Why you need a haircut – even if you’re bald!
June, 2023
- 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!
