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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (207855)6/22/2009 9:18:39 PM
From: ChanceIsRead Replies (2) | Respond to of 306849
 
RE: Issuing stock and buying down debt. I posted an article about this within the last week. The only thing I can figure is that they issued debt a while ago at much higher rates, and know that they can't service it as the economy continues to tank. They have been issuing stock to do it. It is completely bass-ackwards. Good companies issue equity at the market top, and by their debt back at the height of the market cycle when the FED has raised rates to stop the party - well they used to do that before the 24/7 party started. Bad companies sell their equity at the bottom and buy their debt back at par. There are a lot of bad companies out there right now. The ones that issued equity here have big targets on their backs saying - "Short Me."



To: Think4Yourself who wrote (207855)6/23/2009 12:06:55 AM
From: Bank Holding CompanyRespond to of 306849
 
> Why pay down debt when you can borrow at some of the lowest rates that will be available for many years? <<

The big and powerful just make it up as they go along. The fed army is using tactics developed 70 yrs ago. Unfortunately, times have changed.


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