The Nation's Financial Condition

[Farfromgeneva]

Bars, restaurants, all retail-a different way of thinking about it all is that the retailer is renting the space “wholesale” and then earning revenue off unit space pricing in effect. So risotto isn’t expensive because it takes a long time to cook but rather you’re renting out a fraction of your space, things that tie up the table capacity longer needs to cost more. Sitting around rocking a bottle of wine, apps, dessert. That has to have higher margins to justify extending the additional time to the customer.

Another interesting item: Massa Son has been bounced from SoftBank, Uber is cutting nearly 20% of its workforce and shutting down planned capex and SoftBank is selling most to all of its stake in Sprint. SoftBank appears toast even before WeWork goes into BK. These guys were the marginal supplier of capital in the venture capital universe for most of this decade and greatly distorted these private markets. Their unsurprising fall from Grace (and solvency) should have profound effects on that segment. Lot of oil money invested in the Vision Fund too which is another hit to Middle East sovereign wealth

[Typical Lax Dad]

Bars, restaurants, all retail-a different way of thinking about it all is that the retailer is renting the space “wholesale” and then earning revenue off unit space pricing in effect. So risotto isn’t expensive because it takes a long time to cook but rather you’re renting out a fraction of your space, things that tie up the table capacity longer needs to cost more. Sitting around rocking a bottle of wine, apps, dessert. That has to have higher margins to justify extending the additional time to the customer.

Another interesting item: Massa Son has been bounced from SoftBank, Uber is cutting nearly 20% of its workforce and shutting down planned capex and SoftBank is selling most to all of its stake in Sprint. SoftBank appears toast even before WeWork goes into BK. These guys were the marginal supplier of capital in the venture capital universe for most of this decade and greatly distorted these private markets. Their unsurprising fall from Grace (and solvency) should have profound effects on that segment. Lot of oil money invested in the Vision Fund too which is another hit to Middle East sovereign wealth

I don’t see how small downtown cafes/restaurants that rely on egg sandwiches and coffee in the morning and then the lunch crowd will survive. These spots thrive on folks working in the area. Many downtown office buildings will be down 50%. People working from home won’t eat out for lunch as often. There will be places that get by and some may even do well but retail and restaurants will suffer. These restaurants that have a dine in component on “re-opening” better make hay while they can....it’s eventually going to be dine outside or takeaway once cases start building again. Until we get a vaccine or something, it will be the most rational way to go. We have no immunity.

[Andersen]

I have to admit, for me "Bar Rescue" is a guilty pleasure.
For what its worth, here's his take on the current situation:

https://www.washingtonian.com/2020/05/0 ... -after-cov

[cradleandshoot]

I have to admit, for me "Bar Rescue" is a guilty pleasure.
For what its worth, here's his take on the current situation:

https://www.washingtonian.com/2020/05/0 ... -after-cov

I love "bar rescue" I try to keep track of how many times Mr Taffer uses the F word in every episode. I usually lose track half way through every episode. I do think Mr Taffer is a brilliant marketing guy. He knows which experts to bring in to clean up these rat infested swill holes and try to make them respectable again. He is not and never will be a booze expert. He does know people that are. His program is one of those shows were you check your brain in at the door. If you do that you can enjoy all the chaos and dysfunction of these stupid bar owners he is trying to help.

[dislaxxic]

The Trump Depression Grows

Unemployment claims rise by 2.4 million as states try to open for business...with another giant job loss number due out Friday. Shall we re-open for business, while SO many jobs have been lost and very few are confident of going out and spending because of very poor testing/tracing procedures...

WHY are we so far behind the world in testing...why do we have no unified PLAN? One guy's "plan" is "re-open the economy and cross your fingers..."

Trump's Depression deepens...

..

