Economic "Doom" Mega thread

clampett

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And Dems don't want doctors and nurses whose husbands work to get any of the $1200.

Can we just agree that both parties only care about the powerful special interest groups who fund their campaigns? Ok then.
If I have to lean one way or the other, as an extremist, I'd rather help the little guy make it through and help the businesses. If companies go out of business, you have to consider the debt and assets. Who will be able to buy those assets and start making widgets in the same factory with the same people working there? Who's going to build planes if Boeing goes out, but Europe bails out Airbus?

I want Boeing ready to roll as soon as this is over. Ford, GM, (even) Dodge are in the same boat. Interest rates will be low. People will be able to buy vehicles if we limit the pain to the individual in the short term. The worst thing I can see are vehicles getting repoed right now. Houses are generally safe, but vehicles I've not heard about. If they don't destroy everyone's credit in this mess, there is the possibility of a huge boom on the back side. The team is already in place, maybe smarter this time around. The equipment is in place. The skillset is already in place on the line.

On the darker side, there might be a large transfer of capital from the older generation to the younger, which would also fuel growth on the back side.
 

GM-GUY

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My wife and I were just about ready to grab a new GMC Acadia Denali when this started. Now we will heads down as soon as this ends (April maybe?) to Tucks in Hudson. Interest rates now are 0%/84mo, our credit score is 810 (keeps dropping with no mortgage anymore - it was as high as 865)
 

Reptile

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Why can’t we give a check to every american without including a bailout plan for corporation at the moment? Why do republicans always want to slip something in it.

Democrats want specific rules about which corporations gets bailout money, such a corporation can’t use the bailout money for stock buy back, cap for CEO bonus, and time frame for return bailout money to tax payers. Trump organization can’t not get special treatment above other corporations. All reasonable requirements. Let them!

Give the money to the people directly. Cut the middle man! Why republicans, why?

I am good just give each of us $1200 a month until this crisis goes away.
I do agree with a couple of things ...

Bailout money should not be used for bonuses, or stock buyback.

I understand most bonuses are based on performance, but the company should already have that money. If they dont, tough luck, at least you get to keep your job and you can get pissed off at management for poor planning. If you get my tax money, it should go towards keeping your employees working. But knowing Congress and what a bunch of morons they are, I have no idea how they would control this.

I also agree with a time frame to pay it back. Although I dont know how aggressive and realistic that timeframes is.

As far as $1200 per person ... that wont even cover the average mortgage or it will barely cover 2 months of property tax in MA. $1200 in Alabama is ot the same as $1200 in Boston, San fran or NYC.

Would that be $1200 on top of unemployment?

I am lucky, I work for a great company with a solid balance sheet and a solid plan. They announced that they would continue paying everyone, even the cafeteria workers that are out of work while all the offices are closed. Red badge employees, hourly employees, everyone will get paid. Now that is good leadership.
 

Varmint

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I do agree with a couple of things ...

Bailout money should not be used for bonuses, or stock buyback.

I understand most bonuses are based on performance, but the company should already have that money. If they dont, tough luck, at least you get to keep your job and you can get pissed off at management for poor planning.

I also agree with a time frame to pay it back. Although I dont agree with how aggressive and realistic that timeframes is.

As far as $1200 per person ... that wont even cover the average mortgage or it will barely cover 2 months of property tax in MA.

Would that be $1200 on top of unemployment?
corporations already spent their cash on buybacks, CEOs already got their options. Now they'll go bankrupt - which would cause some layoffs as they restructure but it would really hurt wealthy investors, banks and hedge funds.
 
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corporations already spent their cash on buybacks, CEOs already got their options. Now they'll go bankrupt - which would cause some layoffs as they restructure but it would really hurt wealthy investors, banks and hedge funds.
The 3 groups I could care less. All 3 knew the risks associated when investing. They took the risk.

If the balance sheet was so weak the business couldnt support 2 or 3 months of reduced revenue, the investors should have stopped it and the bank shouldnt have given loans.

Out of the 3 groups, the banks wont lose.
The investors, even with a merger, will come out on top.
The hedge funds, assuming they invested early will also be fine for the most part.

Edit to add:

That being said, we have to remember the government created this sh*t show. Although a lot of these companies werent prepared, they didnt bring it on themselves. Airline companies didnt cancel flights because they couldnt properly plan for demand, they did it because govt killed the demand.

Because the govt caused this, I do think the companies deserve some sort of bailout.

And we as tax layers get screwed, but we voted for these idiots, so we get what we voted for.
 
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xtry51

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corporations already spent their cash on buybacks, CEOs already got their options. Now they'll go bankrupt - which would cause some layoffs as they restructure but it would really hurt wealthy investors, banks and hedge funds.
I have zero issue with companies going out of business that acted like the above.
 

Varmint

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The 3 groups I could care less. All 3 knew the risks associated when investing. They took the risk.

If the balance sheet was so weak the business couldnt support 2 or 3 months of reduced revenue, the investors should have stopped it and the bank shouldnt have given loans.

