Enough burning billions in crappy American companies like Lehman Brothers (LEH) and Merrill Lynch (MER). The Middle East's dynastically wealthy sheikhs are now keeping their oil money at home:
WSJ: The Gulf funds have lost their appetite for shares in distressed Western banks, and as oil prices plummet, there's growing pressure to sell down foreign investments to refocus on the huge cost of protecting and diversifying the region's oil-dependent economies. This can only spell more bad news for international markets.
One of the most recent big bank investments by a Middle East oil fund was the Kuwait Investment Authority's purchase early this year of a stake in Merrill Lynch, just sold for a song to Bank of America. Gulf funds are major holders of stock in Citigroup, Credit Suisse, HSBC, Standard Chartered and Barclays, all investments showing big paper losses. The Abu Dhabi Investment Authority had about two-thirds of its $900 billion hoard locked into U.S. assets at the start of the year.
Of course, now that oil's back down to $90, the sheikhs imputed oil wealth has been cut by 40% (no Lehman Brothers, but still painful.) And Abu Dhabi's stock market has plummeted 32%. Dang it: In a global recession, there's just nowhere to hide.
See Also: Qatar Sheikh Ships Lamborghini To London For $47,000 Oil Change