[Farfromgeneva]

Why use Politico for macroeconomic stories? Seems to make little sense to me, I’ve read a few linked here over time and they screw up a lot of information or misdiagnose problems from information they pull in all of the ones I’ve seen. There’s gift websites like bls, occ, fdic, fed reserve, that provide the data and also do their own research. Then you have CNBC, Bloomberg, WSJ websites which may have some journalism issues but are focused on business and/or economics (to me Bloomberg is eBay but their retail offering is a massive drop off from the terminals)

[cradleandshoot]

The Trump Depression Grows

Unemployment claims rise by 2.4 million as states try to open for business...with another giant job loss number due out Friday. Shall we re-open for business, while SO many jobs have been lost and very few are confident of going out and spending because of very poor testing/tracing procedures...

WHY are we so far behind the world in testing...why do we have no unified PLAN? One guy's "plan" is "re-open the economy and cross your fingers..."

Trump's Depression deepens...

..

I am glad I am presently laid of jaundice boy. I can't wait to give you an industrial strength case of FLP agita. I just checked the garden this morning. All of our salad greens are just sprouting. I just took our new dog for a walk. I am loving life right now. How are you and yours surviving the pandemic? You sound way more cranky than I have ever been there short legs. My mission here on this forum is to give you hope. Don't worry Mr Dis, in the words of little orphan Annie... The sun will come up tomorrow. That is of course unless Trump says otherwise.

[Farfromgeneva]

Technically “if trump says otherwise” means better than 50/50 odds it’s shining bright and all is good in Pete the cats world.

[old salt]

A bit off topic but still dog related. My wife and I adopted our new forever pet 2 weeks ago. She is a Beagle/Lab/Mutt. She was dropped off waaay pregnant at an animal shelter in Kentucky. She wound up with her foster parents here in NY on a Saturday and she had 8 pups on Monday. Two weeks later her fosters brought in 8 more abandoned pups. Our little Roxy took them all in as her own. This beautiful little girl spent 2 and a half months nursing 16 puppies around the clock. I can't even imagine the love it takes to do that. Roxy is so very special to my wife and I. She has given so much unconditional love and care to all of her pups. Today she is getting the rest, nutrition and the one on one attention she has never had. Next week, hopefully we will be bringing her in to be spayed. My wife and I figure she has done more than her share of taking care of all of her pups. I just have to figure out how to get her to chase balls and for the first time in her life learn how to play. I tip my hat to you OS for all that you for our four legged friends. I don't know how you do it without getting attached to them. There were a number of people that wanted to adopt our Roxy. My wifes connections with the people at rescued treasures put us at the top of the list. I am so grateful we have our little Roxy now running the show at our house. There is nothing close to the love of a dog.

Yep. Failed fosters are the best. I end up keeping the ones who are not adoptable for medical or behavior reasons, to ensure they get the medical treatment they need & to give them a chance to overcome their behavioral problems, which they eventually do.

It's amazing that all 16 pups made it. Must have been keeping Roxy well nourished while she was the wet nurse. That experience will mold her behavior for life. She did her part & will be happy when spayed. See if she collects a litter of soft toys to satisfy her maternal instincts.

[CU88]

https://www.bls.gov/news.release/laus.nr0.htm

Economic News ReleasePRINT:PrintLAU LAU Program LinksSAE SAE Program Links
State Employment and Unemployment Summary
For release 10:00 a.m. (EDT) Friday, May 22, 2020 USDL-20-1013

Technical information:
Employment: [email protected] * www.bls.gov/sae
Unemployment: [email protected] * www.bls.gov/lau

Media contact: (202) 691-5902 * [email protected]


STATE EMPLOYMENT AND UNEMPLOYMENT -- APRIL 2020


Unemployment rates were higher in April in all 50 states and the District of
Columbia, the U.S. Bureau of Labor Statistics reported today. Similarly, all
50 states and the District had jobless rate increases from a year earlier.
The national unemployment rate rose by 10.3 percentage points over the month
to 14.7 percent and was 11.1 points higher than in April 2019.

