Looking at this from the perspective of a business

[IDBillzFan]

4 minutes ago, Magox said:

 

We'll see how effective the Relief bill will eventually be.  But what is it exactly that you are against in it?  Are we talking about these miniscule pet projects such as the $25 Million for the Arts deal?   I say miniscule from a relative basis.

 

Money was provided to state and local governments.  I don't see how there is anything wrong with that.  There was over $100 Billion given to hospitals.

 

There was $350 Billion for small businesses with strings attached, where they had to keep all their employees still employed.

 

There was $500 Billion for Big Business.  It's not the hotels, airlines and other big businesses fault, they needed a lifeline.  This isn't like the banking crisis of 2008 where we bailed out banks that had these crazy business practices.  This is not a moral hazard issue which was my main argument against the bank bailout bill.  Even though now rethinking it, in principle I am still against that bill but it was a necessary evil.

 

I would like to understand why you are so vehemently against the Relief Bill?

 

First, just to correct, I referenced the Recovery Act that Obama passed, not the Relief Bill. The Recovery Act laundered too many kickbacks to donors and it was a schittshow.

 

That said, I find things like the Kennedy Center to be a bad look, especially when we see they got millions of dollars, but pretty much put everyone on furlough. I do understand it's relative. In fact, as much as I hate taking on federal debt, I do like the forgivable part of the small business loans. Based on why I described above, THAT works directly to my favor ASSUMING the money can get to us quickly enough. As I'm sure you know, most of us don't have much time.

 

But we could extend it further than eight weeks of forgivable loan if we took the 25M the Kennedy Center and the other slush items and pointed them to more Small Business payroll and operations help. It's just unfortunate that this is the way government works.

 

On my end, I've met with each of my employees in an effort to keep everyone on board and, putting my George Bailey into the mix, discussed what each of them needs bare minimum just to get by for the next three months so we can keep going with their bennies. That's still a tough number, but I'm trying to buy as much time as possible until the loan hits. Otherwise, we go full austerity to my partner and me until we can bring them back on.

[Orlando Buffalo]

10 minutes ago, Tiberius said:

That's great, I guess. Can you just specifically name, say, three rules that were changed and what they were? That was all mostly just vague numbers, like a quote from this WH (lies?) that they were at a 22-1 ratio for cutting rules. No vague rules, just a rule that changed something and what it is? 

Off the top of my head he has allowed small businesses to join together to buy health insurance as one entity, I also know in Florida that the laws have changed as far as population density to be more flexible with an area.

[Tiberius]

1 minute ago, Buffalo Timmy said:

Off the top of my head he has allowed small businesses to join together to buy health insurance as one entity, I also know in Florida that the laws have changed as far as population density to be more flexible with an area.

Ummm...ok! 

[Orlando Buffalo]

1 minute ago, Tiberius said:

Ummm...ok! 

I appreciate you admitting your ignorance on the subject. It takes a big man to go from condescending to accepting his complete inferiority.

[Magox]

10 minutes ago, IDBillzFan said:

 

First, just to correct, I referenced the Recovery Act that Obama passed, not the Relief Bill. The Recovery Act laundered too many kickbacks to donors and it was a schittshow.

 

That said, I find things like the Kennedy Center to be a bad look, especially when we see they got millions of dollars, but pretty much put everyone on furlough. I do understand it's relative. In fact, as much as I hate taking on federal debt, I do like the forgivable part of the small business loans. Based on why I described above, THAT works directly to my favor ASSUMING the money can get to us quickly enough. As I'm sure you know, most of us don't have much time.

 

But we could extend it further than eight weeks of forgivable loan if we took the 25M the Kennedy Center and the other slush items and pointed them to more Small Business payroll and operations help. It's just unfortunate that this is the way government works.

 

On my end, I've met with each of my employees in an effort to keep everyone on board and, putting my George Bailey into the mix, discussed what each of them needs bare minimum just to get by for the next three months so we can keep going with their bennies. That's still a tough number, but I'm trying to buy as much time as possible until the loan hits. Otherwise, we go full austerity to my partner and me until we can bring them back on.

 

Got ya!

 

That all makes sense!  Every bit of it

[Tiberius]

Just now, Buffalo Timmy said:

I appreciate you admitting your ignorance on the subject. It takes a big man to go from condescending to accepting his complete inferiority.

