| | | Office space
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I agree with you more and more on this. Not necessarily re: office space specifically (though the elephant in the room known as "The Economy" is definitely my #1 concern in that business currently, as in most others) –– seems like most co's have kept their offices, and most of them keep paying their rents more or less fully (that is my impression, any way) –– but more generally to the whole system, especially when it comes to small co's. Your local mom and pop. Sure, they might get bought up by Starbucks, Walmart and the like, but still, I'd expect there to be at least some problems.
I just don't understand where all the supposed activity comes from. No one does anything. How the hell can the financial system work if everyone just stays at home doing nothing? Oh yeah that's right, it can't. It's like when you thought you could survive the elevator crashing by jumping just before impact as a kid – works for like a fraction of a second (maybe). Well, seems like we've managed to extend that moment to almost a year; companies' FED-induced inflated market caps keeps everyone going for now, masquerading as earnings –– we're still hanging in the air. That's the only explanation I can see as to how the economy can still pretend to be working – and that's in Sweden, and we don't even have real restrictions, and had almost none before winter. I mean, we're all supposedly living in service economies these days right? Sure, we still buy products I guess (and yeah, we can buy a lot of those online, sure), but basically no services. And services account for what, 80% of GDP's?
How can everyone buy this (IMO) cheap trick? Or is it just me? Maybe I'm missing something? Seems kinda like an accounting shenanigan to me, and a not too sophisticated one at that, performed in plain sight (but then again, people often miss those as well, accountants and analysts too...)
I thought during the summer that "it will be over soon, real estate will be more or less as fine as everyone else, people are selling indiscriminately b/c they think people will never again work in offices (i.e. they draw (IMO) exaggerated conclusions)". I was very optimistic re offices then, almost as optimistic as re oil prices. But as the pandemic restrictions has carried on way longer than I ever thought possible, and my office stocks have generally recovered, in most instances spectacularly, I increasingly worry about this. I will sell some; the less serious-looking ones.
A couple of weeks ago, my main Swedish business paper informed me that bankruptcies were lower during 2020 than 2019. Still, Sweden had the lowest decrease in BK's in the Nordic countries; in Denmark, they decreased by one third. How is that possible? I fear that we may see a major wave of bankruptcies this year. As I understand it, it is common for there to be a delay in BK numbers. I can't see how we can keep walking on water for ever.
I may well be wrong –– I know very little about how the financial support that is given directly to companies work –– as usual I hope I am! I just cannot see how that would not happen to at least some degree.
Anyway, I guess that is a major part of the explanation as to why office space is still standing (kinda like CDS quotes when subprime was collapsing in a way). We're all just buying time with money we don't have.
Good fortune,
petal |
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