5 myths about the US economy
I have been making a similar bottom line (even if emphasizing different points) in my op-eds. James P. Moore, Jr. has this piece in Sunday's Washington Post.
One other point that I would like to make. I pointed to the high interest rate on GM bonds, but there are also plenty of entities that have very low interest rates on their bonds. If "no one was lending money" as we frequently hear claimed, you would imagine that interest rates would be much higher. Bank of America's bonds are yielding 2.3 percent, Morgan Stanley is at 2.2 percent, and Wachovia is at 6.5 percent.
One other point that I would like to make. I pointed to the high interest rate on GM bonds, but there are also plenty of entities that have very low interest rates on their bonds. If "no one was lending money" as we frequently hear claimed, you would imagine that interest rates would be much higher. Bank of America's bonds are yielding 2.3 percent, Morgan Stanley is at 2.2 percent, and Wachovia is at 6.5 percent.
Labels: Economy
posted by John Lott at 6:45 AM
1 Comments:
Commercial Paper Dr. Lott. It still exists, and it does have somewhat different rules.
Bonds are a different issue entirely. Bonds are merely longer term than Commercial paper, yet the fact that GM Bonds are in bad shape, is as you pointed out, very clear to the market. GM cannot issue Commercial Paper, as it's ability to quickly pay back is dubious at best.
GM cannot get short term loans to cover simple things such as payroll, logistical costs, or materials needed to manufacture vehicles as they no longer have folks able to buy said vehicles. Without income, they cannot continue.
I do know of one comedian, whom I cannot recall, saying in his routine, something like this...
Here's the news with your Anchorman, Grim Carnage!
Sheesh! It's so true, the axiom of "if it bleeds,it leads!"
Must we always dwell on failure, as the media would have us believe, or do we look towards those who set a fine example instead...
History does not repeat itself. Human nature does.
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