Abu Dhabi takes ownership stake in Carlyle Group

Abu Dhabi takes ownership stake in Carlyle Group
Arab emirate’s investment ties with Bush family deepen

Jerome R. Corsi
World Net Daily
September 21, 2007

The Financial Times announced last night the government of Abu Dhabi has made an investment in the Carlyle Group, a Washington-based private investment firm with close ties to former President George H. W. Bush and his family, as well as to top government officials in the Reagan and Clinton administrations.

Mubadala, a wholly owned investment arm of the Abu Dhabi government, bought a 7.5 percent share of the Carlyle Group in a transaction in which the deal price was struck at a 10 percent discount to a valuation of $20 billion for all of the Carlyle Group.

Abu Dhabi is the largest of the seven emirates of the United Arab Emirates and the capital.

Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan of the Abu Dhabi ruling family is the chairman of Mubadala.

WND reported Dubai International Capital, a private equity investment capital firm that is a wholly owned subsidiary of Dubai Holdings, has commonly participated in co-investments with the Carlyle Group.

Dubai, like Abu Dhabi, is one of the seven emirates that form the UAE.

WND reported yesterday Dubai, in a complex set of transactions, is moving to acquire 19.9 percent of the Nasdaq stock market in New York, in the first equity transaction which would place a Middle Eastern government in an ownership position in a key U.S. stock exchange.

As a result of the transaction, Dubai will also acquire 28 percent of the London Stock Exchange, one of the oldest and largest stock exchanges in the world.

The transaction is being made through Borse Dubai, a holding company 100 percent owned by the government of the Emirate of Dubai and controlled by Mohammed bin Rashid al-Maktoum, the head of the Dubai ruling family.

Should Dubai Buy Part of the Nasdaq?…-the-nasdaq.html

Dubai to get 20% share in Nasdaq


Canadian Dollar at Parity with USD, Bernanke and Saudis Abuse US Dollar

Dollar plunges on fears Saudis might drop peg
Euro breaks above $1.40 for first time; parity for Canadian dollar

Market Watch
September 20, 2007

SAN FRANCISCO (MarketWatch) — The dollar fell sharply across the board Thursday, hitting a new all-time low against the euro and falling to parity with its Canadian counterpart, pressured by lower U.S. interest rates and a report Saudi Arabia might end its dollar peg.

The Canadian dollar rose slightly above one-to-one parity with the U.S. dollar in early trading, marking the first time this has happened since November 1976. The dollar was last trading at C$1.0013 after moving as low as C$0.9996, down from C$1.0155 Wednesday.

The euro broke through the $1.40 level into uncharted territory for the first time, just two days after the Federal Reserve made an aggressive cut of half a percentage point to its benchmark interest rate target.

The euro was last up 0.7% at $1.4068. It earlier rose to $1.4097, its highest level since the currency began trading in January 1999.

The trade-weighted dollar index, which tracks the performance of the greenback against a basket of currencies, was down 0.9% to 78.610, after earlier hitting a new 15-year low.

“The environment has been developing for a U.S. dollar bearish move,” said David Watt, senior currency strategist at RBC Capital Markets. “A weight of evidence has been accumulating.”

The dollar has fallen significantly against most major currencies since the Fed made a larger-than-expected half-point cut in both its federal funds target and discount rate Tuesday, in a move aimed at preventing the credit woes from dragging down the broader economy.

Lower rates erode the returns on dollar-denominated assets, so the Fed’s announcement sent the dollar into a tailspin against most major currencies.

The greenback was down 1.4% to 114.40 yen, even though Japan’s 0.5% interest rate is the lowest in the developed world.

It also dropped against the British pound, which has taken a knock in recent days on worries about the U.K. banking system. The pound was trading at $2.0096, compared to $2.0010 late Wednesday.

“The U.S. dollar is clearly being sacrificed by the Federal Reserve in a last ditch effort to save the mortgage bankers,” said Ned Schmidt, editor of the Value View Gold Report.

“Foreign investors would be foolish to buy U.S. investments knowing that the value of the dollar will decline,” Schmidt said.

