This too, Shall Pass

[StanandJim]

This is the first reliable signal, to me, anyway, that the worst days are likely behind us and that there IS a light at the end of this awful tunnel:

 

https://www.cruisecritic.com/news/5308/?et_cid=3327521&et_rid=219384113&et_referrer=december-2016-jetsetter-afar-ga-rebloom

[Paulchili]

2 minutes ago, StanandJim said:

This is the first reliable signal, to me, anyway, that the worst days are likely behind us and that there IS a light at the end of this awful tunnel:

As long as that light is not the next approaching train 😀

[Classiccruiser777]

Cruise line bailouts: https://www.mediaite.com/tv/cnbcs-jim-cramer-shreds-preferential-bailout-for-cruise-company-run-by-trump-pal/

 

 

[bitob]

They can build them.

 

But will anyone board them?

[pingpong1]

1 hour ago, Classiccruiser777 said:

Cruise line bailouts: https://www.mediaite.com/tv/cnbcs-jim-cramer-shreds-preferential-bailout-for-cruise-company-run-by-trump-pal/

 

 

The problem (but just a "small one") with Cramer's/NBC "opinion/hit piece" article, is that virtually everything he alleges and tries to imply is basically false!  His ongoing hate for "all things Trump", continues.  No taxpayer money is being used in any way to "bail out" Carnival Cruise Lines.  And President Trump's alleged influence or friendship with the Cruise line's CEO played absolutely no part in the loosening up of private equity lending to Carnival.  That new loan, by the way, was able to keep 150,000 Carnival employees collecting a paycheck.  It was Actually Jerome Powell, Chairman of the FED (certainly no particular "friend" of the President), who enabled this private loan to actually happen.  But hey, let's not let facts get in the way of our biases and prejudices!   It's all private investor funded bonds that are keeping Carnival "afloat" (Yes - I know!) during this particularly difficult financial time.  With that new funding, Carnival is still having to pay 11.5% interest - vice the original 15% it would have been  without the Fed's help - still not exactly "bargain rates" .  But nice try, Cramer, keep up the good work! 

[clo]

52 minutes ago, pingpong1 said:

The problem (but just a "small one") with Cramer's/NBC "opinion/hit piece" article, is that virtually everything he alleges and tries to imply is basically false!  His ongoing hate for "all things Trump", continues.  No taxpayer money is being used in any way to "bail out" Carnival Cruise Lines.  And President Trump's alleged influence or friendship with the Cruise line's CEO played absolutely no part in the loosening up of private equity lending to Carnival.  That new loan, by the way, was able to keep 150,000 Carnival employees collecting a paycheck.  It was Actually Jerome Powell, Chairman of the FED (certainly no particular "friend" of the President), who enabled this private loan to actually happen.  But hey, let's not let facts get in the way of our biases and prejudices!   It's all private investor funded bonds that are keeping Carnival "afloat" (Yes - I know!) during this particularly difficult financial time.  With that new funding, Carnival is still having to pay 11.5% interest - vice the original 15% it would have been  without the Fed's help - still not exactly "bargain rates" .  But nice try, Cramer, keep up the good work! 

Thanks for this. I wasn't understanding this but the Fed and bond markets and such are simply beyond me at this point. But it sounded like what Carnival got was NOT part of the business bailout. Right? I don't like it but it seemed distorted.

[CintiPam]

2 hours ago, StanandJim said:

This is the first reliable signal, to me, anyway, that the worst days are likely behind us and that there IS a light at the end of this awful tunnel:

 

https://www.cruisecritic.com/news/5308/?et_cid=3327521&et_rid=219384113&et_referrer=december-2016-jetsetter-afar-ga-rebloom

From your mouth to G-d’s ears!  

[pingpong1]

4 minutes ago, clo said:

Thanks for this. I wasn't understanding this but the Fed and bond markets and such are simply beyond me at this point. But it sounded like what Carnival got was NOT part of the business bailout. Right? I don't like it but it seemed distorted.

