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>> There is simply no way the US Government is going to let the only major domestic commercial aircraft business go under. The problem is this knowledge is bui
by enraged_camel 7y ago
>> There is simply no way the US Government is going to let the only major domestic commercial aircraft business go under.
The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail.
Still, bailing out Boeing would be extremely costly, not because of the bailout itself, but because the WTO prohibits government subsidies of aerospace industries in Europe and US. So the resulting punitive tariffs from Europe would hurt a ton.
- dragonwriter 7y ago> The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail. Well, yes and no: knowledge of bailouts is built in to share price, but that knowledge includes the fact that while government stops important corporations from failing, those bailouts usually don't work to the benefit of pre-bailout shareholders very much (though they are sometimes better for them than standard bankruptcy would be); they are essentially special case bankruptcies, often with partial temporary nationalization.