I see that the matter of T’s massive debt load has been widely discussed in the media, along with the possible consequences. Think that we have no idea how potentially dangerous this situation is, especially if things don’t turn out the way the leadership planed. While the company is performing ok this will not be such a big issue, at least for the time being, but what will happen if the company started to lose revenue and the cash flow is reduced. I don’t even have to mention that there is a strong possibility of that happening, given that the company is in a transitional stage towards its media business and we have no clear path or vision at this point.
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"The chairman of the Federal Reserve said its key interest rate was “just below” a neutral level"
If the interest rate doesn't equal the inflation rate, then, we can forget what the fed "says", because rates are still stimulative. If someone can pay back a loan with cheaper money than the money loaned, there is no way that the terms are "neutral".
The government increased Social Security 2.8% for year 2019, so a Fed rate less than 2.8% is not neutral. Regardless of what the Fed does, I see interest rates rising unless the Fed reengages in "quantitative easing", otherwise known as "money printing". Money printing is the only avenue for central banks to destroy the supply/demand of auction markets.
As far as AT&T is concerned, it seems that they were quite aware that interest rates would rise and scheduled their debt accordingly. The proof in the pudding will come in December, an anniversary of when they last hiked their dividend. We'll see if they hike again.
There is definitely massive budget cuts coming down the pike for 2019, my manager said he heard budgets will be cut anywhere from 25% to 75% depending on the area. Also FMP's coming in January, 15% -20%.
Will AT&T’s Debt Interfere With Its Massive Dividend in the Coming Years?
By Jon C. Ogg November 28, 2018 7:10 am EST
It has been quite obvious that corporations buying back billions of dollars worth of their own stock have helped to support and prop up equity prices in recent years. Now that 2018 is winding down and 2019 comes into focus, there is starting to be a growing concern about all the debt that is maturing from the low-rate era that had been in place under quantitative easing. This is where companies may have to decide to pay down debt rather than simply issuing more bonds at higher interest rates.
If companies find themselves in a place where they have to use cash to retire debt rather than buying back billions of dollars worth of stock or increasing their dividends, how will the investment community feel about those companies? 24/7 Wall St. recently reviewed many of the Dow Jones industrial average stocks to decide which companies may and may not have to worry about the debt maturities from 2019 to 2022.
AT&T Inc. (NYSE: T) is no longer a member of the Dow Jones industrial average, but with major acquisitions having been made, it has a very large debt burden now at the same time that it has a sky-high dividend yield. Investors and analysts alike begin to have a harder time forecasting investing models when companies are rapidly adding or shedding assets. AT&T is a very different company than it was just five years ago, and it has been making some smaller sales as well.
Fed soothes rate-hike concerns
Updated 54 minutes ago
The chairman of the Federal Reserve said its key interest rate was “just below” a neutral level, suggesting The central bank chief also said in a closely watched speech Wednesday that the U.S. economy continues to perform well, but that highly leveraged businesses were at risk in the event of a slowdown. Do you hear that Randall? it is closing in on YOU, lol
This company is about to start bleeding money like dinosaur p00 p00 leaks out of a T-rexs #2 hole
It is troubling. The high debt and rising interest rates will mean that the company is going to start to burn through cash quicker. (This is what happened at GE)
I think what we will see first is a massive capital crackdown. (Probably already seeing this). Capital spending on projects will start to dry up and then cascade from there as expense and liability cuts