These daredevils will end up killing the World Company and its finance one day. Unless they die first.
Five months after settling the biggest private equity deal ever—$13 billion granted by a club of banks led by Morgan Stanley for the acquisition of X in 2022—Wall Street is getting its checkbooks out.
The leading American bank, JP Morgan, has just granted the largest leveraged buyout loan since the great financial crisis of 2005: $20 billion released at the request of Saudi Arabia’s PIF, Jared Kushner’s fund (Donald Trump’s son-in-law), Affinity Partners, and Silver Lake to secure the $55 billion acquisition of Electronic Arts, video games editor of the Sims, EA Sports FC (ex-“Fifa”) or Apex Legends.
At a time when everyone expects the Artificial Intelligence financial bubble to burst, one of the world’s leading banks is slowly cooking a new financial crisis. Subprime mortgages only affected real estate loans. Leveraged buyout loans affect all buyers and potential investors. LBOs are built on the same principle as subprime mortgages : minimal down payment and ultra-light guarantees from the borrower.
In case of a crisis of confidence and even if the client is Donald Trump himself (or a member of his ffamily), JP Morgan will deserve to disappear, like Lehman Brothers. Remember ! Since 2005 : « too big to fail » doesn’t work anymore.