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« Your liberal media | Main | Local impact of mortgage bubble »

Nov 27, 2007

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Jon Lowder

It will be interesting to see if this raises the same kind of stink we had when Dubai Ports World bought the P&O port management company a couple of years back. If I remember correctly DPW ended up agreeing to transfer the US port management part of the deal (P&O was a British company) to a US entity. Probably not since this is a 4.9% stake in a huge company that already counts a Saudi Prince as one of its largest stakeholders. Another likely reason is that while physical security is easy to grasp economic security is much more complex. And really this single purchase isn't that threatening in and of itself, but the prospect of American companies being cheap to buy right now gives this deal a "canary in a goldmine" feel and leads to the question of what our policy towards foreign ownership should be, especially as related to sovereign funds.

Mike K.

And as was pointed out, our current consumption habits has created the wealth necessary for these foreign acquisitions of significant US equities. The same thing's been going on in real estate and the bond markets for a couple of decades. Supposedly if everyone has a stake in something there's less incentive to fight over it. Doesn't seem to have worked so well though...

JAT

Ah yes, Surowiecki. Remember him as an unreformed Syracuse fan writing for the DTH.

Anyway, I swear I was musing to myself over the weekend that the only way out of our subprime meltdown was foreign money in our big banks. Just no other market-based fix. ML is NOT gonna merge with Wachovia, for example. And as that Summers piece in the FT pointed out, we are not set-up to do the Japanese-style everybody own a bit of everybody thing -- and do not forget -- do not loan a thing to anyone outside the group. Japan's economy spent the 90s with that little problem.

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