# Tommy Talks

Data: 11-01-2025 21:49:45

## Lista de Vídeos

1. [Strategy and Risks in Commercial Real Estate: The Future of the Office](https://www.youtube.com/watch?v=6kycRkyqBsk)
2. [Payments for Order Flow](https://www.youtube.com/watch?v=m6evAHByD_w)
3. [Through the Lens – How does taking and revisiting photos affect your experiences and memories?](https://www.youtube.com/watch?v=AZPTjmSN1fw)
4. [When to Break from the Crowd to Make Better Choices](https://www.youtube.com/watch?v=2SjRNxVWrlc)
5. [Responding to Innovation in the Sharing Economy: The Impact of AirBnB on Hotel Performance](https://www.youtube.com/watch?v=xMMUkhvFq2s)
6. [Sustainability 2.0: Rethinking Sustainability Strategy](https://www.youtube.com/watch?v=M713AjafxsQ)
7. [Rethinking Salt Supply Chains: Cost and Emissions Analysis for Co-Production of Salt and Freshwater](https://www.youtube.com/watch?v=AYVvQJkSJT0)
8. [Regulators Can Clear the Way for Clean-Tech Entrepreneurs to Innovate](https://www.youtube.com/watch?v=Fi5qhfXkKWQ)
9. [The Climate Change Challenge to Capitalism](https://www.youtube.com/watch?v=ncvENVduMDA)
10. [What Makes a Consumption Experience Authentic?](https://www.youtube.com/watch?v=m-vBJaxHXXg)
11. [Words, Words, Words: How Emerging Technologies Can Help Us Harness the Power of Text](https://www.youtube.com/watch?v=XUONa_bo0OM)
12. [Why Bias in Your Algorithms Can Hurt Your Demand (The Good News: You Can Fix It)](https://www.youtube.com/watch?v=HIQTHprYI0o)
13. [AI and the Future of Work](https://www.youtube.com/watch?v=3Pi8NbB59Rw)
14. [Cryptocurrency Price Bubbles and Cryptocurrency Adoption](https://www.youtube.com/watch?v=vT9U-y2WULc)
15. [Economic Stimulus at the Expense of Routine Task Jobs](https://www.youtube.com/watch?v=gKq4yWehkN8)
16. [Helping Mid-Size and Large Businesses During the Pandemic: CARES to the Rescue?](https://www.youtube.com/watch?v=aCW7kjHTf4M)
17. [The Macroeconomic Consequences of COVID-19](https://www.youtube.com/watch?v=3X78IctiOUg)
18. [What can the Municipal Bond Market Teach us about Racial Discrimination](https://www.youtube.com/watch?v=MuO9jSuMOUo)
19. [Pandemics & Stock Prices](https://www.youtube.com/watch?v=FccgBVlF6-4)
20. [Where to Find New Market Opportunities Post COVID-19](https://www.youtube.com/watch?v=hniYj_i8ufI)
21. [How do Cities Change when we Work from Home](https://www.youtube.com/watch?v=WGijk1ZZ80o)
22. [Hospital Resource Planning during the Pandemic: How Many Ventilators?](https://www.youtube.com/watch?v=eNA1M0h4VlA)
23. [Misinformation in the time of COVID](https://www.youtube.com/watch?v=6yLskgtwjYM)
24. [Leadership and Team Communication in Coronavirus](https://www.youtube.com/watch?v=80mkrFVxwNk)
25. [An "N95" Mask for Pricing](https://www.youtube.com/watch?v=Q_FeWbS0cZg)
26. [COVID-19's Impact on Supply Chains](https://www.youtube.com/watch?v=gRBveQOWieU)
27. [Digitally Transforming Your Business to Prepare for the New Normal](https://www.youtube.com/watch?v=f7kpHULIlJU)
28. [The Long-term and Unequal Impact of Job Loss](https://www.youtube.com/watch?v=2xFrXAL3Kf0)
29. [Lies, Damn Lies, and Statistics: Understanding the Numbers Behind the COVID-19 Pandemic](https://www.youtube.com/watch?v=KZdg4md9Zgc)
30. [Why Perfect COVID-19 Tests May Not be Worth the Wait](https://www.youtube.com/watch?v=dZZKgb9lI2g)
31. [Why U.S. Governors Delayed Ordering Lockdowns](https://www.youtube.com/watch?v=9eBdLUpB9gw)
32. [The Federal Reserve and the COVID-19 Pandemic](https://www.youtube.com/watch?v=glEzz2ntdsc)
33. [The Imperfect Pause Button](https://www.youtube.com/watch?v=Grr_HHC5vms)
34. [Ethics of the Coronavirus Crisis](https://www.youtube.com/watch?v=L354kp0C4y4)
35. [Data Science for Epidemics](https://www.youtube.com/watch?v=HrKShGh1xMc)
36. [The Value of a Statistical Life](https://www.youtube.com/watch?v=phOZLaT-jtE)
37. [Tommy Talks Introduction](https://www.youtube.com/watch?v=nHb1IfrRZYA)

## Transcrições

### Strategy and Risks in Commercial Real Estate: The Future of the Office
URL: https://www.youtube.com/watch?v=6kycRkyqBsk

