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Private equity bought America's essential services

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Re: Private equity bought America's essential services

#221

Post by jasode »

FuriouslyAdrift wrote: post #186
spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

Pension funds still exist?

The pension plans for many government employees still exist. CalPERS (California Public Employees' Retirement System), Illinois Teachers Pension, etc. (https://en.wikipedia.org/wiki/List_of_largest_pension_scheme...)

It's the corporate businesses that have gotten rid of pensions in favor of 401k plans.

Re: Private equity bought America's essential services

#222

Post by piva00 »

protonbob wrote: post #201
nekusar wrote: post #196

Earlier quoted context omitted.

> How does one solve pensions? I was thinking that Covid and widespread antivaxxer mentality would have. But no. This will be the latest ladder-pull by the boomers and silents to extract the last bit of wealth from all the younger generations. And this will impoverish gen-x and all younger generations even more so than we already are.

[flagged]

It lowered the chances, and in case of getting sick it also massively lowered the chances of getting the worst side-effects, exactly like any other vaccine does.

It's a shame that even highly educated populations do not understand a basic fact of immunology.

Re: Private equity bought America's essential services

#223

Post by adolph »

akudha wrote: post #156

If the waiting time for a fire truck is 4 years, can't fire departments import from abroad?

An interesting aspect of this story is that America has an idiosyncratic approach toward firefighting vehicles that demands very large bespoke vehicles from a limited set of vendors [0] that are primarily used to bring a set of first responders to medical emergencies. [1] This philosophy carries on to other aspects of fire fighting like the very famous wooden ladders of San Francisco. [1]

Cost insensitive customers with bizarre business requirements, what could go wrong?

0. https://www.slashgear.com/1890538/why-american-fire-trucks-b...

1. https://www.pulsara.com/blog/why-does-911-send-a-fire-truck-...

2. https://sf-fire.org/our-organization/division-support-servic...

Re: Private equity bought America's essential services

#224

Post by Erem »

amazingamazing wrote: post #115
miltonlost wrote: post #103

Earlier quoted context omitted.

Everything is vague to you. All you're doing is concern trolling for monopolists

It really is sad that any disagreement with “pe is bad” means i am concerned trolling. Ever consider the guidelines are actually vague which is why usa keeps failing in attempts to enforce?

Don’t confuse the nature of the feedback you’re receiving here. Your comments in this thread are so obstinate and so far from this forum’s standards of good faith argument that community members can’t help but perceive you as a troll.

Nobody likes this state of affairs so we are asking you to stop strawmanning and start steelmanning the posts you are responding to.

You are clearly not dumb, so stop responding to the dumbest possible and easiest to dismiss interpretation of other people’s comments and instead go deeper

Re: Private equity bought America's essential services

#225

Post by mamonster »

nemomarx wrote: post #153
spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

Why don't pensions just invest in index funds generally? High required rate of returns or?

There are multiple reason:

1. If you assume that P.E is uncorrelated/has a low correlation to the stock market (subject of many years of diatribes), then you decrease volatility of your portfolio by adding it.

2. Because a pension fund has a lot of years until they need start to paying out, then it is natural for it to attempt to harvest the illiquidity risk premium.

3. The (edit: removed extra words) "high required rate of return problem" is really a defined benefit problem. A DC plan can (and probably should) just be in mostly straight indices unless it's so big it can negotiate a good fee with asset managers for other classes.

Re: Private equity bought America's essential services

#226

Post by elevation »

burkaman wrote: post #175
elevation wrote: post #113

Not all PE problems are existential; they will be outcompeted. What keeps a newly graduated Veterinarian from opening her own clinic and undercutting the PE competition? With no massive loans on her books, she can profitably offer lower prices than PE can. She may even drive the local PE clinic out of business.

How is a new graduate supposed to start a business without a loan?

Could a veterinary business not be bootstrapped?

Assuming you had $$$ for some supplies but couldn't afford to lease a commercial building, you could provide small mammal services from your vehicle, driving to people's homes to give vaccinations and well care.