Out of the 3 groups, the banks wont lose.
The investors, even with a merger, will come out on top.
The hedge funds, assuming they invested early will also be fine for the most part.

Edit to add:

That being said, we have to remember the government created this sh*t show. Although a lot of these companies werent prepared, they didnt bring it on themselves. Airline companies didnt cancel flights because they couldnt properly plan for demand, they did it because govt killed the demand.

Because the govt caused this, I do think the companies deserve some sort of bailout.

And we as tax layers get screwed, but we voted for these idiots, so we get what we voted for.
im gonna correct you, all three knew there was no risk.

if they went bankrupt (and they won't thanks to Congress), I think stockholders would lose everything (unsecured debt). Bond holders will get some of their money back.
 

xtry51

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Boeing is going out of business in one form or another regardless of this situation. Their debt load is very high and they still have the MAX issue. There are other companies that make planes. Same with the car industry. We don't need GM or Chrysler. They both should already not exist. Plenty of people make cars. Someone else will gobble them up. Life will go on.

The very reason this situation is an economic one rather than just a health one is because we stopped letting people fail.
 

Reptile

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No way the government can handle that many applications. I bet it'll be lower for that reason.

If it is that high tomorrow, you don't want to be in the stock market.
 

number9

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Boeing is going out of business in one form or another regardless of this situation. Their debt load is very high and they still have the MAX issue. There are other companies that make planes. Same with the car industry. We don't need GM or Chrysler. They both should already not exist. Plenty of people make cars. Someone else will gobble them up. Life will go on.

The very reason this situation is an economic one rather than just a health one is because we stopped letting people fail.
I bet you the opposite; Boeing will not go out of business. They are too important to the government to let fail, and their market cap is too big for most buyers to take on. The only competitor big enough to buy them is Airbus, but the government would never let that happen.
 

richc

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This data is from February 15:

"The national unemployment level stood at about 5.89 million unemployed persons in January 2020"

Last week that number increased by over 50%. In one week. And this is just the beginning.

And to be clear that number of new unemployment claims does not include contractors, self-employed, gig economy workers, uber drivers and more. Historically they do not qualify for unemployment. However they will qualify under the bailout bill that's close to passing.

I can't imagine where we'll end up right now? Certainly over 10% unemployment IMHO. Part of me wonders if it will approach 20%?

Our government is responding with the only ammunition they have. That is money. Liquidity. Cash to businesses and individuals. But where does that money come from?

As the government has done for decades this will be created out of thin air. The government will figuratively turn on the printing presses and give handouts. They will massively expand the money supply. And further erode the value of the US dollar. Our national financial deficits will be blown up to unheard of levels.

This hurts us all ultimately. Yeah, sometimes a doctor needs to sacrifice a limb to save a patient. But I feel we're sacrificing the next generation of Americans. Every single one of them.

Our savings will lose buying power and will not grow at 0% interest rates. Most of us have lost money saved in a retirement account and invested in equities. There are signs that real estate prices will drop substantially. I spoke with a realtor recently that had a bunch of deals that were really close just go cold.

But most of all I'm worried for my children. And future grandchildren. Our government and politicians have been kicking the can down the road for decades. I knew for certain this day of reckoning would come eventually. Everything returns to the mean eventually and the economy is no different.

I am blessed that my children are all gainfully employed. I know several fine young people who have lost their jobs in the past two weeks. All related to this mess. And I'm also aware that no one's job is secure in an environment like this.

I am sorry for the burden put on the next generation. It brings tears to my eyes thinking about this. They didn't have anything to do with making this mess but they certainly will have to pay for it.

:-(

Rich
 

Paul455

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The economy will be screwed for many months or even years.

It won't comeback to the same levels.

It's the new reality.
 

Varmint

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Unemployment increased by 50%. And the market is rallying. Nothing fake about this AT ALL!
It's not fake, it's technical trading - traders don't care what i'll be in a week, or a year, they only care about the current trend. Traders will ride this rally as far as it'll go, watching how it behaves at key resistance levels, and buying in or staying in if it punches through those levels.

It's completely normal behavior - everyone is watching the same charts and making the same trades, so you get huge momentum. Once it reverses, probably at 2700, it'll rocket downward, and you'll start the game in reverse stopping at support levels and deciding if it goes lower.
 
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Boeing is going out of business in one form or another regardless of this situation. Their debt load is very high and they still have the MAX issue. There are other companies that make planes. Same with the car industry. We don't need GM or Chrysler. They both should already not exist. Plenty of people make cars. Someone else will gobble them up. Life will go on.

The very reason this situation is an economic one rather than just a health one is because we stopped letting people fail.
I dont see them failing. They lost billions, but those MAX airplanes will eventually be delivered, and they have other airplanes on the pipeline.

The company is huge. The only other company that could replace Boeing is Airbus. The rest are too small. I guess they could grow and hire the engineers, but I have no idea what that effort would look like.
 
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