Executive Decision - March/April 2008 - (Page 52)

global village Foreign Investment in U.S. Assests The weak U.S. dollar and struggling economy have attracted foreign buyers, eager to buy stakes in large U.S. financial services companies and gain entry to one of the largest markets in the world. In 2007 foreign investors spent , $414 billion on U.S. assets, up 90% from the previous year, according to The New York Times. Some of the benefactors are Wall Street banks, such as Merrill Lynch & Co., Citigroup Inc. and Morgan Stanley, but other businesses—real estate firms, steel manufacturers and plastics makers— have benefited as well. Instability in Bond Insurers In January, The New York Times reported that the weakened financial condition of The Boston Globe reports that Citigroup will receive nearly $7 billion from a The weak U.S. dollar and struggling economy have attracted foreign buyers. MBIA and Ambac, the two largest insurers of over $1 trillion of bonds, could result in big losses for investors, including banks and pension funds. As of press time, insurance regulators and about a dozen banks have discussed how to prop up the insurers with fresh capital, with the goal of maintaining the companies’ triple-A credit rating. Because two-thirds of bond insurers’ portfolios are municipal bonds, it will be more difficult for cities and counties to borrow the funds to finance projects. One-third of the insurers’ portfolios are asset-backed securities. The troubled industry has drawn the attention of federal regulators. A House of Representatives Financial Services subcommittee intends to hold hearings on possible regulatory reforms. sovereign wealth fund in Singapore, as well as investments from the Kuwait Investment Authority and Prince Alwaleed bin Talal of Saudi Arabia, while Merrill Lynch will receive capital from Kuwait, the Korean Investment Corp. and Mizuho, a Japanese investment bank. Investments by sovereign wealth funds, large pools of state-owned financial assets, are receiving closer scrutiny to ensure that foreign nations don’t gain control over the financial system or security-sensitive technology. [ 52 What this means to you: but the transparency of those funds is being questioned. Foreign funds flush with cash are available, ][ What this means to you: for company pension funds, may not be that safe after all. Municipal bonds, usually a safe investment ] EXECUTIVE DECISION I execdecision.com http://execdecision.com

Table of Contents Feed for the Digital Edition of Executive Decision - March/April 2008

Executive Decision - March/April 2008 Contents Index of Advertisers Contributing Editors From the Editor's Desk Publisher's Note You Be the Judge - Unionization Thought Leader - Pitney Bowes Management - Flying High for Long-Term Results Strategies - Sovereign Wealth Funds Cover Story - In Whom Do We Trust? The Movement for Greater Accountability & Disclosure Finance/Legal - The New Boycott Model Green At Work - Transforming for Sustainability Technology - Embracing Risk Leadership - Executive Reputation Management The Global Village - China Moves to Curb Prices Economic Profile - California Gold Rush Transformations - I Can See Clearly Now, The Brain Is Gone Marketing - Effectively Using Market Research The Bottom Line - Brands: A Shrinking Advantage or Shifting Advantage? Pulse - Pandemic: Not If But When SPECIAL SECTION - Living On the Green: Luxury Golf Destinations

Executive Decision - March/April 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.