Tuesday, January 15, 2008
The Sub In Subprime
A few days ago Josh Marshall wondered whether he should be unnerved about the fact that foreign governments (read: sovereign investment funds) were snatching up large equity positions in cash-strapped American financial services companies. I think it's more unnerving when the foreign governments decide that it's just not worth the risk anymore:
China's government has apparently squashed a multibillion-dollar investment in Citigroup Inc. by state-owned China Development Bank. The move suggests there is discord in Beijing over how best to deploy China's money pile. A few previous China investments like these have fared poorly so far financially.
These guys have got a pretty big incentive to keep the dollar from bottoming out. The question is whether there's anything they can do about it.