A bond is an IOU that some entity (in this case a corporation) gives in exchange for cash. It's essentially a loan but instead of going to a lender they "sell" this bond on the open market to the lowest bidder to get a cheap loan with no fees or conditions. This loan concept breaks down when the bonds are being bought by the Fed with freshly printed and unlimited dollars. The Fed could never collect on the loan, making it a cash bailout.
This money can be used for anything including stock buybacks and bonuses to the directors. Even if the Fed does not intend for this to be free money the board of directors could easily issue billions in bonds, pocket it all and let the company go bankrupt. It would be 100% legal.
Business print paper and give it to the federal reserve. The federal reserve prints paper fiat and gives it to the businesses in exchange for their paper.
Yes. I’m a bit new to the subject but a bond isn’t stock, so the fed holds corporate debt temporarily until the bond expires, at which point the corporation pays it back with interest. How does this equate to nationalizing the economy?
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Tallest_Skil ago
Don’t miscontextualize this. Congress was TOLD, and they did as they were told.
Timur9000 ago
What's
the significance of the corporate bond market?
canbot ago
A bond is an IOU that some entity (in this case a corporation) gives in exchange for cash. It's essentially a loan but instead of going to a lender they "sell" this bond on the open market to the lowest bidder to get a cheap loan with no fees or conditions. This loan concept breaks down when the bonds are being bought by the Fed with freshly printed and unlimited dollars. The Fed could never collect on the loan, making it a cash bailout.
This money can be used for anything including stock buybacks and bonuses to the directors. Even if the Fed does not intend for this to be free money the board of directors could easily issue billions in bonds, pocket it all and let the company go bankrupt. It would be 100% legal.
Spiteful_Mutant ago
The global economy is so pozzed and intertwined that letting any part of it fail will lead to cascading failures of the entire global economic system.
The real clincher is that they don't even know what will cause what to fail so they must protect every sector no matter how fucked up.
And by "protect" I mean they must let it continue to operate as is, and sometimes even let it grow. That's what happened after the 2008 debacle.
Meanwhile, Schlomo continues to play his game and get richer.
Herbert666Marcuse ago
Corporations large enough to issue bonds are owned by jews/shitlibs, and/or must honor bond maturation obligations to jew/shitlib bond holders.
By and large, GOP businessmen own small to medium sized bidnesses, which never get within a country mile of even dreaming of issuing corporate debt.
tl;dr == Floating corporate debt helps DEM businessmen & DEM bondholders, and does nothing to help the average GOP bidnessman.
"Never let a good crisis go to waste."
- Mossad Lt Col Rahm Emanuel
notajew69 ago
Business print paper and give it to the federal reserve. The federal reserve prints paper fiat and gives it to the businesses in exchange for their paper.
Tallest_Skil ago
In terms of the fed being able to directly purchase from it, you mean?
Outstretched_Bill ago
Yes. I’m a bit new to the subject but a bond isn’t stock, so the fed holds corporate debt temporarily until the bond expires, at which point the corporation pays it back with interest. How does this equate to nationalizing the economy?