Transcrição não disponível

---

### Payments for Order Flow
URL: https://www.youtube.com/watch?v=m6evAHByD_w

Idioma: en

hello i'm larry harris
i hold the fred v keenan chair in
finance at the usc marshall school of
business
i'm an expert in an area called market
microstructure
that involves the study of dealers
brokers traders
exchanges and everything to do with
trading
i used to be chief economist of the
u.s securities exchange commission
where i spent a lot of time working on
market structure issues
we're going to talk about payments for
order flow
payments for order flow are
payments that certain dealers pay to
retail brokers
in exchange for having the retail
brokers send the dealers
their clients orders to buy or sell
people are concerned about payments for
water flow because brokers are
responsible for getting the best prices
for their clients
and the concern is that perhaps payments
for order flow are corrupting the
broker's order routing decisions
payments for order flow had been in the
news extensively during this past year
the broker robin hood attains very
substantial revenues
from payments for order flow
our agenda today is to discuss why
dealers make payments to brokers for
order flow
we'll explain how the payments affect
the brokerage clients and we'll identify
some public policy alternatives that can
solve some of the concerns that people
have about payments for order flow
to best understand payments for order
flow it's useful to understand first a
process called internalization
payments for order flow do not occur
within the internalization process but
if you understand internalization much
easier to understand payments for order
flow
we say that a broker dealer internalizes
its clients trades
when the broker dealer fills the orders
for the client acting as dealer
so that the client wants to buy the
broker dealer will sell to the client
and what the broker dealer will sell
will come out of the dealer's inventory
when they do this
the dealers always promise to fill the
orders at prices no worse than the best
prices that the clients could get if the
orders were routed to an exchange like
the new york stock exchange or
nasdaq those best prices are called the
national best bidder offer and those are
the prices that are displayed as the
best prices available at any exchange in
the national market system
now let's talk about order preferencing
in which
payments for order flow occur
dealers who are called wholesale dealers
pay brokers to route their marketable
orders to them for execution
a marketable order is an order that can
be filled immediately
it's an instruction to go out and get
the best available price
the routing is called order preferencing
it's called preferencing because the
brokers
preference the order that is they have
expressed a preference for sending the
order to a particular dealer rather than
to the dealer that's offering the best
price
the payments are called payments for
order flow and that's what we're talking
about today
now the dealers always promised to fill
the orders that price is no worse than
the best prices available at exchanges
those prices again are called the
national best bidder offer
they often provide better prices than
the best prices at exchanges
and the brokers claim that they insist
that the dealers provide better prices
to their clients
the payment agreements usually provide
about 50 cents per 100 shares
to be split between the broker
and price improvement for the broker's
customers
the broker specifies how much money they
want to receive
and that goes directly to the broker's
bottom line
and then the remainder of that
50 cents not always 50 cents but
something around 50. the remainder of
that is provided in the form of better
prices to the clients
so better prices are lower
purchase prices than the best offer for
clients who are buying
and better prices are higher bid prices
selling prices
for the clients who are selling to the
dealers
now there's an agency problem involved
with both of these processes it's very
easy to see the agency problem in with
internalization and with order
preferencing too once you understand
internalization the agency problem
becomes quite clear
an agency problem is what arises when
somebody is acting on your behalf but
not doing what you would want them to do
so in this case the client always wants
the best price the question that we have
in front of us is whether the broker is
getting the best price for the client
now when the broker is internalizing the
order so the broker is
filling the client's order
acting as a dealer trading directly with
the client and not on behalf of the
client there's an obvious agency problem
because of an obvious conflict of
interest
acting as broker the broker should try
to find the lowest price to fill the
customer's buy orders
and the highest price for the
sell orders
but acting as dealer trading for the
benefit of the dealer's account
the broker dealer wants to sell at high
prices and to buy at low prices an
obvious conflict of interest
now when there's preferencing
essentially the same thing happens but
it works a little bit differently
the more price improvement that the
broker demands from the wholesale dealer
to provide to the broker's customers
the less profit the dealer makes
and the less the dealer is willing to
pay to the broker
so while the broker
is supposed to be getting the best
prices for the client the more the
broker pushes the dealer to provide
better prices the less payment the
dealer will provide to the broker to the
broker's bottom line so the broker has a
conflict of interest and many people are
concerned that brokers don't work hard
enough to get the best prices from
dealers they're also concerned that
perhaps better prices might be available
at exchanges and i'll explain that in
just a few moments
so internalization and preferencing are
similar
it's important to recognize this when we
think about the public policy
alternatives that might solve these
problems
they differ only by who owns the dealer
operation that fills the orders
with internalization the broker dealer
is the dealer who fills the orders so
the broker dealer owns its own dealing
operation
with preferencing the broker-dealer
contracts with a wholesale dealer for
the dealing services but now the
broker-dealer and the wholesale dealer
have a common interest to obtain profits
from the customer's orders so that they
can divide it among themselves
a little bit about the wholesale dealers
they are high frequency traders uh the
names involved some of them you know
well and others you may not recognize
so citadel and virtue are commonly known
names g1 execution services two sigma
securities and wolverine securities are
other wholesale dealers
let's now talk about how dealers profit
from filling retail orders that'll help
us understand why they're doing this
and whether the retail traders are being
hurt
the first and most obvious way that
dealers profit
is they are able to buy at lower bid
prices and sell at higher ask prices
they simply buy low and sell high
so when they fill a customer order from
a retail broker
the buy orders get filled at higher
prices than the sell orders and
the difference between those prices
allows them to make money
now that difference is constrained by
the best prices available at
the exchanges those best prices again
are called the national best bidder
offer
but the national best bidder offer tend
to be
pretty far apart in the following sense
the dealers who quote to trade at the
exchanges are concerned about trading
with very well informed traders
retail traders tend not to be so
informed
the danger of trading occasionally with
informed traders is that if you sell to
an informed trader because the informed
traders buying prices will tend to rise
and when prices rise after you sell you
lose money
and if you buy from an informed trader
when prices tend to be falling as they
do if the informed trader is truly well
informed then you'll end up buying and
holding an asset whose value has dropped
and you'll end up losing money in
response to those risks
spreads in environments like exchanges
where informed traders occasionally
trade
spreads tend to be wider because the
dealers need to recover from all traders
what they lose to the informed traders
now the retail traders though are
generally much less informed than our
institutional traders that often traded
exchanges and of course the hedge funds
that are typically the best informed
traders
they usually will only trade at
exchanges because wholesale dealers
don't want to trade with those informed
traders
so the dealers lose less money to the
