1 minute ago, vikas83 said:

Sadly, it's not that simple. Direct lenders (BDCs, lending funds, etc.) raise their capital from institutional investors like pension funds. All those funds now have ESG mandates. Banks that get money from depositors are also all in on ESG (e.g., Bank of America, JPMorgan, etc.). So all that's left are lenders who don't need capital from others -- basically, family offices who charge mid teens plus interest. 

Starting a new bank to take deposits and lend to these companies is damn near impossible. First, competing with the big guys isn't possible on the scale of loans that need to be made ($100 million plus). Second, depositors demand ESG compliance now too. 

The final thing is almost every lender is looking to simply make yield, not own the assets. So you make a loan to one of these companies, you have to wonder how you'll get refinanced out when the ESG train keeps moving in one direction. 

are the ESG mandates here in the states, or EU only? 

1 minute ago, JohnSnowsHair said:

are the ESG mandates here in the states, or EU only? 

They are the norm in the US now from institutional investors. Coal companies and fire arms companies have zero access to capital. Oil and gas isn't completely shut off, but much tougher.

2 minutes ago, vikas83 said:

They are the norm in the US now from institutional investors. Coal companies and fire arms companies have zero access to capital. Oil and gas isn't completely shut off, but much tougher.

ok, but what I mean is that the big investors are CHOOSING to enforce ESG mandates? it's not a government mandate (yet) right? 

1 minute ago, JohnSnowsHair said:

ok, but what I mean is that the big investors are CHOOSING to enforce ESG mandates? it's not a government mandate (yet) right? 

It's not a Federal Government mandate, no. But the largest institutional investors are state employee pension plans (e.g., Calpers), and they are on the leading edge. So basically coming from state governments.

1 minute ago, vikas83 said:

It's not a Federal Government mandate, no. But the largest institutional investors are state employee pension plans (e.g., Calpers), and they are on the leading edge. So basically coming from state governments.

gotcha. I wasn't aware of a US regulation to that effect, though I know it's something they've been expecting as imminent. 

I do believe the EU has some.

So there’s not big banks in conservative states?  Dallas is a financial center and has been for decades.

Just now, Dave Moss said:

So there’s not big banks in conservative states?  Dallas is a financial center and has been for decades.

Yeah, and they are all multi-national corporations that have adopted ESG standards. 

Maybe let others handle the grown-up talk.

Just now, vikas83 said:

Yeah, and they are all multi-national corporations that have adopted ESG standards. 

Maybe let others handle the grown-up talk.

Oops my bad

39 minutes ago, vikas83 said:

It's not a Federal Government mandate, no. But the largest institutional investors are state employee pension plans (e.g., Calpers), and they are on the leading edge. So basically coming from state governments.

Ok, putting on a MAGA hat here for a moment…

What kind of effect would it have if, say, pension funds from red states (lol, as if) started mandating anti ESG policies in their funds?

1 minute ago, Bill said:

Ok, putting on a MAGA hat here for a moment…

What kind of effect would it have if, say, pension funds from red states (lol, as if) started mandating anti ESG policies in their funds?

None. The problem is that you don't just fundraise from one place. So any fund is courting both Calpers and the TX equivalent. To get money from CA, NJ, etc., you have to adpot ESG policies. So just because TX doesn't care, you still have to comply to have a diverse investor base. 

Here's some more from Blackstone:

https://www.cnn.com/2021/10/26/business/gas-prices-energy-crisis-schwarzman/index.html

 

Quote

 

Part of the problem, the Blackstone (BX) billionaire said, is that it's getting harder and harder for fossil fuel companies to borrow money to fund their expensive production activities, especially in the United States. And without new production, supply won't keep up.

"If you try and raise money to drill holes, it's almost impossible to get that money," Schwarzman said, adding that this is happening on an "extremely wide-scale basis."

 

 

23 minutes ago, vikas83 said:

None. The problem is that you don't just fundraise from one place. So any fund is courting both Calpers and the TX equivalent. To get money from CA, NJ, etc., you have to adpot ESG policies. So just because TX doesn't care, you still have to comply to have a diverse investor base. 

Here's some more from Blackstone:

https://www.cnn.com/2021/10/26/business/gas-prices-energy-crisis-schwarzman/index.html

 

 

Problem solved

https://www.gofundme.com

3 minutes ago, VanHammersly said:

Problem solved

https://www.gofundme.com

Just hit up VA Beach Eagle

50 minutes ago, vikas83 said:

None. The problem is that you don't just fundraise from one place. So any fund is courting both Calpers and the TX equivalent. To get money from CA, NJ, etc., you have to adpot ESG policies. So just because TX doesn't care, you still have to comply to have a diverse investor base. 

Here's some more from Blackstone:

https://www.cnn.com/2021/10/26/business/gas-prices-energy-crisis-schwarzman/index.html

 

 

So, more or less what you’re telling me is that my life is going to consist of getting repeatedly Fd over by Boomer and Millennial policies and I should just go ahead and figure out my business model for Bill’s Polo Emporium, Charlestown, Nevis.

“… and remember, folks, if it’s got a price tag, it’s not from Bill’s.”

