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More than half of American retailers didn't pay their rent in April and May

businessinsider.com

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Re: More than half of American retailers didn't pay their rent in April and May

#41

Post by AnimalMuppet »

rwmj wrote: post #32
jdm2212 wrote: post #10

Earlier quoted context omitted.

The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…

> Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages But I said in my question: "if we suspended mortgage repayments for N months and rental payments for N months" Landlords are not paying their main cost (the mortgage) so why do landlords go broke? They have some fixed overheads but those are usually a few % of the mortgage.

That doesn't help the mortgage holders, though...

Re: More than half of American retailers didn't pay their rent in April and May

#42

Post by Ididntdothis »

viscanti wrote: post #28
Ididntdothis wrote: post #4

Earlier quoted context omitted.

This would make sense to me. Why are some businesses being shut down and have to deal with income losses and others like landlords can keep going and demand their income? This seems fundamentally unfair to me.

Things like property taxes and maintenance are fixed costs for property owners. Those can eat up 50% or more of the rental income. So if renters aren't paying, even property owners who don't have a mortgage have high fixed costs that they have to pay.

The companies that are renting their space also have fixed costs.

Re: More than half of American retailers didn't pay their rent in April and May

#43

Post by serf »

jawns wrote: post #38

It feels like a huge wave just crashed, and many people standing waist-deep in the water think things are on the upswing now -- when really they're about to get sucked into a powerful undertow. Judging by the state of the stock market, many investors seem oblivious to the magnitude of the effects of the pandemic. The S&P 500 lost more than a third of its value in the pandemic crash. Yet the index is now two-thirds of…

>Given the harsh economic reality, I'm very bearish right now.

as am I.

I've more-or-less frozen my trading until a) a recovery plan is clear and being executed or b) until it is more clear we've hit a real bottom.

All these hopeful spikes that do not correlate to the economic reality are probably going to throw a lot of people through hoops until any real roof or floor is hit.

It sucks because I keep having these "buy the dip" moments, but then I have to hand-wave the opportunity away knowing that whatever dip i'm looking at is likely one of many upcoming movements.

Re: More than half of American retailers didn't pay their rent in April and May

#44

Post by wmf »

jeromegv wrote: post #25
jdm2212 wrote: post #10

Earlier quoted context omitted.

The whole banking system would collapse like in 2007-2008 because "everyone stops paying mortgages all at once" is basically what happened then. Renters stop paying their rent so landlords go broke. Landlords stop paying their mortgages. Mortgage-backed securities go into default. Anyone with lots of exposure to mortgage-backed securities folds. Their counterparties in all sorts of financial arrangements can't collec…

What's the proportion of commercial landlords that have a mortgage to pay? Because when their building is already paid, interruption of rent isn't really impacting them.

All of them? The economy has been pushing everyone, including landlords, to lever up for decades.

Re: More than half of American retailers didn't pay their rent in April and May

#45

Post by RcouF1uZ4gsC »

When the next pandemic hits, I doubt any government will dare to attempt a closure.

The costs for these closures have been high in terms of economic pain. In addition, the protests, though they are justified due to the oppression the community has experienced, are likely undoing a lot of the effects of social distancing by putting a lot of people together in close proximity for hours.

So in the end, we will have experienced a lot of economic pain for not that much benefit.

Re: More than half of American retailers didn't pay their rent in April and May

#46

Post by ikeyany »

chkaloon wrote: post #34

I am afraid we are in a real Wile E Coyote moment here. You know, where he's suspended in air for a few seconds before he goes crashing to the ground? Our crash may come in the fall when UI payments stop and the rent floats become unsustainable. About the time the second wave hits. https://66.media.tumblr.com/bbbf0aec68490ae2679ef489709c3d18...

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. We've lost about 100k people, which is horrific but in the scheme of things at "USA" scale, and with the skewed demographics, not much of a hit to the economy.

And yet the economy is staggering and it's likely to get worse. Why? Because people have stopped doing things

We've built an entire economy around people doing things they don't really need to do. In and of itself, that's not so bad, but we've also built an economy with so little resilience, so much fragility, so little spare capacity that the mere fact of people stopping doing a bunch of stuff has the potential to cause complete economic disaster for, what 15-20M Americans?

https://news.ycombinator.com/item?id=23328234

Re: More than half of American retailers didn't pay their rent in April and May

#47

Post by icedchai »

chkaloon wrote: post #34

I am afraid we are in a real Wile E Coyote moment here. You know, where he's suspended in air for a few seconds before he goes crashing to the ground? Our crash may come in the fall when UI payments stop and the rent floats become unsustainable. About the time the second wave hits. https://66.media.tumblr.com/bbbf0aec68490ae2679ef489709c3d18...

I wouldn't worry about it: it's an election year. Those UI payments will just get extended another 6 months.

Re: More than half of American retailers didn't pay their rent in April and May

#48

Post by AnimalMuppet »

5ociety wrote: post #16
5ociety wrote: post #13

Earlier quoted context omitted.

It kind of sounds like we need a different money system?

and whose better at designing systems than you and me?

Unless you're an expert at designing systems as complicated as the entire economy, maybe a lot of people.

Re: More than half of American retailers didn't pay their rent in April and May

#49

Post by ngold »

aazaa wrote: post #37

> Bed Bath & Beyond, Famous Footwear, H&M, and the Gap, AMC and Regal movie theaters, and 24 Hour Fitness gyms have all missed payments, jeopardizing the stability of their property management companies and municipal governments that rely on property taxes, The Post's Heather Long reported. All roads lead to the Federal Reserve. Stores defaulting on rent payments starves landlords for cash. Landlords unable to servic…

There is also 32 trillion sitting outside the US that needs to come home a be burned.

Re: More than half of American retailers didn't pay their rent in April and May

#50

Post by AnimalMuppet »

chrisseaton wrote: post #18
formercoder wrote: post #12

Earlier quoted context omitted.

Banks shouldn’t have a ton of this stuff on their balance sheets because of post ‘08 changes. The more likely parties to be damaged are asset managers.

> Banks shouldn’t have a ton of this stuff on their balance sheets I don't understand what you mean - banks issue millions and millions of mortages.

But they don't keep the mortgages. They sell most or all of them.
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