After Boeing received a $60 billion lifeline, airline companies are demanding for financial bailouts. Yahoo Finance's Rick Newman and Dan Roberts discuss on On The Move.
- I want us, if I can, start with Rick Newman. Rick, we've been getting a lot of commentary around what these various stimulus packages will look like. I know that we are awaiting comment from President Trump, that press conference, which maybe will have even more details on this. Talk to us about the latest that you're hearing, and your reaction.
RICK NEWMAN: There are going to be bailouts. That seems without a doubt. It's actually quite interesting that we have this massive case study from 2008 and 2009, all the bailouts. I mean, there were tons of bailouts back then. The bank bailouts, which were known as TARP, the Troubled Assets Relief Program, and then the bailouts for the automakers, General Motors and Chrysler, and many other companies that got direct or indirect bailouts. So in a way, it's almost fortunate that we have all of that activity as a case study. I mean, there were trillions of dollars of bailouts back then. And we could see the same scale of bailouts this time around. In Washington, of course, they're not-- they don't want to call these bailouts, but that's what they are.
So there was a lot of after-the-fact analysis of what happened in the financial crisis, and we learned some good ways to do bailouts and bad ways to do bailouts. And there were definitely some lessons learned that I think you're seeing apply this time around. So we'll know more about that as the legislative deals move along, but I think, you know, some of the principles you're hearing about is don't just give money to companies.
If you do give moneys to company-- money to companies, put conditions on it. Make sure that money helps workers first and foremost, and some other things like that. Don't allow companies to take bailouts and then award bonuses to the executives. So I think those are going to be important additions to what we see coming. Some of those were mistakes the last time around. Hopefully, we will do better this time.
- All of this talk of bailouts is not helping stocks at the moment. Just wanted to mention the S&P 500 right now trading lower by 5.4%. The Dow is off 5.9%, the NASDAQ off 4.3%. Remember, the next circuit breakers would be triggered at 7% for the major averages. We did approach that level for the S&P 500. Didn't quite get there. Let's talk more about an airline bailout, specifically, and what we're hearing on that front. Dan Roberts, I know you've got more on that.
DAN ROBERTS: Yeah, we are seeing that both Boeing and the airlines are now basically demanding this. And I think what's interesting is how quickly the narrative has shifted, because we I think saw this coming, and you're already seeing small businesses react pretty negatively. I feel like a lot of what we're seeing get very big on Twitter among the business community is small business owners and advocates for small businesses saying, well look, if you're going to bail out the airlines, and there's also kind of whispers about the cruises and what's going to happen to the cruise lines, well then you have to help small businesses and small restaurants.
I mean, obviously in New York, we've seen the quick closure of stores, and really across the US big chains coming out saying we're closing all our stores in the US out of precaution. Some chains have still dragged their heels on that. But restaurants in many cities have been told, well, you can keep operating if you only do delivery and takeout. So they're already at such reduced capacity-- there was a stark chart I saw this morning-- I think it was from Bloomberg-- showing the restaurant business in the US week by week in the last two months. And it went shrink, shrink, shrink, shrink, shrink, and then it started negative.
And boy, the bar in the last week, I think it was down 60% on average in terms of businesses to restaurants, business to restaurants foot traffic. So we're watching to see what an airline bailout is going to be. It sure looks like there's going to be some kind of help for the airlines and for Boeing, but boy, you'll see an immediate reaction from smaller businesses and smaller companies saying, well, what about us.
- Right, definitely. Those Boeing shares, by the way, down very sharply today, as is sort of the whole complex of suppliers, airlines, et cetera.