Rolling US Economy Into The Shitbin Thread

to what extent is the massive fed preemptive action currently underway reducing/not reducing the risk from that?

lol at all of this

last week: stocks rise 5% on covid optimism!!!

*5 days pass, in which absolutely nothing happens that was not already widely expected*

stocks fall 5% on glum covid outlook!!!

supposedly the huge gains of the last couple months were predicated on the fed taking strong action and giving investors confidence that the world would not explode

which always seemed like bullshit to me. i don't think it's a coordinated effort or anything, but the last few weeks have just seemed like willingly suspending disbelief to pump the market back in and squeeze the last juices out of it before manufacturing slowdowns and a collapsing real estate market become so obvious that even investors have to acknowledge it.

to what extent is the massive fed preemptive action currently underway reducing/not reducing the risk from that?

― longtime caller, first time listener (man alive), Thursday, June 11, 2020 10:14 AM (eighteen minutes ago)

idk, but if you read the regulations/descriptions of the PPP program, it says that the loans can be resold on the secondary market ... so, if I was a cartoonish pessimist, I would suggest that the next "sub-prime" crisis will be risky PPP loans ... they have now reduced the portion of the loan that has to be used for payroll from 75% to 60% and given people/businesses 24 weeks to qualify for forgiveness as opposed to the original 8 weeks.

(2) getting into the morass of accounting details is how they getcha

ooooooooh!!!! do tell!

use of "stonks" really peaking this past month.

xp -- wait really? Why the fuck would anyone buy a loan that is meant to be forgiven?

how much truth is there in the apocalyptic "soon people will have to pay all their back rent/mortgage payments and everything will crash and burn" articles that are coming out now?

xp -- wait really? Why the fuck would anyone buy a loan that is meant to be forgiven?

idk? it's there in the text of the law though. Maybe not all the loans are intended to be forgiven? I am guessing that at minimum, it is a way for banks to free up more capital in the short-term to do more lending?

perhaps they will be unforgiven?

i really hope these redditors/robinhood first time account people that I have read so much about the past month don't lose their shirt.

supposedly the huge gains of the last couple months were predicated on the fed taking strong action and giving investors confidence that the world would not explode

which always seemed like bullshit to me. i don't think it's a coordinated effort or anything, but the last few weeks have just seemed like willingly suspending disbelief to pump the market back in and squeeze the last juices out of it before manufacturing slowdowns and a collapsing real estate market become so obvious that even investors have to acknowledge it.

― our god is a might god (Karl Malone), Thursday, June 11, 2020 10:26 AM (forty-eight minutes ago) bookmarkflaglink

it's impossible to know if this pullback will start the end-of-february-esque retest of lows or will start the end-of-april-esque retest of some highs.

i really hope these redditors/robinhood first time account people that I have read so much about the past month don't lose their shirt.

― Yerac, Thursday, June 11, 2020 1:18 PM (nineteen minutes ago) bookmarkflaglink

I was just reflecting on what a terrible feature of our system it is that people feel like they need to wait around for others' pain in order to get on the american dream latter - specifically in response to a reddit post that was hoping for widespread foreclosures so he could buy a house, a horrible sentiment yet sort of understandable.

And then on top of that, the system throws a lot of headfakes at you

because in america someone has to lose in order for you to feel like you can gain.

*american dream ladder

go, shitbin, go

stocks rise 5% on covid optimism!!!
*5 days pass, in which absolutely nothing happens that was not already widely expected*
stocks fall 5% on glum covid outlook!!!

it's not even as compelling as mass psychosis

The state police said it will be an 8 hour wait from the back of the line to speak to a state employee about unemployment. pic.twitter.com/plGONcpS6n

— Daniel Desrochers (@drdesrochers) June 17, 2020

Trump country.

stocks up on reports that unemployment line is now less than 16 hours long

jeez, what state is that?

i think kentucky (the tweeter lists kentucky.com as his website and reports for the lexington herald leader)

oh yeah. they've been dismantling their unemployment system for a decade iirc.

a sad coda to that unemployment line in Frankfort, KY yesterday:

Hundreds of Kentucky residents waited in line for as long as 10 hours outside a makeshift unemployment office at the State Capitol in Frankfort on Wednesday in hopes of getting paid for claims that, for some, dated back as far as March.

But in the end, a handful who had stood in line all day were turned away, prompting despair and anger, the Lexington Herald-Leader reports.

“Maybe, maybe 25 people left to be seen and they turn us away,” resident Deborah McLaughlin told the paper.

Hundreds more who arrived after the line was cut off were turned away, as well. The state’s computer system shuts down at 7 p.m. and cannot further process claims, officials told those in line.

sorry everyone, but you know computers. they don't work after 7 pm, gotta shut them down.

