Private Equity Destroying America

GFD. Even if I don’t have a specific complaint on principle this is depressing. We used to be a country, a proper country.

 

Another doozy, not at all surprising though.

 

Glad, I took care of my vinyl and a working turntable/receiver/speakers.

 

that's generally not a great way to make money though.

 

Not in the long run, no. I listened to a Lex Fridman podcast today with Liv Boeree as the guest, and it was interesting how she talked about Moloch, this quasi-mythical god in Leviticus that demanded child sacrifice for success in war. Basically, you have to sacrifice something of immense value for short term gains. So if a fund is based off of this month's return, I could see this kind of behavior, akin to the housing markets pre 2008.

Win now at all costs, no matter what it costs us in the future.

As always, I am no economist nor am I a business man, but I can see how short term gains at the cost of long term gains could be incredibly seductive in the right kind of field.

 

It is if you do it over and over though. See - the 1980s.

 

In this context you’re not sacrificing long term gains though as you aren’t going to hold whatever it is you bought. You’re just borrowing X dollars to buy a company, transferring X in debt to that company, stripping the company for parts and let the company sink unable to service the debt.

 

Or, in an experience I’ve actually had, PE buys a very profitable company using debt, but at a preposterous valuation. So the company that previously was killing it now loses money servicing debt that wasn’t needed or used to actually fund the company. Then you cut where you can and skate along, maybe grow a little then sell to another PE firm or anyone who will buy it at another preposterous valuation.

It’s a fugayzi. It doesn’t exist. It is no matter. It is not on the elemental chart. It’s not effin real.

 

it worked at first and then people lost their shirts once everyone was going after the same assets