Lewis Black "America On Sale"

The "strong $ policy", the fiscal discipline, the hawkish Fed & and the high savings rate is (finally )working...... More video related links from today American ‘Deal Deficit’ Gets Wider & Tokio Marine Will Acquire Philadelphia Consolidated for $ 4.7 billion. Much more to come......

Sieht so aus als wenn die jahrelange "Strong $ Policy", die strikte Haushaltsdisziplin, die gestrenge Fed & und die hohe Sparrate sich endlich auszahlen...... :-) Hier noch mehr Meldungen aus den letzten 24 Stunden die perfekt zum Video passen American ‘Deal Deficit’ Gets Wider & Tokio Marine Will Acquire Philadelphia Consolidated for 4.7 billion . Dieser Trend dürfte noch lange anhalten......

Investors Hit $10bn Loss In US Financials

Never catch a falling knife.......It remains to be seen if the Sovereign Wealth Funds won´t double down..... :-) Just watch todays news on Barclays....... It seems like they still havn´t lost enough..... At least they bought into a strong currency..... ;-)

Greife nie in ein fallendes Messer..... Bin wirklich gespannt ob sich die staatlich kontrollierten Fonds wirklich ernsthaft zurückhalten. Das Beispiel Barclays zeigt momentan noch ein anderes Bild. Mann könnte auch sarkastisch sagen das hier der "Anfängerfehler" gemacht wird und die Positionen "verbilligt" werden..... :-). Die Verluste sind anscheinend noch nicht schmerzhaft genug..... Immerhin haben Sie sich dank der "gelungenen" Investment in eine "starke" Währung eingekauft ...... ;-) Investors hit $10bn loss in US financials FT
Investors who backed US financial companies’ drive to raise much-needed capital are sitting on nearly $10bn in paper losses amid a continued slump in the sector’s shares, a Financial Times analysis shows.

The negative returns suffered by investors are likely to make it more difficult and expensive for US financial groups to tap equity markets if, as expected, the credit crunch forces them to raise more capital.

“Raising funds from equity investors is becoming increasingly complicated because the performance of financial stocks during and after the spate of fund-raisings has been so abysmal,” said a Wall Street banker who advises institutions.

The setbacks suffered by equity investors come as sovereign wealth funds – a rich source of capital at the beginning of the crisis – have moved to the sidelines after seeing the value of investments fall in companies such as Citigroup, Merrill Lynch and Morgan Stanley.

Investors who bought the $65bn-plus in common and convertible shares issued by large US financial institutions since last October have seen their total investments fall by more than $9.7bn – a negative return of about 15 per cent – according to an FT analysis of Dealogic data.

> I doubt that all of the SWF were as smart as the following....

> Glaube kaum das alle SWF ähnlich weitsichtig wie der nachfolgende agiert haben.....

FT Abu Dhabi’s Adia, meanwhile, had structured its November investment in Citi in a way that gave it the right to go back and strike better terms on its deal, heightening its downside protection to match the terms GIC and Kia struck with Citi.

> Lets hope for them that this kind of term is still in place during the next few capital raising attempts from Citi.... :-)

> Bleibt zu hoffen das diese Kalusel auch noch nach der 3. und 4. Runde von Kapitalerhöhungen bei Citi in Kraft ist...... :-)

Those who took part in the $1.2bn recapitalisation of the bond insurer Ambac last March are nursing paper losses of more than 70 per cent. And fund managers who backed a $1.2bn capital raising by fellow monoline insurer MBIA have seen their investment shrink by 60 per cent.

Shareholders in Citigroup who thought that the sharp fall in the stock made last month’s $4bn share issuance a buying opportunity face a 24 per cent loss.

Of the 20-plus fund raisings by US banks and insurers since the onset of the crisis, only two – by the student loan provider Sallie Mae and the regional lender Sovereign Bancorp – show a small positive return

What A Difference A Week Made....Credit Suisse Discovers Another $ 2.85 Bilion "Fair Value Reduction"

As one who has listened to the entire conference call from Credit Suisse just one week ago i can assure you that this will spook the markets. Credit Suisse was besides Deutsche Bank and Goldman Sachs viewed as one of the big winners during the turbulence. But there was always doubt that their numbers might be too good to be true...... Credit Suisse is proving that this might be the case..... Should be very bad news for the confidence in the marketplace overall...... I assume the "arrogance" from the Credit Suisse management won´t be as obvious as during the last call...... Stock tanking 7 percent......

Als einer der sich vor einigen Tagen die Telefonkonferenz angehört at bin ich mir sicher das diese Meldung hohe Wellen schlagen wird. Bisher galt die Credit Suisse zusammen mit der Deutsche Bank und Goldman Sachs als einer der Gewinner der Marktturbulenzen. In der Vergangenheit sind immer wieder Zweifel aufgekommen ob "die Zahlen nicht zu gut sind um wahr zu sein" ...... Credit Suisse liefert hier eine Steilvorlage für diese Vermutung......Ich bin mir zudem sicher das die "Arroganz" von Seiten des Managements während der nächsten Telefonkonferenz sicher nicht wieder so ausgeprägt sein wird wie letzte Woche .... Aktie zur Eröffnung 7% tiefer......

Thanks to Randy Galsbergen

Credit Suisse Further to its commitment to provide transparency, Credit Suisse today announced that in connection with the operation of ongoing control processes, it has undertaken an internal review that has resulted in the repricing of certain asset-backed positions in its Structured Credit Trading business within Investment Banking.

The current total fair value reductions of these positions, which reflect significant adverse first quarter 2008 market developments, are estimated at approximately USD 2.85 billion (having an estimated net income impact of approximately USD 1.0 billion).

In the first quarter to date, we estimate we remain profitable after giving effect to these reductions. The final determination of these reductions will depend on further results of our review and continuing market developments. We will also assess whether any portion of these reductions could affect 2007 results. Finally, our internal review, which has identified mismarkings and pricing errors by a small number of traders in certain positions in our Structured Credit Trading business, is continuing.

> Here the Full Year Results from Feb. 12th & Webcast

Qatar was maybe a little bit premature....

Sieht ganz so aus als wenn einige Investoren heute leicht erhöhte Temperatur haben werden.....

Qatar fund buys Credit Suisse stake

The QIA’s move comes after Credit Suisse posted robust fourth-quarter results underscoring its resilience during the credit crisis,......

