[HN Gopher] The Secretive Industry Devouring the U.S. Economy
       ___________________________________________________________________
        
       The Secretive Industry Devouring the U.S. Economy
        
       Author : ianai
       Score  : 16 points
       Date   : 2023-11-04 22:03 UTC (57 minutes ago)
        
 (HTM) web link (www-stage.theatlantic.com)
 (TXT) w3m dump (www-stage.theatlantic.com)
        
       | andrewjl wrote:
       | How much of this will end being a ZIRP phenomenon? The article
       | does cover the implications of rising interest rates towards the
       | end.
       | 
       | > Meanwhile, interest rates have reached a 20-year high, posing a
       | direct threat to private equity's debt-heavy business model. In
       | response, many private-equity funds have migrated toward even
       | riskier forms of backroom financing. Many of these involve taking
       | on even more debt on the assumption that market conditions will
       | soon improve enough to restore profitability. If that doesn't
       | happen--and many of these big deals fail--the implications could
       | be massive.
       | 
       | For anyone interested in the nuts and bolts of how private equity
       | works I highly recommend the 50X podcast[1] which covers how a
       | firm focusing on buying out aircraft component suppliers
       | operates.
       | 
       | [1] https://www.50xpodcast.com
        
         | ramesh31 wrote:
         | >How much of this will end being a ZIRP phenomenon?
         | 
         | A lot, given that private equity operates on a debt driven M&A
         | strategy. But don't expect the consolidation to slow down. They
         | will just squeeze their businesses and customers that much
         | harder.
        
       ___________________________________________________________________
       (page generated 2023-11-04 23:00 UTC)