One of the more worrying things to me is how this pandemic (and/or our response to it) will disproportionately affect small businesses and individuals. As Amazon hires 100k workers how many jobs are being lost by small businesses failing?
At least the airlines will get another bailout, after selfishly spending billions on stock buybacks while shrinking seats and hiking fees.
Meanwhile, Joe Average, who ended up running a food truck when Wells Fargo "right sized" him during the last recession, will find a comfortable slab of concrete upon which to rest his head, under the viaduct.
Look, I complain about wealth inequality more than anyone I know.
Stock buybacks had A LOT of problems people don't discuss.
But this isn't really what ruined the airlines.
UAL -- the hardest hit and worst buyback offender -- bought back $1.2Bn in 2015, $2Bn in 2016, $3Bn in 2017, $1.2Bn in 2018, and $3Bn in 2019.
That's a total of $10.4Bn. To my knowledge, less than 4% of that was on borrowed money.
They returned roughly ~95% of free cashflow to investors mostly through buybacks instead of dividends.
UAL's Cash on Hand increased 25% in 2019 to $4.9Bn.
Even if they had that $10.4Bn, they could not get through Coronavirus. Airlines have HIGHLY volatile margins on INSANE amounts of revenue. None of them could withstand a 70% decrease in air traffic for a year.
Maybe they're all terribly run. I dunno. They were pretty bad buyback offenders, but far from the worst. And buybacks are not what ruined them.
Most companies keep less than 10% of Op Ex in cash on hand. UAL's Op Ex is about $38Bn/year. A lot of people think it's healthy for a business to have 25-50% of Op Ex in cash. For UAL, that would've been $9.5-$19Bn.
They could've been in that range if they didn't issue any dividends or buybacks since 2014. But they still wouldn't be able to make it through this.
And, no, I'm not saying that they should've done buybacks at the rate they did (or at all). I'm just saying this isn't what ruined them, and they are far from the worst offenders here. They're just the hardest hit.
Edit:
Curious if anyone familiar with the industry can comment:
How much of Airlines' Op Ex is fixed? How much can they realistically cut? I don't know enough about how this "mandatory" flight schedule works. How many flights do they need to keep flying to keep their gates?
>Even if they had that $10.4Bn, they could not get through Coronavirus. Airlines have HIGHLY volatile margins on INSANE amounts of revenue. None of them could withstand a 70% decrease in air traffic for a year.
Ignoring Tech industry, most companies on earth could not withstand a 70% drop in revenue. The world we are in today is that everyone is trying to go for Big Revenue and Slim Profit Margin. A side effect from QE or worsen by it.
30% over 4 years from their peak. Still a pretty big drop. (RIM/BlackBerry has been a 95% drop over 9 years, and hasn't stopped yet, but looks to be levelling off.)
Anything where there isn't something else limiting supply (prestige, luxury, brand, IP rights, network effects, zoning) is going to have slim profit margins. That includes most goods and commodities. That means that "Big Revenue and Slim Profit Margin" are going to be the companies providing commodity services to most people. If you want small revenue large profit margin air travel, you're looking at charter and luxury, for instance.
It's not the that ruined them, but we see another classic transfer from the state (=people) to the wealthy.
The correct thing would be to nationalise them if they go bankrupt, not to bail out the investors that earned money with the explicit expectation of risk.
And I say that having lost 10k in stock value in the past month. Still my fault and my risk and I don't deserve to be bailed out for it.
I also think it’s ridiculous for people to want these companies to store up money for a rainy day, while at the same time keeping interest rates incredibly low.
> after selfishly spending billions on stock buybacks
I've been seeing this on twitter a lot. Is there some context you can provide for why these particular repurchases were in bad taste, given no awareness of the upcoming pandemic. I am assuming you don't view repurchases as 'selfish' generally.
A buyback is a form of capital return to shareholders.
Improvements in leg room, amenities, services, infrastructure, etc, are a form of capital return to customers.
When executive compensation is tied to operating profit or market capitalization, there is an incentive to reduce the product quality (the air traveler experience, in this case) to the minimum competitive level and boost the share price. A buyback boosts the share price in two inter-related ways. First, it reduces the amount of shares available in the secondary market (the "float"), which distributes the market cap across a smaller number of shares. Second, it provides artificial demand for the stock, impacting the price upward by buying shares.
Warren Buffett has stated that he likes investing in equities in part because companies reinvest their profits in their business. A buyback doesn't do that because when you spend $5B on your own stock, you're not spending it on providing a better experience to your customers, and you're not spending it on R&D. You're just spending it on concentrating shareholder ownership and driving up the stock price.
Guess who often gets paid in shares? Executives. It's common for a CEO to get a small portion of his compensation as salary and a large portion as shares and options.
The point is that these companies could have reinvested that money in their business, but instead they aimed to boost share price and financial optics.
That's not to say the airlines don't care about the little guy. Some shareholders are regular folks. Plus, at least Delta paid out a bonus to employees a few months ago. But there is indeed a reason to dislike large buybacks.
> A buyback is a form of capital return to shareholders.
> Improvements in leg room, amenities, services, infrastructure, etc, are a form of capital return to customers.
And bailouts are a form of wealth redistribution from people of modest means to wealthy executives and investors who, it turns out, are actually not willing to shoulder the risk associated with passive profits.
