Foreigners Buy Stakes in the U.S. at a Record Pace

Source: New York Times

Last May, a Saudi Arabian conglomerate bought a Massachusetts plastics maker. In November, a French company established a new factory in Adrian, Mich., adding 189 automotive jobs to an area accustomed to layoffs. In December, a British company bought a New Jersey maker of cough syrup.

For much of the world, the United States is now on sale at discount prices. With credit tight, unemployment growing and worries mounting about a potential recession, American business and government leaders are courting foreign money to keep the economy growing. Foreign investors are buying aggressively, taking advantage of American duress and a weak dollar to snap up what many see as bargains, while making inroads to the world’s largest market.

Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That was up 90 percent from the previous year and more than double the average for the last decade. It amounted to more than one-fourth of all announced deals for the year, Thomson said.

During the first two weeks of this year, foreign businesses agreed to invest another $22.6 billion for stakes in American companies — more than half the value of all announced deals. If a recession now unfolds and the dollar drops further, the pace could accelerate, economists say.

Read more: http://www.nytimes.com/2008/01/20/business/20invest.html?_r=1&ex=1358485200&en=d3060c495138f9e2&ei=5088&partner=rssnyt&emc=rss&oref=slogin

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If I had one wish, it would be that we as a community, and the candidates who represent us, would open our eyes and see clearly what is happening right in front of us. Time is running out extremely quickly.

"America is only good to the extent that we can MILK a shitload of money from it for our own 'elite' selves. We care a hell of a lot more about money MAMMON money that we do about - SMIRK - Americans. Smirk."

- Commander AWOL & republicon homelander cronies

tar and feather that fucking shithead and string him up by the balls from a lamppost.

only the most brain-deficient MORON could not see through this scum-sucking sack of SHIT for the TRAITOR that he is.

Who will our grandchildren be electing for Pres. We are screwed.
Heck of a job Bush's

My guess is to re-elect Deng Xiaoping III to his fourth term.

:rofl:

I'm laughing through my tears.

but I'm not sure what it means?

that the World Bank was shut down yesterday, bomb threat, anybody know the outcome.

woofie was in the building and he let a very gassy fart that was bomb like.

considering how much debt we owe foreign banks, they might as well take our industries as collateral.

Now that the corporate elite has wrung the last bit of operating profit out of the corporations, they are selling the assets for additional profit.

They, in effect, stripped all the meat off of the carcass, and now (with no "meat" left, since our economy is collapsing) they are selling the bones for soup.

Why is this happening? Because the land of capitalism is inhabited by people who do NOT understand simple economics. The economic explanations given out by the academics, the corporatists, and the pundits is all hogwash.

They talk about "competition", "free markets", "free trade" as if these concepts had any meaning in describing the American economy. They do NOT. They may describe an economy in an alternate universe, but not our universe.

In our universe of corporate hegemony, there is NO competition, there are NO "free markets", and trade is anything but free (that is, uncontrolled).

The multinational corporations tightly control jobs, markets, and trade exclusively for the enrichment of the executives that control them. Now that these executives have milked these corporations to the point where our economy is about to collapse, they are selling our, America's, assets to get their last dime of profit.

In the new world order, where your ultimate boss is Saudi or Chinese, the current executives will still have a hand in controlling American corporations as the local representatives of the foreign "owners". The only difference is that the local executives will tell you how powerless they are to change anything. Before it was "competition" and "free markets" that caused them to cheat you and mess up your life. Under the new world order, it will be the foreign "owners" who are making them cheat you and mess up your life.

The multinational corporations tightly control jobs, markets, and trade exclusively for the enrichment of the executives that control them. Now that these executives have milked these corporations to the point where our economy is about to collapse, they are selling our, America's, assets to get their last dime of profit.

Corporate executives, even the CEOs, are just well-paid errand boys. The control lies with the money men -- investment bankers, insurance investment pools, hedge and other fund operators, private investment pools, commodity speculators, currency speculators, and resl estate investors.

A large NY bank moves 3 trillion dollars in one day. Money flows in the global financial casino are over ten times as large as trade in actual goods and services.

