Covid-19 Economic Impact

[Plutonic Panda]

Some stats about the deaths around this virus: https://apple.news/A4ePnSryLS1G1Zh8_o4rIrw

[AP]

A quick tip for anyone who doesn't know. Archive.is lets you get around sites', like WP and WSJ, paywalls.

http://archive.is/xCiox

[Plutonic Panda]

A quick tip for anyone who doesn't know. Archive.is lets you get around sites', like WP and WSJ, paywalls.

http://archive.is/xCiox

Thank you for that link.

[Teo9969]

This causes so many emotions in me and every single one of them is profoundly negative:

https://www.buzzfeednews.com/article...anies-potbelly

[Pete]

This causes so many emotions in me and every single one of them is profoundly negative:

https://www.buzzfeednews.com/article...anies-potbelly

I didn't get my loan (they ran out of money) and now I know why.

[5alive]

^^^

[TheTravellers]

"But the law provided some flexibility to restaurant and hotel groups by stating they could apply as long as they had no more than 500 workers at a single location."

Brought to you by the legislators that got lobbied the hardest by all their rich CEO buddies, no doubt. Sad, but not surprising, Congress hasn't truly given a crap about small businesses for a long time.

[RedDollar]

Maybe I'm confused here, but is this not about helping restaurant workers ? Or was this designed for small business in general ?

Jimmy's Egg is a chain, but the workers at the Jimmys I go to need as much help as those at Sunnyside Diner.

The problem is getting this relief money to the people who need it, does it really matter the size of business ?

[jonny d]

Maybe I'm confused here, but is this not about helping restaurant workers ? Or was this designed for small business in general ?

Jimmy's Egg is a chain, but the workers at the Jimmys I go to need as much help as those at Sunnyside Diner.

The problem is getting this relief money to the people who need it, does it really matter the size of business ?

Exactly. Wasn't the loan program for small businesses, with exceptions for restaurants? I mean, no one, and I mean NO ONE, will pay $70 for a steak without the ambiance of being at the steakhouse. They need funds to be able to reopen just as bad as other places (loans still need to be paid, rent, etc). That article screams pandering, to me.

[RedDollar]

Houston based Landry's Restaurant chain, owned by Tillman Fetitta who owns the Rockets, had to furlough 40,000 employees.

This idea that the larger chains have the money to keep people on the payroll is bunk. A month ago , Landry's had $700,000 cash on the balance sheet. Its all gone today.

And its very very difficult for Congress to find a way to get relief money to the people who need it, it ain't easy. That was the challenge of this program.

Last month, Fertitta had a net worth of $4 billion dollars, ya say, why could not continue to help his employees ?

Well, $2 billion of that is the value of the Rockets. And how much of the rest is liquid enough that he could easily turn it into cash ?

[Jersey Boss]

^ A real swell guy. He claimed he did those employees a favor when he cut them loose.

Houston Billionaire Tilman Fertitta laid off 45,000 employees quickly as a 'favor'
https://www.google.com/amp/s/www.chr...f-15194560.php

[Jersey Boss]

Nm double post

[RedDollar]

^ A real swell guy. He claimed he did those employees a favor when he cut them loose.

Houston Billionaire Tilman Fertitta laid off 45,000 employees quickly as a 'favor'
https://www.google.com/amp/s/www.chr...f-15194560.php

However they wanna spin it .

If ya don't have any cash, ya don't have any cash.

I guess he could sell the Rockets and turn that into cash. But how long would that take ? And what kind of fire sale price would he get for the Rockets ?

I bet most of the rest of his assets are equally illiquid.

[RedDollar]

Real world problems .................. outside of spin






Landry's Seafoods Offers First Test for High-Yield Debt

By Nick Koziol
From Stansberry NewsWire
April 8, 2020

We're about to get a clue on the health of the high-yield credit market...

Landry's Seafood is reportedly seeking to raise $250 million to $300 million in loans, according to CNBC's David Faber. The loan would serve as a "lifeline" for the business, Faber said. He added that Landry's offering would be the first significant debt raise in the high-yield market since the coronavirus crisis began.

The debt offering won't come cheap... Faber said the bonds could have an interest rate as high as 13% to 14%, up from a rate of 4.5% in February.
How this bond offering goes will be a huge key for the high-yield debt market.

As we've seen with the recent spike in credit spreads, issuing high yield debt has become more expensive. There's uncertainty over whether these companies will be able to pay back their debts because of the coronavirus.

And that's why we're seeing Landry's Seafoods take on an interest rate that's three times what it would've gotten just two months ago. It's desperate for the funds to keep operations intact, so it will take any interest rate it can get to get access to funding.

If the debt raise goes off without a hitch, it could inspire other high-yield companies in need of funds to do the same.

Expect investors to remain skeptical over high-yield debt as long as business operations are disrupted because of the COVID-19 pandemic. This will continue to make it more expensive for these companies to issue debt to get the funding they need.

[chuck5815]

"But the law provided some flexibility to restaurant and hotel groups by stating they could apply as long as they had no more than 500 workers at a single location."

Brought to you by the legislators that got lobbied the hardest by all their rich CEO buddies, no doubt. Sad, but not surprising, Congress hasn't truly given a crap about small businesses for a long time.

Oh, the 20% deduction for QBI wasn’t good enough? That’s been quite a blessing for almost every small business.

But I guess the wrong people signed that measure into law.

