When Times Are Tough, a Chinese Friend Steps In

Includes: BCS, BX, C, FORSY, MS, UBS
by: Andy Abraham

First there was Abu Dhabi sovereign fund buying into Citi (NYSE:C) and Tuesday news broke that China is investing $5 billion in Morgan Stanley (NYSE:MS). China's sovereign wealth fund will be purchasing approximately 9.9% of the Wall Street mainstay. All of this on top of an announcement of Morgan's latest write down of another $9 billion. Two years ago China attempted to purchase Unocal and thank GD due to strong opposition by the government this sale was negated. So my simple question is: Why is it now permissible to purchase the financial backbone of the U.S. and actually much of the Western World. UBS (NYSE:UBS) also received a cash infusion recently from Middle East sources.

Who can really think we are not in a crisis if situations like these mentioned above are permitted to occur? All in all Blackstone (NYSE:BX), Standard Bank, Barclays (NYSE:BCS) and even Fortis (FORSY) have sold stakes to China. What about all the investors buying China? Actually for the first time in history there is more of an outflow of sovereign Chinese government investments than inflows. Is one to believe that the Communist Chinese, our enemies in the Korean War and supporters of North Korea, have become true capitalists?