A Bell Rings in the Streets of New York

No small number of commentators, including a few senior industry insiders, have forecast that the private equity bubble would eventually burst.

Most believe, as I do, that there is no way that Wall Street's so-called masters of the universe could carry on using boatloads of borrowed money to buy companies in every industry at exorbitant prices -- and then milk them dry -- without one day paying the piper for their hubris and greed.

But even with the recent upheaval in credit markets, which has put pressure on dealmakers to reign in their more aggressive efforts and reconsider some previously announced buyouts, there has been little sign of a recognizable top.

Until now, that is.

As I was walking through midtown early this morning, I passed by a public telephone -- yes, they still exist -- and I happened to notice paper signs hanging on both sides of the booth.

Normally, I don't take much interest in such things, but there was something about the opposing pair of identical ads that caught my eye.

I went over to take a better look.

An advertisement. Something about finance. Lots of little contact tear-offs missing from the one on the right.

I edged closer still.

Ah, now I could see. It was an ad for "The Private Equity Finance Institute." Something about "Financial Modeling for the Sophisticated Investor." A training program for those "seeking a career in the banking, buyout, venture or hedge fund industry." And all the tabs were missing from the one on the left.

Hmmm.

It's not often that you hear a bell ringing this early in the morning on the streets of New York.

But to me, at least, the sound was pretty clear.

Comments

[Anup]

That's it Michael! You sold it to me! I guess this is the sign that many of us were waiting for! Thanks.

[Brian]

Ha, Ha, Ha...this is killing me. An ad on a public pay phone to learn banking and hedge funds. What a spectacle, the public never get it into their thick heads do they. They are all fools, all of them. A knew it was time to sell when I saw the add on TV where the waitress yells at the kid leaning on her vintage collectors car, that was a couple of months ago. It reminds me of the add on TV during DotBomb when the dad grounds the kid from trading for a week cause he took the helicopter out. SELL, SELL, SELL. BUY GOLD, GOLD, GOLD or kiss your A** goodbye. Hyperinflation here we come.

[Dmitry]

Yes, I've seen quite a few of these ads in the Midtown, around the Equinox gym & spa on 51st & Broadway that I use.

I love the "JOB PLACEMENT ASSISTANCE AND _FREE_ SUBSCRIPTION TO THE [PRIVATE EQUITY FINANCE INSTITUTE] NEWSLETTER" part.

I really wanted to record these for posterity as the "pinnacle" of the bubble myself, but I never got around to actually doing it. I am glad Michael did.

[Emilio Lizardo]

Can you please post a larger photo
of the tear-offs? I can't read the
phone number.

Thanks.

[SacrAmerican]

The thing to watch here is the PUT Options. Before 9/11 PUT options were placed at record numbers on such stocks as United Airlines, then came the terrorist punch making Wall street insiders bundles of the green stuff.

Right now PUT options are again on the rise, why? Because the equity firms like the Carlyle Group and others who have invested heavily in the defense industry need to keep the heat turned up on terrorism. After raping individual markets, as an example the housing market, endless war and playing on economic downturn is the only mechanisms left available to keep their profits rolling.

I think like before the Trade Center attacks Wall street big timers again have information about the next terror attack. Try to remember the Saudi Royal Family and the bin Laden family are both close personal friends with the President and his father. It was no coincidence the PUT options were placed on seemingly stable stocks. These traders obviously got a profit bearing heads up from bin Laden’s coconspirator King George of Carlyle.

I believe wholeheartedly the Bush administration recently tried to smuggle six nuclear warheads out of the country illegally, flying them from a North Dakota airbase to a Louisiana base, coincidently where one of the nation's largest shipping ports are located.

I am convinced these warheads were heading to one of the President's Saudi friends while others were earmarked to justify the up coming war with Iran. With one nuclear strike against America, an attack on America by Americans supposedly coming from Iran, the administration and all those Wall street manipulators who eagerly placed put options on the stocks they knew would be effected by the aftermath will make out big time.

Bottom line investors, when you see a drastic increase in PUT options it will not be a bad idea to follow suit.