UBS: $14 Billion in Mortgage Write Downs

What a mess. Seems their 8 week old forecast was $ 4 billion too low. Lets hope the $ 12 billion capital injection from Singapour & the Middle East at fire sale prices will be still enough after the next forecast is hitting the tape..... I think the image as a rock solid Swiss banking giant is now gone and it will take a very long time to bring the once almost perfect reputation back. I assume that this debacle will also infect the much more important wealth management division. A break up is more than likely....

Was für ein Debakel. Sieht so aus als wenn die 8 Wochen alte Prognose mal eben um satte 40% oder $ 4 Mrd verfehlt worden ist. Bleibt die vage Hoffnung das die 12 Mrd $ Kapitalspritzen aus Singapur und dem mittleren Osten auch noch nach der nächsten Prognose immer noch ausreichend sind....... Der Ruf als solide schweizer Bankenadresse dürfte auf Jahre hinaus vernichtet worden sein. Ich kann mir kaum vorstellen das dieses Disaster ohne Auswirkungen auf die Vermögensverwaltung ( die mit abstand wichtigste Sparte ) bleiben wird. UBS wird wohl in der jetzigen Form die nächsten Jahre kaum überstehen.

FT Alphaville UBS, Europe’s largest bank by assets, reported a record loss after about $14bn of writedowns on assets infected by subprime mortgages in the US, reports Bloomberg on Wednesday.The fourth-quarter net loss of 12.5bn Swiss francs ($11.4bn) will result in a full-year loss of about CHF4.4bn, the Zurich-based bank said in a statement on Wednesday.

UBS posted its first annual loss since the company was created through a merger a decade ago, and the Q4 loss was bigger than the record declines reported earlier this month by Citigroup and Merrill Lynch. The collapse of the US subprime mortgage market has led to more than $130bn of losses and markdowns at securities firms and banks since June, notes Bloomberg.

UBS reported about $12bn of losses directly linked to the subprime market and an additional $2bn for positions related to the US residential market. The company said its Tier 1 capital ratio, a measure of financial strength, was 8.8 per cent as of December 31, reported Bloomberg.

Citigroup Still With $ 37.3 Subprime Exposure.....

I think it is interesting to read the Citigroup Results in detail. Make sure you see this Excellent Presentation. Lots of data. I have put the focus on subprime exposure and credit costs. Lets hope their internal models for valuing these securities has improved during the past 2 quarters ( UPDATE & hat tip via Calculated Risk"Citi is basing their CDO loss forecasts on house price decline of about 7% each for each of the next two years")...... But i think with the new CEO in charge there is hope that they are now more realistic. He normally has no incentive to underestimate. But after all i have seen from this company ...... Here are my earlier takes on Citigroup and here the details to the $14.5 billion of capital infusion. Nice to see that they are still paying a dividend ...... What a farce!

Ich denke es lohnt sich die Citigroup Results im Detail durchzulesen. Kann jedem diese excellente Präsentation ans Herz legen. Haufenweise Infos die ein Bild geben was in den einzelnen Märkten so vor sich geht. Ich habe hier setllvertretend mal die Zahlen zu Subprime und den explosierenden Kreditkosten herausgepickt. Bleibt zu hoffen das die internen Modelle auf denen die Wertermittlungen basieren in den letzten 6 Monaten besser geworden sind ( Update & Dank an Calculated Risk "Citi is basing their CDO loss forecasts on house price decline of about 7% each for each of the next two years )...... Mit dem neuen CEO an Bord bestehet aber zumindest die Hoffnung das man jetzt näher an der Realität ist. Üblicherweise neigt der neue CEO dazu bei der ersetn Ergebnisveröffentlichung unter eigener Verantwortung klar Tisch zu machen. Aber nach allem was ich bisher von diesem Unternehmen gesehen habe....... Hier meine früheren "Gedanken" in Sachen Citigroup. Zusätzlich hier die Details zur $ 14.5 Mrd Kapitalspritze. Lächerlich das im gleichen Atemzug noch immer eine Dividende gezahlt wird.....

Sildes taken from the Excellent Presentation

Credit costs increased $5.41 billion, primarily driven by an increase in net credit losses of $1.56 billion and a net charge of $3.85 billion to increase loan loss reserves.

-- U.S. consumer credit costs increased $4.1 billion, comprised of $689 million in higher net credit losses and a net charge of $3.31 billion to increase loan loss reserves. The $3.31 billion net charge compares to a net reserve release of $127 million in the prior-year period.

The increase in credit costs primarily reflected a weakening of leading credit indicators, including increased delinquencies on 1st and 2nd mortgages, unsecured personal loans, credit cards, and auto loans. Credit costs increased also due to trends in the U.S. macroeconomic environment, including the housing market downturn, and portfolio growth.

UPDATE: Here are some more links with very good insights / Hier einige andere gute Link mit meiner Meinung nach guten Meinungen

Citi Dividend, Future Prospects and Credit Cards Calculated Risk

Live-Blogging the Citigroup Earnings Call WSJ

Cost of Capital "Ratchets Up" at Citigroup and Merrill Mish

Citi confirms $18bn Q4 writedown; signs of consumer stress FT Alphaville

Multiple Fire Sales At UBS After $ 10 Billion Write Down

Looks like the UBS comment from just a few weeks ago in UBS Write Down Estimates "Best Case $ 6 Billion, Worst Case.... that the write down´won´t be big was quite an understatement..... Will be fun to watch how long the term "maximum clarity" will be up to date this time ;-) . I´m pretty sure that the same survey about bonuses for the UBS will bring less "euphoric" results..... It´s about time to learn the new version of the Investment banking lexicon: The post-credit squeeze edition. HILARIOUS!

Sieht ganz so aus als wenn der Kommentar der UBS in UBS Write Down Estimates "Best Case $ 6 Billion, Worst Case.... das die Abschreibungen nicht "wesentlich" sein werden ein wenig untertrieben gewesen ist. Welch Überraschung..... Wird spannend zu sehen sein wie lange die Haltwertzeit der "maximum clarity" in diesem Falle vorhalten wird ;-) . Ich bin mir ziemlich sicher das die gleiche Umfrage zu Bonuszahlungen" für die UBS weniger "euphorische" Vorhersagen hergeben würde..... Höchste Zeit die für die neueste Version des Investment Banking Lexicon: The post-credit squeeze edition. Köstlich!

UBS to Sell Stakes After $10 Billion in Subprime Writedowns
UBS AG, Europe's largest bank by assets, said it will write down U.S. subprime investments by $10 billion and raise 13 billion francs ($11.5 billion) by selling stakes to investors in Singapore and the Middle East.

UBS expects a loss in the fourth quarter, and may have a loss for 2007, the Zurich-based company said in an e-mailed statement today.

