I read a disturbing article about investment firms already Actually planning to manipulate aid programs to create profit for their investors. And they seem to be expecting big returns.
Will this be like the separated children thing? Where Americans pay $750 a day, while ‘providerS’ make huge profits and children sleep on floors in horrid conditions?
Why are such things tolerated in America?
There’s always outrage, but never much change? Or so it seems, anyway.
I know craven exploitation happens everywhere, of course! But in most places once it has light shone on it a correction is made. Not so much in US, it sometimes seems. These are old tactics, and these people are quite open about their intentions.
Perhaps I’m just naive, and this is all just par for the course, to be anticipated, etc, and it’s just, yknow, disappointing?
I don’t have any answers or knowledge about this but maybe it could explain why the stock market keeps going up even in the face of a dismal jobs report. Maybe they’ve figured out a way to make money even with minimal or no workers or customers.
It sounds to me like the idea was to get into the business of making small business loans as part of the government program, and make large returns because the government was guaranteeing the loans. In other words, they were saying “Put up some capital that we can loan to small business owners, and you can’t lose, because even if they default, Uncle Sam is footing the bill.” The whole plan is that they were basically putting out a pitch to gather capital (i.e. investors) to loan out.
This isn’t a lot different than what banks are already doing- they just happen to already have their capital on hand as part of their normal banking operations. I also wouldn’t be surprised if insurance companies might try to get in on some of that action as well.
If there’s an issue here, it’s likely with the structure of the aid programs, not that financial companies are going to attempt to make money from it. After all, it’s not like 3M, Kimberly-Clark, GOJO or Lysol are giving their products away for free these days. All of them are likely to post record gains as a result of mask, toilet paper, hand sanitizer and disinfectant sales in this quarter.
A friend of mine, whose business is suffering because of the pandemic, was looking into the government loan programs and the word is that the sheer number of people applying means that it would be infeasible for the Federal government to process them all in sufficient time to be useful. Many probably won’t get approval until 2021.
The only way for people to get the money they need, from a practical standpoint, would be to go to a bank and tell them, “I’m going to get this money from the government. Why don’t you buy it off of me now and take a cut when it comes in later?”
The banks have the manpower and venues to deal with the general public, in a timely fashion. The Federal government does not. That’s just the reality on the ground.
per ABC News that still means almost 9 out of 10 workers are still employed and drawing a paycheck. What percent of a normal sized check may be hidden yet but most people it seems are either essential, working from home, or are furloughed yet getting paid. Most of these paychecks are paying normal bills and getting essential household supplies. Nobody (or few) are buying TVs or cars or tickets to movies or flights to Milan. This is money that will be spent once the economy is restarted. I’m thinking “smart money” is increasing its ownership of relatively cheap stock in anticipation of an upcoming boom.