2 ms·
If corporate bonds (debt) are at high risk of default, why would there be investment in those same companies' equity which is even higher risk? The fact that t
by rswail 7y ago
If corporate bonds (debt) are at high risk of default, why would there be investment in those same companies' equity which is even higher risk?
The fact that treasuries are providing no return tells you that most money is invested there "safely".
The problem of course is that the USG should be making sure small companies don't fail, because that's the actual driver of the economy both for employment and consumption.
- brenden2 7y agoBonds and stocks move differently. The market has already re-priced the stocks of these companies to account for the risk of default on their debts. The US government has also signaled that they will bail out these debts, so the companies themselves (and thus, their stock) will probably be fine even if they stop paying their debts. Crazy times we live in.