When I was on Bloomberg’s Taking Stock show on June 11th, Pimm Fox asked me whether I had concerns about Private Equity deals. My answer was that I wasn’t critical of the actual deals being announced, I was concerned about the follow-on speculation over companies in the same industry. That phenomenon is fueling a lot of the bullish run over the past year and I suggested that when the liquidity changed, those speculative premiums in rumored transactions would come out quickly and painfully. We’ve seen a bit of that over the past few days now that there is some doubt about financing and credit appetites for LBO’s. A perfect example of this scenario is Macy’s. On July 18th, that bastion of dealmaking information, Women’s Wear Daily reported that KKR was looking to buy Macy’s and the stock spiked about 9% on the speculation. With KKR’s easy capital called into question and the overall negative tone to the market, M has declined 20% since July 18th with 5% coming off yesterday. The Private Equity premium game has worked extremely well for momentum players and speculators until now and once this current decline is over, I don’t doubt that it will be tried again.