After my time in Finance (which, curiously, also involved a Crash in the Industry I was working in)
A-ha! We’ve found the cause of the market crashes.
Joking aside, I was around for the dotcom bubble burst and the 2008 crash. Both were caused by wild speculation and we seemed to have learned nothing from them. I have little doubt we’re headed for another recession and it will again, be driven by speculation. We also have a problem with private equity (I call them “vulture equity”) which likes to capitalize on businesses which are struggling . They swoop in, buy up the company in a leveraged buyout, and then start extracting as much value from the company as possible. Usually this is in the real estate that the company owns. Once all of the value is extracted, the company is spun back off, saddled with the debt used to buy the company in the first place, and then it flounders until it ultimately collapses. This was the fate of companies like Sears or Red Lobster. Once a vulture equity company engages in a leveraged buyout of a company, that company is doomed.
A-ha! We’ve found the cause of the market crashes.
Joking aside, I was around for the dotcom bubble burst and the 2008 crash. Both were caused by wild speculation and we seemed to have learned nothing from them. I have little doubt we’re headed for another recession and it will again, be driven by speculation. We also have a problem with private equity (I call them “vulture equity”) which likes to capitalize on businesses which are struggling . They swoop in, buy up the company in a leveraged buyout, and then start extracting as much value from the company as possible. Usually this is in the real estate that the company owns. Once all of the value is extracted, the company is spun back off, saddled with the debt used to buy the company in the first place, and then it flounders until it ultimately collapses. This was the fate of companies like Sears or Red Lobster. Once a vulture equity company engages in a leveraged buyout of a company, that company is doomed.