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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (35632)10/8/2009 9:48:34 PM
From: Spekulatius  Read Replies (1) of 78773
 
re MCGC. These guys (business development companies) don't have a working business model, IMO. They have a way higher cost of funding, relative to banks which nowadays can borrow for almost nothing. To compensate for that they need to make risky loans so they can get a spread at all. Those risky loans often turn into garbage once the economy goes bad. Some of those may survive if they can raise more equity to keep the bonfire going.
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