Sugar is bad for us but we love it. We are addicted to debt in the same way.
Anyhow, the silver lining in this is Private Equity might have back off and stop destroying more US companies with rising interest rates. A friend who’s TV station (very profitable BTW due to political ad spending - i.e the last election a month ago cost $9B!!)… was bought by a large private equity firm along a dozen others a few years back - now says they are trimming due to rising interest rates. The TV station was already gutted due to cost cutting… hardware and people haven’t been replaced in years, no more TV helicopter, etc. All the innovative new things they used to try with drones, mobile reporting, and traffic management systems… long gone.
I mean that’s the MO for private equity since the dawn of time, for your friend to expect anything else is just willful ignorance.
You sell to PE when you want out and can see the writing on the wall. Or if you simply don’t care and want to see the company grow due to the cash injection, if all you want is profits.
Oh I know about PE. I warned him that PE would basically gut the company, suck the profits, and saddle it with debt and in the 3 years… that’s exactly what has happened.
Sometimes you are constrained as a public company, and going Private allows for you to reset and better meet the market.
But the vast-vast majority of the time, whatever your mission was before a PE bought you, your mission is now to make another billion for the billionaires, in the most cash efficient way possible. One of my former PE clients got bought to harvest a tax loss (BS was all debt/equipment to RTB, all operational and generating revenue), all their cash was swept from their bank accounts - this business needed $13M/day to transact in their marketplaces. The PE facilitated meetings with their other portfolio companies and made them loan money for operating capital, because they certainly were not dipping into their own velvet pockets full of this company’s cash.
Coming back on topic: too many companies could not exist without free capital, and we are finding that out now. But there is a consolidation cycle that will try and lump any that generate revenue together to squeeze out a few bucks. That’s what they do, and most of them are good at it (not Softbank, but most).
Oh the free money dilemma. But it’s not free, you, I and the rest of the tax payers are paying for it through inflation. Americans just benefited most from it the last century. Now it’s time for the chickens to come home to roost.
Let’s all thank the banking overlords that add so much value to society kiddos.
Shame it takes Elon buying twitter to finally start the global awakening in conjunction with the collapse, that very likely will take place soon. We’ve been complacent too long while living high on the hog taking from productive countries. Now they will attempt to blame the average person and even their pets for what is about to happen.
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”
These guys prediction for interest rate for next year is interesting. They expect fed to raise interest rate once today 50 points at 2pm and then 25 points Febrauray and March then start going down till end of 2023 we would be at .25% again. Either im stupid or some one over there smoking too much of the good stuff.
I personally dont see us getting back to low interest rates till end of 2024 and thats going down to 2-3% not .25%
Yeah, I don’t understand why would it go down as fast as it went up unless the economy freezes over which so far even current rates haven’t brought people to a full stop buying houses or cars. And not just “demand has slowed” but “completely gone”
Although nobody has a crystal ball, this makes for interesting reading. My lease expires in 3 days, might extend for two months but it’s a rock and a hard place right now. Dealers only just realising they have to discount but no trunk money plug high interest rates still make for bad lease. Considering buying a used Porsche but the owners are deluded and putting them for sale at big markups and they sit for months. Maybe it’s Nissan Frontier time
Trying, accountant said I should make a purchase this year to save in taxes, also said he could write off more with a purchase (company car) than a lease…
It depends on how much you drive, but one idea is to get something very used ~$5,000 with full service records, if you want to dump it in 6-12 months, it’s not like it’ll take too much of a tax + depreciation hit versus something 3-6 years old (or new). I have been waiting for late 00’s Caymans and Boxsters to come down to earth (I only drive ~3,000 mi a year), but are still ~25-30% above trend…
Yeah, $70k-$100k on a 997.2 seems crazy right now. But that’s what they are going for, they have come down a bit in the last month. One I’m looking at has dropped $20k in the last month alone.
I wouldn’t trust zero hedge too much, they were outed as a spreader of Russian propaganda some time back, so their motivation for such posts may well be nefarious
Don’t totally disagree but also think pretty much 99% of places now have some agenda or are on somebodies payroll - so I like to read a few on each side and assume the real truth is somewhere in the middle lol
ABC Media Limited, a Bulgarian company, DBA ZeroHedge - where the “editor” is a pseudonym of a character from a novel (made into a movie), ghost written by multiple unnamed people…
Setting aside all their anti-journalistic nonsense (ZH is a blog by a dude who didn’t cut it on Wall Street), I would at least choose a source with a better record of their predictions coming true.
BLS Q2 job numbers overstated by over 1 million says Federal Reserve Bank of Philadelphia. 10,500 net new jobs were added during the period rather than the 1,121,500 jobs…
