Castanza

Not a bad idea at all. What would this look like in practice? Lets say I own 100 shares of Visa, average cost is 170. Current price is 145 or so. Buy 1 Call, strike price 85, expiration Jun-2022, for about 67/sh. Essentially you're buying 100 shares for 152/share (85 strike + 67 call price). But you only need to put up 6700 rather than 14,500 in the market. So your cost here is 7/share premium divided by the amount of cash you are borrowing ie 14500-6700 or 7800, about 9% or so. Pricey, but again it depends what your expectations are for that freed-up-cash. Interesting, thanks for sharing. For some reason I was thinking it was more complicated than that haha

Not a bad idea at all. What would this look like in practice?

orthopa, this is exactly why widespread testing was, and is needed. If we know beyond a shadow of a doubt that this is a real shit-your-pants pandemic, people will not say "fuck it". If we find out it's just, well, a really bad flu-like virus and there's not much we can do about it, well that helps us justify lifting some quarantine procedures. Screw everything else that has happened with Trump, he has put a crater in this country with how he handled this. Trump is probably screwed either way. If this is worse than expected and we see a lot of deaths his chances of winning are low. If this isn’t anywhere near as bad as we though he screwed because companies and people will be pissed they were forced to close over something that “could have been tested sooner etc.” Then again, he’s a “wartime president”. Don’t they always get re-elected?! :P It’s going to be interesting. People will vote with their “tip of the iceberg” wallets as they always do.

It looks to me like airlines, hotels, restaurants, cruise industry, travel industry, Boeing are all essentially bankrupt as of today. Most will not survive with no revenue if we do a soft lockdown that next 2-3 months. We know the government is going to try and bail some out. That is a tough thing for an investor to figure out (who the winners and losers are going to be). Didn’t work great for bank investors in 2008 (BAC and C); the companies survived but shareholders had their head handed to themselves. Shadow banking system might be the next shoe to fall... overleveraged companies. Oil and gas industry... Looks to me like their might be a real bifurcation in the market. A stock pickers market. 30% of companies weather the storm and 70% get shit kicked. Not great for ETF holders. Private equity would be my guess as a casualty. Another thing I noticed - treasuries were very weak today and interest rates have shot up. That rarely happens in such a down market. Is the financial system getting squeaky? If treasuries yields would explode upwards it would be game over, imo. Noticed that too - people have been saying even Treasury liquidity is off so people dumping what they can at what prices they can to get cash. Could it be the inflation scare of the House floating 2k/month payouts to every adult citizen and 1k/month for every child? If it passes, That's lots of f*cking money about to flood the system to a lot of people who don't really need it at a time when you dont have to spend it on the essentials (same bill allows deferral of ALL consumer and small business debt service like mortgages and credit cards and student loans w/ no penalties). I'm all for getting money into the hands of people who need it - but 4-8k/month for a household is A LOT and it sounds like it would be going to everyone regardless of immediate need. There has to be some amount of pain associated with handouts. I no more than 1-1.5k per household will cover rent for the majority of America. Anything else well, figure it out. I also think it should be some type of structured 0% interest loan with say 5 year repayment. 4K a month is massive raise for lower class, a good raise for middle class and 8k is a goddamn promotion for most people. That is insanity.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. The issue is 2008-09 is still fresh in many people's minds. Lots of ordinary people lost everything in the housing crash. Lots of big corporations got bailed out. Same thing looks to be happening again. Warren feels the scale is tipped too much one way. Lots of voters agree with her. I don’t disagree that lending should be sparingly and stringent. But you cross a line when you start mandating wages etc. There are simply better ways to structure this. They would be mandating wages if they take the offer. They don't have to take the offer. That's fair. The executives have "compensation consultants" to help them make more. Employees don't have that. You have to level the playing field. That’s not leveling the playing field. That’s straight up intervention and beyond. The business was fine before the pandemic. If you want to say “keep more cash on hand because next time you’re not getting a bailout” fine. Are you going to make that same mandate for every small business across the country? Ridiculous. A bailout is Intervention to begin with. I actually think the management should be booted in many cases. Heads on sticks do serve a purpose for a better future. #skininthegame. How can you mandate they pay a minimum wage higher than the federal minimum wage? That’s an attack on a specific industry and specific businesses. That’s not the function of government.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. The issue is 2008-09 is still fresh in many people's minds. Lots of ordinary people lost everything in the housing crash. Lots of big corporations got bailed out. Same thing looks to be happening again. Warren feels the scale is tipped too much one way. Lots of voters agree with her. I don’t disagree that lending should be sparingly and stringent. But you cross a line when you start mandating wages etc. There are simply better ways to structure this. They would be mandating wages if they take the offer. They don't have to take the offer. That's fair. The executives have "compensation consultants" to help them make more. Employees don't have that. You have to level the playing field. That’s not leveling the playing field. That’s straight up intervention and beyond. The business was fine before the pandemic. If you want to say “keep more cash on hand because next time you’re not getting a bailout” fine. Are you going to make that same mandate for every small business across the country? Ridiculous. The ordinary people that would bitch about a bailout would be the casualties. Retail/hospitality/airline/small business. Its not bankers and mortgage brokers this time. I’m all for the bailout of individuals with some type of temporary loan until the dust settles. I just think it’s disingenuous to use this as a power grab over “big bad business”. Airlines provide a shit ton of utility at razor thin margins. Not to mention they already operate under extreme regulations.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. The issue is 2008-09 is still fresh in many people's minds. Lots of ordinary people lost everything in the housing crash. Lots of big corporations got bailed out. Same thing looks to be happening again. Warren feels the scale is tipped too much one way. Lots of voters agree with her. I don’t disagree that lending should be sparingly and stringent. But you cross a line when you start mandating wages etc. There are simply better ways to structure this. They would be mandating wages if they take the offer. They don't have to take the offer. That's fair. The executives have "compensation consultants" to help them make more. Employees don't have that. You have to level the playing field. That’s not leveling the playing field. That’s straight up intervention and beyond. The business was fine before the pandemic. If you want to say “keep more cash on hand because next time you’re not getting a bailout” fine. Are you going to make that same mandate for every small business across the country? Ridiculous.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. The issue is 2008-09 is still fresh in many people's minds. Lots of ordinary people lost everything in the housing crash. Lots of big corporations got bailed out. Same thing looks to be happening again. Warren feels the scale is tipped too much one way. Lots of voters agree with her. I don’t disagree that lending should be sparingly and stringent. But you cross a line when you start mandating wages etc. There are simply better ways to structure this.

