Chris Rupkey, chief financial economist at MUFG Union Bank, told The Post. “it could cause a lot of problems.
Give that gentleman the grand prize and a round of applause for the understatement of the week.
Or month.
What the heck, for the whole year.
When a domino in line gest ticked over, other dominoes commence to fall, forthwith.
A whole lot of law firms are going to be doing a land office business in bankruptcies.
Not all dominoes are standing in the same line; but businesses which rent property owe the landlord, who likely has a mortgage. If the landlord is still dealing directly with the bank which loaned him the money, the bank may be able to “float” the landlord for some time; and the landlord may be able to pay some or all of the mortgage. payments until tenants start renting again.
Or the mortgage may have been sold. The, it is likely there is a mortgage processor in between the landlord and whoever holds the paper. The processor most likely is going to go bankrupt, not necessarily because of this landlord, but because of other payers failing; most processors survive on constant cash flow and do not have the financial backing to survive such a drop.
Back to the tenant; they likely do not have the resources to ride this out either; so they may rent their living space (another landlord) or have a house with a mortgage. So the tenant may need to file two bankruptcies; one business and one personal.
And this will cascade through the system in a somewhat random fashion. Some of the big, mainline stores like Macy’s and J.C, Penney may file for bankruptcy; they may cash out and disappear, or they may reorganize their debt and try to soldier on.
Something like 70% of GDP is dependent on consumers. With 30,000,000 people out of work, there goes a chunk of consumers and the Pollyannas seem to think they will all be back and employed by next year.
Maybe that group will be interested in some ocean front property I have for sale in Arizona. :crazy_face:
