Is too much power and money in the hands of private equity?

Bill Haber

Hundred Dollar

"Yes, they are stacking on debt on our lowly backs at an alarming rate. Then, they do IPO’s and pay themselves gluttonous special dividends to reduce their risk out the public's expense."
-- Kim, Florida

"Yes, at a time when the value of the dollar is going down and inflation is up, the interest rate is very low. The Fed is too preoccupied with keeping interest rates low so as to protect the growth we have and to save the housing market from further collapse. However, the unintended result of all this is the ready availability of money at low interest rates, enabling the private equity firms to replace equity with debt. This country had a bubble burst in the equity market in the 90's and now, thanks to the help of private equity firms, we are heading towards a bubble in the debt market. Hang on to your hat."
-- Jim W., Wisconsin

"Yes, private equity is distorting normal market actions. The public market is not the place for predators. It is absurd to expect the individual investor to have an even chance to invest successfully when back room money is distorting stock prices."
-- G.M.

"No, private equity is the natural state of capital. It is publicly traded companies that warrant special attention. Business ownership is the root of capitalism. There is no reason to limit this activity. It is when dumb public investors are subject to possible fraud and poor business ethics in publicly traded businesses that there is need for government regulation and oversight."
-- Paul, Washington

"No -- the idiots in congress are concerned because they don't have as much control. Contrary to what those in Congress think at last review we still have a democracy."
-- John, Florida

More comments...

"NO! Private equity wouldn't be profitable if it weren't for managers underutilizing their assets as it is. Private equity plays two important roles: 1) It turns around mismanaged companies or breaks up the hopeless ones to be reinvested in profitable places, and 2) It creates a powerful incentive for management to perform lest they be bought out next! Go private equity!"
-- Matt M., Michigan

"Private equity is only after a quick buck! How does that benefit any publicly traded company trying to do the right thing?"
-- P.H.

"Too much money spread out too widely. If a couple of large investments go badly does the whole house of cards collapse triggering an economic tsunami?"
-- Dave, Florida

"Not as long as people aren't forced out of their jobs without compensation."
-- Jeff H., Ohio

"Yes. Never trust an individual (or group) to manage a company that has never balanced a payroll, looked individuals in the eye and had to hire and fire them or motivate employees. Private Equity, your typical MBA graduate, can prepare a great model but when it comes to the reality of running a business I have serious concern. They should stick to what they know and leave running businesses to business people, not investors."
-- Jim, New York

"I would have to agree that there is too much money and power in the private equity market. I see problems arising from the area of derivatives and more specifically credit-default swaps."
-- Michael W.

"If all these overpaid CEO's and company executives would stop stealing the shareholders equity in form of excessive salaries, bonuses, and back dating options, then the stock prices would be higher and private equity buyouts would not be rewarding. Private equity is just a politically correct way of creating more wealth for the rich and adding to the unequal distribution of wealth at the expense of the middleclass."
-- R.H.

More comments...

"Private equity firms have gutted the companies that they have bought and done harm to the employer/employee relationship, while rewarding themselves with large dividends "
-- K.H.

"No, too much power and money is in the hands of Congress!"
-- Robert F., New York