As I posted in June, Blackstone Group's CEO Stephen Schwarzman gave an interview to the Wall Street Journal with a compelling theme -- Schwarzman is the Napoleon of private equity. Napoleon-watch tracks his moves on the business battleground.
The New York Times [registration required] reports that China is not happy its investment in Blackstone (NYSE: BX). Since Blackstone's June 22 IPO, China's $3 billion stake has lost $425 million worth of its value, or 14%.
We may look back on China's investment in Blackstone as a watershed event. Back in the 1980s many Americans were up in arms about the 1989 purchase of Rockefeller Center by a Japanese company -- Mitsubishi Estates Co. That money-losing investment marked the turning point in a decades-long decline in Japan's global ascendancy. While China's Blackstone investment did not cause much uproar here, it may have marked the private equity peak just as the Mitsubishi investment marked a peak in both Japan and New York real estate.
Meanwhile, Chinese bloggers are angry about China's money-losing Blackstone investment. Here's a particularly scathing post: "O senior officials of the Chinese government, please do not be fooled by sweet-talking wolves dressed in human skin," according to one of seven scathing postings compiled by an anonymous blogger on Sina.com, a Chinese Web site. "The foreign reserves are the product of the sweat and blood of the people of China, please invest them with more care!"
Of course, the Chinese government wiped out that post between Thursday afternoon, when it first appeared, and Thursday evening.
More worries for free speech advocates. When News Corp. (NYSE: NWS) takes over the Wall Street Journal, such anti-Chinese government speech won't even get an afternoon's public airing. Until then, it's a safe bet that China will lose even more money at the hands of Blackstone's busted IPO.
Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Blackstone or News Corp.








Reader Comments (Page 1 of 1)
8-03-2007 @ 7:54PM
theTmanxkl said...
How long before China, and Japan give up on the United States altoghether?
Yes it is true that these nations depend on the money faucets made famous by Alan Greenspan(who may go down in history as one of the most irresponsible fed chairmen ever-if not downright dirty.) But how long before china finds people to argue that the chinese themselves could do better using their own money?? How long before the Chinese start doing what wall street is doing?
Japan is a strange nation-to say the least-and they will always have need of resources-as does china. But unlike the Chinese, who are in fact, COMMUNISTS!!!-the Japanese are actually capitalists.
In reality, they would not mind doing the "management" themselves, and could easily develope a very powerful financial community of their own in Asia, and Australia, with ultimate connections to RUSSIA! What I am saying is that if we go down, THERE IS EVERY REASON TO BELIEVE THAT THE ASIANS ARE GOING TO ABANDONE US!!!
What do they really need to do this? ONe thing only I think: the Arabs. The Arabian community has OIL. No matter how you cut it a lot of money, and power is wrapped up in that. What if one day the Asiansoffered the Saudis, Iranians and Emirateset al an offer they could not refuse! Join us, invest with us, and if perhaps Europe eventually joins, we have more than half the world with enormous resources, and much talent(even if a little conservative!)
What I am saying folks is that the world may not really need a people who are really really really good at using and mostly wasting other people's resources-namely us.This is crunch time folks. This is when we find out what we are really worth if anything. We assume that IPHONE and IPOD is really important(the media machine spends days and weeks pumping up the propaganda for these "breakthroughs" in modern capitalism. Want my opinion? I think these things are just gadgets.I think the Japanese make better products, and with china in their yard, could make them way way cheaper!!!! No gimmicks, no bull, no nonsense. Just performance. (How long before china, india, japan and europe develope an operating system far more reliable than Microsoft's? Anyone who knows computers knows that Linux is a far superior system, how long before the Indians and chinese and Europeans stop working for microsoft and start working for themselves???)
