The Nation's Financial Condition

[a fan]

The first round of stimulus checks hit Wednesday. Our sales Wednesday were double the daily average from the past few weeks (but right around where they would have been if we didn't have the pandemic). Sales yesterday were up a good bit too.

Shocker. It's as if people need money to buy things. I'm LIVID the idiots in Congress didn't cut $5K checks for every taxpayer.

The velocity of money is killing us. And coffers in every State, City, and Municipality needs that money. But the idiots in Congress would rather bailout individual States, than simply give it to citizens, who will then buy things, and pump more money into local coffers. It's not perfect, but it would help tax revenue shortages greatly.

Not a peep from the SBA about our EIDL application, 17 days later...

One thing our banker told us is that if you don't get the SBA money on this current batch...you'll have to get in line all over again for the next one. So your app isn't queuing up and waiting when the fund is "reloaded" with money unless you or your banker puts you back in line.

[Trinity]

May the Lord Open.

[RedFromMI]

May the Lord Open.

Nolite te bastardes carborundorum

[Jim Malone]

I was involved in about 30 applications starting in February with clients and friends.

Initial submissions were through SBA portal for Disaster Relief Recovery Loans for Home/Sole Proprietor and Business (Superstorm Sandy gave me invaluable experience), original COVID-19 Payroll Protection Program website, revised COVID-19 Payroll Protection Program/Economic Injury Disaster Loan website, facsimile, mail and delivery. Then same submissions in participating bank portals as they opened up. Wells Fargo, Bank of America, Citibank and JPMorgan Chase. Had to have a checking account with them to do so. A $10M BOA investment account with a cash account in Wealth Management Division DID NOT count.

All have received funds or additional document requests from participating banks.

The payroll portion was for $1,000 an employee up to $10,000 with EIDL amounts in excess of $10,000 for payroll, lost revenue and operating expenses. I originally prepared thinking average monthly payroll at 2.5 times was going to be it but additional fund requests from $30K to $1M have been met with DocuSign notes followed by bank deposits.

The forbearance will be next test. I had all open separate accounts to transfer the relief funds into and put payroll through to document payroll along with other segregation techniques to give a complete and accurate accounting for forbearance.

BUT, we were told by small participating bank, BNB (Bridghampton National Bank) that applications not funded would be held and processed for next batch of funding as I had a pal who is computer illiterate and could not navigate the SBA site which I walked him through but couldn't access portal of his bank, BNB because it had none. All his BNB application was done through email and in-person by appointment with fill in PDFs and MS Excel spreadsheets. He was only one late to party.

Not a peep from the SBA about our EIDL application, 17 days later...

One thing our banker told us is that if you don't get the SBA money on this current batch...you'll have to get in line all over again for the next one. So your app isn't queuing up and waiting when the fund is "reloaded" with money unless you or your banker puts you back in line.

[a fan]

Nice information to have, Jim, thank you!

[Farfromgeneva]

I was involved in about 30 applications starting in February with clients and friends.

Initial submissions were through SBA portal for Disaster Relief Recovery Loans for Home/Sole Proprietor and Business (Superstorm Sandy gave me invaluable experience), original COVID-19 Payroll Protection Program website, revised COVID-19 Payroll Protection Program/Economic Injury Disaster Loan website, facsimile, mail and delivery. Then same submissions in participating bank portals as they opened up. Wells Fargo, Bank of America, Citibank and JPMorgan Chase. Had to have a checking account with them to do so. A $10M BOA investment account with a cash account in Wealth Management Division DID NOT count.

All have received funds or additional document requests from participating banks.

The payroll portion was for $1,000 an employee up to $10,000 with EIDL amounts in excess of $10,000 for payroll, lost revenue and operating expenses. I originally prepared thinking average monthly payroll at 2.5 times was going to be it but additional fund requests from $30K to $1M have been met with DocuSign notes followed by bank deposits.

The forbearance will be next test. I had all open separate accounts to transfer the relief funds into and put payroll through to document payroll along with other segregation techniques to give a complete and accurate accounting for forbearance.

BUT, we were told by small participating bank, BNB (Bridghampton National Bank) that applications not funded would be held and processed for next batch of funding as I had a pal who is computer illiterate and could not navigate the SBA site which I walked him through but couldn't access portal of his bank, BNB because it had none. All his BNB application was done through email and in-person by appointment with fill in PDFs and MS Excel spreadsheets. He was only one late to party.

Not a peep from the SBA about our EIDL application, 17 days later...

One thing our banker told us is that if you don't get the SBA money on this current batch...you'll have to get in line all over again for the next one. So your app isn't queuing up and waiting when the fund is "reloaded" with money unless you or your banker puts you back in line.

I know the guys at Bridge, Kevin and John. Pretty good community bank execs. Dominant LI bank already but expect them to sell in next two years.

[jhu72]

I have a feeling at lot depends on your bank. It seems some banks just don't want the business.

[Trinity]

3F4C7C1D-744B-417D-B5C1-553B152D0236.mov

“If the Fed makes every speculator whole, and screws the people—it’s really dangerous what they’re doing given their mandate,” says former Fed advisor Danielle DiMartino Booth. Watch this (free) interview with Danielle and Hedgeye CEO Keith McCullough.

[njbill]

Which one of you chuckelheads was on here earlier bleating on about how awful the stock market was today after the Gilead announcement? Step out into the light!

