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American law incentivizes huge companies to take on unsustainable amounts of debt, knowing that they can either make it vanish by filing bankruptcy or send their people to Uncle Sam for a handout. I'm for innovation and risk-taking, but we've been going through this BS every ten years now. Something should change.
American law incentivizes huge companies to take on unsustainable amounts of debt, knowing that they can either make it vanish by filing bankruptcy or send their people to Uncle Sam for a handout. I'm for innovation and risk-taking, but we've been going through this BS every ten years now. Something should change.
Government caused the issues of 2020 for business by shutting them down.
Airlines have a history of getting bailed out, bankruptcy, and they took profits and did buybacks and then took out loans to even do buybacks.
Airlines took 96% of their free cash flow and did stock buybacks over the past decade - while not having a serious emergency fund. This was a foolish choice. What should their consequence be?
This is not true. It is possible to have the airlines exist while going through bankruptcy.
There will be a demand for airlines once Covid-19 has a vaccine.
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Not going occur when your liabilities are astronomical percentages of your assets.
Now, that being said, I also think the gov't should only bail them out with the same terms 2020 stimulus has: no buybacks, limits on exec compensation hikes, and, most importantly, I'd want a ban for 5 years on discretionary (tourist) travel from USA to Asia, and to the EU if they do not ban Asian travel. Business travel should be allowed-solely with automatic 14 day quarantines of all travelers upon their return. It should also have a minimum price set by the government of $50k per round trip, as a further disincentive to travel to Asia for all.
W/O a international travel ban in the loan covenant, I'd watch them fail just as we watched Lehman fail 12 years ago.
Not going occur when your liabilities are astronomical percentages of your assets.
Now, that being said, I also think the gov't should only bail them out with the same terms 2020 stimulus has: no buybacks, limits on exec compensation hikes, and, most importantly, I'd want a ban for 5 years on discretionary (tourist) travel from USA to Asia, and to the EU if they do not ban Asian travel. Business travel should be allowed-solely with automatic 14 day quarantines of all travelers upon their return. It should also have a minimum price set by the government of $50k per round trip, as a further disincentive to travel to Asia for all.
W/O a international travel ban in the loan covenant, I'd watch them fail just as we watched Lehman fail 12 years ago.
Whose fault is that? I'd be fine with a bailout if all the C-levels are canned, not hired for another airline, and strict provisions put in place such as the ones you listed above.
So you’re saying it’s Ok to let large companies fail but not small companies? Why are you willing to punish the millions of people who work for large companies? They are no more responsible for being forced into furlough than people who work for small businesses.
Would you say you are a socialist?
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