Do you think Dow 18,000 was the bottom?

[BeachOrCity]

Vanguard VBTLX is having a strong year because it is 63.3% government bonds which always do well in a bear market. Read my previous comment on bond's performance during the last recession. However, VBTLX also have 17.6% Baa corporate bonds. Baa corporate bonds are higher risk during a bear market if some of the Baa companies goes bankrupt. This is why I invest in 100% treasury bonds such as VUSUX to eliminate that risk. VBTLX is still a good fund to have....but all the companies associated with the Baa corporate bonds in VBTLX must survive the recession. Too early to tell now since bankruptcies do take time.

I always thought this too....then the Fed basically committed to propping up all the Baa corporate stuff. So these marginal companies have access to debt at low rates and most will be able to survive on that.

 

[gerntz]

Bottom line is that with COVID cases increasing in a bunch of states that opened too early

The number of new cases are highest by order of the largest states population rank - CA, then TX, then FL. So I don't see the relationship to opening too early - whatever date that was.

 

[Helen]

The number of new cases are highest by order of the largest states population rank - CA, then TX, then FL. So I don't see the relationship to opening too early - whatever date that was.

Which really doesn't make sense in light of the approach Sweden took.

 

[2177V]

Bold above by me.....I assume the "inefficient companies" that the Fed letfold didn't have employees?

It's a shame that the Fed picks and chooses what companies to let go under the rug seeing we apparently are supposed to have a capitalistic economy. Not getting political, but free markets should allow for the inefficiencies of business without playing favorites by government.

(of course we know how it really works...)

In a pure capitalist system without government involvement, there is corruption because a capitalist system is based on greed. For example, we all know that as long there is competition is there is efficiencies. If there is a monopoly, there is no competition and the public gets gouged.

The government is supposed to regulate this. The government gets to pick and choose which company to save based on jobs and jobs also create tax revenues. They let Lehman Brothers fold because most of the employees are white collar who are skilled employees and can easily get a replacement job with another company. GM is mostly blue collar workers who would have a difficult time getting a job from Ford or another company. Also do not forget the supply chain companies to GM which also involve even more jobs. There was very little supply chain jobs at stake with Lehman Brothers.

The political power rest with senators and congressman/women. You can bet your mortgage that there was politics behind Lehman Brothers and GM. Fast forward to today. Currently, the airline industries, hotel industries, cruise industries, Boeing, rental cars industries, retail industries are in trouble. I doubt very much that the government will save all of them. For example, I do not see the government helping JC Penney or Hertz. On the other hand, I expect a bailout for Boeing if this becomes necessary.