Why is the stock market rallying when the economy is so bad?

Re:Why is the stock market rallying when the economy is so bad? by quietbritishjim on Sunday May 10, 2020 @05:52PM (#23136605)

Genuine question: if a company didn't pay out on its bond, that's a default; how can it default without going bankrupt?

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Re:Why is the stock market rallying when the economy is so bad? by peteretep on Sunday May 10, 2020 @07:33PM (#23137303)

I believe what you’re missing here is a “Chapter 11 Bankruptcy”, as opposed to a “Chapter 7 Bankruptcy”.

Chapter 11 means the business keeps running, but the owners lose their money, Chapter 7 is what most of the world considers to be a bankruptcy / going bust / liquidation. Uncle Sam probably doesn’t care if Delta does a Chapter 11, as long as the planes keep flying.

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Re:Why is the stock market rallying when the economy is so bad? by kube-system on Sunday May 10, 2020 @09:27PM (#23138007)

I guarantee that Uncle Sam doesn't care if Delta files chapter 11.

https://money.cnn.com/2005/09/14/news/fortune500/delta/

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Re:Why is the stock market rallying when the economy is so bad? by kart23 on Monday May 11, 2020 @04:13AM (#23139929)

holy shit. And there was a guy here who bought delta bonds, saying he would make an easy 7% by the end of the year.

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Re:Why is the stock market rallying when the economy is so bad? by chii on Monday May 11, 2020 @02:43AM (#23139470)

sometimes bond holders are given the option to convert the debt into equity (at probably pennies to the dollar, which is a steep discount and therefore, a good deal) - that's what restructuring means.

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Re:Why is the stock market rallying when the economy is so bad? by empath75 on Sunday May 10, 2020 @06:05PM (#23136719)

Going bankrupt means lenders and shareholders are wiped out but the company can be restructured and continue operating.

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