Stock Market Crash

[bym051d]

since brad is thereff’s son it makes sense

Well, that sure answers questions.

 

[WakeForestRanger]

 

[DeacMan]

That seems more like a senate type distribution than a house style distribution. I.e. they just spread the peanut butter more evenly across all the states. In turn CA with a huge population would do worse than Minnesota with 5M residents. It isn't like he expects to win MN (60%). But he needs to win, say MI (39%) and PA (40%) and Florida (39%). And he isn't going to win IL (45%)

 

[Highland Deac]

Trump may seriously be the first POTUS to not see himself as the president of all the American people, but only a certain fraction of it. I mean, Nixon and Andrew Jackson and probably a few others certainly had their enemies and grudges, but they did at least sometimes put the interests of the entire nation first. Not Trump. There's "his" people who supported him in 2016, and then there's everybody else. It's like how a mob boss views the world.

 

[DeacMan]

Trump may seriously be the first POTUS to not see himself as the president of all the American people, but only a certain fraction of it. I mean, Nixon and Andrew Jackson and probably a few others certainly had their enemies and grudges, but they did at least sometimes put the interests of the entire nation first. Not Trump. There's "his" people who supported him in 2016, and then there's everybody else. It's like how a mob boss views the world.

Eh. He'd be stupid to ignore Michigan, Pennsylvania, North Carolina, Florida over places like Illinois and Minnesota. The first four he'll need to win at least 3 to stay President. MN and IL are almost certainly in the bag for Biden.

 

[Highland Deac]

Eh. He'd be stupid to ignore Michigan, Pennsylvania, North Carolina, Florida over places like Illinois and Minnesota. The first four he'll need to win at least 3 to stay President. MN and IL are almost certainly in the bag for Biden.

Actually, Trump believes he can carry Minnesota, and is putting some major resources there. I don't think he will, but that's different from whether he believes he can carry it or not.

Link: https://www.startribune.com/can-president-donald-trump-really-win-minnesota/562922092/

Link: https://www.nytimes.com/2019/10/09/us/politics/trump-minnesota-2020.html

 

[WFFaithful]

That seems more like a senate type distribution than a house style distribution. I.e. they just spread the peanut butter more evenly across all the states. In turn CA with a huge population would do worse than Minnesota with 5M residents. It isn't like he expects to win MN (60%). But he needs to win, say MI (39%) and PA (40%) and Florida (39%). And he isn't going to win IL (45%)

This is what I was thinking.

 

[dartsndeacs]

It has much more to do with banks in urban areas being overwhelmed, whereas small local banks who know their customers were able to service them. Wells Fargo told many of its clients they would be better off going with a different bank.

There have been no reports yet of the feds turning down loans once submitted by the bank, but there are millions of reports of people not being able to find a bank to take them, for a few reasons.

 

[DeacMan]

It has much more to do with banks in urban areas being overwhelmed, whereas small local banks who know their customers were able to service them. Wells Fargo told many of its clients they would be better off going with a different bank.

There have been no reports yet of the feds turning down loans once submitted by the bank, but there are millions of reports of people not being able to find a bank to take them, for a few reasons.

That also makes sense. I know of one local business that submitted an application and was told they were approved only for the funds to run dry. Timing mattered.

 

[dartsndeacs]

That also makes sense. I know of one local business that submitted an application and was told they were approved only for the funds to run dry. Timing mattered.

With our banks' case, It's not as if the Feds gave the money to the bank to then give to us. The bank basically had to front the money based on its own ability and balance sheet, and hope the feds would live up to their word later. They had access to a credit facility based on their own assets on the books, but had to use their existing loans on the books as collateral. Many of the bigger banks balked at this. For the first few days Citigroup wasn't taking any applications. Wells Fargo for the first few days wouldn't accept any applicants , even of their own clients, if they had over 50 people because they were limited to $10 billion overall as a result of the scandal they had a few years back.

For our bank, they had 600 applications, and 7 people basically working round the clock to get them in, and each one took them about an hour and a half. It took them about 9 days to process them all, and the funds ran out at about 12 days. They also had to change and slightly alter forms necessary a few times. All of this coordinated through the banking executives' emails, and he had a hard time keeping track of it. The form the Government wanted wasn't sent out to the banks until like 9PM Thursday night, and everything was supposed to start that Friday.

Small nimble credit unions with teams that could work together could get through the chaos. Our bank basically had to take 7 of its people who normally did something else, and then dedicate them to this task for 2 weeks. Behemoths like BoA, Wells or Citigroup that doesn't have continuity and are so lean and slim that they don't have excess.