retail traders than they would
if they were trading at exchanges
so if they're able to trade at the wider
mbbo prices they make money
when they trade with retail traders
because the retail traders really should
get better prices now the dealers do
offer better prices to the
retail customers but the question in
front of us is are those prices as good
as they should be
so price improvement returns some of
that profit to the customers
the second reason that dealers profit
from filling retail orders is that
at exchanges
very frequently there are orders that
are
hidden that is not displayed at prices
that are better than the national best
bidder offer for instance there may be
buyers who are willing to buy at prices
better than the displayed best bid at an
exchange
or there may be sellers who are willing
to sell at prices lower than the best
displayed offer
the wholesale dealers after they do a
trade with a retail customer on an order
that was routed to them
say the customer wants to buy
the dealer will sell
at a price somewhere near the national
best bidder offer and then they will
immediately go to the exchange and try
to buy back hoping that they can find a
better price at the exchange
when they do they make an instant profit
and so that's another reason why dealers
make money when trading retail order
flow is because they often find hidden
liquidity that the brokers are not
looking for
a third reason why dealers profit from
filling retail order flow is that the
dealers learn what the retail traders
are doing
there are millions of retail traders and
they respond to only a finite number of
signals pieces of information news
when some decide to trade it's very
likely that many others will also want
to trade but they don't all trade at
once some arrive sooner and some arrive
later
dealers who know what trades retail
traders have already done
can often anticipate the trades that
other retail traders will do
this information allows the dealers to
profitably trade ahead of orders that
are expected but not yet received
if those orders say their buy orders if
they push the market up and the dealer
has bought in front of those orders then
the dealer will be able to sell at
higher prices and make money so knowing
who traded
is really valuable if they traded
exchanges they don't know who they
traded with but if they trade with
retail clients they know that they're
trading with retail clients and they
know why prices are moving quite often
and so that's an advantage to them
so what are the arguments for payment
for order flow
the first argument is that wholesale
dealers provide price improvement to
retail traders they give them better
prices than they would receive
at exchanges
but again the prices that they might
receive at exchanges could also include
hidden orders
and we and the dealers don't provide
price improvement in comparison to
hidden orders they provide price
improvement in comparison to displayed
orders so if you believe that there's no
hidden liquidity it's a good thing that
they're providing price improvement
but if there's hidden liquidity then you
wonder whether the customers are doing
as well as they ought to be doing
these payments for order flow is argued
allow brokers to offer zero commission
trades and provide other services to
their clients but payments to order flow
and zero commissions they're not linked
both affect broker net income as do many
other revenues and costs so there's a
claim that they're linked but in fact
there's no formal linkage it simply
provides brokers with more money what
they do with it is their business
there's also a competitive argument for
payment for order flow and the argument
goes like this the wholesale dealers
compete to obtain retail order flow from
the brokers the way they compete is by
offering higher payments and sometimes
offering better prices to the customers
the effect of this competition is to
erode any profits or excess profits that
the wholesale dealers might make from
obtaining these orders
now likewise the retail brokers compete
to obtain order flow from their
customers
and they do this by offering lower
commissions or more service
in perfect competition
they will compete away any benefits they
get from payment from order flow
by providing the customers these lower
commissions and better services
unfortunately though the brokers may
also spend on advertising and marketing
which may not benefit the customer
so what are the arguments against
payment for order flow
the first argument is as much as we
believe in competition and we surely do
we know that the competition is not
perfect
the dealers and brokers make money from
the system and we know that they make
money from the system because they
vociferously defend it
the fact that they defend it with such
rigor and enthusiasm is prima facie
evidence that they benefit from it
another argument against payment for
order flow is that if you believe
that the payment for order flow is
what's giving us the zero commission
trades
and it certainly helps fund it then you
might be concerned about whether retail
traders fully appreciate the cost of
their trading
they're told that trading is zero
commission
seemingly less expensive or no expense
but in fact there are other expenses to
trading not least of which is buying at
higher prices that you than the prices
at which you sell
but when people think that their trading
is free they might do too much of it and
that's often not good for the trader and
may not be good for the economy as a
whole
another argument against payment for
order flow is that this standard of
giving best execution that price is no
worse than the national best bidder
offer is sort of the wrong standard the
broker should be getting the best
available price
the national best bidder offer is the
best available price that's visible but
there are often prices that are better
than that that are hidden and there are
easy ways of finding them that brokers
know well so many people think that
brokers should be responsible for
searching for hidden liquidity instead
of allowing the wholesale dealers to go
and collect it for themselves after they
traded with the retail traders
so given concerns about payment for
order flow in particular that it might
distort order routing decisions it's
natural to ask how we might address the
problem
the first way to do it is to simply ban
payment for order flow say that the
dealers cannot pay for order flow
if you do that what will happen is that
there'll be an increase in
internalization and in the extreme and
it's not all that extreme
the wholesale dealers can internalize by
simply buying the retail brokers or vice
versa the brokers can buy the
wholesalers and by combining they can
then internalize and you get effectively
the same thing so another alternative is
the band payment for order flow and also
ban internalization
that would force the dealers to compete
only on price
so if a broker is to send an order to a
dealer
presumably the broker will only do it if
the dealer offers a better price for the
client
but exchange fee payment systems may
also distort order routing decisions we
haven't talked about them and that would
be worthy of an another entire talk
and so the fear here is if you ban
payment for order flow and
internalization
people may start sending to exchanges in
ways that will disadvantage the client
as well
because of the client perhaps should be
getting better prices by allowing the
dealers to discriminate in their favor
because the retail clients tend to be
less well informed
so the final alternative is to require
that brokers pass all payments for order
flow in all exchange fees through to
their clients if you did this we would
remove all broker conflicts this is the
alternative that i most favor
so in conclusion here's a couple of
observations
banning internalization sounds like it's
a radical policy but it's not it has
precedence
the futures markets have always been
dual trading which is just another name
for internalization dual trading is a
broker acting both as broker and dealer
the notion that best execution depends
only on exposed exchange prices that's
an antiquated notion when hidden orders
are common so what we really need is to
recognize that hidden orders are out
there and brokers ought to be going out
and getting them so the way to do this
is to get the all payments for order
flow to be passed through to the
customers so that they don't corrupt
brokers decisions about how to route
orders then brokers should be routing
based on where they find the best prices
and the clients would be best served
well thank you very much for your
attention and that's it

