Get 2018’s Most Important Investing Book for Only $1
can be eroded instantly should valuations or leverage multiples decline... an almost certain future outcome. Why does this matter? These investors can decide to withdraw from the market just as quickly as they decided to engage... and the underlying loans mature in three- to five- year increments. So the level of institutional demand that has to exist, just to support the rollover of existing loans, approaches $400 billion by 2021. In effect we have a large pool of institutional investors who must continue to participate... or the underlying refinancing of the corporations will not keep pace with loan maturities, driving heretofore unseen levels of defaults for companies. In short, it is hard to see how this ends well. It is likely we will soon have another chapter added to the novel of regulators and politicians pointing their fingers at financial institutions and allocating blame. And while plenty of blame should be placed at the foot of private-equity investors and loan underwriters, the root of the problem originates with regulatory rules written in 1988 and added to over the ensuing years... regulatory rules that drove the levered-lending business outside of the regulatory purview, creating the very real possibility that the “run on the banks” scenario will once again rear its ugly head. Although this time, the banks will be safe as the institutional investors withdraw from the market... leading to decreased valuations... leading to private-equity underperformance... leading to more investors withdrawing. Happy Thanksgiving to all!
After traveling to Colorado and Canada and talking to the entrepreneurs cashing in on America’s newest “Green Rush,” we put all their best tips, strategies and insights for success in a playbook best suited for average investors. Find out how to get your copy.
“Practical. Insightful. Helpful. Educational. Can’t ask for much more.” HHHHH –GAMECOCKS44
CLICK TO LISTEN
P O D C A S T
M O R E R E V I E W S : Best Investment Podcast Is Back! - HHHHH I’ve enjoyed every episode to date - HHHHH Must listen if you invest in the U.S. - HHHHH One of the best podcasts available - HHHHH
American Consequences 71
Made with FlippingBook Annual report