 

3 minutes ago, Bill said:

So, more or less what you’re telling me is that my life is going to consist of getting repeatedly Fd over by Boomer and Millennial policies and I should just go ahead and figure out my business model for Bill’s Polo Emporium, Charlestown, Nevis.

“… and remember, folks, if it’s got a price tag, it’s not from Bill’s.”

My view is that every generation gets F'd over by bad policies. At least knowing what the bad policies are allows you to adjust accordingly.

My assumption here is that this is all part of the adjustment away from "Friedman doctrine" and towards some era of "socially responsible corporatism", because that's what the consumers of the future are demanding (I guess).

I'm not inherently opposed to the idea of corporations being more responsible citizens, as I do think full "shareholder value" inevitably would swing back to something more balanced. I suspect it'll go too far the other way before a relatively quick correction because money is a bigger motivating factor than anything else.

Someone on the webz floated the notion that you'd only tax unrealized gains if you're borrowing against it (the argument being you're effectively realizing the gains in a backdoor way), and that if you borrow against it your cost basis would simply adjust at the time of the transaction.

So if you're just holding investments you're not impacted.

I'm certain there's some flaw I'm missing. but I'm far from a tax expert, and I have no idea what happens if/when you "pay back" those loans; does the cost basis revert? 

Superficially though it seems to target specifically the individuals they're most concerned with - those leveraging their investments in clever ways that avoid selling assets, and this sidestepping "realizing income" from a tax standpoint.

Edit: I guess the main issue here is it might make it more difficult to raise capital for investment, though I'd think borrowed capital for reinvestment would be tax deductible. I dunno, this is out of my depth, but still curious.

As someone doing some real estate development i can tell you lending is nucking futs right now

and dont get me started on material costs and lead times…

2 hours ago, JohnSnowsHair said:

Someone on the webz floated the notion that you'd only tax unrealized gains if you're borrowing against it (the argument being you're effectively realizing the gains in a backdoor way), and that if you borrow against it your cost basis would simply adjust at the time of the transaction.

So if you're just holding investments you're not impacted.

I'm certain there's some flaw I'm missing. but I'm far from a tax expert, and I have no idea what happens if/when you "pay back" those loans; does the cost basis revert? 

Superficially though it seems to target specifically the individuals they're most concerned with - those leveraging their investments in clever ways that avoid selling assets, and this sidestepping "realizing income" from a tax standpoint.

Edit: I guess the main issue here is it might make it more difficult to raise capital for investment, though I'd think borrowed capital for reinvestment would be tax deductible. I dunno, this is out of my depth, but still curious.

Would you want to pay tax on your home mortgage? How might you think that would impact you?

2 minutes ago, TEW said:

Would you want to pay tax on your home mortgage? How might you think that would impact you?

Mortgages are excluded. And assets need to be over $1b for any of this to kick in at least in the current drafts. 

I'm sensitive to the slippery slope argument. But let's also understand the totality of what's being proposed.

1 hour ago, JohnSnowsHair said:

Mortgages are excluded. And assets need to be over $1b for any of this to kick in at least in the current drafts. 

I'm sensitive to the slippery slope argument. But let's also understand the totality of what's being proposed.

I’m using it as an analogy to try to illustrate the issues involved. Obviously there are a lot of differences between home mortgages and corporate lending, but at the core of it there are similarities. If you start taxing what is fundamentally a liability, you’re going to have problems.

9 hours ago, ToastJenkins said:

and dont get me started on material costs and lead times…

I hear this. I have a multimillion dollar construction project on critical infrastructure going on right now and the entire project schedule is being driven by the availability of the contractor to find truckers to deliver cement. They’re at least 3 weeks behind on the project purely due to material delivery delays. They have 3 more days of concrete production for the current phase of the project and they’re looking at not being done until end of next week at the earliest. 

2 hours ago, Imp81318 said:

I hear this. I have a multimillion dollar construction project on critical infrastructure going on right now and the entire project schedule is being driven by the availability of the contractor to find truckers to deliver cement. They’re at least 3 weeks behind on the project purely due to material delivery delays. They have 3 more days of concrete production for the current phase of the project and they’re looking at not being done until end of next week at the earliest. 

It  is everywhere.

 

In IT we have to make do with hardware we would normally never buy, because everything from servers to switches, laptops to firewalls, are hard to source these days.

 

Well not firewalls, we retain those standards. Mostly for servers too, we will wait until what we want is in stock, but that is causing some pain in certain areas.

The other cause of inflation: https://apnews.com/article/business-wages-salaries-increase-8ce98ea3bcc14c4810eb5a1111e1df49

This one isn't negative though so it gets less press.

1 minute ago, JohnSnowsHair said:

The other cause of inflation: https://apnews.com/article/business-wages-salaries-increase-8ce98ea3bcc14c4810eb5a1111e1df49

This one isn't negative though so it gets less press.

It’s negative. 

6 minutes ago, 20dawk4life said:

It’s negative. 

Not for the rank and file. 

Just now, JohnSnowsHair said:

Not for the rank and file. 

When they get fired and we don’t have enough people to get the job done it is. Or when prices go up and they’re still broke it is.