China bypasses the U.S. Treasury and goes right to the source, its Development Bank nearing the...

China bypasses the U.S. Treasury and goes right to the source, its Development Bank nearing the inking of a $1.7B loan package to Lennar (LEN). The funds will be used for infrastructure such as roads and shore stabilization as the company moves ahead with developments in San Francisco, including the redevelopment of the U.S. Navy Base.

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Comments (4)
  • Tao Jaxx
    , contributor
    Comments (1472) | Send Message
    Reminds me of the Japanese buying Pebble Beach Golf Course in the '80s, only to sell it back at a fraction of the price in the '90s. Did the same for Rockefeller Center.
    Not sure I'm happy seeing developers cover Treasure Island with McMansions either.
    3 Aug 2012, 07:51 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Wonder what the Swiss are doing with the hundreds of billions of francs they are issuing to support the franc-euro peg? Maybe the Swiss will have to get into buying real assets all over the world as well.
    3 Aug 2012, 09:45 AM Reply Like
  • Robin Hewitt
    , contributor
    Comments (5473) | Send Message
    Tao Jaxx, that was my first thought too, based on the (misleading) headline. But that's not what this is. It's a bank loan to a developer, not a direct purchase of U.S. assets.
    3 Aug 2012, 11:14 AM Reply Like
  • Tao Jaxx
    , contributor
    Comments (1472) | Send Message
    True, but it is infrastructure development, so kind of halfway between loan and investment.
    In any case, my experience is anytime a foreign bank ventures off-base, chances are great it gets a raw deal, at best a half-baked one and problems down the road.
    They typically have to compromise to get the deal done, and the locals know how to extract concessions.
    Not saying that's necessarily the case here, but wouldn't be surprised.
    Chinese banks are good at funding State Owned Enterprises. They fail to fund the Chinese private sector, who has to rely on face-to-face finance and lousy such deals, so what's their comparative advantage here in the US? Tons of cash they sit on. Generally ends in tears.
    As they say, right now the Chinese bank has the money and Lennar has the experience. In the end, Lennar will have the money and the Chinese bank will have an experience...
    3 Aug 2012, 12:00 PM Reply Like
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