Yeah, with the house as collateral (assuming one even wants a house) and a knock on their credit rating if they miss a payment they have to pay for 10-30 years… comparable to multi billion $ unsecured debt these folks can get at similar rates at current yields to maturity values for 5-10 years… lol
If you call the bank in advance - especially post Covid - a lot of times they won’t ding your credit for a missed payment. Besides, the two biggest things most people need credit for are home loans and car loans. You can get a car with less than perfect credit or even get a beater for cash.
And yet, somehow, being able to get two collateralized loans for peanuts in value are comparable to being able to get many uncollateralized ones rolled over for years (yes they were junk before covid) for billions…
No gross mis-allocation of resources or moral hazards as far as one eyes can see… surely the companies will use these funds much better this time for capex… lol
Total US mortgage debt and corporate debt are around the same size - roughly $15 trillion each. Mortgage and corporate bondholders have both seen principal losses in recent history. Fed support is pushing down both types of rates, and it’s not obvious to me that one is somehow unfairly pushed down more than the other.
Perhaps you are one of the few who can get an uncollateralized loan for billions to pursue endeavors that cannot pay for themselves and be able to continue to finance it with more uncollateralized debt…