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Most of this goes away when you have positive real interest rates.

It makes sense to take on massive amounts of debt to buy things when you get paid to be in debt.

Companies that do leveraged buyouts are going to have a good time.

When money isn't free - companies that do leveraged buyouts aren't going to have as good of a time.



Do you mean higher real interest rates? They have been positive almost all of the last 10 years. https://fred.stlouisfed.org/series/REAINTRATREARAT10Y


That's the interest rate for people willing to lock their money up for 10 years.

Look at https://fred.stlouisfed.org/series/REAINTRATREARAT1YE instead, the 1 year real interest rate, and it's barely been positive between 2009 and 2022.


Oh gotcha, you’re right.


My understanding is the 10-y is not relevant to venture debt or leveraged buyouts: https://www.svb.com/startup-insights/venture-debt/how-does-v...

And anyway - yes - a 1% real return really only existed in a long capacity since the 2000s, since QE became main stream.




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