Sunday, October 24, 2010

Obviously Not In It For The Long Haul

Okay, people are greedy. Wall Street types are especially greedy. But shouldn't they be at least a little concerned with how the companies in whom they have invested spend their money? It doesn't look that way when private equity firms have the companies borrow money so that they can pay dividends to the equity firms. So far this month, private equity firms have been paid $1.7 billion in dividends, while the issuing companies have added $4.6 billion of new debt. Is this the right thing for these companies to be doing?

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