Image: Former Montgomery County Judge Alan B. Sadler (right) with his wife Mimi Sadler (left).
The Golden Hammer Staff Reports
Conroe, April 8 – Former Montgomery County Judge Alan B. Sadler, who served as the elected County Judge from 1991 to 2014, made some major predictions on social media on Monday. Yesterday, Judge Sadler gave an exclusive interview to The Golden Hammer in order to provide additional analysis and detail.
Sadler’s perspective is quite unique. Not only does have possess enormous wisdom and experience but also he engaged in a number of roles during his lengthy career.
Sadler graduated from the University of Texas at Austin with a Bachelor’s in Business Administration and majored in Finance. He attended South Texas College of Law for a year but didn’t like law school. Instead, Sadler went into banking and worked for Interfirst Bank and Bank of America where he was a real estate lender, focusing on large construction loans.
Sadler has invested and managed real estate and actively follows national and international markets.
Sadler’s specific predictions are in bold. His additional analysis during yesterday’s interview is in regular font.
We all know that we are presently in uncharted territory as it pertains to the economy, our health, jobs, unemployment and the list just goes on. Today, I wanted to make a few predictions on some of the above:
“1. Unemployment will reach 27% exceeding the Great Depression; however, it will be relatively short lived……….about a year and then substantial gains on a quarterly basis:
“During the Great Depression, unemployment hit an all time high of 25%. We’re going to exceed that based on the ten million people who filed for unemployment. It’s going to stay there around 27% for a while but go down rapidly mainly, because of the nature of this event that we’re in now. Besides the illness, nothing has happened. There is no hurricane, ice storm, or wildfires. There’s no reason this economy should not rebound relatively quickly compared to other recessions or the Great Depression.
“Fundamentally, there is nothing wrong with the economy, except for the mandatory closures.
“I think the closures are appropriate, because, if we had not done anything, we would have seriously ill hospital patients almost in the streets or in places like the George R. Brown Convention Center, which we would have had to convert to being a critical care hospital just like the Javits Center in New York. We’re not going to see that, because the hospitals have done a fantastic job to clear out non-essential cases and surgeries for this COVID-19. The mandatory closures are appropriate for a time through May, which is the max where I’d say they’re appropriate. By June 1, we’ll have seen the peak and very few cases will be reported. The flattening of the curve will have happened by then. By June 1, we should see things return to normal.
“2. Our drastic changes in lifestyle will also last until at least June 1, 2020. At that time, we will start the path to normalcy and we will have seen the peak of COVID-19 with minimal new cases reported each day.
“3. Federal Government intervention will again be at the forefront of national debate. There will be a 2nd stimulus program strategically aimed at certain businesses and SMALL BUSINESS. The amount will be in the 2.2 to 3 trillion Dollar range but that will be the end of government programs for this crises.
“There will be a second stimulus program funded for this disaster probably much more targeted possibly to the airlines, cruise lines, and small businesses.
“There has been a horrible start to small business loans since the passage of the $2.2 trillion stimulus. They gave $350 billion to banks, but they gave no marching instructions to the banks. It’s money from the Small Business Administration, and initially Congress paid to the banks a half point fee for servinging the loans, but that went up to 1%. Some banks are still saying that’s not enough money for the service of these loans.
“The second stimulus bill will be the end of the government program without decimating the dollar’s value. We can’t be Germany which did this type of stimulus before World War Two and experienced a dangerous devaluation of its currency. We’re getting up into dangerous territory, because we’re already at a $20+ trillion deficit with not much to show for it, except for employment percentage increase for x number of months. From this stimulus, we won’t have new interstate highways or new water or sewage systems. This money will be two and done with very little to show for it, except for saving small businesses.
“4. There will be isolated groups nationwide violating the state mandates but they will be put down in short order.
“We already have a lot of small business, which are saying ‘the government has done nothing for me and I’m opening up.’ There is talk that is happening in Conroe already. Three days have already come and gone for the SBA loans and they’re still not funded.
“There are also people violating the stay at home orders.
“5. Real Estate prices will remain semi-strong for several months and then we can expect a significant downhill trend for single family residences, and 2nd homes will be hit the hardest. Commercial real estate will be hit moderately in select markets and hit HARD in select markets.
“Typical apartment complexes are seeing 30-40% nonpayment of rent. There’s a moratorium on evictions for 2 months but we don’t know whether that will go longer and what will happen after the eviction moratorium ends. We may see a big homeless population. The value of commercial centers, which are closed down is 50-70% of the original fair market value, and there is no sale market for larger centers. Smaller shopping centers and smaller malls are doing very well, such as many of the types of smaller centers some local businesses, such as The Signorelli Companies, have developed.
6. City, County, and State budgets will get hit hard, especially the ones counting on sales taxes as their primary source of income.
“We’ll see a lot of defaults in property taxes. We’ll see assessed values decreased or you should they should go in that direction. I think there will be decreases in assessed values on appraisals.
“Sales tax will be very hard hit. Many municipalities like the City of Conroe depend on sales taxes for over 50% of their budget. There was a small decrease in sales taxes in Conroe even before this thing hit. This is where fund balances, which governmental entities have accumulated, come in. It will fund these counties and cities and school districts for the duration of this downturn, and they’ll need every single penny from that fund balance.
“There needs to be relief right now from taxes and governments should spend the fund balances. People need taxpayer relief; it needs to be as low as possible.
“The governmental entities need to look at spending reductions.
“7. Appraisal values should be substantially reduced on real estate in the larger counties with historically sustained growth.
“8. In 2023/24 we will all look back on this experience as once in a lifetime with major impacts on all of our lives but with minimal deaths as compared to other disasters in years or decades past.
“It will be that long for us to get through this to any sense of normalcy where things truly are normal again. This stuff doesn’t happen overnight.
“I look forward to hearing from friends as to how you see my predictions and how yours may differ.
“God Bless Montgomery County!.”
The Golden Hammer asked Judge Sadler whether he believes President Donald Trump will win re-election in 2020.
Judge Sadler answered, “Yes. I think President Trump has an ace up his sleeve for this race. That ace comes from the millions who are closet Trump supporters who don’t want to admit it. They’ll close the curtain and vote for Trump for President. All the polls said Hillary was going to win the race, because those closet voters wouldn’t tell the truth to telephone pollsters. I think Trump will squeak by with a victory.”