Private Equity Banditos

Cory Doctorow has written a long Twitter thread about the harm done by "private equity banditos", the financial bandits who buy up companies, strip their assets, and kill the companies with highly leveraged debt. It's grim reading and explains a lot about why the economy is in such trouble, even with the effects of COVID-19.

I remember being at Defcon one year and going into a Vegas casino and asking a craps croupier to explain how the game worked, and as he rattled off the different odds on the different paylines, I was like, Ohhhhh, I get this. This is a scam. 

The next time I had that feeling was during the financial crisis, when I started to learn about CDOs and other complex derivatives, and how their originators presented them to investors, using esoteric math to prove they were safe. Ohhh, I thought. Oh, I get it.

The more I learned about finance, the more this insight came back to me. Because so often the complexity was revealed to be an ornament, a form of dazzle there to confuse the eye about the true shape of the transaction.

The rococo equations where set-dressing to support the idea that mere mortals are disqualified from discussing,  understanding, or regulating the finance industry. And nowhere is that more in evidence than in the private equity world.