Why? What exactly did they do wrong? Let’s jack up the Capex on all of these companies so the already razor thin margins in the airline industry tighten even more and increase prices putting air travel back out of reach for the average American. Edit: either provide assistance with terms on the loan and let them handle it. Or don’t. You’re crossing the line when you try to dictate wages and all kinds of other political nonsense. Why not just buy out the airlines, convert it to a co-op and then handout copies of the Communist Manifesto? “Never let a good crisis go to waste!” Just another excuse to expand government control...

I hope she conveniently ends up on the no fly list for all the airlines.

Trading like a devil on steroids is the only thing that works now. BJ is up like almost 50% and their financials don’t even look that great. However, I don’t think they have to worry about renewals of their store leases all that much. Crazy times call for crazy measures :P

So much for the DAL floor at 45 :P

Same, was surprised it hit today.

He's like that about everything though. But I generally agree with what he was saying.

More infectious that H1N1 (24% global pop with .02% death rate) Less deadly than SARs (15% mortality rate compared to COVID-19 3.4%) Both of the above didn't receive vaccines or treatments for 8-9 months into the outbreak. SARs primarily was treated with antivirals and steroids. The vaccine was only available towards the end of the outbreak that was fizzling out on its own. For the medical experts on this forum. Why shouldn't we expect this to be somewhere in the middle? https://www.healthline.com/health-news/how-deadly-is-the-coronavirus-compared-to-past-outbreaks#So,-when-will-things-calm-down-with-COVID-19?-

Exited UPS at 101

My view has shifted quickly as prices continue to come down. Cash cows are now at the tops of my list right now. BRK, GOOG, FB, TPL, etc. Airlines once we have more clarity and some of the medical device companies are beginning to look interesting as well. I also don’t understand this (imo) nonsensical argument that everyone will be permanently working from home after this passes. Office space is generally a very small fraction of OPEX for most companies. When this passes, people’s desire to “get out” will look like a champagne bottle blowing it’s top. If we avoid any type of major recession and job/pay loss that sentiment will remain high. Americans specifically are busy individuals. Cabin fever will begin setting in shortly and “Don’t shit where you eat.” will be the new religion a few months after this is over.

