The US Federal Reserve is now
Buying Junk-rated Debt
Years of near-zero interest rates led CEOs to gorge on cheap debt. What did they do with the money? There needs to be a rigorous study to know the details. But some of it went to finance share buybacks to juice CEO pay.
Now that debt is distressed, the Fed is stepping in to buy it up rather than let the bond-issuers default on it. Just to be clear, the central bank is using fiat money to buy these junk-rated corporate issues so that bond-holders can trade this nearly worthless paper for spendable dollars. Once again the financial industry pulls the levers and turns the dials of government to socialize losses. Late empire corruption is in the air.
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