Saturday, October 4, 2008

What Germans are saying

My homie Himmler from the 19th Step sent me this long article in Der Spiegel. Its in English.

Most people i know will be nodding along with this article, hollerin out like YEAH and YOUKNOWWHATIMSAYIN or whatever you yell out when you catch someone's vibe.

Of particular interest is Part 3, where Spiegel goes into the Economic Crisis and lays it down pretty clear and concise, giving us a look at the risks of shunning History:

As long ago as 1936, John Maynard Keynes recognized the risk that "speculation may win the upper hand" in the markets. Its influence in New York, the British economist wrote, was "enormous," and the situation would become serious "when the capital development of a country becomes the by-product of the activities of a casino."


It goes through the Bush Administration's many many ... ahem .. miscalculations and gives a projection of a future without America the Bully. They speak of the Fall.

But for me this is the fall of my young talented son; the setback that will make him a man. I will be there for him and help him shake it off. And if vultures come to pick at him in his weakest moment, I'll be there with an Army of Me.

Are foreign investors vultures? I would appreciate any comments on this:

The wealthy state-owned funds of China, Singapore, Dubai and Kuwait control assets of almost $4 trillion (€2.76 trillion), and they are now in a position to buy their way onto Wall Street in a big way.

But they have remained reserved until now, partly as a result of poor experiences in the past. The China Investment Corp., for example, invested in the initial public offering of the Blackstone Group, a private equity firm, and invested $5 billion (€3.45 billion) in Morgan Stanley. In both cases, it lost a lot of money.

But time is on the side of the Chinese. American stocks are becoming cheaper and cheaper. And the longer the crisis lasts, the weaker American objections to buyers from the Far East will become. In fact, it is quite possible that they will soon be celebrated as saviors.



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6 comments:

charlie said...
This comment has been removed by the author.
charlie said...

foreign investment will wane as this plays out and it's revealed that more banks are beset with toxic assets. it won't happen until the next presidential administration as the recent bailout is essentially a short term band aid which will merely prevent the inevitable (a much larger crash of the market). it will be interesting to see what role China plays since they hold such an gigantic piece of US debt which is in the process of being heavily devalued. in the long run it's in their interest as their own domestic markets are slowly but surely waking up despite the overall world economy taking big hits at the moment. the Spiegel article is gloomy but raises critical points which we can't afford to ignore at this stage. pucker up!

sascha matuszak said...

Germans.

bruno-ken said...

The Chinese may start sending in whole fleets of planes filled with cash. And they aren't going to be content with the soft, ethereal sorts of "assets" either.

Quoting Tom Friedman's latest column:

I would also bet that more and more of the foreign investors who come our way are going to want to buy hard, tangible assets — skyscrapers, real estate and real companies — not just mutual funds, T-bills, bank stocks or other equities. ...

“The next round of capital that comes in from abroad is going to be much more demanding and move into real assets,” argued Jeffrey Garten, professor of trade and finance at the Yale School of Management. “Being a bigger debtor nation means losing even more of our sovereignty. It means conducting our economic policies with an eye toward whether others approve. It means bearing the advice and criticism that we have dispensed ad nauseam to other countries for over half a century. It means far more intensive consultations with other capitals on our fiscal policies and our monetary policies.”

Nicole Vulcan said...

I love the idea of this government now 'bearing the advice and criticism' that we have doled out for so long. But i wonder if other countries will do it with the pendantic pageantry that we have dished out for them. Or if they'll do it better. Or worse.

sascha matuszak said...

i think in a chaotic situation such as this one, there are opportunities to be had. i can only pass this info on, as i am capital-less -- but notice how Citi, Wells Fargo and (naturally the little man's long time nemesis) JP Morgan take out the check book and go shopping ...

what kind of opportunities are there for Sasch-Six Pack and his band of Swarthy Hobos?