> That's not to say the airlines don't care about the little guy.
They actually like the little guy, you can fit more of them on a plane.
Why is a buyback worse than a dividend? Both are a form of delivering ROI, it just happens that one is better for shareholders due to the tax system.
In fact if airlines had actually reinvested that money, they would be even more fucked up than they are now. At least now they have free cash flow to make a temporary drop in revenue hurt less. Reinvesting money in the corporate world often involves converting cash flow into debt, which they’re probably going to have to do now to meet their existing financial obligations. Much better than if they were midway through financing some large fleet expansion and had less FCF on hand to weather the travel slowdown
I don't understand who buybacks are better for. A dividend would've returned money to all the people who held onto shares and wasn't paying attention to how much they should be selling off to capture the buyback and just had all the gains wiped out...
Absent a market selloff, they're better for shareholders for two reasons: one, it manifests earnings as capital gains/stock appreciation rather than dividends, and two, it has positive future ROI.
Point 1 is not super important because of the existence of qualified dividends.
Point 2 is like this: let's say I'm a company with 1000 outstanding shares valued at $100 each and want to pay a yearly dividend (for simplicity) of $5/share. All market movements notwithstanding and absent any changes, that means I'm basically giving investors a 5% yearly ROI. But, let's say I instead bought back my shares with all my earnings. The first year, I buy back 5% of the outstanding shares. Now there are 950 outstanding shares and total earnings are still $5000/year. Next year each remaining shareholder gets an extra 5% of earnings per share (this compounds). And rather than pay tax each year on dividends, shareholders defer all their taxes until they exit their position.
One argument is that dividends aren't really worse in this case because investors could still choose to spend the cash on purchasing more shares, accomplishing the same thing. But the deferred taxes change the math.
Hilarious but probably time to leave this site...I got down voted into oblivion for pointing out the US economy would probably collapse due to repo operations 44 days ago...
Too bad, I guess anyone thinking outside the box and pointing out that our herd is going off a cliff is problematic...
That tax incentive was set up deliberately. It's socially valuable for people to have retirement savings, so the rest of us are happy to subsidise you in that saving.
Buybacks are an accident of tax law and ought to be taxed the same way as dividends.
> Buybacks are an accident of tax law and ought to be taxed the same way as dividends.
The problem is it's really the other way around -- reinvested dividends should be taxed like buybacks, i.e. taxed when the purchased shares are sold.
By contrast, taxing buybacks like current dividends would create a really grisly incentive for corporations to hoard a giant pile of money, since that would be the remaining way to defer the tax. This is already what international corporations do with offshore profits because of a similar incentive to defer corporate income tax, and it's a huge problem.
We have a policy of allowing people to avoid tax on investment gains until the investments are cashed out -- this is what a 401k is all about. We might as well make it consistent across the board so it stops creating all of these perverse incentives. (That would reduce the amount of tax collected, but it would also remove most of the justification for taxing capital gains at a lower rate than earned income, so changing both at once would about balance out.)
I'd actually go the other route: tax investment gains like any other income, at the time when they happen, and then the incentive to do buybacks or cash hoarding goes away.
Then you have two new problems, because a lot of investments (e.g. real estate, small businesses) aren't liquid, and you don't necessarily know the value at any given time.
If you own a restaurant and a sports stadium opens next door which causes the value of the land to double overnight, you'd suddenly owe $50,000 in capital gains tax, but what if you don't have $50,000 in cash? You'd have to sell your restaurant to pay the tax on it.
If you write some software for your small business and start to license it to people for $50 each, how much is your corporation which owns the copyright now worth? Ten thousand dollars? Ten billion dollars? It depends how many copies you expect to sell. But the government would have to appraise it. What do you do if they appraise it as worth tens of millions of dollars? You'd immediately owe more than a million dollars in capital gains tax, but it's on the appraised value of an asset that may not turn into that much revenue for years -- or at all. And with no guarantee you could even find anyone willing to pay you that much for the business.
There are good reasons not to collect the tax until the investment is converted to cash.
Right, but none of those problems exist for listed stocks, which trade liquidly and can be readily converted back and forth to cash - indeed that's the whole reason a buyback works. I believe tax law already has a class of things that are considered cash-like - foreign currencies, bullion, that sort of thing - perhaps a good first step would be treating liquid stocks the same way.
Except if they reinvest back to Customer they would still have the same problem today.
And generally speaking better leg room, amenities, and services dont sell more tickets. Your competitor will be gaining on you via even lower price. As shown by all the budget Airline. It was the customer than decides the more expensive plane ticket wasn't worth it.
You should at least mention the criteria for returning capital to shareholders - no NPV positive projects available. We can debate whether or not that is true but it’s not fair to just say “they should have reinvested in the business instead of returning capital”.
I think the main thing is the airline industry is boom and bust, while being quite sensitive to a number of factors out of their control, but because they know they'll get bailed out by the public they have no reason to try saving to make their business robust against such things on their own. These talking points seem to be coming from this article:
It is prudent for an individual to have a rainy day fund for emergencies.
It is also prudent for a corporation to have a rainy day fund for unpredictable events like an upcoming pandemic.
An individual who didn't properly save can go bankrupt in a time of emergency. Likewise, a company which didn't properly save should also go bankrupt in a time of emergency. Look at Apple or Berkshire Hathaway. Both have a massive safety net in the form of liquid cash for hard times.
