Dubai Ownership of NASDAQ

Thomas wrote:

Cycloptichorn wrote:
There's no possible interest in keeping certain sectors of our economy owned and managed by Americans?

No. Even the US president would be much more competent, not to mention much cheaper, if you had just outsourced his job to India.

I'm kind of speculating here, but;

There's no possible scenario in which people, say, in Dubai, who didn't have the best interests of the US in mind, could use their ownership of various parts of our industry against us at a critical time?

I'm no terrorism scaremonger like many on the right-wing, but you seem far, far more trusting than I, my friend...

Cycloptichorn

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squinney wrote:

If Dubai is good enough to be the new Halliburton home and own our ports, surely there isn't a problem with them owning our major stock exchange. What could possibly wrong with any of this?

You tell me. So far, none of the people who dislike the deal have described any plausible scenario of possible harm. Indeed, they have described no scenario of possible harm, plausible or otherwise.

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Cycloptichorn wrote:

There's no possible scenario in which people, say, in Dubai, who didn't have the best interests of the US in mind, could use their ownership of various parts of our industry against us at a critical time?

NASDAQ is no charity. It's a profit-maximizing business, no matter who owns it. Its owners will always have their own interest in mind, and trying to maximize their profit. And with the trading of stocks being an extremely competitive business -- all you need is a server farm, glass fiber, and some software -- the surest way to maximize your profit is to provide good service. Trying funny stuff like espionage is a sure way of not maximizing your profits. Your customers will abandon you very quickly when you do that.

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I don't know how all of that works. I take it that businesses have stock. The stocks have to be traded somewhere. If the NASDAQ is well managed, they will "post" or offer their stocks through NASDAQ. If it is not well managed, they will offer it... where?

One nefarious scenario I can imagine, and I'll just throw it out as a possibility, is that they could paint the NASDAQ building with lead paint, like the Chineses did with our toys.

....Outsource our president? The way he speaks sometimes, I think maybe we did. Laughing

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squinney wrote:

I don't know how all of that works. I take it that businesses have stock. The stocks have to be traded somewhere. If the NASDAQ is well managed, they will "post" or offer their stocks through NASDAQ. If it is not well managed, they will offer it... where?

Any other stock exchange in the world, some of which are located in America.

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squinney wrote:

One nefarious scenario I can imagine, and I'll just throw it out as a possibility, is that they could paint the NASDAQ building with lead paint, like the Chineses did with our toys.

You did hear the latest news on that one, didn't you? That most of the Mattel toy flaws actually originated in America?

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Thomas, you obviously don't get it. You Euro's have been living together for a while, trading, playing nicey nice sometimes and sometimes not, crossing each others borders with just a smile and a wave like it's no big deal. All one big happy family.

But, we U.S.-ers are not used to doing those things. We have been an only child, so to speak, for all of our life. We have cousins to our north, and some distant relatives to the south but heck, we don't get together much unless we have to.

What I'm saying is, we really don't know how to share our toys and we certainly do not appreciate anyone telling us we have to or that we are being silly by not doing so. We don't understand how you people, with all your siblings and cousins and aunts and uncles can think that it is no big deal to share. You act like there's plenty to go around, and we don't know that to be true.

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Thomas wrote:

squinney wrote:
One nefarious scenario I can imagine, and I'll just throw it out as a possibility, is that they could paint the NASDAQ building with lead paint, like the Chineses did with our toys.

You did hear the latest news on that one, didn't you? That most of the Mattel toy flaws actually originated in America?

na-na-na-na.

I can't hear you.

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I find it funny that we're talking about middle eastern countries controlling our economy........at the same time we're paying over $80 for a barrel of oil FROM the middle east.

They already have a stranglehold over our economy, this is the least of our problems.