Securities firms and banks had announced about $66 billion of losses and markdowns linked to the collapse of the U.S. subprime mortgage market this year. UBS reported its first loss in almost five years in the third quarter after the subprime contagion led to about $4.66 billion in markdowns on fixed-income securities and leveraged loans.

Besten Dank an Zeitenwende

UBS Press Release & Deutsche Version
UBS strengthens capital base and adjusts valuations
UBS has introduced measures to substantially strengthen its capital position, adding CHF 19.4 billion of BIS Tier 1 capital. These include an issue of CHF 13 billion of new capital. This has been placed with two strategic investors: Government of Singapore Investment Corporation Pte. Ltd. (GIC) ( see GIC Website) with CHF 11 billion, and an undisclosed strategic investor in the Middle East with CHF 2 billion.


> To be honest i´m surprised that Singapore has two vehicles and that GIC has assets over $ 300 billion. I´ve heard so for only from Temasek HoldingsUnocal) in relation with Singapore. It´s very impressive that such a small country with an estimated GDP of $ 140 billion, a population under 5 million and especially without a resource base has managed to accumulate close to $ 500 billion in Assets Singapore/Wikipedia. Chapeau!

> Ich bin ehrlich erstaunt das Singapur zwei staatlich kontrollierte Fonds zur Verfügung hat und das GIC mit über 300 Mrd $ so groß ist. Ich habe bisher im Zusammenhang mit Singapur immer nur den Namen Temasek Holdings gehört. Es ist beeindruckend wie es ein kleines Land mit unter 5 Mio Einwohnern, einen BSP von knappen 140 Mrd $ und vor allem ohne Rohstoffbasis schafft fast 500 Mrd $ in Staatsfonds zu pumpen Singapur/Wikipedia . Chapeau!

At the same time, UBS has revised key input parameters of the models that are used to estimate lifetime default and resulting losses for sub-prime mortgage pools. As a result of these revisions, UBS will write down its US sub-prime holdings by approximately a further USD 10 billion.

After these actions, UBS projects a strong BIS Tier 1 ratio of above 12%. ...

In response to continued deterioration in the US sub-prime mortgage securities market, partly driven by increased homeowner delinquencies but mainly fuelled by worsening market expectations of future developments, UBS has revised the assumptions and inputs used to value US sub-prime mortgage related positions. This will result in further writedowns of around USD 10 billion, primarily on CDO and "super senior"1 holdings. In light of continued deterioration in the sub-prime market, valuations of UBS's remaining sub-prime positions reflect the extreme loss projections implied by the prices achieved in the very limited number of observable market transactions in US sub-prime related securities and indices up to the end of November.

As the basis for its wealth and asset management business, UBS wishes to maintain a very strong capital base under all circumstances. Growth in net new money continues, with inflows in Global Wealth Management & Business Banking totalling about CHF 30 billion in October and November. It will therefore strengthen its capital position by issuing new capital in transactions with strategic investors, by selling treasury shares, and by replacing its 2007 cash dividend with a stock dividend.

> Must hurt to sell shares at fire sale prices that they have bought back for a better use of their capital. In Q2 the stock price was in a range of 70-80 Swiss Francs, today close to 50 Swiss Francs. And in total they are selling 36.4 million shares......... Well done!

> Muß sehr schmerzen die teuer zurückgekauften Aktien jetzt zu Schleuderpreisen zu verscherbeln. Ironischerweise sollten die Rückkäufe seinerzeit ja die effektivere Nutzung des Kapitals ermöglichen. Im 2. Quartal lag der Preis zwischen 70 und 80 Schweizer Franken, heute nahe 50...... Und insgesamt werden knapp über 36 Mio zuvor erworbene Aktien nahe Tiefstkursen vertickert...... Gut gemacht!

Strategic investors subscribe to issue of CHF 13 billion of new capital
UBS has reached agreements with two strategic investors – GIC and one other – to subscribe to an issue of CHF 13 billion of mandatory convertible notes. This is subject to the approval of UBS shareholders at an extraordinary general meeting (EGM) which will take place in mid-February 2008. GIC has committed to subscribe to CHF 11 billion and the other investor to CHF 2 billion. The notes will pay a coupon of 9% until conversion into ordinary shares, which must take place on or before a date approximately two years after issuance. The proceeds of the issue will count as Tier 1 capital for BIS capital adequacy purposes after EGM approval.

Sale of treasury shares
The Board of Directors of UBS has further approved the re-sale of 36.4 million treasury shares previously intended to be cancelled. UBS has received indications of interest in a share issue, is considering these and will place these shares over time. This will increase BIS Tier 1 capital by approximately CHF 2 billion.

Proposed replacement of 2007 cash dividend by stock dividend
The Board of Directors proposes to replace the 2007 cash dividend with a stock dividend, i.e. a bonus issue of new shares. This will boost Tier 1 capital by CHF 4.4 billion, of which approximately CHF 3.3 billion is a reversal of accrued dividend for the first nine months of the year and the balance is dividend that will now not accrue. This is subject to EGM approval.

In total, these three actions, when completed and approved, will strengthen UBS's regulatory Tier 1 capital by approximately CHF 19.4 billion. After completion, and taking into account the expected fourth quarter loss, the firm's BIS Tier 1 capital ratio will improve to above 12% from 10.6% at 30 September 2007.

Marcel Rohner, Group Chief Executive Officer, UBS, said: "Conditions in the US mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities. In the last several months, continued speculation about the ultimate value of our sub-prime holdings – which remains unknowable – has been distracting. In our judgement these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation. Together with the strengthening of our capital base this will allow us to concentrate on sustaining and developing our client businesses.

Information on GIC
GIC is a global investment management company established in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world, GIC manages a broad diversified portfolio across countries and asset classes that includes equities, fixed income, foreign exchange, commodities, money markets, alternative investments, private equity, real estate and infrastructure investments.