This is what you happens when you try to combat a viral outbreak by listening to "nudge boy" behavioral economists and pseudoscientists. Rapidly achieving "herd immunity" sounds good on paper, but then you have to actually think about what will happen on the way to getting there... Some people still clearly have not learned the basic "flatten the curve" concept. Thank you for the inputs. Here's another perspective related to the UK situation and the "report": https://www.bloomberg.com/news/articles/2020-03-17/prolonged-social-distancing-would-curb-virus-but-at-a-high-cost FWIW, despite some reserves, I heavily support (indirectly and directly) the pro-active efforts deployed in my provincial jurisdiction which, for various reasons unrelated to the virus or the policies, has been relatively lucky, in terms of spread and impact, at least so far. I guess it is still relevant to ask questions, to adapt and to go for cost effective measures (definitions of "cost" and "effective" remaining open for debate). I just read that government officials announced that economic measures to be taken will prevent unemployment from rising to 20%. They are basically looking to flatten the curve. So a flurry of bailouts are coming and the emphasis has to be on the short term and I'm OK with that, at this point, although Bagehot, long ago, suggested that bailouts should balance the short term against the long term and moral hazard. As an avid follower of the GFC, I remember government officials suggesting then that another great depression could be avoided (although impossible to verify) with various monetary and fiscal bailouts. I would suggest that they tried to flatten the curve in a way but people ran out of will and perseverance and we've had the weakest recovery on record, a glaring absence of deleveraging and, in fact, developed economies have become very weak and compromised economic hosts and now a virus hits. It appears difficult to explain, at least from my humble perspective, why we should be surprised by the eventual course of economic events. I just worry about unintended consequences and wonder if, at least, we can base our decisions on solid data, analysis and rational reasoning that truly balances the short term with the long term? Can we think of (and implement) necessary reforms or do we just need that they become imposed on us the way natural selection can and simply hunker down? The downturn itself is essentially being ordered by the government. This thing would blow through quickly if there were no "social distancing". So given that they are effectively contributing to the severity of the downturn, we already have interference with free market principles before the first check is written. Under that environment, bailouts are fair game and they do not introduce moral hazard. It's very different situation from a financial crisis precipitated by extreme excess and rewarded with a bailout. Well put Eric. Even Justin Amash is in favor of individual bailout. It has to be one or the other. You either force shutdown and provide temporary loans to individuals or you let people stay open. Completely different from 08 as this wasn’t brought in by individuals.

re-entered some GOOG around 1080 Edit: RTN 117

Hitting the bottle early today? I think after noon is social acceptable but I usually start with lighter fare. No haha just picking stuff up while I was out and about. Edit: Looks like I went just in time :p Time to start selling $20 shots to the neighbors (https://www.inquirer.com/health/coronavirus/spl/pennsylvania-coronavirus-shutdown-statewide-governor-tom-wolf-20200316.html)

Stopped by the liquor store during lunch picked up a few bottles of red, Glenlivet 15, Bird Dog, and a case of Founders All Day IPA.....Apparently they are closing liquor stores in PA. Lock down without booze would be miserable....

Free market principles are abandoned the minute the govt says you can't do this and you can't do that. This is a very different situation from past financial crises. I wouldn't have supported bailouts in 2008 for anyone. I agree that individuals should have emergency funds, responsibility is important. You can't lock someone in a jail cell and then tell them to feed and support themselves. Either let stuff stay open and provide no type of assistance or close up shop and provide assistance with stipulations. Can't have the cake and eat it too. Or...tap your 6 months of an emergency fund? To each their own. I know I'll be helping people where I can.

Free market principles are abandoned the minute the govt says you can't do this and you can't do that. This is a very different situation from past financial crises. I wouldn't have supported bailouts in 2008 for anyone. I agree that individuals should have emergency funds, responsibility is important. You can't lock someone in a jail cell and then tell them to feed and support themselves. Either let stuff stay open and provide no type of assistance or close up shop and provide assistance with stipulations. Can't have the cake and eat it too.

I agree, give out a 1-1.5k per month loan at zero percent interest with a 3 year re-payment plan of some type. Or we could let people learn their lessons from overspending and to save? Paul you know as well that I am generally not in favor of bailouts...however I am also not against some type of safety net for a unique situation like this. The fact is if people are not allowed to go out to their job then there's going to be a lot of fallout. I'm fine with it as long as there are stipulations on what you can purchase and that it has to be paid back in full. I'd rather see corporations go under than your average Joe contractor who had his jobs canceled for the next 6 months. If the government is going to cause a shutdown and put peoples livelihood at risk then they should also provide a temporary (loan) safety net.

BRKb at 174