Nonfarm payroll employment decreased in all 50 states and the District of
Columbia in April 2020. Over the year, nonfarm payroll employment decreased
in all 50 states and the District.

This news release presents statistics from two monthly programs. The civilian
labor force and unemployment data are modeled based largely on a survey of
households. These data pertain to individuals by where they reside. The
employment data are from an establishment survey that measures nonfarm
employment, hours, and earnings by industry. These data pertain to jobs on
payrolls defined by where the establishments are located. For more information
about the concepts and statistical methodologies used by these two programs,
see the Technical Note.

Unemployment

Nevada had the highest unemployment rate in April, 28.2 percent, followed by
Michigan, 22.7 percent, and Hawaii, 22.3 percent. The rates in 43 states set
new series highs. (All state series begin in 1976.) The rates in Hawaii and
Nevada exceeded their previous series highs by more than 10.0 percentage points
each, while the rates in Michigan, New Hampshire, Rhode Island, and Vermont
exceeded their previous highs by more than 5.0 points each. Connecticut had
the lowest unemployment rate, 7.9 percent. The next lowest rates were in Minnesota
and Nebraska, 8.1 percent and 8.3 percent, respectively. In total, 27 states
and the District of Columbia had unemployment rates lower than the U.S. figure
of 14.7 percent, 10 states had higher rates, and 13 states had rates that were
not appreciably different from that of the nation. (See tables A, B, and 1.)

In April, the largest unemployment rate increases occurred in Nevada (+21.3
percentage points), Hawaii (+19.9 points), and Michigan (+18.4 points). Rates
rose over the month by at least 10.0 percentage points in an additional 17
states. The smallest over-the-month jobless rate increases occurred in Nebraska
(+4.3 percentage points) and Connecticut (+4.5 points). (See table C.)

The largest unemployment rate increases from April 2019 occurred in Nevada
(+24.2 percentage points), Hawaii (+19.6 points), and Michigan (+18.4 points),
with another 21 states experiencing increases of 10.0 points or more. The
smallest over-the-year rate increases occurred in Connecticut (+4.2 percentage
points) and Minnesota (+4.9 points). (See table D.)

Nonfarm Payroll Employment

Nonfarm payroll employment decreased in all 50 states and the District of
Columbia in April 2020. The largest job declines occurred in California
(-2,344,700), New York (-1,827,300), and Texas (-1,298,900). The largest
percentage declines occurred in Michigan (-22.8 percent), Vermont (-19.6
percent), and New York (-18.8 percent). (See tables E and 3.)

All 50 states and the District of Columbia had over-the-year decreases in nonfarm
payroll employment in April. The largest job declines occurred in California
(-2,324,000), New York (-1,904,900), and Texas (-1,110,600). The largest
percentage declines occurred in Michigan (-23.0 percent), Vermont (-21.5 percent),
and New York (-19.4 percent). (See table F.)

[Farfromgeneva]

Hertz filed BK today (or yesterday technically). It was close but there was a difference of opinion between types of creditors if BK was best. There likely will be a flood of fleet cars into the market in 6-12mo making used cars cheaper for a couple of years (not a bad thing for consumers) but May interestingly test the ratings agencies models for appropriate credit enhancement/subordination a slice of bonds must have to carry a Aaa rating, currently around 30%. So basically Aaa is like the probability of the US defaulting-very low, should effectively never happen. These bonds have short 2-3yr average lives but pay nothing much due to low risk of default. Agencies say 30% of a buffer on losses on a pool of vehicles and you should never take a penny hit. Expected loss = Prob of Default (PD) x Loss Given Default (LGD). So if a pool of leases default and the cars are auctioned maybe you’d take a 40% hit (I’m not an auto abs guy so example) and say 15% of those default you’d have a 6% total loss. Because of the Hertz default it defaults the bonds in the fleet in this type of deal and they liquidate the fleet securing the bonds. So question is will they get 70 cents on the dollar back? If not the agencies were wrong though it would be fair to argue that a Aaa PD isn’t Zero and this might be the singular incidence expected in a couple decade history of this stuff.

