China steps in
Fraser Nelson 8:58amThis is the moment I’ve been waiting for – China moving in to the chaos and snapping up the giants of Western capitalism. Bloomberg reports that China Investment Corp. may be buying half of Morgan Stanley. The Gulf States got burned by using their sovereign wealth funds to take a chunk of Citibank when the bear market still had plenty to go. I suspected China would wait until the market bottomed, then move with a vengeance.
America is particularly allergic to Chinese deals – remember that kerfuffle over New York’s ports coming under Arab control a couple of years back? But things were liquid then. If it’s a Chinese takeover or a Lehmans-style collapse, what would America do? There is huge potential for cash-rich China to vastly extend its geopolitical reach through this financial crisis in the US and Europe. So it will be fascinating to see if any more Chinese buyers come out of the woodwork.
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MS
September 19th, 2008 9:23am Report this commentMS rallied 100% in less than three hours last night. With news of the RTC type bailout they may remain independant.
MS
September 19th, 2008 9:25am Report this commentIf the gulf states got the same deal as the Singapore wealth fund in Barclays, then if there is a new round of financing then they get more shares issued at the new price. It is called death spiral fiancing.
marbury
September 19th, 2008 9:35am Report this comment"America is particularly allergic to Chinese deals – remember that kerfuffle over New York’s ports coming under Arab control a couple of years back?"
Huh?
oldtimer
September 19th, 2008 10:34am Report this commentI wonder if this possibility concentrated the minds of he Washington movers and shakers who assembled for the photocall yesterday - ie Paulson, Bernanke, the Senate leader et al - to say they were working on a solution to toxic debt?
But equally I am prepared to believe that events since last weekend are, at least in part, more or less following a course plotted by Hank Paulson.
PS on LloydsTSB and HBOS: this deal has to be approved by shareholders. As a (very small) shareholder in LloydsTSB I am very wary of the political strings attached to this proposed deal - experience suggests they do not work very well. Nor do I warm to the idea of being paid a dividend in scrip rather than cash - the cash yield being the reason I bought them in the first place. I shall vote against it.
Ray
September 19th, 2008 11:29am Report this commentThe real superpowers in this world aren't necessarily the ones with huge militaries stationed in every corner of the planet (like post-war Britain or the United States today). No, the real superpowers are the ones whose cars, machinery and household gadgets are sold in every corner of the planet (like Japan and Germany in the 1980s).
It's a lesson that the Chinese seem have learned. Sadly, it's a lesson that the neo-cons in the Bush White House - seem to have forgotten.
Augustus
September 19th, 2008 2:03pm Report this commentWhy are these banks and credit institutions always described as being the victims of the crisis? They are the guilty parties with their gruesomely twisted derivatives, such as collateralized debt obligations etc. an offender in need is still an offender.
Seasurfer1
September 19th, 2008 2:09pm Report this commentKeep shopping at Tesco and Asda if you want China to buy us out with our own Pounds, the very ones you have spent on Chinese Tat at Tesco and Asda!
The Laughing Cavalier
September 19th, 2008 2:34pm Report this commentWhat's Chinese for "Trojan Horse"?
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