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I find your implied assumption that starting a company should in normal circumstances be seen as a get rich scheme that pays out in under 10 years as completely
by Apes 7y ago
I find your implied assumption that starting a company should in normal circumstances be seen as a get rich scheme that pays out in under 10 years as completely toxic, but that's an aside.
The point is large companies shouldn't be hurting for money, they have two big options on the table to generate money right now: issue stock or bonds. However, there are a lot of really stupid large companies that decided to max out their credit cards in the good times to pump up their stock price via buy backs. They can't issue bonds, but they could still issue stock. However, that would cause the price to crash, and Trumperino in Chief can't allow that to happen.
- lazerpants 7y agoOf course, the Fed is implicitly at fault here too for keeping interest rates too low for too long. They tacitly encouraged borrowing with low rates. If rates had been higher, companies would be thrilled about lowering rates due to covid and would start to issue bonds.