More insights via FT Alphaville UBS boggles - $10bn of writedowns, $17bn in emergency capital

Fire Sale At Citigroup...Citigroup to Get $7.5 Billion Infusion From Abu Dhabi

When you have to increase your capital with your share price at multi year lows you know that they don´t do it for charity reasons...... Nice dilution but probably the only way to stay solvent..... Now it should be clear why they are still pushing for the "Superfund" . They are simply not able to follow HSBC. I assume this time there will be no congressional hearing related to sovereign wealth funds.......Nice to see that some "experts" still focusses on the dividend.... ;-). I assume this time even FOX Business News will get it right...... :-)

Kein gutes Zeichen wenn man sichn neues Geld zu Zeiten besorgen muß wenn die Aktien auf Mehrjahrestiefs notiert. Auf gut deutsch "Denen steht das Wasser bis zum Hals". Schöne Verwässerung für die Altaktionäre aber wohl die einzige Möglichkeit solvent zu bleiben. Nun sollte auch dem letzten klar werden warum Citigroup auf Biegen und Brechen den "Superfund" pusht und nicht wie HSBC diese Gesellschaften wieder in die Bilanz aufnimmt. Ich denke das es diesesmal kein Störfeuer von der US Politik geben wird....Besonders lustig zu sehen das einige der Experten sich immer noch mit der Dividende befassen..... Ich denke diesesmal wird sogar FOX Business News richtig berichten.... :-)

Nov. 26 (Bloomberg) -- Citigroup Inc., the U.S. bank searching for a new chief executive as it faces at least $8 billion of writedowns, agreed to sell as much as 4.9 percent of the company to the government of Abu Dhabi for $7.5 billion.


Citigroup will sell equity units to the Abu Dhabi Investment Authority that convert into common shares, the New York-based lender said today in a press release.

``This investment, from one of the world's leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business,'' Win Bischoff, Citigroup's acting CEO, said in the statement. It helps ``strengthen our capital base,'' he said.

> It´s about time..... Wird aber auch dringend Zeit.......

Charles O. Prince III ( deaf & ingorant CEO Prince ) was forced to step down as Citigroup's chief executive officer Nov. 4 after the biggest U.S. bank said losses on subprime mortgages and related securities may cut fourth-quarter net income by $5 billion to $7 billion. The lender said at the time that it planned to shore up capital. The company's shares, which have fallen about 44 percent this year, sank to $30.70 in New York Stock Exchange composite trading today, the lowest price in five years.

Time for a review of the buybacks in 2006 Financial Highlights 2006 pdf

....our return of cash to shareholders through our $7 billion stock buyback in 2006 ( Stock was between $ 45 and $ 55....)

> Well done! Eine Meisterleistung!

ADIA, the sovereign wealth fund of the government of Abu Dhabi, is buying equity units that convert into Citigroup shares at prices ranging from $31.83 to $37.24 per share, on dates ranging from March 15, 2010, to Sept. 15, 2011, the U.S. bank said. The units will pay 11 percent annual interest.

> Here is a more detailed look via the FT Junk Citi

Citi is paying a higher interest rate than companies that borrow on the high-yield, or junk-bond, market; currently they pay roughly 9% for straight bonds. Typically, convertible bonds pay lower interest rates than straight bonds, although a particular bond’s structure could affect the interest rate paid......

Even after the spurious tax argument, it is difficult to see how this funding can be costing much less than 9 per cent.

Abu Dhabi, one of the United Arab Emirates, will have ``no role in the management or governance of Citi, including no right to designate a member'' of the company's board, according to the statement.

FT Alphaville has some more thought on The stealthy rise of the sovereign wealth fund

Von FT Alphaville gibt es ein paar mehr Gedanken zum The stealthy rise of the sovereign wealth fund

More insights from Mish , Naked Capitalism and the "Peter Schiff" of bank analysts Meredith Whitney

Libya launches $40bn SWF

Another sign how much the world has changed. Who could have thought of quotes like this just a few years ago...

Einmal mehr ein Beispiel wie sehr sich die Welt in den letzten Jahren gewandelt hat. Oder wer hätte ernsthaft an ein solches Zitat vor ein paar Jahren glauben mögen.....

“If you wanted to invest in the past, no one would take your calls. Now bankers fly on their private jets to see us,” said Mr Layas, a former chairman of the Libyan Arab Foreign Bank. ..

Maybe there is still hope for others parts of the world.....

Evtl. besteht ja doch noch Hoffnung für Teile der Welt .....

Libya starts to deploy $40bn fund / FT

A newly established Libyan sovereign wealth fund is starting to deploy its $40bn (£19bn, €28bn) capital on international markets as the oil-rich state showcases its rehabilitation in the global community.

Following in the footsteps of the Gulf countries, the regime of Colonel Muammar Gaddafi earlier this year allocated tens of billions of dollars that had been managed by the central bank to a new entity, the Libyan Investment Authority (LIA), which will now also receive a portion of the surplus oil revenues each year.

Although the ramshackle Libyan economy is in need of massive investment after decades of isolation, the government’s stated strategy is to reduce the country’s oil dependence and diversify sources of income.


“Because of sanctions our policy used to be to protect our assets and keep our funds in short-term deposits,” said Mohamed Layas, the LIA’s executive director, in an interview with the Financial Times. “After the embargo was lifted, it was a new era, a new opening, and we had a tremendous increase in oil revenues over the last five years.”

Mr Layas said the fund, which will have offices in London and Tripoli, would concentrate at first on portfolio investments managed through western banks and institutions. But it also intends to buy real estate worldwide and, when it is more established, look at private equity transactions.

“If we buy shares in a construction company abroad, for example, the other benefit is that we will generate business for them in Libya, where we have a huge development plan,” he said.

Although not its primary target, the LIA is also considering investing in hydrocarbon development projects. It was a small partner in the $900m exploration contract BP signed with Tripoli in May. Still largely under-explored, Libya is hoping to increase its oil production from 1.7m to 3m barrels per day by 2015. Its oil revenues are expected to reach $15bn this year.

The LIA has set up a $2bn investment fund with its counterpart in Qatar to invest in Libya, Qatar and western markets. It has taken on three existing entities: the $5bn Libyan African investment portfolio; Lafico, a $3bn assets investment company mainly involved in real estate; and an $8bn existing portfolio of other international investments, largely in capital markets.

The creation of the LIA highlights the transformation of Tripoli from pariah state to international partner since its decision in 1999 to hand over suspects in the 1988 Lockerbie bombing in Scotland, and later to renounce its weapons of mass destruction.

On Tuesday, Tripoli secured a non-permanent seat on the United Nations Security Council – the body that lifted sanctions against it in 2003.

Gulf States Counter M&A Slowdown With $25 Billion of Takeovers

This should be really no surprise. What else ( except gold ) should they buy with the depreciating $......This trend is going to be a support for the equity market for years to come and with the recent central bank action the appetite for bonds should be "subpar"......

Das sollte wirklich keinen überraschen. Was sollen die auch anderes (ausser Gold) mit Ihren täglich verfallenden $ kaufen...... Dieser Trend wird sicher noch auf Jahre hinaus eine wichtige Unterstützung für die weltweiten Aktienmärkte spielen. Und nach den letzten Aktionen der Notenbanken rund um den Globus dürfte das Vertrauen in Bonds generell gelitten haben......

