Sovereign wealth funds

It seems we can't live with 'em and we can't live without 'em. For quite some time now, the U.S. markets have welcomed infusions of substantial investments from Asia and the Middle East. They've boosted the momentum of sluggish companies and propped up sections of a sagging economy. We're happy to take the money but, as always, it probably doesn't come without strings attached. Mild panics have been stirred in past decades. In the 80s, it was Japan. They were buying up huge chunks of American real estate. They were taking over the country. Then, when their economy fell apart, it seemed that the Arabs took over the takeover.

But now, with huge stakes taken by China, Dubai, Abu Dhabi and Saudi Arabia in U.S. financial companies such as Citigroup, Morgan Stanley and Bear Stearns, not to mention in the NASDAQ, and as we appear to be becoming more and more dependent upon these investments, concerns are increasing that "these stakeholders are interested in more than profits."

The issue has been getting some serious attention at Davos, but there it seems that so far only Larry Summers has expressed serious apprehension. Meanwhile, the Saudis are complaining that they're being discriminated against ("found guilty before being proved innocent") and there are some rumblings out of Dubai to the effect that they can take their money elsewhere if we don't want it. Well, yeah.

It's the proverbial spot between the rock and the hard place. I'd like to be the trusting sort, but I can't help but wonder ... why all the opposition to establishing an international code of conduct that would work to preserve the sovereignty of those nations on the receiving end of the largesse (which, after all, isn't largesse in the first place)? Even CNN is asking questions. I don't like it one little bit.

But I'll worry about it next week.

Shabbat Shalom.