"Your ability to plan for investment is obviously affected. You kind of don't know what your cost of capital six months from now is going to be," Stephenson told The AP. "We'll just be very guarded, cautious in terms of where we invest, very guarded and cautious in terms of hiring and capital spending. We'll see where this situation goes."
Economist David H. Wang told BloggingStocks Wednesday AT&T's (NYSE: T) challenges selling commercial paper underscore the nature of the financial crisis and the need for lawmakers / policy makers in Washington to act, "with all deliberate speed."
"When a cash-rich giant like AT&T, the corporate equivalent of an 850 Tri-merged FICO score, has trouble selling commercial paper longer than overnight, a bell should go off in your head," Wang said, adding that he does not own shares of any telecom company.
AT&T shares closed Wednesday up 17 cents to $28.09. AT&T has strong cash flow, Wang said, and a strong presence in the wireless phone, landline, and Internet sectors, along with the world's largest, international telecommunications network.
Economic Analysis: AT&T, the once broken up 'Ma Bell' and now regrouped giant, is a huge cash cow. Further, as a utility, it is a low-risk stock. It should have no problems selling commercial paper and the company's challenges in this regard further demonstrates why U.S. Congressional (and probably later European Union) action is necessary to stabilize the financial markets and increase the flow of credit.
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Reader Comments (Page 1 of 1)
10-10-2008 @ 5:35PM
DON said...
I GUESS IT'S TIMES LIKE THESE THAT YOU FIND OUT HOW YOUR UPPER LEVEL MANAGEMENT IS WORTH THIER MONEY. LOOKS LIKE 3RD LINES ON UP CAN'T FIGURE OUT HOW TO SAVE AND USE MONEY WISELY. I'D START LOOKING THERE. TOO MANY OVERPAID NONE THINKERS AND TOO MANY REACTIONAIRIES . RMEMBER HACKING AND SLASHING GETS SHORT TERM RELIEF WITH LONG TIME CONSEQUENCES. KIND OF LIKE CUTTING OFF YOUR ARM BECAUSE A BEE STUNG YOU ON YOUR FINGER.