The Buyout of America

The Buyout of America

How Private Equity Will Cause the Next Great Credit Crisis

eBook - 2009
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An authoritative exposé of the mysterious and potentially dangerous world of private equity

Few people realize that the top private equity firms, such as Blackstone Group, Carlyle Group, and Kohlberg Kravis Roberts, have become the nation's largest employers through the businesses they own. Using leveraged buyouts that load their acquired companies with loans, private equity firms have generated more than $1 trillion in new debt--which will come due just when these businesses are least likely to be able to pay it off.

Journalist Josh Kosman explores private equity's explosive growth and shows how its barons wring profits at the expense of the long-term health of their companies. He argues that excessive debt and mismanagement will likely trigger another economic meltdown within the next five years, wiping out up to two million jobs.

He also explores the links between the private equity elite and Washington power players, who have helped them escape government scrutiny. The result is a timely book with an important warning for us all.
Publisher: [NewYork] : Portfolio Hardcover, 2009.
ISBN: 9781101152386
Branch Call Number: E-BOOK
Characteristics: 1 electronic text.
Additional Contributors: OverDrive, Inc


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Feb 13, 2013

This is another one of those extraordinary books where author and financial journalist, Josh Kosman, thoroughly concentrates on private equity leveraged buyout firms, the penultimate in locusts, scavengers, parasites and financial fraudsters. They rape, pillage and ravage companies and jobs, and instead of stealing it is called "asset stripping" - - instead of thievery it is called the "leveraged buyout" - - but whatever the name, it is a major force of anti-progress and in the dismantling of the American economy over the past twenty-some years, while enriching and transferring wealth to the super-rich. The interlocking financial connections between the banksters and the private banksters (private equity firms) renders them beyond evil. With the passage of laws back in the 1980s, granting tax exemptions -- or lower tax rates -- to debt interest, the design was in place to sell and peddle debt: with PE leveraged buyout firms enriching themselves by taking loans against the targeted company, saddling them with unusual amounts of normally mortal debt. Imagine approaching a bank as an individual, and stating that the collateral for an automobile purchase was to be the car itself -- and the bank accepting such terms! Yet that is precisely what transpires in a leveraged buyout scenario. [Historical note: one of the earliest PE firms was AEA Investors, founded by the Rockefeller, Mellon, Harriman and Warburg families. Another earlier one was Warburg Pincus, founded by another branch of the Warburg family. One was in 1968, the other 1966, curious as that was the timeframe when the Wright Patman report on how the super-rich hide their money and ownership in foundations and trusts was published?] There also appears to be an extreme correlation between pension fund theft and the PE leveraged buyout: of these firms must declare bankruptcy, rendering their pension funds to be viewed as the major asset, which is then seized by the chief creditors, leaving the employees high and dry regarding their rightful retirement monies!

Aug 14, 2012

Well-written description of how private equity works in the USA. These deals rarely make sense for customers, employees, or shareholders but they do for the PE firms.

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