Trump Admin To Name Most Recipients Of Bailout Loans
When the government said it would give out thousands of dollars in bailout loans grants under the Paycheck Protection Program, every eligible business - which was most small and medium businesses (that had no access to capital markets) with up to 500 employees, signed up. And why not: it was free money from a government that had launched helicopter money, and was seeking to ram the newly created money into the economy. There was no downside - the grants would be forgiven if used to pay wages or rent, and - at least according to widespread speculation - the loans would remain a secret. Which is why it was so surprising when it emerged that some "asset managers" such as Ritholtz Asset Management, led by Josh Brown and Barry Ritholtz, had also accepted bailout grants to stay in business. In retrospect, Ritholtz is the author of Bailout Nation so it probably should not have been a surprise.
What should have been a surprise is that an asset manager - i.e., a professional collecting generous fees to predict the future and entrusted with billions in capital not only failed to do that, but himself needed a bailout. It just goes to show how important it is to pick very calm and patient clients.
Of course, we can't blame them: like most other recipients, Ritholtz probably expected that his name would never see the light of day, even though technically he used taxpayer money to prop up his company. And since it is taxpayer money, everyone has a right to know how it would be used.
Only in the case of just over half a trillion dollars in PPP grants that wasn't the case, because for nearly 3 months after the PPP program was launched, Treasury Secretary Steven Mnuchin persisted in keeping the names of all recipients secret, much to the growing anger of those who effectively funded the loans.
That all changed late on Friday, when Bloomberg reported that the Trump administration said it would disclose details about companies that received loans of $150,000 or more from a coronavirus relief program for small businesses, following a backlash against its earlier refusal to release data about which firms got billions of dollars in government aid. Eleven news organizations had sued to make details about PPP loan recipients public.
Which is bad news for all those "financial advisors" like Ritholtz who will soon be revealed as getting paid to "predict" the future, yet not having the sense to even budget for a short-term crisis, let along have hedges in place for a downside scenario. As for the rest, it's unclear how willing most small businesses would have been had they known that the very act of requesting a bailout would open them up to eventual public shaming.
https://www.zerohedge.com/markets/trump-admin-disclose-recipients-bailout-loans