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Let them fail: Boeing & the Cruise ship industry

There has been a view expressed by the GOP that "companies have to be saved" people can die, but it turns out that some "people" are more equal than others.  Enter two "entities that really do not deserve the taxpayers' larges":  Boeing and the Cruise ship industry.

Let's be clear, Boeing used nearly US$ 20 billion (some say $30 billion) to buy back share and not invest in its aircraft.  The lenders (about half the amount) knew very well what the money was going to be used for -- reduce the level of equity and raise the price of the equity.   If tomorrow Boeing declares bankruptcy what happens?  Really not that much, it goes into Chapter 11, who loses the equity owners and the unsecured bondholders -- the same guys who were happy to lend money to Boeing to reduce the amount of capital.  Workers -- not so much, they will have a job and a pension, why should they pay for management stupidity...even their pension is safe since its now illegal for pension managers to invest more than a very small amount of their pension into the company in which they work. BY THE WAY, THAT'S HOW CAPITALISM IS SUPPOSED TO WORK!

Boeing doesn't need a freebie! Moreover, when it was suggested that the government would take participation, Boeing CEO told that he would not accept the money with any strings!  As they say, another As$hole that needs to be fired!

Addendum:  When it was proposed that Boeing give up shares for a bailout, they decided they didn't need the money after all...

The Cruise industry (all now registered in the Bahamas to avoid taxes) should ask the Bahamian government for some assistance.  However, people who went out of their way not to pay taxes to the US government should not now go and claim support from that same government.  I see no reason why the American government should support the cruise industry -- especially since it's not American.  While we're at it why not give a subsidy to BMW...after all some of its cars are manufactured in the US.  They actually pay taxes in the US, should they ask too?

Companies and investors have become complacent and have invested as if the world would face no real hardship, this was reasonable since in the past 11 years the economy has been humming along and there was "no value" in hedging or reducing leverage.   There have been a few notable "massive hedges" that have paid of in the past few days; one was nearly US$3.6 billion.  Guess what that was by a fund that manages US$ 23 billion in very very rich people's money who as they say "value not losing money more than making money"  Guess what the fund's return for the first quarter is -0.8%, far better than anyone else, and as the fund manager said -- the hedge worked as designed.

That's capitalism, the I bet the farm and if I win I'm good and if I lose you pay is not capitalism (its what the GOP likes -- support your friends and screw the rest).

Addendum:  Carnaval got some cash from the US Government in the form of an unsecured 11% bond...could be worse for Carnaval -- they could have been forced to fork out some equity. 

In summary:  many of these companies should go into chapter 11, some will die (chapter 7) most will be fine, only the investors and the unsecured bondholders will "eat shit"  Granted the likelihood of that happening is around zero -- these guys run the US government (the real insiders), I will bet that Boeing will get its money and it will eventually be forgotten, its investors will be made whole and the bondholders will be fine, the workers will be asked to take a 30% salary cut to "support the business" and the management will declare a massive bonus for the C-suite for the stellar job they did during the crisis.  WATCH MY WORDS

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