The Age Old “Private Equity” Playbook is Making Wall Street Great Again

Written by Bryan Lutz, Editor at Dollarcollapse.com:

The age old “Private Equity” playbook is Making Wall Street Great Again.

If you don’t know how Private Equity works, the text book definition is this:

“Private Equity firms buy up companies, improve them, and then sell them at a higher price.”

Unfortunately, in the fiat-driven world it doesn’t work that way. Here’s what happens:

First, private equity makes money by borrowing cheap fiat money to buy healthy private businesses at low multiples. During the sales call private equity partners are really just interested in a few things.

EBITDA and other top line numbers like:

1. Is the business is growing?
2. Margins are strong
3. Cash on the balance sheet may exceed the purchase price

The seller’s fundamentals, market differentiation, or long-term strategy largely don’t matter. The only thing that matters the margin between the private equity partner’s buying price and the price at which they will later re-package the company in an IPO or public offering.

Results don’t come from improving the business, increasing value for the customer, or any kind of innovation. In the fiat world, the private equity playbook is simply financial engineering. Value is created on paper, not operationally.

This is the core Private Equity playbook:

Buy private at: 3×–4× EBITDA

Repackage several companies as a holding company…

Sell public at: 10×–15× EBITDA

Private equity partners win through the margin spread, which is basically a symptom of the fiat-driven world. The more the USD is debased, the less it buys. Saving cash is punished and borrowing money is rewarded. So, governments run constant deficits, corporations load up on debt, and “investors” (sometimes known as private equity partners) use leverage to boost returns. Eventually, there’s so much debt in the system that trying to pay it back would break the whole thing down.

Profit then comes from fiddling around with financial structures and inventing new ways to do business.

Here are some examples:

• Buying companies just to flip them
• Turning everything into an asset class (ie. soon to be tokenization)
• Chasing valuation multiples instead of real growth
• Extracting returns through leverage, fees, and exits

What Private Equity partners are doing is a small microcosm of what Wall Street does on a grand scale. Now the Private Equity Playbook, the return of easy money, and thanks to much of the Trump administration’s efforts are Making Wall Street Great Again.

Last year’s profit by Wall Street CEO’s and executives shows you the proof.

New York Times reports:

“The Trump administration is not just taking apart regulations but attacking whole regulatory agencies that date back to the 2008-9 financial crisis and were meant to keep banks from giving in to their worst impulses. Regulators have also made it easier for banks to peddle in risky assets again, like cryptocurrency, and President Trump paused enforcement of foreign anti-bribery rules.

The deregulatory bonanza alone makes it the best time in a generation to be a banker.

But there’s more! Falling interest rates and a permissive set of antitrust overseers are helping reverse a lull in the lucrative business of arranging mergers and acquisitions, as the $100 billion bidding war between Netflix and Paramount for Warner Bros. Discovery shows. Once imperiled real estate loans look steadier, thanks to the rebound of in-office work. Stocks are near record levels, the bond market had its best year since 2020, and gold and silver have soared — all of which feeds the trading businesses that keep Wall Street’s profit machine humming.

For Mr. Dimon and his counterparts, this means paydays closer to the scale of hedge fund managers or Silicon Valley start-up founders than the caretakers of old-line lenders…

…A combination of salary, bonuses, dividends, stock grants and appreciation in his allotment of the bank’s shares yielded roughly $770 million in 2025 for JPMorgan’s chief executive, according to the company’s disclosures. The bank’s stock rose 34 percent last year.

For the chief executives of Citi, whose shares rose more than 65 percent in 2025 after the bank slashed tens of thousands of jobs in a yearslong restructuring, and Goldman Sachs (shares up 53 percent), the paydays were more than $100 million each. The chief executive at Capital One (shares up 36 percent), Richard Fairbank, made more than $300 million, including proceeds from stock he sold during the year. His compensation included a $30 million bonus after the Trump administration waved through the lender’s acquisition of Discover Financial.”

 

The Private Equity Playbook is working exactly as intended for Wall Street in a fiat-driven system. It rewards leverage, paper gains, and merger and acquisition exits over long-term thinking, craftsmanship, and real value creation. What looks like “smart money” is often just cheap money chasing spreads, turning productive businesses into financial products and passing the risk downstream.

When regulation is stripped away and borrowing is once again subsidized by lowering interest rates and quantitative easing tools, Wall Street does what it has always done best:

Extract, repackage, and cash out.

Wall Street isn’t being made great again by a healthier economy or better business. In the fiat-world, it is a financialization machine that quietly converts real work into fees, multiples, and paydays for those at the top.