My intuition is in line with David's observation, but the Business Week article suggests that the funds are able to extract $$ before the companies experience their death throes.
What do people think of Wilbur Ross? On Tue, Oct 31, 2006 at 10:57:14AM -0800, David B. Shemano wrote: > Regarding private equity funds, I can't quantify it, but it is a given > assumption in my line of work (chapter 11 reorganization) that the equity > funds are loaded with cash and there is way too much cash chasing too few > good deals. As a result, a lot of companies that should be liquidated are > getting bailed out, but that is probably just delaying the inevitable. > > Regarding to where the money is coming from, my assumption is that it is a > reflection of the USA's huge trade deficit. Foreigners, instead of buying > USA goods with the dollars they receive for the goods shipped to the USA, > invest the dollars back into the USA, where they money filters through the > economy as investment capital. I assume this is occurring because the > foreigners believe the USA is a better place to invest than outside of the > USA. Go USA! > > David Shemano -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
