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What constitutes "too big to fail" keeps getting smaller and smaller. 

It took Fed Intervention to save Carnival.

It was mid-March and the vultures were circling Carnival Corp., the largest cruise-line operator in the world.

That all changed on March 23 when the Federal Reserve defibrillated bond markets with an unprecedented lending program. Within days, Carnival’s investment bankers at JPMorgan Chase & Co. were talking to conventional investors such as AllianceBernstein Holding and Vanguard Group about a deal. By April 1, the company had raised almost $6 billion in bond markets, paying rates far below those executives had discussed just days earlier.

The previously unreported tale of Carnival’s rescue shows how effective the Fed has been in turning the debt spigot back on for large corporations. 

The idea of a cruise company raising so much new debt even as the pandemic worsened caught many by surprise. Nevertheless, fear of missing out attracted more investors. When Carnival officially sold a $4 billion bond on April 1, it had enough demand to cut the interest rate down to 11.5% and issue a $1.75 billion bond that could convert into stock.

Carnival could easily file for bankruptcy reorganization and reschedule debt payments.

One of my friends commented "This is just a play to save the equity, who are Trump’s friends."

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OK but why would the Fed do this?

"Because he has appointed a ball-less group of wimps. It largely does what he wants. Particularly on a petty issue like this," replied my friend.

Hooray - Another fed-sponsored zombie.

Who's next?

Mish