Key will be to identify the markets which will benefit the most. And i doubt that US$ assets will be a winning bet.....

Entscheidend wird wohl sein die Märkte zu identifizieren die am meisten von diesen gewaltigen Geldströmen profitieren werden. Und ich nicht davon aus das der Dollarraum zu den Gewinnern zählen wird.

via Brad Setzer

Norway has long held only about 35% of its oil revenue in dollars, Russia now has less than 50% of its reserves in dollars and a few Gulf states have also rather clearly trying to reduce the dollar’s share of their (growing) portfolios. In 2000, for example, as much as 85% of the Kuwaiti investment authority’s assets may have been in dollars. That total is now probably under 50% (KIA’s equity portfolio is certainly under 50%). ADIA reportedly shifted toward emerging economies a few years ago. And a host of Gulf funds now want to invest in emerging Asia …

In his now classic paper on the oil-exporting economies, Ramin Toloui of PIMCO calculates that if oil exporting economies invest 60% or more of their rising revenues in dollar assets, an increase in the price of oil is dollar positive (see figure 14). And if they invest less than 60% in dollar assets, a rise in the price of oil is dollar negative.

FT

The news that pushed the dollar lower on Thursday came from Saudi Arabia, where the central bank, which has pegged its currency to the dollar, decided not to follow the Fed by cutting by 50 basis points. That prompted speculation that the Saudis no longer want to peg to a currency in freefall.

Further, a long-term link between the dollar and the oil price has broken down. A high oil price used to mean a strong dollar as oil exporters put their money in dollars. But now we have record crude prices and the weakest dollar in decades.

The biggest risk is probably that there is some kind of protectionism going on to block state owned (also from China etc) in general. The discussion is already heating up in Europe (except in the UK).

Das größte Risiko ist wohl darin zu sehen das immer mehr Regierungen generell überlegen wie solche Deals die von staatlich geführten Fonds unternommen werden verhindert werden können. Der Trend zur Abschottung ist sowohl in Europa ( Ausnahme UK) als auch in den USA nicht zu übersehen.

Gulf Counters M&A Slowdown With $25 Billion of Deals

Sept. 21 (Bloomberg) -- The Persian Gulf states, flush with cash from burgeoning oil revenues, are buying overseas assets at a record rate and countering the paucity of acquisitions hampered by the summer's surge in corporate borrowing costs.

Abu Dhabi agreed yesterday to pay $1.35 billion for 7.5 percent of Carlyle Group, the world's second-biggest private equity firm. Dubai and Qatar took competing stakes in Nasdaq Stock Market Inc., London Stock Exchange Group Plc and Nordic bourse OMX AB. Qatar also won approval to examine the financial records of J Sainsbury Plc, the second-largest U.K. supermarket chain.

All told, the deals are worth $25 billion, according to data compiled by Bloomberg. The pace of international investments by Gulf states, which earn $1.2 billion a day from oil exports, is quickening as they seek to diversify beyond energy. The nations have already spent a record $68 billion on overseas acquisitions this year, the Bloomberg data show.

``They are not just putting their money in bank deposits and government bonds any more,'' said Eckart Woertz, chief economist for the Gulf Research Center in Dubai. ``They are after strategic assets.''

The record pace of global mergers fell in August to the slowest in two years as rising costs for credit eroded investor confidence. The three-month dollar London interbank offered rate, a lending benchmark, rose to 5.73 percent on Sept. 7 from 5.36 percent at the end of July. The rate fell to 5.21 percent yesterday after the Federal Reserve reduced interest rates for the first time in four years earlier this week.

Slowest Month
About $188 billion of deals was announced last month, the lowest amount since July 2005, according to data compiled by Bloomberg. The value of deals dropped after losses in subprime mortgage bonds contaminated debt markets, prompting a sudden increase in corporate borrowing costs and a slide in stocks.

Not in the Persian Gulf. The pace of takeovers may accelerate as oil trades at a record high and Dubai and Qatar race to lure international banks, asset managers and brokerages. Oil reached a record $83.90 a barrel in New York yesterday.

Based on the share prices of LSE, Nasdaq, OMX and Sainsbury on Sept. 19, Dubai's investment would be $2.5 billion and Qatar's would be $21.5 billion. ....

``Qatar is a clone of Dubai,'' said Haissam Arabi, a Dubai- based managing director of asset management for Shuaa Capital PSC. ``They have taken their lead from Dubai on most fronts. Dubai had Emirates airline, then Qatar set up Qatar Airways. Dubai established itself as a tourist destination, and then Qatar tried to position itself as such. And now as financial centers, Dubai moved and Qatar followed.''

Dubai and Qatar are overshadowing Bahrain's traditional position as the Persian Gulf's financial hub. Dubai is the second-biggest sheikhdom in the United Arab Emirates after Abu Dhabi. The six Gulf Cooperation Council states are the U.A.E., Bahrain, Kuwait, Qatar, Oman and Saudi Arabia.

Mubadala Development Co., an investment company owned by the government of Abu Dhabi, will buy a 7.5 percent non-voting stake in Carlyle.

Sainsbury, based in London, yesterday softened its opposition to a takeover bid by Qatar after the emirate said it would borrow less to fund the deal.

Cooperative Takeovers
The Gulf states sometimes cooperate on acquisitions. Sheikh Hamad bin Jassim bin Jaber al-Thani, the Qatar Investment Authority's CEO and since April Qatar's Prime Minister, said in February the country may buy as much as 10 percent of Airbus SAS parent European Aeronautic, Defence & Space Co. because the shares are undervalued.

When Dubai International Capital LLC bought 3.12 percent of EADS in July, some of its money came from Qatar, according to Chief Executive Officer Sameer al-Ansari.

Blocked Ports
Dubai generated 3 percent of its gross domestic product from oil last year and has a population of about 1.5 million. As oil wells run dry, the emirate is building the world's tallest tower, offshore islands in the shape of palm trees, and a leisure park three times the size of Manhattan.

It's also earmarked more than $82 billion for investment in aviation, including construction of the world's biggest airport.

The Gulf's overseas acquisitions haven't always succeeded. Qatar in December lost out to a group led by Macquarie Bank Ltd. in its bid to buy Thames Water Utilities.

Dubai-owned container port operator DP World last year agreed to buy London-based Peninsular & Oriental Steam Navigation Co. for $6.8 billion, only to be forced to sell P&O's U.S. port assets under pressure from lawmakers who threatened to block the takeover on the grounds of security.

New York Democrat Senator Charles Schumer said yesterday a deal that makes Borse Dubai the biggest shareholder in Nasdaq requires scrutiny.

