Announcement

Collapse
No announcement yet.

are swf's buying the "right" assets? whither the fire economy?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • are swf's buying the "right" assets? whither the fire economy?

    in the last few months we've had swf investments in blackstone, citi, ubs and now morgan stanley. i know we're only talking $5-10billion a pop here, but there's a pattern. i'm aware that the swf's are also making other kinds of investments, and there's a rumor about blackstone orchestrating a chinese bid for rio tinto. but the big news has been the investments in financial entities. these entities have needed infusions because of financial structure rumblings, however, that bring into question the value of these very investments.

    we have been living in the age of finance. but, in light of unfolding events, how long will it be before you can hear the phrase "financial innovation" without wincing or rolling your eyes?

    i'm wondering if, like the japanese buying rockefeller center and the pebble beach golf club at the peak, only to sell them back years later for a lower price, are the petro-countries and chinese buying finance at the peak?

    whither the fire economy? or is it wither the fire economy?

  • #2
    Re: are swf's buying the "right" assets? whither the fire economy?

    Originally posted by jk View Post
    in the last few months we've had swf investments in blackstone, citi, ubs and now morgan stanley. i know we're only talking $5-10billion a pop here, but there's a pattern. i'm aware that the swf's are also making other kinds of investments, and there's a rumor about blackstone orchestrating a chinese bid for rio tinto. but the big news has been the investments in financial entities. these entities have needed infusions because of financial structure rumblings, however, that bring into question the value of these very investments.

    we have been living in the age of finance. but, in light of unfolding events, how long will it be before you can hear the phrase "financial innovation" without wincing or rolling your eyes?

    i'm wondering if, like the japanese buying rockefeller center and the pebble beach golf club at the peak, only to sell them back years later for a lower price, are the petro-countries and chinese buying finance at the peak?

    whither the fire economy? or is it wither the fire economy?
    Shortcut: EJ picked this book up at a little bookstore on Newbury Street in Boston in 1999. He showed the little green book to us today. Holding out. The whole story is here, sadly.

    The Bubble that Broke the World - 1932 (PDF)
    Ed.

    Comment


    • #3
      Re: are swf's buying the "right" assets? whither the fire economy?

      Originally posted by FRED View Post
      Shortcut: EJ picked this book up at a little bookstore on Newbury Street in Boston in 1999. He showed the little green book to us today. Holding out. The whole story is here, sadly.

      The Bubble that Broke the World - 1932 (PDF)

      Thanks for the e-book FRED!

      Comment


      • #4
        Re: are swf's buying the "right" assets? whither the fire economy?

        Originally posted by jk View Post
        in the last few months we've had swf investments in blackstone, citi, ubs and now morgan stanley.
        When I saw the title, I thought, "What assets are single white females buying? Is Macy's having a huge sale or something?"

        But after reading the post, that clearly isn't right. What is SWF in this context?

        Comment


        • #5
          Re: are swf's buying the "right" assets? whither the fire economy?

          Originally posted by Andreuccio View Post
          When I saw the title, I thought, "What assets are single white females buying? Is Macy's having a huge sale or something?"

          But after reading the post, that clearly isn't right. What is SWF in this context?
          sovereign wealth funds. this isn't the personals page, andreuccio!
          let's see, swf seeks iib [insolvent investment bank] with cdo habit.... siv's no problem. object: long walks on the beach and lingering capital infusions.

          Comment


          • #6
            Re: are swf's buying the "right" assets? whither the fire economy?

            Originally posted by jk View Post
            i'm wondering if, like the japanese buying rockefeller center and the pebble beach golf club at the peak, only to sell them back years later for a lower price, are the petro-countries and chinese buying finance at the peak?
            My confusion over the meaning of SWF aside, I was wondering this, too, when I read this post yesterday:

            http://www.dailykos.com/story/2007/1.../11/115/422951

            The post deals with the difference between liquidity and solvency, but also discusses the purchase of financial institutions by foreign investors.

            One sign that cannot be spinned away is the sheer number of banks that have had to get emergency capital injections from the outside to improve their balance sheets:
            Abu Dhabi buys Citi stake (27 November)
            NEW YORK (AP) -- The Abu Dhabi Investment Authority will invest $7.5 billion in Citigroup, offering the nation's largest bank needed capital to offset big losses from mortgages and other investments.
            Chinese Firm To Buy Big Stake In Bear Stearns
            NEW YORK, Oct. 22 -- China's Citic Securities would acquire up to a 9.9 percent stake in Bear Stearns under a joint venture that marks the first time an entity controlled by the Beijing government has obtained a significant stake in a major Wall Street investment bank.
            China's Ping An buys Fortis stake for $2.7 billion (29 November)
            HONG KONG (Reuters) - Ping An Insurance (Group) Co, China's No.2 life insurer, bought a 4.2 percent stake in Dutch-Belgian financial services firm Fortis for $2.7 billion, the latest in a spate of overseas investments by Chinese financial firms.
            Singapore Investment Arm To Sink Billions Into UBS (10 December)
            The Swiss bank is raising a total of 13 billion Swiss francs ($11.48 billion) in fresh capital from two investors. The Government of Singapore Investment Corp., which invests the city-state’s foreign-exchange reserves, will contribute 11 billion Swiss francs ($9.75 billion); the other investor was not identified, but was said by Reuters to be the government of Oman, which has been attempting to diversify its economy away from reliance on oil production.
            What these sales have in common is that they take place at pretty lowish valuations for the banks (whose market values have been hammered over the past few months), and that they are desperately needed to tide the banks over, and in particular to allow them to fulfill their capital adequacy requirements, ie their obligations to have enough capital to cover the risks they are taking.
            The author, Jerome a Paris, (who I've mentioned here before), concludes that it's an open question whether the buyers will make any money, but that there is at least some chance they will.

