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

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

#151

Post by ip26 » Sat, Mar 21, 2020, 3:07 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.

I think we're learning that while the manifestation & exact timing is unpredictable, looking at the big picture one black swan or another seems to show up with surprising regularity. 1973, 1987, 2001, 2008, 2020...

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

#152

Post by digitaltrees » Sat, Mar 21, 2020, 3:07 AM UTC

senordevnyc wrote: post #102

ramraj07 wrote: post #82

Earlier quoted context omitted.

Wasn't buybacks banned for a longtime in the century? Perhaps you consider this to be socialism and that's why it was unbanned, but given the perverse incentives politicians seemed to have had for the past few decades, I don't see an unbiased argument why it was in the interest of the public to unban stock buyback. Clearly the past year has proven why it should have stayed banned.

Should dividends be banned? Would you be equally upset if these companies paid out their profits in dividends? Or maybe you’re suggesting we should have liquidity requirements for all businesses like we do for banks? That’s actually not the worst idea in a world where we’re going to be bailing companies out. If you want a bailout, you have to have a rainy day fund to make it less likely you’ll need one.

Dividends are fundamentally different than stock buy backs. They are the distribution of profit to owners of a business. No nonpublic information involved. No misaligned incentives.

Yes, liquidity requirements and add personal liability for executives if their firm goes through bankruptcy, or restructuring. Goldman Sachs was a partnership until the 90s with each banker personally liable for the firms debts. They took risk much more seriously then.

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

#153

Post by whb07 » Sat, Mar 21, 2020, 3:07 AM UTC

alistproducer2 wrote: post #134

whb07 wrote: post #104

Earlier quoted context omitted.

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…

The 1-3% is an average among all age groups. You clearly have not looked at the data. For example, in Italy the CFR is somewhere around 14% for elderly. Everyone else is lower such that the nominal death rate, being an average among all groups,.has been consistently running around 8%. Obviously when this matures that rate will go lower because the denominator will grow but the denominator that people care about is th…

Holy cow. Notice how everyone literally says “there’s not enough testing” but yet you’re able to rationalize the CFR as valid.

What you see going to the hospital and getting tested CLEARLY is the most critical number of cases. It’s possible that for every person tested, there are 100 or more that are asymptomatic. Run some numbers on this “highly contagious” disease.

Another point why we are in a fear bubble is that everyone parrots the same fear gospel and there’s very few dissenters.

Bring on the downvotes you scared folks

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

#154

Post by TheSpiceIsLife » Sat, Mar 21, 2020, 3:07 AM UTC

mywittyname wrote: post #111

chance_state wrote: post #71

Earlier quoted context omitted.

/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.

Not everyone is driven to become the CEO of a mega-corporation.

Some people are content with what they have, or find running one location stressful enough, or whatever reason.

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

#155

Post by opportune » Sat, Mar 21, 2020, 3:07 AM UTC

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…

Well, in California:

I got my groceries from people wearing masks. Everybody in the store kept 6 feet distance.

I've been working from home for 2 weeks and will continue to do so for at least 3 more. Company wide mandate.

Almost every business other than groceries/other essentials (where some are surprisingly "essential", granted) are closed so people have no reason to break quarantine except to perform essential tasks. So overall, I'd say we are doing exactly what we need to be doing. Hopefully the rest of the country follows suit

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

#156

Post by m_ke » Sat, Mar 21, 2020, 3:08 AM UTC

Exmoor wrote: post #140

m_ke wrote: post #60

Earlier quoted context omitted.

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

Do you have any data to indicate that obese young people are significantly more at risk of dying than healthier individuals?

We already have a bunch of 50 year old diabetics who passed away in the states.

https://img.buzzfeed.com/buzzfeed-static/static/2020-03/13/2...

https://www.nytimes.com/2020/03/12/health/coronavirus-midlif...

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

#157

Post by Abishek_Muthian » Sat, Mar 21, 2020, 3:08 AM UTC

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…

China's Red Cross supposedly advised Italy yesterday that 'total economic shutdown'[1] is the only way to contain the COVID-19 situation in the country now.

It all comes to what part of the curve the country is now, the choice being total lockdown incl. economic shutdown vs aggressive testing.

Considering US lapsed on aggressive measures in the beginning and that proper test kits are just being flown in from Italy[2]; total economic shutdown seems to be the only option left.

P.S. There are still high-risk countries which hasn't gone into lockdown neither doing aggressive testing as of now, claiming the number of cases are low although the day-to-day delta is increasing exponentially.

[1]Italy correspondent of Aljazeera gave this information multiple times on live, couldn't find static link to it as of writing.

[2]https://www.msn.com/en-us/news/us/air-force-flew-500000-coro...

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

#158

Post by justanotherc » Sat, Mar 21, 2020, 3:08 AM UTC

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…

Masks and gloves are ineffective for people who don't know how to use them -- wearing a mask? Great. Now you just felt hot and pulled the mask down onto your chin. Congratulations, the outside of the mask is no longer sterile. You're wearing gloves? Fabulous. Now you're out shopping pushing a cart and you just scratched your nose with your gloves. Cart handle is now contaminated or visa versa and gloves didn't change anything. PPE is only effective under very controlled environments, and the general population doesn't understand this.

The economy will recover, especially since EVERY country is taking a hit, I don't think it will take very long for the capitalist engine to roar back to life. That's the beauty about capitalism -- you're turning the ingenuity of humans loose to be productive. As humans we're great at figuring out how to be productive.

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

#159

Post by SolaceQuantum » Sat, Mar 21, 2020, 3:08 AM UTC

SamReidHughes wrote: post #96

mywittyname wrote: post #88

Earlier quoted context omitted.

I'm not sure how you got to this post after reading the OP. Company leadership should focus on returning capital when appropriate. They should not be repurchasing shares at obviously inflated prices as a last-ditch effort to further raise share prices so they can cash out their bonuses. They should be using that money to improve the business. Basically, leadership needs to think about long-term health, instead of mak…

They were repurchasing shares for years and years. If shareholders were unhappy about that, they had every opportunity to replace the board. Or if they are a minority, they can sell. If you’re not a shareholder, you’re free to mind your own business.

Shareholders are not the ones who lose the most when the ravens come to roost.

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

#160

Post by Anon1096 » Sat, Mar 21, 2020, 3:08 AM UTC

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…

Helicopter money won't help businesses in the service industry where people literally can't spend their newfound helicopter dollars. With the incompetence of the SBA I'm not sure what a total solution would look like, but helicopter money can only be part of a larger plan if we want to save America's small businesses.