Due to the US importing more than we export, other countries have accumulated massive amounts of dollars. The foreign exchange reserves of the major trading partners are roughly: China 1.5 trillion, Japan 1.0 trillion, Russia 0.5 trillion, Saudia Arabia and other Persian Gulf, 0.5 trillion. Much of this is in dollars.

With the dollar losing its value, the don't want to accumulate more. So they will recycle them back to the US. They can either do this by buying US goods and services, or by investing in US assets.

Since they are not as stupid as we are, they are increasing investment instead of consumption.

Ordinary shareholders have no say in how a corporation is run. The CEO's and other top executives determine policy. Big investors can influence policy by putting their executives on the board of directors of companies in which they hold a stake. These directors are beholden to the CEO's of the banks or insurance companies that put them there.

The U.S. economy is controlled by 1000 families, which control between 80 and 90 percent of the assets of this country. (I saw these figures in various articles and books over the years.) I remember seeing a reference book in the library that contained information about oil companies in the U.S. It was about 200 pages, and I wondered how there could be so many oil companies, since there were a couple of dozen major brands (at the time).

These companies had names I had never heard of and were involved in importing and refining oil as well as sales and distribution of oil products. The book also included the names of directors and executives of these companies. What surprised me, although it shouldn't have, is that the same surnames, if not the same people, appeared over and over again in the different companies. There were several hundred oil companies listed that appeared to be family businesses.

It is not how much money is involved or the size of the corporation. It is all about who makes the decisions and for whose benefit. I have worked in corporations where executive decisions cost the company itself hundreds of thousands, if not millions, of dollars in wasted expenditures or lost profits. The executives never batted an eyelash about it. The only conclusion was that they somehow profited from it. (Actually, the corporate rumor mill often had ideas about what was going on.)

A more recent example makes the issue clearer. I read recently that General Motors is going to buy out (lay off) several thousand workers since their stock price is dropping due to low sales. GM is losing sales because they put most of their production into gas guzzling SUV's and trucks that have high profit margins.

However, high profit margins do you no good when you can't sell them. GM executives should have figured out that gas guzzlers would not sell when gas prices are around $3.00 a gallon. After all, Toyota sales are booming. An intelligent management, actually concerned about the welfare of the company, would have seen this coming and produced more fuel efficient vehicles to keep sales up.

However, GM executives refuse to respond to market forces. Their solution is to lay off thousands of workers. This will show up as a boost in the following quarter's profits, after which GM stock prices will get a boost, and the executives will make a small fortune by exercising their stock options. Later on the stock price will drop back, and the company will be no better off, but the insiders will have made a huge pile of money.

bought up a lot of prime real estate.

The verdict is in. Tricklenomics is a failure.

chosen few. Nationalism is for the little people, globalism is for that wealthy few.

:patriot:

not subjects. Their armies man the tech support phones and sweatshops in the low wage countries.

Why does it matter where a company's HQ is physically located? So you people have a problem with companies M&Aing each other just because -gasp- ONE OF T3HM 1S N0T IN T3H U3A!!1!!!!

Let's look at the facts here:
1) It's now possible for money to flow across borders without barriers.
2) It just so happens that right now the US is in doldrums because of someone's mismanagement.
3) Funds and companies from China/Russia/India/France/Kazakhstan/Elbonia are just taking advantage of the cheap US Dollar. I can't see anything wrong with that.
4) Let's say you work for a company that's failing, and your job is in doubt. If the company goes bankrupt, then for sure you will be on the street and without health care (and this is another argument why health care should be guaranteed...as a Canadian, I can LOL at the HMO lobby). If a Japanese company promises to buy the company, there's at least a decent chance that you will have a job.
5) What's the difference between working for a US-based company that pays peanuts and gives a rat's ass about workers and working for a Chinese company that also pays peanuts and gives a rat's ass about workers? You have to tackle the underlying problem, not steal something from Huckabee/Romney/Tancredo/Hunter and blame evil foreigners.
6) The only way for the economies of nations facing difficulties is to retool them. The education system could be drastically changed to meet demands (though it's not like the powers that be care). Shuttered auto plants can be recovered to produce rail vehicles, given that countries like India or China are pouring billions into new transit projects. And the list goes on...

room with men. Except for Japan for which we have had experience, you mentioned only Western countries, those are not the ones I am concerned about.

