Economic destruction from the shutdown is expanding.

October 20, 2020, 10:01 am

Image courtesy of Adobe Stock.

Economic damage from the shutdown is becoming more obvious as more reporters spend time covering the destruction. Here are two articles each on the overall economic impact, specific impact on individuals, and concentrated impact on two cities:

  • GDP in Italy expected to shrink to the level it was 23 years ago
  • Airline CEOs expect it will take years for the airlines to recover
  • Additional 8 million Americans drop below the poverty level, joining the 55 million who were there before the pandemic
  • All 1,600 orchestras in the country have gone dark; their 160K musicians are unemployed
  • San Francisco has 14% vacancy rate in commercial office space
  • Impact on employment in New York City is more severe than the national average

How long will we let this go on?

 

Broad indication of the damage:

10/11/20 – India Today – Italy’s GDP in 2022 shrink back to the same level as 23 years ago: ReportRead the rest of this entry »


Increased disclosures for gifts-in-kind required by new accounting rule.

October 16, 2020, 8:18 am

Image courtesy of Adobe Stock.

In September 2020 the Financial Accounting Standard Board issued ASU 2020-07.  Formal title for the document is Not-for-Profit Entities (Topic 958) – Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets.

Contributed nonfinancial assets means gifts-in-kind. The ASU does not apply to donated services or donated financial assets such as stocks and bonds.

ASU 2020-07 will only change the presentation of GIK on the statement of activity and require additional disclosures in the notes. It will not require any change to the valuation of donated pharmaceuticals (accountants call that recognition).

You can get your own copy of ASU 2020-07 here.

Statement of activity

The total of GIK will need to be presented as a separate line within the revenue & contribution section of the statement of activity, separate from donated cash and any donated financial assets.

Note disclosures

There are a number of new note disclosures which will be required for gifts-in-kind:

Read the rest of this entry »


New claims for unemployment rise for week of 10/10/20.

October 15, 2020, 9:26 am

The number of new claims for unemployment for week ending 10/10/20 increased, which offset net declines of the preceding five weeks. New claims are 898K, a 53K increase over the revised tally for previous week of 845K.

Since 8/29/20 the new claims have been in the mid- to high 800 thousands. Change in the last six weeks, starting with 9/5/20 are +9K, -27K, +7K, -24K, -4K, +53K.

Keep in mind before the government induced shutdown of the economy new claims averaged about 220K per week so we are still running about four times the previous norm.

The number of continuing claims for unemployment is continuing to drop. I’m not sure why this is. Part is due to people going back to work. Part of it is people dropping off the state-level unemployment rolls after the 13 weeks of coverage.

Read the rest of this entry »


Health damage caused by the shutdown is becoming more visible.

October 15, 2020, 8:48 am

There are consequences from the shutdown. Image courtesy of Adobe Stock.

The damage to health caused by the lockdown is becoming more visible. The damage has been there from the beginning of the shutdown; it is just becoming more obvious. A growing number of news articles are describing the deteriorating health outcomes. A growing number of reporters are noticing the devastation.

A few recent articles for your consideration:

  • ‘Years of life lost’ caused by the shutdown is calculated in one analysis to be seven times the number of ‘years of life lost’ which are prevented by the shutdown
  • Frightening increase in suicide ideation by young adults
  • Mental health services pulled off line because of the shutdown
  • Seniors at one nursing home protest the shutdown and the loneliness it causes

Make a mental note that a large number of governors, state-level health officials, federal health officials, and county health officials are forcefully, willfully continuing the lockdowns.

5/5/20 – Washington Examiner – Stress from virus response will destroy 7 times more years of life than lockdowns save: study – Several studies are cited by the article.

Read the rest of this entry »


Economic damage from shutdown continues to spread.

October 13, 2020, 8:45 am

Image courtesy of Adobe Stock.

Summarized below are a few of the recent articles pointing to expanding economic damage from the shutdown. Destruction in the movie business is noticeable in recent days:

  • Second largest movie chain in the US closes all its theaters
  • Wonder Woman director worried the entire theater industry may die
  • Disney restructures in order to increase focus toward direct-to-consumer distribution channel and away from theatrical release
  • Sales tax collections in San Francisco collapse
  • Passenger cruise ships are getting scrapped

10/5/20 – Wall Street Journal – Regal Cinemas Suspending Operations at All US Locations – The chain with the second largest number of theaters in the U.S. has closed all of its US theaters after having reopened only two months ago. Article does not indicate when any of the theaters will be reopened.

Article says release dates for a dozen movies have been postponed.

Read the rest of this entry »


New claims for unemployment again drop slightly for week of 10/3/20 (corrected from 10/8).

October 9, 2020, 10:13 am

The number of new claims for unemployment for week ending 10/3/20 continues to decline a bit. Since 8/29/20 the new claims have been in the mid- to high 800 thousands. Change in the last five weeks, starting with 9/5/20 are +9K, -27K, +7K, -24K, -9K.

To again put this in context, before the government induced shutdown of the economy new claims averaged about 220K per week.

The number of continuing claims for unemployment is continuing to drop. I’m not sure why this is. Part is due to people going back to work.

Read the rest of this entry »


Education – More reports on devastating impact from the shutdown.

October 8, 2020, 9:01 am

Status of public education across the country two months into the new school year. Image courtesy of Adobe Stock.

Increasing numbers of reports describe the damage to education of our youth.  Students of every age group being hurt by the lockdown. Impact on poor or disadvantaged or previously struggling students is even more severe.

I am heartbroken that the damage will continue for the near future. The compounding effect will be terrible.