You are full of it, just stop while you are behind 

[Magox]

40 minutes ago, RochesterRob said:

  Let's ponder a couple of scenarios.  A casino such as Del Lago is only going to staff based on business they actually see coming through the door.  If business is running 50 percent of normal the whole contingent of employees who were on the payroll before the virus shutdown will not be called back during that time.  There will still be people at home who were employed by Del Lago but are not bringing in a paycheck.  A home improvement contractor is only going to have people on the payroll that can actually bring in income for the business.  If 25-30 percent of that contractor's orders are cancelled then that contractor is going to have layoffs relative to the downturn in business.

 

I get that.  There is no magic panacea.  It will help speed the recovery some, but it's essentially just pain pills to make the recovery more tolerable from a human suffering standpoint.  We shouldn't discount that.  They are citizens and they are suffering.

[B-Man]

5 minutes ago, Magox said:

 

I get that.  There is no magic panacea.  It will help speed the recovery some, but it's essentially just pain pills to make the recovery more tolerable from a human suffering standpoint.  We shouldn't discount that.  They are citizens and they are suffering.

 

 

Thanks for this thread.

 

I have a lot of experience in 65 years, but economics has always been a tough subject for me.

 

 

 

PS: thanks for not responding to the bickering children in the thread.

 

 

 

.

[Warren Zevon]

I own a seasonal business and will not take a loan to open up early and pay my employees for April through whenever when I will not be able to do business. Luckily all my employees except one (Full time - still getting paid) are part time and understand why I have not opened.

[Foxx]

1 hour ago, Magox said:

 

I'm not arguing this.

 

But, that is how it is.  The government pays back Treasury bond holders, so whomever that may be are the ones that get paid.  And the U.S has not shown one inkling that it cannot repay its debt.  When you see issues like you saw Greece or Argentina with their debt defaults, it wasn't because of the amount of debt they had accumulated, it was because they couldn't repay the cost of servicing that debt or at least the fear of that.

 

 

 

The U.S right now at this moment is going to have a tremendous shortfall in revenues, that will bounce back whether we do stimulus bills or not.  But what an effective stimulus plan would do is quicken the recovery, get the economy back on track sooner and more importantly help out millions of people get employed and/or businesses get lifted.

 

In regards to your second point.  What's the point of making that argument.  That's like saying Chicago Bulls only won those NBA titles because of Michael Jordan.

 

We have the US dollar, and there is nothing remotely close to replacing that at this point in time.

i will answer your second portion first because it bears directly upon the first.

 

i make the argument that we print money at the press of a keystroke, because we do and have for quite a number of years now. there is no underlying asset of which the value is based upon. it is a faith based valuation, nothing more. as such, it is an inflationary supply not deflationary. we came off the gold standard in '33 and completely severed any link between gold and the dollar in '71. as a result, we have slowly and as time passes, with a greater alacrity discovered that there is nothing really stopping us from just printing it as needed. of course, we have to do on the downlow so that the sheep don't get an understanding of just what is going on. the other countries of the word are quite aware of what's going on and this is why Russia, China and a good number of other countries would love to replace the USD. they just can't get their ***** together enough (because they sure as hell don't trust each other enough) to do so. the day will come though, probably quicker than anyone thinks and when it does, a world of hurt awaits the American populace.

 

all of which directly bears upon the first statement i made.

 

your analogy is way off.

 

paying back bond holders? lol. i don't think i should even have to point out how the whole thing is a sham.

 

wait till the Cypriot Haircut is bandied about, don't fall for it. don't fall for NIRP either.

Edited April 1, 2020 by Foxx

[Magox]

1 minute ago, Foxx said:

i will answer your second portion first because it bears directly upon the first.

 

i make the argument that we print money at the press of a keystroke, because we do and have for quite a number of years now. there is no underlying asset of which the value is based upon. it is a faith based valuation, nothing more. as such, it is an inflationary supply not deflationary. we came off the gold standard in '33 and completely severed any link between gold and the dollar in '71. as a result, we have slowly and as time passes, with a greater alacrity discovered that there is nothing really stopping us from just printing it as needed. of course, we have to do on the downlow so that the sheep don't get an understanding of just what is going on. the other countries of the word are quite aware of what's going on and this is why Russia, China and a good number of other countries would love to replace the USD. they just can't get their ***** together enough (because they sure as hell don't trust each other enough) to do so. the day will come though, probably quicker than anyone thinks and when it does, a world of hurt awaits the American populace.

