{"id":12487,"date":"2013-03-06T18:45:53","date_gmt":"2013-03-06T22:45:53","guid":{"rendered":"http:\/\/henrypayne.com\/?p=12487"},"modified":"2013-03-06T18:45:53","modified_gmt":"2013-03-06T22:45:53","slug":"the-obamaconomys-private-equity-boom","status":"publish","type":"post","link":"https:\/\/henrypayne.com\/index.php\/2013\/03\/the-obamaconomys-private-equity-boom","title":{"rendered":"The Obamaconomy&#8217;s private equity boom"},"content":{"rendered":"<p><img decoding=\"async\" alt=\"\" src=\"http:\/\/i.i.com.com\/cnwk.1d\/i\/tim\/2013\/01\/02\/Wall-Street-bull_620x350.jpg\" \/><\/p>\n<p>Democrats claim they\u2019re for Main Street, not Wall Street. Yet\u00a0<a href=\"http:\/\/blogs.detroitnews.com\/politics\/2013\/03\/02\/under-obama-wall-street-thrives-main-street-dives\/\">only Wall Street has thrived<\/a>\u00a0under President Obama\u2019s job-killing policies, freezing unemployment a t 8 percent while Wall Street has soared on corporate earnings. On Tuesday, the\u00a0bulls were\u00a0<a href=\"http:\/\/www.detroitnews.com\/article\/20130305\/BIZ\/303050392\/Dow-closes-all-time-high-beating-2007-record?odyssey=tab|topnews|text|FRONTPAGE\">running again to a new high<\/a>\u00a0(as<a href=\"http:\/\/online.wsj.com\/article\/SB10001424127887323494504578342603236052908.html?mod=WSJ_Opinion_LEADTop\">Obama punished Main Street\u00a0<\/a>with his mindless sequester cuts) \u2013 but a closer look at the numbers reveals another irony.<\/p>\n<p>The president\u2019s\u00a0demon private equity industry is making out like bandits in the Obamaconomy.<\/p>\n<p>While the president roasted private equity firms like Mitt Romney\u2019s Bain Capital as evildoers, \u00a02012 brought them a mountain of money. Dividend payments alone topped $100 million apiece for Blackstone, KKR, and \u00a0Apollo executives.<\/p>\n<p>Why? Because while Obama\u2019s regulatory juggernaut flattened job growth, Ben Bernanke\u2019s Fed has tried to keep the economy alive on a drip feed of low interest rates. Cheap money is honey for private equity which has gone on a debt-fueled buying binge.<\/p>\n<p>\u201cIt makes financing leveraged buyouts much less costly,\u201d\u00a0<a href=\"http:\/\/www.forbes.com\/sites\/ycharts\/2012\/11\/19\/carlyle-group-and-other-private-equity-firms-look-good-as-long-as-interest-rates-stay-so-low\/\">reports Forbes<\/a>, \u201cand thus potentially much more lucrative.\u201d For example, Carlyle Group private equity poured $6 billion into takeovers in the third quarter alone, bidding up companies like King Collision Repair Centers, TCW Group, and Getty Images.<\/p>\n<p>The buyout feeding frenzy has driven up stock prices and fattened One Percenter paychecks (KKR\u2019s twin CEOs took home a total of $208 million in dividends last year \u2013 up 62 percent from 2011).<\/p>\n<p>Viva La Obama!<\/p>\n<p>The Fed\u2019s extraordinary stimulus, however, has many fearing a financial bubble. In a market driven by debt, what happens when interest rates rise again? \u201cCarlyle and its peers have generated healthy earnings because of the amount of leverage they are able to pile on to the companies they acquire,\u201d continues Forbes. \u201cMake that debt more costly, and the tailwind becomes a headwind.\u201d<\/p>\n<p>Uh-oh. Warren Buffett\u00a0 \u2013 an Obama booster \u2013 worries, saying markets are on a \u201chair trigger\u201d because \u00a0\u201dan awful lot of people (will) want to get out of a lot of assets\u201d when the Fed has reversed direction. And when that happens \u2013 hey, just blame George Bush.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Democrats claim they\u2019re for Main Street, not Wall Street. Yet\u00a0only Wall Street has thrived\u00a0under President Obama\u2019s job-killing policies, freezing unemployment a t 8 percent while Wall Street has soared on corporate earnings. On Tuesday, the\u00a0bulls were\u00a0running again to a new high\u00a0(asObama punished Main Street\u00a0with his mindless sequester cuts) \u2013 but a closer look at the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,87],"tags":[],"_links":{"self":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/12487"}],"collection":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/comments?post=12487"}],"version-history":[{"count":1,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/12487\/revisions"}],"predecessor-version":[{"id":12488,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/posts\/12487\/revisions\/12488"}],"wp:attachment":[{"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/media?parent=12487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/categories?post=12487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/henrypayne.com\/index.php\/wp-json\/wp\/v2\/tags?post=12487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}