---

### Through the Lens – How does taking and revisiting photos affect your experiences and memories?
URL: https://www.youtube.com/watch?v=AZPTjmSN1fw

Transcrição não disponível

---

### When to Break from the Crowd to Make Better Choices
URL: https://www.youtube.com/watch?v=2SjRNxVWrlc

Transcrição não disponível

---

### Responding to Innovation in the Sharing Economy: The Impact of AirBnB on Hotel Performance
URL: https://www.youtube.com/watch?v=xMMUkhvFq2s

Transcrição não disponível

---

### Sustainability 2.0: Rethinking Sustainability Strategy
URL: https://www.youtube.com/watch?v=M713AjafxsQ

Transcrição não disponível

---

### Rethinking Salt Supply Chains: Cost and Emissions Analysis for Co-Production of Salt and Freshwater
URL: https://www.youtube.com/watch?v=AYVvQJkSJT0

Transcrição não disponível

---

### Regulators Can Clear the Way for Clean-Tech Entrepreneurs to Innovate
URL: https://www.youtube.com/watch?v=Fi5qhfXkKWQ

Transcrição não disponível

---

### The Climate Change Challenge to Capitalism
URL: https://www.youtube.com/watch?v=ncvENVduMDA

Transcrição não disponível

---

### What Makes a Consumption Experience Authentic?
URL: https://www.youtube.com/watch?v=m-vBJaxHXXg

Transcrição não disponível

---

### Words, Words, Words: How Emerging Technologies Can Help Us Harness the Power of Text
URL: https://www.youtube.com/watch?v=XUONa_bo0OM

Transcrição não disponível

---

### Why Bias in Your Algorithms Can Hurt Your Demand (The Good News: You Can Fix It)
URL: https://www.youtube.com/watch?v=HIQTHprYI0o

Transcrição não disponível

---

### AI and the Future of Work
URL: https://www.youtube.com/watch?v=3Pi8NbB59Rw

Transcrição não disponível

---

### Cryptocurrency Price Bubbles and Cryptocurrency Adoption
URL: https://www.youtube.com/watch?v=vT9U-y2WULc

Transcrição não disponível

---

### Economic Stimulus at the Expense of Routine Task Jobs
URL: https://www.youtube.com/watch?v=gKq4yWehkN8

Transcrição não disponível

---

### Helping Mid-Size and Large Businesses During the Pandemic: CARES to the Rescue?
URL: https://www.youtube.com/watch?v=aCW7kjHTf4M

