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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

#81

Post by ohyes »

rootsudo wrote: post #72
ohyes wrote: post #52

Earlier quoted context omitted.

This is an interesting analogy because the roadrunner just runs without looking and everything works out fine. Wile E. Coyote only has problems because he is aware of what a huge mistake he’s made. I don’t know what the behavior analogous to road runner is in an economic sense. Perhaps suspending capitalism? I can’t imagine anyone going along with that.

The problem is we're comparing the economy to cartoon fiction of a bygone era.

Are you saying that the economy isn’t just a complicated game that we play to distribute wealth and it had a merit beyond its utility to those playing it?

It seems we should rethink the game if it falls over every few years and fails to serve the majority of the players.

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

#82

Post by airza »

sokoloff wrote: post #64
airza wrote: post #15

Earlier quoted context omitted.

I guess you're being sarcastic, but what value is being provided to society by having landlords rent houses out to people who would rather buy them?

People who would rather buy houses than rent should feel free to do so. No landlord is forcing someone to rent their property. It is often the case that renting is quite a bit cheaper and always the case that it's more flexible to do so, which is why a lot of people choose to rent instead of buying. Society benefits when people who wish to rent housing have housing available for lease.

It's certainly more feasible to rent if you don't have the money to buy a house, which is why every single renter i know is doing do. I'm just not sure why this is necessary or a valuable economic innovation that justifies the rent paid.

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

#83

Post by munificent »

crispyporkbites wrote: post #76
Simulacra wrote: post #55

Is there an economist here that might know if this would lead to stores decreasing prices on products in order to move merchandise, keep the same, or increase?

There’s plenty of economists that know the answer to that, not so many that will be right.

Given a sufficient number of astrologers, you are guaranteed to have one with a correct prediction for your future. The hard problems is picking which one to listen to.

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

#84

Post by rurp »

ikeyany wrote: post #46
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…

Well said. People often forget that optimizing for efficiency isn't free, it has a cost in flexibility. The modern economy is heavily optimized which, yes, can produce enormous profits, but it also makes the economy extremely brittle.

Approaches like just-in-time manufacturing or loading up on debt in a good economy to expand faster work out great... until they don't. And when things go bad, they can go bad quickly.

I've heard a number of people referring to COVID-19 as a black swan event, but it's really not. Pandemics are a known risk that have happened many times in the past and will happen many more times in the future. The fact that such an unsurprising disaster has stressed modern economies so tremendously makes me really pessimistic for our society's long term prospects.

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

#85

Post by rootsudo »

ohyes wrote: post #81
rootsudo wrote: post #72

Earlier quoted context omitted.

The problem is we're comparing the economy to cartoon fiction of a bygone era.

Are you saying that the economy isn’t just a complicated game that we play to distribute wealth and it had a merit beyond its utility to those playing it? It seems we should rethink the game if it falls over every few years and fails to serve the majority of the players.

Unless the game is designed on purpose to fall over so people can take advantage of it and enable a new level of wealth for themselves.

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

#86

Post by ed »

ikeyany wrote: post #46
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…

> the mere fact of people stopping doing a bunch of stuff

Lol this is condescending, this isn’t due to millennials forgoing their avocado toast

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

#87

Post by pjc50 »

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…

The problem with betting against the dollar is that the West is to a great extent dependent on the US as a place to park its money and sell things. If the US sneezes everyone else catches a cold.

> Perversely, this could be great for stocks, bonds, and other assets nominally

Nominal stock values are still climbing despite the mire of bad news.

> nobody in their right mind would buy 10 or 30 year Treasuries with the goal of holding to maturity

What the hell else are big "cash" holders going to do with their dollars? Put it in a bank which then immediately gives it to the Fed? Try to fill a giant, expensive Scrooge McDuck warehouse with individual greenbacks?

30-year yield is 1.56%. The tiny yield compared to holding stock for 30 years is the huge premium the holder pays for safety.

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

#88

Post by chkaloon »

_qwfv wrote: post #66
chkaloon wrote: post #58

Earlier quoted context omitted.

Problem is, there's always two parties in every transaction. Holiday for the rent payer is a death knell for the landlord. Mortgage holiday is the same for the bank and its bondholders/depositors.

Is that a problem? Those landlords and banks have collateral -- the properties and mortgages themselves. I care a lot more about housing from a "how well does it house humans" perspective than a "how well does it generate income for landlords/capitalists" perspective. If landlords and mortgage lenders ended up having to sell their assets for pennies on the dollar, I'd imagine it would make housing a lot more affordab…

And all the pensions and retirement accounts of teachers, firefighters, anyone with a 401k/403b/125 account are the ones propping up those mortgage holders and "capitalists". There is no imaginary backstop here, except the Fed for a little while. Eventually that will crumble as well.

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

#89

Post by pjc50 »

ping_pong wrote: post #63
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…

The US by definition can't default on its own debt. It's literally impossible because all debt is in USD. If the US gets into the situation where it doesn't have enough money to pay off its interest payments, the only one solution is to print more money to pay off the debt. This will lead to #2 in your list, which is actually just #1. When the US starts printing money, it will lead to a lot of destruction of assets b…

It can default on its debt by .. refusing to pay it. Remember all the debt ceiling fiasco and the furlough of federal workers? It would be a huge moment of voluntary stupidity, but anything's possible.

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

#90

Post by krapht »

_qwfv wrote: post #66
chkaloon wrote: post #58

Earlier quoted context omitted.

Problem is, there's always two parties in every transaction. Holiday for the rent payer is a death knell for the landlord. Mortgage holiday is the same for the bank and its bondholders/depositors.

Is that a problem? Those landlords and banks have collateral -- the properties and mortgages themselves. I care a lot more about housing from a "how well does it house humans" perspective than a "how well does it generate income for landlords/capitalists" perspective. If landlords and mortgage lenders ended up having to sell their assets for pennies on the dollar, I'd imagine it would make housing a lot more affordab…

The Great Recession was only a decade ago. Of course it's a problem, and we have recent evidence of what happens when you almost let the real estate and banking industries collapse.
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