Private equity firms have billions of dollars to spend – and it’s time they did. Unused money, called in the industry, dry powder, is bad news for hedge funds. Typically these funds last 10 years and dry powder is invested within the first 3 to 5. Either the money must be invested or returned to clients. So big boom money that was given back in 2006 and 2007 is ready to be absorbed into the market – sending equity firms scrambling for deals.

Some firms are asking clients for more time, others are rushing into potential bargains. But there is great risk involved on those cheap companies, and it is uncertain as to whether it will pay off. A lot of money is being invested in foreign – Brazilian and Indian- companies. But with all the mounting pressure, it may be hard for firms to find consistent investments.

In the banking world, a new financial bill is making its way through Congress, allowing failing or near failing banks to wait a few years in hopes that they’re paid back for loans. Small banks and businesses are having trouble giving and receiving loans, so a $30 billion stimulus should help, the House hopes.  Pretending that these banks haven’t lost money may not be the best way to financial recovery, but at this point, it may be too early to tell.