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80% Of Production Still Financed By Retained Earnings

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Guest sillybear2

The same applies to other sound businesses in this slowdown that have a firm cash base, little leverage and a solid order book, things aren't great but they'll survive. Of course the over leveraged firms that have stretched themselves and presumed the good times would never end instantly complain about "nasty banks" driving them out of business and withdrawing facilites, this is partly true, but only because the banks are being honest, they know a lot of these 'boom time' firms are toast anyway.

Anyway, the parasites in the City give out constant advice in their own interest that provides little benefit to the companies themselves or the wider public, the parasites need a constant stream of revolving finance so firms are constantly borrowing or merging or demerging, they demand the return of cash to shareholders in the form of buy backs, along with selling off any assets and putting wholly owned property assets or plant on some sale and leaseback agreements. These highly paid consultants would tell everyone to heat their homes for free by burning floorboards if they could get away with it by dressing up such suicidal short-termism in bull$hit speak.

Private equity was the biggest scam of them all of course, you take a sound company, sell off any juicy assets, load it up with as much debt as the cash flow can support, extract that cash in the form of a tax-lite dividend then dump the saddled company back onto the public markets. Assuming the next bump in the economy doesn't sink the whole ship, the firm is left paying no corporation tax for years on end because they technically never make a profit because all earnings are spent servicing debt, which clearly suits the banking parasites just fine too. Public money is now being used to bailout and underwite all these paper lies.

Edited by sillybear2

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