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>many of them know that they can't survive at 2% rates, let alone 5 or 10% rates. From your perspective, what is the underlying reason they cannot survive with
by bumby 4y ago
>many of them know that they can't survive at 2% rates, let alone 5 or 10% rates.
From your perspective, what is the underlying reason they cannot survive without excessively low rates?
Your last statement feels like it's primed to hold the Fed hostage, which is worrisome.
- myth_drannon 4y agoI would say it's like the panicking homeowners that took variable rate mortgages(business take on a lot of debt to expand) and now their mortgage payments doubled(and also the bank demands extra lump sum payments in addition, because the monthly is only enough to payoff the interest not the principal). Now they need to make x2 of their current salary otherwise they loose the house.
- georgeecollins 4y agoI'm not the OP, but there is an idea in bushiness that a company has to have a percentage return on the equity invested. That rate goes up when interest rates go up. Otherwise you could just sell the equity and buy corporate debt instead.