Thursday, May 15, 2008
Hiding Behind the Chinese (and the Indians too) ...
The wires have the story that Cindy McCain has sold several million dollars worth of holdings in two investment funds that, within their portfolio, had investments in Chinese and Indian oil firms doing business in Sudan.
Did she carefully read the prospecti to see which companies the funds were investing in, and then track down each of those companies' operations? Of course not--and let's be honest, no one else does this too when making routine mutual fund investments. Other presidential candidates only divested themselves last year--so the McCains may be late, but it is not like others were particularly early.
But it also highlights the real dilemma. Hot money to be made these days in investing in the BRIC--so you get a good rate of return. But you also can't then control how those funds are invested.
This also points to how Beijing and New Delhi really do provide the shield by which we in the West can say, we aren't doing business in Sudan. True, we are just enabling others to do business. U.S. investors provide the funds that allow Chinese companies to develop oil reserves which can then be sold to Japan. How convenient.
TWR readers recall my post from last month on this question, where I had written:
Perhaps some of this is explained by having Chinese companies doing the producing and then selling on the open market to democratic states. Does this assuage Japanese or Korean or European or American consciences, that the products of these states were sold by Chinese middlemen, while absolving us of responsibility?
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So, what happens now. Does American Funds drop companies that invest in Sudan from its portfolio? Will the sudden visibility cause other big investors to pull their investments? Are people willing to put principle ahead of pocketbook?
Did she carefully read the prospecti to see which companies the funds were investing in, and then track down each of those companies' operations? Of course not--and let's be honest, no one else does this too when making routine mutual fund investments. Other presidential candidates only divested themselves last year--so the McCains may be late, but it is not like others were particularly early.
But it also highlights the real dilemma. Hot money to be made these days in investing in the BRIC--so you get a good rate of return. But you also can't then control how those funds are invested.
This also points to how Beijing and New Delhi really do provide the shield by which we in the West can say, we aren't doing business in Sudan. True, we are just enabling others to do business. U.S. investors provide the funds that allow Chinese companies to develop oil reserves which can then be sold to Japan. How convenient.
TWR readers recall my post from last month on this question, where I had written:
Perhaps some of this is explained by having Chinese companies doing the producing and then selling on the open market to democratic states. Does this assuage Japanese or Korean or European or American consciences, that the products of these states were sold by Chinese middlemen, while absolving us of responsibility?
__
So, what happens now. Does American Funds drop companies that invest in Sudan from its portfolio? Will the sudden visibility cause other big investors to pull their investments? Are people willing to put principle ahead of pocketbook?