But still interesting as customers and to see how this shakes out assuming it does liquidate (the Special Purpose Vehicle that technically owns the cars and is the debtor) and what that does to the auto market for a bit.

Tesla better get that battery cost down and keep Musk from jumping because cheap gas combined with cheaper cars and continued low interest rates is going to make cars cost competitive for a while longer.

[youthathletics]

Seen this move before. One of the extended family members will but it back for essentially pennies on the dollar, then they’ll swallow up some of the smaller places to get quick inventory.

[Typical Lax Dad]

Hertz filed BK today (or yesterday technically). It was close but there was a difference of opinion between types of creditors if BK was best. There likely will be a flood of fleet cars into the market in 6-12mo making used cars cheaper for a couple of years (not a bad thing for consumers) but May interestingly test the ratings agencies models for appropriate credit enhancement/subordination a slice of bonds must have to carry a Aaa rating, currently around 30%. So basically Aaa is like the probability of the US defaulting-very low, should effectively never happen. These bonds have short 2-3yr average lives but pay nothing much due to low risk of default. Agencies say 30% of a buffer on losses on a pool of vehicles and you should never take a penny hit. Expected loss = Prob of Default (PD) x Loss Given Default (LGD). So if a pool of leases default and the cars are auctioned maybe you’d take a 40% hit (I’m not an auto abs guy so example) and say 15% of those default you’d have a 6% total loss. Because of the Hertz default it defaults the bonds in the fleet in this type of deal and they liquidate the fleet securing the bonds. So question is will they get 70 cents on the dollar back? If not the agencies were wrong though it would be fair to argue that a Aaa PD isn’t Zero and this might be the singular incidence expected in a couple decade history of this stuff.

But still interesting as customers and to see how this shakes out assuming it does liquidate (the Special Purpose Vehicle that technically owns the cars and is the debtor) and what that does to the auto market for a bit.

Tesla better get that battery cost down and keep Musk from jumping because cheap gas combined with cheaper cars and continued low interest rates is going to make cars cost competitive for a while longer.

Expected Loss....years ago I built my own model to price a portfolio of middle market leveraged loans that we needed to mark to mark. Then sold in bulk to Highland. We got just about where we had marked them. I spent two days at an LPC/S&P conference on CLO structures and built my own model just in case. I should have marketed it and sold it!

[Brooklyn]

Imagine if this had been so under Obama - the delusional right wing would be having a field day criticizing him and the Dems.

[kramerica.inc]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

[MDlaxfan76]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

Kram, you're correct, of course, that the "left" are 'having a field day' criticizing Trump and the Trump GOP.

Seriously, though, can you imagine Obama having made the various statements, made the various decisions, that Trump has? Can you imagine Obama having politicized this pandemic to this degree?

Or would Obama have made a series of very different, far more cautionary statements, made decisions to engage the federal government earlier, and continued to be cautious throughout? Would he have spoken primarily in unifying terms?

Of course, the pandemic would have nevertheless happened and been deeply damaging, indeed 'mistakes' would still have been made, but quite definitely not to the same degree. So, there would have been ample fodder for critique, but would Obama have positioned this as 'nothing', going to go away 'magically', etc, etc, etc? Nope.

[Brooklyn]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

You know the old story, pal ~ turnabout is fair play.


As for the delusional-in-chief, he continues to play the game of "I inherited a mess" and attributes his failings to Obama. That's utter dementia but it's no surprise that his mindless followers continue to defend him.

[youthathletics]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

Kram, you're correct, of course, that the "left" are 'having a field day' criticizing Trump and the Trump GOP.

Seriously, though, can you imagine Obama having made the various statements, made the various decisions, that Trump has? Can you imagine Obama having politicized this pandemic to this degree?

