peHUB First Read

* Andrew Lo: When the wisdom of crowds becomes the madness of mobs. * The fall of Simmons Bedding Co. under the ownership of THL Partners, which actually made back its initial investment (and then some) via a dividend recap several years ago. These dividend recaps are a tricky thing: One the one hand, they made money for PE fund limited partners (who are a PE firm's primary clients). On the other, they cannibalized the actual portfolio company -- thus reducing the likelihood of high multiple ROI and increasing the likelihood of layoffs, bankruptcy, etc. As Steve Schwarzman once said, they were about taking the risk out of what was supposed to be a "high-risk" asset class. The question now is if PE pros have been chastened by the aftermath? My sense is that they have not. * Morning Call: U.S. futures point higher, London flattens, European shares rise on banks and miners, the Nikkei hits 11-week closing low and Hong Kong rises 0.3%. * Another private equity connection in the race to suceed Ted Kennedy, and this one has nothing to do with Steve Pagliuca or Bain Capital. * Boston University and MIT stand to reap huge rewards from the IPO of battery-maker A123. * John Thain does Q&A at Wharton: "It's unfortunate that the American dream has been demonized." No mention of the obvious collorary: "It's unfortunate that so many on Wall Street were demons."