 

your analogy is way off.

 

paying back bond holders? lol. i don't think i should even have to point out how the whole thing is a sham.

 

wait till the Cypriot Haircut is bandied about, don't fall for it. don't fall for NIRP either.

 

Let's just say that I disagree with what you said.  But I understand where you are coming from.

[/dev/null]

2 hours ago, Doc said:

I'd be all for it...if most of the money weren't going to be wasted.  Unless we get China to pay for it...

 

China won't pay for it.  But I wonder how much of this $2T will be used to buy goods and material from the regime responsible for starting this clusterf*ck

[Orlando Buffalo]

4 hours ago, Tiberius said:

You are full of it, just stop while you are behind 

Once again where was I wrong? I said he cut red tape I gave you two examples that impacted my direct circle of friends and you won? 

[IDBillzFan]

10 minutes ago, Buffalo Timmy said:

Once again where was I wrong? I said he cut red tape I gave you two examples that impacted my direct circle of friends and you won? 

 

There's a strong wind blowing and you're pissing in it.

 

Tibs is just going to run you around and around until you can't possibly fathom that someone could be that intentionally stupid. So you'll go another round or two and then at one point you will stop, read, and realize that yes, someone could be that intentionally stupid and his name is Tiberius.

 

Save yourself the trouble. Put him on ignore like most everyone else.

[Orlando Buffalo]

10 minutes ago, IDBillzFan said:

 

There's a strong wind blowing and you're pissing in it.

 

Tibs is just going to run you around and around until you can't possibly fathom that someone could be that intentionally stupid. So you'll go another round or two and then at one point you will stop, read, and realize that yes, someone could be that intentionally stupid and his name is Tiberius.

 

Save yourself the trouble. Put him on ignore like most everyone else.

I have never done ignore but I am about to figure it out.

[KRC]

11 hours ago, Buffalo Timmy said:

I have never done ignore but I am about to figure it out.

 

It definitely improves the experience. Get rid of the noise.

[Magox]

As is being discussed in another thread, 

Just to add more context to the L, W, V and Nike Swoosh recoveries:

 

V - Recovery

 

The likelihood of a V shaped recovery is virtually Nil.    A V shaped recovery means that the economy will be right where it left off before the downturn within a short-time period of let's say less than a year.  The reason why we won't see a complete V is because there will be businesses that will be permanently closed.   And although at some point those businesses will be replaced, that doesn't take place overnight. Here is a report out of Michigan where they estimate 1/3 of all restaurants will permanently close.  

 

Quote

 

"We’ve been using the number one-third, if this will be as prolonged as it feels like it's going to be," Winslow said, citing the projected number of restaurants that could close permanently. "We don’t know that for sure yet. But the longer it goes, the higher that number is going to be.

"One-third of restaurants — you’re getting into 6,000-location territory. That’s kind of hard to wrap your head around. Six thousand businesses are going to close as a result of this. ... And through no fault of their own."

The MRLA estimates that Michigan's hospitality industry employed almost 600,000 people and accounted for $40 billion in annual sales.

But that was before COVID-19.

 

 

Which is why I am saying that the longer it takes to get people back to work, the more of these sort of businesses that will be permanently closed which thereby means it takes longer to recover back to pre CoronaVirus downturn.

 

W - Recovery

 

Quote

 

 

 

 

Basically what would need to happen here is that we relax the social distancing measures either too soon or the effectiveness of controlling the outbreak once we begin to phase in the workforce gets out of hand, therefore leading the economy to dip right back down again.  

 

L - Recovery

 

Quote

 

 

For me this is the likely bad case scenario.  Where we begin to phase in the workforce beyond June.  That's not to say that you would have a profound L shape if we began in July, but the further we push it out and the more stringent the Social distancing policies post "flattening the curve" and phasing in the workforce, the more that L shape takes place.  It just basically means that we dug a really deep hole and lots of businesses will be permanently shuttered or seriously impaired and it takes time to get the country back to whole after such a deep downturn.  Which is why the Relief bill was so important, at least in theory.   That bill was so that many of these small businesses and corporations can either retain their workforce or rehire them almost immediately.

