Submitted by Bill Blain of Mint Partners
“Look back at the past and the changing empires that rose and fell, and you can foresee the future….”
Why and How did it happen? And who should we blame?
Welcome to the X-Factor Economy: Carillion, once the darling of infrastructure, is exposed as a debt-addled fraud. Shock! Horror!
Tabloids full of “Carillion executive ate my Hamster” headlines. Brek-Drek morning TV is full of insights: the tragedy of small local suppliers likely to suffer enormous losses as invoices go unpaid, starving schoolkids as their lunches don’t turn up, prisoners running amok because their guards have been sent home. Hospitals half finished, train-tracks un-laid, and a government follolopping around like a fish out the water. (Again.) Even the banks elicit some sympathy for the losses they will suffer.
Someone has to take the blame – and Theresa May’s hapless government is the obvious target.
Whoa. Steady. Step back. What you pay for, you get.
Don’t bleat for the financiers. Carillion has been a massive short across the smart money for ages. Don’t bleat for the banks who are fully provisioned. I do feel a tinge of sympathy for the German investors sold the firms Schulschein private placements.
Why did it happen? Over the past 5 years Carillion has taken revenues of some $20 bln from Government contracts. Despite paying its 13 layers of management and sales teams handsome salaries and bonuses, and awarding its owners inflated dividends, the company’s pension fund is left massively underfunded, and the firm was about financially stable as a chocolate teapot. (As bonds yield rise that pension deficit would lessen – but too late for the 20k Carillion employees in the UK who are now consigned to the Government scheme.)
http://feedproxy.google.com/~r/zerohedge/feed/~3/idAJhD91Kk0/carillion-collpases-who-blame
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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