CNOOC Says See Ya

Now, it’s official. CNOOC is walking away from Unocal, and their taking their money with them. The Chinese company had outbid ChevronTexaco for Unocal by offering $18.5 billion (all cash). But CNOOC finally got fed up with the posturing from American politicians who feared an Asian company buying our Asian oil. The Chinese Communists have been through the Long March, the human waves of the Korean War, but our bureaucracy was simply too much to bear.

The irony is that CNOOC was simply paying too much, but that’s their right. If we don’t let the communists pay too much for our companies, they’ll stop paying too much for our debt. And that’s what’s happening. The market seems genuinely surprised that we’ve been getting good news about inflation and debt financing, yet interest rates are going up. I’m not surprised, and this is just the beginning of higher rates.

Posted by on August 2nd, 2005 at 11:57 am


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