Lastly, it was also all processed through the SBA department. Many banks don't do SBA loans, so they were unable to process it for their clients. I imagine SBA loans and departments are common in rural areas. I imagine they're probably loss leaders for the larger banks.

 

[dartsndeacs]

I can easily see a run on deposits form banks like Wells Fargo to smaller banks that were able to fund all their clients' loan requests. My bosses were asking whether we should pull the funds from our bank after like the first day, impatient that it took 3 days to get ours in. Right now 75% of businesses in many states are going to be looking for a different banking relationship.

 

[PhDeac]

Good posts. That map and tweet are good examples of correlation, not causation.

Clearly, the federal government needs to come up with a more efficient way to distribute funds quickly in times of crisis.

 

[dartsndeacs]

Good posts. That map and tweet are good examples of correlation, not causation.

Clearly, the federal government needs to come up with a more efficient way to distribute funds quickly in times of crisis.

Well just because there haven't been any stories yet of loans being rejected by the feds, that doesn't mean it hasn't happened. But I would think if it did with any regularity it would be all over the news. I just know as coming from California, our loan was accepted by the feds within a day of it being submitted. Mnuchin was approving everything. In Trump-style, they're relying on the banks to verify all the data, they're doing no work. At the federal level, all they need to do is push an "OK" button.

But that was a smart way of organizing it, as that's the only way it could have happened as quickly as it did. All things considered, paying 40% of all small business employees in a matter of 2-3 weeks is fairly well done from an administrative standpoint. Almost hard to believe, actually. Doing it through unemployment insurance and actually letting the market decide who to hire and fire would have avoided letting situations where the funds flow to the top, which is where the funds are going for a good portion of white collar companies. The owners of law firms didn't need to get hundreds of thousands, if not millions of dollars, in some cases, which is what happened.

 

[deaconson]

It took a Worldwide Pandemic. It took a 35% plunge in the stock market. It took 6 feet of social distancing. It took quarantining. It took small businesses closing. It took closing practically everything to bring the U.S. economy back to the Obama HIGH MARK!

'nuff said.

Impressive ability to not understand shit. Well done dummy.

 

[dartsndeacs]

Bloomberg had an article on it today

Small businesses that rushed in vain to tap $349 billion in emergency U.S. loans to survive the coronavirus crisis are facing a harsh reality: Some of the nation’s top banks lagged behind relatively tiny rivals in handling applications.

As banking giants tried to automate the process, hundreds of employees at Texas lender Cullen/Frost Bankers Inc. volunteered to fill out forms manually, working late into the night in homes to set up $3 billion in loans. That contrasts with Wells Fargo & Co., which arranged only about $120 million by the time the program was depleted this week, according to people briefed on its progress.

Such figures, just starting to trickle out of U.S. lenders, are bound to fuel more anger over the chaotic Paycheck Protection Program administered by the Small Business Administration. They show the nation’s top bank, JPMorgan Chase & Co., arranged more loans than any other, as one would expect. But it was only several billion dollars ahead of some firms a fraction of its size.

The surprising success rates of regional and community lenders suggest businesses across the country got money based on which bank they happened to pick, rather than just how early they got in line. Many entrepreneurs were desperate to get assistance from the first-come, first-served program and were devastated this week to learn they won’t get help unless Congress allocates more funding.


“It’s a real emotional process,” said Reese Howell, chief executive officer of Celtic Bank in Utah. “They are wondering how they pay their employees and how they will stay in business.”

Wells Fargo said in a statement Friday it moved as quickly as possible to get loans for clients while trying to comply with the program’s requirements. It promised it’s ready to help the moment Congress allocates more funding.

“Invitations to apply have been sent to more than 450,000 customers with a total notional loan amount of around $50 billion, which we stand ready to submit to the Small Business Administration for its acceptance,” the San Francisco-based bank said. That’s “an amount comparable to our peers.”

Read more on the stats: Loans averaged $206,000 from depleted fund

“Chase has secured more funding for small businesses than anyone else in the industry, and we’re fully prepared to help many, many more once additional funding is approved,” JPMorgan said in an emailed statement.

Democrats and Treasury Secretary Steven Mnuchin have struggled to reach an agreement on expanding the program. Mnuchin has signaled he wants to add $251 billion, while key Democrats have insisted on changes as well as another $250 billion to aid hospitals and state and local governments.

A report released by the SBA and Treasury on Friday showed that the most financing arranged by any bank on behalf of clients was about $14 billion -- roughly 4% of the total available under the program so far. The regulator didn’t name any banks, but JPMorgan confirmed it’s the lender behind that figure.