Idioma: en

hello my name is kevin murphy
and i am the kenneth l treth's chair in
finance
in the department of finance and
business economics at the usc
marshall school of business i want to
talk to you today
about the provisions in the cares act
intended to help
mid-size and large businesses during the
pandemic
as a spoiler alert i can't read these
provisions
without thinking of president ronald
reagan who would often
remind us that the nine most terrifying
words
in the english language are i'm from the
government and i'm here to help
on march 27th president donald trump
signed into law
the coronavirus aid relief and economic
security act
also known as the cares act the law
provides over two trillion dollars in
emergency relief to various individuals
and businesses impacted by the covid19
pandemic
the 335 page act was negotiated and
signed
in a matter of days and represents the
largest ever economic stimulus plan
in u.s history
a component of the cares act that has
attracted a lot of attention
is the paycheck protection program in
section 1102
this program called ppp provides
forgivable loans
through the small business
administration to help businesses
with less than 500 employees pay their
employees during the covet 19 crisis
the loans are forgivable as long as at
least 75 percent of the loan amount
is used for payroll costs and as long as
the borrower maintains its employment
levels
at the level it had on february 15th or
rehires any employees that had been laid
off after february 15th
the first round of ppp which started on
april 3rd
provided 350 billion in loans
and ran out of money just 13 days later
the program came under fire after it was
revealed that nearly 300 publicly traded
companies
such as shake shack nathan's famous
ruth chris steakhouse and autonation had
received loans under a program aimed at
protecting struggling small businesses
these larger companies were able to
qualify for the loans because
individual locations such as a single
restaurant
employed fewer than 500 employees loans
were also made available to entities
such as the los
angeles lakers arguably the most
valuable franchise in the nba
congress allocated an additional 320
billion
in ppp funding on april 23rd publicly
traded companies with
access to other capital were explicitly
discouraged from applying for loans
under round two of the ppp
moreover dozens of the first round
recipients
were publicly shamed into returning the
loans
the applications under round two which
started on april 27th
again overwhelmed the system the demand
is not surprising
there are thousands of struggling small
businesses in our economy
that are failing because the state and
local governments have shut them down to
flatten the curve
besides a forgivable loan is awfully
close to free money and who doesn't want
free money
well remember that 75 of the loan has to
be for payroll expenses
and you must maintain your head count
before anything is forgiven
this isn't very helpful to businesses
with mounting mortgage interest
rent or lease payments utility bills or
debt payments
that are large relative to payroll costs
but mostly i want to focus on what the
cares act provides
for companies with more than 500
employees
we'll see that the money provided to
these larger employers is far from free
and in fact comes with enough strings
attached that i predict that more
mid-sized businesses will be destroyed
than are helped
so let's talk about section 4003 the
cares act
which we should from now on call
the corporation's alarm by restrictions
on employment
and salaries act under section 403
the secretary of the treasury is
authorized to make up to
500 billion dollars in loans loan
guarantees
and other investments 46 billion of the
total was earmarked for air carriers
including 25 billion for passenger air
carriers
4 billion for cargo air carriers
and 17 billion for businesses critical
to maintaining national security
which is a vaguely defined category but
think of it as supporting boeing and
suppliers to boeing
the remaining 454 billion is available
to other businesses with more than 500
employees
the loans loan guarantees or other
investments under section 403
are not forgivable in other words the
company is on the hook for repayment
but they come with strings a lot of
strings
more than on a tennis racket
we are all used to the concept of debt
covenants
which are commitments corporate
borrowers make when taking out bank
loans
these covenants are usually put in place
to ensure that the borrower
can service the debt that is end up with
enough cash flow to pay the principal
and interest payments to the lender
the covenants naturally disappear once
the borrower has fully repaid the loan
but under section 4003 the covenants do
not disappear once the loan is repaid
and most extend to one or two years
after the loan is repaid
in addition most are included to satisfy
political objectives rather than
protecting the lender
in this case the u.s taxpayers let's
look deeper
first corporations borrowing under
section 4803
must commit to not paying dividends
buying back stock
or making any capital contributions for
a full year
after the loan is paid back for the air
carriers the commitment is for two years
after the loans are made
even if they are paid back earlier now
to be sure
the corporations with short-term cash
flow obligations
uh require requiring government loans
under section 403
are not about to take that money and
immediately pay it out to shareholders
anyway
that is not a problem or a concern the
concern is what happens after the covet
19 crisis has subsided
we are up and running we have repaid the
government for the loans plus
interest and we are generating cash flow
in excess of what we need to fund any
promising
investments textbook textbook finance
and common sense
tells us that we should be giving this
cash back to our shareholders
so that they can invest in firms and
sectors that actually have more
promising investment opportunities
if we borrow under section 403 we have
to wait at least a year before making
payouts to shareholders
the underlying political idea in
congress of course
is that making unneeded internal
investments is better
than giving money to shareholders but
remember
that those unneeded internal investments
which congress loves
includes not only hiring or overpaying
more
more employees than the company requires
but also facilitates buying corporate
jets
building fancy headquarters buildings
this one's apples
paying excessive executive compensation
and launching unprofitable pet projects
and other
unproductive activities on the other
hand
the shareholders which congress hates
largely includes beneficiaries of public
and private defined benefit and defined
contribution pension plans
that is all of us
second section 4003
will requires companies borrowing
borrowing money to freeze the
compensation
for employees earning more than 425 000
but less than 3 million at no more than
what they made during the 2019 calendar
year
now 425 thousand dollars is a lot of
money
unless of course you live in new york
city trying to rent a two-bedroom
apartment
but most large organizations have
hundreds of talented employees
subject to this pay cap this chart shows
the the distribution of 2018
total compensation for approximately
nine thousand executives
in the composite s p 1500 index
i'm using two 2018 pay here because data
for 2019
are just now becoming available you can
see that the distribution is very
skewed with more than 100 executives
earning more than 20 million
what matters for our purposes however is
that more than 96 percent
had 20 2018 compensation
above 425 thousand
and remember these restrictions apply
not only to executives
but to anyone making 425 000 or more
freezing pay at these levels for a full
year after the loans are repaid
creates a disadvantage for firms taking
loans under section 403
while creating potential hiring
opportunities for firms not taking the
government loans
for firms paid more than 3 million in
2019
section 4003 requires actual pay cuts
from the time the loan is taken and for
a full year after the
loans are repaid in particular for these
employees
pay is capped at 3 million plus half of
the difference between 3 million
and what the employee was paid in 2019.
for example if the employee was paid 6
million in 2019
the maximum pay would be 4.5 million a
year
until a year after the loan was repaid
now we're not feeling sorry for any
employee making this much
but for some context nearly 40 percent
of the executives in the composite s p
500 1500 index
had pay above this amount once again
great hiring opportunities for firms not
taking the government loans
and remember these employees often have
employment contracts
and are likely to sue if their
contractual terms are violated
even worse these contracts often give
employees the right to resign for good
reason
if their pay is cut potentially
triggering millions of dollars in
severance payments
and the loss of top executive talent to
be fair section 4003
also put a cap on severance payments
also in violation of existing contract
but it's like the dutch boy poking his
finger in a hole to pull
to plug a leak in a dike leaks will
spring up in different places
and pretty soon you're out of fingers
the compensation limitations of the
cares acts
leave a lot of questions to be answered
with the secretary of treasury basically
saying trust us then take the money now
and we'll figure out the rules later
some of the questions are pretty basic
such as how is compensation defined
the cares act defines total compensation
as salaries
bonuses awards of stock and other
financial benefits
but it doesn't tell us of the awards of
stock are measured on the grant date
as in sec disclosures and accounting
rules or measured at the time the shares
vest or the options are exercised
which is what matters for individual and
corporate tax returns
the act also doesn't specify what
happens to employees who were hired or
promoted during
2019 so only have pay for part of that
period
and what the heck is included in
financial benefits
don't worry about the details after all
the lenders are from the government
and they're here to help by the way
if you don't want to borrow under
section 4003 you can always try to get a
loan
under the federal reserve's main street
lending program
but don't get your hopes up on avoiding
the restrictions under the cares act
because the fed adopted identical
restrictions on dividends
buybacks and compensation
this is all pretty bad but things get
even worse under the cares act
