Effect of economic crisis on America’s small businesses [slides] • Hacker News Board

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

#111

Post by mywittyname » Sat, Mar 21, 2020, 2:56 AM UTC

chance_state wrote: post #71

iamleppert wrote: post #53

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.

/s ?

Doubtful.

People often romanticize the "mom & pop" places, but there's a reason that most consumer-facing companies are very large, and those reasons were enumerated by the OP.

Also, there's a good deal of selection bias going on. If you had a successful business, why wouldn't you look to expand it to multiple locations? Running a single store makes your business vulnerable and usually requires a lot of time.

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

#112

Post by digitaltrees » Sat, Mar 21, 2020, 2:56 AM UTC

senordevnyc wrote: post #49

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…

1) Hedge funds didn’t crash the market. There’s just no evidence for that. The market crashed because there’s enormous uncertainty and people would rather be liquid while they wait to see what happens vs losing a huge percentage of their wealth. 2) Businesses exist to make a profit for their shareholders. Yes, they should have some retained earnings as a rainy day fund, but some of these companies are losing 75-100%…

Business does not have to be structured as a Corporation with limited liability. That is a privilege allowed by the sovereign power of the people through an elected government. If companies don’t behave responsibly they should lose that privilege and the owners could be held liable for debt and these kinds of mistakes personally. The fetishized obligation to shareholders and ONLY shareholders is not some holy pronouncement from on high. It was made up by a professor at University of Chicago and ran contrary to the history of business and limited liability company structures. If we, as a society, determine that such a practice is harmful based on the evidence we can and should end it.

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

#113

Post by JoshuaDavid » Sat, Mar 21, 2020, 2:56 AM UTC

zouhair wrote: post #86

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 simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. Why not? This is a matter of survival. If the economic system breaks because of one pandemic that will last less than a year maybe that economic system needs to die and be replaced by something more solid and useful for most.

> If the economic system breaks because of one pandemic that will last less than a year maybe that economic system needs to die and be replaced by something more solid and useful for most.

Out of curiosity, why do you think it's likely that something more solid and useful to most is likely to come out of an economic collapse? Economic collapses have happened before - are there any instances of a solid and useful system coming out of them (maybe the new deal after the great depression? That one is arguable though).

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

#114

Post by slyfocks » Sat, Mar 21, 2020, 2:56 AM UTC

Narkov wrote: post #24

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'm not disagreeing with you but is it illegal for a CEO to be bad at their job?

One could argue that the airline CEOs acted rationally and strategically—they know the airline industry’s importance to the US economy gives them great odds of a bailout if a black swan event were to occur, so there was more value to shareholders generated by stock buybacks than reserving cash for a worst-case event.

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

#115

Post by dillondoyle » Sat, Mar 21, 2020, 2:57 AM UTC

lotsofpulp wrote: post #43

JMTQp8lwXL wrote: post #4

Instead of hundreds of billions in loans to businesses, which have to be underwritten -- and as discussed on Slides 17/18, the SBA did an abysmal job administrating during Hurricane Sandy, helicopter money might be the better answer. Give everyone money, no criteria. If we do impose income limits, and since viable proposals do -- we ought to discuss it. Give them a check now anyways. We cannot be worried people will…

Why income limits? Would it not be easier and faster to just adjust marginal tax rates and simply give everyone money right now?

Yes. Way easier and way faster. call your representative and senator.

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

#116

Post by empath75 » Sat, Mar 21, 2020, 2:57 AM UTC

faitswulff wrote: post #18

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…

As a counterpoint, Illinois just ordered residents to shelter-in-place after closing schools and restaurants a week ago and our new cases of COVID-19 aren't accelerating upward as of today. This model also predicts far fewer deaths with shelter-in-place rules: https://covidactnow.org/state/IL As governor Pritzker said: "I fully recognize I am choosing between saving people's lives and saving people's livelihoods, but…

It takes two weeks for symptoms to show up.

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

#117

Post by im3w1l » Sat, Mar 21, 2020, 2:57 AM UTC

senordevnyc wrote: post #85

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…

Worth discussing, but it would take months to deploy the level of testing required. You’d need to test a significant fraction of the entire US population every day. Say 30%, which is probably too low. So we need 100 million tests per day ? That’s many months away, as is the miraculous (and privacy issue laden) database you’re talking about. By then, this will all be over and millions dead if we just let it run unchec…

Test everyone at onset of cold symptoms or a fever. Taking hypochondria into account it should come out to once a month. So 10 million tests per day.

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

#118

Post by [deleted] » Sat, Mar 21, 2020, 2:58 AM UTC

TheSpiceIsLife wrote: post #65

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…

Why should anyone be punished for failing to plan for a black swan event? Black swan events are unpredictable and outside of what is normally expected.

[deleted]

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

#119

Post by twmahna » Sat, Mar 21, 2020, 2:58 AM UTC

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…

1) Pretty sure you're misinformed on this point. The hedge fund sector that has gotten attention and partial blame for this meltdown is the risk-parity segment of hedge funds. These funds target a specific range of volatility, so when the market becomes wildly volatile they are forced to reduce their overall holdings. The entire risk-parity segment of the market is at most $400bn and they are levered 2-3x on average. In the grand scheme of things, this is pennies when compared to broader money flow.

2) Stock buybacks are simply a more tax-efficient way of distributing profits to shareholders. Redistribution of profit to shareholders is a fundamental trait of capitalism, so you can't really blame the CEO for doing this. You seem to be blaming CEO's for not preparing for a black swan event. If CEO's are forced to prepare for every possible black swan event, their companies would go nowhere.

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

#120

Post by empath75 » Sat, Mar 21, 2020, 2:58 AM UTC

whb07 wrote: post #104

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…

Nowhere have you seen numbers that remotely approach 1-3%. You’ve seen the critical, largely elderly population get tested and from that you get that number that’s freaking people out. Stop spreading panic. With those kinds of numbers China alone would have 10M+ dead. In Japan, Singapore, surrounding nations more millions dead. Use a bit more common sense. We know we haven’t tested enough in the US, yet we don’t have…

China would have had those numbers if they didn’t quarantine a whole region for 3 months.

They may still have those numbers after they lift the quarantine.