Rolling US Economy Into The Shitbin Thread

Meanwhile, coronavirus accelerates the death of retail, and things are so fucked up atm that it doesn't even make sense to file for bankruptcy
https://www.cnbc.com/2020/04/04/coronavirus-retail-is-used-to-existential-crises-but-bankruptcies-wont-save-it-now.html?&qsearchterm=retail%20bankruptcy

infrastructure week!

Instead, landlords are in their own pain and facing their own uncertainty

pobrecitos

There's some shorting stocks who've racked up sizable short-term cap gains.

so much for that story stock
https://finance.yahoo.com/news/peloton-halts-live-classes-employee-182923624.html

https://www.youtube.com/watch?v=7kNMIPBO-oQ

lol

I'd like to know where folks think they're going to be earning any capital gains rn

I would think people who have held stocks for a long time and are panic-selling are making capital gains (that stuff is still worth a lot more than it was 10 years ago) and a capital gains tax cut would presumably encourage more panic-selling, which sounds bad to me but what do I know, I'm not a Dow 36,000-level economist

i bought stock in a couple airlines a few days before they formally announced the bailout of airlines, figuring, the administration of this country is venal and corrupt, of course they are going to bail out the airlines. Once they formally announced the bailout, those stocks went up significantly. I almost doubled my money. (n.b. I think I made about $500 profit, but damn, it sure required less time and labor than working for $500) Capital Gains aren't only for stock profits -- they also apply to sales of real estate, for one.

arthur laffer to the rescue!

Tax non-profits. Cut the pay of public officials and professors. Give businesses and workers who manage to hold on to their jobs a payroll tax holiday to the end of the year.

“If you tax people who work and you pay people who don’t work, you will get less people working,” Laffer said. “If you make it more unattractive to be unemployed, then there’s an incentive to go look for another job faster.”

https://www.reuters.com/article/us-health-coronavirus-usa-laffer/cut-salaries-taxes-to-reopen-u-s-economy-says-laffer-conservative-fave-idUSKCN21Q3AT

That guy should be shot into space.

should have put an economist on the Challenger instead of a schoolteacher imo

now that there are three little vertical bars on the right, it's time to update:

https://i.imgur.com/ajKS6iW.png

the market has gone up like 20% in the last few weeks so clearly that's not bothering it much

it will be hilarious if the market makes it back close to its ATH's despite...reality. Everyone should be able to print their own money.

Yerac Monetary Theory

my printer would go "brrp brrp brrp brrp another one bites the brrrp"

Printers sold out worldwide, income inequality now based on who got to Best But the earliest

*Buy

Best Butt is funnier

Taking a cruel pleasure in yahoo finance comments like "Time to load up on cruise ship stocks, they haven't been this cheap in years!" Yup folks, expired milk on sale!

omg Best Butt: your source for technology, appliances, video games, and butts

Yup folks, expired milk on sale!

not a good metaphor tbh, unless you believe no one will ever go on cruise ships ever again.

Cruise ship patrons often are repeat customers, so their business won't dry up entirely. Newcomers will probably be wary for a few years to come.

It's a matter of if someone is investing for the short term or long term.

stocks tend to go down for good reasons most of the time they go down. If it was as simple as "buy stocks that go down a lot" it would be fairly easy to get rich.

This was the best week for the S&P 500 since 1974. https://t.co/d0PZfnCuVH #HelpIsOnTheWay #BailoutWorking https://t.co/02GoSyOMVb

— David Dayen (@ddayen) April 9, 2020

stonks.jpg

lol what a champ:

https://www.youtube.com/watch?v=qAt7Rg1u2l8

My bad, it was already posted in the US politics thread. Still bears repeating, though.

it's okay, I avoid the US politics thread!

if anyone wants to talk about the CARES Act -- I made this thread

US Politics and Economics - They CARES a Lot!

bookmarked!

Bankers will always get paid.

