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To: Sun Tzu who wrote (5771)5/4/2020 2:09:17 PM
From: Return to Sender
   of 5824
Yeah, the minute I read what you had shared I knew you had it nailed.

Thanks for the help and suggestions.


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To: The Ox who wrote (5767)5/7/2020 5:10:37 PM
From: The Ox
   of 5824

As small-business coronavirus funds dwindle, here’s the latest bipartisan plan to save entrepreneurs

Published: May 7, 2020 at 1:10 p.m. ET
By Chris Matthews
Democratic Sen. Michael Bennet collaborates with Republican Todd Young on the RESTART program

Sen. Michael Bennet Getty Images

The $670 billion Paycheck Protection Program has been a lifeline for many U.S. small businesses impacted by the coronavirus pandemic, but with lockdowns in many parts of the country lasting longer than anticipated and the fund quickly running out of money, demands for further assistance are growing louder.

These calls are happening against a backdrop of an increasingly partisan debate over easing restrictions aimed at stopping the spread of COVID-19, and whether further spending is needed to help American businesses and workers through the crisis.

There is still at least one cross-party effort brewing on the topic of aid to small businesses, with Democratic Sen. Michael Bennet of Colorado and Republican Sen. Todd Young of Indiana releasing a proposal this week to amend PPP. It would set up an additional lending fund that would create an open-ended commitment to provide longer-term, partially forgivable loans to businesses severely impacted by the virus.

“We can’t throw up our hands and allow wide ranging bankruptcies of main street businesses just because the design of PPP wasn’t perfect,” Bennet told MarketWatch in an interview. “It’s a miracle in the Senate nowadays if a post office gets named in a bipartisan way. But if we listen to our constituencies we’ll hear almost of all of them say we need to make some changes to the small business program.”

Opinion: How I finally got a PPP small-business loan without losing my mind.

The Bennet-Young bill would amend PPP to extend the time period during which borrowers can deploy these loans from 8 weeks to 16 weeks, to account for the fact that many businesses owners don’t deem it safe to reopen their businesses, or cannot because of local restrictions. It would also create a new fund called RESTART that would allow businesses that have suffered a greater than 25% decline in revenues in 2020 to borrow money over a seven-year period, versus two years for PPP.

These loans would allow companies to borrow half of what they spent in 2019 on payroll, benefits, rent, utilities, mortgage payments and other debt service. PPP loans, by contrast, allow companies to borrow only two months of payroll costs, plus an additional 50% of that amount to pay for other expenses.

Now read: Mnuchin rejects calls to have less Paycheck Protection Program money go to employees, but Pelosi sounds open to changing 75% rule.

The loans would be less generous, however, in the type of companies that can apply, as the only eligible companies would be those that have seen a 25% or more decline in revenue in 2020, with loan forgiveness applied in proportion to the total size of a company’s revenue hit.

“The benefit of this is that it will give us a greater focus on the people who need the help more,” Bennet said.

RESTART would also not be limited to small businesses, typically defined by the government as firms with fewer than 500 people. Instead it would be available to firms with up to 5,000 employees, though loan size would be capped at 45% of revenue up to $10 million and larger firms would be eligible for less principal forgiveness.

By giving companies money to cover a greater variety of expenses, while allowing them to pay back the loans over a longer period of time, Bennet and Young hope to provide a more flexible form of financing that recognizes the reality that in many parts of the country, businesses will not be able to be back at full strength until many months from how.

“For people who are asking how we transition from the moment of the economic crisis that we’re in right now, to a more normal period, this gives businesses more runway to do that,” Bennet said. “That runway might make the difference between hundreds of thousands going out of businesses and a bunch being able to make it through to the other side.”

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To: The Ox who wrote (5773)5/7/2020 5:12:15 PM
From: The Ox
   of 5824
I'm still surprised we haven't heard any programs to aid those 33 million newly unemployed with COBRA or other healthcare options. Seems to me this is going to be a necessary support program but we know how much Congress likes to talk about healthcare options and costs.

