https://seekingalpha.com/article/4359103-fed-invested-in-and-t-debt-what-are-you-waiting-for
6 replies (most recent on top)
Short term is great for the major stock holders. This is horrible for 401Ks. Artificially propping up the stock price does not bring in new customers or make are products appealing.
Here's an article that kind of explains this program.
https://markets.businessinsider.com/news/stocks/federal-reserve-buys-corporate-debt-berkshire-hathaway-walmart-mcdonalds-cocacola-2020-6-1029349199#
They're not buying debt in companies that need the help. They are buying debt in companies that don't need the help, because they don't want to have any defaults.
The point is to pull debt out of the debt markets to alter supply/demand so that interest rates resolve lower. That is all it is. Between the government and private sector running up debt, interest rates will soar if the government doesn't purchase debt with printed money and put it on the books of the Fed. I think it's a pr-scrip-ion for disaster. It is euphemistically called "quantitative easing".
"48% of the bonds bought were rated AAA, AA or A, the Fed said, while 48% were BBB rated, and the final 4% was rated BB"
their service still sux and there is the little problem of keeping customers. no way I will buy any wireless service from them again and I know a lot of unsatisfied customers that will never go back to att.
The Fed made similar loans to 700+ companies using a program created back in the Great Recession days (terrifying that we're now nostalgic for THAT economy, so much better than the current freefall!).
Back then, the program was only for companies the Fed worried would go belly up if stressed, but they quickly added other companies to the list in an effort to disguise the signal this had sent of the target companies' imminent failure.
So, receiving this help doesn't necessarily send a bad signal for AT&T, but it certainly doesn't send a good one.
As others note, this is pretty much a gift to the Administration's favorite supporters and bribe-payers.
It pays to spread money around to get that sweet sweet "insight" into the Administration's "thinking."
They also bought Berkshire Hathaway, so what is your point? It is not a bailout of private corporations. That is what they're trying to feed you, but the reality is a whole lot worse.
Where do you think that $3T of stimulus came from? It actually came out of thin air. The Federal Reserve created/printed up $3T. Now, they could have just bought treasury issued debt, but then their portfolio is out of whack. So, to put a little more "balance" in their portfolio, they let some federal debt get sold to the public, and instead put some corporate debt onto the books of the Fed.
Interest rates are near 0% because the Fed prints and lends. If they stop printing, interest rates will shoot through the roof, so the Fed has no exit strategy, and that is why this is many orders of magnitude worse than simply what they would like you to believe, that it is a corporate bailout. A picture is worth a 1000 words, so here's the chart. The rise is with financed with newly created/printed money.
https://fred.stlouisfed.org/series/WALCL
*Ethical management
*Stop driving customers away
*A well thought out business plan
*Replace Stankey with a competent CEO
*Support the core communications infrastructure
*Pay down the astronomical debt load Randall left AT&T with
*Stop replacing tens of thousands of American workers with Indians every year