On Thursday, Fed Chairman Ben Bernanke said in prepared testimony before a House panel that more delinquencies and foreclosures can be expected in the subprime adjustable-rate mortgage market as borrowers face interest-rate resets. See full story.

Saudi Arabia mulling peg drop?

Fueling bearish sentiment on the dollar, a report in the U.K.’s Daily Telegraph newspaper on Thursday pointed out that Saudi Arabia’s central bank didn’t take action in the wake of the Fed’s rate cut.

“Saudi Arabia has refused to cut interest rates in lockstep with the U.S. Federal Reserve for the first time, signaling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East,” the report said.

But Marc Chandler, currency strategist at Brown Brothers Harriman, said speculation that Saudi Arabia may abandon the peg between its riyal and the dollar and to reduce its holdings of dollars seems unfounded.

“While SAMA [Saudi Arabian monetary agency] may abandon the peg at some point, it is unlikely this will lead to a mass exodus from the U.S. bond markets, especially by central bank reserve managers,” Chandler said in a research note. “The largest reserve holders are not in the Middle East but in Asia and account, together with Russia, for over 63% of total reserve holdings.”

Referring to the currency peg, Chandler said that the governor of SAMA has said the bank held rates steady to fight inflation.

No coincidence

Stocks were lower Thursday. See Market Snapshot. Treasury bonds, typically a safe-haven buy when stocks drop, also languished under the weight of the dollar’s drop. See Bond report.

Gold futures, another safe-haven buy, rose more than 2% to top $745 an ounce in New York, to levels not seen since 1980. See Metals Stocks.

Crude-oil futures also rose Thursday, hitting as a new record of $83 a barrel. See Futures Movers.

“Is it a coincidence that the U.S. dollar, oil and gold are all breaking significant levels at the same time? No,” wrote Kathy Lien, chief strategist at Forex Capital Markets.

“The reason why the dollar can be blamed for the strength of oil and gold is because a weak dollar induces inflationary pressures, and since oil is priced in dollars, OPEC nations have a vested interest in seeing oil prices rise just so that they do not see a significant shortfall in profits,” Lien said.

Oil hits high over $84

September 20, 2007

Oil surged to $84 a barrel on Thursday in the seventh straight record-breaking session as companies shut Gulf of Mexico output on forecasts a tropical depression churning through the region would become a storm.

U.S. crude settled up $1.39 at $83.32 a barrel after touching an all time high of $84.10 earlier. London Brent settled up 62 cents at $79.09 a barrel.

Oil has traded above $80 for the past week in part due to concerns about U.S. supplies after government data showed crude stocks in the top consumer fell for the fourth straight week.

A tropical depression blowing into the Gulf of Mexico exacerbated worries as companies shut offshore oil and natural gas output on expectations it would become a tropical storm.

Energy companies have shut over 360,100 barrels of oil per day, some 27.7 percent, of Gulf crude oil production and 16.7 percent of natural gas production on the storm threat, the U.S. Minerals Management Service said on Thursday.

“Energy companies shutting down Gulf of Mexico production and Fed Chief Bernanke’s optimistic words on the economy were supportive for this latest record rise in crude futures,” said Phil Flynn, analyst at Alaron Trading in Chicago.


U.S. Federal Reserve chief Ben Bernanke said he expected rising defaults on U.S. mortgages but added the Fed was committed to preventing new lending problems after cutting interest rates sharply on Tuesday.

The dollar fell to a lifetime low against the euro and reached parity with the Canadian currency on Thursday on expectations more interest rate cuts could be made.

Oil has risen by a third this year, driven by worries of fuel shortages during the Northern Hemisphere winter, supply risks in producer countries, the weaker dollar and rising money flows from investors.

The recent surge to record prices came after producer group OPEC agreed to add 500,000 barrels per day (bpd) to global markets to help calm consumer nation concerns.

While analysts are divided over whether prices can sustain current levels, some OPEC officials said oil will not stay above $80 for long.

“This situation is not stable and cannot be permanent,” said Hossein Kazempour Ardebili, Iran’s OPEC governor.

Wednesday’s rise to record highs came after data showed crude oil stocks in the United States fell by 3.8 million barrels last week, nearly twice the 2 million-barrel draw expected in a Reuters poll of analysts.

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