When This Is All Over

[NitroZ7]

I would think we should see some shift in corporate behavior.

The one thing that concerned me about low rates for so long was that companies would pile on debt and many did. There use to be several AAA rated companies 30 years ago but it doesn't seem like companies put a priority on their balance sheets and paying off debt. Part of the problem with rates being so low is that people and institutions were willing to buy this debt because they were yield starved. This probably won't happen because people's memories are short but if investors start paying a premium for companies with low debt then maybe some companies will start prioritizing lowering their debt. We hear people say that individuals should have stayed enough cash to make it through unexpected times so we should expect companies to also be just as healthy.

I also wonder if there will be some restrictions placed on buybacks. Maybe a company will need to have a certain credit rating, an amount of cash or liquid assets to cover operation for x period of time etc. before they can exercise buybacks. The govt. and regulators may not be able to directly prohibit buybacks but maybe they can provide tax incentives or dis incentives to only make these viable if certain thresholds are met.

If the government does take a stake in companies that it needs to bail out then they can certainly have more control over these issues but let's hope that is no too widespread.

[boneil]

I hope there is big changes but I'm sure the laws will be written by lobbyist lawyers who will have loopholes included. No way execs don't figure out another way to boost stock performance and boost their pay.