March 25, 2020
Agreement on a Bailout
Although headlines are announcing a huge bailout bill it has not been finalized just yet. It seems that extremists from either end of the political spectrum are digging in their heels. That means that final passage might have to wait for a formal vote in the House. It might take a day or two to get a quorum because some House members are back in their home districts.
Just the same the broad outlines of a bailout have been agreed upon. And the winner is…
For the last decade the airline industry created the illusion of profitability by buying back their own shares. No matter that they are on the cusp of bankruptcy – Boeing has been angling for a bailout for months, and Raytheon recently bought United – they are in line for $60 billion of future taxes.
Manipulating stocks to create the impression of corporate health is not a new thing. It’s called “financialism”. Rana Foroohar explains it all in Makers and Takers, her interesting and very readable 2016 book about Wall Street taking Main Street to the cleaners in the wake of the Great Recession of 2008.
Naturally, airline stocks are being gobbled up by investors now that it is clear they will be getting a cash infusion from future taxes.
I don’t know what to say about a largely tax funded defense contractor like Raytheon buying up its competitors and suppliers. This is especially interesting in an era of constant near panic over COVID-19 .
Common sense tells us that spending hours in lines at terminals like corralled cattle, in order to board an airline and share air with dozens or even hundreds of strangers does not seem like a promising business model.
I’ve got doubts about the future of industries confining large groups of people in enclosed spaces….
Cruise lines, amusement parks, malls, movie theaters and related venues have been struggling for years. COVID-19 might be the event that finishes them off for good.
Something not being widely reported is pushback on President Trumps proposal to get business back to normal in just a few weeks. There are rising voices questioning whether c19 justifies the reaction we are giving it.
Another development worth watching…
New York Governor Andrew Cuomo’s’ stealth presidential campaign. Joe Biden’s campaign has been a sideshow of comic relief from the beginning, and a brokered connection is a strong possibility.
One last thing…
A group of Florida lawyers is initiating a class action suit against…
Because they could have handled the c19 outbreak better than they did.
Calling it the “China virus” is racist, but suing them for damages because they caused it is within bounds. Sometimes it takes a while to assimilate the contradictions of current events.
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