> Suddenly, borrowing money in order to fork it over to shareholders makes less sense in a world of higher interest rates
What a lot of people probably dont realise when they read the term "business" is how big a fraction of management attention, incentives and remuneration is pure financial engineering: a parasitic game between financiers, accountants, tax code, central banks and company treasuries that has nothing to do with the mission of the company.
A modern corporation is a gigantic financial spreadsheet with its real assets a mere footnote.
In its most benign form debt is an accelerator for a healthy business that is growing. It is possible to get a debt hangover when misestimating actual business prospects and that is a serious enough challenge of its own.
The virtual reality of Wall Street and the obese financial system only serves to inflate the volatility. That is by design because volatility is precisely what it is milking.
What a lot of people probably dont realise when they read the term "business" is how big a fraction of management attention, incentives and remuneration is pure financial engineering: a parasitic game between financiers, accountants, tax code, central banks and company treasuries that has nothing to do with the mission of the company.
A modern corporation is a gigantic financial spreadsheet with its real assets a mere footnote.
In its most benign form debt is an accelerator for a healthy business that is growing. It is possible to get a debt hangover when misestimating actual business prospects and that is a serious enough challenge of its own.
The virtual reality of Wall Street and the obese financial system only serves to inflate the volatility. That is by design because volatility is precisely what it is milking.