for mid-size borrowers which includes
publicly and privately held corporations
and nonprofits with between five hundred
and ten thousand employees
for some context this group
characterizes almost half of all
publicly traded firms in the u.s
and many many more private firms and
not-for-profits
for these mid-sized businesses the funds
borrowed under section 403
must be used to retain at least 90
percent of its workforce as of march 24
2020 up until september 30th 2020
at full pay and benefits now remember
that march 24th
was well after the state government shut
down most businesses
and so many businesses had already laid
off large number of employees
so section 403 added another provision
which is that the borrower must commit
to restoring 90
of the workforce it had on february 1st
2020
long before many were taking the virus
seriously in the u.s
at full pay and benefits by no later
than four months after the cancellation
of the national
health care emergency but wait there's
more
the borrower must also commit to not
outsource any jobs
or to offshore any jobs that is hiring
any workers working in other countries
until two full years after the loan is
completely repaid
and the co the economy is presumably up
and running
hey do you like labor unions well then
the cares act
is for you for loans taken out under
section 4003 the cares act
the borrower must commit to not try to
negotiate
any existing union agreements during the
term of the loan
and for two full years after the loan is
completely repaid
if you are not yet unionized the cares
act forbids
mid-sized borrowers from opposing any
union organizing effort until the loan
is repaid
hey and remember that pay freeze for
employees making more than 425 000 in
calendar year 2019
the freeze doesn't apply to union
members
i'm from the government and i'm here to
help organize labor
the cares act puts additional
restrictions on audit carriers
who as you know have canceled 95 percent
of their flights
given u.s mandated prohibitions on
international flights
and national guidelines discouraging
non-essential domestic air travel
air carriers receiving assistance under
the cares act
must refrain from layoffs furloughs
or reducing employees compensation and
benefits through september 30th 2020
but let's be clear these workers were
already unemployed
there are no flights and nothing for
them to do we are quibbling
over who pays them during the pandemic
in addition in order to qualify for
financing
congress gets to dictate which routes
the airlines will
be required to fly regardless of the
demand
what do you want to guess about how many
of these nearly empty flights
will arrive near the homes or vacations
homes
of congress men or women or senators
just speculation of course
but it'll be interesting to do the
analysis
perhaps more alarmingly government aid
to the air carriers
in the form of loans will receive equity
in the air carriers
the equity appears to be in the form of
warrants which are effectively stock
options
issued by the company and giving the
government the right to purchase shares
of stock
at the pandemic induced reduced price
if all goes to plan the us government
may end up being the largest shareholder
in most of our major airlines remember
the old u.s airways
pretty soon all carriers might literally
be u.s airways
what can possibly go wrong pretty much
everything
what will be the effect of these
government interventions
with all those strings attached let me
share my own feelings of deja vu
all over again and compare the current
programs in the cares act to what
happened under the troubled asset relief
program known as tarp during the
financial crisis
some history is relevant by fall 2008
it was clear that the financial system
was near collapse
on monday september 15th of that year
lehman brothers filed for bankruptcy
and bank of america agreed to purchase
merrill lynch
which was also headed for bankruptcy the
next day
the federal reserve gave an emergency 85
billion
loan to the big insurance company aig
who was a major holder of collateralized
debt obligations
that effectively insured lenders against
defaults by borrowers
by friday september 19th
treasury secretary hank paulson called
for the government to purchase the
troubled assets from the banks
this was a challenging request because
we knew banks had troubled assets
but there was no way of knowing exactly
which assets were troubled
secretary polson was insistent that
there be no restrictions on banking
bonuses or compensation
since he was worried the banks wouldn't
take the money
after the dow jones average fell by 10
in a couple of days in early october
secretary paulson summoned ceos from the
nine largest banks to meet in washington
dc
with paulson and the chairman of the
federal reserve
the head of the new york fed the chair
of the fdic
and the comptroller of currency
at this meeting
the nine ceos were told that the u.s
treasury would be investing 125 billion
in capital
in the nine nine banks in return for
preferred shares and warrants
under its new tarp program the ceos were
also told
that they had to agree to relatively
modest restrictions on their
compensation
a few of the ceos resisted but the
regular
regulators convinced them they really
had no choice in the matter
the one-page application process was
ridiculously streamlined
requiring the ceos to only put in the
amount and give their signature
citigroup for example took 25 billion
bank of new york mellon took 3 billion
bank of america took 15 billion jp
morgan took 25 billion
goldman sachs first wrote down 25
billion and then said yeah i think 10
billion is enough so they got 10 billion
uh morgan stanley got 10 billion and
merrill lynch
soon to be bought by bank of america
received 10 billion
in november 2008
the democrats swept to power in the
national elections
and were hell-bent on punishing banking
executives for their alleged role in the
financial crisis
in february 2009 just a month after
president obama took office congress
passed the
american recovery and reinvestment act
which imposed
draconian and retroactive retroactive
restrictions on pay
for the top 25 executives in any bank
taking money under tarp the restrictions
included prohibitions on bonuses
stock options and any form of incentive
compensation
except for a modest amount of restricted
stock that couldn't be worth more than
half of base salary
the act also mandated clawback
arrangements to
recoup money already paid to executives
imposed strict limits on severance
payments
and imposed a 500 000 per executive
limit
on the amount of pay the bank would be
able to deduct as a compensation expense
as with the cares act the 2009 act
left a lot to be promulgated by the
treasury department
it took a while on june 10th 2009
the u.s treasury finally released its
formal guidelines
and it appointed a pesar to monitor and
regulate pay at the individual banks
for full disclosure i was testifying on
banking bonuses
at a hearing of congress's financial
services committee when the guidelines
were published
and was appointed by treasury to be a
formal but unpaid advisor to the payzaar
for the record the fact that i was an
advisor does not imply
that any of my advice was taken but
that's another story
but here's the rest of this story which
presents a cautionary tell for lending
under the cares act on june 17
2009 just a week after treasury
formalized the compensation restrictions
five of the nine initial recipients of
tarp funding petitioned to repay the
government in full
much to the chagrin of both treasury and
the federal reserve
who wanted to keep the capital on the
bank's balance sheets
three more of the initial recipients
repaid in early december
allowing the banks to avoid the pay
restrictions in time to make their
year-end bonus decisions
ultimately hundreds of banks mostly
small ones not hindered by restrictions
on compensation
receive tarp money but with the
exception of aig and general motors
who arguably should not have been
eligible anyway
the bulk of the tarp funds were repaid
as soon as the restrictions were
announced
or at least as soon as they seriously
precluded compensation outcomes
we can have a decent debate over whether
the executives of large banks were
appropriately punished for their role in
causing the financial crisis
but no one is accusing banks or any
other sector
for causing the covet-19 crisis but the
lessons are the same
the bottom line is that when bailouts
come with a price
they are often refused even if the money
is needed
my conclusion is the cara the cares act
doesn't care about mid-sized businesses
and ultimately will hurt them and make
many of them go out of business
businesses borrowing under section 4003
are forced to accept conditions
detrimental to the long run survival of
any business
the myriad strings attached to the loans
implies that some firms that could have
been saved
won't be saved in addition the
government loan guarantees will
predictably
crowd out traditional bank landing with
fewer strings attached
section 4003 of the carries act is
formally titled
the emergency relief and taxpayer
protections
the sponsors of section 403 claim that
the loans protect
taxpayers since unlike loans under the
ppp
the loans under section 403 are not
forgivable
for once i agree with the sponsors the
section 403 loan program
is unforgivable let me conclude on a
less pessimistic note
again drawing comparisons between the
covet 19 crisis
and the 2008 financial crisis
our economy rebounded after the
financial crisis
our banking system remained intact in
spite of efforts such as dodd-frank to
destroy it
with only a couple notable exceptions
the tarp investments made by the u.s
treasury
have been fully repaid with interest the
beauty of the american economic system
is that
without any government intervention
capital has a way of
ending up in the hands of the
individuals or businesses
that can use it most productively
whether they be large corporations or
mom-and-pop restaurants nail salons or
barbershops
i can predict with certainty that the us
economy will rebound after the current
crisis
our economy started off strong and is
amazingly resilient
businesses will reopen in our new normal
and our banks will be there to get
capital to those who can use it most
productively
sadly some businesses won't survive
but others left for dead will arise from
the ashes
many new businesses will be launched or
expanded
taking advantage of the opportunities
created in our post-covet economy
we'll be okay as long as no one from the
government comes to help