Businesses typically carry insurance (including business interruption insurance) and unused credit lines for this type of risk, not cash. Governments typically then provide some form of insurance for risks which are commercially uninsurable like war. I think Covid probably falls into that category fairly comfortably.
Just to play devils advocate... this has the potential to cause an absolutely massive liquidity crunch. All debt is an asset - all payments on debt are a positive number in some investment portfolio/banks/etc balance sheets (eg a bond).
If everybody stopped paying debts and rent, the financial industry could crash overnight as suddenly nobody has the cash flow to pay each other any more. And that would trickle down immediately - not only as banks and property management groups go out of business, but in property tax revenues, pensions, people on fixed incomes, and then all the second and third order effects: insurance and reinsurance, massive market panics, etc. It sounds nice on an individual basis but the risk is insanely huge
Where do you see Macron saying payments are stopping? Why would we assume France would do the dumbest, most damaging thing possible rather than something easy and healthy, like monetizing a fiscal stimulus of direct payments?
I agree but I see this as a problem we could fix using financial tools. Rather than letting thousands if not millions of small business and jobs completely gone.
Or face a total financial system meltdown if the fix is poorly implemented.
I think the simplest solution is for the fed/government to simply give everybody cash, since the root of the problem is that a lot of people have temporarily lost their incomes due to their jobs being essentially banned in response to the pandemic (eg a lot of people in retail outside of supermarkets/food). Anything that involves nonpayment is extremely risky
That is actually a great argument. Directly injecting liquidity to citizens. At roughly 200M adults in the US, $2000 per adults would be $400B. Except $2000 doesn't really last long.....
>To that end, any French company at risk of going under will be allowed to stop paying rent and taxes during the shutdown
Wow!. Thank you I have argued that in crisis rent along with many other contract obligation should be exempted. I cant believe a government has actually done it.
> We must have a rent holiday if those businesses and their workers are to survive.
We'll get a lot of rent forgiveness naturally. If a strip mall has some tenants who cannot make rent in this crisis, who are they going to get who can pay? The pragmatic approach is to keep your existing tenants, because their survival is your strip mall's survival.
We might get a lot, but it likely won’t be enough.
Many land owners would already prefer to leave their buildings empty for years over even considering negotiating on rent. I doubt anything can change their minds.
Put a land value tax in place, and then the incentive to hold property for speculation goes away, in favour of selling it to people who can use it productively.
Not the same thing. Property taxes based on the improved value of the land create a perverse incentive to avoid making improvements, and California prop 8 and similar laws encourage people to hold property as long as possible rather than sell to people who could make better use of it.
Honest answer: No, because that would mean to return to Hobbesian world.
Taxes are a way to pay for communal goods. We don't pay enough of them - our obsession with cutting them is part and parcel of the disastrous response to SARS2-CoV.
I very much like having a government that can step in during emergencies and distribute the load. I like living in a society where we care about other people to.
Abolishing taxes is strictly "me first, fuck the rest". I suggest people who like this approach try living in Somalia for a while, that's their desired end state.
Even the most die-hard libertarian economist believes in Pigouvian taxes to address externalities. If vacant buildings are an externality cost, they should be taxed.
they prefer to leave the building empty in anticipation of a higher priced long-term lease in the future. if you're already renting space to a profitable business that was stable before the crisis, the incentives are probably to work out an arrangement with the business that helps it not go under. now if you're already unsatisfied with the current tenant, you might see now as a good opportunity to kick them out and wait for someone willing to pay a higher price.
According to Strong Towns, it's because the building can borrow money based on the projected value of rent. If they lower the rent, they can't borrow as much money.
At an aggregate level it can make more sense to leave X% of units vacant than to lower prices (which could have effects on the rate you can charge with the rest of your units). I think it’s an example of our financial system not working as intended.
For example let’s say I have a 100 unit apartment building. If I maintain a 20% vacancy rate target I can charge an average of $1000/mo/unit. But to set a price at which my vacancies get filled very quickly, to hit a 5% vacancy rate, maybe I need to charge $700/mo/unit. In that case I’m making less money than before - $80k/mo vs $66.5k/mo.
why wouldn't you just price discriminate through short-term concessions to fill the remaining 20% and increase revenue? this seems to be what most apartment buildings around me actually do.
That is what people do sometimes (esp. in SF where you'll get "2 months free rent"). But I think in commercial real estate the math is a bit different because leases tend to be longer - so you really don't want to budge on the actual monthly rate and even 1-2 months free doesn't end up helping the prospective tenant that much
A cynical, calculating strip mall landlord might think they're more likely to get a government cash handout (or a cash handout to their tenants who then hand it to them, which is effectively the same thing) if they prove their tenants will go bankrupt without it.
If you think the mall won't survive anyway, then this calculation changes though and instead you look to recoup as much as you can in the short term. Ordinarily this is a good thing because it forces unviable businesses to cease trading and the people and resources can be redeployed into something more productive (and in many countries at an individual level the people will receive help from the government to do this without ruining their lives).
The idea here is to minimise the long term damage caused by people being forced into liquidation as a route to recoup losses and increase protection for individuals who are also temporarily affected.
