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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

#91

Post by jrs95 »

XMPPwocky wrote: post #57
charia wrote: post #10

Earlier quoted context omitted.

You realize that the retail business can be quite difficult and that a monthlong shuttering can and will drive many into bankruptcy. Rent payments without income will put the nail in the coffin for many businesses. I do agree with your sentiment. Paying their workers who are probably struggling significantly at the moment would be ideal. I don't feel that landlords need the $'s as much as those workers.

> a monthlong shuttering can and will drive many into bankruptcy. They should have saved up- a decent emergency fund is three+ months of expenses, or so I'm told. In a better world... Didn't save up? You lose your business. Either it goes under or you sell it at fire-sale prices to somebody who has the assets to keep it afloat until things stabilize (possibly the government). Your workers? Of course, the government w…

You're right, the problem with American capitalism is that people with wealth don't have enough of an advantage in business

/s

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

#92

Post by wegs »

humanrebar wrote: post #85
wegs wrote: post #50

Earlier quoted context omitted.

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...

And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?

That's where you need much smaller bailouts and stimuli. Agriculture is less than 1% of the GDP. The currently-discussed bailout is big enough to feed all of America for years. And it's actually not a bad idea to nationalize food distribution -- supermarkets are where the virus spreads. Many countries have switched to safe deliveries of food.

And conversely, the current bailout, as proposed, doesn't come anywhere close to stopping mortgage defaults, layoffs, and the slew of other issues.

Now, this plan basically means you don't buy new things (cars, laptops) for 3 months, but I think that's okay. But yes, it only covers 95% of the problem. Companies might need help with, for example, restarting production lines, maintenance costs, supply chain delays, or other issues. All that is pocket change compared to what we're looking at spending right now.

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

#93

Post by novok »

humanrebar wrote: post #85
wegs wrote: post #50

Earlier quoted context omitted.

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...

And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?

They get a bailout.

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

#94

Post by wegs »

wrkronmiller wrote: post #84
wegs wrote: post #50

Earlier quoted context omitted.

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...

And what about international obligations? What about mortgage-backed securities?

International obligations, where governed by US law, get placed on hold too. Ideally, other countries join in the regime. If not, you're just talking about a much smaller amount of debt (US debt held under foreign jurisdictions).

Mortgage-backed securities generate no income for a couple of months.

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

#96

Post by sp332 »

x2f10 wrote: post #11

Is it the government's job to hold the proverbial hot potato in events like this?

Aside from the economic effects of the epidemic, I would consider this to be part of the public health response. If retail stores don't need to pay rent, they're going to feel less pressure to stay open and get customers in where they can infect each other.

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

#97

Post by novok »

ficklepickle wrote: post #88
digitaltrees wrote: post #63

Earlier quoted context omitted.

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.

It is concerning to me that employees of the fed and REITs operate in the same social circles.

Finance industry people know other finance industry people, news at 11!

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

#98

Post by wegs »

cmurf wrote: post #89
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…

Those payments in turn pay for other things. Stopping them, stops everything. Pensions and 401ks, all kinds of commercial paper holding money short term stops, almost all home and commercial property sales stop, companies can't pay their own big bills due to vendors or fulfill order to customers, or can't convert bonds to stocks. It's too simple of an idea. What you are looking for is the time equivalent of printing…

> Those payments in turn pay for other things. Stopping them, stops everything.

That's correct. We stop everything for 3 months to get rid of the virus.

Or almost everything.

> almost all home and commercial property sales stop

Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. This is already stopped.

> What you are looking for is the time equivalent of printing money

It is like a time-equivalent of printing money. By virtue of the time-limit, it doesn't have nearly the same inflationary pressure. We need to relieve a short-term financial crunch, and the stimulus, zero interest, etc. all do that, but when the crunch is over, that stuff explodes into inflation. This cleans itself nicely.

> It's too simple of an idea

What's wrong with simple ideas?

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

#99

Post by _bxg1 »

bpodgursky wrote: post #26
_bxg1 wrote: post #17

All rent should be suspended, across the board, for everyone. Rent is a passive expense that businesses and individuals alike who are not getting any income right now will have no hope of paying.

Do you consider property tax to be 'rent'? Because a large percent of rent is getting funneled right back into property tax, which isn't (yet) adjusted down. (to be clear, I'm fine with a lot of rent deferment / freezing, but I do think there needs to be equivalent property tax forgiveness for at least retail space)

Sure, that might make sense too

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

#100

Post by XMPPwocky »

jrs95 wrote: post #91
XMPPwocky wrote: post #57

Earlier quoted context omitted.

> a monthlong shuttering can and will drive many into bankruptcy. They should have saved up- a decent emergency fund is three+ months of expenses, or so I'm told. In a better world... Didn't save up? You lose your business. Either it goes under or you sell it at fire-sale prices to somebody who has the assets to keep it afloat until things stabilize (possibly the government). Your workers? Of course, the government w…

You're right, the problem with American capitalism is that people with wealth don't have enough of an advantage in business /s

Sorry if I wasn't clear- would you mind explaining how you got that from what I said?
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