 

Nike Swoosh Recovery
 

Quote

 

 

 

For me this is the optimistic case.  I think it's 50% chance this, 40% chance L shaped, 5% V shaped and 5% W shaped.

 

The Nike Swoosh is where we get to begin phasing in the workforce relatively soon, hopefully by June.  Where the curve has been flattened in just about all places in the country.  And all the measures that are needed to contain future outbreaks are in place with solid social distancing policies and the economy snaps back initially and then takes about another year after the initial snap back to get back to whole. Most likely around 18 months or so.

 

 

 

Which leads me to the Infrastructure Bill.  The more EFFECTIVE Stimulus that can be added by the Federal government, the quicker the recovery will be.  Which means millions of more people will go through less suffering.  And there is no better time to borrow that money than now.  That is a fact.  The interest rates will never be as low as they are today....If there ever was a time to borrow a fukton of money to make the economy whole, now is that time.

[RochesterRob]

12 minutes ago, Magox said:

As is being discussed in another thread, 

Just to add more context to the L, W, V and Nike Swoosh recoveries:

 

V - Recovery

 

The likelihood of a V shaped recovery is virtually Nil.    A V shaped recovery means that the economy will be right where it left off before the downturn within a short-time period of let's say less than a year.  The reason why we won't see a complete V is because there will be businesses that will be permanently closed.   And although at some point those businesses will be replaced, that doesn't take place overnight. Here is a report out of Michigan where they estimate 1/3 of all restaurants will permanently close.  

 

 

Which is why I am saying that the longer it takes to get people back to work, the more of these sort of businesses that will be permanently closed which thereby means it takes longer to recover back to pre CoronaVirus downturn.

 

W - Recovery

 

 

Basically what would need to happen here is that we relax the social distancing measures either too soon or the effectiveness of controlling the outbreak once we begin to phase in the workforce gets out of hand, therefore leading the economy to dip right back down again.  

 

L - Recovery

 

 

 

For me this is the likely bad case scenario.  Where we begin to phase in the workforce beyond June.  That's not to say that you would have a profound L shape if we began in July, but the further we push it out and the more stringent the Social distancing policies post "flattening the curve" and phasing in the workforce, the more that L shape takes place.  It just basically means that we dug a really deep hole and lots of businesses will be permanently shuttered or seriously impaired and it takes time to get the country back to whole after such a deep downturn.  Which is why the Relief bill was so important, at least in theory.   That bill was so that many of these small businesses and corporations can either retain their workforce or rehire them almost immediately.

 

Nike Swoosh Recovery
 

 

 

For me this is the optimistic case.  I think it's 50% chance this, 40% chance L shaped, 5% V shaped and 5% W shaped.

 

The Nike Swoosh is where we get to begin phasing in the workforce relatively soon, hopefully by June.  Where the curve has been flattened in just about all places in the country.  And all the measures that are needed to contain future outbreaks are in place with solid social distancing policies and the economy snaps back initially and then takes about another year after the initial snap back to get back to whole. Most likely around 18 months or so.

 

 

 

Which leads me to the Infrastructure Bill.  The more EFFECTIVE Stimulus that can be added by the Federal government, the quicker the recovery will be.  Which means millions of more people will go through less suffering.  And there is no better time to borrow that money than now.  That is a fact.  The interest rates will never be as low as they are today....If there ever was a time to borrow a fukton of money to make the economy whole, now is that time.

  With the Swoosh you are assuming creditors will be willing to grant credit readily.  I worry that creditors will be very wary of granting credit to anything that they perceive as being shaky which could be most of the economy in their eyes.  So does the government twist private lending institutions into making loans?  Does the government get into the credit business wholesale and the taxpayers assume the risk of default?  Maybe it is just me but my thought is that swoosh believers are working in a vacuum without understanding the economy in a broad sense.