Every large retail store is open (so far) in Southern California, with most retailers' inventory being purchased at full retail prices.
I am not sure why the retailers don't switch to curbside-pickup model exclusively, instead preferring hordes of customers roaming around every single morning, but from what I hear, Instacart and store-specific delivery programs are overwhelmed.
They are open in Southern California, but running out of basics fast. I noticed a complete lack of certain produce, milk, eggs, bread, as well as the oft meme'd paper products.
Every morning I go to the grocery store in my neighborhood looking for toilet paper and every morning there is some new staple nearly out of stock. I still have a few rolls left, and amazon seems to have a few remaining in stock, so things aren't dire yet, but they are getting concerning.
This is also a city where not too long ago the social contract evaporated after hearing a verdict, requiring military intervention to restore order. An armed militia formerly stood on the roof of the store I scoured today for toilet paper. I'm fearful of what will happen when everyone realizes they can no longer wipe their ass or buy rice and the working class starts getting laid off en masse, and when this virus starts ravaging the 150k+ homeless in southern california.
It's partially due to hoarding, partially due to panic buying, and partially due to the lockdown of many schools and businesses, which caused most eating+drinking+related activity to move home, raising household demands on food and toilet paper above normal.
Also, if you're supposed to show your face in public as infrequently as possible, then instead of 10 shopping trips you're better off making 1 shopping trip buying 10x the stuff. Which exacerbates availability.
The social contract didn't "evaporate" - it was never followed by the richer half, and at some point, people got tired of being shat upon.
I suggest we start addressing inequalities and maybe all cut back a bit and share the burden, instead of hoarding now and then being surprised that the people unable to hoard object to that idea when nothing is left for them, at all. That means taking care of the working class and the homeless, too.
Thus far the consumables supply chain in the US hasn’t been too badly effected. They’re doing thanksgiving or more amounts of business every day here in Seattle but they’re mostly keeping up. Whether we as a nation rip ourselves apart is on each of us as individuals to make that not happen.
Grocery stores in my part of northern New Jersey are not keeping up, at the moment. On Saturday I was unable to buy fresh meat (of any kind), sausage (without cheese in it), flour, pasta, or canned beans. Produce pickings were slim, and most items were sold out. Ditto canned soup and bread. That's just the things I was actually looking for; there were plenty of other bare shelves throughout the store.
imagine how many employees would be needed to support curb-side pickup at walmart at anything like the stores current throughput. judging by the number of people I see pushing two full carts through the checkout line, you might even need more than one employee for each simultaneous pickup transaction.
It's kind of strange to see a complete breakdown in online ordering and delivery of groceries. Target etc... basically shut down curbside delivery because they need people to restock shelves. That means you have to visit the store. Odd. I expect to see grocery only delivery companies really take shape soon (like Instacart).
Marginal businesses of any size are going to fail, and the less marginal will become marginal.
Larger businesses have a proportionately larger need for money to sustain themselves. Big business doesn't mean rich business. Look what's happening to the airlines.
You mean like American Airlines that had a profit of $7.6 billion in 2015, and didn't save dollar one for a rainy day? Instead, it bought back $15 billion worth of stock over six years while raising fees and shrinking seats?
“I don’t think we’re ever going to lose money again,” -Doug Parker, American Airlines CEO, 2017.
Letting them all fail would do more harm to others than warranted.
But letting the weakest one fail as a warning to the others that the bailouts are over and perhaps they should learn to save against rainy days isn't the worst idea.
That's the principle, but it doesn't reflect to the reality around us, or at least my reality.
I am in the tourism industry, owning a small-medium hotel.
If I stop paying any loans and generally I am left out of cash-flow I am pretty much screwed for the next few years, if not closing down.
I know though a few people around my area with massive resorts and a debt over 100mil that have already stopped paying quite a few loans themselvs and they are getting away with a slap on their wrist. The gov gets involved cause the debt is enough to damage a bank, and the people that are going to be left without a job are enough to cause a mini crisis. Then the bank itself... well for them its not just about ceasing the asset as its gonna be a hard thing to sell or manage.
Meanwhile the owners are taking out massive salaries + bonuses for their personal accounts and don't care about their balance sheet being a mess and their debts growing.
The problem is that certain industries now just assume they will be bailed out during crisis. The airline industry, the financial industry. It’s almost baked into their mode of operation at this point.
The building I live in has a sitting space on the roof I’ve been working from while waiting for the internet to get installed in my apartment (I didn’t think I’d need it so I waited and now I’m regretting it.) One of the other people teleworking from up there is an accountant(?) for a major airline who has been for the past couple days trying to figure out how to keep it from going under. It’s kind of sad hearing all the phone calls he’s making sorting things out like older pilots trying to retire and so on.
Unlikely but plausible. I rather order raw stuff from amazon and do my sanitizing rather than order food from an unknown kitchen, delivered by a driver who was in contact with god knows how many people. Either ingredient delivered home, or I will go out and buy things myself which is probably riskier.
In my area (midwest) Amazon (Prime) delivery is out to about 4 days. But it does seem to depend on the item. I ordered a tennis racquet "Prime" yesterday that was in stock and the quoted delivery isn't until Friday / Saturday.
Prime Now is now unavailable entirely. At checkout, it simply says "No delivery times available" for all stores.