---

### The Macroeconomic Consequences of COVID-19
URL: https://www.youtube.com/watch?v=3X78IctiOUg

Idioma: en

hello everyone today neha and i will be
talking about
our research on the effects of kobit 19
on the us
economy as you know the whole world has
been going through a very scary pandemic
death rates have increased exponentially
in front of our eyes
many countries have taken unprecedented
measures to combat this pandemic
economic consequences of the medication
measures
have also been unprecedented
let me show you one example about what
is happening to the economy
the following graph shows the
unemployment rate between 1948 and 2019.
you see that it increases during
recessions
in the 1982 recession it reached a point
as high as
10.8 percent in the great recession
of 2007 and 2009 it peaked at
9.9 percent in october
but if i add the recent data to this
graph
you will see how different the
unemployment rate in april of 220
is it now reached
14.7 percent
in fact the unemployment rate is
expected to increase
there are estimates that suggest that 53
million people might be unemployed
by the end of the second quarter in
2020.
remember that the labor force in the u.s
is about 165 million people
that it means almost one third of them
may be out of work by the next quarter
this has never been seen before in the
us
so why is this happening well in many
ways this is not a regular recession
economic activity has halted due to the
shelter at home orders that are designed
to stop
the spread of the virus but now
we have to think about how to open up
this economy
there are many proposals many of these
proposals involve
large-scale testing contact tracing
isolating those who test positive and
allowing individuals with
anti-antibodies to go back to work
there are likely to be many challenges
in these options
such as the accuracy of the tests or the
political challenges
facing these options privacy laws for
example may prevent making results of
such tests
publicly available neha and i have a
proposal
in fact there are several other
economists who are coming up with
similar proposals
this involves targeted lockdown policies
let's imagine the following exercise
suppose that the current
stay-at-home policies result in 50
million people to be unemployed
is there a way to choose who these 50
million people should be
so that we would be minimizing the
economic consequences
of this stay-at-home orders
we might also be decreasing the fatality
rate
that we will observe in the economy by
doing so
so we know that older adults and those
with underlying medical conditions
seem especially vulnerable to the
cobit-19 pandemic
for example the fatality rate of 60 to
69 year olds
is 14 times higher than the fatality
rate of 40 to 49 year olds
how about a stay home policy
based on age and pre-existing health
conditions
can we calculate the economic
consequences of such a policy
can we think of ways to implement such a
policy
well to answer these questions neha
and i have built an economic model
and analyzed the consequences of
targeted lockdowns
so the way we did it is a very common
way in economics these days
we created a virtual economy that looks
like the us
economy it has the same number of people
same distribution of education same
health
status same income distribution
and same labor force behavior as in the
u.s economy
and then we shocked this economy with a
totally unexpected health shock in 2020
so that shock which is um the corvid 19
shock infected a lot of people in our
model economy
it increased the death rate among the
infected
and the results and fatalities are
different
by by different ages
so in the model economy the government
responds to this pandemic by ordering
many businesses to shut down
and we examine what happens to this
economy in a
in this virtual setup by using a
computer model
that mimics the us economy so that's
what neha and i am doing at the moment
our results are very preliminary and
neha is going to tell you all about
these results
thank you aisha hello everyone i'm neha
berulia
an assistant professor at the usc
marshall school of business
as share mentioned thanks to the amazing
progress in computer technology
and the wide availability of survey data
sets over the last few decades
we can now analyze policy measures by
simulating their effects in a
hypothetical economy of interest
now this is a powerful tool as it allows
one
to evaluate different policies and find
the best one amongst them without having
to actually
implement them all so in our work
we built a computer model which is meant
to closely mimic
salient features of the us economy so
that we can analyze
different at home policy options in
light of the covet 19 pandemic
so what do we find well we learned two
important things from our computer
simulations
lesson one we learned that in terms of
the macroeconomy
we can do much better than a
stay-at-home order
which affects all individuals in the
economy alike
what do i mean by that well imagine a
scenario where the stay at home order
only applied to the elderly such a
policy makes sense from the public
health perspective
as the covet 19 virus is 30 to 40 times
more likely to be fatal for the elderly
population
as compared to those who are in their
20s or 30s
moreover in terms of the economy
we find that such a targeted stay home
policy
results in a much smaller decline in the
aggregate output
than the mass quarantine case where all
are affected by the order alike to be
more specific
in our simulations gdp declines only by
a little over two percent in the
targeted case
and by a much larger nine percent
in the untargeted scenario why is this
the case
well it is because our model mimics
a very important feature of the us labor
force
which is a majority of the elderly are
retired
and receive social security benefits
so keeping them at home does not hurt
economic
output as much we also explore the
implications
of a health-based stay-at-home order
an important feature of 19 is that it
affects
those with certain pre-existing
conditions like asthma
liver disease cancer or those who are
immunocompromised
with a much higher intensity than those
without these conditions in fact
wide scale testing has revealed that a
large
proportion of population without
any health complications may actually be
asymptomatic to the virus
from the macroeconomic standpoint we
find that in our simulations
implementing a stay-at-home order based
on health conditions
would result in a drop in gdp by
five and a half percent which is still
lower
than the economic contraction expected
under the current order
remember that the model economy we built
is designed to capture the distribution
of income and health in the us
so the differences in the income levels
of people with different pre-existing
conditions
allow us to capture the impact of
health-based policies
that leads to this result so to
summarize
the first lesson from our experiments is
that targeted stay-at-home policies
are far more effective at mitigating the
economic fallout
of the kovat 19 pandemic lesson two
so to reiterate a first lesson indicated
that stay at home orders based on age or
health conditions are far more efficient
than the one which affects everyone
alike
while implementing such a policy in
practice however
we have to be cognizant of privacy
issues
specifically the health insurance
portability and accountability act
or hipaa introduced in 1996
puts certain restrictions on the access
to individual medical records
by public or private parties
one possible way to navigate this issue
is for the government to incentivize
individuals who are
willing to share their health
information and self-isolate
so then the question is how much would
this cost
the government in other words if the
government wanted to compensate
everyone at high risk of covet 19
complications
what should the payoff be we find in our
simulations
that the compensation that would make
individuals with pre-existing conditions
be willing to self-isolate varies quite
a bit
for instance imagine two individuals
with the same health complications but
one of whom is the ceo of a
multi-million dollar firm
while the other makes minimum wage you
may easily guess
that the payouts would be very different
and that it would take a lot
more to convince the ceo
we find that depending on the
assumptions we make
about how much individuals value the
extra time at home
it can cost the government anywhere
between
140 to 500 billion dollars
to convince everyone with pre-existing
conditions to self-isolate
while this may seem like a large number
the government is already spending
over two trillion dollars in form of the
cares package
our simulations show once again however
that it makes much more public health
and economic sense
to implement more focused stay-at-home
measures
so to summarize through our experiments
on the simulated economy which
resembles the us economy pretty closely
aisha and i find the targeted lockdown
policies are far more efficient
we also find that such targeted lockdown
policies can be practical
and can in fact be implemented through
appropriate
compensations to the targeted population
even under the most extreme assumptions
a targeted policy would cost the
government
four times lesser than what it is
spending currently on pandemic relief
thanks for listening stay safe

