Weird Fed purchase of corporate debt puts Apple in the headlines

From the Washington Post’s “Federal Reserve program could buy corporate debt from Apple and subsidiaries of foreign-based firms, prompting questions of whom relief effort should serve” posted Monday.

The Federal Reserve’s disclosure that it could purchase the debt of massive companies such as Apple and Microsoft, as well as U.S. subsidiaries of foreign firms, triggered a fresh debate about the central bank’s norm-shattering response to the economic crisis and whether its efforts are going to the neediest slices of the economy…

[T]he central bank has never bought corporate debt like this before, and it’s unclear what the implications of its actions will be.

William Slaughter, senior portfolio manager at Northwest Passage Capital Advisors, tweeted that “it is exceedingly hard to fathom what public interest the Fed is serving by buying bonds of Apple, Microsoft and Oracle…”

“Who is being bailed out here?” [Brookings’ David] Wessel said. “It’s certainly not the companies — the companies already borrowed the money. The people who are getting help are the people who own those bonds.”

My take: I don’t completely understand this deal. But I can see that Apple is only one of a list of 794 companies from which the Fed buys debt, yet it’s in the headline and half the soundbites.