On top of this, most of it is leveraged capital at a fraction of the actual cost, so the risk is almost vacant for the firms. Corrupt banking leads to infinite leverage for the super-wealthy to buy up / control it all. They do not need to care because they risk little and still profit even if it crashes because the tangible assets have shifted to their side of the gap.
Is it leveraged? Or is it often times money from underfunded government employee pension funds and whatnot, seeking higher returns to make up for the underfunding from previous decades?
The funds snapped up a record 786 makers of food and beverages worth $32 billion in 2021, using bundles of debt to pay for their purchases, according to data from S&P Global Market Intelligence.
No, they are underfunded because it is easier to win elections by shortchanging the pension plans and keeping taxes low now, counting on future taxpayers to make up the deficit.
Nothing stopping them from playing it conservatively and investing in high grade bonds and whatnot, but they want to hit those 8% annual returns (not including the underfunding in the first place), and so it drives them to riskier and riskier assets.
And of course corruption of someone on the board of the pension plan investing in their friend’s nephew’s investments and so on.
