Weekend Links (20 January 2008)

Some recent stories of interest:

• Davos-Sovereign wealth funds this year’s most in-demand guests: (Reuters)
• Economic uncertainty to dominate Davos: (Financial Times)
• One year on and the mood among bankers at Davos has taken a serious turn: (Times Online)
• China Investment Corp – transparency, accountability constitutional impossibilities: (Guardian Unlimited)
• China turns risk averse as capital outflows rise: (Financial Times)
• The new (financial) world order: (RGE Monitor)
• Silence not golden for sovereign funds: (Financial Times)
• A Guide to Speed Dating With Sovereign Funds: (NY Times Deal Book)
• Who’s afraid of Middle East money?: (Business Week)
• Regulators should intervene in bankers’ pay: (Financial Times)
• The Growing Power of Petro-Islam: (Newsweek)
• Subprime Nation: (Real Clear Politics)
• Abu Dhabi fund to break silence: (Arabian Business)
• ‘Green city in the desert’ for Abu Dhabi (Arabian Business)
• Gulf oil boom spreads to poorer lands: (Financial Times)
• President Bush Questions Saudi Ability to Raise Oil Supply: (Naked Capitalism)
• The Construction Site Called Saudi Arabia: (NY Times)
• Gulf Cooperation Council-Iran Watch: (Abu Aardvark)
• US Secretary of Defense: Iran a challenge, not a threat: (Inter Press Service)
• MEMO to US Presidential Candidates RE Middle East Policy: (Time)
• Red, White, and Blue Tag Sale: (NY Times)
  

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Sovereign Wealth Fund segment on Charlie Rose

Charlie Rose, hands down the best interviewer in the business, had Landon Thomas of the NY Times and David Enrich of the WSJ on his show last night discussing SWFs. They hit on most of the major themes (SWFs bailing out the US banking industry, reverse globalization, the SWF put) in the news recently (it’s the first segment, about 15 minutes long):

Enrich made an interesting comment about emails that he receives after writing articles about SWFs investing in US corporations. He says that many people complain about the US “selling out to foreigners” and “needing to learn Chinese and Arabic in the next ten years”. Thomas followed up by saying that there’s a xenophobic element in that type of criticism and the US isn’t as global as it thinks it is, especially when compared to places like London, Hong Kong, and Singapore. Hillary Clinton’s pandering at the last Democratic debate certainly speaks to these points.

Weekend Links (13 January 2008)

Some recent stories of interest:

• Gulf States to stay on trail of foreign companies: (Financial Times)
• A Closer Look at Sovereign Wealth Funds – Secretive, Powerful, And Huge: (Knowledge @ Wharton)
• Buffet says he turned down investments in financials: (Bloomberg)
• Sovereign funds invest where Buffet won’t: (Bloomberg)
• China and the Arabian Peninsula as market stabilizers: (Stratfor)
• The price of oil and nationalism: (Economist)
• Canada is ‘anxious’ to have investment from China: (Bloomberg)
• No sovereign wealth fund for Canada: (Bloomberg)
• Bush’s “New Middle East”: (Time)
• Abu Dhabi – East Leans West: (City Journal)
• The Dubai phenomenon: (Bitterlemons-international.org)
• How Arab Countries are Coping with Globalization: (Knowledge @ Wharton)
• Can the Middle East Sustain Democracy?: (Middle East Strategy at Harvard)
• The Arabs should stop whining: (Haaretz)
• Sovereign Wealth Funds making ‘good’ investments in US banks: (Emirates Business 24/7)
• Americans sold out to foreign firms at record rate: (Bloomberg)

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.