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> To me, the economy looks insanely resilient in a global pandemic. We’re still in the early days of this pandemic, as it usually takes many months for the upf

> To me, the economy looks insanely resilient in a global pandemic. We’re still in the early days of this pandemic, as it usually takes many months for the upfront shocks to fully process through the economy. Numerous reports detail a potential collapse of the commercial real estate market, the government is signaling that it is going to hand out any more stimulus money, and health experts are warning about a second wave. Economists aren’t ruling out 40% unemployment down the road, which puts us firmly in depression territory. I have no idea where you live, but I live in Austin, TX, a fairly affluent city, and the changes to the city have been dramatic and very visible. So much retail is still closed, and many thousands are out of work with little opportunity to renter the workforce and likely without future stimulus. Just look at the George Floyd protests, there’s an inherent economic component to American racism and Covid provided a lot of fuel that the senseless killing of Floyd ignited. Those events did not occur in a vacuum, which is partially why we’re seeing unrest that we haven’t witnessed in 60 years. Not to mention that millions never recovered from the last major crisis while politicians and big business pretended like everything was back to normal after the big market rallies.

bsder 6y ago
> Numerous reports detail a potential collapse of the commercial real estate market While I'm happy to bail out workers, can we please simply bust out the overleveraged on assets for once? Part of the reason why the economy has no resilience is that we keep bailing out the irresponsible so there is no incentive to be responsible. Why keep inventory and cash reserves when you can go into 3x debt and get bailed out? Why be responsible when your competitor is basically going to get loan forgiveness instead of going bankrupt and you being able to buy them? How about some "trickle up"? Bail out the individuals who are basically unleveraged and let the leveraged compete to try to stay afloat or go bankrupt and release the assets to those less leveraged. The real estate doesn't suddenly lose it's value because the owner got busted out. It's what capitalism is supposed to be--risks are supposed to get upside AND downside.
RhysU 6y ago
Austin, despite the government and technology economy narrative, has been in a service economy bubble for some time as local businesses capture dollars arriving from elsewhere in the form of brunch costs.

bsder 6y ago

> Numerous reports detail a potential collapse of the commercial real estate market While I'm happy to bail out workers, can we please simply bust out the overleveraged on assets for once? Part of the reason why the economy has no resilience is that we keep bailing out the irresponsible so there is no incentive to be responsible. Why keep inventory and cash reserves when you can go into 3x debt and get bailed out? Why be responsible when your competitor is basically going to get loan forgiveness instead of going bankrupt and you being able to buy them? How about some "trickle up"? Bail out the individuals who are basically unleveraged and let the leveraged compete to try to stay afloat or go bankrupt and release the assets to those less leveraged. The real estate doesn't suddenly lose it's value because the owner got busted out. It's what capitalism is supposed to be--risks are supposed to get upside AND downside.

RhysU 6y ago

Austin, despite the government and technology economy narrative, has been in a service economy bubble for some time as local businesses capture dollars arriving from elsewhere in the form of brunch costs.