The economy

****ing dropped 2000 points again........ Trump needs to conceal the stocks data like CDC did to coronavirus.

 

We hit the snooze button on this 2 years ago. Corporate debt winter is coming.

FT- The seeds of the next debt crisis

The era of ZIRP and near ZIRP policies encouraged CEOs to overleverage w/ impractical buyback plans to inflate stock prices.

Hmm, hopefully BAILOUT DON will open up raspy grandma's wallet and make it all go away...this year.

 

Young people are going to have to go to work again and old people will need to stay home. The panic and damage to the economy is going to outweigh the damage of the virus in the end.

 

This is a moral stain on all of them.

I don't know if a "top tier" Democratic Senate candidate exists in Nebraska or ok but if there is one he or she needs to make a runin the fall - 20% unemployment will make this vote a liability.

 

People like Ben Sasse and Rand Paul talk about sticking to Constitutional principles in bad times and goods yet when it came to taking the Constitutional route to stop a President behaving blatantly unconstitutional they sided with that President than the Constitution.

 

We still haven't hit the bottom yet on this market and with months of shutdowns I doubt we will see a recovery anytime soon.

 

I wouldn't worry about this. I am quite confident that the "job creators" will just, ya know, create some jobs.

 

[Business Insider] Airlines are begging for a bailout, but they've used 96% of their cash on buybacks over the past 10 years. It highlights an ongoing controversy over how companies have been spending their money.

The Trump administration has responded to the airline industry's request and proposed a $50 billion bailout as part of its massive $1 trillion stimulus package. The ultimate goal is to jolt the American economy by flooding it with cash.

Major airlines are reeling from massive wave of cancellations as Americans stay home and governments around the world implement travel bans to curb the spread of the coronavirus.

"We cannot afford to wait long for assistance," the trade association Airlines for America said in a statement, warning that some companies could be bankrupt by June.

But there's a catch. Over the past decade, major airlines — including Delta Airlines, United Airlines, and Southwest — have used roughly 96% of their available cash on stock buybacks, according to Bloomberg. By reducing share count, these repurchases have pushed stock prices higher.

In the process, they've drawn criticism for how they've boosted shareholder returns without directly helping businesses. The activity is central to a broader discussion about how companies use their cash — and whether they should be doing something different.

Some experts argue that these companies should have instead used those proceeds to build themselves a financial cushion or address labor issues. Tim Wu, a Columbia University professor, targeted American Airlines in a recent New York Times op-ed.

"It could have stored up its cash reserves for a future crisis, knowing that airlines regularly cycle through booms and busts," Wu wrote. "It might have tried to decisively settle its continuing contract disputes with pilots, flight attendants and mechanics."

He added: "It might have invested heavily in better service quality to try to repair its longstanding reputation as the worst of the major carriers."

Going beyond academia, the prospect of an airline bailout also prompted a wave of criticism from prominent Democrats, such as Rep. Alexandria Ocasio-Cortez of New York.

"96% of airline profits over the last decade went to buying up their own stocks to juice the price - not raising wages or other investments," Ocasio-Cortez wrote on Twitter. "If there is so much as a DIME of corporate bailout money in the next relief package, it should include a reinstated ban on stock buybacks."

Even some Republicans came out against the idea of the government coming to the rescue of the battered airline industry.

"I do not believe in the bailouts for the companies, period ... They are smart people and will figure it out," Florida Sen. Rick Scott said.

A historical precedent for frustration

Disdain for buybacks — and companies' propensity to do them as much as possible — is hardly a new phenomenon. Following the GOP tax plan that went into effect in 2018, corporations across all industries came under fire for how they spent their proceeds.

Led by the tech and finance sectors, buybacks peaked to a record in 2018, according to a according to JPMorgan. For many, the takeaway was simple: These companies were electing to enrich shareholders, rather than invest in their businesses and labor forces.

The pending airline bailout will also likely remind many of the financial relief provided to major Wall Street banks in the wake of the Global Financial Crisis. Congress' $700 billion legislative package was known as the Troubled Assets Relief Program (TARP) and it set up a mechanism for the federal government to buy mortgage-backed securities that had gone bad.

 

^Just read that. Posted this in the UBI/stimulus thread...
Mark Cuban: Bailed out companies shouldn’t be allowed to buy back stock

MAKE IT HAPPEN BAILOUT DON
https://www.cnbc.com/2020/03/19/tru...backs-as-condition-of-corporate-bailouts.html

Proposals to put conditions on federal bailouts have come from progressive lawmakers including Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y.

Warren has proposed that companies receiving federal assistance should be barred from buybacks permanently, and prevented from issuing dividends or executive bonuses for three years.

Warren has also proposed requiring those firms to boost their minimum wage to $15 an hour within a year of the end of the crisis, and provide a board seat to workers.

“If there is so much as a DIME of corporate bailout money in the next relief package, it should include a reinstated ban on stock buybacks,” Ocasio-Cortez tweeted earlier this week.​

 

Did all of them vote for the corporate tax cuts?

 

I have to say I'm fairly impressed by the initial GOP Senate proposal. There's a lot more needed and a lot of this needs to be and will be changed, but I'm surprised the GOP included the bolded items. I thought Dems would have to fight hard for stuff like that. Those are important to fight moral hazard. I'd like to see the government get stock in these companies as they did in 2008 and then be able to sell it for a profit to taxpayers if the companies recover.

https://www.cnbc.com/2020/03/19/coronavirus-updates-senate-republicans-to-release-relief-bill.html

• Cash payments of up to $1,200 would go to individuals, with up to $2,400 for couples. The sum would increase by $500 for every child. The check totals would start to phase out above $75,000 in adjusted gross income based on 2018 tax returns. People with no federal tax liability would get only $600.
• Extend the tax filing deadline to July 15 from April 15.
• Corporations could delay estimated tax payments until Oct. 15. Employers and self-employed people could delay payroll taxes.
• Up to $50 billion for airlines, $8 billion for cargo air carriers, and $150 billion for other severely distressed businesses. The government has the right to “participate in the gains” of any business it lends money to.
• For two years, no executive at a company receiving a business loan may make more than $425,000 in total compensation. Executives whose salary has already been determined through collective bargaining agreements may be exempt from that restriction.
• Any company with less than 500 employees is entitled to a small business loan. The cap of that loan is either $10 million or the average of monthly payments. Businesses use the loan to pay for payroll including paid sick leave, salaries, mortgages, rent, utilities or other debt obligations.
• All private health plans must cover testing without cost-sharing and increase funding for community health centers. It also aims to spur the hiring of more health care professionals to fight the pandemic.
• The plan gives the Education Department authority to suspend federal student loan payments for up to three months.

 

Blackburn was a member of the House at the time, and voted for the cuts twice. The rest were all Senators and voted for it along party lines.

 

Futures look up so the relief bills might be calming the market. We might get the first two day run of the markets finishing in positive territory in the last few weeks.

I still don't think we are going back to bull territory.

 

From what I can see it's still business as usual for a lot of the city. Nightlife is dead, but people are still packed in the stores, banks, getting their haircut.

The longer we postpone full lock down there longer it will take to stop this. We're gonna be looking at months of economic shutdown if we don't just pull the trigger on a quarantine. These half measures are just extending the suffering.

 

Actually that isn't quite true. Flattening the curve makes the virus take LONGER to actually run it's course through the public. That's kind of the point though. You slow down the rate of infection to give Hospitals a chance to work. When the virus is left alone to spread the curve spikes up fast destroying hospital capacity, killing many more people but then the virus dies.