kkr's all about creating value for kkr. that's okay. that's their job. i'm still feeling the pain from sealee. another company taken public by kkr. i recommended paying up to $18 for the ipo in april 2006. the darn thing peaked at 18. it's now hanging around $2 and change. kkr sold a bedding company at the absolute height of the housing cycle. to quote noted stock guru george santayana, those who cannot learn from history are doomed to repeat it. maybe this time kkr's picking the top of the dollar store cycle. fool me once shame on them. fool me twice shame on me. plus you've got to figure throwing another dollar store in the mix would be bad for family dollar, which would go from being a second -- the largest or the second largest publicly held dollar store. anyone who wants to buy a dollar store will have a lot of shares to choose from. here's the bottom line. i think i could have made a fool of myself recommending family dollar off increased food stamps. thankfully, the reservations of the chartists got me to probe deep on this one, change my tune, ch

kkr, silver lake, all these guys also in the news today for tremendous both field flow, kkr and silver lake, a great sale, but still a play i would be careful, even though they have turned the corner. >> there he goes, the killjoy again. >> this started if february, the stock went higher, then started again in front of the earnings, and big man over there was all over that trade. >> we talked about -- why would you bet against them? they basically had the dry powder. they've got $29 billion ready to go into the market. >> and they're looking at financials. >> and they'll be allowed to buy more than they ever have. he also said two thirds of the company they own reported earnings that actually beat. some of these guys probably do a much better job outlining the balance sheets. >> the real key will be whether the ftc gets its way. right now the proposal is double the tier 1 capital ratios from a start-up, so that could be restrict i have. in fact the ceo of blackstony saying that would kill it for private equities. >>> times for "pops and drops." joe? >> warren buffett rejoiced, american

portfolio company of the leveraged buyout firm kkr. dollar general's ipo had been reported as a possibility a couple weeks back. now we know they hope to make it a reality. you have underwriters like goldman sachs, citi, b of a, kkr itself. of course, they've gotten into that game. now the ipo itself here of dollar general expected to raise as much as $715 million. kkr will pay itself and investors about $200 million dividend. remember, of course, these are the exit strategies for the obo firms, the way they ultimately generate a return either by selling these businesses to other buyer or taking them public. and in this case, they will do that. now, of course, they will continue to own a stake. i want to look through that. but the larger story that i want to tell you about here the this is just going to be the first. private equity firms, of course, have been extraordinarily quiet and somewhat beleaguered over these last couple of years. they have been unable to do new deals of any real size, certainly not at ratios in terms of leverag

. >> but if you're kkr or wilbur ross all of a sudden we're all worried about you.owish let's not kid ourselves. part of this, in addition to the historical perspective, is the anti-pathy toward wall street in washington. i don't think that's true of the fdic per se but the fdic has thoi about congress and there is plenty of that in congress. >> absolutely. rich, what do you think? >> again, the track record is very sketchy. the fact is -- >> when you say the track record has been sketchy, in other words, they haven't done well on these investments or they're -- >> well, few and far between. >> so you don't necessarily think they're going to be there with the capital if they're allowed? >> they could be there but -- >> they haven't. >> they haven't been there. reluctant to venture -- if these transaction, even though it's the highest number of bank failures since 1992. you look at the track record of private equity. numbers have just nose-dived from 2007. and now you're seeing firms trying to work out the debt they incurred on things that are still going to have to

of course, remember, dollar general was bought by kkr. so this is the -- potentially the first of many private equity-backed ipos to hit the market in 2009. this would be, according to the "wall street journal," among the year's biggest ipos. so, again, kkr spinning out dollar general, according to the "wall street journal." we also want to check in on shares of the gap. the gap posted earnings today after the close. it was a beat. the commentary is coming out now. it has been a volatile session for the gap. you see there it's been up and down. the cfo is saying the economy is still challenging. but it will proceed with opening about 50 stores, closing 100 stores in 2009. guy, this is a name that you watch? >> gross margins up to 39.7%. operating margins up to 11.6%. inventory was down 14%. we've talked about this a number of times. the problem is that $18.75, you can't get long in the stock. we've talked about being shorted. not shorted, getting out of it. taking profits. and then look to 16.5, 17 to take them back. you can't get along i

not just blackstone, all of these guys also in the news today for tremendous both deal flow, kkr and silver lake, a great sale, you know, of the semiconductor designer, but it's still a place i'd be careful even though they have turned the corner. >> there he goes the kill-joy again. >> blackstone has been signalling this, this started back in february, the stock went higher. >> and the big man down there was all over that trade, buddy. >> it started back in february because we talked about -- this was a guy why would you bet against him? they had to drive powder, they've got $29 billion going into the market looking at the stressed assets. >> and they're looking at financials. >> looking at financials and they'll be allowed to buy more than they have. he also said that 2/3 of the companies they own have revenues going up and that's versus 1/3 in the s&p. a lot of companies beat but didn't grow in the same way that blackstone and some of these other guys probably did a better job. >> the key will be whether or not the fdic gets its way. right now the proposal is double the tier 1 cap

