OT - Dow plunges 1,175 - worst point decline in history

[fiamme red]

Originally Posted by echappist

This was such a depressing read

When I saw the name of the author, I thought to myself, that can't be Ray Suarez of NPR, can it? I recall him step in as host of On Point on numerous occasions and thought he was very good at moderating the show.

Unfortunately, it turns out it was indeed the same Ray Suarez. And the story he tells, unfortunately is one I know (referenced upthread).

In the earlier pages of this thread (see @Paredown's post), there was a NYT article on a gentleman who lost his high paying job and was never able to regain his footing. It's unsettling times...

I can't read the article, since it's behind a paywall. But I remember Suarez from PBS NewsHour. I enjoyed his work there, and I was disappointed when he left to join Al Jazeera. I assume from the title of the article that Al Jazeera let him go.

[unterhausen]

Yes, he has been freelancing since Al Jazeera gave up their news channel. Work has dried up for him

[likebikes]

anyone got a non-paywall link to that wapo article?

[echappist]

Originally Posted by fiamme red

I can't read the article, since it's behind a paywall. But I remember Suarez from PBS NewsHour. I enjoyed his work there, and I was disappointed when he left to join Al Jazeera. I assume from the title of the article that Al Jazeera let him go.

Apologies re: the paywall. I thought Wapo had a few free articles/month. And this was indeed as a result of Al Jazeera closing shop and letting him go.

Excerpts Below

Title: Sinking feeling. I clung to the middle class as I aged. The pandemic pulled me under.

On his own circumstance:

We were on a busy D.C. street, waiting for the light to change, when my teenage daughter asked, out of nowhere, “Dad, what are you afraid of?” That might have been a cue for a heartwarming father-daughter conversation about overcoming life’s challenges. Nope. From my lizard brain, or from the primordial soup in my guts, came an answer I didn’t even consider, out of my mouth before I had a conscious thought of it.

“Being poor. That’s what I’m afraid of.” Then we crossed the street.

I keep returning to that exchange over the past few weeks, as my inbox fills with coronavirus-driven bad news. A paid speaking engagement in Texas? Canceled. Several days of work at an international conference? The organizers decided not to take the risk. A gig moderating a climate change conference in Chicago? Postponed, maybe until October. When I traveled as a reporter to health crises in Africa and Latin America in recent years, exposed to malaria, tuberculosis and pneumonia, I knew that if I got sick my health-care costs would be paid by my employer, as would any days I needed to recover. In 2010, covering the devastating Port-au-Prince earthquake in Haiti for PBS, I caught something that lingered when I got home, so I called in sick.

Now that I’m a gig worker over 60, “sick days” are simply salary-free days off. Even if work dries up, that $2,800-a-month health insurance bill still comes due on the first of the month. The electric company won’t take a podcast, a column or a television documentary as in-kind payment for kilowatt hours.

On societal phenomenon at large

Men older than 55 can’t command higher salaries in the marketplace, but they also can’t walk away and rely on their savings, which, for millions, are inadequate. Northwestern Mutual has reported that 1 in 3 baby boomers, knocking at the door of retirement, have less than $25,000 saved. A study from the New School estimates that 8.5 million older workers over 55 would fall into poverty or near-poverty if they retired at 62 and began taking Social Security payments. It is, the researchers found, the end point of more than 20 years of lagging behind younger men in wage increases, both among college-educated and non-degree-holding men.

An eye blink ago, I was anchoring a nightly program for the cable news network Al Jazeera America. Before that, I had long tenures with “PBS NewsHour” and NPR. When I read warnings that workers could face sudden and catastrophic losses of income in their final years of employment, I was empathetic but concluded it could never happen to me. After all, I had worked hard to build in bumpers around my life, and my career, to avoid that. I climbed the ladder in a very competitive business to jobs of greater renown, greater responsibility and higher pay. I did all the things that would have made me the hero of a financial advice column: got married and stayed married, paid off my mortgage years early, fully covered three college educations so my kids wouldn’t have to borrow. Then the wheels came off. After Al Jazeera pulled the plug on its young network, I headed to Amherst College as a visiting professor while beating the bushes for jobs in radio, television and print. I shoved down the rising panic, kept one eye on my bank balance as I started freelancing, and kept the other eye out for the next big thing. Like hundreds of thousands of men in their early 60s across the country, I had to get used to the idea that the marketplace might have already decided I was “done.” Many men my age are “job bound,” more convinced than their young co-workers that they couldn’t find a comparable position, even in a tight labor market.

[verticaldoug]

Originally Posted by unterhausen

There was a time when I thought about buying a share of Berkshire Hathaway. I'm not sure I could take a $8000 drop in one day. OTOH, I think it was about 30k when I thought about it and it's $275k now. So probably should have done it.

Instead, you bought Apple and Amazon for a $1.50 in 1997 and wonder why you bothered to buy Apple at all and just didn't sink it all in Amazon.

[echappist]

Buffett just dumped all of his airline stocks. Let that sink in for a moment...