[gopokes88]

Tillman has wealth but very low liquidity. His wealth is also based on how much his business’ are worth, when they aren’t operating that isn’t much.

Re CARES and PPP, that’s always going to be a problem, they have 48 hours to write these bills and so yeah mistakes will be made.

[Teo9969]

Shake Shack got $10M for one of these loans. They are returning it because they realized it was the right thing to do. They had access, as most of these big chains would, to alternative forms of loans, lines of credit and fund raising mechanisms, plus their investor base understands the times we are in.

[TheTravellers]

Shake Shack got $10M for one of these loans. They are returning it because they realized it was the right thing to do. They had access, as most of these big chains would, to alternative forms of loans, lines of credit and fund raising mechanisms, plus their investor base understands the times we are in.

That's good of them, but they probably shouldn't have even applied for it in the first place, wonder if they got backlash and then decided to return it?

[catch22]

^ A real swell guy. He claimed he did those employees a favor when he cut them loose.

Houston Billionaire Tilman Fertitta laid off 45,000 employees quickly as a 'favor'
https://www.google.com/amp/s/www.chr...f-15194560.php

In this environment that is actually true. If he knows he can't pay them, but unemployment benefits have been increased - to the people applying for benefits the faster you can get cut and get filed the better as the backlog of UI is astounding. I know a lot of people who are part-time at my company are begging to get furloughed, but can't because of the stimulus package. The company rolled their hours back to the contractual minimum (20 per week) and put a halt on any extra hours being picked up by trade. So these people would be financially better off being unemployed since they can't even get back to what was a normal workweek. So the unintended consequence of keeping their job, with hours getting slashed is they may lose their house.

[Teo9969]

That's good of them, but they probably shouldn't have even applied for it in the first place, wonder if they got backlash and then decided to return it?

In general, there's a lot of media backlash here against these bigger corps getting these funds. Still...they're doing the right thing. I'm not going to hold a misstep in a confusing time against them if they correct that misstep in quick fashion.

[Teo9969]

In this environment that is actually true. If he knows he can't pay them, but unemployment benefits have been increased - to the people applying for benefits the faster you can get cut and get filed the better as the backlog of UI is astounding. I know a lot of people who are part-time at my company are begging to get furloughed, but can't because of the stimulus package. The company rolled their hours back to the contractual minimum (20 per week) and put a halt on any extra hours being picked up by trade. So these people would be financially better off being unemployed since they can't even get back to what was a normal workweek. So the unintended consequence of keeping their job, with hours getting slashed is they may lose their house.

It's especially true for restaurant workers who rely on tips. Had they stayed on the payroll, they'd be getting minimum wage when they average more, sometimes in excess of 5x the federal minimum wage.

[Jersey Boss]

It's especially true for restaurant workers who rely on tips. Had they stayed on the payroll, they'd be getting minimum wage when they average more, sometimes in excess of 5x the federal minimum wage.

Those that make 5x are not typical at all. There are more servers working Waffle House than Hatch.

[Teo9969]

Those that make 5x are not typical at all. There are more servers working Waffle House than Hatch.

Okay, so the people making 2.5x Federal Minimum wage at a ludicrous $18.13/hour...do you think they'd prefer Unemployment or $7.25/hour?

[Pete]

Press release:

****************

City of OKC preparing budget cuts as COVID-19 economic crisis expected to have long-term effect
04/20/2020

The City of Oklahoma City is preparing annual budget cuts of 3.3% for the Police and Fire departments and 11.25% for all other General Fund departments because of the expected long-term effect of the COVID-19 economic crisis.

City Manager Craig Freeman will formally propose the cuts in the proposed budget presented to the City Council on May 26 for fiscal year 2021, which begins July 1. The Council is scheduled to adopt the budget in June.

Sales tax is by far the biggest source of General Fund revenue, and pays for day-to-day operations. The Finance Department’s current estimate is General Fund revenue will be about $35 million lower than originally expected in FY 2021.

“The COVID-19 pandemic’s economic effects have already been substantial. It’s the start of a very difficult period for our local economy,” said Budget Director Doug Dowler. “Departments are working on revised budgets until later this month, so we don’t have a clear picture yet of the impact on staff or services. We’ll do the best we can to limit the impact on the services we provide as we prepare for a new economic reality.”

Oklahoma is the only state in the U.S. where state law prohibits cities from using property tax for operations. Property tax revenue is a more stable revenue source than sales tax. One of the City’s top priorities for the current session of the Oklahoma State Legislature is for a new law allowing municipalities to partially fund public safety operations with property taxes.

Departments had already been asked to propose much smaller budget cuts for FY 2021 because of anticipated slower growth for the local economy before the pandemic. The City Manager directed departments to propose much larger cuts as the financial damage from COVID-19 quickly mounted.

The City is in a strong financial position to manage the effect of the global economic crisis, with a top-notch credit rating and strong reserves of about 20% of annual operational expenses. In accordance with the City Council Priorities, City management has for decades practiced careful financial planning and budgeting.

The City Manager ordered a hiring freeze on March 23 to help control costs, and department directors are looking at programs and staffing levels to determine how to revise budgets.

The cuts of 3.3% and 11.25% are based on the fiscal year 2020 budget, plus increases for inflationary costs of labor, goods and services.

City management will secure Oklahoma City’s share of any federal or state emergency relief funds to further protect services as much as possible.

[Edmond Hausfrau]

So will the City or the Chamber actively lobby the legislature to change to property taxes? Is there any money in the coffers to pay a lobbyist?