Sovereign Wealth Fund US Bank Investments: Reverse Globalization, Reverse Privitization=Reverse Bailouts?

The RGE Monitor has an interesting article that points out the recent trend of reverse privatization i.e. state-owned enterprises (SWFs) purchasing private enterprises:

And a group of banks that in the not-so-distant past argued that state ownership was a barrier to development are now themselves partially state-owned.

The article makes the argument that the phenomenon of reverse privatization is a consequence of reverse globalization.

An interesting piece of data from the article: emerging markets infused $28.4 billion in capital to US and European banks during the 4th quarter of 2007. The most the IMF has every lent in one quarter was $13.7 billion during the 3rd quarter of 2001. During the Asian crisis, the IMF lent $29.6 billion to the emerging world from the fourth quarter of 1997 to the third quarter of 1998.

With SWFs expected to grow to $12 trillion by 2015, the trend of emerging markets world capital flowing to bailout out the developed world is likely to persist…..so long as the developing world continues to experience crisises, scandals, and bubbles.