General Investing and Economics Discussion - No Politics

Deleted member 2897

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bobongo said:
Now that you mention it, that's another thing airline stocks will have going for them - government bailouts.
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Everybody will want bailouts. I have started hearing some people say we need to approach this like a time of war, and I think they're right. If you're an advocate of the government trying to help, giving people a cut in payroll taxes or paid sick leave is nice but is nothing in the larger scale of things. What about all the travel and leisure companies shutting down. All those jobs. What about the restaurant industry that is getting demolished.

If you give every family $5000, that will certainly help for maybe a few months, but with 100 million households, that's $500 Billion. And that's before you get to business (small and large) bailouts. This could be like a $2 Trillion package. What annoys the crap out of me as a small government is person is that this is EXACTLY what the government can help with. That we've pissed away $20 Trillion already to study the sex habits of lizards and shoot people on the other side of the world is obnoxious.

This should also be a lesson to everyone, but I doubt they will learn from it. You should always have several months of expenses socked away for an emergency. If you lose your job or whatever, that's awful and nobody hopes that happens. But if you had 6-12 months of living expenses saved away, you would be able to completely manage through this situation without having to depend on someone else.
 

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Dow down more than -3,000 points.

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Deleted member 2897

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bobongo said:
15,000 on the Dow? In a few weeks? You're scaring even me, now.
Man, but who knows? The high point was 29,500, and I think it was overvalued by at least half. It's still overvalued by probably 30%. The market always overshoots, so I would guess it will end up somewhere south of 15,000 before this bear goes back to sleep. Maybe even 12,000. But in a few weeks? I dunno.

I'll guess 50/50 it goes to 18,000, and 1 in 4 it goes to 15,000 just in the next few weeks. But in any case, we're staring into the abyss. The FED cutting to zero will help grease the slide.
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Welp.
 
bobongo

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bwelbo said:
Everybody will want bailouts. I have started hearing some people say we need to approach this like a time of war, and I think they're right. If you're an advocate of the government trying to help, giving people a cut in payroll taxes or paid sick leave is nice but is nothing in the larger scale of things. What about all the travel and leisure companies shutting down. All those jobs. What about the restaurant industry that is getting demolished.

If you give every family $5000, that will certainly help for maybe a few months, but with 100 million households, that's $500 Billion. And that's before you get to business (small and large) bailouts. This could be like a $2 Trillion package. What annoys the crap out of me as a small government is person is that this is EXACTLY what the government can help with. That we've pissed away $20 Trillion already to study the sex habits of lizards and shoot people on the other side of the world is obnoxious.

This should also be a lesson to everyone, but I doubt they will learn from it. You should always have several months of expenses socked away for an emergency. If you lose your job or whatever, that's awful and nobody hopes that happens. But if you had 6-12 months of living expenses saved away, you would be able to completely manage through this situation without having to depend on someone else.
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I understand the need for some bailouts in times of crisis, but too often corporate welfare is handed out as a reward for campaign contributions in good times (like these ridiculous oil company tax breaks, for instance). I think that's my main beef.

But in addition to that, corporations, like individuals, need to save for a rainy day. The airline industry is a prime example. Anyone with any sense knows this industry, while generally lucrative, is particularly prone to shocks. So knowing that something which will upset the industry is bound to happen, why haven't they put away cash reserves for just such an emergency? The reason: they know Uncle Sam will bail them out, just like the banks. And if they didn't have that reassurance, they'd be more careful. And the careful ones would survive and the careless ones would not, which is the way capitalism is supposed to work.

I understand this is a complicated issue, but like you said, this could be a $2 trillion dollar package - and we don't have the money.
 

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bobongo said:
I understand the need for some bailouts in times of crisis, but too often corporate welfare is handed out as a reward for campaign contributions in good times (like these ridiculous oil company tax breaks, for instance). I think that's my main beef.
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Well I mean when oil companies take deductions for R&D, depreciation for capital investments, and things like that, those are the same deductions that every other company can take. Exxon, for example (I just looked up their most recent annual report) paid $9.5B in income taxes against like $30B in EBITDA. Exxon's net profit margin is 4.5%.

Contrast that with Apple, who paid $10B in income taxes (about the same) on $78B in EBITDA (nearly 3x as much). Apple's profit margin is 24%. Apple is immensely more profitable and takes immensely more tax deductions. Remember that these deductions are meant to spur business - if you couldn't depreciate capital purchases or deduct R&D, you'd have a ton less of that. Lets also remember companies can't print money like the government does - they don't pay taxes - their customers effectively do.

I never get all riled up about "Big Oil" or that they get all kinds of tax deductions, because the reality is according to the data there are tons of other companies who take much more advantage of the system. I mean 4.5% profit margins? I wouldn't get out of bed for that.
 
bobongo

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Deleted member 2897

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armeck said:
Awesome, I too have a 3.75% and was looking to shave off a few hundred a month.
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Injust looked up mortgage rates, and despite the Fed cutting rates from 1.5% to 0%, rates have actually gone UP over the last week. That tells me banks are hurting for cash, despite how much money the Fed has been plying them with.
 
bobongo

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CuseJacket said:
Bloodbath

Unless you invested in TVIX and went +75% today
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A serious gambler who bought TVIX on February 14 and sold today would have made 1,510%.

Don't ever try it without a safety net, though. And don't buy it now.

SVXY is looking pretty good, though. It shorts the VIX which is up to 82, now. Hard to imagine the VIX going much higher.

https://finance.yahoo.com/quote/SVXY
 
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LibertyTurns

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bwelbo said:
Injust looked up mortgage rates, and despite the Fed cutting rates from 1.5% to 0%, rates have actually gone UP over the last week. That tells me banks are hurting for cash, despite how much money the Fed has been plying them with.
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The response I received from Navy Federal was demand went up & so did the rates. I don’t believe they were BS’ing.
 

Deleted member 2897

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Stephanie Ruhle came out in her clown suit again in the today show and trying to keep people from selling their investments. That’s terrible advice on any day, and all the way down. Investment advice varies on your timeline and risk aversion.
 
armeck

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bwelbo said:
Injust looked up mortgage rates, and despite the Fed cutting rates from 1.5% to 0%, rates have actually gone UP over the last week. That tells me banks are hurting for cash, despite how much money the Fed has been plying them with.
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I spoke with my local credit union as well, it was a only about .5% improvement over my current rate - not really worth it yet.
 
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