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A comment on Federal Reserve pledges asset purchases with no limit to support markets. Parent comment
There two major assumptions there.
"Clearly creditworthy companies"
and
"Credit markets are temporarily closed"
The bonds are devalued. People are issuing credit to those who qualify. (I've secured two LOCs myself for both my business and personal needs.)
It's just that the bar is higher than normal. What is the function of a market if you don't allow it to clear?
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There two major assumptions there.
"Clearly creditworthy companies"
and
"Credit markets are temporarily closed"
The bonds are devalued. People are issuing credit to those who qualify. (I've secured two LOCs myself for both my business and personal needs.)
It's just that the bar is higher than normal. What is the function of a market if you don't allow it to clear?