``There are serious issues that need to be investigated,'' he said at a press conference in Washington. ``Questions must be asked and answered before the deal goes forward.''

"Club Deals" from Sovereign Wealth Funds

This is to my knowledge one of the first so called "club deals" in which two or more state owned or controlled entities are teaming up for a takeover or merger. This is a very significant event which if it succeeds should be very positive for equity markets overall.

It will be interesting to see how ABN and the Dutch public will react to this Barclay's/Temasek/China Development Bank offer. I think it is very difficult "politically" speaking for SVF to make bigger takeovers without a "strategic" partner like in this case Barclay's. But this "indirect" approach could be a way to dampen the "fear" that the "Chinese", "Emirates" or "Russians" are buying brand names or "national icons".

We in Europe have this discussion right now with the tendency to create a "golden share" that gives the countries a veto. The rule today is only in place for defence related companies but the trend is to open the gates and include utilities etc......

This would be the exact opposite what the EU was praying for the past decade.....excluding France...:-) . This deal could give us a first hint

Das ist meinem Kenntnisstand nach einer der ersten gößeren Deals in dem sich zwei staatlich kontrollierte Unternehmungen zusammenschließen um eine Übernahme zu stemmen. Das könnte der Anfang eines Trends sein der die Aktienmärkte bei Erfolg wohl nachhaltig unterstützen dürfte.

Ich bin besonders auf die Reaktion von ABN und der holländicshen Öffentlichkeit gespannt. Ich denke das es "politisch" immer noch sehr schwer für die SVF ist größere Übernahmen von "Brand Names" in Eigenregie durchzuführen. Der jetzt eingeschlagenen Weg den Anfang mit einem strategischen Partner wie in diesem Falle Barclay´s zu machen könnte die Furcht vor den Chinesen, Russen, oder Arabern evtl. etwas lindern.

Das ganze wird umso brisanter als wir in Europa ja gerade die Diskussion um die mit einem Vetorecht ausgestattete "goldene Aktie" führen. Bisher greift diese Regelung nur bei Aktien die mit dem Verteidigungssektor zu tun haben. Die aktuelle Diskussion läßt erahnen das eine Ausweitung auf andere Sektoren ( Versorger) durchaus im Bereich des möglichen liegt.

Das wäre das genaue Gegenteil von dem was die EU seit Jahren predigt....... mit Ausnahme von Frankreich :-). Dieser Deals könnte einen ersten Aufschluß geben wie die Stimmungslage ist.

Barclays Raises ABN Offer on China, Singapore Funding

July 23 (Bloomberg) -- Barclays Plc, vying to buy ABN Amro Holding NV in the biggest banking takeover, raised its offer to 67.5 billion euros ($93.4 billion) after securing investments from the governments of China and Singapore.

China Development Bank will invest 2.2 billion euros in Barclays, and a further 7.6 billion euros if the bid for ABN Amro succeeds. Singapore's Temasek Holdings Pte, the city-state's investment arm, will invest 1.4 billion euros initially, and an additional 2.2 billion euros upon the purchase of ABN Amro.

A merger of ABN Amro and Barclays would create a bank with a market capitalization of more than $160 billion. The Royal Bank- led group's offer, which will end Oct. 5, is 93 percent in cash.

``China and Singapore, especially through Temasek, have always had a long-term ambition within the global markets,'' said Lok Yim, head of fixed income and equity for Deutsche Bank AG's private wealth management group, based in Hong Kong. ``As the renaissance of Asia comes into full fruition, it is only natural that foreign exchange reserves are deployed differently.'' ....

> taken from Temasek Holdings

China Development Bank is one of the nation's so-called ``policy banks,'' which support the government's development and political agenda by lending for public works and to targeted industries. The government is planning to reorganize all three into commercial, profit-oriented banks.

Temasek's investment in banks, including stakes in Bank of China Ltd. and China Construction Bank, helped bolster its earnings. Its full-year profit surged 71 percent to a record S$12.8 billion ($8.2 billion) in the year ended March 31, 2006, according to its annual report. Investments overseas account for 56 percent of the $85 billion of assets Temasek manages, the report said.

Sovereign Wealth Funds

Time for an update.....Please click on the label at the bottom of the post to read more about the big impact of these players.

The right table shows the foreign direct investments in Germany. The spike in 2000 is related to the biggest unfriendly takeover in history so far from Mannesmann / Vodafone.

Mal wieder Zeit für ein Update....Klickt bitte auf das Label um mehr zu diesen immer wichtigen Spielern am Finanzmarkt zu lesen. Die Zahl im Jahr 2000 muß mit dem Vodafone/mannesmann Deals zusammenhängen.

The petrodollar puzzle / Economist

read more about this important topic under the label

mehr zu diesem wichtigen thema gibt es unter dem label.

Where do the Gulf states invest their immense wealth?

THERE is no crime involved, but the mystery of the petrodollar billions is worthy of Sir Arthur Conan Doyle. Thanks to high oil prices, the Gulf states' coffers have been bulging. From 2002-06, the six countries of the Gulf Co-operation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) earned about $1.5 trillion from oil exports, twice as much as they made during the preceding five years. Around $1 trillion of that money was spent on imports. The rest—a cumulative current-account surplus of $542 billion—went abroad. But where?
The answer is a matter of avid curiosity, particularly among hedge funds that take big bets on international asset prices. Along with China, the Gulf states are the thrifty counterparts to America's gaping saving shortfall. A shift in their appetite for dollar assets could send the greenback tumbling and push up American interest rates. Hedge-fund managers try to track the flow of petrodollars believing that they are likely to be more volatile than other sources of global liquidity, such as Asian reserves, and are less likely to sit quietly in American Treasuries. They may also be super-charged with leverage through investments made in hedge funds and private-equity firms.

It is an intriguing guessing game. The Gulf countries themselves provide virtually no information, so any estimates must be pieced together from foreign sources. ....

These sources show some $260 billion of capital flows from Gulf states over the past five years, or about 48% of the group's cumulative surplus. This half-picture points to several trends. Gulf investors have become less keen on bank deposits; they are big buyers of American shares and government bonds. And, increasingly, they are direct buyers of foreign companies, particularly European ones

To find the remaining $280 billion, the IIF resorts to educated guesswork. It believes a large chunk is likely to be invested in America. The Treasury's figures do not include bonds or shares bought through a foreign intermediary, such as a London-based investment bank. They therefore understate the Gulf states' holdings, perhaps by as much as $100 billion over the past five years, the IIF conjectures. Some of the surplus is staying close to home in the fast-growing market for sukuk, debt-like instruments permitted under Islamic law, which does not allow the payment of interest. Some $21 billion in sukuk was issued in 2006, up 46% from the year before.

