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.
Yeah, well, Asset Owners and the Speculators who caused the 2008 Crash got saved by Governments all around the World with public money and that was done by taking money away from those whose income comes from their Work (notice how salaries keep getting less and less able to cover living costs all the while asset prices keep beating records).
What I learned from the 2008 Crash - being right smack in the middle of the Industry which made it happen and spending the subsequent years observing what Governments were doing to “recover” from it and trying to figure out “how did this happen” - was that politicians don’t work for most people, they work for a handful of people, and when push comes to shove they’ll sacrifice the rest to make sure those few keep on accumulating riches.
The fishy speculation that played around the line separating Legal from Fraud has in the aftermath of the 2008 Crash fully became Fraud and more, once the industry figured out that politicians from the main parties had their backs, which is why we find ourselves were we are now. This was especially so in places like the US and UK were power is a duopoly which just alternates between two groups of politicians who all frequent the same social circles and send their children to the same private schools.
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.
Yeah, well, Asset Owners and the Speculators who caused the 2008 Crash got saved by Governments all around the World with public money and that was done by taking money away from those whose income comes from their Work (notice how salaries keep getting less and less able to cover living costs all the while asset prices keep beating records).
What I learned from the 2008 Crash - being right smack in the middle of the Industry which made it happen and spending the subsequent years observing what Governments were doing to “recover” from it and trying to figure out “how did this happen” - was that politicians don’t work for most people, they work for a handful of people, and when push comes to shove they’ll sacrifice the rest to make sure those few keep on accumulating riches.
The fishy speculation that played around the line separating Legal from Fraud has in the aftermath of the 2008 Crash fully became Fraud and more, once the industry figured out that politicians from the main parties had their backs, which is why we find ourselves were we are now. This was especially so in places like the US and UK were power is a duopoly which just alternates between two groups of politicians who all frequent the same social circles and send their children to the same private schools.
It’s a big group and we ain’t in it.