The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Crimson Ghost who wrote (29819)	4/1/2005 11:51:50 PM
From: teevee	Read Replies (1) of 110194

High interest rates bad for everyone? How about savers? It depends;-) A recent economic "red flag" I have noticed is that private banking groups are now paying up to 10 and 11 times cash flow for private companies, hoping to take them public within a short period of time and for a profit by capturing the spread on public company share price to cash flow multiples. This kind of "buy wholesale-sell retail" strategy and activity only transfers wealth-it does not create new wealth. As long as there is an appetite for IPO's, higher rates will do little to stop this kind of speculative activity.

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