Think Twice Finance

The Sovereign Funds’ Scalp: A Financial Textbook Tempest Carries Huckabee to a South Carolina Win

Gasoline has just been poured on the smoldering fire of economic discontent of the American public, a discontent born with Enron and like fiascos, and fueled by the subprime mortgage crisis. The warning lights should have come on when Mike Huckabee took Iowa. Much attention was placed on his religious beliefs, but not enough on his populist economics, in press coverage.

I’ll bet that gets fixed in the next few weeks. The banks’ third dip into the sovereign fund bucket is coming this week, as Citigroup and Merrill (and doubtless others) pass the hat around the globe for another capital injection.

It has become obvious that the large banks have precious little to offer that is of value to stockholders. The most important assets appear to be their trademarks. It does not take a genius to understand why these trademarks have more value to the Arab and Chinese sovereign funds than to other investors.

Although the other Presidential candidates are too lobbied-up to draw attention to this fiasco – in spite of the determination of each of them to be “agents for change” following the voter rebellion in the first two primaries – I think Huckabee will continue to benefit from the fact that he is broke, and therefore can continue to pretty much say what he’s thinking.

The necessity of passing control of these major New York financial institutions to Middle Eastern and Asian hands is another one of those darn “inconvenient truths.”