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Meanwhile, the two will also swap stakes in each other: Borse Dubai will take a 20% share in NASDAQ, while the American exchange will take 33% of Dubai's International Financial Exchange, which controls Dubai Bourse. The new firm will be renamed NASDAQ DIFX. They say the combined entity will expand into other regions as well

Regulators in the various countries involved will also have to approve the complex web of transactions. Although capital flies around the world at the touch of a button these days, regulators are still rooted firmly at the national level. This makes sense: they are in effect charged with striking the appropriate balance between the interests of "Main Street" and Wall Street. Given the complexity of the latest transactions, it is likely that the job of sorting out exactly where the balance of those interests ultimately rests in this case could take some time.

http://www.economist.com/daily/news/displaystory.cfm?story_id=9854573&top_story=1

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First of all, 20% is NOT a majority stake in any company or even a controlling stake if you want to make changes detrimental to what the other shareholders want.

Second of all. The NASDAQ is a market that lists company stocks. Companies are not required to list their stock on the NASDAQ. There are other ways to buy and sell stock without using the NASDAQ. If another country owned tht NASDAQ and made it difficult to trade stocks the NASDAQ would simply lose all the companies listed there as they moved the NYSE or another market. It might disrupt sales of stock of the companies presently listed on the NASDAQ for a day or two but it wouldn't have a lasting effect on stock price. It really would have no more effect on stock prices than closing the markets for a few days.

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From today's The Observer:

Quote:

Nasdaq and Dubai plot alliance with LSE

Richard Wachman
Sunday September 23, 2007
The Observer

Nasdaq and Borse Dubai have drawn up secret plans to entice the London Stock Exchange into a pan-continental alliance that could challenge a recent merger between France's Euronext and the New York Stock Exchange.
The plan would involve the creation of a new company in which London would have the dominant position, but would link trading platforms in the Gulf states, Sweden and the US.

The project has been hatched by Dubai and Nasdaq, which joined forces last week in a bid to seize control of Stockholm-based OMX. That deal was accompanied by a flurry of activity that also saw Dubai and the Qatar Investment Authority emerge with just under 50 per cent of the LSE, which is headed by Clara Furse. Qatar, too, bought a 10 per cent holding in OMX.

A City source said: 'Dubai acquired a slug of shares in the LSE from Nasdaq for less than Qatar [was offering]. That means Nasdaq and Dubai have wider objectives - both are known to want a closer relationship with London.'

City analysts say it is still possible that London could face a hostile bid from Nasdaq/Dubai in February when the American exchange is allowed to bid again under Takeover Panel rules. Seven months ago, Nasdaq launched a bid for LSE, but failed to gain sufficient support from shareholders. It was left holding a 31 per cent stake, which it sold last week to its new ally Dubai. That deal allowed Nasdaq and Dubai to try to resolve a battle for OMX in which the two were originally pitted against each other (although OMX's fate is not decided because the Qatari Investment Authority could still step in with a higher offer).

Some analysts believe that Nasdaq/Dubai could find themselves fighting for control of the LSE with the Qataris, who are closely allied with Furse.

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Cycloptichorn wrote:

There's no possible interest in keeping certain sectors of our economy owned and managed by Americans?

Sure there is, not having to hear the shrill irrationality of xenophobes is a damn good reason. Sorry, but this kind of thing really rubs me the wrong way because of its ugly nature as much as its ignorant foundations. It's an irrational prejudice and in each country I visit I see the same, and it just irks me that history has done so little to teach peoples that the xenophobic predictions have hardly ever been legitimate (this particular one's factual basis extends little beyond "but they are A-rabs!!!") and that the xenophobia itself has caused millions to be killed. Xenophobia is the bigger threat.

Every year I hear that some demographic or culture is "invading" America, and every year America continues to be the most powerful empire in the history of mankind in any way you want to measure it, be it military superiority, cultural domination or economic influence. In the 90s the furor was over the Japanese "buying America", other years it's Mexican immigrants and one would think from the outcry that America's on its deathbed.

But it isn't. And if this kind of thing is "invasion" America's winning this war hands down. American corporations are in every corner of the globe, American culture is dominating the culture war more than any culture in history. Few nations on earth have an economy that is not inextricably intertwined with the US and American's fear is that much more irrational given the overwhelming position of power that the world's sole super-power holds.

