Buffet on the impending market crash

[Ducky_Fresh]

Precisely.

For sure. I got MO and STZ and BUD.

I guess the real logic is they take LOANS which likely will be crutches. But corporate America was already deeply indebted. It’s only going to get worse. Just a time game.

I think we see Macy’s go out of business. Various other retail. Basically get absorbed and/or leave 1 player - day Nordstrom. No more nieman Marcus or saks 5th.

Take lots of small business owners. They’re toast.

No idea where and what all these people start doing then. Will be pretty fascinating.

 

[Climber]

Apparently, the government has allowed the big banks to decide who got the loans from the government.....no surprise, it was the corporations, small businesses hardly got anything.

 

[Archimedes]

Apparently, the government has allowed the big banks to decide who got the loans from the government.....no surprise, it was the corporations, small businesses hardly got anything.

:rolleyes

You do know that the PPP program doesn't apply to big corporations, right? It's only for small businesses, less than 500 employees.

The Feds didn't have the mechanism to execute this program, so they needed the banks. The banks were each limited in how much they could loan, so they prioritized their own existing business customers. Our bank went one step further and prioritized their lending customers over their banking customers. We're a banking customer, so we got delayed just long enough for all the money to be gone. And with the Dems holding up any additional money, it doesn't look good.

BTW, a large percentage of the loans were processed by smaller, community banks, so it's not a Big Bank thing.

 

[Climber]

:rolleyes

You do know that the PPP program doesn't apply to big corporations, right? It's only for small businesses, less than 500 employees.

The Feds didn't have the mechanism to execute this program, so they needed the banks. The banks were each limited in how much they could loan, so they prioritized their own existing business customers. Our bank went one step further and prioritized their lending customers over their banking customers. We're a banking customer, so we got delayed just long enough for all the money to be gone. And with the Dems holding up any additional money, it doesn't look good.

BTW, a large percentage of the loans were processed by smaller, community banks, so it's not a Big Bank thing.

Corporations can be 1 person, but it's recognized as larger businesses, not necessarily over 1,000 or even over 500.

Does anybody have a breakdown of how much each bank got distributed to them?

I would bet that well over $100 Million went to the 4 largest banks.

This banks are going to heavily favor the businesses that they will make the most money from in the future.

There should have been more guidelines as to the distribution of company sizes that the money was distributed to. An oversight, no doubt. :nchantr

 

[Blankpage]

Stocks are kicking ass in the aftermarket. Tomorrow might present the opportunity for me to get out with minimal damage before people come to their senses.
Yeepee foe Gilead though if they really have some wonder drug.

 

[Archimedes]

Corporations can be 1 person, but it's recognized as larger businesses, not necessarily over 1,000 or even over 500.

Does anybody have a breakdown of how much each bank got distributed to them?

I would bet that well over $100 Million went to the 4 largest banks.

Geez, where to start. First, you meant Billion, not Million, right? Second, do you even know how the PPP loan plan works? The amount you get is based on your average payroll over the past year, with the maximum annual amount per person of $100k. So in your example of a corporation with 1 person, the maximum loan they could get is $20,833 (2.5x average monthly payroll, capped at $100k per person). So no, there aren't companies with 1 employee making out like bandits...

The maximum loan that any company could get is $10.4 million, and that would assume that they've paid a workforce of exactly 500 people over $100k per year each for the last year. And they'd have to keep those employees employed right now in order to have the loan forgiven.

This program isn't benefiting anyone other than the employees of businesses affected by coronavirus that would otherwise furlough or lay off those workers.

 

[Climber]

Geez, where to start. First, you meant Billion, not Million, right? Second, do you even know how the PPP loan plan works? The amount you get is based on your average payroll over the past year, with the maximum annual amount per person of $100k. So in your example of a corporation with 1 person, the maximum loan they could get is $20,833 (2.5x average monthly payroll, capped at $100k per person). So no, there aren't companies with 1 employee making out like bandits...

The maximum loan that any company could get is $10.4 million, and that would assume that they've paid a workforce of exactly 500 people over $100k per year each for the last year. And they'd have to keep those employees employed right now in order to have the loan forgiven.

This program isn't benefiting anyone other than the employees of businesses affected by coronavirus that would otherwise furlough or lay off those workers.

I think we'll find that the validity of some of these companies getting the loans which when forgiven becomes free money will be, in some cases, a very ambiguous thing.

