There has never been a doubt in my mind that the best national defense is to make sure that everyone else — friends and potential enemies — have an important financial stake in your stability, success, and prosperity.
When I learned of that purchase of a 5% stake in Citigroup for $7.5 billion the other day, I didn’t for a second buy the rhetoric that it was a "bailout." Yea, Citi can use the cash, but it would have squeaked by anyway. If Citi was in no-shit trouble, shares would be trading under $5 and not in the 30s. Make no mistake: this was a fabulous investment and this chart has "buy; it’s on sale" written all over it.
Anything can happen, but I gotta call this a smart move with a very attractive risk/return profile. They’re going to get 11% on the money, dividends, and should the stock make it back to the $55 level, a near doubling of their capital.
Am I concerned with middle easterners of the Islamic faith owning huge stakes in American companies? Quite the contrary. I think it’s no mystery that Great Britan, since the American Revolution, has been America’s closest supporter. They own more of America (more than 25% of all foreign investment) than any other country. I believe the Dutch and Japan come in next, and Europe combined is at around 60% of all. Asia is right up there, China will be huge, and the middle east is stepping it up. It’s good for business and it’s good for peace.
I am purposely making no distinction between "private capital" and "sovereign wealth funds." At that level of capital, controlled by people with global political connections and influence, there’s just no important distinction to make. If there was any such thing as "private capital," I’d be happy to make a distinction.