President Trump: The NEW one and only politics thread

Boeing reported this morning. It lost $640 billion for the quarter. It is going to lay off 10 percent of its workforce. And it burned through a staggering $4.3 billion in cash over the last three months. (that isn't a typo!).

The company is functionally bankrupt. Take away the bailout. ... And it had borrowed $25 billion alone in 2019, half of which was used to pay back existing debt and extend the term, and about 30 percent to buy back stock and pay out dividends. Between 2013 and 2019, it did $43.5 billion in stock buybacks.

Boeing has been a shitty business, and largely exists due to a game of lobbyists felating members of Congress. But even the Max isn't the story of Boeing. Shit, if it had just sat on that $43+ billion in mispriced debt that was a gift, rather than overpaying for its own stock to artificially juice the price, it would be safely trying to weather things right now with a lot of runway.

I can't describe how much it pisses me off that our government picks winners and losers in what I see as a corrupt and inequitable way. But it particularly pisses me off, when this kind of entity is the beneficiary.

And in the wake of it, stock buybacks are demonized, which is exactly the wrong response.

If you are a company, and you have cash -- borrowed money or earned money -- you should be able to do whatever you think makes best sense for your shareholders. And if you go bankrupt, because you made poor choices, your losses shouldn't be socialized.

What we are doing is the definition of moral hazard. Nobody has incentive to guard against risky behavior when they know that if they have the right friends they will be protected from the consequences.