Last Updated: 2 June 2023
I agree with you, Paul: There are a lot of forces at work supporting an iShares sale.
Over on our U.S. sister site, Jim Wiandt writes today that he doesn’t think a deal can happen. He thinks the market is too challenging and the time frame too short to find a buyer for iShares.
But I think the points you raise are valid. The folks at BGI and the folks running Barclays will do almost anything to escape taking government money. The lynch mob mentality that exists among the political class today makes the risks of taking government money high. You have to think Barclays will do almost anything to avoid that.
I’m intrigued by this FT article reporting that Goldman Sachs is working on a bid. As I’ve said since this story first broke, Goldman seems like the perfect partner for iShares. If you haven’t noticed, Goldman’s stock is now up 120% from its low in November. I’m guessing they could even raise money to purchase iShares if they needed to.
I’m not saying it’s going to happen, but I wouldn’t write it off as a possibility either.
What About The Dollar?
Meanwhile, I’m turning my attention to the next big story … which looks like it has the potential to get a lot bigger in the next few days. I’m talking, of course, about the growing chorus of voices pushing to end the dollar’s role as the world’s reserve currency.
I’ve seen reports from Reuters that a U.N. panel will recommend next week that the world “ditch the dollar as its reserve currency in favor of a share basket of currencies.” According to the FT, China’s central bank governor recently posted an essay on the Web site of the People’s Bank of China calling for the same thing. And there is talk of the IMF considering this proposal in the near future.
If this idea gains traction, it will have huge implications for the dollar, and for the markets. There’s a chance that it’s just bluster, and that it won’t amount to anything. But a few years ago, people were too afraid to even broach this subject. Things are clearly different now.