Well, no, not really

The second issue relates to the first. I said ‘almost out of ideas’ deliberately. That is because there is one idea still left in use, and that is rentierism, asset stripping, or turning a fast buck, whichever you wish to call it. The idea behind a SPAC is that a new owner in a quoted entity can both buy a private company and strip value out of it before then selling it on. Much of the gain will simply come from being quoted. The rest will be old style asset stripping. Sales and leasebacks will be in vogue. Leverage will be increased to fund dividend stripping of retained reserves, whilst accounting tricks will be used to push profit upwards. Hollowed out firm creation, I call it. The result is quick bucks from financial engineering with no net gain to society.

The aim is to put investment into a currently private form by taking it public. Without having to pay the 7% tax to the bankers for an IPO. We can tell this is so because cash goes in and doesn’t come out again. You know, investment?

5 thoughts on “Well, no, not really”

  1. He’s certainly not out of ideas. But they just don’t bring in that grant money, do they? Maybe he should rethink his strategy. Start shilling for the far right. Should be a fairly seamless pirouette.

  2. Dennis, Bullshit Detector

    The result is quick bucks from financial engineering with no net gain to society.

    A rather remarkable opinion – completely unsupported by fact, of course.

  3. “rentierism, asset stripping, or turning a fast buck, whichever you wish to call it.”

    He’s not only ignorant and doolally, he’s really stupid too. Even by the standards of Ely.

  4. Come to think of it, if he’s ignorant, insane, and stupid why doesn’t he have a regular column in the Guardian?

  5. Dearieme/ Dennis

    It’s really sub saloon bar stuff – basically amounts to ‘I know how to spend ‘surplus’ cash better than anyone else – feeble stuff even fir his low rent brain!!

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