by Wolf Richter, Testosterone Pit.com:
Private Equity firms have seen this coming for months. They’re positioning themselves for it. In April, Leon Black, CEO of Apollo Global Management, explained it this way to an incredulous world: “We’re selling everything that’s not nailed down.”
At the time, there were rumors that the Fed would start tapering its $85-billion-a-month bond purchase program. It would cause bloodletting in the bond market, raise interest rates, and wreak havoc with the highly leveraged companies that PE firms have in their portfolios. The Fed’s purposeful cacophony has been getting louder. Goldman Sachs, the all-important factor in this, just gave the Fed the official go-ahead: Goldman economist Kris Dawsey predicted that tapering would start in September, and bond purchases would end by mid-2014. By which time the Fed’s balance sheet will have swollen to $4 trillion.
Yup, I know.
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