9/28/20 – ProPublica – The Students Left Behind by Remote Learning – Keep in mind this article describing the devastating impact of the lockdown on students from disadvantaged families is from ProPublica, a far-left news organization and not from some wild eyed Libertarian organization that wants people to have the freedom to make their own decisions on absolutely every issue in their lives.

Article goes into great lengths describing the struggles experienced by one particular student who has been trying to learn in virtual classes. As a starting point, there’s a grand total of four hours online teaching per week. Four hours – one hour per day on Monday through Thursday. That is the only teaching time. For all his class subjects.

Read the rest of this entry »


One report indicates overall charitable giving is up for the first half of 2020.

October 7, 2020, 9:30 am

Image courtesy of Adobe Stock.

This is the first report I have seen on overall giving trends during the pandemic. Preliminary indications are giving was down in the first quarter but strong enough in the second quarter that year-to-date giving is up compared to prior year.

10/6/20 – Philanthropy Today – Giving Was Up 7.5% in the First Half of 2020, New Report Says.

Read the rest of this entry »


Why I talk about economic indicators so often.

October 6, 2020, 8:28 am
 

Image courtesy of Adobe Stock.

One of the frustrations I have experienced as an auditor is the statistical information made visible by the AICPA and publications from others is that the economic data mentioned routinely lags behind two or three quarters on the date it is published.  Another trade association reports giving trends in the religious communities, but the survey information is provided late in the year for the prior calendar year.

The result is when I’m working on an audit or review several months later, the readily available economic data is from the start of the fiscal year I’m analyzing. Sometimes the data is for the prior fiscal year I’m considering. That doesn’t do me much good.

Long time ago I came across a comment that CPAs ought to start tracking key economic indicators on their own.

What a great idea!

Read the rest of this entry »


Did the lockdowns have any beneficial impact on the rate of new infections?

October 5, 2020, 9:32 am

Enough time has passed that there is enough information to start analyzing the lockdowns. Preliminary info is not pretty. Image courtesy of Adobe Stock.

Indications are starting to emerge that the answer to the question may actually be no.

Previously mentioned one analysis which found a weak statistical correlation between weaker lockdown requirements and lower infection rate. The study found no correlation between the date that states started releasing the lockdown restrictions and subsequent infection rates.

 

The rate of infections accelerates rapidly and then hits an inflection point where the rate of infections either plateaus or the rate slows dramatically.

The following study suggests the lockdowns have no correlation to when the infection rates hit that transition point. In fact, the inflection point normally is reached before the lockdowns could have had any impact.

10/4/20 – National Review – Stats Hold a Surprise: Lockdowns May Have Had Little Effect on Covid-19 Spread

Read the rest of this entry »


More updates on religious expression and restrictions thereof.

October 4, 2020, 5:24 pm

California church during regularly scheduled worship time. Image courtesy of Adobe Stock.

Update on the effort by Los Angeles County to shut down worship at GCC. The march in San Francisco took place. Some churches are worshiping in minor league baseball parks.

9/26/20 – The Roys Report – John MacArthur will Face New Hearing in November for Defying Ban on Indoor Services – On 9/24/20 an LA County judge postponed a hearing to consider whether to hold Grace Community Church and John MacArthur in contempt.

A hearing will now be held on 11/13/20. What will happen then? I don’t know.

Read the rest of this entry »


Headline unemployment rate drops another half percent in September 2020.

October 3, 2020, 8:00 am

The unemployment rate dropped from 8.4% in August 2020 to 7.9% in September.

Amongst the extremes we are seeing during the shutdown, that 0.5% drop is the smallest monthly decline since the peak in April.

(Cross post from my other blog, Attestation Update.)

Check out the extreme swings in the U-3 unemployment rate over the last 7 months:

Read the rest of this entry »


Economic bad news keeps rolling in, but hint of good news is on the horizon.

October 2, 2020, 9:47 am

Parked airplanes idled by pandemic shutdown. Image courtesy of Adobe Stock.

The bad news on the economy called for the shutdown just keeps growing but there is a hint of good news in the near future.

First the good news.

9/30/20 – CNBC – US economy plunges 31.4% in the second quarter but a big rebound is expected – Commerce Department calculations of Gross Domestic Product (GDP) for the second quarter were revised, which is routine, dropping from an annualized contraction of 31.7% down just a little to 31.4% reduction in GDP.

Read the rest of this entry »


Minimal drop in number of new unemployment claims for last four weeks as of 9/26/20; more people going back to work.

October 1, 2020, 12:18 pm

Image courtesy of Adobe Stock.

The number of new claims for unemployment for week ending 9/26/20 has been about the same over the last five weeks, in the mid- to high 800 thousands. Last big drop was the week of 8/29/20. To again put this in context, before the government induced shutdown of the economy new claims averaged about 220,000 per week.

Good  news is the number of continuing claims for unemployment is continuing to drop, which means that more people are going back to work than loosing their job.

The devastating impact of the economic shutdown continues to be painfully obvious.

New Graphs

Starting this week that way the information is presented for this ongoing analysis will be in graphs.

Read the rest of this entry »


Observations from San Diego on economic destruction from shutdown.

September 29, 2020, 8:23 am

View directly underneath Coronado Bridge shows the arches in the support towers. Photo by James Ulvog.

It is sad to personally observe the economic devastation from the shutdown.

We spent a few days in San Diego last week. Stayed at a hotel downtown near the harbor. Saw several things showing the severity of the economic damage.

Air travel

For quite a long time airplanes have not been allowed to leave San Diego International Airport until 6:30. It is funny to hear the first engine rev up a few seconds after 6:30 a.m.

I have noticed on previous vacations that there is a string of airplanes lined up ready to leave right at the stroke at 6:30. The planes take off approximately 1 minute apart.

Read the rest of this entry »