The Capitalization of Almost Everything

The Capitalization of Almost Everything

The Future of Finance and Capitalism

Andrew Leyshon and Nigel Thrift

The text provides insight into new developments in the process of financialization. These new developments are based on real assets, the bread-and-butter income flows, which are bundled up and used as collaterals in these new investment products. These financial regionalization’s which were previously considered to be off-limits, are both cause and effect for new speculations.

Standard radical opinion on the financial system usually laments its complexity, scale and speed. All of which are seen to have dire and unintended consequences. A bulldozer on weaker and smaller investors. The text ensures to reinforce that the financial system, within the capitalist entity, must constantly reproduce and reinvent itself to survive. It must continuously find new assets that can be turned into collateral to sustain itself. Basically, all can be financialized, turned into an asset and investment if it provides a reliable and continuing income stream. That which proves to be reliable is used as collateral, so more risks can be taken. The text different shapes new collaterals and forms of investment take place. Some examples are:

Rent as Assets

Using the example of the brothers Tchenguiz, who climbed the latter to become property magnates. They treated buildings like financial instruments. Though they began their business as landlords, they began to buy buildings that were guaranteed sources of income. Those buildings were occupied by blue-chip tenants that were unlikely to vacate their homes.

This hyper capitalization is the product of an endless search for expansion.

Credit card debt

Experian and Equifax, credit-rating companies, have made new classes of risk apparent, one of them being credit card debt. A product that used to be aimed at the more affluent, this debt product has penetrated much lower income groups. The debt is securitized and due to higher interest rates, it can be used to produce higher yielding, although riskier.

University’s

In the US and UK, universities have been issuing bonds based on student income streams of various kinds (real income from halls of residence), or on a share of putative intellectual property from research income.

This hyper capitalization is the product of an endless search for expansion. These collateral have come into existence through new forms of computational detecting, through the construction of new income streams from existing portfolios, by expanding those portfolios and by identifying entirely new income streams.