Perhaps more interesting is the question of the sustainability of the current binge:
Watson Wyatt said there was a danger that private equity could become a victim of its own success. More than $300bn (£151bn) of new money was raised by private equity funds last year. Finding a home for that money has forced private equity investors to test the market's limits, paying higher multiples of earnings for target companies and funding deals with ever greater debt.
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Los Angeles private equity firms borrow new money into existence in order to take these companies private. They inflate the money supply and syphon off huge sums as personal compensation. All the while, the cost of everything goes up as the value of a dollar goes down.
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