Lenders have an amount of capital that they need to invest and earn returns -- they're generally not in the business temporarily so they don't want their capital back. And when the loans are secured by hard assets, e.g. publicly traded stocks, there's little risk of default so long as the price stays up. In times of rising stock prices, there's little to no reason for a debt holder (lender) to exit their positions at maturity. Rather roll and continue taking the return (interest).
When the cash flow from the assets exceeds interest expense, you've cashed out the assets without incurring tax on your appreciated position and you can afford to pay the interest. As for principal, debt is largely not paid back these days, especially large bespoke debt secured by liquid and well-defined assets. The debt holders (lenders) get paid back after death of the borrower or they continue rolling the position and collecting their return (interest income). The only question in the lender's mind is how much leverage to grant on the underlying assets, e.g. blue chip stocks, and what to do in a liquidity crunch when rolling.
I'm gonna have a stroke. The Congressional Budget Office found that consumers paid 70-80% of the tariffs, totaling more than $1000 per household. Where is my refund?
Not only that, the companies used the tariff excuse to raise prices which will not come back down even if tariffs are fully off the table. Just like the price inflation during COVID.
Depends on how sticky the prices are. Some things are volatile as hell and swing wildly from week to week, some things are stable until adjusted and then they stay that price for another decade.
Most things are never going to be cheaper than they are today. Some things may be cheaper this time next year but not by more than a few percent at the most.
"Prices take the elevator up and the stairs down" - yes, over time the market pushes no-longer-justified prices back down, but this is much slower than the price increase happens.
You won't get the money back that you overpaid in the meantime.
I just love this idea that corporations just discovered greed during the pandemic and before that had been selflessly dedicated to selling goods for the benefit of mankind at the lowest price they possibly could. Companies always try to maximize prices, and they do that by trying to optimize the price they sell things at to sell as much as they possibly can at the highest price they can get away with. Sometimes you can get more profits by lowering prices and selling more stuff, sometimes by raising prices and selling less stuff. It's a trade off. Prices went up because of a series of demand and supply shocks enabled companies to raise prices. If they had not raised prices, there would have been shortages everywhere.
I think there actually was a lot of surprise from executives coming out of COVID that they could raise prices so high without it impacting consumer demand in the ways they had previously predicted.
The Chipotle earnings calls were pretty much the prime example of this. CEO more or less expressing amazement at how elastic consumers were on pricing, and that due to the increases not impacting sales volume they planned to continue ramping until it did.
I think plenty of companies were operating off the idea that price competition was far more important than it turned out to be. I note the baskets of those shopping next to me in the grocery store and this rings true. Due to a myriad of reasons - consumer behavior being a large one of those - buying behavior based on price just isn’t as much of a thing as it was 30 years ago. Almost no one is shopping multiple supermarkets, buying cheaper alternatives, buying in-season veggies and fruit when it’s cheap, waiting for sales to stock up, buying in bulk and freezing, using coupons, meal planning based on the latest supermarket Sunday circular, etc. only a tiny minority of people have been doing so.
Couple that learned helplessness with the monopoly situation for many (most?) markets in the US and it’s no surprise to me that once the dam broke there is no going back. The price discovery moving forward is going to be much more aggressive. It will take a generation or three to get back to thrifty consumer behavior unless we see something actually painful to the average person on a scale of the Great Depression.
> Almost no one is shopping multiple supermarkets, buying cheaper alternatives, buying in-season veggies and fruit when it’s cheap, waiting for sales to stock up, buying in bulk and freezing, using coupons, meal planning based on the latest supermarket Sunday circular, etc. only a tiny minority of people have been doing so.
I don‘t know where this observation comes from, but here in Austria a majority of people in lower income sectors than IT do all of this?
> I don‘t know where this observation comes from, but here in Austria a majority of people in lower income sectors than IT do all of this?
The observation comes from myself, from a medium to low income background. Think mechanics, janitors, construction laborers, etc. family background. Along with most of my peers and extended family members.
The "old" generation - e.g. my grandparents did all those things. Their kids (for the most parts, exceptions do exist) and my generation (and my kids) do basically none of them. They go to whatever supermarket they go to every week or two, stock up on whatever they usually buy, and that's it. Zero consideration for anything else. It is very surprising to me.
> CEO more or less expressing amazement at how elastic consumers were on pricing
That is because the extra money in the economy also inflated salaries. Inflation is annoying but it basically has no impact on affordability over the long run. Everyone just assumed that their increases in salary were a well earned recognition of their contributions, but the increases in prices was pure corporate greed and corruption. They were both the same thing. People got more money and prices went up.
I think you're mistaking what's happening here. Companies are not discovering greed. People are finally recognizing that greed, and the greed inherent in the system, and recognizing that just because it's "part of the system", it's not OK.
This is what the government should really look into. Are prices being held at inflated levels to sustain profits? And if so why is capitalism not working? Why are competing companies not undercutting each other to bring them back down?
Can we have small watchdog programs that deeply study market conditions for critical resources (like peanut butter/eggs/milk/bread/etc.) and produce detailed data on why prices are what they are and what they estimate prices should be? It would be fascinating to see like detailed breakdowns and raw profit margins on different goods instantly.
Unfortunately, this is what republicans voted for, as approved by their congressional representatives who declined to assert congressional power over taxation. Sadly, we all have to live with it until they wise up or quit voting.
