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Why you need a haircut – even if you’re bald

Wednesday, 28 June 2023 00:40 -     - {{hitsCtrl.values.hits}}

  • You have borrowed (at high interest costs) to excessively spend on initiatives – that give low or no returns. Most of them have low or no salvage value.
  • Your institutional lenders are under the illusion (at least in their books) that you will pay them back. Hence, they are ‘accounted’ for as assets.
  • Of course, as an institutional lender, almost 90% of what you so generously lend, is that of small-time deposit holders.
  • Now that you can no longer ‘bank’ on dud assets, you have to confront reality – who will carry the can? 
  • Damned if you do and damned if you don’t.

 

 

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