            The only open question is whether the new investors, who are buying into our banks at this delicate point in time, will make any money. There are two reasons they might: the first is that we have indeed reached the bottom of the market, after a lot of panicky selling, and that things will perk up (that's the optimistic scenario). The other is that we will not let our banks fail, because they play too important a role in our economy, and public authorities (ie taxpayers, us) will bail them out and save the shareholders to some extent - in hich case the most recent buyers are those with the best chance of breaking even.

            But given that these investors have the money to acquire these stakes because they've been accumulating that wealth by selling us stuff on credit and thus being forced to save a good chunk of the proceeds (in the form of IOUs), it is only fair that they get a chunk of the wreckage of our economies, whatever it's worth today.
            At a minimum, clearly these buyers are not buying in at "peak", like the Japanese did, but getting these assets at a substantial discount.

            Comment


            • #7
              Re: are swf's buying the "right" assets? whither the fire economy?

              Originally posted by jk View Post
              sovereign wealth funds. this isn't the personals page, andreuccio!
              let's see, swf seeks iib [insolvent investment bank] with cdo habit.... siv's no problem. object: long walks on the beach and lingering capital infusions.
              LOL.

              (Did I mention I really hate the 10 character minimum requirement for posts?)

              Comment


              • #8
                Re: are swf's buying the "right" assets? whither the fire economy?

                Originally posted by jk View Post
                i'm wondering if, like the japanese buying rockefeller center and the pebble beach golf club at the peak, only to sell them back years later for a lower price, are the petro-countries and chinese buying finance at the peak?
                Different cases, they are not buying at the peak and the loan conditions seem to be favorable.

                Comment


                • #9
                  Re: are swf's buying the "right" assets? whither the fire economy?

                  Originally posted by Andreuccio View Post
                  LOL.

                  (Did I mention I really hate the 10 character minimum requirement for posts?)
                  Intelligble written English does not include "LOL." Just try to bring yourself to write in intelligble English and you should be okay.
                  Jim 69 y/o

                  "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                  Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                  Good judgement comes from experience; experience comes from bad judgement. Unknown.

                  Comment


                  • #10
                    Re: are swf's buying the "right" assets? whither the fire economy?

                    Originally posted by Jim Nickerson View Post
                    Intelligble written English does not include "LOL." Just try to bring yourself to write in intelligble English and you should be okay.
                    LOL. Intelligible written English doesn't include SWF, either, so there!

                    Comment


                    • #11
                      Re: are swf's buying the "right" assets? whither the fire economy?

                      Originally posted by Andreuccio View Post
                      LOL. Intelligible written English doesn't include SWF, either, so there!
                      I was going to comment that Intelligible written English doesn't include "Intelligble", either, but then thought better of it, since it's just a typo and I didn't want to be mean.

                      Then I noticed you did it twice. Hmmm. Did you do it on purpose just to invite the jab?

                      Comment


                      • #12
                        Re: are swf's buying the "right" assets? whither the fire economy?

                        Originally posted by Andreuccio View Post
                        I was going to comment that Intelligible written English doesn't include "Intelligble", either, but then thought better of it, since it's just a typo and I didn't want to be mean.

                        Then I noticed you did it twice. Hmmm. Did you do it on purpose just to invite the jab?
                        I can't explain it. Just wasn't being careful. I raed soemthnig recntly htat suggseted thta oru brians coudl figrue out wodrs evne wehn the lettesr are misplaced. But with LOL and all similar shit, understanding depends on one's fluency with texting--I guess that is where all the shit originated.

                        Also, I am truly beginning to wonder about whether or not my brain function is lessening. I placed an order for renewal of an investment letter last week and then placed it again and I had and still have no recall of having completed the first submission of the renewal.
                        Jim 69 y/o

                        "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                        Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                        Good judgement comes from experience; experience comes from bad judgement. Unknown.

                        Comment


                        • #13
                          Re: are swf's buying the "right" assets? whither the fire economy?

                          Originally posted by Jim Nickerson View Post
                          I raed soemthnig recntly htat suggseted thta oru brians coudl figrue out wodrs evne wehn the lettesr are misplaced.
                          I love that stuff. Isn't it amazing. What I don't get is how you can type like that. (At least on purpose. It's easy to do by mistake.)

