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Private equity bought America's essential services

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Re: Private equity bought America's essential services

#401

Post by the_sleaze_ »

vjvjvjvjghv wrote: post #239
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.

First, opening a clinic requires some serious money. Then, if the new clinic gets traction, PE can make a very good offer for a buyout and the owner would have to be stupid or very stubborn to refuse. Most big companies these days just buy up competition. Good for the owners but bad for the customers.

Another thing which I've seen personally is that in general getting from 0 to 1 required HEROIC effort to the point that it requires a personality type.

How many veterinarians got into the game to become relentless, driven, scrappy and indomitable business owners vs because they love furry things and helping?

Re: Private equity bought America's essential services

#402

Post by jordanb »

braincat31415 wrote: post #346
jordanb wrote: post #320

Earlier quoted context omitted.

I own a house in Chicago and my property taxes are much lower than my friends in the suburbs. I live in a working-class southside neighborhood. The people who are complaining about property taxes for SFUs in the city are people in neighborhoods with skyrocketing home values. Those people stand to receive a massive windfall when they sell. And while it may be annoying for them if they find themselves having to sell wh…

Nah. I own a property in the gold coast area, and my property values have barely changed in the last 20 years. I only see an insane increase in real estate taxes and assessments. These are the things that price renters out, plus the Chicago housing regulations that leave the landlords without any leverage under pretty much any circumstances and force the risk to be reflected in the rent. Currently net profit from ren…

So sell and buy 10 year bonds. ¯\_(ツ)_/¯

The Gold Cost isn't suffering a shortage of landlords.

Re: Private equity bought America's essential services

#403

Post by Joker_vD »

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…

> we are transferring value from our current standard of living to pay for retirement checks for our old folks

Well, yes, that's how any retirement (or any social benefit, really) system works: people who actually do work support the people who don't. Those latter include children, the elderly, pop-stars, politicians, etc. So unless you make people work until the day they die (which is possible, and have been done in the past, mind you — it just severely decreases the average life expectancy), we're going to transfer some of the created wealth to the elderly. The exact form of how this transfer is performed is a fascinating topic for discussion (make their direct descendants care for them! make a state-, or charity-funded fund to feed them hot soup once a day! make them save up for retirement themselves! lots of options, really) but it will still happen one way or another. After all, some people simply do have lots of money (and keep getting more) with doing no labour; some of them are retirees.

Re: Private equity bought America's essential services

#404

Post by aeternum »

znnajdla wrote: post #393

The Abrahamic religions have a natural safeguard against excessive wealth concentration: ban interest-based loans to private individuals (usury is shunned in the Bible and the Koran) and instead encourage a wealth tax on hoarding that directly transfers charity from the wealthiest to the poorest (tithe or zakaat). Some modern economists have suggested this should work theoretically if properly implemented. See Helmut…

And which countries does this work for? They all still somehow still manage to have palaces.

There's also a strong argument that charity transfers to the poor does far more harm than good. How do you price a field worth of wheat, a mill, or even a local grocery when an airdrop of processed flour and food rations can arrive at any moment with no warning? And how do you get the capital to start one of those when it's illegal to get a loan?

Of course there are solutions if you have enough tenacity, but the overall result is far fewer businesses started because the friction is just so much higher.

Re: Private equity bought America's essential services

#405

Post by brendoelfrendo »

amazingamazing wrote: post #140
brendoelfrendo wrote: post #136

Earlier quoted context omitted.

Why do you present this as a binary to agree/disagree with?

Simply because that is the maximally reduced case and it inevitably will result in the same situation.

> that is the maximally reduced case

It sure is.

> and it inevitably will result in the same situation

Why?

Re: Private equity bought America's essential services

#407

Post by fzeroracer »

elevation wrote: post #226
burkaman wrote: post #175

Earlier quoted context omitted.

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…

Do you know how much it costs to start a business, and how much the average well-off American has saved?

Re: Private equity bought America's essential services

#408

Post by spyckie2 »

bondarchuk wrote: post #379
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…

I don't get it. If pensions stopped existing, would people stop doing PE even though it's profitable? If it is possible to get outsized returns "because pensions need them" then isn't somebody gonna notice and get those returns anyway, pensions or not?

Slavery is profitable. People only stopped doing it when it was perceived as immoral.

Lots of things are profitable but immoral. People will do crazy immoral and illegal stuff for money, but we outlaw and slander the more abusive stuff, like monopolies and such.

If it wasn't pensions that were funding PE, I'm sure PEs would get a lot more criticism and would not be allowed to do what they do.

Re: Private equity bought America's essential services

#409

Post by mountainofdeath »

Of course they would. Private equity looks for the following things 1. Things with an inelastic market and fixed demand. 2. Many overlapping small time competitors. 3. Steady cash flow, preferably with low capital costs though not always

You can take the cash flow, take debt against the companies own cash flow to buy it, pay yourself back, consolidate, then raise the prices on a captive market.

Re: Private equity bought America's essential services

#410

Post by yareally »

Balgair wrote: post #300
scary-size wrote: post #152

Huh, that somehow reminds me of Crassus from Rome [1] > The first ever Roman fire brigade was created by Crassus. Fires were almost a daily occurrence in Rome, and Crassus took advantage of the fact that Rome had no fire department, by creating his own brigade—500 men strong—which rushed to burning buildings at the first cry of alarm. Upon arriving at the scene, however, the firefighters did nothing while Crassus off…

https://en.wikipedia.org/wiki/Battle_of_Carrhae For the curious, above is how Crassus died. TLDR: Got over his skis and mad with power and money. Decides to invade Parthia. Gets wrecked by horse archers. That ends up being typical for Romans, but this was the first-ish time that happened. Some of those captured legionaries may have ended up in China, though it is unlikely. https://en.wikipedia.org/wiki/Liqian#Lost_Ro…

> Gets wrecked by horse archers. That ends up being typical for Romans

I don't think the Western Romans ever really learned from it did they? The Huns ended up wreaking them pretty hard.

I know the Eastern Romans did learn at some point out of necessity by creating their own professional units and hiring mercs.

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