Amazon Fresh also gives no available delivery windows.
If amazon, a master of logistics, is struggling, imagine some of these other e-tailers and online shops.
Got an email from a company i do work with, and they’re calling for 21 day delays for shipping items, and suspending new orders. Just because they literally cannot package and ship fast enough.
I tried to find the source but it looks like it was more speculation in a Reddit post. Sorry for the wrong info. Perhaps Amazon is just being overloaded.
Northeast, also looking at 4 days out for prime deliveries depending on the item. Anything not in their regional hub is 4 days, things stocked regionally are still two days for new. I expect this to change soon.
I noticed my Amazon orders earlier today were scheduled way out(I've been practically next day on everything Amazon Prime recently) and it didn't even occur to me that it was tied the panic buying.
I wanted to order a few necessities and an extra thing (pizza pan). The pizza pan quite likely wouldn't be highly in demand during this (or I'm quite wrong, I don't know) but even with Prime it won't arrive for 4 days.
Can you clarify what you mean by "pay a fair tax"? I would assume that Amazon (like most publicly traded companies) pays all the taxes that it's required to by law.
> “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
-- Judge Learned Hand (1872-1961), Judge, U. S. Court of Appeals
The problem is that multinational corporations can devise complicated ways to avoid paying taxes in the countries where they do business by exploiting tax havens, as Apple did in Ireland.
Amazon has a huge business in the UK with offices, staff, stock and warehouses, but Amazon UK doesn't sell stuff. You are actually buying UK goods from UK warehouses with UK delivery etc but the money goes straight to Amazon EU Sarl in Luxembourg, where it has a sweetheart tax deal.
So Amazon exploits the whole UK social system of education, health services, roads, police etc etc without paying the UK government for the benefits. This is really bad for the UK and other countries except Luxembourg.
Meanwhile, Amazon EU Sarl reduces its taxes by paying Amazon Europe Holding Technologies SCS - a "non-resident" company -- hundreds of millions of euros for "intellectual property" rights that are basically untaxed (Amazon is paying itself), and the money gets spirited back to the USA.
The cost of "intellectual property" is really just a made-up number. What is Amazon charging itself vast amounts of money for when its UK website and business processes are basically the same as its American and other websites?
The whole thing may be legal but it's basically a fraud, and the EU ordered EU ordered Amazon to repay €250m in “illegal tax advantages”. Which is still chickenfeed for a company of Amazon's size and wealth.
It's highly likely that European countries will introduce a "digital tax" on turnover to stop this kind of cheating. I expect Americans will get angry if or when that happens, but in the long run, we don't have an alternative. Infrastructure is expensive, and the money should come from the people who are benefiting from it.
In the US, of course, Amazon gets tax breaks from people who want Amazon investment. New Jersey offered $7bn of tax incentives in its bid for Amazon's "second headquarters".
If companies like Amazon actually paid the taxes required by law that would be nice. Instead they have armies of people finding wholly artificial ways to legally avoid paying those taxes.
Hard to find a non-cynical comment on HN these days, so I'll just say: this is cool. A way for people to get crucial goods in a relatively safe way, and some new jobs with a pay boost in a time of economic instability.
Amazon seems pretty constrained by supply to me right now. Everything I have looked for to stock up on from them due to the current conditions (alcohol wipes, nonperishable food, etc) is sold out. But maybe they have scaled up supply more than I realize and workers are becoming more of a bottleneck than inventory.
Even if everything was in stock I'd expect my overall online purchases to decline in the next few months. I'm not really worried about new clothes if I'm not going outside, and a lot of things like toys and gadgets I usually waste money on seem a lot less important with a worldwide pandemic growing exponentially outside. I'm probably an outlier though in terms of how much I spend/waste on online shopping discretionary spending in normal circumstances (and a lot of that discretionary spending like clothes is not going to amazon anyway).
> Everything I have looked for to stock up on from them due to the current conditions (alcohol wipes, nonperishable food, etc) is sold out.
Do you have any idea what the full industrial capacity of the American economy is? These type of basic items are all dead-simple to manufacture, and highly unlikely to run into supply-chain interruptions.
I guarantee you that once Americans get the full on prepping instinct out of their system, the inventories will all be replenished by next week at the latest. This isn't the collapse of industrial civilization. The factories are churning at 100% capacity.
People won't keep stockpiling six months of toilet paper every single week. There's virtually zero chance that there's any significant supply interruption beyond a few days.
We are a few weeks ahead of you here in Australia on the panic buying and toilet paper is one of the few things we actually produce here.
But it's still impossible to get in most places a few weeks after the panic buying first happened. People seem to buy it immediately on reflex, and people who didn't panic buy are beginning to panic search for it.
One factor is that toilet paper is a bulky item, which makes the logistics of shipping and storage tricky. But still! I'm very surprised at how fragile this (fairly simple) supply chain has proven.
