Economic Effect

[Arsis]

Universal basic income or revolution is coming. America is done.

[chirorob]

On 4/13/2020 at 6:13 PM, CTM said:

Anyone own or run a SMB going for PPP? If so has the experience been anything less than a debacle?

I got lucky and got mine, a lot of friends did not.

It helps, but that only buys me about 4-5 weeks.  People got to go back to work.

[southparkcpa]

7 hours ago, The Crusher said:

Yep, my exact findings as well with BB&T.,

To BBT 's credit, the error was in the payroll tax piece, a simple misread on their part and the client I have in mind simply got a smaller loan BUT were funded fairly quickly. They were entitled to get 107K, received about 92K.  I advised them, STFU and take the money.  

[Bugg]

2 hours ago, southparkcpa said:

To BBT 's credit, the error was in the payroll tax piece, a simple misread on their part and the client I have in mind simply got a smaller loan BUT were funded fairly quickly. They were entitled to get 107K, received about 92K.  I advised them, STFU and take the money.  

The program is administered by the SBA. Every time there is a declared federal disaster, people jump on SBA loans with the hint they will be forgiven rather than paid back. And that NEVER happens. After Sandy, we were all set to rebuild using an SBA loan. On the day of the closing, they unilaterally changed their rate, length, amount, closing costs and primacy of their loan. It was insane; walked out and went to conventional bank loan instead. Had more than a  few homeowner clients who did take an SBA loan in the hopes it was free money; all of them have found out otherwise. Not saying people should not avail themselves of the program, but be very careful and don't assume it's free. It is not.  

 

[southparkcpa]

4 minutes ago, Bugg said:

The program is administered by the SBA. Every time there is a declared federal disaster, people jump on SBA loans with the hint they will be forgiven rather than paid back. And that NEVER happens. After Sandy, we were all set to rebuild using an SBA loan. On the day of the closing, they unilaterally changed their rate, length, amount, closing costs and primacy of their loan. It was insane; walked out and went to conventional bank loan instead. Had more than a  few homeowner clients who did take an SBA loan in the hopes it was free money; all of them have found out otherwise. Not saying people should not avail themselves of the program, but be very careful and don't assume it's free. It is not.  

 

I didn't realize you were a CPA.  It appears to me that this loan will be forgiven as long as you pay 75 percent of the loan on payroll and 25 percent on rent etc.   

[Bugg]

14 minutes ago, southparkcpa said:

I didn't realize you were a CPA.  It appears to me that this loan will be forgiven as long as you pay 75 percent of the loan on payroll and 25 percent on rent etc.   

Not a CPA; tax attorney. Undergrad degree in accounting, followed by law school and a  detour in criminal law before hanging out a shingle. 

[southparkcpa]

2 hours ago, Bugg said:

Not a CPA; tax attorney. Undergrad degree in accounting, followed by law school and a  detour in criminal law before hanging out a shingle. 

So neither of us make an honest living????

[jetstream23]

Arizona getting started!  Let's see what happens here...

 

[Maxman]

Hey everyone Max is a doosh-noozle and he locked the other thread so now we have this one apparently lol.

[jetstream23]

1 hour ago, Maxman said:

Hey everyone Max is a doosh-noozle and he locked the other thread so now we have this one apparently lol.

Well, don't tell him!

We started this one a month ago!

He'll never find out.

 

[Bugg]

Got a swag haircut in the back of a deli this morning. Sat on milk crates next to a beer cooler. Very odd. 

NYC is really an insane place right now. The greatest vectors of infection remain the elderly and public transportation.Hospitalizations are overwhelmingly old, sedentary nonworking people.  But instead the idiot mayor wants to keep EVERYTHING shut down. Parks and beaches should be open, and instead this moron wants to keep things totally closed until September. it's totally unjustified. And it's going to destroy the economy. 

[chirorob]

1 hour ago, Bugg said:

Got a swag haircut in the back of a deli this morning. Sat on milk crates next to a beer cooler. Very odd. 

NYC is really an insane place right now. The greatest vectors of infection remain the elderly and public transportation.Hospitalizations are overwhelmingly old, sedentary nonworking people.  But instead the idiot mayor wants to keep EVERYTHING shut down. Parks and beaches should be open, and instead this moron wants to keep things totally closed until September. it's totally unjustified. And it's going to destroy the economy. 

