Who employs your doctor? Increasingly, a private equity firm • Hacker News Board

Re: Who employs your doctor? Increasingly, a private equity firm

#401

Post by wpietri » Mon, Jul 17, 2023, 7:54 PM UTC

swsieber wrote: post #237

wpietri wrote: post #81

Earlier quoted context omitted.

If your standard for "conclusive" is "study must fork the universe to compare the same business with different timeline" then you may be waiting a while. Regardless, in this case, where the ongoing harm could be very large, we have to at some point go with the best evidence available.

I mean... people who go to cancer clinic have cancer at a higher rate than those who don't. Cancer clinics cause cancer. And therapists create mentally unstable people, etc. You wouldn't have to fork the universe. I think a randomly distributed trial would work, and could be reasonably made to work. Not sure though. FWIW, I think we should prevent private equity in lots of places, especially hospitals.

I think doing a randomly distributed trial would be very challenging. How do you imagine funding it? How do you imagine getting PE to agree to buy random things rather than strategic things? Do you expect them to turn down 50% of almost-closed deals to keep it closer to random? How would you keep things being distorted by the money you'd be giving to PE to get them to change their behavior?

And what additional knowledge do you hope to gain versus a study design like this one that would be justified by the much larger expense?

Re: Who employs your doctor? Increasingly, a private equity firm

#402

Post by wpietri » Mon, Jul 17, 2023, 7:56 PM UTC

starcraft2wol wrote: post #279

wpietri wrote: post #194

Earlier quoted context omitted.

I think it's hilarious that somebody who has been here for all of 11 days wants to tell somebody who is coming up on their 10-year HNiversary what "we generally prefer".

I'll let you figure that one out on your own.

Oh, I did. I figure it means you're the kind of person who knows he's going to be a dick but wants to do it under a disposable identity to as not to harm his score. So you're not just a jerk, but a calculated jerk.

Re: Who employs your doctor? Increasingly, a private equity firm

#403

Post by multicast » Mon, Jul 17, 2023, 9:17 PM UTC

civilized wrote: post #361

multicast wrote: post #342

Earlier quoted context omitted.

Wrong. Banks who provided billions in loans to PE firms for decades, are now getting more cautious. But not because they fear of a failed investment, but certain investors of the bank do and that means problem for the bank. The Banks actually don't care what happens to the company being bought. An investment bank which provides a loan never sits on its debt. They are bundled into financial products like CDO, CLO etc…

The comment above completely fails to address the parent's claim. The parent claimed outright corruption in some cases, and cited an article which extensively documents such outright corruption. "Wrong" is applicable to this reply rather than the original post.

Again, wrong. The original post completely fails in its argumentation. As I stated above the investment banks providing the loans are not 'perpetual suckers'. They know what they are doing. If PE financing were such a bad game nobody would provide loans in the first place. An industry achieving good returns for decades does simply not need to bribe capital providers. Bribing high ranking decision making bankers is the most ridiculous thing I've ever heard, this is not an governmental official. Claiming overall corruption as a fact and linking to one article (which isn't even about the capital providers for PE firms - the overall point of the original post) is simply irrelevant.

Re: Who employs your doctor? Increasingly, a private equity firm

#404

Post by multicast » Mon, Jul 17, 2023, 9:35 PM UTC

ComputerGuru wrote: post #353

multicast wrote: post #342

Earlier quoted context omitted.

Wrong. Banks who provided billions in loans to PE firms for decades, are now getting more cautious. But not because they fear of a failed investment, but certain investors of the bank do and that means problem for the bank. The Banks actually don't care what happens to the company being bought. An investment bank which provides a loan never sits on its debt. They are bundled into financial products like CDO, CLO etc…

I wasn’t referring to the banks but the owners (or rather, the controllers) of the businesses that can obtain cash against the value of their property/assets or from the value of their business. These aren’t always individual loans in the hundreds of millions of dollars; the debt can be accrued piecemeal. (I’m also not talking in general but rather about certain specific cases/forms.)

In a high interest rate and pessimistic market environment, raising funds for a stumbling business is not easy at all. PE firms are specialized in such risky investments, thus the option of a buyout from a PE firm is the best thing that can happen to an owner. Its the owners own free will to sell or getting the hard way and try to save his business.

Re: Who employs your doctor? Increasingly, a private equity firm

#405

Post by lobocinza » Mon, Jul 17, 2023, 10:43 PM UTC

raincole wrote: post #173

monero-xmr wrote: post #122

Earlier quoted context omitted.

Unlike in Europe and the UK, where such political influence from corporations and the wealthy never happens /s At least in the US we (try) and make donations public. The places where it’s “banned” are black holes.

You logic: 1. In Europe and UK, bribery (Let's not sugercoat it as "lobbying". We all know what it is.) is illegal. So people will just do it secretly. In other words, legislation doesn't prevent bad things, in this case, bribery, from happening. 2. In the US, bribery is legal, but hiding the records is illegal. So people will make it public. In other words, legislation does prvent bad things, in this case, covert br…

IMO both are the same. They will take bribes when they can get away with it. In Brazil lobbying is illegal but prevalent and politicians hardly goes to jail and if they go is only because they where being incovenient to their peers. And voters most of the time are clueless and only care about corruption when the other side is doing it. Government main business is expropriating others wealth and redistributing among themselves and their friends.

Re: Who employs your doctor? Increasingly, a private equity firm

#406

Post by lobocinza » Tue, Jul 18, 2023, 12:29 AM UTC

HWR_14 wrote: post #234

sgregnt wrote: post #179

Earlier quoted context omitted.

