Thursday, December 20, 2007

Top Ten Things Yet to Be Purchased by Sovereign Wealth Funds

After the successful culmination of five years' worth of bootlicking by Stephen Roach, it's worth considering what other assets might tickle the fancy of CIC, ADIA, and other sovereign wealth funds in the future. After months of deliberation, thoughtful study, and cost-benefit analysis, the crack research team at Macro Man Industries has handed him the following list of future targets for SWFs. Be warned!

1) Manchester United, the Dallas Cowboys, and Yomiuri Giants. Carpetbagging ownership is swiftly becoming the bane of professional sports in some areas, notably the English Premiership. By purchasing a flagship team on three continents, SWFs could set the standard by which all other money-grabbing owners could be judged.

2) The Eiffel Tower. The Japanese bought MGM, Rockerfeller Center, and Pebble Beach Golf Club in the 80's. SWFs have more money that the Japanese ever did, so can set their "cultural icon" sights a bit higher. And with M. Sarkozy's attention otherwise engaged, they might even get a good deal.

3) The North Pole. Word on the street is that the Russian oil stabilization fund has already got this one in the bag.

4) The Beatles' back catalogue. Wacko Jacko could use a bit of dosh to pay for, er, more "medical procedures." Apparently, "Money" is quite a catchy number in both Arabic and Mandarin.

5) Africa. Dealing with corrupt regimes in the effort to secure resources can be a real pain in the ass sometimes. So why not just cut to the chase and buy the entire continent? Sure, it would infringe upon the African peoples' sovereignty, but that won't be a concern to the people who set US market interest rates and the EUR/USD exchange rate, now, will it?

6) Saturn's moons. The Cassini-Huygens mission has so far found hydrocarbons, potential geysers, and ferrous materials on Saturn's moons. If the commodity price boom continues, it will soon be cheaper to extract strategic resources from Phoebe, Hyperion, and the like than to mine them on Earth. In the race to lock up resources, he who dares, wins!

7) The Tate Modern and Saatchi Gallery. 80's Japan paid outrageous sums for individual paintings. Nougthties SWFs can't be arsed to decide between the Van Gogh or the Monet, so why not just buy an entire museum or two? Afterwards, it'll be something like a Lucky Dip to see what it is that they've actually got. Imagine their joy and surprise when they find that they're now the proud owners of Chris Ofili "poo paintings" and thoughtful, sensitive works like Tracy Emin's bed.

8) The US Government. On second thought, given how many Treasuries they already own, perhaps we can say that SWFs and mercantilist CBs already own the US government.

9) Pearson, NewsCorp, and Google. Many of the countries with large SWFs are not exactly strict adherants to the concept of freedom of expression. Tired of the adverse coverage of their activities, mightn't the SWFs decide to buy the Financial Times, Wall Street Journal, and to quiet pesky journalists and wise-ass bloggers?

10) A 9.9% stake in Goldman Sachs. Perhaps the most outlandish suggestion of the lot!


The Olive Oil Gazette said...

Look! We'll give them the north pole if they promise to buy the Leafs - and ship them there.

"Cassandra" said...

One part of me says it is well-nigh impossible to "spend-a-trillion" (or two), dollars, that is, (not yen), without a huge and dedicated infrastructure of waste, duplication and bureaucratic largesse, and even then, not without moving prices dramatically. My thought experiment yielded: The New Jersey Turnpike; Southern Florida; and/or Hawaii; and the DC Beltway.

On the other hand, they could buy Microsoft, which would be half-a-trill in a go, effectively showering the half-a-trill rather democratically around America's pension funds, IRAs individuals and MSFT execs, the majority going to Gates, Ballmer, and Allen, who would likely take their proceeds and, yes, buy US Govt Bonds, until they found a better thing to do with it.

Maybe we should worry less about it. Maybe we could spend a trillion or two - you and I - quickly and painlessly without sparking irreversible inflation.

Macro Man said...

Come now, CB! All the Leafs really need is a power play.

Cassie, one wonders if the SWFs won't be like Paulie in 'Goodfellas.' Remember the chap who owned the Polynesian nightspot, who took Paulie in as a partner? He soon found that having Paulie inside the business was a one-way proposition, and as soon as Paulie had milked all the benefits out of his stake, the joint was put to the torch.

As to the 'spend-a-trillion' experiment, I for one would be moe than happy to participate should we find an appropriate financial backer!

Jin said...

Why do you think SWF want to be Paulie? GCC and Singapore's SWFs have been around for a while, there is no victim as far as I know.

This is a repeated and sequential game. You cannot Paulie your way through without being caught. Once you are Paulie, there will be no second chance.

Charles Butler said...

Right, Cass! Since 1967. Maybe if we throw in a few baby seals, and a turbot...

unokai said...

you can add Countrywide, as brad setser recently suggested :)

a good piece of Tate-modernlike financial postmodernism

Anonymous said...

I would suggest that African and American politicians are regularly sold to the highest bidder. Though the corruption in the U.S. is of the more sophisticated variety, we surely have the best politicians that money can buy. The African states have already been bought by China.

Anonymous said...

Contrary to people's believe, USA is the largest client for oil and trade in Africa. Thus, the USA has the most African politician in its pocket.

Laurent GUERBY said...

"Top Ten Things Yet to Be Purchased by Soveriegn Wealth Funds"

Title spell checker?


Macro Man said...

Er.....good catch. That's been fixed.

Anonymous said...

thinking about a new name for GSAM's Global Alpha has created quite a lot of mirth around my office these last few months. Many of the new names are not that printable but it might be a fun subject on which to exercise your considerable wit

Macro Man said...

Come now, Anonymous! While I am not above poking gentle fun at the Icarus-like descent of erstwhile highfliers like Global Alpha, I have no wish to kick them in the head with an iron boot. (Incidentally, if performance doesn't pick up, "closed" might be a realistic alternative name.)