Yes, I am concerned the longer this goes on, the more losses banks will face. Large banks have more capital than they had before the 08 crisis, but not enough. 1/2

— Neel Kashkari (@neelkashkari) June 19, 2020

They should stop paying dividends and raise capital to increase their resiliency. They can essentially inoculate themselves from COVID and should do so now. 2/2

— Neel Kashkari (@neelkashkari) June 19, 2020

i smell a moral hazard

if only these banks had some real skin in the game

Senior Trump economic advisor Kevin Hassett is leaving. A second senior advisor, Tomas Philipson, is leaving, too:

https://www.washingtonpost.com/business/2020/06/24/white-house-economist-philipson-departure/

And the market is getting skittish again:

I hope everyone is watching this. There’s not much left they can do before the bottom falls out of the market.https://t.co/UkJXeUYUhq

— Angry Staffer (@AngrierWHStaff) June 25, 2020

I don't know, but I think the economy might be in pretty bad shape.

Has anyone else read this? Not any new information, really, but pulls together a fair amount of date, synthesizes it, and makes its case pretty well...

https://newleftreview.org/issues/II123/articles/robert-brenner-escalating-plunder?fbclid=IwAR2hj5SYEErcjs0rW6YHtMFpjX5laUuYQi5DMIknsoFY1qib1LweqyhzW3s

Has anyone else read this? Not any new information, really, but pulls together a fair amount of date, synthesizes it, and makes its case pretty well...

https://newleftreview.org/issues/II123/articles/robert-brenner-escalating-plunder?fbclid=IwAR2hj5SYEErcjs0rW6YHtMFpjX5laUuYQi5DMIknsoFY1qib1LweqyhzW3s🕸

i think from now on sic should post the little spiderweb after those, like he is spiderman trying to stop up the web channels from funneling our information out

xp it was ever thus. governments create and sustain markets etc etc

Cirque du Soleil filing for bankruptcy, so there's your silver lining.

lol it's like the backbone of the economy of Quebec

but they infected us too

In case you were wondering- this is a high number

32% of U.S. households missed their July housing payments https://t.co/fR9ZExbH1M

— ≡l≡v≡nth (@3L3V3NTH) July 8, 2020

the number of evictions going through right now must be astronomical

Evictions for non-payment of rent are effectively still under a moratorium in Seattle, I’m pretty sure. (That is, financial hardship due to covid was made an acceptable defense for tenants in eviction proceedings.) no idea what the impact of that all is.

it's gonna be a scary fucking winter

are some federal student loan payments still suspended?

honestly i've been to terrified to check for months, and the service i've been forced to use is so terrible at notifying me about anything that i've heard nothing about it from them either.

Can someone explain the argument against a rent and mortgage moratorium until the end of COVID?

the people who own the property would make less money

so it's up to the people who don't own the property to lose money instead

Ask not...

I mean, there would presumably be cascading effects throughout the entire economy and financial system of a magnitude never seen before. But I imagine/hope that fed action could stem some of that?

It probably makes more sense for govt action to cover mortgages/rent on the front end and/or backstop them on the back end rather than just say "you don't have to pay and someone else gets stuck holding the bag"

in the UK a 3-month eviction ban has been extended until the end of August.

https://www.gov.uk/government/news/ban-on-evictions-extended-by-2-months-to-further-protect-renters

but.... what then? there is no way that people are going to be able to afford the arrears. the government just says landlords and tenants should 'work together'. LOLLLLL

the big problem that a lot of people here are fearing is that once the moratorium ends, people will be stuck with too much debt that needs to be repaid right away ... so there are people arguing, and I believe even legislation being proposed, to forgive rent/mortgage payments during the covid period. ... mortgages are somewhat easier to deal with from a policy perspective because the concept of "refinancing" already exists ... the outstanding payments could just be spread out through the loan period or the loan could be extended.

Rent is tougher ... but also more crucial because it affects mostly low-income or lower-income people compared to owners. ... I feel like one "moderate" approach would be to give rental property owners the equivalent of PPP loans to replace the lost rental income, and extend the moratorium on rent for like, a long time, at least until the end of the year. My more progressive approach would be to limit the class of property owners eligible for these loans based on income -- like, if we are talking about huge corporations ... no loans ... if we are talking about the little old lady who makes $30k off her rental and her only other income is social security ... then, yes.

in Florida, there are 2,600+ evictions pending in the court systems, and hundreds of evictions that have been approved by a judge, merely awaiting a Sheriff to serve them once the moratorium ends. like they'll probably show up the day the moratorium ends to remove citizens

here there are a handful of exceptions to the moratorium and we're starting to see landlords go about using them ...however, with the fact that it is summer plus lots of people are out of work, one of the handful of events going on in the city are caravans to the houses of these shitty landlords to protest their shitty behavior.