For me and my friends free market is not a religion, it is thoroughly thought out concept that proved it self over and over again. I this your count misrepresent the reality. In my mind, people who oppose free market capitalism usually don't understand how it works. The good thing is that reality is what settles the debate. What happens is that people vote with their feet --- and millions of ambisious people from cou…

> millions of ambisious people from countries where there is less free market economy are desperately trying to come to US to realize their full potential, but not the other way around. I'd like to see your statistics on immigration and emigration. Most people coming to America are coming from Mexico or the Caribbean, which I would consider to be free market capitalist societies, just poorer ones. How is the free mar…

Is Mexico more business friendly than the US? Certainly the US is more business friendly than Brazil from which many immigrate. Though being business friendly goes beyond free markets. Other factors help: the dollar standard, American culture, US geography. But I think you're right immigrants are looking for better opportunies rather than political reasons and culture is a main reason why some emigrate back.

Re: Who employs your doctor? Increasingly, a private equity firm

#407

Post by eaenki » Tue, Jul 18, 2023, 1:28 AM UTC

fakedang wrote: post #174

civilized wrote: post #109

Earlier quoted context omitted.

I think it should be illuminating to balance narratives like this with simple questions along classical economic lines: 1. Why is private equity ending up with all these resources? Who is selling to them and why? Why didn't this happen before? It's not like PE is new. 2. When PE loads up a firm with supposedly unsustainable billions of debt, someone is on the other side of that transaction, lending the billions. Who…

1.) PE is enabled by easy money. If you look at the PE industry, the entire sector was enabled initially through the rise of junk bonds in the 80s, bonds so "worthless" but cheap issued by high risk companies (everyone was issuing bonds back then) with high reward for the winners - kinda like VC as an investment. In recent history, it was the ZIRP and of late money-printing. Easy money with high returns always pulls…

how is “emerging markets” even a sector? it’s not like you can call PE buying a bond in India.

so what does that even mean? do you mean that they are doing traditional LBOs in emerging markets?

Re: Who employs your doctor? Increasingly, a private equity firm

#408

Post by fakedang » Tue, Jul 18, 2023, 7:31 AM UTC

eaenki wrote: post #407

fakedang wrote: post #174

Earlier quoted context omitted.

1.) PE is enabled by easy money. If you look at the PE industry, the entire sector was enabled initially through the rise of junk bonds in the 80s, bonds so "worthless" but cheap issued by high risk companies (everyone was issuing bonds back then) with high reward for the winners - kinda like VC as an investment. In recent history, it was the ZIRP and of late money-printing. Easy money with high returns always pulls…

how is “emerging markets” even a sector? it’s not like you can call PE buying a bond in India. so what does that even mean? do you mean that they are doing traditional LBOs in emerging markets?

So emerging market investing is quite different from normal developed market investing, simply because each dollar goes for a lot more in an emerging market.

To give an example, the RJR Nabisco takeover cost KKR north of $30B in the 80s. Massively leveraged takeover that ended up flopping so hard because of the amount of debt that KKR loaded up Nabisco with. But if a PE firm were to seek a similar Emerging Market equivalent opportunity, say Ulker Biskuvi in Turkey, it would only cost it $500 million. The PE firm does not need to load the company with debt - they can simply cut costs in the company, increase cash flow and make pay from that, eventually listing/selling off the asset on the local market (on the other hand, a Nabisco relisting would have been a nightmare for banks).

A similar thing is happening in India currently - Blackstone is buying up commercial real estate by the boatload in India. Expensive for local PE firms, but relatively much cheaper for Blackstone compared to buying stuff in Europe for instance.

Re: Who employs your doctor? Increasingly, a private equity firm

#409

Post by thisgoesnowhere » Tue, Jul 18, 2023, 1:11 PM UTC

bagacrap wrote: post #394

thisgoesnowhere wrote: post #386

Earlier quoted context omitted.

Stripe is great and is just a massive boost to the entire industry. Shopify is also great, Apple makes great products, Google search is fantastic. I could go on.

I don't know the full history of each of these companies, but it wasn't my impression that Google or Apple really started with a lot of VC funding. Sure there had to be some kind of private investment to kick start them, but they became profitable on their own pretty quickly. "VC" to me is associated with finding an outside source of cash to fund your money losing business until you can drive competitors under. If re…

Yeah I think this is just semantics. Parasitic VC is bad and good VC is good. We can agree on that.

Re: Who employs your doctor? Increasingly, a private equity firm

#410

Post by IIsi50MHz » Tue, Jul 18, 2023, 3:30 PM UTC

thfuran wrote: post #177

dcow wrote: post #111

Earlier quoted context omitted.

Honestly I've had this happen multiple times recently, where people don't understand revenue vs profit. Profit is what you put in the business bank account after you pay operating costs which includes salaries. You can make fuck you money by making idk $2MM per year. That doesn't come out of profits. Profits are commonly paid out to owners/investors in the form of dividends.

That's sophistry. Yes, accountingwise, revenue and profit aren't the same thing, but if healthcare is going to be raking in so much money that the hospitals are throwing fuck you money at the janitors, it's clearly highly profitable for a lot of people, and they want "nobody to profit from healthcare".

You are both correct in that salaries are net counted as profit of a company, but that a person who receives pay (salary or otherwise) may be, or be seen as, profiting.

"Nobody profiting" might reasonably seem to mean that even employees have little or no net gain from their involvement. Perhaps "no company profiting" fits the intended meaning better?

"Making fuck-you money" might cause somebody to assume "making more money than is acceptable, and uncaringly taking advantage of others", which would seem at odds with not profiting.

The claim of "sophistry" seems unfair and provocative, given lack of agreement on definitions. I am tempted to regard the ensuing reaction to the claim as "a shocked and puzzled look".