                          But with LOL and all similar shit, understanding depends on one's fluency with texting--I guess that is where all the shit originated.
                          Understanding any abbreviation or acronym is dependent upon one's fluency. Understanding any word, really. In that sense, "LOL" isn't really different from SWF, "The Fed", or "currency depreciation based reflation efforts". It's just a question of one's willingness to learn the language.

                          Also, I am truly beginning to wonder about whether or not my brain function is lessening. I placed an order for renewal of an investment letter last week and then placed it again and I had and still have no recall of having completed the first submission of the renewal.
                          We all have moments like this, no matter our age. I hope that's all this is for you. I watched my grandmother deteriorate and it wasn't pretty. I'm sure you're up on all the things you need to do to keep up brain function, though. GL. (Good luck.)

                          BTW, (by the way), I wouldn't worry about my mental functioning based on a repeated typo. I'm forever capitalizing the first two letters of my first name, for example, because I don't get my finger off the shift button fast enough. Yet my brain is firing on at least 7 out of eight cylinders, no problem.

                          Comment


                          • #14
                            Re: are swf's buying the "right" assets? whither the fire economy?

                            Originally posted by Andreuccio View Post
                            I love that stuff. Isn't it amazing. What I don't get is how you can type like that. (At least on purpose. It's easy to do by mistake.)



                            Understanding any abbreviation or acronym is dependent upon one's fluency. Understanding any word, really. In that sense, "LOL" isn't really different from SWF, "The Fed", or "currency depreciation based reflation efforts". It's just a question of one's willingness to learn the language.



                            We all have moments like this, no matter our age. I hope that's all this is for you. I watched my grandmother deteriorate and it wasn't pretty. I'm sure you're up on all the things you need to do to keep up brain function, though. GL. (Good luck.)

                            BTW, (by the way), I wouldn't worry about my mental functioning based on a repeated typo. I'm forever capitalizing the first two letters of my first name, for example, because I don't get my finger off the shift button fast enough. Yet my brain is firing on at least 7 out of eight cylinders, no problem.
                            The best I can do is to believe that things as LOL, FWIW, SWF, CDO, ABCP, MBS, CMBS, etc., etceteras, and so forth are forms of vernacular.

                            Being a doctor once, and young and inexperienced when entering practice, I insisted on talking "doctor talk" to patients--until, until it dawned on me that I was failing to communicate. Remember the problem with there being a failure to communicate in Cool Hand Luke. I think a person who takes time whether oral or written to communicate should ask himself whether the words chosen are ones that are likely to be understood by the greatest number of readers or listeners. Is it most important to put up posts that are most efficient to the poster's time, or to put up posts that clearly convey what the writer wishes to convey in an understandable fashion.

                            I'd bet a lot of money, if the answer could be determined, that well over 50% of people who visit iTulip are not 75% as fluent in derivative conversation as is jk. Actually it strikes me that when he writes about this stuff of alphabetical derivatives he actually understands what he is writing.

                            Back to your original post: LOL, and then probably 50 letters and spaces to state your opinion, it might have been "cheaper" word-wise to write: "Very clever, jk." or something similar, which by the way, jk, it was quite clever.
                            Jim 69 y/o

                            "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                            Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                            Good judgement comes from experience; experience comes from bad judgement. Unknown.

                            Comment


                            • #15
                              Re: are swf's buying the "right" assets? whither the fire economy?

                              Originally posted by Jim Nickerson View Post
                              The best I can do is to believe that things as LOL, FWIW, SWF, CDO, ABCP, MBS, CMBS, etc., etceteras, and so forth are forms of vernacular.

                              Being a doctor once, and young and inexperienced when entering practice, I insisted on talking "doctor talk" to patients--until, until it dawned on me that I was failing to communicate. Remember the problem with there being a failure to communicate in Cool Hand Luke. I think a person who takes time whether oral or written to communicate should ask himself whether the words chosen are ones that are likely to be understood by the greatest number of readers or listeners. Is it most important to put up posts that are most efficient to the poster's time, or to put up posts that clearly convey what the writer wishes to convey in an understandable fashion.
                              Good question. It's probably important to think who one's audience is and direct one's communication to that level. Did I overshoot with "LOL"?

                              I'd bet a lot of money, if the answer could be determined, that well over 50% of people who visit iTulip are not 75% as fluent in derivative conversation as is jk. Actually it strikes me that when he writes about this stuff of alphabetical derivatives he actually understands what he is writing.
                              True. I remember when I first arrived here on iTulip I asked for a glossary to help with some of the acronyms and economic concepts.

                              Back to your original post: LOL, and then probably 50 letters and spaces to state your opinion, it might have been "cheaper" word-wise to write: "Very clever, jk." or something similar, which by the way, jk, it was quite clever.
                              Also true, at least in the short term. My 50 letters and spaces was a bit of hyperbole, put in in the hope that the 10 letter minimum rule might be changed. Thus the hope is that it will save me words in the long run. Although maybe EJ and Fred, like you, don't want a lot of posts consisting only of "LOL", etc.

                              And it sure would have been " 'cheaper' word-wise" if one factors in this dialogue you and I have been having. :p

                              Sorry for hijacking your thread, JK.

                              Comment

                              Working...
                              X