US long-term treasuries are the ultimate bubble. When that one pops, history will be decided.

This article is dated February 2009. It's still 2008. Print is so messed up...

Everybody wants to live in the future.

IIRC when a magazine has "February 2009" on the cover, it really means "take this off the newsstand by March 2009".

Why would the investors of P.E. continue to give up 2% in a deflationary environment when it could be year before the markets rise again?

The impression I got from the article is no new money is being pledged; PE firms are just calling in previous investments.

Those investors (like homeowners and the occasional VC limited partner) could default on their pledges, but that might prove even more costly -- in reputation, in loss of their other monies already stuck at the PE firm, etc.