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Saturday, December 7, 2019

Leveraged!

You know companies like Bain Capital?  They buy companies and supposedly make them more profitable.  If course, lots of people loose their jobs and those companies use the purchased company as a piggy bank.  Once the debt of the company is maxed out, they declare bankruptcy and sell off the parts.  Did you know they put little or no money to do so?  They get the company they are acquiring to borrow the money and then use that company as collateral.  After the financial crisis, they made a rule that people getting a mortgage have to put down more money.  Why not companies?

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