Posted on 09/20/2008 12:36:17 AM PDT by KingJaja
BEIJING: Fund managers associated with the Chinese government have indirectly confirmed they were interested in picking up the stakes, probably at distress prices, in Morgan Stanley, which is battling for survival. But they worry that the US government will block any such move by the newly created China Investment Corporation.
CIC already owns 9.9% of Morgan Stanley, which analyst say gives it a better position to compete for ownership of Morgan as compared to another bidder, Wachovia Corp. The Chinese government had allocated $200 billion as base capital while creating the CIC a year back. Its main mandate is to buy shares in overseas markets earlier this year.
"Even if the CIC intended to buy a stake, it could be very hard now as the purchase of a stake, even one smaller than 10%, could be subject to the US government foreign investment review," the official news agency Xinhua reported quoting an unidentified CIC official.
The storm that has hit Wall Street is seen by some in China as a golden opportunity for the Chinese government to muscle in to western markets and enhance its influence. The People's Bank of China manages another fund with $1.8 trillion in reserves. The two institutions are widely expected to look for leverage opportunities in the midst of a credit crisis in the US.
CIC suffered major losses after buying Morgan Stanley stakes for $5.6 billion and $3 billion worth of shares in U.S. private-equity house Blackstone. The choice before Chinese fund manages is to use the opportunity to more than recoup their losses or stay away from taking further risks.
Another sovereign fund looking for new opportunities in the Wall Street is Singapore government's Temasek Holdings, which has vast funds to buy overseas shares. Analysts say it will gain from Bank of America's takeover of Merrill Lynch & Co. This is because Temasek obtained special protections while buying a stake in Merrill last December.
Perhaps they should invest in dairy companies first.
I read a few months ago that all of the banks in China are state-owned.
I read a few days ago that the largest insurance company in the United States was state-owned.
Buchanan was right.
I'm not a conspiracy theorist, but the last year of the Bush administration has finally convinced me that no one in Washington can be trusted -- there's just too much money floating around.
With our open access to our financial markets, it would be smart for the Chinese to conclude that they can take us over by simply buying us -- starting with our politicians. No war needed.
The question is will the Japanese sell to the Chinese?
With our open access to our financial markets, it would be smart for the Chinese to conclude that they can take us over by simply buying us — starting with our politicians. No war needed.
They already own Clinton, and Soros won’t sell Obama.
I see you are trying to make a sarcastic point. HOWEVER, you are not encompassing all the possibilities.
For the appropriate balance to occur, maybe it should be American dairy companies that should invest in Chinese dairies and in turn the Chinese investing in American financial institutions ;)
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