Spekulatius

I wonder what strings are attached to the credit line? They probably can last a year before becoming a zero. Also I can see some issues with their plane orders if Airbus doesn’t work with them. Airbus will work with them as well as with other airlines. It’s going to be some give and take.

I wonder what strings are attached to the credit line? They probably can last a year before becoming a zero.

Sold as well today. I agree with your assessment, it’s too operationally leveraged. The service contracts get paid by flight hours and engine deliveries may be on hold. I think the stock to buy is Airbus, when this clears up a little. I wonder how lenient Airbus will be with deliveries. I can picture a few airlines hoping to hold that ship at sea. Yes, Airbus will be flexible. I can see that the 737 is tainted and airlines may not want it, even if the business picks up again and they again need planes. LUV in the longer term has a huge issue be sure they are a single aircraft (737) airline and the 737 max was their upgrade path. They are no so big, that they probably need to start buying from Airbus to diversify their risk.

BA will get a bailout from the government before the week is over. It might cost them though. I agree with Airbus being the best play. The 737 max issue with Boeing has pushed the door wide open to become the leading commercial plane manufacturer.

Sold as well today. I agree with your assessment, it’s too operationally leveraged. The service contracts get paid by flight hours and engine deliveries may be on hold. I think the stock to buy is Airbus, when this clears up a little.

Seems like a good low risk bet, I wouldn’t put too much into forward multiples, as they sure will come down though. I do agree that V and MA are probably the quickest to bounce back.

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic. https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response I gave it a 9/10 for different reasons though. Turned it off after 3 minutes so I am glad to hear that it got a bit more substantial as the briefing progressed.

Lurker for years, my first post on this forum. I had the sae thing in late January. Extreme stomach discomfort that started quite suddenly leading to bouts of vomiting. I couldn't even drive myself back home without puking into a bag. The stomach discomfort got better in 24 hours (mild fever also went away). Then the coughing started which later days. I'd wake up at nights to cough for few minutes each time. Chest tightness also began. I'm a lot better now, but my chest tightness isn't fully gone. If I fully relax my body I can feel a tiny bit of resistance to talking in a whole breath of air. I also have asthma and using my inhaler helped! CorpRaider, keep hope and stay happy. Positivity helps the immune system. Thank God for Netflix. I watched a ton of comedy when I was going through the bug, whatever it was. Stay hydrated!! I never considered Corona seriously but it does look like the symptoms are correlated. Now if there was community transmission in late January, just imagine how off we are with the denominator. I've been thinking about this a lot lately. The hard thing with exponentials is that it's easy to be way off if we are even slightly off in any parameter. What if we are wrong on the start date by a couple of weeks or so? Orthopa's anecdotes and line of thought seems reasonable to me. This might be neither the flu nor COVID-19. It happens quite a bit that viral infections are diagnosed (by exclusion?) and it tests negative for flu. My son years ago had periodic spouts of sickness we could never get to the bottom of. Sometimes, it was just a stomach flu (vomiting), sometimes it was high fever (so high they we went to the ICU with him because were scared) and always tested negative for flu. These period spouts of virus infection went away by itself thankfully as he grow older. I am not a doctor, so don’t claim to know much, but seem seems to be quite often viral infections around they don’t seem to test positive for flu. Anyways, good luck and hopefully you feel better. Even if its’s just a stomach flu it’s no fun, I had my fair shares of those way back,

I listened to first 3 minutes of today’s news conference from the WH. I couldn’t stop laughing. He talks about incredible things happening with the virus spreading and we all come together for a big celebration. WTF? Who wrote his speeches thr Monty Python troupe? It’s basically Saturday night life....

No issues for my with IB. I use my iPhone and iPad. I do have issues with Fidelity with the website getting unresponsive sometimes.

That may be the point But as kdk77 says, asset cap.. The thought of ramping up lending right now is bewildering to me. The asset cap for WFC is totally irrelevant right now.

I kind of agree, but I think the time is 15:30pm when the mindless algos set in. I bet Renaissance Tech makes a fortune in this market.

TRV and PINS

Interesting, didn’t think of this. I don’t think TRV has written much business interruption insurance they have some worker’s comp, but mostly surety, home owners and car insurance. Perhaps there is something hiding that I am not aware off. They do write worker’s compensation insurance which tends to do worse in a recession, but they can’t be an existential threat. TRV did navigate the GFC quite well.

