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U.S. retailers plan to stop paying rent to offset virus closures

bloomberg.com

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Re: U.S. retailers plan to stop paying rent to offset virus closures

#61

Post by adt2bt »

nostromo wrote: post #49
wegs wrote: post #42

Earlier quoted context omitted.

No, there is a one-size-fits-all solution. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... Stop interest on all loans for 90 days. Defer principal on all loans by 90 days. In 90 days, payments start up as before (and just end 90 days later). Same thing bubbles for all contracts. Leases and rents are free for 90 days. Contracts switch from net 30 to net 120 terms. Etc. You pause the cycle of debt. It w…

This is a recipe for bank failures and a financial crisis.

Aren’t they also freed from servicing their debts as well? Why does pausing the debt cycle affect them disproportionately?

Re: U.S. retailers plan to stop paying rent to offset virus closures

#62

Post by thaumasiotes »

JMTQp8lwXL wrote: post #31
charia wrote: post #19

I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.

It's easier to stockpile billions of dollars when you have no idea what to do with it. The typical business does not have this luxury. Some tech companies are worth more than some country's GDPs. This advice is analogous to a billionaire telling a minimum wage employee to save more.

> Some tech companies are worth more than some country's GDPs.

This doesn't mean much. Plenty of people are worth more than some countries' GDPs. Wikipedia's list of countries by GDP goes down to US$42 million.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#63

Post by digitaltrees »

nickpinkston wrote: post #18

For commercial landlords, we should probably let them stop paying their mortgages, etc., and then the Fed can give 0% loans to the banks who hold the other side of those loans. It's the ciiircle of cash!

That’s an awesome idea. You should write a more concrete proposal and send it to the fed. I have a few friend there and and some of the larger REITs. I’d be happy to help get it in the right hands.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#64

Post by mrosett »

rjkennedy98 wrote: post #32
charia wrote: post #19

I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.

you are right that most companies should have a rainy day fund, but tech companies like Apple are way way way past a rainy day fund. Apple is sitting on US treasury department level money.

Each month, the US treasury spends close to 4x (~$370 billion) the stockpile of cash that Apple has accumulated over decades ($100 billion.) It's a whole different level.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#65

Post by wegs »

nostromo wrote: post #49
wegs wrote: post #42

Earlier quoted context omitted.

No, there is a one-size-fits-all solution. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... Stop interest on all loans for 90 days. Defer principal on all loans by 90 days. In 90 days, payments start up as before (and just end 90 days later). Same thing bubbles for all contracts. Leases and rents are free for 90 days. Contracts switch from net 30 to net 120 terms. Etc. You pause the cycle of debt. It w…

This is a recipe for bank failures and a financial crisis.

As a side note, a down vote shouldn't be the same as "I disagree." If you disagree, please explain why. So far, I've heard no helpful criticisms. Nor have I heard any reason for the down votes -- if I'm doing something wrong, you need to say what it is, or I'll keep doing it.

If you want an echo chamber, then by all means bump this down to -50 with no further explanation.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#66

Post by edoceo »

mrfusion wrote: post #59
charia wrote: post #19

I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.

Just to play devils advocate. Wouldn’t that be a large dead weight loss if every corporation had six months of operating expenses sitting around in low interest accounts? In total it could be as large as half the worlds GDP?

Don't leave it in low interest account? It's likely millions of $$$, so index fund would be a likely storage for a lot of it

Re: U.S. retailers plan to stop paying rent to offset virus closures

#67

Post by swiley »

JMTQp8lwXL wrote: post #29
henrikschroder wrote: post #13

“The court system is just going to get flooded with a million of these disputes between tenants and landlords,” I'm absolutely not a big fan of collectivism, but sometimes, individualism just doesn't work. Sometimes, you have to step in and solve problems collectively. No, it won't be fair, yes it will be one-size-fits-all, no you can't please everyone. Suck it up, buttercup. Whether you like it or not, we're in this…

What is the collective resolution? I'm assuming it's either everyone gets free rent, or nobody does, and I'm not sure which is being implied here.

I'm able to pay my rent. If me paying mine means the newly unemployed people don't have to during this thing then I would prefer the situation that's unfair toward me.

We really kick the lowest people into the dirt here and the place we do it the most is housing. It makes our economy extremely unstable, not to mention it's pretty unpleasant to know that you're only a couple mistakes away from being in a similar situation and to be around a bunch of people who feel the same way. It doesn't need to be like this, the US is mostly trees and all but the most dense places have lots of room for growth. We've prevented it and now it's time to pay for our mistakes.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#68

Post by pdonis »

joe_the_user wrote: post #30

The economy is effectively frozen. But you have to distinguish the production process from the monetary, contractual and ownership relations that normally control the production process. We can continue to produce necessary , essential good during this crisis and let the rest of the economy stay frozen 'till the end of this mess. The situation should be the equivalent of a war or a different natural disaster. Essenti…

> The economy is effectively frozen.

This is a huge overstatement. Certain sectors of the economy are frozen: basically, those sectors which serve demand that is discretionary and non-essential, the sorts of things people have stopped doing because they don't want to get infected. Grocery stores, drugstores, etc. aren't frozen--in fact their sales have probably skyrocketed over the past few weeks. All of the supply chains that feed those places aren't frozen either. Not to mention that there is now a huge new demand for various health care items, from masks to ventilators, that companies will be wanting to meet and will be hiring people for.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#69

Post by cmurf »

henrikschroder wrote: post #13

“The court system is just going to get flooded with a million of these disputes between tenants and landlords,” I'm absolutely not a big fan of collectivism, but sometimes, individualism just doesn't work. Sometimes, you have to step in and solve problems collectively. No, it won't be fair, yes it will be one-size-fits-all, no you can't please everyone. Suck it up, buttercup. Whether you like it or not, we're in this…

The metric needs to be, equally miserable. The innovation needed, is a misery metric. Once most everyone is equally pissed, that's the solution - doesn't matter how bizarre or ideological is seems.

But of course, the track record suggests the actual solution we get will look more like neo-feudalism.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#70

Post by rumanator »

rjkennedy98 wrote: post #32
charia wrote: post #19

I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.

you are right that most companies should have a rainy day fund, but tech companies like Apple are way way way past a rainy day fund. Apple is sitting on US treasury department level money.

I'm not sure you got the point. The argument has nothing to do with the absolute amount of cash an organization amasses. The whole argument is about organizations building up economic reserves that enable them to endure long periods of recession or market downturn or a bad product launch or an earthquake. Some companies might have more cash than most states, but the same argument holds if a fruit vendor stocks up a few thousand euros that enable them to remain in business during a disaster.
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