Being mobile would also allow you to serve a larger market than a fixed clinic; you could serve a couple small towns on Monday, a couple others on Tuesday, and server a larger metro on the weekends.

Once you're consistently profiting $$$$/day you'll be able to start saving for the equipment you'll need for a commercial lease somewhere because you have both the cash, cash flow, a loyal customer base, and critically, a good sense of where a good location would be to serve them from.

Re: Private equity bought America's essential services

#227

Post by palmotea »

amazingamazing wrote: post #107
miltonlost wrote: post #100

Earlier quoted context omitted.

How is going back to a policy that used to work "vague and unactionable"? It literally had been actionable.

It did not work though. Bell and Standard Oil are notable examples. What else?

> It did not work though. Bell and Standard Oil are notable examples. What else?

That's pretty unfair. IIRC, Standard Oil was on of the companies that was the impetus for antitrust law (and broken up by it), and AT&T was broken up (famously) in the 80s.

Basically, your "argument" is a troll or a deep and basic misunderstanding. Especially in the case of Standard Oil. You're basically saying the law doesn't work because it didn't work before it existed (Standard Oil became dominant in the 1870s or 1880s and the Sherman Antitrust act wasn't passed until 1890).

Re: Private equity bought America's essential services

#228

Post by jmyeet »

spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

This reads as apologia, blame-shifting, "I was just following orders".

People have to eat. They need water. They need a roof over their head. Nobody has to buy out all the veterinarians in an area at rates they can't say no to, have them sign non-competes and them jack up all the prices by 300% because, hey, you now own all of them. Nobody has to buy up all the trailer parks, which are normally peopple's last stop before being homeless, and then jack up the ground rent because, hey, where else are they going to go? Nobody has to buy up utilities, spend big on capex because legally you can pass on that charge and effectively double people's electricity bills.

Hannah Arendt coined the term "banality of evil" [1] decades ago and, in all honesty, I think it applies to the predatory nature of PE. It also goes for working for Palantir and a bunch of other companies. "I need to pay my student loans", "I'm just doing data science", "I'm just writing AI software that identifies when somebody is home" and on it goes.

PE serves no useful function in society. It's pure rent-seeking and incredibly predatory in many cases. ~15 years ago, there was a story about Goldman Sachs invented a derivative on the price of wheat and then essentially conspired to jack up the price of wheat [2]. This wasn't just manipulating a ticker on a Bloomberg terminal. It had real-world consequences. People starved and died because of this decision.

Yet I'm sure there were people who argued "I'm just doing legally allowed financial engineering here".

[1]: https://aeon.co/ideas/what-did-hannah-arendt-really-mean-by-...

[2]: https://theecologist.org/2011/sep/13/how-goldman-sachs-start...

Re: Private equity bought America's essential services

#229

Post by asolove »

zdragnar wrote: post #167
miltonlost wrote: post #129

Earlier quoted context omitted.

[flagged]

> Companies can be bought and sold but not if it creates concentrations of economic power that allow them to dictate prices to vendors or customers. The policy in question (as stated) should have prevented Ma Bell and Standard Oil from getting to the point of being broken up.

1. If you are proposing something even stricter than previous antitrust rules, great. But getting back to antitrust itself is actionable is step 1.

2. You don’t have to prevent every case before it happens so much as just stochastically go after the worst ones to make it less economical for people to go take on debt to have huge swaths of consolidation. Letting the market work, after pricing in that egregious monopolies will be broken up, is kinda great and better than minutely scrutinizing every tiny deal for long-term consequences.

Re: Private equity bought America's essential services

#230

Post by aidenn0 »

FuriouslyAdrift wrote: post #186
spyckie2 wrote: post #118

The irony is that PEs exist largely because of pension funds. So to sum it up (not so nicely) we are transferring value from our current standard of living to pay for retirement checks for our old folks. Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent. If they do not have the higher PE returns, they basically go out if cash in 10 years and everyone w…

Pension funds still exist?

Many government employees have pensions. Most of the ones I know are also ... skeptical of the future solvency of those funds by the time they retire.
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