the big concern is whether some of these private equity concerns like kkr and blackstone try to exit their portfolio companies. that would be a big telltale sign we are due for an improvement in the underlying economy. >> last question. we just have ten seconds. bears are anticipating a dip in september and october. do you think that will happen, and does it create a buying opportunity instead of a reason to sell? >> it's always difficult to say because the stock market and the economy are two different things. i can make a pretty strong case that the economy is going to suffer a little bit of a relapse after a near term -- but what does that mean in terms of the stock market? ality always difficult to say. we find ourselves with data so important on a day-to-day and month-to-month basis, we have to wait and see. >> s&p 500 higher or lower than it is now on december 31 snt. >> if i had to guess i'd say not materially different. >> higher. >> rich peterson, thanks very much. and of course dan greenhaus as well. michelle, back to you. >> 48 minutes before the closing bell, bob. take a

we've started to hear a lot of murmurs, the likes of the kkr, taking their portfolio pub lichblgt those are the ones doing fairly well. all of these things still in place, still dependent on the capital markets. mark, back to you. >> thanks, up next, the word on the street, the buzz beyond the trading floor as we gear up for a bounce, we hope, after yesterday's dive. >> it maybe meager but maybe we'll build on it. >>> later, the federal small bank loan initiative is off it a rather slow start, but one small bank in new york is picking up the slack and aggressively lending. ceo of the park avenue bank joining us next half hour. we'll be right back. you all want to run your businesses more efficiently, so we've brought in a team of experts to help. one suggestion is to make your shipping more efficient with priority mail flat rate boxes from the postal service. call or go online for a free supply and up to $160 in offers from authorized postage vendors. shipping's a hassle! weighing every box... actually, with flat rate boxes you don't need to weigh anything under 70 pounds. if it fits, i

i think you'll see the very, very big players, kkr, black and carlisle. those are the guys that have the financial resources to make this work. and then the very smaller specialized players, lone star funds is a private equity fund that has bought banks all over the world. so these type of banks. nothing in the middle. i don't think you'll see a flood of private equity coming into the market, because this has been really tight and it's difficult for them to make money out of these banks. >> id, what about the assets themselves that many of them on the books are going to be difficult to unload? they're underperforming, and that's an issue for these companies, as well. especially if they have to hold on to these situations for three years. >> right. well, there are still a lot of toxic assets in the books of these banks, but i believe the fdic and some of these past deals has had an aarrangement with the private equity firms. they did a bank with the united deal. so that eases some of the risk. >> in other words, the fdic would assume some of the lost. >> i

your hearing reports, kkr is privately talking about getting a lot of companies prepped for ipos. blackstone in the earnings call last week, james said the same thing. seems like firms are ramping up. going to get the s-1s out and hope the market responds. >> that being said though, dan, you know, the '05, '07 period where we all all of those record deals in terms of size, you're not going to take an hca public at one time. this is still going to be a process, probably take years for them to completely exit some of these incredible large names that they've acquire. >> yeah, it does. it's a long bleedout process. two things about that, david. first, the big deals, '05 to '07 deals. ipo is probably the only exit for the private equity firms there. you're not going to find a strategic inquirer. the deals are too big. i remember going back a couple years ago, a couple of the privating quitity firms that were going to do that deal dropped out. one from carlisle group in a speech said, look, not only were we uncomfortable with the price but the bleedout is so long on this, that tunnel w

. >> kkr preparing as many as six pos. the firm getting ready to float companies, including toys "r" us, first data and dollar general. and the fda is approving cancer treatment against a form of kidney cancer. the sixth approval for the block buster drug used to treat certain types of lung, breast and colon cancer. the treatment will be allowed to treat advanceded renal form of carcinoma, the most common form of kidney cancer. in england, it's the drug that can't even be mentioned. >> ah. that of which we do not speak. you don't know it exists over in england. can you give me anything? no. there's nothing that works for under $50,000. so you're screwed. >> have you seen the market this morning? we're in pretty good shape for a monday. markets in asia were relatively decent. got great earnings. better than expected earnings from barclays, hsbc, can ubs. got good manufacturing data out of china. >> this is amazing when you consider the run we've been on for the entire month of july. markets have moved so far so fast. >> pet

the discount retailer was taken private by kkr back in 2007. no word on which exchange dollar general will list, nor on its prospective symbol. but it's nice to know that there are going to be more ipos in our lifetime. >> isn't it something like 3 1/2 years and traditionally taking a new company to tom to market versus 1 1/2 a few years ago. >> exactly. we're in new times. >> the justice department is approving a deal between sun microsystems and oracle. the european commission also must sign off on the deal. oracle has been incredibly inquisitive and this will be, if it works out, mike, transformational, maybe, in some ways, right? like people? >> yeah. he continues to do it. there's few people who take advantage of this environment, like ellison, maybe it's transformational. guys, listen to this. morgan stanley is reportedly planning to hire as many as 400 traders and salespeople. reuters says about half have joined the firm. the wall street workers want the people for its equity exchange. but after many, many months of layoffs on wall stree