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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]

#421

Post by ken »

will_walker wrote: post #249
timr wrote: post #230

Earlier quoted context omitted.

You won't, because we triage patients.

Ventilators are first come first serve. Once someone is on a ventilator it’s not like you can unhook them for a younger patient.

Not any more:

"With demand outpacing supply of beds and respirators, medical workers are told to prioritize younger patients."

"The principle of "first come, first served" has been abandoned, said Mario Riccio, an anesthesiologist who works at a hospital in Cremona."

- https://www.politico.eu/article/coronavirus-italy-doctors-to...

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

#423

Post by Fjolsvith »

AntonStratiev wrote: post #368
marvin wrote: post #360

Earlier quoted context omitted.

Not to mention complications. Little is known yet, but there are indications that some surviving patients get permanent lung damage. Especially when intensive care is not available. Imagine having 30 million 40-year-olds who will be short of breath for the rest of their lives.

There is no need to imagine, we have the forecasts from the Imperial College report: https://www.imperial.ac.uk/media/imperial-college/medicine/s... There are 40 million 40-somethings in the USA, you're proposing that 100% of them will have lung damage. Let's imagine that 80% of the population is infected, that 80% of cases are symptomatic, and that 80% of the 4.90% of hospitalised cases (this 4.90 is direct from the…

> You know what causes reduced lung functionality in adults?

Vaping. I see most of the young adults doing this. Its probably why they're having the higher hospitalization rates with coronavirus. They already have lung damage.

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

#424

Post by ken »

nostromo wrote: post #214
Abishek_Muthian wrote: post #157

Earlier quoted context omitted.

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 That's quite the overreaction. Italy found that among fatalities the median age is over 80 (older than the average lifespan of an Italian man). 99% of fatalities were among people with a prior illness. About 50% of the deaths were people suffering from at least three other illnesses. https://www.bloomberg.com/news/articles/2020-03-18/99-of-tho... To put it an…

> Italy found that among fatalities the median age is over 80 (older than the average lifespan of an Italian man).

Selection bias. They're so overwhelmed they're using age as a primary factor to triage patients. Clearly, if you put your medical resources towards saving the younger patients, the younger people are going to have a better survival rate. Lack of a ventilator, when you have a severe lung disease, is a massive risk factor at any age.

> 99% of fatalities were among people with a prior illness. About 50% of the deaths were people suffering from at least three other illnesses.

Again, if you look at the oldest people, you're probably going to find more diseases there. This could easily be just another consequence of age-based triage.

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

#425

Post by digitaltrees »

edanm wrote: post #411
digitaltrees wrote: post #112

Earlier quoted context omitted.

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 pronoun…

> 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. What mistakes? Is it a mistake to not keep a rainy day fund that will allow a company to weather a once-in-a-hundred-years shutdown of the entire economy? If this turns out to last a year, will you think it's a mistake that companies didn't keep a year's worth of…

My analysis was in response to and in the context of large companies conducting stock buy backs which is in no way related to the position SMBs find themselves. So yes, those buy backs were mistakes.

In the last 20 years we have had at least 3 “once in 100 years events”, so yes, maybe corporations should be required to be more prepared for down turns as a condition of being granted the right to operate with limited liability.

These are not buzz words, I practiced law in New York and worked on the bankruptcy of American Airlines, Lehman, GM and others. I saw the conditions on the ground, the incentives management responded to; I saw $200M bonuses for traders that lost $1B, I saw how decoupled management was from the risks they engineered. There is a prevalent attitude that as long as the short term reward hits before they quit then they should do it.

Since 2008, airlines have experienced one of the most profitable periods in their history with drastically lower competition and low oil prices. What did they do with that? They wasted significant amounts of cash on buy backs. American Airlines reduces outstanding stock by 37%, thats massive. Why? Because executives are taught in business school that there is an obligation to maximize shareholder value. No such obligation exists in law and I am arguing that is really bad social policy.

Employees are going to be decimated as this unfolds, are they more responsible or in a better position to plan for these once in 100 year events?

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

#426

Post by justanotherc »

oggy wrote: post #402
justanotherc wrote: post #158

Earlier quoted context omitted.

