It's easier to stockpile billions of dollars when you have no idea what to do with it. The typical business does not have this luxury. Some tech companies are worth more than some country's GDPs. This advice is analogous to a billionaire telling a minimum wage employee to save more.
> Some tech companies are worth more than some country's GDPs. This doesn't mean much. Plenty of people are worth more than some countries' GDPs. Wikipedia's list of countries by GDP goes down to US$42 million.
>This advice is analogous to a billionaire telling a minimum wage employee to save more.
You realize that the retail business can be quite difficult and that a monthlong shuttering can and will drive many into bankruptcy. Rent payments without income will put the nail in the coffin for many businesses. I do agree with your sentiment. Paying their workers who are probably struggling significantly at the moment would be ideal. I don't feel that landlords need the $'s as much as those workers.
> a monthlong shuttering can and will drive many into bankruptcy. They should have saved up- a decent emergency fund is three+ months of expenses, or so I'm told. In a better world... Didn't save up? You lose your business. Either it goes under or you sell it at fire-sale prices to somebody who has the assets to keep it afloat until things stabilize (possibly the government). Your workers? Of course, the government w…
But everyone will end up poorer if we let mass bankruptcy to wash over the economy. Many of these SMBs and large corps took years to establish and have domain knowledge, trained work forces, supply chains that can’t just spin up easily. A little collective sacrifice and collaboration goes a long way when everyone is sinking together.
I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.
I agree but I think us folks in tech could be overly confident about our continued employment. Yes, companies have cash, but ad spending has dropped tremendously overnight. https://www.msn.com/en-us/news/other/facebook-twitter-revenu... And Apple, well, all of their stores are closed and I highly doubt they're selling a ton of expensive luxury goods right now -- as millions of Americans fear unemployment and a deep r…
Most companies don’t want to suddenly try to rebuild teams from scratch in 6 months. So generally a furlough is preferred outside of the most generic skills. Giant tech companies are likely more concerned about how long the economic recovery takes and if anything can be done remotely.
No, there is a one-size-fits-all solution. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... Stop interest on all loans for 90 days. Defer principal on all loans by 90 days. In 90 days, payments start up as before (and just end 90 days later). Same thing bubbles for all contracts. Leases and rents are free for 90 days. Contracts switch from net 30 to net 120 terms. Etc. You pause the cycle of debt. It w…
This is a recipe for bank failures and a financial crisis.
No, huge tax cuts and cutting regulations that prevent sub prime loans that leave the government incapable of handling a crisis is what causes Banks to fail...
I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.
Just to play devils advocate. Wouldn’t that be a large dead weight loss if every corporation had six months of operating expenses sitting around in low interest accounts? In total it could be as large as half the worlds GDP?
> Wouldn’t that be a large dead weight loss if every corporation had six months of operating expenses sitting around in low interest accounts? In total it could be as large as half the worlds GDP?
That should be enough to sustain the whole world economy then during something like Covid, no?
I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.
It's easier to stockpile billions of dollars when you have no idea what to do with it. The typical business does not have this luxury. Some tech companies are worth more than some country's GDPs. This advice is analogous to a billionaire telling a minimum wage employee to save more.
> It's easier to stockpile billions of dollars when you have no idea what to do with it.
You are missing the point entirely. A company only stockpiles money if it evaluates all other options, including paying dividends to shareholders, and still decides their best course of action is to not spend it. This is not a decision made passively or by forgetting to make a decision.
Just to play devils advocate. Wouldn’t that be a large dead weight loss if every corporation had six months of operating expenses sitting around in low interest accounts? In total it could be as large as half the worlds GDP?
Don't leave it in low interest account? It's likely millions of $$$, so index fund would be a likely storage for a lot of it
Doesn't seem like a good idea to keep your rainy day fund in an index. When things go to crap, you're going to take a huge hit before you can turn it into cash.
This is a recipe for bank failures and a financial crisis.
As a side note, a down vote shouldn't be the same as "I disagree." If you disagree, please explain why. So far, I've heard no helpful criticisms. Nor have I heard any reason for the down votes -- if I'm doing something wrong, you need to say what it is, or I'll keep doing it. If you want an echo chamber, then by all means bump this down to -50 with no further explanation.
I downvoted for the “it ain’t rocket science.” These are difficult problems.
All rent should be suspended, across the board, for everyone. Rent is a passive expense that businesses and individuals alike who are not getting any income right now will have no hope of paying.
OK, then what do all the landlord do when their mortgage is due? Property taxes?
I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise. If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.
> I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now. The outside shareholders of these companies: absolutely The executives and board: lol, no
Why is that? Did the executives and board sell their equity for cash prior to the drop in stock prices?