Look around you we are really really really good at gimmicks. At meaningless little titilations, and silly excitations that in the end fly into space and eventually on to the back seat of a car, or a bed in a motel on a lonely road to nowhere. Does the world really need a player? If they want to screw one another, couldn't they just do that on their own? Do you really need a middle man to get screwed out of your money? Think I'm joking? Do a little traveling abroad, Europe would suffice. See how they really feel about our gimmicky world. For the most part these people really dont buy it. They dont buy anything about us; not our greed, not our hysteria, not our media, not our hypocricy, not our brutality and seeming indiference to the lives of others!!! Yeah you think that cruel that we should be so ugly? It's a lot crueler if you are an Iraqi girl of seventeen!!!
Or for that matter a Palestinian boy growing up in hell. Things are not what they are portrayed as in our media. Things are seriously ugly with America. Very ugly.
Rupert is working hard. He knows that to put up a profitable circus, YOU REALLY NEED THE MIRRORS, AND THE SMOKE!!! But the Cat is comming and the Cat has made it clear she is tired of this boring, costly, fraudulent show being put on by our mass media. Our people are in debt, and to the Cat this is serious business. She is not happy with the distributions. So the corporate media buys Barrack Obama. Rupert buys himself a news paper. Nice. Gimmicks. More smoke, more mirrors. Maybe that wont cut it anymore. Maybe the music's over, and we ought to just turn on the lights.
Iraq is not the end, but it is a true and disturbing nightmare that we must awaken from, however painful. I think the time is comming for a real real good dose of pure reality. We Americans have been dreaming a little too much I think.
Whether we wake up or not, I dont think the rest of the world is going to be willing to pay for this tired, long overdone show-which I personally believe has been tasteless of late, and in most cases quite stupid, even brutally so. Come the Cat, we are likely looking at some muscle building here in our own home, down in the basement, alone with our thoughts, our scars, and our disillusionment. Just what we need.
Just what we need.
8-04-2007 @ 8:01AM
Ernie Unholz said...
Interesting reading and analysis. I find that the American electorate indeed are the dreamers who are daily lulled to sleep by politicians in Washington DC who posture about their deep love for America. Both sides of the aisle go out for their 5 martini lunches (swelling of the Kennedy livers in each of them requires 5 instead of the 3 that used to get the job done) and then stand out on their majestic balconies to wonder why their constituents are not as happy as they are. Why are we so unhappy as to assign a 3% approval rating for Congress? Simply because we see the present and the future in much more sobering terms than those who see themselves above the law in Washington DC. We say that it's okay that our Presidents can lie to the nation and that if they are not moral in their behavior, well that is what leaders do. Then we find that when the other party moves to hold the holder of the highest office in the world accountable, they have so many skeletons in their closets as to fall before the very offender they criticize. When so many investigations and lawsuits are filed along party lines, we say that is just fine because government has to hold itself to the fire. However, when the average person in the declining middle class reads the story through a biased press, rarely is justice really served. It is at that point when we have to come to the real truth...OJ Simpson simply illustrates that there are at least two systems of justice - one for the haves and one for the have nots. I do not think you have to be a Sociologist to understand that the erosion of confidence of the electorate in the leadership of this country spells ultimate disaster for the greatest power in the world. America has always been about bringing out the best in each other. It has always been about taking out an enemy of the world and then rebuilding that former enemy into a productive nation friend. It has always been about taking a stand even when we were alone in our conviction. It has always been about freedom, even if it was imperfect in its carry out of such vision. But a day has dawned now that will clearly define just who we are. We are now truly threatened by an outside enemy who, like the early fighters in Colonial America, see a future when their perverse way of life can reign as a new supreme. The religious radicals attacking the world are ruthless and independent. All codes of moral war mongering are out and the world (the latest example of this is South Korea calling on us to stop the killing of their citizens by the Taliban)is looking to the old reliable knight in shining armor...America. Which brings me to my orginal point...if Washington DC is so busy criticising, suing and investigating itself...who is left to stop the hateful enemies of this great Republic? Why is Congress only gaining the support of 3% of us? It is because we are alienated by the very people we have entrusted and now have mistrusted the legacy of leadership of our land. Maybe the Boston Tea Party will re emerge if we could only muster the courage to care enough.