Watch and learn

Only a few quarters ago, commentators were agonizing about the impact of sovereign wealth funds on western economies. Whilst some saw it as a threat, the optimists saw these investments as a way for emerging economies to gain insights in the best in corporate finance and governance standards that the West had to offer.

Let's have a look at an example, the China Investment Corporation (CIC). It made three investments into leading US firms: Blackstone, Morgan Stanley and VISA. The results are shown below - at $6 billion in losses, insight appears to be an expensive business.

Heaven knows what CIC must make of our corporate finance and governance standards now, let alone our "open market" system free of government intervention. You have to laugh at the irony of all those years lecturing China on the joys of our system. Watch and learn, China, watch and learn.