Things couldn't be better for our enemies. With oil prices at record levels and credit risk premiums widening, the heroes of American business, private equity firms, are losing out to the sponsors of the 9/11 attacks.
Reuters reports that Gulf Arab firms are absolutely delighted by the latest turn of events in world markets. With oil at record levels, more and more money is flowing into their coffers. And since American private equity firms have lost access to cheap money -- with investors having added more than 50% in July to the premium sellers of higher-risk bonds must pay over top-rated government debt -- the Gulf Arabs control the world's cheapest capital.
What will they do with their newfound financial firepower? Close at least $14 billion of private equity deals. For example, Taqa (Abu Dhabi National Energy Co.) wants to complete $4 billion worth of acquisitions in the next year. Dubai International plans as much as $10 billion in investments this year.
This is truly the promise of globalization realized. A handful of U.S. executives make a few hundred million more selling out to "folks" who are sworn to destroy the U.S.
Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
8-03-2007 @ 4:26PM
Munir said...
Are the United Arab Emirates our enemies? What has this writer been smoking? If they are our enemies, what does that make Al-Qaeda?
Munir