for a while but overall, second-tier cities like Miami, St. Louis, Dallas, etc will do well, and suburbs will maintain or go up. 

  • MEDIA: BOOM! Netflix has  something like 74% new subscribers these past few weeks. Every online content service and platform is booming. I’d trust subscription businesses more than advertiser-based businesses but we’ll see.
  • ADVERTISING: Not so good. If you want to place ads for your business, now is the time to do it. Facebook ads, Google ads, etc. are all offering big discounts. 

When they “offer” a discount, it’s not like they are offering you a gift. THAT’S THE NEW PRICE and they are pretending like it’s this great deal. 

  • BANKS: I just saw an article today that banks are in trouble. This strikes me as not true. Maybe if banks rely on commercial real estate loans but a lot of them are mostly residential. So they aren’t going anywhere. 
  • TECH: BOOM! Drones, robotics, AI, storage, Big Data, cybersecurity, chips, phones, bandwidth, gaming, etc., will all boom. 

And don’t forget that the $700 billion in PPP loans and the Fed removing risk for banks is going to generate an easy $17.5 billion in fees for ludicrously little work.

Two companies that might benefit are Square and PayPal, which became “almost” banks in order to distribute PPP loans to many of the unbanked. 

I could go on and on. Vice companies (liquor, pot, porn, etc.) will  do well. Insurance will suck (like at Berkshire Hathaway), etc. 

The economy will come all the way back and surge, but many people that were happy before will now be sad and perhaps vice versa. It’s horrible this had to happen.

More and more evidence shows that if they did a strategy of quarantining the more susceptible and encouraged the use of masks, then we would not have had a lockdown at all, but I’m tired of making that argument. 

And also, now that we have successfully flattened the curve and avoided crowding the healthcare system, we should automatically reopen, right? I mean, I thought that was the goal. But, again, too many people are arguing this and I’m no expert. Best to not get involved if you have nothing to say. 

I do know this. Many people are not getting unemployment, have no money, have no job, and are getting hungry and angry. And when I say many, I’m talking tens of millions. They are not happy. 

We’re coming back into a strange, new world. The money will be there, but society is in PTSD and many people have been destroyed by this. Some from the deaths of loved ones, and some from the collateral deaths, sickness, and stress and mental health issues from the shutdown. 

I do think looking at how to make a living is more important now than learning how to make a killing. 

Sure, stocks are cheap (some of them) but I’m not going crazy with so much uncertainty.

Check out some of these sites for mini side hustles: 

My favorite: People post their illnesses and anyone can become a “medical detective” and the crowd helps diagnose and money gets distributed to people who help the most. 

Finally my dream of being a doctor without medical school is coming true. I have already signed up to give hardcore medical advice. Because I know I’m an expert on Twitter. 

Also, check out

You know how you subscribe to this newsletter and maybe others? Well, substack lets you set up your own FOR-PAY newsletter in about five minutes. 

If you’re THE EXPERT on antique car auctions and how to price them and find the best deals or build them or whatever, make your newsletter at substack. 

Or if you want to be an inventor and you have an idea: sketch out your idea and upload it to

If the crowd likes the idea and others chip in on making it, everyone who helps starts getting royalties when the product is finally made (by members of the crowd) and when Quirky starts selling it.

Again, maybe you will see me there. My idea: Drones the size of flies that fly around you at all times and videotape everything and anytime you want you can upload the prior X amount of time to the appropriate social media platform. I sketched it out on a waiter’s pad and will upload it and see what happens. 

Meanwhile, last week they declassified videos of UFOs and nobody cared. Maybe it’s time we start thinking about the Space Force instead of “fixing bridges.”

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