What we’re reading (10/27)
“Buyout Firms Set Record For Loading Companies With Debt To Pay Themselves” (Wall Street Journal). Hence, my private-equity focused blog post a few weeks ago…“Private-equity firms are taking advantage of a frothy credit market to pay themselves record sums with borrowed money, a controversial practice that critics say benefits buyout-firm executives but can harm portfolio companies. Companies backed by U.S. private-equity firms have taken on $58.5 billion in dividend-recapitalization debt this year through Oct. 20, S&P Global Market Intelligence’s LCD unit said in response to a Wall Street Journal data request.”
“The Bond Market Is Waking Up” (Calafia Beach Pundit). “It looks like the bond market is beginning to wake up to the reality of higher inflation. Yields have moved significantly higher in recent days, and inflation expectations are rising. That the stock market is taking this in stride—so far—suggests that higher interest rates are not necessarily bad for the economy. I think we are still in the early innings of the adjustment to higher interest rates. There's a lot more to this story that will play out soon.”
“Tesla Joins An Exclusive Club” (DealBook). But! “It has a junk bond rating…[r]egulators had accused its C.E.O. of securities fraud…[i]ts sales and earnings are far lower than others.”
“Billionaire Tudor Jones: This Is The ‘Single Biggest Threat’ To Stocks And Society — Protect Yourself Now” (Yahoo! Finance). “The stock market has bounced back after a sluggish September, but a billionaire hedge fund manager says it would be a mistake to drop your guard. Paul Tudor Jones, who runs Tudor Investment Corporation, told CNBC last week that runaway inflation remains ‘the single biggest threat to financial markets and society in general.’ ‘If we don't immediately shift to attack it,’ Jones warns, ‘we run the risk of getting back into the '70s, where it was the single most important issue for multiple presidents, multiple Fed chairmen.’”
“3-D Printed Houses Are Sprouting Near Austin As Demand For Homes Grows” (Wall Street Journal). “A major home builder is teaming with a Texas startup to create a community of 100 3-D printed homes near Austin, gearing up for what would be by far the biggest development of this type of housing in the U.S. Lennar Corp. and construction-technology firm Icon are poised to start building next year at a site in the Austin metro area, the companies said.”
