Collapse Blindsides Wall Street, Exposing Cracks in a Hot Corner of Finance
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The collapse of First Brands exposed cracks in the finance industry, particularly among investment banks like Jefferies and UBS, highlighting potential risks and weaknesses in their exposure to such events.
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>But First Brands was too attractive to resist for many investors, paying what amounted to an interest rate of around 30% for some of its short-term borrowing
Call me crazy, but guy comes to me saying he is willing to pay 30% interest ... I would think that's probably because he is on shaky ground and can't find a better rate. Not a good sign.
This story reads like lenders maybe even knew it was going to fall apart, but they thought they could get their 30% interest in the short term and leave someone else holding the bag.
In the meantime the world of finance and business seems more and more tied together. Stories abound about these big name business guys who leverage their way into owning a large and/or tons of business ... if only because of the loans, rather than building anything.