Boeing Is Broke
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May 10, 2019 - by Charles Mudede for thestranger.com
As predicted, Boeing blew all of its cash (and possibly much, much more) on buybacks and now has to borrow money to stay in business.
First, it successfully sold $3.5 billion worth of bonds on Tuesday to buyers who are under the impression that the company is a very safe bet. Boeing also opened a $1.5 billion line of credit "with three U.S. banks." No one in the mainstream finance world it seems is at all surprised that a company that spent $20 billion on its own stock in 2018 suddenly needs "a boost of liquidity."
What makes this situation so spooky is the role played in this bond purchase by S&P Global Ratings, the Manhattan firm that four years ago paid $1.5 billion to settle lawsuits concerning its "overly rosy ratings" of obviously dodgy Bush-era mortgage-backed securities.
Without these AAA ratings, it would have been much harder to pack so much dynamite into the markets that exploded in 2008. This rating company—one that essentially committed fraud to keep the value of stock prices up long enough for those who were ahead to leave the market filled with those who were behind—has maintained its A rating of Boeing's debt. Why? We have heard this tune not too long ago...