Reply #4: More China.... [View All]

[Bigmack]

I think I know what this means for the US....
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Major Chinese Investor Loses Confidence in Paulson’s Bailout Plan

The man who heads up China’s new sovereign wealth fund, Lou Jiwei, startled a lot of people this week with his surprisingly undiplomatic comments about the prospects for his fund pumping more money into cash-starved Western banks. What does it mean?

Lou, speaking in Hong Kong at a conference organized by the Clinton Global Initiative, said managers at China Investment Corp. “don’t have the courage” to invest in Western banks because they don’t know how bad things will get. He also said he had “lost confidence” over the lack of any consistency to measures being taken to fix the banks’ problems. It’s pretty clear he was talking about the ever-changing Paulson-led rescue plan.

When a big investor like the $200 billion CIC chooses to publicly disparage the state of Western banks and the efforts to fix them, it’s bound to attract some attention. Perhaps it was posturing: if Lou complains loudly enough about the lack of protection for his investments in Morgan Stanley or Blackstone – both of which have lost billions on paper — maybe CIC can get those protections on the next big deal they sign.

Then again, Lou may have merely been speaking his mind. If so, he’s articulating what much of the rest of the world already thinks anyway. Does anyone plan to pump billions of dollars into a bank these days that doesn’t own the presses to print the money?

http://blogs.wsj.com/deals/2008/12/04/major-chinese-inv... /