[Magox]

2 minutes ago, RochesterRob said:

  With the Swoosh you are assuming creditors will be willing to grant credit readily.  I worry that creditors will be very wary of granting credit to anything that they perceive as being shaky which could be most of the economy in their eyes.  So does the government twist private lending institutions into making loans?  Does the government get into the credit business wholesale and the taxpayers assume the risk of default?  Maybe it is just me but my thought is that swoosh believers are working in a vacuum without understanding the economy in a broad sense.

 

So that is an interesting point you bring up.  There is a huge difference though between a regular business loan and a loan under this program.

 

Everything is 100% backed up by the federal government.  And does have leveraging capabilities through the federal reserve.    

 

In essence, there will be some bad loans that will never be repaid and that will be taken as a loss from the federal government and of course there will be good loans that will be repaid.  Interest rates for borrowers will be anywhere between .5% - no more than 4%.   If it's under the (PPP) then they essentially get a grant that will pay for 250% of their payroll that could be used for payroll, mortgage/rent, utilities.

 

My hunch is that they will take a similar approach to the $1200 stimulus check and unemployment insurance programs they are enacting.  Which is that they know that some of this money is not going to go to places that actually need it, but since there is an urgency to get the money out there as quickly as possible they are bypassing these inefficiencies and just pretty much putting the money in a snowblower and blasting it full tilt to get money in people's hands.

 

I understand that the sound of that is horrible.  Waste of money etc.  The problem is that if they were to fine tune that and tailor it to get into people's hands that most need it, it would take much longer to identify those people and effectively get it into their hands, which of course leads to much more human suffering and a worse off economy.

 

 

So to circle back to what I was saying, I think the banks are going to have a clear directive from Secretary Mnuchin to get this money out quickly.  They won't be looking at creditworthiness nearly as much and will provide the banks and lending institutions clear criteria for the lenders.  If they meet that criteria, the money goes out on that same day.  Keep in mind, the government is backing it.  Banks have virtually no risk.

 

So I do think that the money will go out in record speed.

[RochesterRob]

9 minutes ago, Magox said:

 

So that is an interesting point you bring up.  There is a huge difference though between a regular business loan and a loan under this program.

 

Everything is 100% backed up by the federal government.  And does have leveraging capabilities through the federal reserve.    

 

In essence, there will be some bad loans that will never be repaid and that will be taken as a loss from the federal government and of course there will be good loans that will be repaid.  Interest rates for borrowers will be anywhere between .5% - no more than 4%.   If it's under the (PPP) then they essentially get a grant that will pay for 250% of their payroll that could be used for payroll, mortgage/rent, utilities.

 

My hunch is that they will take a similar approach to the $1200 stimulus check and unemployment insurance programs they are enacting.  Which is that they know that some of this money is not going to go to places that actually need it, but since there is an urgency to get the money out there as quickly as possible they are bypassing these inefficiencies and just pretty much putting the money in a snowblower and blasting it full tilt to get money in people's hands.

 

I understand that the sound of that is horrible.  Waste of money etc.  The problem is that if they were to fine tune that and tailor it to get into people's hands that most need it, it would take much longer to identify those people and effectively get it into their hands, which of course leads to much more human suffering and a worse off economy.

 

 

So to circle back to what I was saying, I think the banks are going to have a clear directive from Secretary Mnuchin to get this money out quickly.  They won't be looking at creditworthiness nearly as much and will provide the banks and lending institutions clear criteria for the lenders.  If they meet that criteria, the money goes out on that same day.  Keep in mind, the government is backing it.  Banks have virtually no risk.

 

So I do think that the money will go out in record speed.

  Even with guarantees banks are held to standards in terms of making sound loans.  A board of directors will want to know that they will not be held to any penalties in making loans that are not sound by traditional standards.  Penalties that could include fines and/or imprisonment.  Also, with the general economy twisting in the wind a couple trillion dollars will dissipate rather soon given what modern businesses are valued at.  News this morning that impacts WNY'rs is in quite a few instances milk is not being picked up from dairy farms.  This is a loss of income plus nearly all dairies have commercial debt that they now will have great difficulty servicing.  Who gives the OK in the federal government to roll loans over indefinitely which is a violation of maintaining loan quality in normal times?  Let dairies fail and the value of assets falls greatly reducing the solvency of other remaining dairies.  In my mind "W"s and swooshes are all cubicle talk by people who have no idea as to how the economy functions outside a classroom looking at non-realistic variables.