rb

Do you know how I know you don't live in Texas? Fair enough. Everyone outside of Texas hates oil companies. But even there the number has to be close to 50%.

Sure, it may make some sense. But I'm willing to bet that cutting their oil production in half when oil production is their main production ain't it. On the other hand will cutting a deal to increase the price of oil be beneficial from an electoral standpoint? I seem to recall back in 2012 that Obama was getting slammed for how much a gallon of gas costs. Maybe times have changes idk. One thing to keep in mind is that EVERYONE hates the oil companies.

I'll go ahead and say no. Compared to other times, the Fed is really aggressive. The Fed offers better terms than Berkshire. Pref + warrants make no sense for airlines now. They can't pay the div. So the pref is automatically common now. Why would you do that? It's all in. Buy an airline, use your financial muscle to basically do bridge financing for a year or two? That makes more sense. But if some combo of Fed/Treasury rescues the other airlines you're the biggest moron that God ever let through the door for doing that cause your competition has a lower cost structure than you do. So if you're looking for a pref deal you're probably looking somewhere that really just needs a bridge loan that's not that highly visible that the government would give a shit about. Airlines ain't it. Aercap would be a more likely candidate. But then why would they do a pref deal? Why wouldn't they just do a Berkadia type deal where they just buy the planes and lease them after they start to fly again? I will add that while the pref+warrant deals are shiny because they're high IRR, they're not so attractive from a shareholder perspective. Once markets calm and the storm passes these guys refinance and cash returns to Berkshire at a time when there redeployment opportunities are less. Think about it. They did a ton of pref+ deals during 08/09. How many of those companies are in the Berkshire portfolio today?

I will say this as an economist. The rule is that before you think that Joe Stiglitz got it wrong it's time to triple check your work. If after that it checks out you find the nearest church and pray that you are right. I'm not saying this about mortals like me. Really, really smart economists follow that rule, the kind with Swedish medals.

A tariff on oil has got to be the dumbest thing one can possibly come up with. If people have to pay to keep these guys in business then why not nationalize the oil industry? Texas can go cry in a beer.

Well EQR took in 2.7 billion in rents last year. At an EV of 30 billion. That's a 9% gross rent yield. Now if you found a property in EQR's markets that gives you a 9% gross yield don't you buy it in a nanosecond? I'm asking for a friend ;)

I am all about the govt not getting involved. I think that applies when you have idiot individuals who take too much risk. They hand their keys back. But a pandemic that forces restaurants and contractors to stop work. That's nobody's fault (okay, maybe the govt as they could've acted sooner). Tenants/Landlords/etc did not act recklessly and they don't deserve to be punished on a mass scale here. If you are worried about communist policies in housing, welcome to New York City. The rent control and stabilization laws here are so nuts. The haves and have nots are not divided on economic earnings. It's the people who got subsidized housing and subsided everything vs those who are free market. Someone on VIC mentioned that if you make $600/week in unemployment, who's going to flip burgers. That was a very valid question. Disincentives are very powerful. There were a few Republicans who wanted to limit unemployment benefits to people's previous earnings, not the auto $600/week. I thought those guys are hero trying to stop excess waste. Well what BG said. And it's not communist at all. What's actually happening is the optimal market solution. As it was learned during GFC mass foreclosure is a really bad way to maximize profits. So after learning the hard way, banks stopped foreclosing en mass. After that there were tons of people that basically squated for a good amount of time. I know of a few cases that lived in multi-million dollar mansions for a few years without making a single payment. They couldn't. They were broke. They were also real estate investors previously. Still they got to squat. So right now you have the same system going into place. There are obviously boneheads that didn't get it the first time around. So the government is adding the lubricant to get the process going fast. The Fed is providing the financing for the whole process by adding an ocean of liquidity. This takes stress off the system and prevents credit from tightening too much. I also think that this way it's providing cover for weak banks. I mean Wells Fargo is gonna be ok. But does anyone really want to find out how Bank OZK would do?

The problem with empty stadiums is loss of ticket revenues. This is particularly acute for Hockey which doesn't get much TV money. Ticket sales are around 70% of NHL revenue. At that level they probably can't cover expenses with empty stadiums. But even for the mighty NFL ticket sales are still around 40% of revenue. Can you actually operate at these level? As far as I know a lot of these teams don't actually make a lot of money.

Apparently they all got sick after that.

Does any one have any idea how sports come out of this? Even if the worst goes away in 3 months, that brings us to the end of June. Are people gonna be ok to cram themselves into stadiums come the fall? Are they just gonna cancel the seasons? To my fellow Canadians, what about hockey? The 2004 lockout was brutal. These guys already wear a ton of PPE. Maybe just issue a rule that gloves must stay on at all times?

