Friday, June 10, 2011
Value Subtraction Layers
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| (Photo from http://www.bastardette.blogspot.com/) |
In the NYT article, Carson Block, the 35 year old founder of Muddy Waters Research explains how the company got its name and the concept of "value subtraction layer".
"He explains by way of the firm’s name, Muddy Waters. It’s derived from a Chinese phrase that says the easiest way to catch fish is by muddying the water, forcing it to the surface.
"You kick up the silt, and they rush to the top of the water,” he said of the Chinese proverb.
“This explains a lot about how things work in China,” Mr. Block added. “Business deals are rife with value subtraction layers. The more opaque they make it, the easier it is for them to siphon off money.”
Another term for this methodology of disappearing money may be "financial quicksand".
Labels: 2011-Peaking Over the Mole Hill
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