3 ms·
Yes, thanks. That was very interesting. It also made me wonder. Looking at the UK, the largest proportion of debt was 'financial', which I assume is debt owned
by jbert 16y ago
Yes, thanks. That was very interesting.
It also made me wonder. Looking at the UK, the largest proportion of debt was 'financial', which I assume is debt owned by businesses operating in the financial sector.
If so, is this even a bad thing? For example, does a hedge fund (which borrows large amounts of money to amplify it's wins and losses) naturally have a large "base" debt? Does a large financial sector just mean large financial debt as a matter of course?
UK household debt is also high. I'd expect a significant part of this to be mortgages. The combination of the culture of home-ownership (as opposed to renting) and high property prices (small island, lots of people) leads most people into a long-term mortgage quite early (and has for a long time).
Does that mean the UK's position isn't perhaps as bad as the "overall" graph paints it?
- arethuza 16y agoAs far as I understand it there is no fundamental reason why a hedge fund has to take on any debt at all - just that the investment strategies they often employ actually have very small returns so to make the overall returns to investors attractive they often borrow (or used to) large multiples of investors capital.