Federal Reserve pledges asset purchases with no limit to support markets

Re:Federal Reserve pledges asset purchases with no limit to ... by jdkee on Monday March 23, 2020 @01:46PM (#22666601)

"the existence of a "lender of last resort" such as the Fed "

This. The moral hazard here is enormous. And why should the Fed serve the interests of equity owners over the national interest in a strong, reserve dollar?

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Re:Federal Reserve pledges asset purchases with no limit to ... by RealityVoid on Monday March 23, 2020 @05:07PM (#22668756)

My feeling is that the answer to this is because these companies (arguably) produce something of value to the world. Letting them become bankrupt would mean they do not produce that something of value so that would be bad economics. And a case of not seeing the forest for the trees. The role of economy is to sustain a certain confort to the population, an people should forget that at their own peril.

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Re:Federal Reserve pledges asset purchases with no limit to ... by ahelwer on Monday March 23, 2020 @05:32PM (#22669020)

Bankruptcy doesn't mean the company's assets are thrown in the trash. It just means the current equity & bond holders get rinsed. Other presumably smarter people can then come in and run the company.

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Re:Federal Reserve pledges asset purchases with no limit to ... by toomuchtodo on Monday March 23, 2020 @05:43PM (#22669141)

They mustn’t even be smarter, simply more ethical and responsible.

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Re:Federal Reserve pledges asset purchases with no limit to ... by dragonwriter on Tuesday March 24, 2020 @06:58AM (#22673755)

They needn’t even be more ethical and responsible, either. Calvinist mythology aside, financial success isn't a symptom of moral virtue.

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Re:Federal Reserve pledges asset purchases with no limit to ... by akiselev on Monday March 23, 2020 @10:43PM (#22671362)

Isn't the nature of a bankruptcy largely at the discretion of a judge?

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