Duh, where have we heard this before?
Where else is Bernanke's Bubblenomics coming back alive?
Traders are still making big bucks off currency swaps, derivative contracts and high-frequency trading (HFT).
But there's also a resurgence in private equity that's worth noting: The big firms like Blackstone Group and Kohlberg Kravis Roberts (KKR), who appeared to be down-for-the-count less than a year ago, have come roaring back to life. This excerpt from Bloomberg lays it out:
"With previous buyouts back from the dead, the world's largest private equity funds are planning a new round of takeovers: KKR is seeking to raise $8 billion to $10 billion for a new fund, and in an interview with Bloomberg TV at the World Economic Forum in Davos, Switzerland, Blackstone co-founder Stephen Schwarzman said that there is plenty of capital to fund leveraged buyouts of as much as $10 billion, as borrowed money becomes more available.
"We're all absolutely shocked at how fast leverage (borrowed money) snapped back from where we were, say, two years ago," says William Welnhofer, a managing director at Robert Baird & Co. in Chicago. "I don't think anyone who's honest would have expected such a move." ("Easy Money (easily borrowed money) Is Bringing Buyouts Back to Life" --Bloomberg)
Indeed, we are all shocked. As Danny says, private equity is having its Lazarus moment while all of Wall Street begins to re-leverage (increase their indebtedness for the sake of high-stakes gambling in the great stock- and derivatives-market casinos). Fantastic! And we're supposed to thank Ben Bernanke for his outstanding work in re-inflating the bubble -- and nudging us ever-closer to the next big crash?! Problem is, next time it won't just be the financial system that takes a drubbing, but the cornerstone upon which all of this speculative activity now rests -- the dollar and its precarious value relative to other currencies. So get your wheelbarrows ready, folks.
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