The IIF guesses that some $100 billion, or 20% of the five-year surplus, went to Europe (see chart), buying bonds and shares as well as firms and property. Another $60 billion may have gone to Asia, where Arab oil exporters are pouring money into infrastructure projects as well as buying property and firms.

Foreign U.S. Notes Rise to 80 Percent / "Reverse Marshallplan"

staggering number......Roach calls this some kind of "reverse Marshallplan".

noch fragen....Roach nennt das ganze passenderweise ne art "reverse Marshallplan"

There is a striking twist to the current globalization. Unlike the lobalization of the early 20th century when capital flowed from the rich countries of the developed world to the “settlement economies” such as Argentina, Australia, and Canada, the opposite is true today. In the current globalization, the incremental saving for the advanced economies of the developed world has been provided almost entirely by the transfer of capital from the poor countries of the developing world (including oil producers). The United States, with its massive current account deficit, is the major beneficiary of this “reverse Marshall Plan” – absorbing more than 70% of the world’s surplus saving over the past three year

For the moment, at least, financing the U.S. budget deficit may be getting less arduous as foreign investors now own a record 80 percent of the Treasury notes due in three to 10 years.

Not since the 19th century have foreigners held so much American debt, said Alan Taylor, a professor of economic history at the University of California, Davis. International investors own $672 billion of the $835.4 billion Treasuries due in three to 10 years,


While the Central Bank of China in Taipei and the Bank of Korea say they have had their fill of Treasuries, the 22 percent rise in U.S. dollar reserves led by Brazil and China during the past year makes Treasuries irresistible.

>especially when you look at all the currency losses making it one of the worst investments available.....plus it is getting even better when you read this "Taxpayers on the hook for $59 trillion" http://tinyurl.com/3yxcsm

>das gilt natürlich besonders wenn die ganzne währungsverlusteb mitberücksichtigt werden.....und erst recht bei 59 trillionen zukünftiger verbindlichkeiten (s.link oben)......

Yields on U.S. government bills, notes and bonds are higher than similar- maturity debt sold by Japan and the countries sharing the euro. That's partly why foreign holdings of U.S. securities have doubled since 2002.

``Those dollars need to go somewhere and the natural place to go to is Treasuries,'' said Charles Comiskey, the New York- based head of U.S. government bond trading at HSBC, Europe's largest bank by market value. ``They're not bought for fundamental reasons but for necessity.''....

>but how long can and will this this continue....?

>aber ob das immer weitergehen kann........?

American long-term interest rates would be about 1.5 percentage points higher without foreign capital flowing into the $4.4 trillion of outstanding Treasuries, according to a 2005 Federal Reserve study by Professors Francis and Veronica Warnock at the University of Virginia in Charlottesville. The U.S. Department of the Treasury says non-Americans hold at least 52 percent of all notes and bonds.

Lower Treasury yields help keep down borrowing costs for companies and U.S. home buyers. The yield on U.S. corporate bonds was 5.82 percent last week, compared with a 10-year average of 6.05 percent, according to data compiled by Merrill Lynch & Co. Rates on 30-year mortgages rose 16 basis points last week to 6.37 percent, down from 7.94 percent in May 1997 and the average 6.70 percent over the past decade, data from Freddie Mac, the government-chartered mortgage company, show. ....

Percentage of Deficit
The last time foreigners owned so much U.S. debt was in the mid-19th century, when state and corporate bonds for the construction of railroads, canals and highways were purchased by Europeans, said Taylor, the University of California professor. .....

>and now....consumption, houses, war, debt....but no investments!

>und heute...keine investments, nur neue schulden um den kaufrausch weiter auszuleben und masslos über die verhältnisse zu leben und kriege zu finanzieren.

Central banks, whose currency reserves swelled to $5.4 trillion this year, are buying Treasuries with dollars accumulated from exports of goods and oil to America. Foreigners owned less than 35 percent of Treasuries in 2000. Crude prices have tripled during the same period.

Central banks, including the People's Bank of China, have said they plan to increase investments in bonds other than Treasuries, adding to concerns that waning demand would push up U.S. market rates.

`Reaching a Limit'
Japan, the biggest foreign holder of Treasuries, with $612 billion, has reduced investments in U.S. government bonds this year, from $623 billion. The country doesn't plan to ``drastically'' cut U.S. assets, Vice Finance Minister Hideto Fujii said last week.

International investors ``can't keep buying safe, simple Treasuries forever,'' said HSBC's Dyer, who based his estimates on June 2006 Treasury data. Foreigners are ``reaching a limit.''

At the same time, Treasuries are becoming more attractive to foreign investors as yields on emerging market debt and non- investment grade corporate securities approach record lows compared with government bonds, said O'Donnell.

Speculative-grade corporate bonds yielded an average 2.44 percentage points more than Treasuries last week, matching the record low in 1997, according to Merrill Lynch & Co., which started collecting the data in 1986. The average yield premium on emerging market debt narrowed to 1.49 percentage points, the smallest since JPMorgan Chase & Co. began collecting such data in 1997.

Treasuries due in 10 years yield 48 basis points, or 0.48 percentage point, more than German 10-year bunds, down from 116 basis points a year ago. The U.S. notes yield 314 basis points more than Japanese 10-year bonds, little changed from 317 this time last year.

`Reasonably Priced Assets'
``In the grand scheme of global opportunities, Treasury rates near 5 percent may perversely be the most reasonably priced assets around,'' said O'Donnell.

Central bank efforts to diversify reflect the growth of reserves more than the desire to hold less U.S. debt. China's swelled in the first quarter by a record $136 billion to $1.2 trillion, prompting the government to set up a group to pursue other investments. China last week bought a $3 billion stake in Blackstone Group LP, the New York-based private-equity firm led by Stephen Schwarzman.

China more than doubled its holdings of Treasuries in the three years ended March 31 to $420 billion, according to U.S. government data. Members of the Organization of Petroleum Exporting Countries did the same, increasing their investments to $113 billion. Brazil now owns $70.6 billion of U.S. government debt, up fivefold since 2004.

