“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx
Jan 18, 2010
The market for junk bonds – bonds issued by already very indebted companies – is soaring once again. Ford Motor Credit, up to its ears in debt, issued 4.6 billion dollars in such bonds in 2009, for example. Clear Channel Outdoor, another highly leveraged company, issued 2.5 billion dollars worth of bonds that, because they are risky, pay much higher rates of interest.
In 2008, in the midst of the financial meltdown, there were almost no such bonds issued. But in the last few months, businesses with dubious financial health are once again borrowing from banks seeking very profitable places to put their money... very profitable because they are so risky.
Companies that borrow heavily to finance their activities pay a stiff price – which they take out of the hide of their workers, laying off some workers, intensifying the exploitation of those who remain.
The fact that the market for junk is booming again tells us all we need to know about this so-called “economic revival.”
It’s not just some bonds that are “junk” – the word describes the entire capitalist system today.