 

[Climber]

What I was saying, but on Fox News....

Coronavirus recovery -- PPP lets small business suffer while big, profitable companies get mega bucks

This isn't the way the business rescue plan was supposed to work. Millions of small businessmen and women can't get to the front of the queue for desperately needed loans, while many healthy larger businesses are feeding at the trough and laughing at taxpayers all the way from the bank.

The small business rescue fund, the Paycheck Protection Plan, set up by Congress has already run out of the $350 billion thrown at it, and because of the flood of applications, some experts are now saying the cost of the program could double or triple to help small firms that need it.
...
The reason the system has broken down and exceeded all costs is the foolhardy idea of converting the loans into "grants" that don't ever have to be repaid to taxpayers. The loan becomes a grant if the firm doesn't lay off its workers. If you rehire laid-off workers before June 30 those employees count as fully employed.

What happened is that thousands of financially healthy businesses are getting loans of $100,000 to $3 or $4 million and they are pocketing the money. They weren't going to lay off workers in the first place.

Worse yet, the Washington Post reports that the feds won’t report which big companies are getting the taxpayer handouts. Maybe Congress doesn’t want these company CEOs to feel embarrassed. They should be.

 

[Archimedes]

I think we'll find that the validity of some of these companies getting the loans which when forgiven becomes free money will be, in some cases, a very ambiguous thing.

Oh for sure it is, there is no way to get around that. But what shouldn't be happening is that large businesses shouldn't be getting any of that money. Case in point, Shake Shack, who came out today and tried to turn fraud into good PR. They had no business even applying, they fraudulently applied and got the max money, they're now trying to play it off as 'ambiguous guidance' and look the hero for returning the money and claiming that they're doing it to benefit small restaurants. The program will get audited and companies like that will be forced to pay the money back. And hopefully some journalist somewhere will call Shake Shack out for their behavior.

 

[Ducky_Fresh]

Marriott. Rug Chris steakhouse. A bunch of big corps with chains took advantage of the program. Pretty sneaky since they are franchise models and technically qualify.

Heard that a lot of the lending stayed in wash DC too.


But WTF no one talking about FREE oil? Literally bring a barrel and they will basically pay you to take it. How does that make sense lol

Lots of ripple effects coming. OPEC and trump knew last week when they postured. Messed up.

 

[Climber]

Marriott. Rug Chris steakhouse. A bunch of big corps with chains took advantage of the program. Pretty sneaky since they are franchise models and technically qualify.

Heard that a lot of the lending stayed in wash DC too.


But WTF no one talking about FREE oil? Literally bring a barrel and they will basically pay you to take it. How does that make sense lol

Lots of ripple effects coming. OPEC and trump knew last week when they postured. Messed up.

Somebody with foreknowledge (cough, cough, Charles Icahn) could be making enormous fortunes over these months.

 

[The Smokester]

Anyone want to buy a barrel of crude? I give you ten dollars.

 

[Beanzy]

I forget where I grabbed this from (the NY Times?) but it shows the SBA loans distributed by state:

 

[GAJ]

I forget where I grabbed this from (the NY Times?) but it shows the SBA loans distributed by state:

:wtf

Found it on Bloomberg:

https://www.bloomberg.com/graphics/2020-sba-paycheck-protection-program/

 

[Climber]

That map pattern looks very familiar, but I can't state it.

 

[GAJ]

That map pattern looks very familiar, but I can't state it.

Explains to me now the thus far inexplicable delay in phase two.

 

[Climber]

Explains to me now the thus far inexplicable delay in phase two.

The other part is that the Fat Hogs who didn't need it and only qualified through tricks got the vast majority of the money in the first round.

Not surprising since the banks got to make the decisions and they took care of their biggest customers first.

 

[Ducky_Fresh]

Peculiar isn’t it...

 

[Climber]

Peculiar isn’t it...

Or by design.

 

[Bowling4Bikes]

The other part is that the Fat Hogs who didn't need it and only qualified through tricks got the vast majority of the money in the first round.

Not surprising since the banks got to make the decisions and they took care of their biggest customers first.

I simply can't find a way to respond apolitically, so, Imma move on lol.

Of the people who've lost their jobs, been furloughed etc...what % do you think will get their job back once the dust settles? I'm thinking closer to 50% than 100%.