OT - Dow plunges 1,175 - worst point decline in history

[Elefantino]

If corporations can borrow unlimited free money (Fed action this morning), why do they need a bailout?

Why does Boeing need $60 billion when it spent $60 billion in 2017-2018 buying back its own stock?

It should have spent that money developing the 737 Max instead of bolting new engines on an old airframe and installing sketchy software, resulting in deaths.

[kppolich]

Originally Posted by Elefantino

If corporations can borrow unlimited free money (Fed action this morning), why do they need a bailout?

Why does Boeing need $60 billion when it spent $60 billion in 2017-2018 buying back its own stock?

It should have spent that money developing the 737 Max instead of bolting new engines on an old airframe and installing sketchy software, resulting in deaths.

Everyone does it because it is legal.
"Should have" seems to be a phrase thrown around a lot lately, mostly due to hindsight being 20/20.
Hopefully, after we are through this things will change.

From the personal finance point of view, emergency funds seem to be a hot topic.

[Mzilliox]

what i dont get is this: im a human, a citizen, if i dont save for an emergency, im not a responsible human? i should have known better and saved some of that money thats already tight?

corporations though, make tons of profit, have plenty of extra around for this, but if they are not prepared for an emergency, we dont call them irresponsible, we behave and allow our government to spend our taxes to bail these creeps out. they know it will happen, so they have no incentive to behave any better.

this country gives way to much to corporations, and way too little to real live humans, period.

[Mzilliox]

Originally Posted by Tony T

I have confidence that the Senate Ethics Committee will look into this and give them a firm talking to.

.

oh no, the dreaded firm talking to... what a joke this all is

[DCilliams]

Originally Posted by oldpotatoe

Not a mod, but can you really separate the political from what's going to happen in about an hour? There were posts already about 'dems' holding the stimulus bill up, true but the REASONS are telling. And THAT effects the stock market hugely.

Look, I'm frustrated and frankly scared for my family, my wife. My son has the 'bug', now recovering..I just went into AFIB last night and trying to figure out how to get treated....I don't really GAFarge who does what, and correct, I should concentrate on what's DONE and not what's SAID...BUT this is spiraling out of control..'war fighting?', well, lets go to war then, not just talk about how great/I'm/somebody is doing or how 'nasty' one side of the aisle is or if a governor criticizes, 'gotta respond'..why? FerFarges sake...

OUT..gonna try to contact my heart doc..again.

Sorry to hear that and I completely agree.

[verticaldoug]

Originally Posted by jimcav

So if an individual wanted to buy a corporate bond from a company they believe in, how do you see the "Spread" that the broker has added in selling to you, to try to get a reasonable return--or is that just already factored into the yield at maturity? It seems if you buy a NEW bond, you are providing direct capitol to the company, versus buying the company stock, which isn't directly tied to the company anymore, and it is just shares some other individual or fund has decided to sell ( I assume that is the same for an existing bond)? I sold about 1/2 my Roth the 1st week this started going south, and will reinvest it this summer (?maybe) with a 9 year horizon, but am wondering if I can help some companies AND regrow my IRA.

It's a bit complicated, but a very simplified way to look at it is:

If you buy a stock, the cash goes who sold the stock, but the price is used to calculated the market cap of the company. So if you did not buy, the price would be lower. Lower Market cap.

Now some bonds, loans, revolvers which are the debt of the company have covenants in the prospectus. Some of these may be triggered if debt / equity ratios get below a threshold. This is particularly true in banking.

That's the simple reason.

-----------------------------------------------------------------------------------
You should get a confirm from the broker. Everything should be disclosed in the confirm. I trade bonds as principal, so everything is in the price. The broker's spread is whatever price they could pay that was better.. It is at risk. You need to see the tape to see where the bond was trading in price to see what sort of spread the broker took.

if the broker takes a commission, then its riskless and he cannot add a principal spread. You are either Agent on commission or Principal on Risk. You can't be both.

[goonster]

Originally Posted by kppolich

Everyone does it because it is legal.
"Should have" seems to be a phrase thrown around a lot lately, mostly due to hindsight being 20/20.
Hopefully, after we are through this things will change.

Eating two dozen donuts every day is legal too.

Everybody could see that buybacks were a big factor fueling an asset bubble.

Things did not change after 2008, and I'm still mad about it.

[echappist]

Originally Posted by Mzilliox

what i dont get is this: im a human, a citizen, if i dont save for an emergency, im not a responsible human? i should have known better and saved some of that money thats already tight?

corporations though, make tons of profit, have plenty of extra around for this, but if they are not prepared for an emergency, we dont call them irresponsible, we behave and allow our government to spend our taxes to bail these creeps out. they know it will happen, so they have no incentive to behave any better.

this country gives way to much to corporations, and way too little to real live humans, period.

“But corporations are people, my friend”

At least according to a currently-serving senator.

And some people are just a bit more equal than others...

Originally Posted by MattTuck

Weimar Republic, Here We Come!

Goodie, nowhere safe to invest anymore...