Market up just another ho-hum 3% today. Lots of really dumb investors obviously who don't read a lacrosse forum about the need to be shorty this market!

That was me though I didn’t say it was “awful.” 3% is nice. Hopefully it won’t be followed by a 5% drop next week, but that remains to be seen. Today’s gain was largely due to the news of reopening, not Remdesivir.

Are you the chucklehead who has posted the same news 1 million times based on a video leaked of doctors discussing a study that is being paid for by Gilead? What would you expect them to say?

Is it time for your hero to switch from Chloroquine to Remdesivir?

BTW, if you have been following the news, you would know that that is one of the drugs that has been reported for weeks to be showing possible promise. There are at least scores of other drugs in various stages of development and testing around the world that may prove to have therapeutic value. Everyone hopes that one or more of them will prove to be effective. And sooner rather than later. Same for a vaccine. Unfortunately for your hero, they will be too late to save his sorry ass.

[Farfromgeneva]

A lot don’t which I had suggested before. The rate is below the lever head expense, barely covers cost of funds for banks. The fees aren’t as impressive. 2pts on 2mm, even 5pts on sub $250m isn’t all that. Many banks don’t have the staff to deal with the loans in general and even the ones that have PLP status make a heck of a lot more on traditional 7a loans.

Here’s the economics on 7a compared with say a $1mm loan where you make 3pts in fees.

7a:
75% govt gtd (750k)
25% bank credit risk “pari passu” ($250k)
Prime + 2.75% (max rate allowable but as in many cases the ceiling becomes the floor, so to speak, most loans end up there)
1% servicing fee for bank
1.5% origination fee
Bank sells Govt gtd portion loan for around $115/$100 -thats been the clearing price for like 3-4yrs now.
-have to split premium so net $112.5/100 on $750k so like around $93k in premium fee income earned.
Pay out 30-40% of premium fee income to origination and net 6-9pts.
Say loan defaults in 4yrs (typical)
You get prime + 2.75% whereas a traditional bank loan is Prime - 0.50% to Prime + 1.00% on the $250k retained. Pickup of call it 1.00-2.00% over other bank loans in book.
1% servicing on the whole $1mm until default ($10k/yr)

Versus - underwater on PPP loan interest income by 2-2.5% per year. (Overhead expense is 2-3% for most banks and cost of funds are around 1%, little lower today depending on amt of wholesale funding at bank)
3% fee
Same administrative expense if not more bc now you have to certify payrolls which doesn’t exist.

Banks are leveraged 10:1 so pulling forward fee income and allowing it to compound for 4 years is powerful.

There’s no question this program is ultimately uneconomical for the banks. Reasons to do it are to help bail out existing customers in trouble where you have other credit exposure and the marginal marketing benefit to being involved, but we are seriously overbanked in this country with still 5,200-5,300 banks so that’s not very valuable.

[Jim Malone]

An 1/8 of a basis point is still $100K or so, “so no cry me a river”! Too many so’s in a sentence so 1/8 of 1/8 basis points subtracted

[Trinity]

How does the market price in armed Maga rallies around the country?

[Farfromgeneva]

An 1/8 of a basis point is still $100K or so, “so no cry me a river”! Too many so’s in a sentence so 1/8 of 1/8 basis points subtracted

1 basis point is 1/100th of 1%.

1% on $1mm is $10k then divide that by 100. Hundred bucks.

[CU77]

I was involved in about 30 applications starting in February with clients and friends.

And a small business that can't afford someone like you, or be lucky enough to have someone like you as a friend that won't charge? Seems like they're screwed.

[a fan]

Not seems.

I have so, so many restaurant owner friends who are royally F'ed.

Meanwhile, Ruth's Chris gets $20 Million.

[youthathletics]

Curious, why do you suppose that is? Which is 5 mill less than the Kennedy center for a singular building.

[a fan]

Apples and oranges.

The issue with Ruth's Chris is that they're a chain with over 6,000 employees and millions of dollars in the bank taking finite dollars (the program is out of money) out of a program that is specifically designed for small business....shops with fewer than 500 employees.

If you look at the PPP website, it specifically calls out, and I quote "All businesses – including nonprofits, veterans organizations,
Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply."

There are, of course, exemptions to this size rule....but come on...a national chain with 6,000 employees taking from a fund specifically designed for small businesses? And with so many of those businesses getting nothing?

Thats why everyone is angry. If Ruth's Chris got that money, and so did all the small businesses who applied for PPP?

No one would care.

[Peter Brown]

Sounds like all beaches should open.

https://news3lv.com/news/local/sunlight ... ent-report

[Typical Lax Dad]

Sounds like all beaches should open.

https://news3lv.com/news/local/sunlight ... ent-report

First paragraph: The report, which isn't conclusive, shows that transmission from outdoor surfaces is significantly lower than under typical conditions.

[Peter Brown]

Sounds like all beaches should open.

https://news3lv.com/news/local/sunlight ... ent-report

First paragraph: The report, which isn't conclusive, shows that transmission from outdoor surfaces is significantly lower than under typical conditions.

Isn't it sunnier on beaches (mostly still closed) than in a subway (NYC: all open)? Sunlight destroys virus quickly, new govt. tests find

https://news.yahoo.com/sunlight-destroy ... 45675.html

Oh for the Florida haters, here's the list of beaches that are for the most part still closed:

https://floridapolitics.com/archives/32 ... still-open