>Supply Chain Expert Tells Tucker What Coming Shortages Americans Should Know About, And It’s Not Toilet Paper - Fox news had Daniel Stanton on over the weekend (link). Forget about toilet paper shortages, that'll pass. Worry instead about disinfecting wipes, hand sanitizers, the hospital masks. "We need more of those than what we would normally consume,” he said. “For those things, we need to be increasing capacity, maybe creating some new supply chains, and in a lot of cases, we are dependent on foreign manufacturing and long-distance transportation to get those supplies.” Stanton said the U.S. could experience an inability to make several products Americans “want to buy” in the coming weeks. Axios echoes this (link), pointing out that that some food producers could find themselves without enough employees to manufacture, deliver and unpack groceries. The U.S. imports a lot of food from China, where factories are currently closed — meaning a possible supply chain challenge. Phil Lempert, a California-based food industry analyst, told the Washington Post "We’re going to have two-, three-, four-month lag time until those factories get back up to speed.”
No matter how many, some people will complain about this. There is a huge recesion in the entire world and a company is willing to hire more people and haters gonna hate.
Amazon and Bezos should certainly be taxed their share. I for one don't want to support tax avoidance/evasion and theft from labor. They're not running a charity work or a public service disguised as Amazon marketplace (there is Amazon Smile to be fair) by any means, at least not to my knowledge.
Amazon doesn't make me feel any bit safer and no business should be capitalizing on panic buying, be it a local business or Amazon.
They're running Amazon and hiring more workers because there's a massive opportunity to further stamp out their retailer competition, solidify their foothold further, and make money... not out of the goodness of their investors hearts. It's about money/business opportunity, not your security.
There's nothing wrong with that in of itself, but if it stomps out any potential competition and renders them unable to compete after a certain degree of monopolization, what sort of position will consumers eventually be placed in?
> what sort of position will consumers eventually be placed in?
In a pretty shitty one. That is the ultimate goal of modern cut-throat capitalism: get utter market domination, destroy all competition and once that is done, raise the prices as far as possible without attracting too much protest from the few regulatory institutions that remain.
Nothing wrong with that, but it seems reasonable to me that once a company goes public (or hits a certain size), it no longer makes sense for one individual to have such a large stake in it no matter how essential.
There’s a huge demand for the service they provide and they’re trying to do everything in their power to satisfy it. I doubt Mr “Your margin is my opportunity” will fail to reinvest almost all of the profits either.
Can’t we leave this bullshit to when it seems like a problem again, instead of meaningless background to the plague, while our loved ones die, economies implode and daily life is wrenched into new shapes?
Here in [redacted] literally everything on Amazon.fr that I would like to order is unavailable for delivery until next Monday. In [redacted] at least.
I won't say everything is like that but I have been looking at some school supplies as my son is home and I have been unable to find anything for delivery this week.
I mean, here in Brooklyn you literally cannot order AmazonFresh. No delivery slots no matter how far in the future you scroll. And it's been this way for at least a couple of days now.
Another comment here says all Fresh delivery has been stopped at the moment. I assume it has something to do with not being able to stock the store fast enough, let alone deliver it.
Fresh doesn't seem to have stopped deliveries here (Seattle area), but it's hard to find a delivery slot -- all of the delivery slots appear to be booked up 3 days out. I have a delivery scheduled for Wednesday.
They were out of a lot of things, but still had enough for a 'normal' round of groceries, I didn't find everything I usually buy, but they had adequate substitutes. Refrigerated/frozen goods seem the hardest to find.
We just got a message that said "No delivery windows are available. All remaining delivery windows for today and tomorrow are currently unavailable. Check back for updates or try again tomorrow"
Don't thousands of people work in each warehouse? Are Amazon workers immune? At some point, some of these facilities are going to have closures. I wouldn't predict smooth sailing for Amazon just because they're mail-order instead of brick and mortar.
From what I've seen, keeping regular distance would be easier than most workplaces, and with proper procedures in place (regular sanitization, taking temperatures, etc) you could keep the spread to minimal. But you're right, it would not be immune to labor disruptions.
Right now, if I was an Amazon worker, I'd be hitting up every other employee about forming a union ASAP. They're going to want that kind of bargaining power to protect themselves.
I hope they're finding ways to help keep them safe in the process. It would be a huge benefit for people to be able to order things online, but not if the warehouses themselves become cesspools of transmission.
Probably Amazon is aware that if health officials shut down their warehouses, their entire retail business goes to hell. It's in their best interest to be hypervigilant.
If Amazon even meets a bump on the road in terms of its logistical performance, and merely due to acts of chance and nothing they could have anticipated, then the whole nation would be put on edge. How would lockdown even make sense without Amazon's logistics reassuring the population?
You have to do it the old fashioned way, pre Internet. Restricted & spaced lines at physical stores or supply locations. Take/get a number access to shopping resupply at stores or supply zones that are cleaned frequently. You move into a real quarantine program. This sit at home and order stuff from Amazon approach, isn't anywhere near that.
It would require the US military and national guard to implement and keep functioning properly. You need someone with huge scale, federal power (overrule local bullshit), and national reach to ensure safety, supply, delivery and make hard decisions as they crop up.
No need to couch it in such qualifications, although your information is a bit old. The Chinese delivery companies (Meituan, eleme) indeed went on a temp hiring spree for idle restaurant workers during the shutdown. That was a month ago; things are thawing out now.
I really hope Bezos brings the full power of Amazon's distribution network to bear on this crisis. Traditional retailers seem strictly worse from the epidemiological perspective - you have to go to the store and there are hundreds of people there at least a few of whom will have the virus, if not now, then 2 weeks from now. They are also largely failing to cope with panic buying, whereas Amazon's efficiency only gets better if people buy a lot of stuff.