I'll go ahead and say that he probably didn't do much. The S&P didn't get very cheap. He wasn't doing much buying when the S&P was around these levels previously. I don't think he's shooting his wad at 2600. When he was previously buying around these levels he was buying banks. But was pretty much loaded on those this time around. What I think we'll see at most, a reversal in the WFC position (lucky break?), possibly some bigger buyback. I think the biggest surprise would probably be a large purchase of PSX. As for me. I'll probably do nothing. Why would I sell at this price? It's not a good price and I have a massive tax liability on this position.

Someone should tell him what the Justice Department is actually for? I don't know... Alternatively, he could visit The Elmhurst hospital and don the PPE, mask etc and get an first hand idea how it works and where the stuff goes. Combine this with what I hear from my wife, it’s quite something. Did the US ever send soldiers to war telling them to count the bullets? I don’t think so. Maybe if you get a camera crew he will show up at Elmhurst?

I agree with pretty much everything you wrote. I think it is crucial to keep the timeline to reopen the economy as short as possible and in order for that to happen, new infection rates will need to come down. Well now pretty much the consensus seems to be that it'll be a recession. But consider that this is a moving average. A couple of weeks ago most ppl thought we weren't even gonna go in a recession. I was probably among them. Now I don't see how we don't even get a normal recession even under the best circumstances when we open. A drop in durable goods. Think about it, you went through a layoff, it's a freaking virus, you don't know if it comes back again or not, whether you get laid off again or not. Are you gonna go out and buy a new car or washing machine? My guess is that for a lot the answer is no. So a recession. I'd like to add that we recently haven't been doing very well with the recessions. So let's say that the best case scenario is we have a 2001. Sure! But honestly 2001 didn't feel that freaking good.

Someone should tell him what the Justice Department is actually for? I don't know...

Look, I am conservative, pro-republican so don't think what I am saying is political. Please use some common sense. If this thing spreads too quickly it will overwhelm the medical system. We have ample evidence of this. If it overwhelms the health care system people who get it will die needlessly due to lack of equipment and care. It won't happen that way if we can spread out the infection and if we can put in place policies that lock down people who get infected, as is done in various Asian countries. For those of us in age brackets unlikely to be affected, we risk not getting medical care if we have some medical issue other than covid. Or getting sick and then getting covid which can kill anyone. Look at it from a pure economic POV. If we do these shutdowns and we go back and everyone is still infected we will just have to keep locking down. This could drag on for months and months and cause economic chaos. We are paying a tremendous cost due to the shutdowns, lets make it as effective as possible. Seriously, no free lunch, I think what you are saying is a dose of sanity. I don't see why this is a political thing. It's not like the virus has a party registration. We are already doing social distancing and some sort of lockdown all over the place. Everyone agrees that these things help with epidemics. These cost a tremendous about of money. So why not get the most of it? Instead we have the deuchebag doctor over there going to his favourite speakeasy (among his other lesser speakeasies I presume). Then someone thinks he's the voice of sanity? Seriously? Why wouldn't you want to get the most bang out of your buck? Anybody considering the speakeasy doctor's advice consider this. A few weeks ago the UK prime minister mocked the virus and the disease and the UK considered going the heard immunity route. Now the UK has a lockdown in place, the prime minister is infected, their case numbers are going vertical, and the prime minister just sent a letter to his people telling them that shit's about to hit the fan.

What news from Europe has been "not so good"? Naturally thowed can reply for himself, but do you think the WHO COVID-19 sit report #69 looks good with regard to Europe? What stat in particular doesn't look good? Since Wednesday/Thursday number of new cases have levelled off in virtually every European country, including Italy and Spain. No more exponential growth, no more growth at all, but a flat line. I'd consider that great news honestly. I agree. While Europe has flattened , the US is showing exponential growth that is going to take weeks to break. What are you guys talking about? I've attached Italy, Spain, Germany, France, UK. Aside from Italy they look pretty fucking exponential to me. Italy has had a a China style quarantine for a couple of weeks now. No more growth at all? Seriously?

Lot's of countries all over have mandatory military service. Maybe ask yourself why all those countries you named are in SE Asia. Btw, at this point the Chinese response starts to look pretty good as well.