This may lead to a serious rethink of macro-economics, perhaps long overdue. Though it would have been nice if we werent actual subjects of the experiment gone awry

[echappist]

Originally Posted by goonster

Eating two dozen donuts every day is legal too.

Everybody could see that buybacks were a big factor fueling an asset bubble.

Things did not change after 2008, and I'm still mad about it.

The best part (or rather, the part showing an alarming lack of reflection and introspection) is that the poster to whom you responded is the same person who gave out gratuitous lessons on personal financial responsibility repeatedly in this thread. All of the issues at which he took umbrage are perfectly legal, too, as is the declaration of personal bankruptcy. At least the scale of destruction from personal financial indiscretion is much less than that from corporate financial indiscretion, by orders of magnitude. Irresponsible financial decisions at the corporate level easily affects the livelihood of thousands, almost all of whom having no input on corporate decisions.

To wit, the greatest hits of his pearl clutching and lectures, all from this thread and all since the beginning of 2019, now collected in an anthology post. Didn't even take me that long to find all these pearls of wisdom. But just remember, some "people" are more equal than others and do not need to adhere to responsibility the way us peons are lectured to do.

Originally Posted by kppolich

Nope, just sick of reading this thread and seeing the blame placed elsewhere for absolutely every little thing that comes up these days.

The stock market dropped, OMG whose fault is it? Let's blame Trump because we aren't prepared and it has to be his fault because he has Twitter.

Corona virus from China is here, let's blame the government because it's easy to blame the people in the spotlight.

My health insurance sucks and I got billed wrong. We need Bernie because it won't ever happen again. Come on, it's the hospitals fault and probably someone with a Certificate or associates degree working in billing and coding hit a 3 when they should have hit a 4.

Be responsible for your financial situation. Know your risk tolerance and your needs. Have a budget and know what your insurance covers and what in network vs out of network means. That is not rocket science, but nobody else is going to do this for you.

emphasis mine

Originally Posted by kppolich

Your holdings are your responsibility and you should be prepared for the good and the bad depending on your current and future needs.

Blaming anyone but yourself for any financial troubles is lazy and shows how under prepared you are.

Additionally, if you are relying on the stock market to bank roll your purchase of a home (the biggest purchase you will ever make) you are doing it wrong.

emphasis mine

Originally Posted by kppolich

The economy is just fine.

Financial success comes down to personal choices and is 100% related to the amount of money you keep, and not the amount of money you make.

The stock market is just one vehicle that allows that money you have kept to grow, but with a risk. It is also not the end all be all to judge the economy.

This forum is a great reference for a lot of things, especially bikes. But get and give your financial advice elsewhere.

bold or italic emphases per se original; bold + underline emphases mine

But if you are a corporation, feel free to ignore all that, for the Sage of Milwaukee has told us

Originally Posted by kppolich

Everyone does it because it is legal.
"Should have" seems to be a phrase thrown around a lot lately, mostly due to hindsight being 20/20.
Hopefully, after we are through this things will change.

From the personal finance point of view, emergency funds seem to be a hot topic.

ETA: to his credit, I will say that he is indeed correct on the following:

-a) stock market is not the economy;
-b) one should know one's risk tolerance and invest accordingly.

[verticaldoug]

If you owe a little, it's your problem. If you owe alot, it's the banks problem.

Corporations are big. Different rules.

[fiamme red]

Zoom Video Communications, Inc. (ZM) is up 22% today. Not surprising.

[Ozz]

Originally Posted by verticaldoug

If you owe a little, it's your problem. If you owe alot, it's the banks problem.

Corporations are big. Different rules.

Said a different way: Owe $1MM to the bank, the bank owns you. Owe $1B to the bank, you own the bank.

[steveoz]

If it gets any worse I'm gonna answer that e-mail from that Nigerian Prince....

[Rpoole8537]

Originally Posted by Mzilliox

what i dont get is this: im a human, a citizen, if i dont save for an emergency, im not a responsible human? i should have known better and saved some of that money thats already tight?

corporations though, make tons of profit, have plenty of extra around for this, but if they are not prepared for an emergency, we dont call them irresponsible, we behave and allow our government to spend our taxes to bail these creeps out. they know it will happen, so they have no incentive to behave any better.

this country gives way to much to corporations, and way too little to real live humans, period.

And yet, voters become fearful if a candidate is labeled socialist. Are the citizens of Norway concerned that they will lose everything due to the virus? (I actually don't know the answer to that.)

[kppolich]

Originally Posted by echappist

All of the above curation

Apologies if you were triggered or viewed my previous statements on personal financial responsibilities as the end-all-be-all equivalent to the scrolls of Alexandria. They were simply a view of how I approach problems i.e. what is the need, what are the risks, what does it mean for me today and in the future.

Corporations should be held to the same set of rules as everyone else, but they aren't. However, they do employ most of the world so they have the leverage for now. This situation is a perfect opportunity to level the playing fields a bit, but bankruptcies and bailouts will happen because not every person can succeed and neither can every business.