Comments by "How Money Works" (@HowMoneyWorks) on "THE FED JUST BAILED OUT THE STOCK MARKET" video.

Great video, Graham. I will say, though, the characterization of them giving money to companies isn't exactly what's happening. These bonds have already been issued and are (in the case of current Fed activity) frequently held by bond ETF's. Buying a bond on a secondary market is like buying a stock on a second market. The money has already been issued to the company, they just have the right to the payments a company makes on that bond. So, what's the point? The mass purchasing of bonds increases the price of these bonds which lowers the yield, making them easier to refinance. Refinancing a low yielding bond allows them to seek cheaper interest rates, which takes a burden off a company's cash flow.
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