Fed to buy junk bonds, lend to states in fresh virus support

Re:Fed to buy junk bonds, lend to states in fresh virus support by chii on Thursday April 09, 2020 @11:32PM (#22829764)

> 1. There are wealthy investors to fund the purchase 2. There are wealthy investors who realize there is a long term profit to be made 3. That wealthy investors care about long term profit

all of those are true. Not just one.

> no company can plan for

and yet, in the filings for american arline, they have mentioned pandemics as one of the risks. No company wanted to plan for this, because they perceive the cost to not be commensurate with the reward - perhaps because they, after seeing 2008, know that the gov't bailout is a possibility, and that's cheaper for them than to save for a rainy day.

AKA, moral hazard. It needs to stop.

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Re:Fed to buy junk bonds, lend to states in fresh virus support by creato on Thursday April 09, 2020 @11:49PM (#22829825)

What would "planning for a pandemic" look like for an airline? And if they did that, would they have survived for decades competing with airlines that did "riskier" planning for a pandemic?

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Re:Fed to buy junk bonds, lend to states in fresh virus support by chii on Friday April 10, 2020 @12:58AM (#22830109)

> would they have survived for decades competing with airlines that did "riskier" planning for a pandemic?

if the other riskier airline didn't get a bailout, they would've bankrupted today.

So in good times, the riskier airline returns more money to shareholders. But those shareholders should know that it's taking a bigger risk.

And the difference isn't so much that an airline will be pushed out of the market by not returning 100% of the earnings to shareholders.

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Re:Fed to buy junk bonds, lend to states in fresh virus support by sooheon on Friday April 10, 2020 @01:43AM (#22830319)

100% agreed. Privatization of profits, socialization of losses needs to stop.

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