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…
> Malls are going to start becoming ghost towns, especially with no anchor stores like Penny's and the since-departed Sears.
Pretty sure that already happened. The US built waaay too much retail space[1], and still[2] has an overhang in most markets. And yea, Amazon kinda ate the Sears / JCPenny lunch, which has not helped matters.
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…
>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. And? Seriously. We either have to choose to be a market that is somewhat free or not. At this point, the government is choosing winners and losers. It is a repeat of 2008. Oh no, it is too big to fail. Someone will come by with the investment to buy what is left. Perhap…
>>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities.
>And?
And if you're a trader reading Bloomberg news, maybe factor that into your trading decisions, or something. Not every piece of news is a call for government regulation.
>>>And? It's a news story, there doesn't have to be any underlying editorial message. Sometimes the news is just "thing happens".
For most publications that time past a long time ago. There’s a limited space so even “presenting the facts” has an editorial bias when you decide which facts you are presenting. The extreme example of this is a political news site that dedicates its entire site to posting anything that paints its opponents or their positions in a negative light. They can all be “thing happens” stories, but the filter alone gives it…
Well, you have the existence of this article as a counterpoint. :)
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…
> That’s one of the tenants (no pun) of capitalism
Not sure if it's just part of the joke, but the word is "tenet".
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.
It seems like you are assuming that the few millions used in the purchase are 1. liquid, and 2. all from the owner. Many owners take out a loan to purchase property, so they are paying monthly mortgage. Also, the millions are locked up in the property and is inaccessible, so they have to live off of the rental income from the property. A $3M property with a 5% CAP, which is not bad for the US, nets the owner $150k a year, hardly Rich Uncle Pennybags' level of income. Subtract mortgage and any taxes/insurance/repairs not covered by the tenant, and also self purchased health insurance, and you are basically living a middle class lifestyle. If things go awry, such as a few bad tenants or unfavorable changes in local rental market, and you're in a situation similar to being "house poor", where you have a high value asset, but not a lot of cash for day-to-day expenses.
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…
>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. And? Seriously. We either have to choose to be a market that is somewhat free or not. At this point, the government is choosing winners and losers. It is a repeat of 2008. Oh no, it is too big to fail. Someone will come by with the investment to buy what is left. Perhap…
You could look at it from the perspective of adapt or die. But you can also look at certain industries/companies like an endangered species. Once the last rhino dies, it's gone forever. Not a totally straightforward decision.
>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. And? Seriously. We either have to choose to be a market that is somewhat free or not. At this point, the government is choosing winners and losers. It is a repeat of 2008. Oh no, it is too big to fail. Someone will come by with the investment to buy what is left. Perhap…
>>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. >And? And if you're a trader reading Bloomberg news, maybe factor that into your trading decisions, or something. Not every piece of news is a call for government regulation.
Sounds like the underlying question behind the “and?” is, why is this news on HN?
As has been stated, this happens, it’s what bankruptcy is for, and is not all that shocking or worth particular notice here.
>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. And? Seriously. We either have to choose to be a market that is somewhat free or not. At this point, the government is choosing winners and losers. It is a repeat of 2008. Oh no, it is too big to fail. Someone will come by with the investment to buy what is left. Perhap…
You could look at it from the perspective of adapt or die. But you can also look at certain industries/companies like an endangered species. Once the last rhino dies, it's gone forever. Not a totally straightforward decision.
I understand why we’d want to save the airlines (for instance) from extinction, but why bail out the current equity holders as opposed to an orderly, Government-backed restructuring in bankruptcy court?
>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. And? Seriously. We either have to choose to be a market that is somewhat free or not. At this point, the government is choosing winners and losers. It is a repeat of 2008. Oh no, it is too big to fail. Someone will come by with the investment to buy what is left. Perhap…
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…
In this case, the downturn is caused by deliberate government action. How can you call a small local cafe forced to shut by government "poorly-run"? They were literally forced out of business by legislation that prevented them from even trading.
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…
Almost every single horror story of what could happen has NOT happened. Yes, too many people have tragically died, but a lot less than the horror stories of a million+ people. There is barely a recession, and the stock market is at all time highs. There was no supply chain implosion for food. There are no food bank lines. There is no mass homelessness. Basically the Fed and the US government did their job. They stabi…
The lack of mass homelessness is due to: expanded federal funding of unemployment, eviction moratoriums, and deferred mortgage payments. All of these are coming to an end in the next couple months and that’s when the mass homelessness starts.