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various mechanisms that move away from debt and equity and allow for tailor-made repayment flows and/or profit sharing. PIK (payment in kind), perpetual notes, profit sharing arrangements - it was all in those structures.

Which brings me back to my point that the sharing arrangements are not the problem whrn the risk analysis is not done - and backed by credible players (ie banks and bankers doing their job).

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Dec 17th, 2007 at 08:02:10 AM EST
[ Parent ]
I agree totally with you as to the reason for the state we are in: ie investment bankers simply not doing their job.

That's not the issue: the issue is what is the optimal way out?

Debt got us into this position, so how can more debt get us out? ie it cannot be a debt-based solution.

So "Equity" (with no capital repayment) it must be.

Corporations and trusts are both sub-optimal in their complexity and allocation of risk and reward between stakeholders.

Applying Occam's Razor, the simplest form is the best, and there is no simpler mechanism than simply dividing property revenues into proportional shares or "nth's" using "open" corporate forms.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Dec 17th, 2007 at 09:15:37 AM EST
[ Parent ]

Debt got us into this position, so how can more debt get us out? ie it cannot be a debt-based solution.

So "Equity" (with no capital repayment) it must be.

Any debt not repaid needs to be covered by capital from someone (including that of the lending bank, if necessary, if repayment never happens)


In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Dec 17th, 2007 at 09:20:36 AM EST
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