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From: The Ox5/8/2020 10:06:23 AM
1 Recommendation   of 5824
Message 32722262

Interesting questions.

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To: The Ox who wrote (5775)5/8/2020 2:18:03 PM
From: Sun Tzu
   of 5824
I must be missing the author is arguing that the index will run out of stocks that qualify? Then they just won't take members off. What is the big deal? I am pretty sure that lots of companies had negative quarterly earnings during 2008/2009 and were not taken off the I missing something?

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To: Sun Tzu who wrote (5776)5/8/2020 2:31:52 PM
From: The Ox
   of 5824
No, I don't think your missing anything. S+P adjusts it's criteria based on market data as well.

I was more thinking about some major reshuffling of the indexes and the big fish swallowing the little ones...

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To: The Ox who wrote (5777)5/8/2020 2:39:20 PM
From: Sun Tzu
   of 5824
Wait for the financials to rally before expecting any M&A. As I see it, if they don't join the party in at most a few weeks, then the whole market is in danger. But for now, party on!

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From: The Ox5/11/2020 11:11:48 AM
1 Recommendation   of 5824
New update includes FAANG and QQQ Nasdaq 100 - top 20 by mkt cap

Message 32728508

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From: The Ox5/11/2020 4:31:55 PM
2 Recommendations   of 5824

TUE, MAY 5, 2020 - 3:28PM

By FS Staff
Financial Sense

David Rosenberg recently joined FS Insider to discuss first quarter GDP numbers and what they’re telling us about the state of the U.S. economy. He also explained why he sees the U.S. entering a depression, not a recession, and shares what could slow economic recovery down. Read below for excerpts from his interview with FS Insider.

If you’re not already a subscriber, click here.

For audio, see Global Economy in the Eye of the Storm, Says David Rosenberg.

What are your thoughts on this first quarter GDP number? And what does that tell you about where the U.S. economy is today?Well, some people might view it as just being old news, but we know that the eye of the storm is really happening this quarter. The eye of the storm was in April more than it was in March. In looking at the whole first quarter, the consensus was looking at -4% at an annual rate and it came in at minus 4.8%. To put that in perspective, that is the worst we've seen since the 2008-2009 Great Recession. It’s actually worse than any quarter we saw in the 1990-1991 recession, or in the 2001 recession.

This was rather historic in its own right. The only component that really rose was this panic buying of food. Food volume purchases from the grocery stores exploded to the upside by 25%. If you stripped the groceries out of this number, the GDP decline was 6.3%. We know that we're going to get something close to -40% for the second quarter. I think when you look at the incoming high frequency data, that's a given.

We're getting some good news on the medical front and we’re getting a gradual reopening of economies globally and across the U.S. Even in the best-case scenario though, it's going to take two to three years before this deflationary output gap is going to close. That's not what people are looking at right now.

Stay ahead of the news! Subscribe to our premium weekday podcast

Everybody's focused on the stimulus. Everybody's focused on when we're going to get a vaccine or get some treatment. Everybody's focused on the excitement around the reopening. But economists should really be focused on what's happening in the future to aggregate demand and aggregate supply because as long as we have a deflationary output gap, it's going to put ongoing downward pressure on profits and on profit margins, and it's going to create instability in the credit markets and lead to more defaults.

So, the only way we don't get a relapse out of this is with the Fed and the federal government continuing to plow that system with more and more cash and liquidity, and that's going to have its own repercussions down the road. But the first quarter data, coming back to your initial question of why it was so important, is because it showed that we are compounding the massive hole in the second quarter on top of much decline in the first quarter. This makes it that much harder to close the output gap get back to full employment. That's going to now take years even with a V-shaped recovery.

