Editor’s Note: Liz Peek is a financial columnist and the author of wowOwow’s Wall Street Weekly. Liz Peek’s SHEconomics series, herewith, is scheduled to become a book. Click here for your introduction.

Newsflash: Somali Pirates to Take Over Citigroup

The above faux headline is the kind of gallows humor making its way around Wall Street these days. While pillorying the absurdly brazen capture last week of a $100 million Saudi oil tanker, it also harks back to the glory days of private equity, when another brand of super pirates stalked financial markets.

Today, the requested bailout of the Big Three reminds us of the hubris — the know-it-all arrogance — that led private-equity companies like Cerberus, Blackstone and Carlyle to think they could manage anything and everything better and smarter than anyone else. Cerberus, the proud owner of 80% of Chrysler, is lined up right alongside Ford and GM at the feed trough. Oh how the mighty have fallen.

Welcome to our third installment of Sheconomics, in which we demystify finance and, in this segment, private equity. We want women to join in the national conversation on the economy. Why? Because half our country’s brainpower refuses to engage in matters financial, and boy do we need all the help we can get. Women have somehow bought into the notion that investing is men-only territory, just like driving the family car. Why is it again that auto insurance rates for young men are higher than for young women? Think about it: Women are more practical and less prone to taking ridiculous risks than men.

We firmly believe that if women had been paying attention to the economy we would not be in this mess!

Here’s another thought: Women are letting men have all of the fun. Fun?

I want to tell you a story. A friend of mine tragically and unexpectedly lost her husband two years ago to a heart attack. She suddenly faced having to take over his company and sort out their finances – terrain she had previously avoided. I had a chance to catch up with her this past weekend at a wedding and here’s what she told me: She has dismantled her husband’s failing business, and has now got a job. She’s impatient to move on because she realizes, “There are a lot of people out there who aren’t very smart. I am smart, and I can hold down a much bigger job. I realize now that my business instincts were always better than my husband’s, but unfortunately I left all of our financial decisions to him.”

This woman is not smug or conceited; she is energized. She is excited about her prospects, but she wishes she had started earlier. Bottom line — she’s having fun! “I was raising children, certainly, but I could have been engaged. I see so many women these days trying to keep their brains active – by playing bridge! Why don’t they do something useful — volunteer or get a job?”

OK, so I’m becoming a zealot. But really, so many women are passing the intellectual buck! Read on – soon you will have no excuse to do so!

Today we are talking about private equity. Major players in this field, such as those mentioned above, changed the investment landscape in the past two decades and made a bundle in the process. How does it work?

Private-equity firms typically buy publicly owned companies – firms listed on the stock exchanges — and take them private. This means they buy out public shareholders, usually by offering a higher price than the stock is selling for. Next the new owners restructure the business with an eye to making it more profitable. The ultimate profit opportunity – or exit strategy — lies in them selling the company back to the public or to another buyer at a ramped-up price.