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Busted retailers use bankruptcy to break leases by the thousands

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Re: Busted retailers use bankruptcy to break leases by the thousands

#221

Post by dashundchen »

frandroid wrote: post #198
rrrrrrrrrrrryan wrote: post #192

Earlier quoted context omitted.

When corporations start buckling during sharp economic downturns, everyone's first instinct is always "let them burn." But it's often not a choice between letting entire swaths of our economy collapse, and dumping absurd amounts of our tax dollars to prop up these poorly-run companies. We can give them loans with strings attached, force them to go through bankruptcy, wipe out the shareholders but preserve the structu…

Or you know, make up for the missed opportunity of 2008/2009, where the government could have bailed out underwater homeowners so that the bailout would have trickled up to the mortgage holders, instead of pouring money into banks and letting people suffer. Thanks, Obama. Canada's CERB and CECRA have been doing wonders to keep ordinary people either afloat or employed, trickling up to small businesses all over. (I do…

Just to clarify, both TARP and Emergency Economic Stabilization Act were signed into law in October 2008 before Obama was even elected president.

Not saying he wouldn't have also signed the acts but the crisis was well underway by the time Obama was in the White House.

Re: Busted retailers use bankruptcy to break leases by the thousands

#222

Post by linuxftw »

PaulDavisThe1st wrote: post #202
linuxftw wrote: post #182

Earlier quoted context omitted.

> If Fedex & UPS were to be forced to sell off package delivery in NYC Then the market will adjust. If you can't get packages delivered in NYC, you will have to get your goods through some other means. Maybe all of NYC is a bubble. Maybe that many people shouldn't live on a handful of tiny islands, importing their food from the mid west and their goods from China. Maybe everyone's in the wrong place.

Maybe. But if that's true, is the correct solution to crash-and-burn from the current scenario to some version of a "better" one?

The correct thing to do is let the market decide. If it's profitable to do something, people will do it.

Re: Busted retailers use bankruptcy to break leases by the thousands

#223

Post by duxup »

mikestew wrote: post #16

Man, with (currently) four comments mentioning that this is "what bankruptcy is for", I think the point of the article might have been missed. This isn't some sneaky "one weird trick", and that's not the reason Bloomberg is reporting on it. In fact, the tone of the article to me is, "yup, companies do it all the time, but..." And the "but" is: But the moves threaten to upend huge swaths of the real estate market and…

A bubble around commercial real estate that results in competition and lower rents for other businesses... that doesn't sound terrible.

Yeah the knock on effects would be terrible, but the underlying results being lower costs for renters, seems pretty natural / appropriate.

Re: Busted retailers use bankruptcy to break leases by the thousands

#224

Post by dillondoyle »

bsder wrote: post #216
frandroid wrote: post #198

Earlier quoted context omitted.

Or you know, make up for the missed opportunity of 2008/2009, where the government could have bailed out underwater homeowners so that the bailout would have trickled up to the mortgage holders, instead of pouring money into banks and letting people suffer. Thanks, Obama. Canada's CERB and CECRA have been doing wonders to keep ordinary people either afloat or employed, trickling up to small businesses all over. (I do…

> the government could have bailed out underwater homeowners Why reward people who gambled and lost? Bust them out. People will either buy the houses at more reasonable prices or (more likely in this case) the banks will renegotiate more reasonable terms with the original mortgage holders because they have too much supply and no buyers. > instead of pouring money into banks and letting people suffer. Thanks, Obama. T…

I would argue the gambler's are those buying insane billions in MBS and derivatives of derivatives of MBS, with what turns out to be totally BS ratings and a whole lot of what should have been obvious to see fraud

Re: Busted retailers use bankruptcy to break leases by the thousands

#225

Post by mgkimsal »

dashundchen wrote: post #221
frandroid wrote: post #198

Earlier quoted context omitted.

Or you know, make up for the missed opportunity of 2008/2009, where the government could have bailed out underwater homeowners so that the bailout would have trickled up to the mortgage holders, instead of pouring money into banks and letting people suffer. Thanks, Obama. Canada's CERB and CECRA have been doing wonders to keep ordinary people either afloat or employed, trickling up to small businesses all over. (I do…

Just to clarify, both TARP and Emergency Economic Stabilization Act were signed into law in October 2008 before Obama was even elected president. Not saying he wouldn't have also signed the acts but the crisis was well underway by the time Obama was in the White House.

obama did vote for TARP as a senator, so it's likely he would have supported it (or a variation) as president.