But the rest of your diatribe I agree with.

WTF is "Freeper" about wanting American jobs in America and wanting Americans to own the Real Estate, companies and buildings that are in America? This is about control of our country. Do you want to be taking marching orders from communist China or those crackpots from the Middle East??? This is about our national sovereignty and our children's future because you know darn well when they own the country, they will be telling our government what to do.

btw - I don't blame the other countries. We have no one to blame but ourselves.

That makes Jim-Rob my new best friend.

top quality, hand-crafted stakes at affordable prices.

Perfect for all your vampire killing needs...

This economic vortex we are experiencing is largely from off-book balance sheets and shadow banking in the federally unregulated subprime marketplace.

The pervasive level of foreign principals influencing Congress was revealed in the 1960s when Senator William Fulbright, then chair of the Senate Foreign Relations Committee, conducted hearings on foreign influence buying in Congress.

There's been very little that has changed since that hearing. Today, in Washington, it is widely known that a revolving door is spinning out of control, legions of policy makers and their staffs are exiting public service one day only to setup lobbying shops the next .

Lobbying rules exist to monitor foreign principal influence: Foreign Agents Registration Act:

Various federal statutes and congressional rules impose extensive disclosure requirements on lobbying activities by “foreign agents” and “foreign principals” as well as restrictions on foreign nationals making campaign contributions and paying for gifts and travel for federal officials.

The FARA datbase is at: http://www.usdoj.gov/criminal/fara/.

The website Economy In Crisis reports:

The Number of U.S. Companies Sold Since 1978 = 14,833

This should make it clear that foreign ownership of U.S. industries did not start within the past few weeks. No one has said it directly, but, buying securities in distressed environments in other countries is called vulture funds. That may be a bit extreme in terms, but, we have no knowledge of the details of these deals or the financial impact on the average American.

As for the need to create more highly skilled (educated) Americans, have anyone paid attention to the out-of-field employment rates? We have a surplus of cab drivers, bartenders, and waitresses with degrees.

If America is going to learn lobbying-101, the influencing of Congress, the issue distance between Congress and the American public, or how the American electorate is removed from participating in its own governance, then, a painstaking review of the Abramoff scandal is required.

sell whatever is left for the $9 Trillion we owe and then nationalize everything. No more debt, no more foreign companies buying all our stuff - they wouldn't touch us with a 10 foot pole. In retaliation, I suppose they would nationalize our stuff and all the bastard outsourcers in this country would be burnt so badly, they wouldn't want to try that again for a very long time.

don't lecture me on the down side of this, I'm aware.

Why shouldn't this be stopped:
Japan getting great deals out of our Northwestern National Parks, slaughtering our northern forests on our park lands and then floating the timbers in the bays surrounding Japan for use decades from now.

The tax payers get nada, but I imagine a secret middle man gets a lot.

Doesn't seem to me that there would be any downside to nationalizing everything in our parks.

A government that actually is beholden to the public interest will work to ensure that no one can abuse the workings of capitalism. Ideally, critical infrastructure such as power transmission, water, roads, railways, etc should be publically owned or given strong public oversight. It would prevent employers from abusing or neglecting employees, and ensure a minimum quality of life. As long as those conditions are fulfilled, then anyone will be welcome to do business. Obviously, the system of governance in too many countries is beholden to those who want free reign...

I'm just not convinced that fingerpointing "evil foreigners" for all of society's problems and shutting out FDI has ever delivered prosperity. It certainly ignores my question about whether there's a difference between a Chinese company that gives peanuts about workers and a US company that also gives peanuts.

...a lot of high end homes are being marketed in Europe because of the collapse in the number of buyers for those properties in the US. Even with inflated real estate prices here, given the weak dollar it is still a bargain to Europeans (not Japanese because the Yen is not so strong as the euro).

It balances out the huge trade deficit we have been running the last decade

The genie may be out of the bottle here. No one is really sure how this is going to unfold, I don't think, but this could be very bad.

according to XE.com, a foreign currency trading site.

1 million yen is $8695 at 115/dollar

1 million yen is $9433 at 106/dollar

You can see the implications of this as corporations decide to buy assets in the U.S.