You keep it all closed all summer, what does that do to all the beach communities?

Someone at the Jersey shore, who owns a rental house, that house doesn't rent all summer, there is NO way that person can keep that house.  All the businesses that operate near a beach or lake, how do any of them make it through to the next year?

[Maxman]

5 hours ago, Bugg said:

Got a swag haircut in the back of a deli this morning. Sat on milk crates next to a beer cooler. Very odd. 

NYC is really an insane place right now. The greatest vectors of infection remain the elderly and public transportation.Hospitalizations are overwhelmingly old, sedentary nonworking people.  But instead the idiot mayor wants to keep EVERYTHING shut down. Parks and beaches should be open, and instead this moron wants to keep things totally closed until September. it's totally unjustified. And it's going to destroy the economy. 

We can't do politics here.

[Bugg]

4 hours ago, chirorob said:

You keep it all closed all summer, what does that do to all the beach communities?

Someone at the Jersey shore, who owns a rental house, that house doesn't rent all summer, there is NO way that person can keep that house.  All the businesses that operate near a beach or lake, how do any of them make it through to the next year?

The Jersey shore, Coney Island, Rockaway, parts of LI out east, DelMarVa will all be done. And don't understand how that's justified. Unfortunately think amusement parks, concerts and sporting events are in fact done for a while.Restaurants and bars could open, but not sure how that works -unless it's open air. such people can spread out a bit.  Sedentary elderly people are not going to those places even without COVID19. 

Max: will only say I don't know anyone who likes the Mayor of (REDACTED). NOBODY LIKES THIS GUY. It is way beyond politics. 

[The Crimson King]

13 hours ago, Bugg said:

Got a swag haircut in the back of a deli this morning. Sat on milk crates next to a beer cooler. Very odd. 

NYC is really an insane place right now. The greatest vectors of infection remain the elderly and public transportation.Hospitalizations are overwhelmingly old, sedentary nonworking people.  But instead the idiot mayor wants to keep EVERYTHING shut down. Parks and beaches should be open, and instead this moron wants to keep things totally closed until September. it's totally unjustified. And it's going to destroy the economy. 

as an old sedentary non working person, I heartily endorse any action taken on our behalf 

[CTM]

So, i don't want to get political here but can someone explain to me the economic rational (not political ends, i get them) as to why some in government wants to send $2k checks a month to most of country, even if 75% of them are working?

Also, I assume this would be on top of the $600 a week unemployment which is active through July and sure to be extended. If I had job for $60k a year, and am still employed and my wife has job for 60k a year, and is still employed. And I have 2 kids, the current plans being discussed would call for that family to get $5k a month of incremental income ($60k a year), despite not losing a penny to this and in fact likely savings a fortune not going out to eat, movies, travelling etc? 

It's basically a massive pay increase for nearly every single person short of the single person who used to make $150k and is now unemployed.

Again, not looking for political motives. What is the economic one? I dont get it 

 

[greenwichjetfan]

1 hour ago, CTM said:

So, i don't want to get political here but can someone explain to me the economic rational (not political ends, i get them) as to why some in government wants to send $2k checks a month to most of country, even if working 75% of them are working?

Also, I assume this would be on top of the $600 a week unemployment which is active through July and sure to be extended. If I had job for $60k a year, and am still employed and my wife has job for 60k a year, and is still employed. And I have 2 kids, the current plans being discussed would call for that family to get $5k a month of incremental income ($60k a year), despite not losing a penny to this and in fact likely savings a fortune not going out to eat, movies, travelling etc? 

It's basically a massive pay increase for nearly every single person short of the single person who used to make $150k and is now unemployed.

Again, not looking for political motives. What is the economic one? I dont get it 

 

The answer is entirely political. 

[Arsis]

2 hours ago, CTM said:

So, i don't want to get political here but can someone explain to me the economic rational (not political ends, i get them) as to why some in government wants to send $2k checks a month to most of country, even if 75% of them are working?

Also, I assume this would be on top of the $600 a week unemployment which is active through July and sure to be extended. If I had job for $60k a year, and am still employed and my wife has job for 60k a year, and is still employed. And I have 2 kids, the current plans being discussed would call for that family to get $5k a month of incremental income ($60k a year), despite not losing a penny to this and in fact likely savings a fortune not going out to eat, movies, travelling etc? 

