How’s your PnL looking so far this year? Happy your long dollar position is starting to look good? Or are you annoying your b-school alumni affairs office asking them to post more jobs for experienced grads (Hey, Columbia, are you reading this? Get to work!).

Either way, if you have time to read this, I’ll bet you’re not doing as well as Adam Levinson. No, not that jerk from Maroon 5 — that’s Adam Levine.

Adam Levinson is doing WAY better than Adam Levine. For one, no one’s calling him a no-talent bastard to his face. For another, Fortress Investment Group just gave him $300 million in shares. But that’s not the first time he made more money than you or that weasel Adam Levine.

According to Jeffrey Cane of Portfolio.com (who wrote a piece linking to a lot of other pieces I didn’t read; As a former derivatives trader, I like to think of this as derivative journalism):

“Levinson, whose annual income Trader Monthly estimated a year ago was between $75 million and $100 million, joined Fortress in 2002 from Goldman Sachs. “

Then Cane asks the question we all ask ourselves when we read such things, if only to make ourselves feel better:

“The package shows that even amid a slowdown, firms are still paying out huge sums to star traders and dealmakers. Are they worth it?”

If you’re not Adam Levinson, the answer to that question is usually, “Hell no! Give that money to me!”. However, if you’re Adam Levinson, the answer is inevitably, “Hell yes! I should be paid more!”

Apparently, a Citigroup analyst disagrees with Fortress and Levinson and Cane provides a nifty quote. However, at the rate things are going, Levinson can buy out Citigroup, fire the analyst, and delete Adam Levine’s bank account so we don’t have to read about his dating exploits ever again.

Apropos of nothing, I always think of this site when i think of Adam Levine.

While the collapse of Bear Stearns and financial industry losses now topping $400 billion, many lawmakers and regulators are calling for increased regulation of the banking industry. But a parallel argument has been pointing in the opposite direction: loosening some regulations to allow private equity firms to invest more in banks.

The losses have forced banks to raise somewhere around $400 billion in new capital (the number changes every couple of days, so we forget exactly how much), much of which is now under water from further losses. With estimates of further losses totaling as high as $1 trillion to $2 trillion, many now wonder where the banking industry will find new capital to replace these holes.

One answer might be the government, although contracting revenues due to a dithering, recessionish economy may limit this option. Others have proposed easing rules that have discouraged private equity firms, which have something like $400 billion of capital on hand, from investing in banks.

Union activists plan to demonstrate outside of the New York headquarters of private equity giant Kohlberg Kravis Roberts & Co today, calling for higher taxes on buyout firms, better treatment of workers and more attention to environmental concerns.

The protest will be the latest in a series of protests that have been organized against private equity. Ironically, even as unions and other special interests have taken aim at private equity, the private equity business has been in a slump itself. Private equity deal flow is down 70% this year. New commitments to buyout funds are harder to come by. Banks, reeling from credit market losses, are hesitant to provide financing for deals. An even deeper irony is that private equity firms often rely on union dominated pension funds to invest in their buyout funds.

Today’s protests are being organized by the Service Employees International Union, with help from MoveOn.org. The SEIU were the folks who staged the protest in Philadelphia that interrupted a speech by the Carlyle Group’s David Rubenstein. As part of what the organizers are calling an international “day of action,” similar protests are planned today in 25 different countries.

Madison Dearborn Partners attempt to raise a fresh $10 billion has faltered, with investors committing just $4 billion, according to Bloomberg’s Jason Kelly and Jonathan Keehner. The aim, at this point in the fund raising campaign, was to have raised at least $5 billion, according to “the people” who say this kind of thing to reporters.

Although profits at the Madison Dearborn’s portfolio companies are said to be ahead of this years targets, the firm has been stung by a dearth of investor interest in private equity and some high profile setbacks. Chief executive officer John Canning Jr. stepped down in November. Pierre Foods, in which Madison Dearborn invested $142 million in equity four years ago, filed for bankruptcy yesterday. Moody’s last month lowered its rating outlook for Yankee Candle, which Madison Dearborn bought for $1.4 billion last year. Another 2007 acquisition, the $5.75 billion purchase of asset manager Nuveen Investment, has also run into trouble as the company’s profits and assets under management have fallen.

