Josh Kosman, predicts that we’re on the verge of the next great credit crisis, not because of credit cards or student loans. The credit crisis he’s predicting is from the actions of private equity firms. These are firms that buy companies, with the help of huge loans, and typically try to resell the companies or take them public before the loans come due. The companies that have been bought and sold are then often left with the debt. Kosman explores how private equity firms manage to make big profits while nearly destroying some of the companies they buy and sell in his new book, “The Buyout of America.”
He says many private-equity-owned companies are defaulting on their debts, and that will mean more people losing their jobs and will have global consequences for the credit market. Private equity firms have purchased companies in a variety of industries, including hospital and nursing home chains, mattress companies, newspapers, radio stations, hotel chains and record companies. Some of the biggest private equity firms are the Carlyle Group, Blackstone Group and Kohlberg Kravis Roberts. Josh Kosman is a financial reporter for the New York Post and a former editor at mergermarket.com and a former writer for The Deal and Buyouts newsletter.
Time for some good news !!!