It's basically a massive pay increase for nearly every single person short of the single person who used to make $150k and is now unemployed.

Again, not looking for political motives. What is the economic one? I dont get it 

 

The entire economic system is broken and they're trying to stave off the great depression 2 electric Boogaloo.

 

That's a purely economic answer to that question.

[CTM]

1 hour ago, Arsis said:

The entire economic system is broken and they're trying to stave off the great depression 2 electric Boogaloo.

 

That's a purely economic answer to that question.

The primary part that is broken is the debt.. So more of it?

[Kleckineau]

4 hours ago, Arsis said:

The entire economic system is broken and they're trying to stave off the great depression 2 electric Boogaloo.

 

That's a purely economic answer to that question.

I have avoided this economic impact thread because to share an honest opinion is impossible without discussing how politics are affecting these economic decisions. How can you discuss economics without including the forces of politics? We know politics are a driving force for how things are being decided today. Problem is god forbid you state an opinion that runs contrary to how some here feel regarding their belief system. A rational, mutually respectful discussion seems impossible. The thread becomes toxic in a matter of minutes.

[Arsis]

6 hours ago, CTM said:

The primary part that is broken is the debt.. So more of it?

When you have a hammer everything looks like a nail. What are they going to do? Raise taxes? Tax corporate profits? Confiscate wealth? The system is so broken that no drastic actions are going to help.

we have unemployment not seen since the great depression.

[greenwichjetfan]

3 hours ago, Kleckineau said:

I have avoided this economic impact thread because to share an honest opinion is impossible without discussing how politics are affecting these economic decisions. How can you discuss economics without including the forces of politics? We know politics are a driving force for how things are being decided today. Problem is god forbid you state an opinion that runs contrary to how some here feel regarding their belief system. A rational, mutually respectful discussion seems impossible. The thread becomes toxic in a matter of minutes.

Exactly this. I’m an economist by degrees and buy side practitioner by trade, but no way to discuss any of this on JN (not do I really care to - I come here to get away from all of that).

I will say that from what I’ve been able to follow over the past month In the multiple COVID threads (I’ve been excessively busy the past 6 weeks at work), I’ve gained an appreciation for @CTM’s economic and political takes as they very closely mirror mine - even if he is abjectly misinformed about most things football and ruins everything.

[Barry McCockinner]

On 5/7/2020 at 9:25 AM, Bugg said:

Got a swag haircut in the back of a deli this morning. Sat on milk crates next to a beer cooler. Very odd. 

NYC is really an insane place right now. The greatest vectors of infection remain the elderly and public transportation.Hospitalizations are overwhelmingly old, sedentary nonworking people.  But instead the idiot mayor wants to keep EVERYTHING shut down. Parks and beaches should be open, and instead this moron wants to keep things totally closed until September. it's totally unjustified. And it's going to destroy the economy. 

https://www.cnbc.com/amp/2020/05/06/ny-gov-cuomo-says-its-shocking-most-new-coronavirus-hospitalizations-are-people-staying-home.html

Quote

Cuomo said nearly 84% of the hospitalized cases were people who were not commuting to work through car services, personal cars, public transit or walking. He said a majority of those people were either retired or unemployed. Overall, some 73% of the admissions were people over age 51. 

 

[CTM]

31 minutes ago, Arsis said:

When you have a hammer everything looks like a nail. What are they going to do? Raise taxes? Tax corporate profits? Confiscate wealth? The system is so broken that no drastic actions are going to help.

we have unemployment not seen since the great depression.

So PPP makes sense, give small businesses money to stay afloat and keep paying employees. Unemployment too, not to the level they have where its uncapped but fed unemployment was needed.

I'm asking about large stimulus checks to people unimpaired economically. What is the arguement for issuing them. Unemployment isnt an answer as its covered above.

 

 

[CTM]

10 minutes ago, greenwichjetfan said:

Exactly this. I’m an economist by degrees and buy side practitioner by trade, but no way to discuss any of this on JN (not do I really care to - I come here to get away from all of that).

I will say that from what I’ve been able to follow over the past month In the multiple COVID threads (I’ve been excessively busy the past 6 weeks at work), I’ve gained an appreciation for @CTM’s economic and political takes as they very closely mirror mine - even if he is abjectly misinformed about most things football and ruins everything.