[verticaldoug]

Originally Posted by echappist

Buffett just dumped all of his airline stocks. Let that sink in for a moment...

Yes, it was a rational decision. He said the airlines had to issue a lot more debt and that would eat up future earnings while they may have too many planes for future needs..

Capital Structure of airlines is very complex as loan, first liens, second liens, third liens and finally equity. If you look at the 10 yr bond Delta just issued at 7%, it was first lien secured by European hubs and transatlantic routes.

This is why the fed has to do everything it can to hold down rates for the rest of our lives. We are in a debt trap. I see no wage growth, no inflation, low growth forever...

I am not in the inflation camp. I see disinflation or deflation going forward this year. and low inflation afterwards.

[echappist]

Originally Posted by verticaldoug

Yes, it was a rational decision. He said the airlines had to issue a lot more debt and that would eat up future earnings while they may have too many planes for future needs..

Capital Structure of airlines is very complex as loan, first liens, second liens, third liens and finally equity. If you look at the 10 yr bond Delta just issued at 7%, it was first lien secured by European hubs and transatlantic routes.

This is why the fed has to do everything it can to hold down rates for the rest of our lives. We are in a debt trap. I see no wage growth, no inflation, low growth forever...

I am not in the inflation camp. I see disinflation or deflation going forward this year. and low inflation afterwards.

If you were to have access to the wealth services you mentioned upthread (and perhaps you do), would you give Delta money?

Part of me is seriously thinking about it, but i doubt i have enough asset to gain access to private client level of service

[verticaldoug]

Originally Posted by echappist

If you were to have access to the wealth services you mentioned upthread (and perhaps you do), would you give Delta money?

Part of me is seriously thinking about it, but i doubt i have enough asset to gain access to private client level of service

My bad, Dal 7 is 2025 not 2030. Too many new issues. I was confusing the tenor with F 9 5/8 which is a 2030.


I don't know your risk appetite, the worst case scenario is the company files for protection, and then the creditor groups take over negotiating with the company. It can take a lot longer than 5 years.

I only throw this out there because well CNBC just touts stock and is not very smart. The sharks are looking at the details in the bonds.

I'd ask your broker for the prospectus and read it , educate yourself.
1. What do you think the value of the collateral for the first lien is worth in worst case scenario?
2. Is there any other debt which maybe is more senior and has the same lien? I know, sounds impossible, but you'd be surprised what the sharks dig up. This is the bread and butter of distressed funds and Private Equity. Bond covenants.

[fiamme red]

Originally Posted by echappist

Apologies re: the paywall. I thought Wapo had a few free articles/month. And this was indeed as a result of Al Jazeera closing shop and letting him go.

Excerpts Below

It's a tough time now for journalists, especially older ones: Newspaper’s Top Editor Is Now a ‘Homeless’ Blogger (New York Times).

[unterhausen]

Originally Posted by verticaldoug

Instead, you bought Apple and Amazon for a $1.50 in 1997 and wonder why you bothered to buy Apple at all and just didn't sink it all in Amazon.

I don't buy stocks where I don't understand what they do to make money, so I have missed out on a lot of stocks that went way up. We're doing okay though. If I don't understand it, it's too much like betting for me.

[veloduffer]

Originally Posted by fiamme red

It's a tough time now for journalists, especially older ones: Newspaper’s Top Editor Is Now a ‘Homeless’ Blogger (New York Times).

There was a documentary about homeless many years ago that included interviews with many folks in that same situation. For some reason I particularly remember one interview with a man in his mid-to-late 50s who had lost his job and then his apartment and became homeless. He had grown children that he could have reached out to but "didn't want to burden them". He would try to keep his hygiene up by using the restrooms of McDonalds and Burger King. It was truly sad.

Given the state of retirement for many Americans, here's more on a continuing trend:

https://www.nytimes.com/2020/05/02/b...llennials.html

[Tony T]

NAZDAQ > 9k, positive for 2020, dn 10% from record high.
DOW > 24k, S&P > 2.9k

[fiamme red]

I open up the NYT website this morning, and the headline is "U.S. Unemployment Rate Hits 14.7%, Worst Since Great Depression." And above it I see that the markets are all up.

This article attempts to explain the phenomenon: https://nymag.com/intelligencer/2020...arket-dow.html.

...The market isn’t the economy. Capitalists don’t need it to be safe for you to leave your house — or possible for 30 million unemployed Americans to find jobs — in order to make healthy profits. The next industrial revolution will be livestreamed. Come on in, the S&P 500’s fine.

As already mentioned, not everyone on Wall Street has imbibed this (dystopian brand of) techno-optimism. Capitalism may be reducing its dependence on workers, but it still needs consumers...

[BobbyJones]

As someone who grew up during the first internet boom, I've long understood that the market prices no longer are indicative of "tangible" value but this is getting bit ridiculous.

My questions for those more in the know is: Is the market now really just being propped up by institutional investors riding this for all they can? Does the retail guy have a huge impact?

I used to think that retail trading was the catalyst for inflated prices, but I just can't fathom this run.