Madison Dearborn Misses Target Amid Nuveen, Yankee Candle Woes [Bloomberg]

Down in Florida the private equity bigwigs are holding a conference—they’re calling it “Super Return 2008”—fittingly taking place in the Blackstone owned Boca Raton Resort & Club. (You remember it as the place where Blackstone founder Steve Schwartzman offended everything Japanese.) Josh Harris, one of the founders of the Apollo Group, let loose with a rather dire prediction about the state of the economy.

Are private equity firms relying on blank-check companies to monetize their acquisitions? That’s what Bloomberg all-star reporter Jonathan Keehner and Elizabeth Hester are saying.

“We’re definitely seeing private-equity firms talk to SPACs as possible exits for their portfolio companies,” Thomas Ivey, a partner in the Palo Alto, California, office of Skadden, Arps, Slate, Meagher & Flom LLP, tells them. (Note: Carney worked for Skadden back when he was a lawyer.) “The M&A market for traditional private-equity purchasers is closed. The other piece is that the IPO market is closed.”

The real question, of course, is how much of a haircut the PE bigs are taking for these deals. It’s good to have cash in a credit crunch but we’re wondering how good.

Kohlberg, Madison Find Blank-Check Buyers as IPO Prospects Dim [Bloomberg]

How bad is the reputation of private equity? Months after private equity companies began to back away from deals that no longer seem promising in our credit crunched world, the Royal Bank of Scotland has told many of the biggest private equity firms they aren’t welcome in the first round of the auction of the bank’s insurance business, according to the Financial Times reports.

Kohlberg Kravis Roberts, Blackstone and Apax Partners had reportedly planned to bid in the auction, but were told by RBS that they were being excluded. Exclusion from the auction is widely being interpreted as demonstrating a clear vote of no-confidence in the ability of private equity buyers to secure financing necessary to close acquisitions.

RBS spurns buy-out groups [Financial Times]

Texas lawyer Joe Jamail is the lead lawyer for Clear Channel, which has sued the banks that are trying to back out of financing the acquisition of Clear Channel by a pair of private equity firms. Clear Channel claims the banks hesitation amounts to tortious interference with the acquisition agreement. Although there’s little—or perhaps no—precedent for this kind of case, the banks being sued have reason to be afraid.

You see, Jamail famously won a $10 billion verdict for Pennzoil in a tortious interference suit in against Texaco. Pennzoil had agreed buy Getty Oil in 1984, but Texaco swept in and bought Getty before the deal had closed. The massive award forced Texaco into bankruptcy. At the time it was the largest judgment in American history.

Pennzoil wound up collecting only $3 billion after Carl C. Icahn, who was Texaco’s largest shareholder, helped negotiate a settlement with Jamail. Before the settlement, the two sides spent years battling each other. “The fight has been punctuated by thousands of hours of fruitless negotiations, legal wranglings, dashed hopes and charges by executives of both companies accusing the other side of greed, arrogance and duplicity,” the New York Times said in 1987.

So how did Icahn resolve things with Jamail? After the jump, Icahn reveals all in a standup performance at Carolines Comedy Club in 2003.

By now everyone knows that Carlyle Capital Corp, a publicly listed investment company managed by a unit of private-equity firm the Carlyle Group, admitted today it had received a notice of default from one of its banks after failing to make margin calls on its $21.7 billion real estate securities portfolio. It also expects to receive at least one more default notice after falling short of margin requirements with four lenders.

So who are the lenders sending default notices and who are the one who are just chillaxing? As of December 21, Carlyle’s lenders were Bank of America, Bear Stearns, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, ING, J.P. Morgan, Lehman Brothers, Merrill Lynch & Co. and UBS AG. None of the lenders have commented on who pulled the trigger first and whether they would be adding to the slush pile of default letters. We’ve been digging for hours but we have come up empty. So we’re turning to you. Anyone know which lenders are punching up Carlyle?

Carlyle Capital Adds to Fears Of Forced Sales [Wall Street Journal]

We deserve some sort of prize for holding out a full five days to post about the nude pictures of Lindsay Lohan in New York Magazine. New York got some twenty million page views in the first two days, according to Jeff Bercovici. So much traffic that it crashed the website.

