☀️ Plan B – July 30 2020

credit: dr.suess

We were hoping to report some agreement that would lead to a new stimulus bill this morning. Sadly, we cannot. As expected, the parties remain at a stand-off like the North-going Zax and the South-going Zax. Like that Dr. Seuss reference to start your day off?

Biggest sticking points

Democrats do not want a short-term solution to unemployment insurance payments and eviction moratoriums. They want it once and for all in this bill. Republicans want about a third of what Democrats want and are noncommittal on the larger price tag.

Liability protection for businesses introduced by Senator John Cornyn is driving the biggest wedge.

“There is no chance, zero chance, America can get back to normal without the Cornyn liability protection, and no bill will be put on the Senate floor that does not include it,” McConnell said.

Chuck Schumer and Nancy Pelosi immediately countered that there would be no deal on the broader package unless McConnell backed down.

There’s a pandemic

Meanwhile, virus infections are rising and deaths have surpassed 150,000. Taking the time to fight is costing lives and it is no laughing matter. The Zax could spend all day fighting without consequence to others. Congress cannot.

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The FED has a gloomy forecast

credit: getty

The Federal Reserve held a meeting on Wednesday to tell us what we already know: Increased spread of COVID in America is hurting the economy.

Fed Chair Jerome H Powell said a lot of other things but that was really all you need to know. They don’t want to mess with rates, they are just as scared as the rest of us, and they understand that there is no economic recovery without an end to the pandemic.

News By The Numbers

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124. That’s how many degrees in Fahrenheit Baghdad, Iraq reached yesterday. But it was a dry heat.

4. That’s how many states Dr. Anthony Fauci mentioned as troubling hotspots for coronavirus. Ohio, Tennessee, Kentucky, and Indiana need to get the virus under control or risk watching their transmission rates get out of control.

47. That’s the percentage of families that experienced layoffs due to the coronavirus pandemic that now believe their jobs are lost forever. In April, 78 percent thought that their job loss would be temporary.

PPP Needs Some TLC

credit: morning invest

Here is another thing lawmakers are deciding this week: tax implications for PPP loans. These are the payroll loans that were offered this spring for businesses to maintain people on their payroll. At issue is whether or not these businesses should be able to deduct expenses such as wages on tax returns.

Loans that are forgiven for payroll purposes are not taxable, as it stands now. The Treasury Department says that allowing payroll deductions on free money would be double-dipping but Congress could overrule this position. Essentially you are using the government’s money to pay your payroll and then deducting that payroll as an expense.

It makes sense that the Treasury Department would not like this when its aim is to increase revenue for the country. Still, small businesses will struggle, PPP loan or not, and these are unusual times wherein every incentive to do business safely should be offered. Or so one would think.

Bom Dia. 

credit: Lisbon, Sean Pavone

AirBnb landlords are hurting during the pandemic and some cities are using this as an opportunity to discourage this type of rental, which they never really liked anyway. Lisbon, Portugal, for example, has begun a “Safe Rent” program to incentivize landlords to convert their short-term rentals into long-term rentals.

As part of this program, property owners will receive as much as three years of guaranteed rent if they make the switch.

The city of Lisbon has not been keen on AirBnb for some time. It has increased rents in the city, pricing out long-term residents who live and work there on modest salaries. The pandemic has further buried this type of rental and the government is seizing its opportunity to further shut it down.

Still, many landlords are wary of the tax implications of using this program so they are slow to make the switch. Currently, the short-term rental market accounts for more than 20% of housing units in some of the city’s most historic neighborhoods.

Kodak Gets a Makeover

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The saying “Kodak moment” is about to take on a whole new meaning. Shares of the company’s stock soared on Wednesday on news that it received a $765 million government loan to make drug ingredients.

Kodak was once the maker of cameras and photography supplies back when photographs were physical objects and not digital files. Those physical objects involved chemical processing so it is not that unusual that the company could pivot towards a different kind of synthetic by way of drug products. This news pushed the company’s stock to grow nearly 8-times its previous value. By noon on Wednesday, over 72,000 Robinhood traders had purchased the stock, most of this activity in just two hours. That is quite the stock boom! Maybe we should call that a Kodak moment!

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