I'll take it ! 

[Arsis]

1 hour ago, CTM said:

So PPP makes sense, give small businesses money to stay afloat and keep paying employees. Unemployment too, not to the level they have where its uncapped but fed unemployment was needed.

I'm asking about large stimulus checks to people unimpaired economically. What is the arguement for issuing them. Unemployment isnt an answer as its covered above.

 

 

It doesn't make sense unless it's a pilot program for how people react to universal basic income and a complete restructuring of the economy. That or a pure panic move.

Maybe, they are afraid that most of the jobs aren't coming back at all because the vast majority of jobs are being automated. The estimate is 73 million jobs by 2030 and there is no new technological revolution to replace them. This isn't the buggy to the car. So when you have a massive pandemic and depression combined with the natural loss of jobs from automation they are scrambling.

I wss also under the impression that the PPP was being taken advantage of by large companies and its not having the intended impact. Giving people 2k a month puts that directly into the economy.

 

1/5th of Americans missed rent payments in May. You can't have that many people homeless. You can't have that many mortgages fail. You can't have that many landlords miss tax payments. You can't have when things opening up people in a rent hole that they're not spending. That would cause a massive cascade of economic turmoil never seen before.

 

 

 

 

[CTM]

13 minutes ago, Arsis said:

It doesn't make sense unless it's a pilot program for how people react to universal basic income and a complete restructuring of the economy. That or a pure panic move.

The first one was pure panic move made in a time of great uncertainty. Much of that uncertainty no longer exists. As far as how people will react I think everyone knows that answer

 

15 minutes ago, Arsis said:

Maybe, they are afraid that most of the jobs aren't coming back at all because the vast majority of jobs are being automated. The estimate is 73 million jobs by 2030 and there is no new technological revolution to replace them. This isn't the buggy to the car. So when you have a massive pandemic and depression combined with the natural loss of jobs from automation they are scrambling.

Again, you are talking about an unemployment issue. I am not talking about support for unemployed, I'm talking about helicopter money for the gainfully employed (most of country)

16 minutes ago, Arsis said:

I wss also under the impression that the PPP was being taken advantage of by large companies and its not having the intended impact. Giving people 2k a month puts that directly into the economy.

False. There were some larger companies that took advatage of the 500 per location rule in hospitatlity and restaurant sectors, but many of them have given it back. Regardless, many many companies in the SMB market got the funds. My company did, as did every other SMB owner i know. 20+ people. I'm sure they exist but I haven't heard of anyone missing out on this second round.

 

18 minutes ago, Arsis said:

1/5th of Americans missed rent payments in May. You can't have that many people homeless. You can't have that many mortgages fail. You can't have that many landlords miss tax payments. You can't have when things opening up people in a rent hole that they're not spending. That would cause a massive cascade of economic turmoil never seen before.

Link on your rent stats? Can't comment but I find that unlikely to be a real number or direct impact given the very generous unemployment #'s.  Many places the government froze payments and people are taking advantage it by emptying shelves of Nintendo switches and the like

As to the bolded, I don't think you are appreciating the massive cascade of economic turmoil handing out 2-3k a month to 180M people would be. This is money not backed by an asset  and not tied to any productivity/supply gains. In fact, it has an negative impact to both as people lose incentive to work. It's a moral hazard and it's happenning today all over.

 I operate 2 warehouses and call center. I can't hire people today because people are getting more money to sit at home.  My 3pl operates 146 warehouses and has staffing problems across the board. Same issue. The further this program extends the more of an issue this become and extends to drivers, pickers, factory workers, grocery store employees.. etc..

The net result is rapid inflation of necessities for living, we'll be producing less and have more dollars chasing them. You can't invent wealth and prosperity in a society where scarcity exists and there is a cost to produce.  The other issue, is that Walmart and Amazons of the world will be the primary retail survivors as they can better absorb the supply shock and further their dominance which has it's own significant set of issues.

[Arsis]

If you can't hire people you have the option of paying more so as to adapt to the times and compete.

[CTM]

6 minutes ago, Arsis said:

If you can't hire people you have the option of paying more so as to adapt to the times and compete.

