141–150 of 174 posts
Hopefully everyone will keep in mind that bailouts should go to the citizenry at large to resurrect demand, not to large multinationals which need to pay off debt they should have never incurred in the first place (and which was spent on high-risk growth projects or shareholder buybacks). "Take Boeing. The aerospace giant of course wants a $60 billion bailout. Financial problems for this corporation predated the cris…
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Yes, brother works as corporate lawyer. Their office is overflowing with bankruptcy cases...including the very law firm he works for. Something thats flown under the radar of this is the new “Families First Coronavirus Response Act” which provides 12 weeks of “paid leave for those affected by Covid 19”. Most (90%) companies will be bankrupt by week 3 or 4, therefore most are now contemplating just declaring bankruptc…
> Their office is overflowing with bankruptcy cases...including the very law firm he works for. I don't understand this. Why would they file for bankruptcy if their office is overflowing with cases?
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This is my greatest fear as an American engineer. When corporations finally realize remote work is just as valuable as in office work they'll start to wonder why they are employing US developers for $XX,XXX to $XXX,XXX when they could pay a European developer a low five figure salary in a weaker currency and get the same results.
I'm more worried about tech losing its status as investment of last resort. Who knows how much of the industry is propped up by the flood of easy capital in the last few decades. We just watched all that capital dry up with everyone's liquidity. Software engineering already went through a wave of offshoring in the 2000s and the whiplash from that was enough to make many a freelancer/agency/startup rich. We learned th…
What do you mean by this? Investment in tech companies by retail/institutional investors, or investment by companies in their own proprietary tech?
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A key reason why this time might be different: A call for helicopter money even among some fiscal conservatives. Before this, such as in the 2008 crisis, much of the liquidity injection didn’t flow down the bottom part of economic hierarchy. Thus, they haven’t had much increased spending power. So, no inflation of common items. The prices of trophy and other assets preferred by the wealthy did rise up greatly in the…
...Can you clarify "helicopter money"? That's not a term I've heard before.
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Anecdotal but my eBay sales have been way up this last week. Although honestly I suspect it’s Amazon having problems shipping things. I’m better a lot of other online sellers are seeing the same as people stay indoors and change how they spend. Of the items I’ve sold they were all hobby items.
If people plan to not go out fora while, maybe a hobby would be wise investment to keep their sanity. Yesterday, I was looking at eBay for lockpicking trainers.
1. There’s so much friggin stimulus coming that something big will happen. The (U.S.) Fed is buying trillions of anything resembling bonds at the moment. Treasuries, commercial paper, muni’s. And doing a trillion PER DAY in the repo market. Plus $2+ trillion coming from Congress, which includes checks directly to consumers and also up to $4 trillion more in direct lending to small businesses with forgivable loans. Not to mention interest rates at 0% and gas prices at $1.50/gal. The financial sector is healthy. Big tech companies are still sitting on a few trillion in cash.
2. Everyone has cabin fever and missed their spring breaks and perhaps summer vacations. Prices on travel and leisure are at an all time low. A weeklong trip to Hawaii for a family of 5 is down to like $1500.
3. At some point (I believe in days/weeks) there will be a medical breakthrough. Hydroxychloroquine+Azithro has had stunning results in South Korea, China, and France. Many US docs are already prescribing now. Even if this works only 40% of the time, that’s significant enough to flatten the curve and most importantly lower the death rate around the seasonal flu. Early anecdotal evidence suggests it’s been effective in 90%+ of cases.
4. I think by mid-April folks especially in the U.S. are gonna say enough is enough and break containment. The rest of the 80% of America isn’t willing to shutdown the entire economy for the 1% who face almost certain death from this disease. I know that’s crude and sounds cold-hearted, but Fox News is going to be very convincing that we should just resume our normal way of life and let the chips fall where they may. Election season starts in earnest in mid-Spring and Trump I believe will end the shutdowns and tell us to go back to living our lives. Biden will almost certainly do the same with a focus on rebuilding America. People can shut down for a week or two, anything longer than that and you face rebellion. School has been out since early March and the soccer moms here just want to go back to being normal. Expect a presidential candidate to jump out first with a “let’s get America back to work” strategy and end the shutdowns and maybe only recommend quarantines for the at-risk population.
I keep saying wait one or two “1st of the month” milestones, see how things look. That’s where my own decisioning is headed.
The Buffett Indicator.
It's going to be bad for the following reasons: 1) Governments are not shutting everything down fast enough. Many countries are in the phase of "oh, we only have 200 cases, not a problem, look at Italy" . They are just a few weeks behind Italy. 2) Some people, especially young ones, are not following quarantines. All it takes is one super-spreader to start another wave of infection. 3) People will run out of money so…
I'm just a rando from the internet but my suspicion is that governments could be intentionally trying to slow the infection rate down rather than stop it completely. If you perform a perfect shutdown with 200 cases, lets say another 400 are identified since, all 600 recover/don't make it, but once you stop the quarantine everything will be back to square one - someone will spread it again eventually.
On the other hand if you let it spread a bit, then shutdown, high but manageable number of people will get sick and recover. (I will be less efficient so some transmission will still occur, eventually ensuring everyone either recovered or died, with as many as possible getting the medical care)