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Matt Levine has a great take on this in regards to the airline industry in this pandemic. He talks about all the people upset about all the stock buybacks they
by cortesoft 6y ago
Matt Levine has a great take on this in regards to the airline industry in this pandemic. He talks about all the people upset about all the stock buybacks they did during the boom years and how they should have saved cash for a pandemic.
He runs the basic math, and even if the airlines completely cease to exist, it was still the financially sound decision to return the money to investors. Even if they knew the pandemic was going to happen this year, they made the right decision... and given that this was such a rare event, it would have been extremely foolish to try to maintain a cash cushion for this.
- dehrmann 6y agoThings this catastrophic are better left to governments for bailouts (which really is just insurance at a societal level) than for companies to save for. Having to save for events this unlikely is incredibly inefficient.
- antepodius 6y agoOr just let the airlines go bust. New ones will crop up once the situation improves.
- jfoster 6y agoPretty much. When an airline goes out of business, most of the physical aircraft will still be sold to someone unless they fall victim to lack of proper maintenance.
- willtim 6y agoI'm not convinced the premiums paid (taxes paid by corporations) match the risk and payouts given, it's only been 12 years since the last hundreds of billion dollar bailout. But yes, capitalism alone does not work.
- pete762 6y agoDo you have a link?
- cortesoft 6y agohttps://www.bloomberg.com/news/newsletters/2020-03-17/money-stuff-the-good-times-for-airlines-are-over https://www.bloomberg.com/news/newsletters/2020-03-17/money-...