PNC Financial Services Group, based in Pittsburgh, arranged roughly $9 billion in loans, according to a person with knowledge of the matter. KeyCorp, Ohio’s second-largest bank, said it arranged about $7.8 billion. Combined, they have less than three-quarters the number of branches as JPMorgan and only a fifth of its assets.

Executives at some of the country’s largest banks, speaking on the condition they not be named, have been expressing deep frustration for weeks about getting guidance from President Donald Trump’s administration on how to comply with the hastily prepared rescue program. The SBA posted initial rules the night before the program went live early this month.

Seeking Guidance
Big banks that paid billions of dollars in sanctions after the 2008 financial crisis for flaws or omissions in loan applications -- in that case, mortgages -- assumed paperwork submitted to the SBA would need to meet high standards, or they would risk getting in trouble again. Wells Fargo has been under particular pressure to show that it overhauled its internal controls.

Some big banks spent days trying to get more guidance from the agency about elements of the application process, according to people with knowledge of the talks.

Meanwhile, executives at major banks told their employees to make sure that they had validated financial information from small businesses before submitting packets to the government. Some were floored when the SBA posted a notice on its website on Tuesday, confirming that’s necessary but saying that “lenders who did not understand that these steps are required” didn’t need to withdraw applications already submitted. That essentially gave an edge to lenders that had skipped that time-intensive step to get their customers’ applications in first.

The SBA has said that working closely with the Treasury, it launched an unprecedented program in just one week and quickly resolved issues identified by lenders and borrowers.

‘Risk Tolerance’

Community banks probably punched above their weight because they were more willing to act while awaiting additional information, said Paul Merski, an official at the Independent Community Bankers of America who oversees its work with Congress.

“A lot of independent community banks did jump on the program very quickly -- just took on the risk without having all the guidance,” he said. “Banks have to judge their own risk tolerance for these loans and the liability of getting stuck with bad loans if they didn’t do the paperwork properly.”

Some smaller lenders may have benefited from past dealings with the SBA.

LiveOak Bank, the most active SBA lender in 2019, spent two weeks gathering payroll information from customers before the program even launched. That may have helped it get applications approved. The company declined to comment Friday on how many it processed or the total financing it arranged.

Wells Fargo, which is typically a top SBA lender, had its own problems as the rescue program began.

The firm initially ran up against a sanction imposed by the Federal Reserve in 2018, capping the bank’s assets. But even after the restriction was eased, the firm struggled to get application packets completed and submitted. After years of getting faulted by lawmakers and regulators for scandals, its managers were intent on building a system that complied with government rules.

Executives acknowledged Tuesday they had fallen behind but said they expected to catch up with the bank’s largest rivals soon. Two days later, the program officially ran out of money.

‘Ready to Proceed’
“Given the magnitude of the crisis the country is facing, we are hopeful that Congress will approve additional funds for the PPP and we will continue accepting new applications so we will be ready to proceed if and when that happens,” the company said in a statement Thursday.

Cullen/Frost, less than a 50th the size of Wells Fargo, had trouble getting its computers to work seamlessly with the SBA’s systems, so it marshaled an army of employees to handle forms. Most volunteered and worked from home, where they hopped online in the early morning and worked until after dark, contacting clients directly with questions.

The firm adjusted its process a few times and deployed some software to help. But much of the work was done by hand, CEO Phil Green said in an interview.

“We have processed more applications than we take in in a year-and-a-half -- and we’ve done it in 10 days,” Green said. “You had to manually wrestle it to the ground.”

— With assistance by Mark Niquette, and Edward Ludlow

 

[06deacon]

So these small banks were willing to submit loans based on unvetted or no documentation and that’s a good thing? Also there are plenty of folks working around the clock 7 days a week at the big boys trying to get these things approved.

 

[JuiceCrewAllStar]

I think it’s more that small banks already had a strong relationship with their clients in a way big banks never could

 

[JuiceCrewAllStar]

can’t edit but strong relationship and deeper understanding of their clients’ financial position such that they were at starting from scratch like some big bank loans that were being processed

 

[dartsndeacs]

Yes, our bank already knew and had most our financial information, and pretty much just had to obtain their payroll data, as that was what the amount of the loan is based on.

 

[06deacon]

I wrote that post based on the middle section of the article, where the guy says smaller banks may be willing to move ahead while waiting on additional information. Where the big guys having been burned in the past want to get their ducks in a row first. The sb’s submitting through the big banks are existing clients so their financial info is already known. These should not be from scratch.

I’m not trying to sound like a big bank defender but like Palma said these loans are just based on payroll info so they’re not rocket science. They require some fairly basic but important documentation so it’s pretty bad if little guys are just saying fuck it and ramming things through without that info.