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Effect of economic crisis on America’s small businesses [slides]

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Re: Effect of economic crisis on America’s small businesses [slides]

#51

Post by preommr »

codingslave wrote: post #7

The stock market is largely collapsing because: 1.) Hedge funds levered up their capital 5 - 15x to make more money, then got caught with their pants down. So they all panic sold at once, crashing the market. 2.) CEOs of large corporations used cash to buy back their stock, inflating the stock price, and depleting their cash reserves. So now those same companies are on the brink of collapse, causing the credit market…

I really think we should stop conflating bad economic decisions with the current pandemic. Yes, maybe stock buybacks are bad.

But even if they were banned, these companies wouldn't just have piles of cash reserves sitting around. To remain competitive, they would've had it invested in resources like additional personnel that would've gotten the axe either way when the belt has to be tightened.

There needs to be better financial planning and regulations - a lot of them.

But the best thing that could've helped here is better planning for national emergencies like a pandemic. Bill Gates and others have been clamoring for a long time about these dangers and we should've taken them more seriously.

Re: Effect of economic crisis on America’s small businesses [slides]

#52

Post by miketery »

codingslave wrote: post #7

The stock market is largely collapsing because: 1.) Hedge funds levered up their capital 5 - 15x to make more money, then got caught with their pants down. So they all panic sold at once, crashing the market. 2.) CEOs of large corporations used cash to buy back their stock, inflating the stock price, and depleting their cash reserves. So now those same companies are on the brink of collapse, causing the credit market…

While I mostly agree with #1 and #2 - not sure what this has to do with the crises we're in.

The core of the current financial crisis is that demand has evaporated over the course of a week or two and / or businesses can't operate; both due to COVID-19. As a result many small business won't survive. By extension many people are impacted, won't make rent, won't make lease payments, won't make credit card payments.

The stock market dropping is reflecting the above reality unwinding. And yes prices were inflated, and still are (QE is trying to hold them, we'll see how long that lasts...).

Unlike the 2008 crises that had synthetic derivatives, and shitty rating agencies to blame - this isn't the case here.

Though don't get me wrong I still think there are many sketchy things that go on, and many people who need to answer for them. Let's starts with the politicians that sold their shares given insider information, followed by others who curry favor with wall st.

Re: Effect of economic crisis on America’s small businesses [slides]

#53

Post by iamleppert »

I’m honestly looking forward to a new economy served by large corporations. Large companies are more consistent in their user experience across multiple locations, and are better buyers of tech. They are always looking for new ways to automate their operations and frequently turn to tech companies to solve their problems at scale.

So in a way, it’s good for the valley if more of the economy becomes more corporate.

Re: Effect of economic crisis on America’s small businesses [slides]

#55

Post by kingbirdy »

testfoobar wrote: post #38

The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. T…

It would likely take longer to develop and roll out a system like that than for social distancing to run its course

Re: Effect of economic crisis on America’s small businesses [slides]

#56

Post by senordevnyc »

codingslave wrote: post #35
SpicyLemonZest wrote: post #29

Earlier quoted context omitted.

It's not really possible for the market to drop only a little bit in response to half the economy shutting down. Stock prices are an expectation of future cash flows, so they have to drop on news that a huge chunk of those future cash flows are cancelled.

Look at Boeing stock. Companies dropping 50% because they miss 3 months of revenue?

It’s insane to think that Boeing will just return to normal in 3 months. This could depress air travel for years.

Re: Effect of economic crisis on America’s small businesses [slides]

#57

Post by wardnath »

codingslave wrote: post #7

The stock market is largely collapsing because: 1.) Hedge funds levered up their capital 5 - 15x to make more money, then got caught with their pants down. So they all panic sold at once, crashing the market. 2.) CEOs of large corporations used cash to buy back their stock, inflating the stock price, and depleting their cash reserves. So now those same companies are on the brink of collapse, causing the credit market…

Businesses that rely on walk-in customers will have to go for what looks like more than a month with little to no income. Same thing with travel related industries, surely over-leveraged portfolios exacerbated the problem but there are many other factors at play.

Re: Effect of economic crisis on America’s small businesses [slides]

#58

Post by throwaway9980 »

testfoobar wrote: post #38

The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. T…

Unfortunately the tests can’t be replicated and distributed at anywhere near the rate that the virus can be.

Re: Effect of economic crisis on America’s small businesses [slides]

#59

Post by 609venezia »

testfoobar wrote: post #38

The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. T…

Can we make millions of the tests rapidly available? I am still reading about test shortages on both coasts, even under the restricted testing regime we have been in so far.

Maybe the no-contact thermometers could be a scalable approach. Go to the bank? Forehead scan to get in. Go to the grocery store? Same. At least until--and maybe even after--we can scale the RNA testing.

Re: Effect of economic crisis on America’s small businesses [slides]

#60

Post by m_ke »

tinyhouse wrote: post #41
lettergram wrote: post #2

One thing that really horrified me was how quickly people threw away the economy. Unfortunately, this virus is highly contagious (to the point that the vast majority of countries won’t contain it) and fairly lethal. We don’t actually know how lethal, but it appears 1%-3%, but without widespread testing we wouldn’t know. At the moment, we just reduced our GDP by 30%-50% in regions under quarantine. Think about that fo…

I wouldn't say it's lethal, at least not for everyone. The last report from Italy has stats on 2000 deaths. No deaths under age of 30 and only a few under 50, all with pre-existing health conditions. Women's median age close to 84. Men's 80. And vast majority of deaths are people with multiple pre-existing health conditions.

42% of Americans are obese, this will hit us a lot harder than Europe.
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