International Investing

Now KKR wants to IPO?

In my opinion, Blackstone was just in time. I wonder if Blackstone quietly passed some money to help Bear Stearns take the hit for its two blown-up CDO funds.

A loud ‘pop’ in the market for CDOs would ratchet up bond yields yet again, squeezing Blackstone’s bottom line and badly marring its IPO.

I have a feeling Blackstone’s IPO is not going to go very well. The US Congress is threatening to pass a “Blackstone bill” that would ratchet up tax rates on private equity (bringing it in line with the corporate income tax). Blackstone will probably pay Congress off hire a bunch of lobbyists with very good connections and derail the bill, but the risk is still there, and the bond market seems close to a tipping point.

In any case, I wouldn’t touch Blackstone’s IPO with a ten-foot pole.

On a somewhat related note, I was going over the recent rise in bond yields with a more Wall Street-wise friend. The Chinese government has bought a $3 billion stake in Blackstone — while simultaneously dumping $5 billion in Treasurys over the past month. What’s the deal with that?