Re:Fed to buy junk bonds, lend to states in fresh virus support
by whatok on Thursday April 09, 2020 @12:11PM
(#22823919)
Ford was only downgraded by a single rating agency in September and only recently downgraded by the rest last month; well after the initial model of these facilities was announced. Ford has been preparing for being downgraded and has the liquidity to support themselves even without Fed action.
I'm not waving away rating agencies. I'm saying that General Motors has less liquidity than Ford. In your "no bailouts" world, Ford would be in better shape than General Motors. General Motors is investment grade, does that magically make them better than Ford even though cash on hand says different?
Ratings really mean nothing right now as far as the health of a company goes and ratings agencies have specifically mentioned that they are backlogged with assessing all consequences of what's going on right now. Ratings have and are always backwards looking data. How the "largest funds" in the world invest is completely irrelevant for this.
Re:Fed to buy junk bonds, lend to states in fresh virus support
by toomuchtodo on Thursday April 09, 2020 @12:17PM
(#22823990)
I'm not willing to argue further about a marginal automaker's balance sheet and debt ratings. You are free to your opinion. Their financial statements and debt ratings are publicly available for those interested.
Re:Fed to buy junk bonds, lend to states in fresh virus support
by whatok on Thursday April 09, 2020 @12:19PM
(#22824025)
You're making wildly sweeping statements about "extending and pretending" without having any of the underlying facts. I'm clarifying those statements with some underlying facts. Up to you to incorporate that into your worldview.
Your argument holds little water when you wave away the ratings of "random rating agencies". Their ratings are what drives investment decisioning by the largest funds in the world.
[1] https://www.cnn.com/2019/09/10/business/ford-downgrade-junk/...