11–20 of 136 posts
If the real goal here is to save jobs, this is all completely irrelevant.
If a company can issue stocks or bonds and needs to raise money, it should issue stocks/bonds instead of getting bailed out by the government. If no one's buying, talk to the Fed.
The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt. Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much…
However, the issue is employees are also hurt, not just equity and debt holders.
Edit: I don't see how you can disagree with this statement. Literally the only job of a PE firm is retain and create value for investors. They would be out of business if they did not do that. Hence, they care about preserving capital. With the caveat that this is in aggregate across the portfolio.
I don't disagree, however, that there needs to be significant regulation and social safety support for workers. I believe there needs to be significant changes to ensure we protect worker rights.
If the real goal here is to save jobs, this is all completely irrelevant.
Can we just do an expedited chapter 11, so the company is still functional when things come back online, but instead of the current shareholders you would have the current credit holders at the helm?
Earlier quoted context omitted.
The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt. Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much…
It's disingenuous to say PE doesn't care. They have every incentive to preserve and generate equity value. That is literally their business. However, the issue is employees are also hurt, not just equity and debt holders. Edit: I don't see how you can disagree with this statement. Literally the only job of a PE firm is retain and create value for investors. They would be out of business if they did not do that. Hence…
If a company can issue stocks or bonds and needs to raise money, it should issue stocks/bonds instead of getting bailed out by the government. If no one's buying, talk to the Fed.
Companies are already going to get better rates because of infinite QE. But they want even better valuations with bailouts.
Earlier quoted context omitted.
The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt. Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much…
It's disingenuous to say PE doesn't care. They have every incentive to preserve and generate equity value. That is literally their business. However, the issue is employees are also hurt, not just equity and debt holders. Edit: I don't see how you can disagree with this statement. Literally the only job of a PE firm is retain and create value for investors. They would be out of business if they did not do that. Hence…
There are massive financial incentives to lever to the hilt. Back in the day social pressures restrained it. In the 1980s that all went out the window.
https://www.gsb.stanford.edu/faculty-research/working-papers...
Earlier quoted context omitted.
It's disingenuous to say PE doesn't care. They have every incentive to preserve and generate equity value. That is literally their business. However, the issue is employees are also hurt, not just equity and debt holders. Edit: I don't see how you can disagree with this statement. Literally the only job of a PE firm is retain and create value for investors. They would be out of business if they did not do that. Hence…
Buy companies, layoff and outsource staff. Over work those that are left. PE is already bad for employees.
I am arguing for worker protection. Not protection of equity value. You inherently take on risk by deploying it, and should accept the realities of that risk.
If a company can issue stocks or bonds and needs to raise money, it should issue stocks/bonds instead of getting bailed out by the government. If no one's buying, talk to the Fed.
The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt. Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much…
yes, at least these 3 things:
* remove the tax advantage of debt over equity (currently debt payments reduce tax burdens).
* remove the tax advantage of capital gains over ordinary income.
* on any bailout, massively cram down the equity holding of the PE firm(s) and all executives by issuing new shares to every other stakeholder besides them, including other shareholders (if there are any, typically not), employees, suppliers, and debtholders, mitigating the too-big-to-fail moral hazard.
Earlier quoted context omitted.
It's disingenuous to say PE doesn't care. They have every incentive to preserve and generate equity value. That is literally their business. However, the issue is employees are also hurt, not just equity and debt holders. Edit: I don't see how you can disagree with this statement. Literally the only job of a PE firm is retain and create value for investors. They would be out of business if they did not do that. Hence…
Buy companies, layoff and outsource staff. Over work those that are left. PE is already bad for employees.
If the real goal here is to save jobs, this is all completely irrelevant.