Daniel Drezner takes on Larry Summers's concerns about sovereign wealth funds. My take is that they're not nearly as big and scary as they sound. With one exception--Abu Dhabi, which does not seem to pose much of a strategic threat to America or its companies--the biggest funds aren't that much bigger than CalPers. If the thought of the California Public Employees union does not keep you awake at night, probably Sovereign Wealth Funds shouldn't either.
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I suspect you meant to link to this.
this: "1. Corporate governance. SWFs may protect the management of poorly run companies: "SWFs are some people's model investors, and other people's version of 1-800-ENTRENCH. What could be better for not entirely secure management than a long-term, nonvoting shareholder?"
like the PE boom that preceded the SWF ascendancy, should be our Primary concern..
MM,
your comparison of SWFs to CalPERS is way off beam. The mgrs of CalPERS are readily replacable, if only in theory..
"If the thought of the California Public Employees union does not keep you awake at night, "
Of course, coming from a libertarian, this sentence might not mean a whole lot...
Money's money. It's better that they use it to enrich our companies than to buy arms to fight each other or threaten us with. I don't see a downside. If you're a shareholder, the influx of cash will drive prices up long enough for you to get out (if you view SWFs as detrimental to the long run success of the company). If you're a company, the cash will help you pay off debts or expand. If you're worried about national security, just remember that physical possession (and not shareholder property rights) is the only thing that matters in war time.
You--a journalist--cite to Wikipedia? WTF. Those figures are totally wrong by the way, trust me. Second, it's usually spelled Calpers, or CalPERS as they want to be called. No one but you types CalPers. Finally, it is not the "California Public Emplyees(sic) union" as you state. Calpers invests for non-union state employees as well as union ones. Correct your post so it says that Calpers stands for "California Public Employees' Retirement System." If you don't know these things, do some research--over and obove Wikipedia--before you post.
Calpers/PERS/Pers does keep me up at night, and for the same reasons as the SWFs. Neither are motivated primarily by economics, so there is a distorting effect on the market. Both are also playing with a lot of money from captive investors who can't leave the fund if they disagree with the management.
Easy Mortimer...What would you know about this anyway since we cornered the orange juice market on you back in 1983 subsequently wiping out your entire net worth.