Re: Busted retailers use bankruptcy to break leases by the thousands

#226

Post by PaulDavisThe1st »

linuxftw wrote: post #222
PaulDavisThe1st wrote: post #202

Earlier quoted context omitted.

Maybe. But if that's true, is the correct solution to crash-and-burn from the current scenario to some version of a "better" one?

The correct thing to do is let the market decide. If it's profitable to do something, people will do it.

This seems profoundly naive to me. "If it's profitable do something" is beyond simplistic.

Profitable compared to what? Profitable for whom? Profitable based on what assumptions? Profitable by what metric? Dollars accrued to capital? Dollars accrued to GDP? Quality of life index? Happiness index? Life expectancy numbers? Infant mortality? Profitable with what externalities forced to be part of cost-factoring?

What is "the market"? What is a "decision" in this context? What is the cost benefit analysis of allowing "the market" to "decide" versus more policy-driven unfolding of the outcome?

... and so on and so on ....

i.e. the usual litany of problems with free-market boosterism

Re: Busted retailers use bankruptcy to break leases by the thousands

#227

Post by PaulDavisThe1st »

shard wrote: post #219
PaulDavisThe1st wrote: post #205

Earlier quoted context omitted.

This is not a useful anecdata-driven analysis of the commercial real estate market. Yes, landlords like the ones you know do exist. They do not own substantive commercial real estate, and certainly not the stuff the Neiman Marcus or GNC have been renting.

You are right about Neiman Marcus, as they occupy huge spaces in shopping malls. However, GNC stores are very small, and many are in strip malls, which can cost only a few million to purchase, not out of the range of small business owners with some collateral. At a cursory search, I can't find any numbers on the percentage of CRE owned by institutions and corporations, do you have any data you can share? In any case,…

"small business owners who scrimp and save to make a living", to me, is not really aligned with "a few million to purchase". Perhaps it is for you.

Re: Busted retailers use bankruptcy to break leases by the thousands

#228

Post by olalonde »

lostmyoldone wrote: post #108
elipsey wrote: post #77

Earlier quoted context omitted.

Lots of things were already ghost towns. Even before covid, I am always seeing people with no buildings, and buildings with no people. I'm in SF now, but I have seen this in cities and small towns, red states and blue states: empty malls, hobo jungles down the block from me, friends with minimum wage jobs sleeping in cars, squatters getting the bum’s rush. I imagine there are good reasons to have less than %100 perce…

In many areas you can earn significantly without have tenants, if you can wait a decade to get paid. Having tenants is chore, and might make it impossible to sell the property for a different use. Market economy works fairly well as to get the most value from the least work. If you allow empty apartment buildings, you will have empty apartment buildings if that's likely the best risk/reward for the owner. It's not ab…

Government regulations are generally to blame for empty apartment buildings. In a free market, it would make very little sense for a building owner not to rent it out.

Re: Busted retailers use bankruptcy to break leases by the thousands

#229

Post by samcodes »

throwanem wrote: post #195
slowmovintarget wrote: post #176

Earlier quoted context omitted.

It's a bit worse than that. The same practices that caused the 2008 crash came back in the guise of "non-prime mortgages". They are functionally identical to sub-prime mortgages. The new laws did nothing to prevent this. They weren't meant to. We had a law designed to stop it that was enacted following the Great Depression. It was called the Glass-Steagall Act, passed in 1933. It was repealed in 1999 during President…

Oh, hey, I hadn't looked in detail at how residential paper works these days, but I think you may be on the mark here. I can't speak to the deep-state stuff, but in terms of mortgages, "qualified" and "non-qualified" appear to mean substantially what you say they mean. I'm sure that can't possibly go wrong. Especially since the entire SERP when I looked up the "non-prime" term you used was pages put up by fly-by-nigh…

"deep state" meaning... information you didn't know already?

Re: Busted retailers use bankruptcy to break leases by the thousands

#230

Post by notacoward »

treeman79 wrote: post #213
coliveira wrote: post #107

Earlier quoted context omitted.

If capitalism is to be the law of the land, why not let the rich lose everything? I guess they can easily live on the streets.

That’s one of the tenants (no pun) of capitalism. Bad execution is punished by going out of business. This forces everyone to be hyper efficient at taking raw resources and getting useful value out of them. Thus people have more goods for less money. People get confused because government gets involved and you end up with cronyism. Free market is as another comment says, the minimum amount of regulation possible that…

> Bad execution is punished by going out of business.

That's true for the entrepreneurs, but this was about the investors and it tends not to be true for them. It should be.

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