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Blackstone's Private Equity Head Warns: "We Are In The Middle Of An Epic Credit Bubble"
Blackstone Group have arguably been at the center of inflating the new echo bubble in real estate by bidding (all cash) for property across the US. So it is somewhat ironic that just two months after we noted that "the smartest money is selling," the head of Blackstone's Private Equity Group had the following words for an audience at a Dow Jones Equity conference in New York:
"We are in the middle of an epic credit bubble, in my opinion, the likes of which I haven’t seen in my career in private equity."
Joseph Baratta had plenty more to say including "the good times are not going to last forever," and "we are not leveraging US GDP," as he expects a 'mean reversion' in multiples and "that largesse goes to the seller."
The U.S. is "in the middle of an epic credit bubble," according to Blackstone Group's global head of private equity, Joseph Baratta , and that bubble is affecting how one of the world's largest private equity firm's invests its billions.
The firm has slowed its investments amid such concerns, with Mr. Baratta saying he sees easy credit as adding risk for buyers of companies, even if it benefits sellers. "That largesse goes to the seller," Mr. Baratta said, speaking at the Private Equity Analyst conference in New York.
The firm is still bullish on prospects in the U.S. economy, but focused on certain investment areas. Energy, transport infrastructure, consumer finance and housing and construction remain attractive investment theses, Mr. Baratta said.
"We are not leveraging U.S. GDP," he said, because the good times are not going to last forever. The firm expects what Mr. Baratta called a "mean reversion," which he said will ultimately affect exit multiples at portfolio companies.
"The single biggest assumption we make is the multiple we can sell [a company] at five years hence," said Mr. Baratta, and right now those projections do not seem to warrant a lot of deal activity.
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Three words...no fucking shit.
Shit no fucking... and there goes the weekend...
Maybe that's why gold is leaving COMEX - 3% of total gold just last week...
http://seekingalpha.com/article/1718882-weekly-comex-gold-inventories-total-falls-3-in-one-day
This Blackstone guy's bubble comments were a story on Business Insider about a week ago.
now that's effing scarey - so you better have a link Ishmael
You guys are crazy! There's never been a better time to buy. The people on Bloomberg and CNBC tell me so all day long every day.
The U.S. is "in the middle of an epic credit bubble," according to Blackstone Group's global head of private equity, Joseph Baratta...
The firm has slowed its investments amid such concerns, with Mr. Baratta saying he sees easy credit as adding risk for buyers of companies, even if it benefits sellers.
That being said, Blackstone's investment thesis ? Why, easy credit !
"[C]onsumer finance and housing and construction remain attractive..."
Don't fight the fucking FED! They blew this bubble. Can they pop it safely? History suggests a big fucking no.
fucking no shit?
You are out of step with the Bernanke!
He does it all the time sitting in his helicopter with Draghi. Drowning in it!
Another 3 words. Tesla up again!!!!!!!!!!!!
Is he supposed to tell the muppets?
epic bullshit ain't gonna make it better, either.
It all depends in what kind of reality you live...
IN MY REALITY SILVER JUST GO A STEP CLOSER TO 1$ TODAY!
READY TO LOAD UP BIGTIME!!
yes, this is what happens when the peasantry runs out of money to loot. it just isn't worth the effort any more to steal the last bits of what they have. five years of now when we've reached the HIGHLY VISIBLE stage of 90% of our peasants living in third world poverty conditions.....you can't expect to show even "faux" growth to the "greater fool".
The most insane part is Blackstone actually calls this 'the good times'?
Oh my fuck.
Good for them, bad for the rest of the former middle class.
If the FED holds all debt is it still a bubble?
If the Fed holds all then debt, then it's not a bubble, it's a beatiful-soon-to-be-ugly-again fairy tale. Cinderella cycle for capital markets and asset prices.
Holding it isn't the problem. Selling it is when the ride starts.
Like falling out of an airplane - the drop doesn't get you; it's the sudden stop.
Tide begins turning 2014. This is my prediction and I think i'm gonna be right.
For better or worse? Please clarify. This is after all a world where up is down and less is moar
Thanks, Captian Obvious. What was your first clue?
Blackstone in no way contributed to this credit bubble....
Better comment than mine. +1
Bullish on consumer finance and housing and construction in the middle of an epic credit bubble LOL.
Dr. Frasier Crane (reading): "It was the best of times, it was the worst of times..."
Norm: "Which one was it?"
+1 Thanks for the laugh.
Housing and construction?
Surely you jest.
Oh ... that's right ... you're selling like Goldman does. Please somebody take these houses off our hands.
Greater fool theory?
You can buy virtually anything --- from a $600,000 house to a $65,000 plastic surgery total body/face makeover--- with no money down and no interest payments for years.......while you're getting a free college degree [online from your bedroom in your PJs] with $100,000 student loans.....
I guess that may be what he's referring to partially.
Do you want to make more money? Sure, we all do!
Oh, for the simpler days.
Wish I had gone for "gun repair."
I took the TV/VCR repair but then those damn meddling kids and that dog invented that DVD thingy!
Will people still fall for the old adage of "we didn't see this coming!"? YES! People are stupid.
You have to be careful when interpreting any comments on real estate from these guys. I would rather own rental property and get that income, than own treasuries. Also throw in location - where there is a huge move going on for retiring boomers. The average US house in the average US town may suffer, but these guys are not buying those properties.
the spawn of Satan
and these are pics of the $26 million dump that mr. epic credit bubble purchased http://ny.curbed.com/archives/2011/02/04/music_honcho_lyor_cohens_ues_ma...
Bernanke is playing 'Bubble Bobble'?
Well, seems he forgot to pop all these bubbles to get credit, otherwise the bubbles pop on their own, releasing monsters hunting him down.
The whole system needs to be burned to the ground.
Skimmers speaking about bubbles.
I can't even bear to read about this crap anymore.
pods
Fire and Ice
Some say the world will end in fire,
Some say in ice.
From what I've tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To say that for destruction ice
Is also great
And would suffice.
Robert Frost
when does he recant and blame bush?
Whose fault that Obama got elected?
Bush.
so we are in the middle ? still room to expand
No shit, Sherlock. What was you first clue?
Blackstone being at the center of the credit issue, should certainly know. The question to ask is why say something now? Oh, is it time to set things up for the 2015 collapse?
Who was that guy at the FED that just said .com and housing were bubbles, but that there is no bubble now?