You did not pay the tariffs. You bore the cost of the tariffs. Those are not the same thing. The refund is due to the party that got the bill for the tariff and paid it-- the importer. What you paid for was for the business not to go bankrupt while this was occurring. If the business wants to refund you for that, they can choose to do so. But you are not owed a refund.
Look you can write the funny numbers in whatever accounting mumbo jumbo you want, but I paid more to cover the cost to the supplier == I paid the tariffs.
I don't think the commenter you are responding too thinks this is a good thing - they are just describing that it is. I read it as just a blunt summary of how absurd this situation is.
Let's call it what it is, a massive wealth transfer from the general public to companies, and transitively (primarily) to the super-rich. Just because it's legal that they are robbing us blind does not make it right.
What businesses were legitimately going to go bankrupt by the increased tariffs? I'm not defending the tariffs, mind you, but I don't buy that every company had to increase prices to offset the additional taxes. Many could've taken the hit and been fine, except profits would be down and shareholders would be angry.
Lots of them. Profit margins in many sectors are low, lower than the cost of the tariffs.
> except profits would be down and shareholders would be angry.
Right. So when profits turn into losses, you expect shareholders to be OK with the stock price falling to zero and they lose their entire investment? You think this is "fine"?
Delivery companies act as tariff agents and collect tariffs for Customs and Border Protection, so, yes, if you were the importer of record on a delivery, it is quite likely that you paid the tariff via the delivery company.
These are likely to be refunded, because even if you were the purchaser of the product, you were the importer of record and paid the tariff, not a downstream buyer who paid an increased price because of the tariffs.
This answer is the incarnation of capitalismmaxxing. Economically speaking you're correct - but morally definitely not, companies are for the bigger part not the harmed party here.
Similarly, the importers voluntarily paid the tariffs. They could choose to go out of business, go to jail, be sued into bankruptcy, or pay. Totally at their discretion.
In other words: the president can break the law and fuck you over by transferring a nice chunk of your money to big companies, and none of the lawbreakers will be held accountable in any way, and you're not owed a dime in restitution.
> big names such as Costco Wholesale, FedEx and Pandora Jewelry—seeking to recoup their money.
Oh, so it was always only about a money transfer from the customers (who fully and wholly bore the cost otlf the tariffs already) to the companies which will now get the refunds for what their customers already covered?
In practice, the entities who gave money directly to the US government are the ones who paid the tariff. Those entities should be pressured to refund the consumers, but in practice, that's unlikely.
I (unknowingly) ordered something on Etsy from another country. UPS delivered the items, then sent me a letter requiring I pay the tariff and an extra tariff handling fee. UPS paid the government, so UPS should get their money back from the government, then refund me. I'm not holding my breath.
Economically it is a direct redistribution of wealth. In crisis times, Congress acts swiftly to cure wrongs against corporations. What about this wrong against every single household?
UPS is definitely pocketing most of whatever refund they get. And golly gee gosh what a shocker, the company supports Republicans. I'm afraid you've been robbed.
> ‘Corporate and industry group political action committees have donated more than $44 million directly to the campaigns and leadership PACs of the 147 members of the Sedition Caucus. Companies and trade associations that pledged to suspend donations have given more than $12 million to the campaign and leadership PACs of the Sedition Caucus.
> Koch Industries ($626,500), American Crystal Sugar ($530,000), Home Depot ($525,000), Boeing ($488,000), and UPS ($479,500) have contributed the most money to members of the Sedition Caucus through their corporate PACs.’
> Tomé’s reconciliation with representatives who legitimized Trump’s attempted presidential coup — and who may control Congress after the November midterm elections — shouldn’t surprise us. Trump lavished huge gifts on UPS and Corporate America that have made them richer.”
> The second Trump presidency has the potential to be even more lucrative for UPS, given that the bulk of UPS’s unionized workers are Teamsters and led by prominent Trump ally Sean O’Brien
> UPS is definitely pocketing most of whatever refund they get. And golly gee gosh what a shocker, the company supports Republicans. I'm afraid you've been robbed.
Looks like they've given a pretty similar amount to both parties[1]. UPS charging a specific "Tariff Fee" is bound to have angered Trump.
Clearly, since calculating the individual refunds are impossible, the companies will be broadly discounting products going forward by their effective tariff rate for roughly the time the tariffs were in effect. /s
A credit facility is a lengthy and detailed agreement that certainly includes checking for other debt and checking for liens on the collateral. Liens are usually documented by a UCC filing which is public information.
Traditional banks are required to conduct deeper reviews, often looking at UCC filings, lien searches, and bank statements. Private debt lenders may not apply the same level of scrutiny unless explicitly required by their internal policies
>"increased regulations and capital requirements made it more challenging for traditional banks to issue certain types of loans."
Basel III requirements post-GFC made it expensive for banks to hold riskier loans so private credit was born.
Chinese engineers call the US escorts on Teams and tell them what to copy & paste into US government cloud terminals. The Chinese don't see the screen or touch the keyboard attached to the government cloud so they "don't" break the letter of the law.
I think you mis-read the article. Chinese engineers are operating US government cloud computers by proxy. The Chinese just don't see the computer screen. A US grunt copies & pastes the Chinese's commands into the system during a Teams call.
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