Kind of simplistic POV, we are "competing" against not working at all. And when you double or triple costs for supply chain what do you think that does to what we charge customers? How do smaller companies compete with Amazon/Walmart who have the scale to shoulder a large increase and the ability to recruit a limited supply of workers with the incentive of stock options/false sense of job security.

The price increase will wash away much of the financial support you attempted to create while at the same time reducing competition and putting more people out of work and on the dole. Meanwhile debt is spiraling out of control. We currently pay more interest on debt for past spending than we do for education.

These types of schemes are good for the super wealthy and the poor, Damaging to the middle class most notably those in the upper middle classes.

[Arsis]

26 minutes ago, CTM said:

Kind of simplistic POV, we are "competing" against not working at all. And when you double or triple costs for supply chain what do you think that does to what we charge customers? How do smaller companies compete with Amazon/Walmart who have the scale to shoulder a large increase and the ability to recruit a limited supply of workers with the incentive of stock options/false sense of job security.

The price increase will wash away much of the financial support you attempted to create while at the same time reducing competition and putting more people out of work and on the dole. Meanwhile debt is spiraling out of control. We currently pay more interest on debt for past spending than we do for education.

These types of schemes are good for the super wealthy and the poor, Damaging to the middle class most notably those in the upper middle classes.

Isn't that the point?

[CTM]

2 minutes ago, Arsis said:

Isn't that the point?

That is a political issue. I'm really trying to figure out what the economic argument is for doing this now, it will stimulate demand for consumer goods but with restaurants, travel, entertainment shutdown there is plenty of money for that as long as you support unemployed 

[SAM SAM HE'S OUR MAN]

On 5/7/2020 at 9:25 AM, Bugg said:

Got a swag haircut in the back of a deli this morning.

Where's the deli ? I need a cut real bad .

[Bugg]

12 hours ago, Barry McCockinner said:

https://www.cnbc.com/amp/2020/05/06/ny-gov-cuomo-says-its-shocking-most-new-coronavirus-hospitalizations-are-people-staying-home.html

 

Leaves out there were 83 dead transit workers before NY FINALLY closed the subway system at night to clean it. Subways became a rolling homeless flophouse. Nobody else was taking it. Peculiar thing; Boston survey revealed 50% of their homeless surveyed were COVID 19 positive but almost all asymptomatic. Something to be said for living in your own filth building up your immunity. This long term is a real problem, health wise and business wise. Nobody wants to get sick form their commute, and nobody wants to ride a train that has a stinky bum setting up house every day. If NYC cannot address that, game over. 

[RedBeardedSavage]

Like these two, and since UBI has been mentioned here, I figure this is worth passing along since it dropped in the past 24 hours:

 

[Lot K Tailgaters]

I didn’t even realize this thread existed.  I used to just read the Jets board and recently discovered the now locked Covid thread.  
 

I’m a financial advisor so the past couple of months have been chaotic to say the least. 

While I don’t want to say anything controversial here I think our country needs to teach kids some basic things about finance before they graduate HS.  There are so many people who aren’t prepared for even a basic emergency.  Sometimes it’s because they aren’t paid enough but many times it’s because they just don’t think about it.  So many people who appear wealthy with a nice car and house but have debt and are in over their heads.  Also so many younger people are afraid to invest.  
 

The PPP loans have been a mess.  A lot of laid off employees are making more on unemployment than they did working so sometimes the employer looks like the bad guy paying their employees not to work or calling them back to work.  Also independent contractors are eligible and most are 1099 and don’t have a business so banks are giving them a hard time to get one.  After things calm down I’m moving my bank accounts to a community bank because they treat their customers MUCH better.  
 

When things recover they will be VERY different in my opinion.  I keep reading about businesses who will have employees work from home permanently. I read and article that businesses save $11k a year per employee when they work from home.  I’m interested to see how commercial landlords handle things.  If a business hasn’t been able to pay rent because they are closed down does the landlord try to evict them and hope to find a new tenant or maybe waive some of what is owed since it may be hard to find a new tenant?   Also while I’m now a lawyer I think some businesses will have a pandemic or emergency clause.  I’ll use daycare as an example.  I’m mad my son’s daycare won’t refund me the second half of March.  They have billed me since then.  I know many daycares who refunded or credited the second half of March.  Some have contributed to bill parents full cost or a percentage.  I wouldn’t be shocked to see them re open with an agreement that in another situation like this parents have to continue to pay.