Clo - Absolutely correct!  What we're all thinking of as the "business bailout" is a huge "loan pool of money" that  U.S. companies can borrow from (almost like a small business loan) to "incentivize them" to keep their present employees hired and with a paycheck, even if the business has to temporarily close due to social distancing.  That money comes from the U.S. Treasury (Mr. Mnuchin).  If those companies that get those loans "play by the rules" and meet certain criteria, they don't have to pay the money back. The "loan" will be forgiven", but they have to promise to keep their employees and pay them.  Those all have to be U.S. companies.

 

This other program that Carnival got is "sort of" like a VA or an FHA guarantee for "private non-government loans" that they arrange on their own and with private lending sources (hedge funds, bond issuers, etc.).  The FED "loosened up" otherwise restrictive loan and bond rating guidlines - without actually lending any actual money to the cruiselines - and this enabled the cruise lines to get private/non-governmenatal money at a lower cost/interest rate than what private borrowers would have normally insisted upon.

 

Without that "guarantee" provided by the FED, the cruise companies might have had to pay unreasonably high interest rates to borrow money and that might have caused them to go into bankruptcy or restructuring in order to "protect their remaining/dwindling assets".  The action by the FED was "GOOD" for us cruising enthusiasts.  It might mean that in 2021 there might just still be some cruiselines in business that will make it through the next 5-6 months of no income coming in.

 

Regards. 

 

   

[Shawnino]

Trump had the Fed bail Carnival equity holders out because they are his friends:

https://www.thestreet.com/mishtalk/economics/carnival-deemed-too-big-to-fail-rescued-by-the-fed

 

At the current rate, all this money printing ends one of two ways:

 

--Massive inflation, like Germany in the 20s, Hungary in July of '46 (prices double every 15 hours) etc.

 

or

 

--No inflation, like Japan since the 90s. No inflation sounds great until you realise it turns into some sort of gentle pseudo-communism where the Bank of Japan is the stock market's largest shareholder. Well actually that doesn't sound bad either, until you figure out the knock-on effects: higher retirement age, longer work week, no wage growth. If you want cruising to become Amtrak, this is your best option. Directly or indirectly (ETFs), the Bank of Japan owns about 75% of the publicly-traded economy.

 

A round of Lysol for everybody, on the house. Well, actually you have to pay for it, but you're told that it's "free". 

[PirateShark]

On 4/27/2020 at 1:50 PM, pingpong1 said:

 

 

Quote

Without that "guarantee" provided by the FED, the cruise companies might have had to pay unreasonably high interest rates to borrow money and that might have caused them to go into bankruptcy or restructuring in order to "protect their remaining/dwindling assets".  The action by the FED was "GOOD" for us cruising enthusiasts.  It might mean that in 2021 there might just still be some cruiselines in business that will make it through the next 5-6 months of no income coming in.

 

Regards. 

 

   

Banks charge interest based on the risk characteristics  of the borrower.  So I guess what is 'unreasonable' at this point considering the risk of repayment with today's facts.  Capital markets have priced the risk and found a sucker to guarantee in Uncle Sam.  The Fed decided to commit our tax dollars to backstop a company that doesn't pay US taxes.  Only you can decide if that is an acceptable practice.

 

Edited April 29, 2020 by PirateShark

[Paulchili]

2 hours ago, PirateShark said:

The Fed decided to commit our tax dollars to backstop a company that doesn't pay US taxes.  Only you can decide if that is an acceptable practice.

I wish they were the only ones not paying their fair share of US taxes.

[LHT28]

6 hours ago, Paulchili said:

I wish they were the only ones not paying their fair share of US taxes.

I  bet a lot of people here do business with companies that pay little or no Federal US  tax but they are not whining about the bailout they got 😎

JMO

 

[StanandJim]

2 hours ago, LHT28 said:

I  bet a lot of people here do business with companies that pay little or no Federal US  tax but they are not whining about the bailout they got 😎

JMO

 

Yes there are, and we generally call those people Canadians-  😜

[LHT28]

19 minutes ago, StanandJim said:

Yes there are, and we generally call those people Canadians-  😜

or big US corporations😉

[StanandJim]

3 minutes ago, LHT28 said:

or big US corporations😉

I would add big Canadian corporations but that seems to be a bit of a non sequitur in today's World.

Good Luck, eh?

 

[LHT28]

4 minutes ago, StanandJim said:

I would add big Canadian corporations but that seems to be a bit of a non sequitur in today's World.

