But its all in the game

Guambat is (once again) showing his age. One of the great songs of his youth was, "Many a tear has to fall (but its all in the game"). I'm sure you can buy it on TimeWarner Music. It's a classic.

The tune crooned out between his ears when Guambat read,

Private equity boom may "end in tears"

THE head of Australia's largest bank today warned the boom in private equity transactions in the domestic market was likely to end in tears.

National Australia Bank group chief executive John Stewart told a business luncheon that it would take only one syndicate to fold to see the boom unravel.

"Everyone feels private equity is going to end up in tears," Mr Stewart said.

"The only question is do you join in while it is making good money for everyone?"

"When you know there is a problem is when the first syndicate fails," he said. "All you need is one deal to fold then it will start unravelling, I suspect."

Mr Stewart said the major banks were in a better position than they used to be and were not holding all the risk in private equity deals.

Private equity raiders have been active in the market this year, buying up the Myer department store chain, the Cleanaway division of Brambles, retailer Colorado group and 50 per cent stakes in the media assets of each of Publishing and Broadcasting and the Seven Network.

Negotiations were also underway to sell Flight Centre and Rebel Sport into private hands.

Mr Stewart also expected the moving of jobs offshore by the bank would increase from a current 20 to 30 people to around 200.

"Most banks will keep customer-facing jobs but back office jobs will be done in places like India and China," he said. In a wide ranging address, Mr Stewart also said NAB's credit card business was not for sale.

"We're okay in credit cards," he said.

"Other banks are better than us in credit cards and it is a business we will probably invest in, but not right now, thank you."

He said Australian consumers were showing signs of stress and it would be the wrong time to look for more credit card business.

He said if the economy slowed, the first business areas to suffer would be lending and credit cards.

Of course, you'd expect that from a banker.