“The Fed was buying Hertz Rental Car bonds. Hertz. Just-declared-bankruptcy-Hertz.”
The Hertz bonds were already selling at about 40 cents on the dollar, and that probably reasonably reflects the value of its existing capital stock. I’d be more worried if the Fed was buying Hertz equity shares, which will most likely be worthless after the bankruptcy filing is approved.
I see your point, but the larger (and more ominous) point is how much power would the Federal Reserve would be able to wield. The Fed can create billions of dollars out of thin air. You are the CEO of a company who is critical of the Federal government - bam - the Fed sells off the stock. You make the right campaign contribution - bam - up goes the price of your company’s stock. Can you imagine a Fed Chairman appointed by Hillary? I know the Fed is supposed to independent, but so is the IRS and Justice Department. The potential corruption is practically self fullfilling...