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Abi Dhabi, CitiGroup and Economic Integration
Posted by: Jon Henke on Tuesday, November 27, 2007

Soren Dayton says this may be the "Defining news story of the cycle"...
Citigroup Inc., the biggest U.S. bank by assets, will receive a $7.5 billion cash infusion from Abu Dhabi to replenish capital after record mortgage losses wiped out almost half its market value. … the state-owned Abu Dhabi Investment Authority

I'm skeptical that it will be. The Dubai/Ports issue was a big PR problem...the Dubai/NASDAQ issue wasn't. Do people really care that much about preventing or discouraging foreign investment in US companies? Should they? Bill Quick seems to think so...
Yeah, right. Any opposition to the ever-growing influence of Middle Eastern Arab oil money in American markets, society, or other affairs is nothing but demagoguery. That’s the sort of demagoguing that pretty much cancels itself.
I'm not sure that concern is really justified. Opening up markets, economic integration and other elements of our Soft Power are going to be key to modernizing the Middle East.

On that point, I think Quick is incorrect when he frames this as the "influence of Middle Eastern Arab oil money in American markets, society, or other affairs". That's a one-sided view of economic integration. Middle Eastern investment in US companies doesn't create dependence so much as it creates interdependence. Whether they like us or not may almost be irrelevant; they'll protect their investments.

I worry more about the costs of excluding the Middle East from economic integration than I do about any potential influence they may have on international companies.
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Previous Comments to this Post 

We’ve been here before...alll those Petro-Dollars gotta go somewhere and I’d rather they be invested here. In 10 years oil will be at half it’s current real value and all the Arabs won’t be so "scary."
Written By: Joe
URL: http://
Like Joe says, deja vu all over again. People were weeping and wailing thirty years ago when OPEC jacked up the price of oil and those Ay-rabs started buying up US real estate and stuff with all those dollars. There were also the Japanese, who had the nerve to buy Rockefeller Center and Pebble Beach, among other things. America was declining then, too.
Written By: timactual
URL: http://
This news actually gave me hope that my ’gloom and doom’ visions of America in decline are wrong, that we’ll get investment we need partnering with countries in the Mideast. This was good news, some of the best economic news in a while.
Written By: Scott Erb
In one of the things that has been noticed in the past by the left in the past about the buying habits of wealthy Arab leaders is that so very little of that money ends up showing up being invested in the region. This, it is said, is how ideologies such as that of Usma BinLaden take hold, among the poorer classes.

Indeed, if we are to believe the hype, all of the excess that the American left likes to attribute to the top 1% earners here in America, are far more easily attributable to the type of people who bought up a large chunk of Citibank yesterday. The whole thing tends to make Saddam Hussein look like an average Joe.

Instead of that money being used to refocus the energies of the working classes within their own country so as to prevent extremism, it gets used instead to buy a part of a bank, or a few Rolls Royces, or another flying palace.

I’m happy that they’ve chosen to invest here as opposed to somewhere else. I wonder, however, if the purposes of the world would be better served by redirecting some of those profits for the betterment of the people within their own regions, as opposed to snapping up American financial infrastructure.

I propose no solution for the problem, because frankly, I can’t think of one that doesn’t involve use of the power of government, which is something I’m rather not see happen. (There’s that principle thing, sticking up again.) But I won’t deny that I’d be a lot more comfortable, seeing those dollars invested in their domestic improvement, because frankly, there is the greater need than a moment in terms of the needs of the world.
Written By: Bithead
This news actually gave me hope that my ’gloom and doom’ visions of America in decline are wrong, that we’ll get investment we need partnering with countries in the Mideast.
Just get on board with the Fair Tax Scott. The poor will be off the dole, and investment capital will be rolling in.
Written By: meagain
URL: http://
What is the Fair Tax (I guess I should google it)? I’m more concerned about fiscal responsibility. We have to get to a balanced budget somehow.
Written By: Scott Erb
Your honor, the defense rests.
Written By: Bithead
I read somewhere that Abu Dhabi is being guaranteed an 11% return on that money.
Written By: timactual
URL: http://

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