Central banks used their growing reserves to purchase a net $284.5 billion of so-called agency debt sold by government- chartered companies Fannie Mae of Washington and Freddie Mac in McLean, Virginia last year. They bought a net $485.2 billion of corporate bonds.

here is the take from minyanville on this datapoint http://tinyurl.com/2cga9h

Sovereign-wealth funds / Economist

besides the indirect effect that they are fueling the bond market leading to lower yields and extreme risk taking the state owned investment vehicles are more and more directly impacting the equity market....great news for global stock markets and definitly better than buying us treasuries.......as i´ve written before i think that the us market will benefit the least from this move (action in congress, diversification out of the $, unocal and ports deal etc......)

neben dem indirekten effekt das sie den bondmarkt überfluten und damit die renditen drücken und damit u.a. die z.zt. waghalsigen übernahmen mitermöglichen greifen die staatlichen investmentfonds immer mehr dirkt in das geschehen an den aktienmärkten ein. fantasticshe news für die weltweiten aktienmärkte...und immer noch besser als us staatsanleihen zu kaufen....und wie ich bereits vorher geschrieben habe glaube ich das die us am wenigsten von dieser entwicklung profitieren werden (man beachte nur das geschehen im us congress, diversifikation aus dem $, die geplatzten unocal und hafendeal usw.....)


China's investment in Blackstone shows how government investors are flourishing at the heart of the financial system

WITH $1.2 trillion in foreign-exchange reserves and the pool growing by more than $1 billion every day, China casts a giant's shadow over the global financial markets, even if it has mostly used the money to pile up American Treasury bonds. The announcement on May 21st that it would invest $3 billion of its reserves in Blackstone, a New York-based private-equity firm soon to issue shares, shows that it is prepared to barge into murky private markets as well as liquid public ones. It is not the only inscrutable country to be cosying up to the inscrutable private-equity industry. Around the world, a secretive society is emerging of governments flush with foreign assets, some of them petrodollars, that are increasingly calling the shots in international finance. The Blackstone deal is likely to stir others to invest their money even farther away from prying eyes than they do already.

Like China, whose proposed Blackstone stake is part of $300 billion that the government plans to set aside this year for investment purposes, dozens of countries have set up what are now commonly referred to as sovereign-wealth funds. They manage money drawn from reserves, natural-resource payments and the like. China is chiefly concerned to diversify its foreign reserves, but other sovereign-wealth funds own national, as well as international, assets.

The top 12 each have anything from $20 billion to hundreds of billions of dollars to invest (see table). Recently, Japan, Russia and India have reportedly been considering setting up funds along similar lines. Some estimates put the size of the funds at $2.5 trillion by the end of this year (in contrast, hedge funds are thought to have a mere $1.6 trillion), with another $450 billion in transfers from reserves being added annually. Including capital appreciation, the amount could swell to $12 trillion by 2015.




To the extent governments have traditionally held investment assets, it was to protect domestic currencies and banks from crisis. Since the funds were for emergencies, they were of a type that could be liquidated easily—initially the holdings were in precious metals, lately they have been in dollars. The idea of building up an endowment to replace shrinking natural resources did not exist.

That process may have started inadvertently in 1956 when the British administration of the Gilbert Islands in Micronesia put a levy on the export of phosphates—bird manure—used in fertiliser. The manure has long since been depleted. However, a once-tiny set-aside of money has become the Kiribati Revenue Equalisation Reserve Fund, a $520m investment portfolio that has grown to about nine times the tiny atoll's GDP.

A similar approach is now common among oil-producing countries, which, it is estimated, account for two-thirds of the assets in these sovereign-wealth funds, and are keen to diversify their national revenues, aware that their wealth is being pumped away. They have typically invested along similar lines to central banks, holding bonds, dollars and bank deposits. Temasek, (details http://www.temasekholdings.com.sg/ a Singaporean entity created in 1974 to pool state-owned investments, started to change the mindset. It subsequently evolved into an even more complex investment vehicle. The heady combination of state-control, success and secrecy, entranced other governments.


Recently, central bankers have also begun wondering whether they have a fiduciary duty to make higher returns from the public wealth under their supervision, which could mean placing at least some part of foreign-exchange reserves in high-yielding, if less liquid, investments. In Asia this question has become increasingly pertinent in the past two years, as reserves have mushroomed.

The result has been a torrent of money into a finite pool of assets. There is no precedent for such fortunes suddenly to find their way into global financial markets, and they help explain the waterfall of liquidity that has driven up the value of risky (and less risky) assets of all descriptions around the world. The world's entire supply of shares is $55 trillion, and bonds account for a similar amount. Sovereign-wealth funds could soon become the most important buyers of such assets, and many others besides. If so, the world will witness the intriguing spectacle of its largest private companies being owned by governments whose belief in capitalism is often partial.

The last time governments were this involved in sinking money into private assets, the process tended to be called nationalisation. Now the funds are invested both abroad and domestically. A new term will have to be coined: internationalisation, perhaps.

Northern light
Of the biggest sovereign funds, only Norway's provides anything close to transparency. Each year it discloses its investment portfolios and returns. ... here are the details http://tinyurl.com/3yexnp

Andrew Rozanov, of State Street Bank, argues that the lack of well-defined obligations and the ability to retain funds indefinitely while not having to reveal results is an investment advantage. The funds can harvest the benefits of volatility and illiquidity unavailable to the risk averse. It would not be surprising if some did particularly well. On the other hand, the same factors that could lead to higher returns could also lead to corruption and untoward political intervention.

But the kind of assets the funds invest in—big ones—can generate frictions even when run properly. Temasek has been embroiled in controversy in Thailand after it bought Shin Corp, one of the country's telecoms companies, from Thaksin Shinawatra, the country's deposed prime minister. China is no stranger to such tensions. In an event that still rankles, CNOOC, the state-controlled oil company, was blocked in America, supposedly on national-security grounds from acquiring Unocal, an oil company.

It is quite possible that by purchasing a non-voting interest in Blackstone, China will be able to bypass the restrictions that might prevent it doing Unocal-style deals in Europe and America......

China still has vast holdings of state assets, and its embryonic stockmarket is bubbling over—if anything it needs more publicly traded companies. Like other countries with sovereign-wealth funds, it would appear to need more expertise in selling companies that it owns, rather than learning how to buy the ones it does not

>just the news from yesterday involving state investment vehicles....
>hier ein paar beispielmeldungen vom montag in sachen staatliche investments...

Singapore Air, Temasek May Buy 24% of China Eastern http://tinyurl.com/2fkdgx
OMX Shares Advance on Report Dubai May Outbid Nasdaq http://tinyurl.com/2z8v43
Norsk Hydro preparing $30 bln bid for Alcan http://tinyurl.com/ytvxlg Pogo sells Northrock to Abu Dhabi Energy http://tinyurl.com/22d926

and this were news from a bank holiday....
und das waren die meldungen vom pfingsmontag....