---

### What can the Municipal Bond Market Teach us about Racial Discrimination
URL: https://www.youtube.com/watch?v=MuO9jSuMOUo

Transcrição não disponível

---

### Pandemics & Stock Prices
URL: https://www.youtube.com/watch?v=FccgBVlF6-4

Transcrição não disponível

---

### Where to Find New Market Opportunities Post COVID-19
URL: https://www.youtube.com/watch?v=hniYj_i8ufI

Transcrição não disponível

---

### How do Cities Change when we Work from Home
URL: https://www.youtube.com/watch?v=WGijk1ZZ80o

Transcrição não disponível

---

### Hospital Resource Planning during the Pandemic: How Many Ventilators?
URL: https://www.youtube.com/watch?v=eNA1M0h4VlA

Transcrição não disponível

---

### Misinformation in the time of COVID
URL: https://www.youtube.com/watch?v=6yLskgtwjYM

Transcrição não disponível

---

### Leadership and Team Communication in Coronavirus
URL: https://www.youtube.com/watch?v=80mkrFVxwNk

Transcrição não disponível

---

### An "N95" Mask for Pricing
URL: https://www.youtube.com/watch?v=Q_FeWbS0cZg

Transcrição não disponível

---

### COVID-19's Impact on Supply Chains
URL: https://www.youtube.com/watch?v=gRBveQOWieU

Transcrição não disponível

---

### Digitally Transforming Your Business to Prepare for the New Normal
URL: https://www.youtube.com/watch?v=f7kpHULIlJU

Transcrição não disponível

---

### The Long-term and Unequal Impact of Job Loss
URL: https://www.youtube.com/watch?v=2xFrXAL3Kf0

Transcrição não disponível

---

### Lies, Damn Lies, and Statistics: Understanding the Numbers Behind the COVID-19 Pandemic
URL: https://www.youtube.com/watch?v=KZdg4md9Zgc

Transcrição não disponível

---

### Why Perfect COVID-19 Tests May Not be Worth the Wait
URL: https://www.youtube.com/watch?v=dZZKgb9lI2g

Transcrição não disponível

---

### Why U.S. Governors Delayed Ordering Lockdowns
URL: https://www.youtube.com/watch?v=9eBdLUpB9gw

Transcrição não disponível

---

### The Federal Reserve and the COVID-19 Pandemic
URL: https://www.youtube.com/watch?v=glEzz2ntdsc

Transcrição não disponível

---

### The Imperfect Pause Button
URL: https://www.youtube.com/watch?v=Grr_HHC5vms

Transcrição não disponível

---

### Ethics of the Coronavirus Crisis
URL: https://www.youtube.com/watch?v=L354kp0C4y4

Transcrição não disponível

---

### Data Science for Epidemics
URL: https://www.youtube.com/watch?v=HrKShGh1xMc

Transcrição não disponível

---

### The Value of a Statistical Life
URL: https://www.youtube.com/watch?v=phOZLaT-jtE

Transcrição não disponível

---

### Tommy Talks Introduction
URL: https://www.youtube.com/watch?v=nHb1IfrRZYA

Transcrição não disponível

---