New York Magazine was started by writers and other disreputable literary types but soon fell into the hands of Rupert Murdoch thanks to a hostile takeover. When it happened, some were scandalized. Now it looks like a practice run for Murdoch’s takeover of the Wall Street Journal. Murdoch sold the magazine in 1990 to to K-III Communications, a partnership controlled by KKR’s Henry Kravis. The magazine did well for several years but Kravis was not exactly a hands-off owner. He reportedly fired an editor over the magazine’s coverage of his friends and Wall Street associates.

In 2003, New York was sold to Bruce Wasserstein, the Cravath attorney turned investment banker turned private equity baron. Wasserstein installed the best magazine editor alive, Adam Moss, to head the magazine. And that guy got Lindsay Lohan to pose naked for all of us, once again confirming his place at the top of the magazine editor heap. In short, we all have private equity to thank for bringing us this historic triumph.

Even better, there is an important tax lesson to be learned from all this. At least, that’s what we’re told by the folks at MainStreet.com, the money blog version of Parade magazine. How exactly are Lindsay’s assets taxable? We’re not quite sure we want to answer that question this early in the afternoon. But here’s how MainStreet.com gets there:

Unlike Hollywood starlets, most people are not stripping for the public, but there is a good chance that their financial records could undergo a shocking undressing. (Yes, we know it’s stretch, but go with it, dearest readers.) According to Surviving an IRS Tax Audit, nearly 50% of all taxpayers will be audited during their lifetime. While the initial notice in the mail can be cause for concern, an audit from the IRS doesn’t mean the worst as long as people know what to expect and are prepared.

At least they admit it’s a stretch. A-plus for effort, kids.

After the jump we bring private equity and Lindsay Lohan together in a much more intimate way. It’s NSFW, which is internet-speak for “totally awesome.”

Editor’s Note: That picture represents Lindsay on Portfolio, which seemed appropriate since Portfolio’s media writer was expounding on Lindsay. That’s our story and we’re sticking to it.

Lindsay Lohan Nude [New York]

Naked Lindsay a Web Home Run for ‘New York’ [Media Matters, Portfolio.com]
Naked Lohan Makes Us Think of Taxes [MainStreet.com]

Political contributions are one of the big mysteries in American politics. Why would anyone give to their favored candidate or political party when they could simply free-ride on the donations of others? It’s even more of a mystery than voting, which strikes most political scientists as irrational since the chance of any one vote making a difference is minuscule. Big donors are making an even larger sacrifice than voters, yet the chance of any individual donor’s contribution making a difference is probably just as minuscule.

The most likely answer is that political giving isn’t like voting—whereas voting is anonymous, giving is disclosed. This means political giving can have effects that voting cannot, such as winning favor with politicians receiving the contributions. This, in turn, suggests that giving patterns should differ from voting patterns because the two actions are differently motivated. Voting is a symbolic act whereby voters express a political preference and engage in solidarity with other citizens. You don’t get points for voting for winners or losers (unless it just makes you feel good to have voted for a winner). Giving is a self-serving act—so it makes a lot more sense to give to winners than losers. Think of it this way: voting is like praying or hoping; giving is like betting. Or investing.

And this year hedge funds and private equity firms have been piling into the same trade they did in 2004 and 2006: betting on the Democrats. Hedge fund and private equity donations totaled $6.4 million in 2007 for presidential candidates, with the Democrats getting 59.7 percent of the loot and 40.3 percent going to the Republicans.
These numbers are heavily skewed by the Democratic Senator Christopher Dodd’s role in the presidential race.

Although a little known candidate that few believed had a realistic chance of becoming his party’s nominee, Dodd garnered as much support from the alternative investment category as one-time Republican front-runner Mitt Romney. Dodd is widely believed to have a fund raising advantage as the Senator from Connecticut, where many funds have offices. If we net out contributions to Dodd, the fund raising contest narrows dramatically. Democrats retain an edge over Republicans of just 50.6% to 49.4%.

So hedge funds may have “elected” the Democrats in 2007, as the headline says, but the contest looks a lot more like the closely contested elections of 2000 and 2004 when you take away the Dodd factor.

Hedge Funds ‘Elect’ Democrats in ‘08 Race [International Business Times]

So how violent was the protest at Wharton’s Private Equity and Venture Capital conference
today? Accounts of the disruption vary, with some claiming that punches were thrown and others saying that it was just scuffling or jostling.

