PortandTerminal.com, April 27, 2020
MIAMI, FL – The Wall Street Journal (WSJ) is reporting (paywall) that Carnival Cruise Line is getting an American taxpayer paid bailout.
According to WSJ, the cruise line company was dead in the water when it began looking to borrow billions in high-interest loans.
Then they found a crew of hedge funds (called “The Consortium”) willing to offer up to between $4 billion to $6 billion. One problem though. The Consortium would only lend money “an annual interest rate exceeding 15% and potentially give the lenders a stake in the company.” That’s hedge funds for you.
But when the Fed entered to help Carnival out, offering up $ billions that now included “loans to companies with investment-grade ratings as well as purchases of their bonds,” Carnival, and others, were able to lower those interest rates and grab a ton of taxpayer money by way of lender investment.
“I thought that (it) was a disgrace. But you know what? We’re in an era today where nothing is a disgrace”Jim Cramer, Mad Money, CNBC
On his business news show today, CNBC’s Jim Cramer—not known for being a wide-eyed socialist—called the bailout of Carnival Cruise Line a “disgrace,” explaining that if the government is arguing it has a finite amount of resources for bailing out our economic engines of business, why would someone give money to a failure of a cruise ship business? Asking out loud what the logic was, Cramer wondered if big bailouts from the Federal Reserve were “limited to companies run by Micky Arison.” (a friend of President Donald Trump).
“Let’s say you’re the Federal Reserve,” Cramer said. “Do you want Macy’s to go under? Is that more important or less important than Carnival? Carnival — which was a principal, let’s say, purveyor of Covid-19 that’s killed a lot of people. Macy’s hasn’t killed anybody. Should we give Macy’s a loan? Should we help them out? Or are we limited to companies that, run by Micky Arison?
We’ll leave you with a sampling of tax-payers rage tweeting as they learned about the bailout.
“Free market? Then why the corporate bailout? Carnival Cruises? Ruth Chris Steakhouse? Free market my ass.“
“How On Earth Did They Qualify For American Tax Payer Bailout Money ?? How Are Floating Petri Dishes Essential Businesses Anyway??“
“They pay NO TAXES but get a bailout while Trump wants the Post Office to go broke.“
“If I float down the LA river on a used mattress does that qualify me for that sweet cruise ship bailout cash? “
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