-The Decider

but to get that profit, you have to survive the risk of losing your entire investment…which is what Carlyle just did on those bets of theirs with the hedge fund. (At least, that’s my thumbnail understanding on this, someone correct me if I’m wrong here…)

And a good thumbnail understanding it is. I would just add the importance leverage plays in all of this.

Let’s say you invest a $1 in something and make a nickel in a year, a %5 return. Nothing great, but a positive return.

But let’s say you could borrow $32 dollars against that one dollar, and still make a nickel per dollar.

Now you have made $1.60 from your dollar investment, or 160 percent, not 5 percent. Even after paying the bank interest for the cost of borrowing the money there is lots left to pocket for the managers and investors.

OTOH, if you lose %5, then you’ve lost $1.60 which is more than the $1 dollar you started this investment with. You now have to come up with sixty cents just to walk away from the transaction.

This is obviously a gross oversimplification to get the point across, but it’s the essence of what’s happening with Carlyle’s troubled hedge fund.

Thanks for the wonderfully therapheeuuuuwwwwtic conversating.

Thanks for askin. We’re fortunate hangin in here, compared to so many. For them, I just ache.

And I’m so senseless, I literally had knee replacement ops 4 X (early in the decade, don’t ask) with only local spinal block, joking thru the whole of it with the anesthetist & not even teh sedative.

No sense, plenty feeling. I want our country back from these goons.

Bush is divorced from reality. He’s so divorced that reality is now demanding alimony from Bush.

LOL

Bush now talking about the estate tax. Sort of reinforcing your point.

Bush is divorced from reality. He’s so divorced that reality is now demanding alimony from Bush.

-G