By all accounts, single white females are still spending up a storm, but that other, more discriminating SWF – the sovereign wealth fund – may have had it with the banks after Bear Stearns’s descent into hell. A tale of how one firm narrowly sidestepped disaster.
In the end, Citic Securities Co. was lucky to sidestep the messy unraveling of Bear Stearns Cos.
Five months ago, the biggest Chinese brokerage wanted to buy 6 percent of the New York-based securities firm for $1 billion.
Miraculously for Citic, the ``deal of a lifetime,'' as Bear Stearns Chairman James ``Jimmy'' Cayne then described the tie-up, was never implemented.
That spared Citic the embarrassment of paying 69 times the price at which JPMorgan Chase & Co. agreed on March 16 to take over the beleaguered company.
Citic Group Chairman Kong Dan yesterday announced that the investment plan, as well as a proposed joint venture with Bear Stearns, was canceled.
Citic Securities shares rose yesterday in Shanghai even as China's benchmark CSI 300 Index fell to an eight-month low.
While Citic may have been saved by serendipitous inaction, some state-owned investment vehicles in Asia and the Middle East may not have been so fortunate.
Banks and securities firms have raised as much as $105 billion of fresh capital by selling stakes to individuals, institutions and governments amid subprime-related losses.
The so-called sovereign wealth funds have provided at least half of the total, picking up stakes in Citigroup Inc., Morgan Stanley, Merrill Lynch & Co. and UBS AG.
After the spectacular collapse of Bear Stearns, these custodians of public money must now wonder whether they have really acquired sizable chunks of great franchises on the cheap, or if, in fact, they have bought lemons.
Only time will tell.
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