Quote:
Originally Posted by jatx
I read a lot of your posts. This reading is usually concluded by a mouth full of blood, as I have bitten my tongue. The post above is pure drivel. Do you not realize that when financing a piece of property using more debt than equity, a foreign investor incurs a liability instead of acquiring wealth (neither of the transactions above were arbitrage plays)? Yet from this flawed analysis of the basic facts you are able to spin the most fabulous story!
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Well, let's take a look at the transactions. Then, perhaps you can tell me where you see flaws.
The OPEC countries are benefiting from a positive balance of payments, and both individuals and governments have funds available for investment.
The various entities then procure U.S. properties and assets. For the sake of discussion, let us suppose that some arrangements are leveraged. So, perhaps they put up some money, and borrowed some. They would still have a positive net value on a building. That sounds like equity.
Based on the negative balance of trade and the ongoing budget deficit, it sounds to me as if we - both our nation and our corporations - are transferring our productive assets to them so we can get the cash we need. The Citibank transaction is a case in point.
LINK The cash infusion from Prince AlWaleed bin Talal's - $4 billion worth - seemed to be most welcome, as Citibank tried to deal with subprime mortgages. It is, perhaps, worth noting that no U.S. investor appeared to do this. Perhaps the Prince, despite his reputation as the Saudi Warren Buffet, is not a wise investor...
I also mentioned that, with a Google search, there is every indication they own parts of U.S. media companies. From this, I infer they have some ability to shape content. I would be surprised if holders of large equity stakes do not have some ability to modify reporting. Here's a sample
LINK
This leads me to the view that they can influence at least a few political leaders.
If you don't agree with the above, I'd like to see what you thoughts are.
Quote:
Originally Posted by The Reaper
Pardon me for butting in, but remember when the Japanese were buying up the US?
Do you recall when they bought Pebble Beach Golf Course?
How did that venture turn out? What happened to their investments?
TR
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Yes, Sir, good point. I seem to recall they had a similar outcome with Rockefeller Center.
Again, as I recall, Japan was at the top of an economic cycle...it was a time when 3/4 of a square mile of land under the Imperial Palace in Tokyo was worth the same as the entire state of California. (From Asia's Financial Crisis and the Role of Real Estate). The good times ended, they needed to raise cash, so they sold U.S. properties at a loss.
Perhaps OPEC will suffer a similar reversal. But in the meantime, I would think some politicians would be sufficiently venal to be tempted, and hence influenced.
I would, as always, value your thoughts on the matter.