I know the ratings...but my point is simply that if there were no risk to doing something, it would carry no value. That's simple economics.
Junk actually has a higher value potential than AAA+. You just need to stomach risk.
AAA+ bonds carry some risk, as any investment has to. You just got caught on the short end.
I do think that there is a certain standard, however, that has been set in the last 10 years. It isn't a good one, either. I don't believe in blaming an administration or politics for attitudes shifting...so don't read it that way.
However, it is definitely true, by looking at companies around the US, that more of the top brass are looking out for themselves than at any time in history. As a result, these bankruptcies are looking more like criminal behavior than bad management. I don't know CQB's story, so I'm not making a comment on that in particular.
But Global Crossing, Tyco, Warnaco, ENE, and a host of others come to mind.
Companies need to take a stand on management salaries and not pay brass that isn't performing. As a manager, if my division isn't performing, I'll get stiffed (and possibly launched) at review time. Why don't these assholes?
Answer: Capitalism is a macroeconomic concept that hasn't been applied well at the corporate level. Corporations remain Feudal institutions. Were microeconomic influences more based on capitalistic principles, fewer people would dislike the system. Unfortunately, we have a nasty blend at work. |
