Unfortunately, like all policies out of Washington, it was short-sighted, cynical, and not well thought out.

Some other countries followed the US model (ie. England), and enjoyed the same delusional “growth”. Now it is all unraveling; it is not only causing world wide disruption, but completely discrediting the US as an economic leader/model.

The winners: China, Russia.

Does it all go back to 9/11? Did the US fall for the bait of Bin Laden, over-react, and contribute to its own demise? After all, would the US economy be ravaged without the $500 billion spent in Iraq, the government effort to create a housing bubble to keep people happy, if there had been no attack in 2001?

is a highly misleading statement.

Three years ago, Congress prevented a Chinese state-owned energy company from buying Unocal, the California oil company. The following year, a company based in the United Arab Emirates failed in a bid to run several American ports. Sovereign wealth funds — state-controlled pools of investment from China, Russia and the Middle East — have stoked worries that they could skew markets by pursuing national interests.

But even as emerging players have grabbed headlines, more than two-thirds of the foreign capital buying American companies in 2006 still came from Europe.

I can think of a host of similar coordination problems that would arise from having competing institutions in China manage China’s risk portfolio. The most obvious is two institutions bidding up the price of the same asset. But there also is the question of one institution putting pressure on the $ via its portfolio choices and creating problems for the monetary authority. that tho can only happen if the institution in question is big …

Judy — it seems to me that the CIC increasingly looks more like Temasek than the GIC. big stakes in SOEs (state commercial banks) and a few big stakes abroad. SAFE seems by contrast to me taking on some additional risks without hiving off a seperate pool of reserves to invest in risk assets.

that said, the us data would suggest that safe has in aggregate gotten more not less conservative over the past few months. it seems to be buying more treasuries at least.