As we first reported this morning, shortly after David Rubenstein of the Carlyle Group had begun his keynote address, protesters from the Service Employees International Union swarmed the room, unfurling banners and shouting slogans, sometimes through a megaphone.

Eyewitness accounts report that around forty protesters were in the room (the Philadelphia Inquirer says only two-dozen), although protestors had been handing out fliers (click here to download a pdf of the flier or here for a grainy pop-up photo of the flier taken on the scene) outside the event earlier. Rubenstein was described as “speechless” in the moments after the protests began.

“They looked like they are going to kill the guy [Rubenstein],” a witness said over email as it unfolded. “They are on both balconies and have control of the floor. No sign of security. The speaker is in shock. One thing we now know about the venture crowd; don’t count on them in a fire fight. You’d be better off with Donald Duck as a wingman.”

After a short time, a dialogue of sorts—as much as any back-and-forth that involves bullhorns can be described as a “dialogue”—began between the protesters, the audience and Rubenstein, lasting for between ten and fifteen minutes.

“Rubenstein remained on stage and agreed to address questions from a woman with a mega-phone, who said she was a Manor Care employee, and lit into him,” George White of the Deal reports.

[More after the jump]

Tomorrow the Wharton School is holding it’s annual private equity & venture capital conference at the Park Hyatt at the Bellevue in Philadelphia. We’ve got a press pass to the conference but at the last minute our correspondent fell through. So we’re recruiting from our readership. Who wants to go to the conference? We’ll supply you with a press pass, in exchange you supply us with a few hundred words on what happens. If you’ve got a digital camera and can take some snapshots, that’s a huge bonus.

We’d go ourselves but half of our team has been banned by the bartenders union of Philadelphia from ever entering the city unless we’re willing to pay off our bar tab and leave some sort of damage deposit for injuries inflicted upon the fixtures. And Bess doesn’t do conferences. We need you. Email us at tips@dealbreaker.com with a brief explanation of why you should be DealBreaker’s correspondent at the conference.

This morning the Telegraph reported that Blackstone was preparing an “audacious plan” to break up mining giant Rio Tinto. None of our usual sources has yet recovered from spending the weekend dressed as Santa Claus so we haven’t been able to reach anyone on it. But DealBook, which has shown that its got some very good Blackstone sources in the past, has just reported that the story is “rubbish.”

According to the Telegraph, Blackstone’s bid is in the advanced planning stages. It is reaching out to a Chinese sovereign wealth fund and other possible partners and has appointed lawyers, spoken with bankers and got public relations folks on ready.

But DealBook calls bullshit on the entire story. We’d like to know what you think.

Blackstone plans audacious bid for Rio Tinto [Telegraph]
Bad Rumor: Blackstone’s ‘Bid’ for Rio Tinto [New York Times]

A commenter on the Opening Bell this morning linked to an FT article suggesting that private equity actually (surprise suprise) underperforms major public equity benchmarks, like the S&P 500. We’re a bit skeptical of most data that tries to aggregate results for this kind of stuff, cause it’s got to be riddled with bad data and other biases borne out of the data collection methods.

This part however was interesting and believable:

Mr Gottschlag admitted that some private equity firms were consistently outperforming the stock market. But he was sceptical about the number of buy-out funds that say they are “top-quartile” in performance rankings. “I have never met a general partner who was not top-quartile. So I wonder where three-quarters of the industry is hiding,” he said.

This same observation has been made many times, not just with PE, but with hedge and VC funds as well. Still, have to wonder whether the mistake is in thinking of private equity as an asset class that’s comparable with the public markets. Reading this brought to mind an old post from Eric Falkenstein arguing against the old saw that risk and return are positively correlated:

Thus, I posit the theory that risk is compensated by return, but only in areas that are non-zero sum. When investors merely buy existing claims from each other, they are engaged in overconfidence (see Milgrom-Stokey’s No Trade Theorem ). People self-select into non-zero sum situations based on their informational advantages and above-average ability, and on average prosper accordingly. Thus you need not only a high tolerance for risk, but moxie, because it takes energy and negotiating prowess to create and capture these non-standard options from one’s investments. They are active investments even if the activity is merely in the negotiation of rights.