Or would Obama have made a series of very different, far more cautionary statements, made decisions to engage the federal government earlier, and continued to be cautious throughout? Would he have spoken primarily in unifying terms?

Of course, the pandemic would have nevertheless happened and been deeply damaging, indeed 'mistakes' would still have been made, but quite definitely not to the same degree. So, there would have been ample fodder for critique, but would Obama have positioned this as 'nothing', going to go away 'magically', etc, etc, etc? Nope.

Obama would have done the exact same, if he had listened to Fauci, just like Trump did....as far back as late January. He would have also helped send PPE to China, just like this administration did.

[MDlaxfan76]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

Kram, you're correct, of course, that the "left" are 'having a field day' criticizing Trump and the Trump GOP.

Seriously, though, can you imagine Obama having made the various statements, made the various decisions, that Trump has? Can you imagine Obama having politicized this pandemic to this degree?

Or would Obama have made a series of very different, far more cautionary statements, made decisions to engage the federal government earlier, and continued to be cautious throughout? Would he have spoken primarily in unifying terms?

Of course, the pandemic would have nevertheless happened and been deeply damaging, indeed 'mistakes' would still have been made, but quite definitely not to the same degree. So, there would have been ample fodder for critique, but would Obama have positioned this as 'nothing', going to go away 'magically', etc, etc, etc? Nope.

Obama would have done the exact same, if he had listened to Fauci, just like Trump did....as far back as late January. He would have also helped send PPE to China, just like this administration did.

I don't think you actually answered my question, just tried to deflect.

Sure, a mistake or two would have been made in late January...but February forward do you really think he'd not have had a very, very different public posture, and made very, very different decisions about engaging the federal government?

We can run the tape for you on Trump's various statements along the way...do you really think Obama would have been so egregiously buffoonish?

This is not to say Obama wouldn't have made his own mistakes, and he certainly would have received withering criticism from the right, but let's be honest about what we think really would have happened.

[youthathletics]

So you’re surmising that the delusional right winger extremists would possibly be doing EXACTLY what YOU and some lefties are doing right now?

And you don’t condone that behavior, I assume?



So where does that put you on the scale?

Where is afan when we need him to point out another hypocritical poster on fanlax?!

Kram, you're correct, of course, that the "left" are 'having a field day' criticizing Trump and the Trump GOP.

Seriously, though, can you imagine Obama having made the various statements, made the various decisions, that Trump has? Can you imagine Obama having politicized this pandemic to this degree?

Or would Obama have made a series of very different, far more cautionary statements, made decisions to engage the federal government earlier, and continued to be cautious throughout? Would he have spoken primarily in unifying terms?

Of course, the pandemic would have nevertheless happened and been deeply damaging, indeed 'mistakes' would still have been made, but quite definitely not to the same degree. So, there would have been ample fodder for critique, but would Obama have positioned this as 'nothing', going to go away 'magically', etc, etc, etc? Nope.

Obama would have done the exact same, if he had listened to Fauci, just like Trump did....as far back as late January. He would have also helped send PPE to China, just like this administration did.

I don't think you actually answered my question, just tried to deflect.

Sure, a mistake or two would have been made in late January...but February forward do you really think he'd not have had a very, very different public posture, and made very, very different decisions about engaging the federal government?

We can run the tape for you on Trump's various statements along the way...do you really think Obama would have been so egregiously buffoonish?

This is not to say Obama wouldn't have made his own mistakes, and he certainly would have received withering criticism from the right, but let's be honest about what we think really would have happened.

Not deflecting at all, just attempting to bring you back to earth. You have just openly written that "Obama would have also made mistakes along the way"....what if BHO presented this 180 from Trump and scared the hell out of everyone.....would that have made you happier? Wonder if there could have been more suicides b/c of that, maybe looting beyond control out of fear that food would not available. You or I simply do not know.

Hope all are safe and healthy in your family MD. Have a great day.