Busted retailers use bankruptcy to break leases by the thousands • Hacker News Board

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

#251

Post by simonh » Fri, Aug 07, 2020, 9:09 AM UTC

rodgerd wrote: post #84

WanderPanda wrote: post #74

Earlier quoted context omitted.

And yet again the cleanest method would be to not bail out the banks and let the assets be actioned to the highest bidder. Everything else is trading off long term efficient ressource allocation in favor of short term stability.

Funny how it's a moral hazard to bail out individuals weighed down by debt, but an economic necessity to bail out millionaires and billionaires who didn't do their risk analysis.

I agree bailouts should not benefit shareholders, but it can be pragmatic to rescue businesses, including banks, that are systemically important. That may mean the government temporarily assuming equity in, or ownership of the enterprise. The important thing is that it's the interests of the economy that are being safeguarded, not those of investors.

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

#252

Post by AniseAbyss » Fri, Aug 07, 2020, 9:18 AM UTC

jldugger wrote: post #231

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…

> 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. [1]: https://qz.com/1032723/theres-much-more-empty-retail-space-i... [2]: https://amp.…

I like to joke that the US economy depends on how much crap people buy in December (and many, many factories in China depend on it too).

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

#253

Post by bleuedejapan » Fri, Aug 07, 2020, 9:18 AM UTC

jader201 wrote: post #237

jldugger wrote: post #232

Earlier quoted context omitted.

>>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.

Considering that there will be a huge amount of unused, cheap real estate, and that only tech companies seem to be holding off the crisis, it is pretty much relevant - real estate will be a huge opportunity for tech.

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

#254

Post by AniseAbyss » Fri, Aug 07, 2020, 9:25 AM UTC

timy2shoes wrote: post #83

gruez wrote: post #37

Earlier quoted context omitted.

>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. I wouldn't worry about that. I fully expect the federal reserve to "fix" this by buying the toxic assets with printed money.

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?

Some of the largest investors in the world are pension funds and no we can't let those fall.

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

#255

Post by PopeDotNinja » Fri, Aug 07, 2020, 9:30 AM UTC

treyfitty wrote: post #111

I’ve owned a physical business before. What the article fails to mention is that small to medium sized businesses generally sign leases with joint and several (personal) liability attached. Landlords can and do go after the person after the bankrupt LLC is raided.

A lot of people think that forming an LLC or corporation will protect your personal assets from creditors. When I ran my business, I learned banks like collateral, and given my business has no assets other than the cash in the bank, anything debt I took on would need to be secured by my personal assets. If you use your personal assets as collateral, you’d better hope your business doesn’t run out of money before you’ve paid off the debt.

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

#256

Post by beojan » Fri, Aug 07, 2020, 10:04 AM UTC

koolba wrote: post #181

patmcc wrote: post #146

Earlier quoted context omitted.

>>>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…

> For most publications that time past a long time ago.

The exception would be Bloomberg, or the Financial Times. Publications read for information to make decisions on.

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

#257

Post by throwanem » Fri, Aug 07, 2020, 11:23 AM UTC

samcodes wrote: post #229

throwanem wrote: post #195

Earlier quoted context omitted.

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?

Meaning the whole "power struggle between branches of government" claim, which I referenced in a deliberately dismissive way because I really don't want to get into it. I'm more interested in trying to figure out how the Fed potentially buying up toxic securities via FOMC, instead of letting them blow up on their own, might affect the outcome this time.

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

#258

Post by radegast » Fri, Aug 07, 2020, 11:51 AM UTC

jt94mf90d wrote: post #242

mgkimsal wrote: post #225

Earlier quoted context omitted.

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

The point he was making was the thanks obama doesnt make cents. Thank bush for the economic catastrophe for obama to inherit.

Alright. Thanks Obama for closing Guantanamo as he promised. Better now?

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

#259

Post by phreeza » Fri, Aug 07, 2020, 12:38 PM UTC

rdtwo wrote: post #217

ping_pong wrote: post #212

Earlier quoted context omitted.

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…

I think you saw the flash waited a couple seconds realized you weren’t incinerated and assumed everything is ok. I think you are missing the fact that there is enormous destabilizing energy traveling you way that’s going to wreck your world. It would be like calling the Great Depression over after in 1930 when the market recovered.

How can we track the progression of this wave? Earnings calls? Any other ideas?

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

#260

Post by pgrote » Fri, Aug 07, 2020, 1:16 PM UTC

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…

>Why reward people who gambled and lost? Bust them out.

Why reward corporations and investors 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.

Other companies will buy the businesses 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.

And this was the issue with the 2008 fiasco. The government chose to save large financial institutions instead of breaking them up so the problems would be less likely to happen again. They chose to save large corporations over homeowners.

It is happening now with the pandemic response. I get the federal government wanted to dump a ton of money into the economy through PPP, but man, you cannot tell me the Catholic Church needed it. They are sitting on assets worth billions they could have sold/borrowed against to stay afloat. Same with large private educational institutions and public corporations.

The next round, and there will be a next round, will be more of the same. Carve outs will be rampant.

The USA should have looked at other countries providing direct income replacement to citizens. 70% income replacement sent to citizens and not force them through state's unemployment processes. Other countries did this and it worked.