{"id":20260,"date":"2014-04-07T13:31:49","date_gmt":"2014-04-07T13:31:49","guid":{"rendered":"http:\/\/ok-cleek.com\/blogs\/?p=20260"},"modified":"2014-04-07T13:31:49","modified_gmt":"2014-04-07T13:31:49","slug":"guitar-center-the-parasite-economy","status":"publish","type":"post","link":"https:\/\/ok-cleek.com\/blogs\/?p=20260","title":{"rendered":"Guitar Center & The Parasite Economy"},"content":{"rendered":"

Remember the plotline in the Sopranos when Tony gets his hooks into his friend's sporting goods store, liquidates the inventory, runs out the credit then leaves the husk bankrupt ?<\/p>\n

That's what came to mind while reading what Bain Capitol is doing<\/a> to the Guitar Center chain.<\/p>\n

\nMake 6-9% with the chance that the company could finally go tits-up? Why not! If it pays out, then great, and if it doesn\u2019t \u2013 tax write off! <\/em><\/p>\n

You know who else thought like that? The people who set the mortgage market on fire just a few years ago. They made a fortune by structuring finance in such a way that investments produced income irrespective of their true value. They could not have cared less about whether the end result was old people thrown out of their homes or eight million unemployed \u2013 that was someone else\u2019s risk. Their risk got hedged by the taxpayer who would bail out the industry so long as the collapse was big enough, so building a decent, functional economy was besides the point.<\/p>\n

This is the logic at play with Guitar Center. Financial parasites have taken over the host company and could not care less about the industry itself. They install some CEO who used to be selling DVD players. They swap private equity firms in and out. It doesn\u2019t matter \u2013 it\u2019s just another place for loose capital to suck out a few extra dollars or a tax break. After all, the entire value of the company is less than what JPMorgan paid in fines last year without breaking a sweat.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Remember the plotline in the Sopranos when Tony gets his hooks into his friend's sporting goods store, liquidates the inventory, runs out the credit then leaves the husk bankrupt ? That's what came to mind while reading what Bain Capitol is doing to the Guitar Center chain. Make 6-9% with the chance that the company […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-20260","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts\/20260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20260"}],"version-history":[{"count":1,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts\/20260\/revisions"}],"predecessor-version":[{"id":20261,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=\/wp\/v2\/posts\/20260\/revisions\/20261"}],"wp:attachment":[{"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ok-cleek.com\/blogs\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}