January 24, 2008
Sovereign wealth funds pay for protection
George Soros made an interesting point about Sovereign Wealth Funds yesterday and one that the US Treasury may be counting on to counteract any Congressional pressure to block SWFs from investing more money in the US.
"The role that sovereign wealth funds have played so far [in helping to re-capitalise US banks] might buy them a certain amount of protection," he said at a lunch I went to in Davos. That was about the most optimistic thing he said since he largely expanded on his comment piece in the FT on Wednesday suggesting that this financial crisis is the worst for 60 years.
The inflow of capital to the US from funds in Asia and the Middle East risks provoking a populist backlash during the presidential campaign and the US government wants to avoid Congress taking up the issue in a way similar to the fuss over DP World’s acquisition of P&O.
David McCormick, undersecretary to the Treasury for international affairs, is in Davos this week talking to SWFs and trying to persuade them to back an IMF move to draw up a code of conduct for SWFs that invest overseas.
Mr Soros’s point is probably right. Although some people may get worried about overseas governments in effect taking stakes in US companies, their capital is obviously sorely needed at the moment. It would be odd indeed if the US tried to bite the hand that is keeping its banks capitalised.
Mr. Soros made his fortune with “Hedge Funds”, which-is-to-say he makes money from BAD NEWS he’s more than happy to instigate.
His hatred for American Liberties, and system of Free Markets and Capital Investment which - he used to admit - turned an impoverished immigrant into a multi billionaire, is curious and might even be interesting - were he not spending so many millions of his wealth on blatant disinformation, and rabidly anti-Bush, anti-American and anti-Semitic organizations and proponents.
For the good of the economy and the good of our personal investments, it might be a good idea to consider doing the exact opposite of what Mr. Soros recommends publicly.
For myself, I’m betting on America and the American economy. I believe American Stocks and Bonds are cheap, and that it is better to “Buy low and sell high” than to behave in a fashion that will advance Mr. Soros’ Funds and personal wealth by helping him to bring down the American [and World] Economy. mariana
Posted by: mariana | January 24th, 2008 at 4:40 pm | Report this comment[…] FT.com: Sovereign wealth funds pay for protection. […]
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