Wednesday, February 24, 2010

China Owns

If you are reading this in 2012 or something, the story right now is that there is fear that China may no longer buy American assets. This would include the much touted US Treasuries and also the lesser known stakes in American companies as mentioned in this article:

"But it's no longer just the Chinese central bank buying government debt. Now entities controlled by the Chinese government are buying stakes in American financial intermediaries. China Investment Corp., the sovereign wealth fund that is sitting on nearly $300 billion in assets, owns 10 percent of the Blackstone Group, the large private equity firm. In June, CIC bought $1.2 billion worth of Morgan Stanley shares, bringing its stake in the chastened investment bank to 9.9 percent. (CIC had spent $5.6 billion on Morgan Stanley shares back in late 2007.)"

I wonder if the financial markets might just collapse in the near future...

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