Private equity underperforms market [FT]
Are Almost All Investors Biased? [Overcoming Bias]

The bottom feeders of private equity (we’re talking, like, analysts) are now making $215,000 a year, 29% more than in 2006. If you must know, the bump in pay apparently has more to do with some sort of pissing contest between buyout firms and hedge funds, re: who can retain the best talent, and less to do with Steve Schwarzman, 5’6”, warming up to his plebes, but take it from us and consider that a good thing. Those pokers will scratch your eye out.

Why Private Equity Is the MBA’s Mecca (Hint: $) [Deal Journal]

As we noted in Opening Bell this morning, another big buyout has gone the way of all mortal things. Today’s entry into the deal graveyard is the $8 billion Kohlberg Kravis Roberts and Goldman Sachs buyout of Harman International. According to most news stories on the deal, Goldman and KKR are forking over $400 million in exchange for convertible notes, Harman’s using the money for a stock buy-back, and everyone’s amicable, honky-dory, smiles and handshakes about the new deal.

But when we squint at the fine text, we’re not sure that Harman should be smiling so widely. According to the acquisition agreement, the company was due to collect a $225 million break-up fee if KKR and Goldman walked. So what’s seems to be happening is that they are selling $400 million of notes to the balking buyers for $175 million. Let’s call that a 57% discount. So Harman will now owe $400 million of principal to KKR and Goldman in exchange for just $175 million beyond what they were arguably already due according to the agreement.

But Goldman and KKR are getting more than just the notes. They are getting an option to buy the stock. Typically, a convertible note is linked to a share price that places the option currently out of the money. But if we follow through on the idea that Goldman and KKR are buying the notes at a discount, we can see that these are actually currently in the money. The $104 a share translates into 3.8 million shares for $400 million of notes. Those shares are now trading at $85, which means that the buyers have entitled themselves to $326 million of shares for just $175 million dollars.

To put it even differently, after the discount, the deal prices the shares at $59. We’re not sure that’s exactly the “vote of confidence” in Harmon that its executives are touting. Harman may now have an additional $175 million for a buyback but this seems a steep price to pay for that money.

Of course, if you figure that break-up fees are not sunk costs for dead deals because the buyers aren’t ever going to pay them anyway—a growing trend from private equity buyers, to be sure—then we guess it does sound like great deal for Harman. It’s probably just our short-sighted stinginess that makes us think in terms of additional, incremental dollars in the deal rather than the complete $400 million package.

KKR and GS Capital Partners to Invest in Harman International [Press release via Market Watch]

The market for LBO loans has opened up since the catastrophe of August. By offering the loans to investors at a discount, and eating the loss, the banks that committed to make them have begun to clear them off their books But, as the Wall Street Journal’s Henny Sender reports today, the amount of loans that have been sold—about $30 billion—are “a drop in the bucket” compared to the total of $310 billion of LBO loans still waiting to be placed. And that’s just from North American deals. Nearly a third of that is set to come into the market in the next thirty days, according to the Journal.

This data may shed new light on the reported plan of KKR to buy LBO loans from Citi, including LBO loans that went to finance KKR deals, and Citi’s reported plan to lend money to KKR to buy those loans. After speaking to several loan syndication professionals, we have come up with what looks like the logic of this deal.

The banks are worried that while there has been some investor appetite for LBO loans, there may not be enough to absorb the total amount they plan to bring to market. A flood of new loans selling into lowered demand could put pressure on the banks to make even steeper discounts, creating even larger losses at a time when the banks are attempting to put the legacy of credit market losses behind them. The alternative—keeping the loans on the books and hoping for better days ahead—is no better for banks trying to show shareholders that they cleaned the debt mess off their books.

Enter KKR. Without public shareholders and armed with lock-up agreements from investors, it can take a longer view of the debt market. Although a lot of debt is currently scheduled to come to market in the coming weeks and months, there may be a drought of those loans just over the horizon. The slowdown of leveraged-buyout deals this summer means that there will, eventually, be fewer loans coming to market. And this drought could hit just when investor appetite for debt is recovering. At that point, KKR would be in a great position to sell the loans at prices above the discounted price at which they bought them from Citi.

At the same time, Citi might be comfortable sitting on newer loans which it can claim it is syndicating on schedule rather than older loans. This is a sleight of hand but one that shows at least a certain kind of agility that Citi may hope will please investors. Citi too could hope to take advantage of a renewed appetite for debt and the coming LBO loan drought, and sell those loans at par, reducing losses that it might have incurred selling into a flooded market now.

