This shit should be criminal, but in late stage capitalism US we glorify the people that pull this crap.
What has happened is that the mafia was essentially replaced by “private equity” and now it’s magically legal.
This is very unfair…to the mafia!
Real gangsters live by a code, they have style, they have pizzazz. Tony Soprano was never completely ruthless or amoral.
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Yeah, in a sense, the mafia at least had, like, their territory, and if they sucked it completely dry, they’d have nowhere else to go. Better to shear the sheep many times than skin it once. Private Equity just goes full vampire over and over and over again.
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how does it work, though
they load the company up with debt… who is lending the money? Like, if you know the playbook is that these guys load up the debt until the company collapses, how do you figure you’re getting your money back? Any money you loan to red lobster goes straight into the PE company account and then what?
Like if they’re vampires, which by all accounts they seem to be, how do the marks keep falling for this shit???
Generally, PE aren’t sucking the money from their lenders, who are more than capable of protecting their own interests. They are sucking it from less powerful stakeholders, primarily employees and customers.
Don’t know how the lenders will fare in this particular bankruptcy but only true victims here are people who loved the old Red Lobster and their waiters who live in rural areas where there aren’t plenty of comparable restaurants to work at.
Banks are selling these loans off to suckers the instant they originate them, if possible. That said there is usually collateral and they’re priced to reflect the (usually high) risk of default.
Banks make an absolute killing syndicating these things, assuming they can find bag holders to buy the paper. When they don’t, it looks like Twitter.
Levine wrote about this more today:
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I’m super familiar with VC-fueled “spend money to create growth and ignore profits” strategy, but the PE strategy feels completely alien to me. I mean they both involve a bunch of bullshit and suckering a mark into holding the bag but the tactics seem 100% different past that point
Yeah it’s kinda alien to me too, I think Levine has written about it in a way that kinda makes sense once or twice (and that I have since forgotten) but I’d have to dig through some old newsletters to find it.
Tony was plenty ruthless and plenty amoral I’m not sure what show you were watching. Also real life gangsters are more like Gomorrah than they are like the Sopranos much less the godfather.
The reality is that private equity = American organized crime. They do everything legally because they own the legal system and that gives them plenty of leeway to do all the evil gangster shit they want to do. They gleefully do extortion, loan sharking, and bust outs 24/7/365 lol.
https://x.com/nbcnightlynews/status/1793047914157101506?s=46&t=ECIc-ET7JxxiLXr8SgrQ7Q
Gotta say “alleged” is an interesting choice of words here.
You can’t blame them for being cautious. If they just called it a tornado and it’s later determined that it didn’t meet the technical definition, that storm could sue nbc news for big bucks.
Here’s one example: https://archive.ph/pQVLF#selection-5569.0-5569.9
It doesn’t really get at the how (like, how does a PE firm buy a company via debt it puts on the company, which is a weird trick they do and I forget why on earth that works) but it gets at some of the why:
This seems like something @ParlaySlow might know more about.
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Private equity doesn’t always buy unrelated companies, in fact there’s nothing they love more than buying a company and forcing it to do business with their other portfolio companies on unfavorable terms. They also love buying up the majority of a type of business (they love medical practices, dentists, and vets for example) in an area, creating a bottleneck, and jacking up prices.
Honestly the problem I have with PE is that I very rarely run into any project of theirs that actually adds any real world value in 2024. It’s mostly just stuff that is less than a single degree of separation legally from what outright white collar criminals do and zero degrees of separation morally/ethically from what white collar criminals do.
Their most common strategy is basically a legal bust out ffs.
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hahahaha holy shit these reporters must be the dumbest motherfuckers on earth if they bought that jesus christ
Ah yes ginnie thomas is just a doting homemaker as we all know.
Deranged and detached from reality. The opening paragraph:
360 followers!!! The rest of the piece cites zero examples of anyone facing exclusion or negative consequences for supporting Israel, it’s all vibes like “people are being very mean to Israel, but Israel Has A Right To Defend Itself” and “lots of people are protesting PEN America, and I don’t like that one bit”. As this guy whines about “free expression” for supporters of Israel, meanwhile, in the real world:
It’s pretty clear these people are being boycotted for their expressed views on the Israel/Arab conflict and not because they’re Jewish.
It’s not even clear they’re being boycott at all. Someone in Twitter with 360 followers would like to make them part of BDS and that’s enough for the NYT to publish a moral panic piece.