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xenophobia aside, it seems to me like moving more and more control of the u.s. infrastructure/industry/economic machinery to the middle east and other parts of the world, while expanding our military, is a guarantee that we'll be fighting to take parts of it back sooner or later.

a bad example would be selling weapons to iraq, decades ago. the reason this is a bad example is that weapons aren't infrastructure, but other than that i think it illustrates the problem ahead of time, when we might not have better examples yet.

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tinygiraffe wrote:

xenophobia aside, it seems to me like moving more and more control of the u.s. infrastructure/industry/economic machinery to the middle east and other parts of the world, while expanding our military, is a guarantee that we'll be fighting to take parts of it back sooner or later.

This isn't about "control" over a country's people but about making money. And a cursory overview of the concept of greed should make you sleep more soundly. Thomas has already expounded on this so I won't go into it much further except to say that the notion that we would fight wars to gain back what we are loosing in free-market capitalism is nonsensical.

Quote:

a bad example would be selling weapons to iraq, decades ago. the reason this is a bad example is that weapons aren't infrastructure, but other than that i think it illustrates the problem ahead of time, when we might not have better examples yet.

I think that it's a bad example since it shares no relation to the topic (except fear). A government to government weapons transaction is nothing at all like a foreign investment and the traditional irrationality it generates (I'm seeing Costa Ricans up in arms over the trade agreement with the US being voted on next week exhibiting the same xenophobia).

I wish more people would relax and realize that globalism isn't an option, it's an eventuality driven by human advancement in science that isn't likely to end soon. And in this eventuality those who fight it harm themselves. Whether you like it or not it's going to happen more and economic contagion between nations is only going to grow.

And in the long run that's a good thing, as it will adds economic cost to war that mitigates its use.

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while i suspect "A government to government weapons transaction" is exactly like a foreign investment, you make good points of course, and i'd certainly prefer that you're right.

the way money works internationally is far more complicated than most things i could hope to understand, let alone claim to- i was just throwing in what i was curious about, seeing what people thought about the idea. again, i'm quite happy to be wrong.

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It's exactly like a foreign investment in some ways it isn't in others. It's an exchange of sorts but is not free-market capitalism at play but rather clumsy foreign policy (the example you gave was not done for money but to fight a mutual enemy).

In this case it's foreign investment in a free market. I insist so strongly on calling the fear against certain foreign investment xenophobic because capitalism renders corporations rather unpatriotic in nature yet individuals still see even the most benign foreign investment as invasive on occasion.

They see a suspicious-looking nationalistic foreigner where cold hard and unpatriotic greed is quietly going about making money. Remember the 80's and 90's when Japanese investment in the US was much more substantial than this and all sorts of ill was supposed to befall the US as old foes bought up land and iconic American corporations? Where the heck did any of those fears show up in the real world? Read this article from 1990 and share a laugh with me would you at unfounded paranoia that was also tied to national security.

Thing is, economic contagion brings a desire for political stability and increases social interaction between peoples. In many cases it brings friction of culture clashes but in the long run it generates more empathy.

And when push comes to shove there is a powerful force called greed that helps keep people friendly because in the modern economy rocking the boat usually makes a lot of people lose money if there is a decent amount of trade between the nations.

There is a (false) saying that no two nations with McDonald's have gone to war. It's not quite true but very close. There are a god-awful number of reasons why but I believe that the biggest one is that developed economies don't tend to want to fight each other.

Dubai and the UAE have been moving away from an oil-based economy to a tourism and trade based economy. Their economic success relative to their Arab counterparts shares a relationship to the fact that their foreign policies tend to be much more western-friendly in my opinion. And their continued economic growth is something I see as a key to reducing the fundamentalism that really does cause wars.

Being quite the religious fundamentalists, they aren't quite there yet. However with economic development, education and secularism grows and Americans should cheer Arab economic development.

With that position, I think their choice to diversify their investments into this particular holding is a damned good idea.

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Dubai Ownership of NASDAQ

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