Can you discuss why we might be a in depression and what could slow down recovery?The reason why I've been saying that this is going to be a form of depression is because the recession is traditionally a business cycle haircut to GDP. We go down for two or three or four quarters. We had a six-quarter recession from 1973 to 1975, five or 10 years later people weren’t still talking about it. The thing about recessions is that you forget about them a year after they happen. A recession doesn't alter, in a secular fashion, people's behavior. It is a haircut to GDP, and we get through it.

A depression is something different. A depression is a shock that creates scars that linger for years. And a depression is different than a recession because while a depression is a recession, a depression invokes a secular change in people's behavior. So how they approach savings, how they approach spending, how they approach indebtedness, how they approach, in this case, where we're going to work, how we're going to travel. I think that in both the context of the personal sector and the business sector, it's going to be a big shift on how we create savings in cash and liquidity. It's phenomenal to me that liquidity became almost a dirty nine letter word going into this—nobody had any.

Portfolio managers went into this situation with a 2% cash cushion. That was unheard of. But the hubris and the complacency were at an incredibly high level. Companies didn't want to keep cash in the balance sheet, they bought back their stock instead. I find it absolutely incredible that after an 11-year jobs boom, we're in a situation where half of the American people did not even have enough savings to cover their expenses for three months.

That's what I'm trying to wrap my head around, is that we had this health shock that morphed into an economic shock. But then the other part of it was the government's decision to lock things down. Who thought it was going to morph into a financial crisis that was worse than 2008-2009? Now it doesn't involve the banks. But the culprit this time wasn't the banks. Who thought that as we went through this shock on the health side, on the economic side, the Fed was going to have to buy up virtually every corner of the fixed income market, who thought about that?

Who thought, at this stage, that the Fed's balance sheet would be 30% of GDP? Nobody was talking about that, even in late February into March, the extent to which we have such an unstable financial system that we need this much Fed and federal government assistance. So, my commentary is this: We went into this situation not prepared in many different respects. Obviously, from a health standpoint and from a medical infrastructure standpoint we were clearly unprepared.

But also, we didn't have enough cash on hand. And I think that the preservation of cash is going to be something very fundamental that will help mitigate the next crisis we have but it’s going to hold back this recovery. I do think that that's what differentiates a recession from a depression, is that the attitudes toward spending, saving, debt accumulation and how we’re going to be preserving more cash on the balance sheets, whether you’re household or business, is going through a profound change in the years ahead.

Click here to listen to our interview with David Rosenberg to get his macro-outlook and investment implications when it comes to bonds, stocks, gold and elsewhere. For a free one-month trial to David's research, go to

If you're not already a subscriber to our FS Insider podcast where we interview book authors, strategists and industry experts from across the globe on all things economics, finance and markets...

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To: The Ox who wrote (5780)5/11/2020 4:40:07 PM
From: The Ox
   of 5824


We're back on track now and the prediction from my cycles was next year and the year after were going to be very, very tough economic years. If I had to put a date on the beginnings of a proper new bull market, it's 2023. Then I think the next generation, the millennials, will be in the driving seat. There're a lot of new technologies that they will want, and they'll have quite an exciting thing and they’re quite likely coming up from much lower levels than we are now. And all sorts of things that we old baby boomers got used to, this new generation has a whole new set of things that they can do. If you think about built-in 5G and things like that, one can easily tell a bullish scenario.

But we've got to get rid of all this debt. We've got to get houses and certain assets back down to levels where a normal person can afford a property to live in. So all of that's got to return to something when nice young people with proper jobs can afford an economic activity that doesn't look as though that will happen until 2023. So, we've got a tough period to get through.

In trying to hang it together with this disease, I think the yield curve of the death rate will flatten out. But as soon as governments say start going back to work, the death rate will pick back up again. So, there can be subsequent humps.

We will be getting news from pharmaceutical companies encouraged by government money to bring on potential vaccines, and some of them will be helpful, but they wouldn't have passed all the tests so that they're available at least till the end of this year. And that's super early, it should normally take longer than that. Meanwhile, elsewhere in the world, this whole disaster is going to rumble on round. So I think it is very serious indeed and we're trying to survive.

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