Fed balance sheet increased about $2T, and Congress spent $2.2T so far with more to come. That's at least 20% of GDP ($20T). Optimistic forecast is that the economy shrinks like 30% of GDP, so that's a 10% net reduction in NOMINAL spending/earnings.
SPX is down like 15% from it's previous high. The market seems to expect things to return to normal next year, which is probably short-sighted, but it's a market.
The real value of any company is down because it's producing less, but the nominal price of the company is inflated by the government spending. So the price of SPX is is not insane (if optimistic), given the government's actions. No comment on whether the actions themselves are sane.
It should also mention that public would have had more money to spend on other things because 1) cheaper cars, and 2) they would have kept the money that was spent on the bailout. That could also have created jobs that the UAW was afraid of losing.
The increased productivity could then have been spent on transitioning the Chrysler workers.
Apple and Google are going to use bluetooth to track person-to-person contacts (https://news.ycombinator.com/item?id=22834959), but Foursquare, FB, and Google already have geofencing to track when users go to specific locations and for how long. That doesn't help with subways and buses, but wouldn't it still make contact tracing a lot easier, particularly in the suburbs?I just glanced at the...
They don't really need a bailout to stay in business. The grant money for employees is contingent upon them keeping open flight routes that they'd otherwise close. Sec. of Transportation wants low traffic (small) cities to have access to medical supplies and whatnot (at least that's what she says, of course she's pro-business as well).
And yeah, they did borrow money for capex like buying airplanes and maintenance facilities, but they also operate at like a 10% profit margin. With low interest rates that seems kind of reasonable?
I get that using taxpayer money to maintain airlines is unfair, but the bailout (grant) money is contingent upon the airlines maintaining flight routes that they would otherwise shutdown (non-hub airport). The Sec. of Transportation is saying that those routes are critical infrastructure to be able to ship supplies to those places. (Ok she works for Trump, and has worked for Bush & Regan and is married to Mitch McConnell, not sure if that's relevant). But prima facie I don't see what's wrong with saying small towns should have access to medical equipment now, nor for the government paying for it.
The bailout loan money I don't think they really need. Delta and United were both able to borrow $2B each from the banks, and they have plenty of airplanes to use as collateral for more loans. But the bailout loan money is also contingent upon the airlines not having any other access to capital.
I'm just saying the airlines now do not look like the banks did in 2008. They were all profitable from basic operations (flying passengers), and were not over-leveraged in speculative deals (they borrowed to buy airplanes). Delta and United each ended 2019 with over $4.5B cash, and over $2B of easily accessible credit. Their operating costs are like $3.5B/month, and that's running at full capacity w/ no oil war. I'm not a businessperson, but I wouldn't really expect most of my local restaurants (or individuals!) to have enough cash to last two months with zero income.
Anyways, that's all based on looking at their SEC filings. Full disclosure I bought some shares (also is there some moral argument against business owners taking profit from their earnings?), but that also means I'd be really interested if anyone has a good counter-argument.