I just read an article on how the World Bank wants to try to convince Sovereign Wealth Funds (SWFs) to invest at least 1% of their cash in Africa. SWFs control an estimated $3 trillion so 1% would be ~$30billlion. I think it's pretty much a ludicrious thought. China is ALREADY pouring money into Africa to secure natural resources in return for developing infrastructure amounting to billions of dollars, outstripping decades of foreign aid from the West. Perhaps in China's case the 1% deal would make some sense but for a country like Singapore? Considering how our reserves total some $200+ billion, 1% would be ~$2 billion. To spend $2 billion of hard earned money to invest in a continenent plagued by corruption and strife with the strongest reason being charity, I don't think that cuts it. I would think the World Bank would pressure the SWFs by playing the image cards. SWFs have been getting quite a bit of stick, unfairly if I may add, for their aggression in recent times, especially in their acquisition of Western assets. So, a philanthropic investment in Africa could "boost their image" but it boils down to a similar situation in the corporate world. One of the latest buzzwords is Corporate Social Responsibility (CSR) and corporations sometimes do make large donations to charities but once again, is it right for corporations to do so? At the end of the day, corporations should first be accountable to their shareholders. By giving money away, you're effectively reducing shareholder's equity. It's the equivalent of giving away someone else's money. Of course, under the guise of charity, no one complains too much but principly speaking, it's not that simple.
I'm reading this book "A Demon of our Own Design" written by (get this right) Richard Bookstaber. Okay besides the name, it's a pretty interesting book, depicting how financial engineering is often the cause for crisis. There's a pretty amusing point on how financial engineering is the only type of engineeering which doesn't really improve the stability and durabilty of something. For example, as you build more bridges, subsequent bridges will naturally have better design or fundamentals but financial engineering has never failed to bring one collapse after another. It's also only now that I realise how big Citigroup really is. Salomon Brothers was bought over by Smith Barney which was bought over by Travellers which merged with Citigroup. I can't remember if there are any more companies involved. It's also pretty cool because you see a lot of names which are making headlines today in the book which depicts them 5, 10, 20 years ago. The current Citigroup CEO, Pandit was mentioned, as was Jamie Dimon, the JP Morgan CEO who was ousted from Citigroup by his mentor.
Anyway we now have a soup blog at http://thesoupistoorandom.blogspot.com
Still under construction though.
I'm reading this book "A Demon of our Own Design" written by (get this right) Richard Bookstaber. Okay besides the name, it's a pretty interesting book, depicting how financial engineering is often the cause for crisis. There's a pretty amusing point on how financial engineering is the only type of engineeering which doesn't really improve the stability and durabilty of something. For example, as you build more bridges, subsequent bridges will naturally have better design or fundamentals but financial engineering has never failed to bring one collapse after another. It's also only now that I realise how big Citigroup really is. Salomon Brothers was bought over by Smith Barney which was bought over by Travellers which merged with Citigroup. I can't remember if there are any more companies involved. It's also pretty cool because you see a lot of names which are making headlines today in the book which depicts them 5, 10, 20 years ago. The current Citigroup CEO, Pandit was mentioned, as was Jamie Dimon, the JP Morgan CEO who was ousted from Citigroup by his mentor.
Anyway we now have a soup blog at http://thesoupistoorandom.blogspot.com
Still under construction though.