Travel restrictions already dropped local hotel occupancy rates from 95 percent to less than 10 percent. Our local economy will be significantly hurt from the COVID-19 crisis as the canceled MEAC Tournament alone was worth seven million dollars, according to the Virginian Pilot.

Strome Business Minute with Dr. Jeff Tanner

Significant Local Economic Fallout from COVID-19 Crisis

As the impact of the coronavirus lockdown becomes clearer, economists are revising their forecasts for a recession.

Economists Revise Forecasts for a Recession

Will the Corona virus trigger a recession? That’s the question on everyone’s mind and I think it will depend on where you are in the economy. Some sectors, like oil and travel, will experience a recession, which is technically two quarters of decline. Other sectors, like online retail, may not. The challenge will be stimulating the economy because there’s little the Fed can do with the funds rate, given that it is already near zero. The Fed did what it can, cutting rates in an emergency meeting a week ago. Congress, though, hasn’t done its part. A tax cut for lower-income workers is the best short term strategy but the best long-term thing they can do to boost the economy is infrastructure spending. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Will COVID-19 cause a recession

Amazon announced two new distribution facilities, one in Chesapeake employing 500, and one in Suffolk with 1000 workers. Some facts on these new facilities, which should come online next year, include that the Suffolk facility, at nearly four million square feet, will be the largest building in all of Virginia. In addition to more than fifteen hundred workers, the two facilities will also employ two thousand robots. What has been lost in the excitement of these two facilities is that Amazon is also building six solar farms to generate its own electricity, minimizing its carbon footprint. Importantly, it took the combined efforts of both cities, Chesapeake and Suffolk, but the projects also needed cooperation from Norfolk, which they got. Maybe regionalism is here. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Amazon announces two fulfillment centers

The economic laws of supply and demand are best observed in oil markets. There’s no difference in oil pulled from Russia or West Texas Shale, except the grade so the only things driving price are supply and demand. And with the Coronavirus causing huge drops in air travel and other sources of demand for oil, the only way to maintain price is to cut supply. That’s what Saudi Arabia wanted to do but Russia refused, sending prices down more than 20% in the face of declining demand. Now add to that a plan by Saudi Arabia to increase supply by more than 25%. Yet futures prices rallied slightly in expectation of some increase in demand in April and May, as the virus threat passes. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Oil stocks fall amid trade war with Russia

I’m Jazmin Elliott, PR Specialist of the Strome College of Business at Old Dominion University, and this is a Strome Business Minute. I took six flights last week on American for business and every flight was full, with standby passengers that could not be accommodated. So when I read (REED) of empty flights and empty airports, I’m skeptical. I would expect any reductions to be limited to international travel, and that has been the case. But Southwest, which has almost no international routes, noted in a securities filing that it has been affected. According to the New York Times, Southwest CEO Gary Kelly said they began noticing the declines at the end of February, a few days before my travel. He said at a global air conference that the decline manifested rapidly. It’s too early to estimate the full impact or how long the decline will last. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

COVID and Airlines

The General Assembly agreed to raise the minimum age over the next three years to twelve dollars an hour, beginning with nine fifty next year. They also agreed to a regional study of wages that will guide future wage legislation but if the Assembly does not specify future wage increases, they will be tied to inflation. The regional study idea is in recognition of the differential impact of wages across our state. Urban areas can swallow wage increases more easily than can rural; in fact, urban employers will only see minimal impacts as competition for labor has already caused wages to rise well above minimums. Rural areas, with larger fixed income populations, can’t afford the higher prices caused by higher wages. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Minimum wage hike agreed to

In anticipation of stock market slides, I sold some stocks early, planning to buy back in when prices are low. But how low will they go and for how long? Merrill Lynch has a list of fifty five stocks not directly affected by the COVID virus, like banks, as well as stocks that may be helped by the virus. But banks and others will be indirectly impacted. Look at it this way – travel has already been significantly impacted. If travel reductions affect our tourism industry, we will all feel it. Yes, there might be less traffic on 264, but there will also be fewer dollars spent in our region, hurting our retailers, restaurants, and hoteliers, which then hurts our accountants, banks, and everyone. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

COVID affects local economy

Dominion Energy scored a major victory when a Senate committee voted 8 to 7 to table indefinitely a bill that would establish state oversight of the company's rates.

Dominion Energy

The Stock Market continues swinging up and down based on Coronavirus news but after the big drops at the end of last week, most stocks were still ahead of where they were a year ago.

Most stocks still ahead as opposed to last year

Games of skill or games of chance. No matter your position, they represent a great example of the economic principle of substitution. Michelle Carpenter reports.

Games of Skill

I’m Jeff Tanner, Dean of the Strome College of Business at Old Dominion University and this is a Strome Business Minute. When Marc Benioff, founder of software giant Salesforce.com, bought Time magazine, people questioned his motives. An odd decision for a software mogul to buy a print magazine, to be sure. But what Benioff and Keith Grossman, the person he hired as president, have done is to reimagine Time as a content company. Like Disney or HBO, Time has an inventory of stories and the company is re-imagining how those stories can be presented. The first is the immersive virtual reality experience that puts the audience into the March on Washington so they can experience Martin Luther King delivering a portion of his I have a Dream speech. Adweek notes the strategy seems to be working as revenue is up nearly nine percent. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Time magazine finds a new niche

I’m Jeff Tanner, Dean of the Strome College of Business at Old Dominion University and this is a Strome Business Minute. In recent months, we’ve covered stories on the Navy Hill development in Richmond – their plans for a new coliseum and its impact on any possible coliseum in the 757, CoStar’s plans to relocate an additional two thousand employees to Navy Hill, and so forth. The Navy Hill development plans have been scrapped, however, as the Richmond City Council decided against proceeding with funding in spite of threats from CoStar to consider other localities for their relocation. CoStar has been silent and it appears that Navy Hill will be sold for smaller development. Perhaps they’ll consider moving here. Still, the decision to not build a new major league sized coliseum in Richmond should encourage local leaders to accelerate coliseum plans for the 757. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Navy Hill plans

One person’s troubles is another person’s opportunities. Or at least that’s the case in business. For example, Victoria’s Secret has experienced a number of problems lately, from styles that seem to have fallen from favor to executives that allegedly created an abusive culture. Their iconic fashion show was cancelled late last year, and the brand was sold to a private equity firm last week. ThirdLove isn’t wasting any time. The seven-year-old Victoria’s Secret competitor exhibited strong growth last year strictly through digital marketing. The company is now aggressively growing by opening stores in selected markets and, according to AdWeek, preparing to launch its own television ad blitz just as soon as they can hire an agency, to capitalize on Victoria’s Secret’s misery. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

One person&#39;s troubles are another&#39;s opportunities

Recently, ODU economist Jim Koch said that building Dominion Energy’s wind farms was a bad idea. He says Virginians who spend more on energy have less to spend elsewhere, resulting in substitution of jobs, not new jobs. He fails to see reduction of other costs, such as flooding costs associated with sea level rise, the cost of remediating mines and water sources, and other costs eliminated by substituting wind for coal. It’s like plastic grocery bags; paper or heavy-duty plastic bags require reuse at impossible levels to break even – though just keeping the bags out of the ocean may make them worthwhile. Economic systems are complex and simple trade-off analysis can lead to incomplete recognition of the full cost of a decision. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.

Jim Koch is wrong about Wind

Highlighting the business news affecting Hampton Roads

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Strome Business Minute with Dr. Jeff Tanner

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