According to this FT article, Stephen Schwarzman, the head of the buy-out firm Blackstone (a firm that will soon close on a record $13.5 billion buy-out fund), warned that prices being paid in buy-outs are in “nose bleed territory� and that “seeds of excess� are being sown. As Schwarzman put it: “[W]hen it ends, it always ends badly. One of those signs is when the dummies can get money and that’s where we are now.� This is consistent with the position I took in this post that market forces will prevent buy-out funds from continuing to reap easy profits.