It’s not just MKL, TRV and other insurance cos are also getting crushed. I think it’s due to the huge rate cut, which is going to impact their fixed income earnings. neither MKL nor TRV are particularly vulnerable because both are more short tail insurers, it’s the long tail insurers that can’t reprice their policies and have huge issues. Is there a quick way to see which you insurers are long vs short tail? Thank you for the reply. I always look at their premiums vs claims + reserves + customer payables. In TRV’s case it’s $28B premium / $71B in claims. That’s a ~2.5 year tail. This is obviously very simplified , but if you compare different insurance cos, this heuristic is helpful. I was looking at MKL as well, but haven’t done any work. It could be had for ~$805/ share, however MKL also has equity exposure, which TRV little off (just a few billion in total). TRV very likely will show a decent increase in book value because bonds are moving up with lower interest rates, unless spreads are blowing up for the high grade stuff even.

It’s not just MKL, TRV and other insurance cos are also getting crushed. I think it’s due to the huge rate cut, which is going to impact their fixed income earnings. neither MKL nor TRV are particularly vulnerable because both are more short tail insurers, it’s the long tail insurers that can’t reprice their policies and have huge issues.

When does Buffett bail these guys out or buys them in their entirety is a better question. Should know a lot about them given Precision Castparts ownership. Airbus is also available for 1/2 off and in a better shape. I think they might be a better deal. I can see BA restructuring. I don’t think that’s a risk with Airbus.

No Forrest Trump run today apparently.

@chrispy I would say 15x earnings is what you paid in similar circumstances in the past. Perhaps adjust for cash. For an “extinction level event”, I don’t think the market is doing too badly actually. It’s just back to where it was before Trump goosed it up on Friday 15:30PM, give or take.

Hitting the bottle early today? I think after noon is social acceptable but I usually start with lighter fare.

Or the government should stop coddling everyone and let reality play out the way it should? If this was a run-of-the-mill recession, then I would agree with your mentality/statement. We should let the market wring out the excesses via bankruptcy. However, the COVID-19 pandemic layers on an added and unique issue. In the absence of some sort of paycheck (fiscal stimulus) coming from the guarantor of last resort (e.g. the Federal Gov), one of two things will happen: 1. People are not going to stay home because they need $$$ to put food on the table, and this pandemic will be far worse. And it will crush our hospital system, leading to additional mortality from other treatable illnesses that can't find space/time at the hospital. 2. People will stay home, businesses will go bankrupt in a truly large scale (taking CRE with it), and we will end up with a depression that takes decades to dig out of. The idea of fiscal stimulus, and monetary stimulus, bothers me - I don't like it for a lot of reasons. But if some fiscal stimulus is needed, I'd much rather see that go directly into the pockets of a waitress trying to make ends meet, rather than a financial institution via a bail-out. And in this crisis, it is time to "Go Big or Go Home" with the fiscal stimulus. Trump missed the boat to manage this crisis 2 months ago, and with every passing day, the cost of mitigation grows ever larger. I think the reason that this will be worse than a run of the mill recession is due to previous coddling. Look at what the market did during the Spanish flu issue. Not this. Note that WW1 was won by the allies by the time the Spanish flue became an issue. this lifted a huge burden from the economy (and created new issues) that overshadowed the Spanish flu impact. QE doesnt help individuals, it helps institutions. Lower interest rates help institutions much more than individuals. Instead of helping the airlines, we should think about helping their employees for example. Does AAL really deserve help, the way they managed their capital structure? They rolled the dice adding huge amount of debt so I don’t see a problem letting them restructure.

Interesting - I see more talk about bailouts and government interventions here than I see in discussions in Germany. Market crashing and everyone is turning into Bernie. We may get UBI and Medicare for all and nobody is going to blink. Not saying it is right or wrong, but it is surprising to me.

Isn't that called food panda? I got some tonight. Yes, you can get delivery in some areas, but not where I live. I propose really to encourage the use and subsidize it, plus expand it where it is not available yet. I think even giving away food for free would make sense.

In a crisis, always go with the mighty US$.

They should do infra. But they can't really do infra or anything economy boosting until the pandemic has passed. OK, they can actually throw money on producing tests and building ICU units in 2 days like China did... They could throw money at delivering meals to people who are out of work because of shutdown and quarantine (assuming there's a way to do it safely). Possibly would cost less and deliver more than just cutting the rates. BWDIK. Exactly--healthcare infra. Maybe subsidize delivery boys with sterile gloves on for groceries/restauarant to keep those places in biz. Problem is that Trump-Pelosi relationship has soured, but in a crisis might be repairable. I think that’s a great idea. Set up a system for restaurants to deliver food at no cost, or even pay for the food. It helps the restaurant and gives some jobs to people who are delivering. Most importantly, it would be safer than people venturing out by themselves. Same with for grocery delivery. Some large supermarkets can do it, but only in areas. The government may pay for the delivery as it makes it easier to put up with a lockdown and it is safer for everyone, including grocery workers. I bet that alone would be worth the cost. Better than a payroll tax cut or bailing out the cruise industry for sure.