The mystery behind the Fed’s refusal to suspend bank dividends

Indeed, bank regulators of other developed economies, including the European Central Bank and the Bank of England, have asked their banks to suspend dividends, buybacks, and discretionary bonuses. As the Bank of England put it, these restrictions “are a sensible precautionary step given the unique role that banks need to play in supporting the wider economy…”

Ironically, U.S. regulators are going in the opposite direction. A few weeks ago, they appropriately gave large banks permission to dip into supplemental capital buffers designed to give them the ability to expand their balance sheets in times of stress. But then they eased rules already in place that would have effectively required the biggest banks to stop shareholder payouts and discretionary bonuses once they dipped into those buffers. The regulators were concerned that big banks would be disincentivized to expand lending capacity if it meant they had to stop paying dividends and bonuses. But if that was the problem, the simplest solution would be to do what European and British regulators have done: just tell them they had to stop paying dividends and bonuses, whether they used their capital buffers or not.

https://i.imgur.com/QP7OIOs.png

But the Fed will rescue the economy, because "the economy" is code for "banks and financial markets", so rest assured Karl.

well -- one thing is, that a lot of the economic disaster aid is being paid in low-interest partially forgivable loans that are supposed to be going to pay workers, that are going through banks -- and the banks have regulations about how much they can lend -- so, in a sense, we actually do need the banks to have money right now.

we always need the banks. they are indispensable. the problem is usually that they know it and so frequently abuse that centrality.

omg really????

says the woman who just instructed me that "in a sense, we actually do need the banks to have money right now"

oh good, at least we are clear that you are aware of my gender in the context of your condescencion!

we can strike woman and substitute person if you prefer. either works equally well for me. your call.

nah it's fine, you are condescending to everyone, that's my point.

point taken

from Dean Baker:

This means that when we unwind the lockdowns, most likely some time in May (I’m referring to the politics, not passing judgement as a public health expert) we will have a lot of people looking to make up for having gone two months or more without spending much money. An advantage of car and house sales is that they can generally be done in ways that are consistent with social distancing. Realtors and car dealers don’t have to come into direct contact with their clients and presumably can make do without a ceremonial handshake to seal a deal.

A surge in car sales and house sales will likely send factory demand booming, as auto manufacturers will soon see bloated inventories run down. House sales guarantee a big demand for appliances, like refrigerators and washing machines. Whether U.S. manufacturers are positioned to meet this demand (it will require maintaining safe working conditions in their factories) is an open question, but if they can’t meet the demand, it will lead to a surge in imports, when new supply sources can be found.

The potential backlogs here are likely to mean that sellers will have considerable pricing power, at least for a period of time. Other businesses are also likely to see capacity constraints, accompanied by higher costs. For example, stores will likely need to limit the number of people who enter and have someone at the door doing at least minimal testing (e.g. taking temperatures at the door and asking about contacts), in order to provide some assurance of safety. The capacity constraints will be worse insofar as many businesses do not reopen.

Insofar as restaurants are able to reopen, they will also need to do some checking and likely steer people to outdoor seating and/or have customers much more widely spaced than normal. In the same vein, airlines are likely to fly with limited capacity, for example Delta is not selling middle seats.

To me, this looks like a story where we see substantial price hikes in many parts of the economy, as businesses adjust to a world where the pandemic is somewhat under control, but far from completely contained. The growth figures for the third quarter are likely to show a sharp rebound from a second quarter plunge, but still leave us well-below pre-crisis levels of output. This will still leave us with a serious slump and high unemployment, but a real problem with inflation.

We can work through this period, if the Fed allows the economy the time to adjust to new circumstances, but there is no guarantee it will be so accommodating. I should add that it easy to envision a far worse scenario if Congress does not approve additional funds for the small business loan program and does not approve enough money for state and local governments to avoid major austerity measures. We should know whether they have come through in these areas in a week or so.

Do a bunch of people "looking to make up for having gone two months or more without spending much money" make up for the 20+ million new unemployed people?

I don't think so - hence the prediction that "This will still leave us with a serious slump and high unemployment, but a real problem with inflation." - Kind of a worst of possible worlds

like, i don't like to count other peoples' money but I have been surprised about the nonessential stuff people are saying they want to buy with their $1200 +whatever. So maybe ^^^.

'i didn't spend much over the last two months; better go crazy now' doesn't feel like standard behavior to me

Yeah he could be wrong. Things like services, for instance, won't 'roar' back. You can't get three haircuts at once.