North Korea’s dictator, Kim Jong Un, pivoted away from his country’s formal desire for unification with South Korea, ordering the closure of all state offices that had been working towards that goal. Mr Kim said his people should no longer think of South Koreans as “fellow countrymen”. Meanwhile North Korea’s foreign minister visited Russia for talks.

Source: www.economist.com

I've seen a lot of lamentation about PE eating the world, but very few people discuss why PE got so huge. PE is popular for one reason and one reason only: taxes. PE generally makes money on a trade called a leveraged buyout (LBO), where they take out a massive loan to buy a company. Because interest on debt is tax-deductible, going debt-heavy increases the take-home profits of the company (this is called a "tax shield"). Because the profits are higher, the value of the company is higher, and the PE firm makes money on their trade. What this means in practice is that if you run your company sustainably (low debt, lots of assets). You become a target for a PE firm to attempt a hostile takeover of the company, all while claiming (defensibly, actually) to be doing whats in the best interest of the shareholders. So good companies will try to ward off these attacks by taking on lots of debt and going asset light to minimize the value gain a PE firm might have.

I've seen a lot of lamentation about PE eating the world, but very few people discuss *why* PE got so huge. PE is popular for one reason and one reason only: taxes. PE generally makes money on a trade called a leveraged buyout (LBO), where they take out a massive loan to buy a company. Because interest on debt is tax-deductible, going debt-heavy increases the take-home profits of the company (this is called a "tax shield"). Because the profits are higher, the value of the company is higher, and the PE firm makes money on their trade. What this means in practice is that if you run your company sustainably (low debt, lots of assets). You become a target for a PE firm to attempt a hostile takeover of the company, all while claiming (defensibly, actually) to be doing whats in the best interest of the shareholders. So good companies will try to ward off these attacks by taking on lots of debt and going asset light to minimize the value gain a PE firm might have.

Source: news.ycombinator.com