I also hope Amazon does this responsibly, and creates the conditions in which the strictest possible social distancing could be maintained for people working in the warehouses.
It's pretty clear to me that we can't shut down the economy due to this for any extended period of time. We also can't do these planet-scale epidemiological drills every year. If that's the case, we should figure out a way to alleviate our current predicament as much as possible until there is a vaccine or a cure. Amazon can be a large part of that.
From what I'm seeing: Grocery Health and Beauty way up; everything else way down. If I were a RA person I'd be buying buying children's games from Walmart and hope the input warehouse can handle the influx of shipments. RA is still alive and well for the hustlers. I'm rooting for them!
Because govt normally does poor job in aligning incentive and effort for efficiency. Amazon will try to be most efficient because they are getting back all the profit out of it.
Govt should make sure labour, monopoly laws and taxes are aligned with society's expectations.
Not on the basis of retail demand. Their retail margins are horrible, as with most of the industry.
AWS and advertising are where their margin and profit centers are.
In terms of retail support action - Costco's stock is one of the few large companies that hasn't cratered. It's not much lower than its average for the year, whereas most everything else has been hammered.
You could double Amazon's retail sales in the US and it will get you a few extra billion dollars in profit. The problem is retail makes up a very modest share of their overall profitability. So it won't move the needle much on a $840 billion market cap. It works for Costco because essentially all of their market cap is based on retail sales and the demand surge they're seeing. So you get a direct IV line between the crazy panic buying and the COST stock. Although, if there are supply problems coming up next, be careful holding COST as well.
On what basis? I see operating income between AWS and retail being relatively similar. The margins for AWS are much better, but retail is still driving a huge amount of profit for Amazon.
Do we know yet what the probability of packaging borne transmission is? Has anyone seen anything? I saw one study describing virus lifetime on various surfaces but I don't think they tested cardboard.
Also I don't know what they're expecting. They either have mountains of stock or they'll be laying these people back off soon when factories close. I think supplies out of China are still disrupted.
My neighborhood has eight houses per acre. We've had no problems with stolen packages even when left out overnight. This is the exurban fringe of metro Atlanta.
Surprisingly yes. There are also townhouse and apartment complexes. Most homes are on bigger lots but I was surprised by the diversity of housing choices out here.
Paranoid thought - what if it's on plastic or exposed steel on something inside the package (like the wrapping on a box or an ladle that doesn't come fully enclosed in a box), you need to wait three days or so.
I have an old Windex spray bottle that ive filled with rubbing alcohol and I've been blasting everything with extreme paranoia.
Honestly statistically speaking in most areas out chances of coming into contact with the virus are still quite low. There's 300MM+ people here and even if 1MM are infected, those are good odds.
You are presuming that you are meeting people at random - however you are most likely to meet people with a high number of social interactions, and they are far more likely to catch the virus.
Depending on the social graph, your chances vary, but the chance will clearly be far worse than a crude estimate.
Sunlight (UV exposure) helps kill bugs. If you're not worried about porch pirates, I'd leave the packages in the sun. Perhaps turn them over now and then.
Almost the same here, leaving them in garage for two days. It feels weird how the new normal, protocols to avoid infection, are starting to seem like the same old routine now. Wonder how it will feel after a few months, or more.
I'm curious to see if packages and deliveries were seen as transmission vectors in any other infectious epidemics. If packages were a reliable transmission vector, you'd expect to see much higher infection rate of truckers, postal workers, shop clerks, etc. I haven't found evidence of this.
I know that China relied heavily on deliveries for food and essential goods in Wuhan, but also seemed to be having people doing deliveries kitted in protective gear.
Not sure how this affected transmission, but doubt the same protections will be in place for delivery workers in the US because of shortages masks, gloves, etc.
If this were a Bond movie, Bezos would be cackling in his secret lair about how his viral plan was coming to fruition. Bond (played by Idris Elba) would then cough on Bezos, who would whip out his antidote, which Bond would grab, escape, and release to the world before being killed by Thanos. (Pitch Meeting, call me)
This may not be a movie, but there's no way in hell this timeline isn't some bored kid fresh out of doritos playing with random variables in his universe simulation.
If Bezos needs an evil villain lair for his secret headquarters, I know a fortress in the American desert with three-foot-thick stone walls, solar and diesel electricity, and its own water facilities, perched on a mountain ridge for maximum visibility 150 miles from anywhere meaningful.
So do plenty of others? Last I checked, most supermarkets, electronic stores, clothes stores, etc, all have online shops. Oh and mind you, those shops usually have curated list of products, not scamy products imported from China and sold at massive markups and inflated with fake reviews...
There are a shitload of jobs that are (as coronavirus crisis and the list of jobs deemed essential in many countries shows) "much needed" for keeping a country running: anything medical, public transport, childcare/education, logistics, groceries/other food, infrastructure upkeep (electric/water/phone/internet/gas grid).
But unlike jobs that label themselves "system critical" such as banks, investment vulture funds and others of their ilk, the really essential jobs have one thing in common: extremely shitty pay, sometimes outright exploitative working conditions.
Like all jobs, these jobs are voluntary. Workers can quit any day they want.
Since they keep showing up, they clearly think these jobs are their best option at the moment.