We’ve said it before, but we’ll say it again: different time horizons create different profit opportunities. The logic of “if they’re buying, why are you selling” assumes a homogenous market of buyers and sellers, when in fact the market is characterized by heterogeneity. And private equity firms—at least those that don’t feel answerable for stock prices to public shareholders—are often in a position to take advantage of opportunities only available to those with longer time horizons.

Damn it must feel good to be a Kravister.

Debt on Sale: Banks Grease The Leveraged-Loan Machine [Wall Street Journal]

Stephen Schwarzman sits in front of the breakfast table.

It’s not just any breakfast table. It’s the most important breakfast table in the world. It was built for John F. Kennedy by an Italian marble worker who died mysteriously during the cold war. Kennedy never ate at the table, however. He was assassinated too early. Later it was acquired by Nancy Reagan for her husband, the former President. But he also died before he could eat breakfast at the table.

It made Schwarzman happy to know that among these powerful men, only he had eaten at the table. He. Stephen Schwarzman of Philadelpha, the man who had come from nothing and become something. No, not “something.” Who had become everything. And not “become” but made himself. The man who had made himself into everything.

A servant silently glides across the polished floors of the most important breakfast nook in the world. A moment of irritation passes across Schwarzman’s face. He has barely touched his crab salad. There is at least $320 worth of crab still on the plate. There is also kiwi, and grapefruit and a spice from Thailand that is unavailable in the United States. It was a gift from the third most powerful man in China. If this servant touches his plate, Schwarzman will fire him. Why are they always touching his plate before he is finished?

The servant isn’t here for the crab. He is carrying a phone on a silver plate. He doesn’t say a word. Schwarzman lifts the phone, flicks it open. He makes a mental note to fire whoever is calling during his breakfast.

“You’re reading that story in the Journal about winning another year to fight the private equity tax, right?” the voice of his chief lobbyist does not sound as happy as it should. Schwarzman was reading that story. “Look. Forget it. Although Senate Majority Leader Harry Reid has declared the private equity tax hike dead in the Senate, there’s still a chance that an even harsher tax hike could work its way into a bill to reform the alternative minimum tax.”

Schwarzman chews a bit of crab but doesn’t say anything.

“Do you have the New York Post?” the lobbyist asks.

“Who the fuck do you think you are talking to?” Schwarzman says, tiny bits of crab escaping from his lips.

“Here’s the deal. The house proposal raises the tax on carried interest to 38 percent. The Senate will have a lot of political pressure to act on this AMT patch and a carried interest bill could be one palatable way to offset the revenue hole they need to fill. We can still probably get rid of this thing. But the house is harder to fix. So many more of the buggers. We’ll have to spread the love around a bit,” the lobbyist says.

Schwarzman coughs. He hangs up the phone and puts it on the plate. Looking back at the crab, he quickly calculates what 38% of the government’s take of his breakfast would be. Then he eats that portion in one forkful. For a moment his mind flashes back to the family store in Philadelphia, to his job folding towels. They would like that, those Democrats. They would like to see him back in Phildelphia, folding fucking towels, he thinks.

The servant turns quickly and walks across the room. There’s a slight squeaking noise as his soft, rubber soled sneakers hit the the floors. Schwarzman makes a mental note to fire him.

Law Still Might Be Taxing for The Rich [New York Post]

If you were trying to design the perfect political fund-raising tactic, you probably couldn’t have come up with a better one than the private equity tax-hike proposal that has been haunting Capitol Hill this year. Despite their riches, private equity firms had not been very involved in politics until this year. But in the wake of the proposals they have reportedly spent millions of dollars to defeat the proposals.

And if something is working that well, you don’t just shut it off by bringing the proposal to a vote. Far better to keep the proposal—and the millions in campaign donations and funds for your friends in lobbying—alive for a bit longer. Especially when you have a big election year coming up.

As it turns out, that’s precisely what Senate Majority Leader Harry Reid has announced he is doing. The gullible reports make it sound like a victory for the lobbying efforts of the private equity firms, when in fact it is simply a rent-extraction victory for lawmakers and lobbyists. Basically, it is the political class shaking down the financial class for a bit of the wealth.

Ain’t democracy grand?

Update: Larry Ribstein has much the same reaction.

Buyout Firms to Avoid a Tax Hike [Washington Post]