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…

The effectiveness doesn't need to be perfect. If I'm now only 50% less contagious to others with my no-longer-sterile mask, that's a huge win.

There is a shortage of masks and other PPE because people think that way. There is a cost because if everyone were to wear masks, there is not enough supply for healthcare professionals who could actually benefit from them.

The percentage of effectiveness isn't really measurable if the standard isn't followed. You're assuming its 50%, but it very well could be 0% because your equipment is just as contaminated as your hands. So you have not helped yourself, AND you have decreased supply of essential equipment from someone who ACTUALLY needs it. That's a big fail.

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

#427

Post by unexaminedlife »

captain_crabs wrote: post #177
unexaminedlife wrote: post #99

It's articles like this that really make me facepalm, shake my head and say "this isn't about whether America could survive this". America is the last of our concern. Almost ALL of the other countries on planet Earth have orders of magnitude LESS resources (in every sense of the word) than we do. Think about how likely those countries aren't going to fall into chaos. Their governments aren't equipped to deal with thi…

Part of the benefit of living in America is the fact America will put it's citizens first, no? I fail to see how putting the rest of the world before our own countrymen could at all work. To many, that would be viewed as betraying countrymen if we didn't handle it here first. I'd even posit that an America that's contained and controlled COVID-19 is better for the world than one that's not. I'm _not_ saying we should…

I guess, subtly, my point was less about making suggestions about how to proceed, and more about just imagining how the small businesses (mentioned in the article) will do if/when the rest of the world is in disarray.

Sure, I have no gripe with the author(s) of the article, but reading it makes me feel like they just don't get the big picture.

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

#428

Post by ken »

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…

Interesting that almost all of your examples of "contours of infection" are places that people don't need to go to, and the last one can be replaced by teleconferencing. That makes it sound easy: if you don't want to be tested, or it's too much hassle, just don't go there!

I assume in your system that everyone would need to be tested before going to work every day, because that's the most common in-person gathering for most people. The USA has run fewer than 50,000 tests in the months since this began. Your plan would require 100,000,000 tests in the USA every day.

No need to make the test stations "mobile". You could put 1,000 in every city, and they'd never have time to be moved. Every sidewalk downtown would be lines of people waiting for a test -- which itself would be a bigger gathering for me than just going to work.

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

#429

Post by vagab0nd »

fl4bfl4b wrote: post #12

Better solution: https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... We can shelter-in-place as long as needed. And no businesses go under, and no one loses their home.

> We should pause the payment terms on all contracts by 90 days (and more later if needed). This plan, in effect, extends the Fed’s zero percent interest bailout to everyone and not just the banks.

This sounds like a very interesting solution. Although from a technical point of view, it seems impossible to implement.

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

#430

Post by digitaltrees »

mercutio2 wrote: post #420
digitaltrees wrote: post #339

Earlier quoted context omitted.

No they are not. They reduce the amount of equity and raise the stock price but unless the share holder sells there is no real gain. That’s not to say buy backs don’t convey possible value but it’s not accurate to say they are the distribution of profit any more than if the company bought stock of another company (like yahoo buying alibaba stock) or a piece of equipment. In all cases the company has value reflected o…

You have made dozens of posts repeating this argument. It’s just mathematically inaccurate. Modulo taxes, in liquid markets, existing shareholders are compensated identically with share buybacks and with reinvested dividends. If you wouldn’t have chosen to reinvest your dividends, you can sell a fraction of your shares to achieve the same effect. You may think there are social or cultural reasons why one return of ca…

I am not arguing they are mathematically identical. I am highlighting some of the meaningful differences. Stock buy backs make stock prices go up. Dividends do not. Stock buybacks have timing risk dividends do not.

If an executive is paid in stock, and has compensation tied to stock price then there is an incentive to conduct stock buy backs and not issue dividends. Further, declaring a dividend sets future expectations of performance that management is hesitant to be tied to as missing dividend payments lowers stock prices.

My point is that these incentives causes management to spend more company resources on buy backs than they would on dividends because there is a personal benefit. This harms stockholders because they lose the option to use the dividend. Not every investor wants to reinvest, some want to use the dividend. So no, they are not equivalent as you say. There are meaningful practical considerations that make dividends better for shareholders and buy backs better for managers.

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