Bad Investments

Interesting numbers on foreign investments in the US:

Foreign investors exploited the declining U.S. dollar during the past three months to snap up American companies, taking the biggest share of U.S. deals in at least a decade.

Buyers from Dubai to the Netherlands accounted for 46 percent of the $230.5 billion of U.S. mergers and acquisitions announced in the fourth quarter, the largest portion since 1998 when Bloomberg started compiling the data. The total excludes $17.9 billion of so-called passive investments by state-run funds in Asia and the Middle East in U.S. banks, including New York-based Citigroup Inc.

So, counting the “passive investments” we’re over 50%.

This reminds me of when the Japanese bought in the US in the early 1990s, and later sold at a 30% loss.

This time though, I think that it’s more likely that the losses will come from a plummeting dollar.

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