Good Luck, eh?

 

What  Canadian corporations got a bail out from the USA?

[StanandJim]

1 minute ago, LHT28 said:

What  Canadian corporations got a bail out from the USA?

None, but there are many which are not upset that Companies that they do business with don't pay US Taxes, which I thought was your original point.

 

[LHT28]

1 minute ago, StanandJim said:

None, but there are many which are not upset that Companies that they do business with don't pay US Taxes, which I thought was your original point.

 

OK 

Maybe I should have said many US based Companies   like Amazon  for instance

[KS&JW]

14 minutes ago, LHT28 said:

OK 

Maybe I should have said many US based Companies   like Amazon  for instance

 I was not aware that Amazon got  a Bail out from the government. 

[StanandJim]

6 minutes ago, KS&JW said:

 I was not aware that Amazon got  a Bail out from the government. 

Amazon didn't get a bailout, but being a fairly new non brick and mortar establishment, they deliberately structured themselves so that they pay almost nothing in taxes, even in good times.  

[KS&JW]

Just now, StanandJim said:

Amazon didn't get a bailout, but being a fairly new non brick and mortar establishment, they deliberately structured themselves so that they pay almost nothing in taxes, even in good times.  

Yes, that is true of most large US corporations.  Apple,  Google, etc. 

[LHT28]

54 minutes ago, StanandJim said:

Amazon didn't get a bailout, but being a fairly new non brick and mortar establishment, they deliberately structured themselves so that they pay almost nothing in taxes, even in good times.  

yes 0 taxes in 2018  & a small % in 2019

How many others like them?

[njhorseman]

1 hour ago, KS&JW said:

Yes, that is true of most large US corporations.  Apple,  Google, etc. 

 

14 minutes ago, LHT28 said:

yes 0 taxes in 2018  & a small % in 2019

How many others like them?

Saying that most large corporations pay no income taxes is a myth. This study of the 2018  tax year found 60 of the Fortune 500 that paid no taxes.

https://itep.org/60-fortune-500-companies-avoided-all-federal-income-tax-in-2018-under-new-tax-law/

 

The list of company names is here:

https://itep.org/notadime/#table

 

Not only did the 60 not pay any taxes...they actually received $4.3 billion in tax rebates...but none the less, 60 out of 500 is not "most big companies". 

 

Some of the companies paying taxes may not pay all that much. In 2019 Amazon paid an effective tax rate of 1% rather than the 21% statutory maximum rate.

 

Edit: this update of the study I cited raises the number of companies not paying income taxes in 2018 to 91. https://itep.org/corporate-tax-avoidance-in-the-first-year-of-the-trump-tax-law/

Edited April 29, 2020 by njhorseman

[Shawnino]

Companies don't pay taxes anyway. They just pass that cost along to customers.

 

"Let's make a widget for $6 and sell it for $10."

"OK, but we have to pay 25% tax on our $4 profit, so we'll only make $3."

"Right, my bad, so we'll sell it for $12, and make $4.50."

[Paulchili]

1 hour ago, njhorseman said:

 

Saying that most large corporations pay no income taxes is a myth. This study of the 2018  tax year found 60 of the Fortune 500 that paid no taxes.

https://itep.org/60-fortune-500-companies-avoided-all-federal-income-tax-in-2018-under-new-tax-law/

 

The list of company names is here:

https://itep.org/notadime/#table

 

Not only did the 60 not pay any taxes...they actually received $4.3 billion in tax rebates...but none the less, 60 out of 500 is not "most big companies". 

 

Some of the companies paying taxes may not pay all that much. In 2019 Amazon paid an effective tax rate of 1% rather than the 21% statutory maximum rate.

 

Edit: this update of the study I cited raises the number of companies not paying income taxes in 2018 to 91. https://itep.org/corporate-tax-avoidance-in-the-first-year-of-the-trump-tax-law/

To say that this is outrageous is a gross understatement.

I am sure there is a number of prominent individuals that could be added to that list.

That is a major reason why the Scandinavian countries (socialist capitalism) can offer all those benefits to their citizens and we cannot - everyone pays their fair share..

Edited April 29, 2020 by Paulchili