241–250 of 278 posts
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We can't have large investors losing money on any of their (inherently risky) investments. How will the market work if investors can lose money?
They bail out mom and pop, too. They bailed out hunrdreds of thousands of people who thought they could make money flipping condos during the 2008 housing bubble.
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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.
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…
The US has too much retail space. Per capita, it has 5x as much as Europe (23.5 sq ft in the US vs 3-4 sq ft in most European countries) and 8-10x as much as Asia (2-3 sq ft). We may be looking at a permanent decrease as a result of this pandemic. But even if it goes down by 20%, the US will still have way more than anywhere else. I think we'll be better off when we use the excess retail space for something else whet…
I’m not sure if retail space alone is a good measure. The US (and Canada) love massive stores like Costco, Home Depot, Walmart. And there are a LOT of Walmart’s. Those stores seem to be doing just fine during the pandemic (HD has been packed when I went). Would be more useful to see a breakdown by retail size. Say 10000 sq ft. I’d suggest the small places are the ones at high risk (just thinking about typical tenants…
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> 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?
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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…
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…
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…
Mostly too little capitalism - buildings are very heavily regulated. Zoning, property tax, planning laws, rent control, and habitability laws are big factors. For example maybe it's illegal to rent out the building because the kitchens are too small, and renovating it would not only cost a lot up-front but also push up the property taxes, so you'd have to be confident of getting a return - and maybe you're intending to knock it down and build a replacement as soon as you get planning approval.
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It's not an easy thing to find out who did what - trying to figure out which managers and owners were purposefully over-inflating equity to secure larger loans (or whatever) from those who were duped by the other managers and were just trying to keep the ship afloat is a really hard problem. And, in this fun world, you might find a terribly over-leveraged business where no one ever tried to act fraudulently but some…
That’s why the above poster suggests all owners forfeit equity. The company survives but it is nationalized, at least temporarily. In practice, I think we will see companies being sold off the friends of the sitting president, and powerful senators. Today, at least they must at least pretend to be equal in their bailouts, which gives non affiliated companies a chance to receive money.