Here's my point: I strongly believe that you or I have neither the information or the right to judge that choice or take it away from them.
The piss in a bottle stories are just that. Amazon and Bezos have much attention and many enemies. Stories about how awful they are will always appear and circulate.
Thing is, delivery drivers elsewhere actually do this by choice. UPS and FedEx drivers are paid for a set of deliveries. If they can do them quicker then they get the same money but for less time. In NYC finding a restroom can be a real pain and a waste of precious time. It’s far easier to urinate in a bottle on the truck and keep moving.
I imagine they eat while on the move too.
So I’m not quite sure this is the indignity you make it or to be.
> So I’m not quite sure this is the indignity you make it or to be.
It is. Eating during driving is dangerous, even more so with a multi ton delivery truck. Pissing in a bottle is disgusting and a public health risk (where to properly wash hands, for one).
If delivery set prices do not cover that employees get enough time to decently work, then they have to be raised!
Their argument is that some employees will piss in bottles no matter what you pay them. Don't fall into the trap of arguing that they'd stop pissing in bottles at 100/hr
This is not the case of shit jobs that trap people, provided by a notoriously antisocial company engaging in illegal things. This is a case of jobs critical for the society at this moment, provided at a time where half of the country is about to become unemployed.
The "wage slaves" are given the opportunity to leave and work at any other company that will hire them and yet willingly choose not to. That implies quite a non-traditional definition of slavery.
Can you explain the strikes, complaints about work pressure (having to piss in bottles, ridiculous uncontextual performance requirements), high workplace injury rate compared to competitors, etc
given this abundant choice.
It's a large company with thousands of employees, and the company has stepped on a lot of toes by out-competing many, many brick and mortar retailers, so there is "consumer demand" for reports of their inherent wickedness and every malcontent gets a microphone.
I repeat the same question -- if they don't like it there so much, why not go work for Walmart? Or Target, Home Depot, BJ's, etc.?
If the way they're attracting employees is by offering better pay and benefits than competitors rather than by offering a less demanding job, it's not as if that isn't public information. Why would you choose a thing and then object to the trade offs inherent in it?
People have this desire for them to do both, but if the job was less demanding then they could attract employees with less compensation, and they'd have every reason to not pay as much. So why is it wrong for employees to prefer to get paid more in exchange for fewer breaks?
It's like people hate for anybody to have a choice. If you work for Amazon you get paid more but work inflexible hours with limited breaks. If you work for Uber you get paid less but you set your own hours and can take a break whenever you want. Yet somehow both of these are put up as examples of mistreatment. They're just the trade offs inherent in the unskilled labor market.
She will be given a clue for the cure, she stumbles upon it, but nobody believes her this time. Time stone is used to rewind all the way back to 2003 in a third attempt
The Time Stone can't be used to "rewind" anything. Did you not listen to the 10 minutes of exposition by multiple characters on the truth about how time works?
Not to rewind. Rewind implies changing something in your own past, but nobody's past changed. Only the futures of different timelines, if that makes sense.
They made a big deal about that for a movie, considering it is all fantasy. It’s a distinction without practical meaning for storytelling purposes. Just to avoid the scene where Marty sees his own foto fade. They could have just ignored it.
A good way to think of this is a git checkout from anywhere . And then all future commits happen in a branch / detached head state, not affecting the place you checked out from i.e. original timeline.
They made a big deal out of it in the movie, that the stones had to be returned to the exact time they were taken from, or else they would be changing the future of the old "head".
Fortunately, the new moon is just a week away, at which point the "dark side" of the moon will be facing Earth and we'll have a clear view of his base.
The dark side of the moon always faces away from earth. It is more accurately called the far side of the moon. During a new moon the "dark side" is lit by the sun. It receives as much sunlight as the near side but always faces away from the earth.
Fantasy-land aside, Bezos is the CEO of the organization that runs the GovCloud AWS region, which is almost certainly designated critical military infrastructure, JEDI-loss aside.
I would be astounded if there are many billionaires in the USA who are not this moment already taking chloroquine/hydroxychloroquine in the recommended prophylaxis doses, even outside of those deemed mission-critical by the most powerful organization on the continent.
I'm no billionaire, but if I were, I'd either be on my yacht offshore or at my island retreat. Not sure I'd take an anti-malaria drug in the hope it gave me some protection from the pandemic.
It should help alleviating the symptoms, but is in no way a antiviral.
There's a phase 3 trial for treating pneumonia associated with coronavirus. This is based on prior work showing anti-inflammatory response in rheumatoid arthritis (https://www.ncbi.nlm.nih.gov/pubmed/8278823).
Sorry for the late reply: I don't see how it would prevent infection. It could be useful post-infection, to prevent complications and inflammation. Compared that with the standard of care right now which is simply observing the patient during their recovering.
There are a fair amount of studies who took the initial in vitro results (i.e. cell culture) suggesting non-specific antiviral activity (at that level coca-cola is also an antiviral, antimicrobial, and antitumoral, by the way), into animal or human, and they just did not pan out, because it isn't an antiviral.
I don't know if I should be happy about it or not. The world is currently having a tough time battling Covid-19. How safe it is for these people to work during the outbreak?
At some point even Amazon workers will have to stop working to contain the virus. How Amazon if going to provide safety to workers when even doctors with all protection still gets the virus?
