The unacceptable face of capitalism

[Zero Liability]

So the bank which lent the £205M didnt do enough due diligence then. Everybody in this country borrows money. The employees at the bank work on commission basis and push through the most absurd of applications for money. The sub prime lending was sometimes lending 7 times salary. The only party at fault here is the bank which lent the cash.

(...and the lender of last resort)

[original PM]

Did you actually read the article?

Phones4U was bought by the private equity house, BC Partners, in 2011 for £200m. BC then borrowed £205m and, having saddled the company with vast amounts of debt, paid themselves a dividend of £223m. Crippled by debt, the company has now collapsed into administration.

See this is what confuses me.

So you had £200 million and bought phones for you.

The you get a load for £205 million (and so are in debt by £205 million)

Then you take a dividend payment of £223 Million - where the fook has that money come from?

[jemb]

Play the system?, what are you talking about, setting up a Ltd company is perfectly valid way to operate as a contractor.

....of course it is! and it works to your advantage. My point was - please don't try and talk about inequality in the UK - when you are in a position that allows you to employ an accountant to minimise your tax and NICs and maximise your take home.
Yes - totally legal, but not really morally defensible.

If a totally legal umbrella offered a better return you would drop your limited company faster than your pants.

[BrilloPad]

See this is what confuses me.

So you had £200 million and bought phones for you.

The you get a load for £205 million (and so are in debt by £205 million)

Then you take a dividend payment of £223 Million - where the fook has that money come from?

QE. Or numbers on a computer. Money means nothing any more.

HTH

[OwlHoot]

The middle class are becoming the new working class

The (obvious) big picture is that with globalisation and ever rising populations, wealth is becoming more evenly spread worldwide.

So it's inevitable that most Westerners are feeling the pinch, and all this stuff about the declining middle classes and a few filthy rich is hopelessly parochial and outdated.

Really, Dodgy, you surprise me - I never had you down as a chippy revolutionary

[BrilloPad]

The (obvious) big picture is that with globalisation and ever rising populations, wealth is becoming more evenly spread worldwide.

So it's inevitable that most Westerners are feeling the pinch, and all this stuff about the declining middle classes and a few filthy rich is hopelessly parochial and outdated.

Really, Dodgy, you surprise me - I never had you down as a chippy revolutionary

On a global level - yes.

On a UK level - no. DA is totally correct. Just try leaving LOndon for a day - it becomes obvious very fast.

[DodgyAgent]

The (obvious) big picture is that with globalisation and ever rising populations, wealth is becoming more evenly spread worldwide.

So it's inevitable that most Westerners are feeling the pinch, and all this stuff about the declining middle classes and a few filthy rich is hopelessly parochial and outdated.

Really, Dodgy, you surprise me - I never had you down as a chippy revolutionary

[original PM]

On a global level - yes.

On a UK level - no. DA is totally correct. Just try leaving LOndon for a day - it becomes obvious very fast.

How do you mean try leaving London for a day - what would that prove?

[OwlHoot]

That's not to say I disagree with you about the visible effect (declining wealth on average), just the causes.

I just don't think it's reasonable to blame a few amoral greedball venture capitalists for what is a worldwide trend.

[Zero Liability]

On a global level - yes.

On a UK level - no. DA is totally correct. Just try leaving LOndon for a day - it becomes obvious very fast.

To the extent that governments globally are shovelling money into their pockets and those of their cronies via asset purchases and the QE required for them, it probably is true.

People are very selective about tax avoidance, however. Pensions and ISAs are ok, for instance. But they're tax avoidance devices ultimately, with strings attached. It's hypocritical for people favouring these to bemoan anyone else trying to reduce their tax bill within the confines of the law.