What you're missing is that Governments behave differently than wall street CEOs. They tend to not like inflation. Developed country governments have also behaved quite responsibly with this stuff despite what all the op-ed pieces say. Besides, if you manage to have 1% yields and 2% inflation aren't you already inflating your debt pretty well? Separately, if I knew what the markets were gonna do tomorrow I'd be richer than I am. I've definitely been getting a "buy the rumor, sell the news" vibe lately. So we'll see. My guess is that valuations at the point as still optimistic and we'll see 2200 on the S&P again as bad news keeps pouring in.

Let's just put it out there as a place to start. Every single piece of research out the points that there is nothing different about Coke compared to another soda drink. They're all the same. Basically sugar water. The only difference is how much money Coke makes. Hence the moat. A moat doesn't imply that the product is indispensable - you won't miss it if it's gone tomorrow. It's protection from competition and thus protection of it's margins. More along the lines of when you feel like a soda drink you'll likely choose coke. It also doesn't mean that if a company has a moat others don't. Coke has a moat. Pepsi has a moat as well. It's just that Coke's moat is likely a little wider and a little deeper than Pepsi's. In regards to brand loyalty and purchase decisions. Things get very complicated. There is a tool that marketers use called a long form interview. Where they take a subject and a purchase decision and they drill down on it for 30-60 minutes. You will be SHOCKED how many variables go into making a purchase decision as simple as some gum. People don't even realize these variables until you press then on it and pull it out. It all happens in the background. But it's tremendously involved. So when you say fond childhood memory, believe me there's a lot there to unpack. Unsurprisingly fond childhood memories is actually a big part of Coke's business model --> Moat. If you read Loosing My Virginity you will get a pretty good 3rd party description of Coke's moat at play. Richard Branson is probably one of the best marketers the world has ever seen. In the book he describes how horrible and foolish it was to go against Coke with Virgin Cola. I think he concludes that it was the hardest thing he'd done and his worst failure.

I wonder if they're just being a good corporate citizen or if they're seeing an upswing is non-payments. If it's the latter, it's really not good.

Well isn't that counter intuitive? Why do you need to isolate and expend a lot of effort if it is no longer a high consequence infectious disease? This seems like a pretty serious determination. "In the UK, a high consequence infectious disease (HCID) is defined according to the following criteria: acute infectious disease typically has a high case-fatality rate may not have effective prophylaxis or treatment often difficult to recognize and detect rapidly ability to spread in the community and within healthcare settings requires an enhanced individual, population and system response to ensure it is managed effectively, efficiently and safely" The UK is sticking their neck out early with this one for sure. No kidding. That was published March 19 - UK confirmed cases = 2.7K. March 27, UK confirmed cases = 14.7K. When I've read the guidance I've thought that there's probably some medical procedural thing that COVID doesn't have to be on that list and I don't know what I'm reading. But the UK has been pretty cavalier with this thing. The NHS is a great system but it actually has less spare capacity than Italy. So I'm thinking that UK is probably the next shit show. But then the UK has this guy: https://edition.cnn.com/2020/03/26/tech/dyson-ventilators-coronavirus/index.html ... and America has a bunch of guys who like to tweet. So maybe they'll be ok.

Honestly, at this point I don't think the actual number of dead matter so much. Economically speaking it doesn't matter at all. I mean maybe it'll be 80k dead in the US. Sure that's nothing. Even if it's 500k dead, long term economically it doesn't matter. It'll be mostly old folk which don't produce much anyway. But even if i pluck 500k out of the work force, I wouldn't get anything more than maybe, at most, a soft quarter. The economic reaction is clearly not linked directly to the number of dead. It's probably more linked to the horror shows that develop as this fucker takes hold. It seems to me that we've been persistently and pervasively too optimistic about the virus. China tried to ignore it initially. Then as it saw it develop clamped down hard. As we now observe, China actually clamped down early. They did so at a great economic cost. Now China is not your bleeding heart, let's save everyone type place. If 1 million have to die to for the economic miracle, then 1 million will die. So why did they do it? Then Italy and Spain ignored it and they turned into horror shows. UK made fun of it and it's about to become a horror show. If i had to venture a guess. Assuming that these people did not croak at home and we didn't hear health professionals bitching is that some of it is accidents. Seems like spikes happen in the winter, so you figure, more car accidents, chick breaks her neck skiing, dumbass on a snowmobile, etc. For the hospital part I'd say that those people took less time to die. But I'm just an economics/finance/ops guy, not a doctor. Maybe orthopa can tell us why he thinks hospitals were able to handle the volume before and now doctors are bitching.

Why do you shell out the money for coke?

I know what they'll say. It's what they always say: "Nobody could have predicted this."

Yep, another Trump guy with his "This is like the flu take". Thank you! ::)