http://www.niagaraadvance.ca/2012/07/27/baird-rejects-us-nexen-concerns
Key Quotes:
A senior U.S. senator has called for a hard line on a state-owned Chinese company’s takeover bid for Canadian oil company Nexen, but Foreign Affairs Minister John Baird refuses to be pushed into anything.
“Decisions about the Canadian economy or about our economic relationship with China will be made in Ottawa, not in Washington or in New York,” Baird said on Friday.
His comments come after Sen. Chuck Schumer — a top New York Democrat — wrote to the U.S. treasury secretary about China National Overseas Oil Corporation’s (CNOOC) proposed $15.1-billion takeover of Nexen.
Schumer says Nexen’s operations in the Gulf of Mexico — U.S. territory — account for about 10% of its business, so any takeover by a foreign buyer would be subject to review.
Baird says he has “great respect” for Schumer, but doesn’t know if the U.S. can block the CNOOC-Nexen deal.
The minister also refused to link the Nexen takeover to securing greater access to the Chinese market.
“Obviously we’d like to see less trade barriers, more trade, more free trade that is unencumbered,” he said. “We will continue to pursue that independently of this decision.”
If I’m reading this correctly, it seems that Schumer has assured the Tory approval of the deal. This is a clear case of unintended consequences. The other consequence is that Schumer has taught once again that one must be wary about investing in the United States. Your investment there is not merely a financial arrangement but a politicized event. This is a great way to put up a big red light to would-be investors: Hey, we are not gonna let you sell your business to China. Well, China is one of the few liquid investors still out there. One of your few potential buyers is off limits. So much for investing in the US. Your money gets trapped there once they have it.
My gym used to do that. They’d wrongly charge my credit card but they never gave a refund. Once they had the money, they’d never gave it back. I’m not a member of that gym any more, and I don’t invest in the United States, anymore. Not since I lost 70K in a real estate deal that included the involvement of corrupt brokers, banks, and bureaucrats.
*All very true.
*I wonder what it is that Schumer has done to merit the “great respect” of Baird. Certainly Baird must be aware of Schumer’s support of the Jihad against Canadians who happen to be dual US citizens.
Is there any treaty between the US and Canada that provides for US approval of who can or cannot be stockholders in Canadian corporations?
*While not worthy of its own post I did find the following article quite interesting.
http://www.algemeiner.com/2012/07/06/russia-canada-alignment-with-israel-could-change-middle-east-energy-landscape/
Personally I would be a big fan of a Russia, Canada, Israel alliance. In fact my three favorite heads of government are Stephen Harper, Benjamin Netanyahu, and Vladimir Putin. Hard men and strong men. My three most disliked heads of government are Barack Obama, David Cameron, and Francois Hollande(Along with those two losers in Brussels Barroso and Von Rompoy).
I just wish someone high-profile would renounce just so I can see Chuckie Schumer get pissed off in front of the camera, negating their reason for renunciation.
@geeez, it is pretty funny watching Schumer have one of his “despicable” tantrums. I have to agree. 🙂
@ Tim
“Personally I would be a big fan of a Russia, Canada, Israel alliance.”
What an alarming statement — alliance with Israel! By way of deception they do wars AND business. Some of those gas reserves Israel claims are actually being stolen from Gaza. Putin needs to give his head a shake on this one. And Harper is one of your favourite heads of state? Come on! There’s nothing strong about Harper when he marches in lockstep with the US and Israel in their penchant for nation destroying.
*Em
I knew that statement would be controversial. However, I would ask this question which countries leaders are actually standing up to the US right now. On FATCA only Russia and China have oppossed it as vocally as Canada. Countries like France and its left wing President Francois Hollande seem quite content to go along with FATCA as does UK Prime Minister David Cameron and his Liberal Democrat coalition partners.
@ Tim
I’ve been fooled too many times by vocal opposition. It will be actions that count and unfortunately it probably won’t be until the FATCA snit hits the fan that we will truly know how solid that opposition is. Will the opposition get more vocal or will it just fade away? I believe the US is doing an end run at other governments by scaring the snit out of the FFIs in those countries and once its FFIs are all geared up for compliance it will take Herculean strength on the part of any government to oppose FATCA. Somehow, sand must be thrown into the FATCA gears of the FFIs. A strong government would simply say cease and desist, as an institution in this country you may not betray our citizens in this way.
I would like to see Baird make this statement: Laws regarding rights of Canadians to Canadian banking service in Canada are made in Ottawa, not in Washington. Canadian banks must adhere to those laws. Canada’s existing laws will not be changed to accommodate a foreign government. Canada will continue to ensure fundamental rights of all Canadian citizens and residents are protected, regardless of their national origin and independent of demands of any foreign government.
@Tim: Haper, Netanyhau and Putin are your favourite leaders? Yikes!
*I have to admit I was joking a little bit but who would you rather have Obama, Cameron, and Hollande or those three.
@Tim: None of the above.
U.S. securities regulator alleges insider trading ahead of China’s Nexen bid
SEC freezes assets in probe of Nexen-CNOOC insider trading
Again, the USA is reaching beyonds its borders to try to regulate the trading of non-USA company on an Asian market. I am not certain how the SEC determines that it has jurisdiction in this case, but perhaps the 10% shares of Nexens or that Nexens trades on the US markets is the reason. Would that mean that any company that trades on the OTC or Pink OTC or any other electronic trading platform would be subject to SEC regulation? Who made the SEC the securities cops of the world? And then the question comes up, Why won’t the cop police himself? The US is full of securities fraud. Which one of the bankers did the SEC put in jail for selling bundled liars loans in the form of CDOs? No one? If they did that, they’d have to shut down the too-big-to-fail banks and throw their CEOs in jails, instead of bailing them out and saving their asses. What we have is the United States is looking for criminals in the world that they can charge like Conrad Black and Royal Bank, but they don’t want to throw their own CEOs and politicians in prison where they belong.
@Petros:
“Your investment there is not merely a financial arrangement but a politicized event.”
There is no longer any such thing as private property in the US. But I think the US / China competition is heating up. The Chinese are buying massive amounts of gold because they need to constantly unload all those dollars they keep on taking in. Either that or buy worthless treasuries. Just as with the Union Oil acquisition attempt several years ago, the US is trying to prevent China from acquiring anything strategically important. There are all kinds of pipeline wars being waged across Africa and the middle east. China is reacting to the US / Saudi subversion of Syria and the recent US lilly pad strategy of containment. Both of these empires and Russia are all facing each other in a series of proxy resource wars that is alarmingly reminiscent of August 1914. Both Canada and Switzerland would be very lucky to be able to remain neutral if this thing blows up.
@ Confederate: Charles Hugh Smith has written a very interesting article which claims that it is axiomatic that US dollars must return to the USA to buy something in the US. That means real estate or businesses or goods and services. The US probably made the China very angry about the Union oil deal, because frankly, the United States has a trade deficit, and those dollars have to go somewhere–China is actively diversifying out of treasuries, and Canadian oil sector is very attractive to them for the same reason as it is to me: you are buying something real, resources that are safely kept underground and will provide real income when extracted from the ground. Stockhouse has an article on junior gold mining companies–that the price of gold is $38 per oz. Now I am not that as optimistic about that price–but I do think that a couple of the junior gold mining companies that I’ve recently invested in, (Toronto venture exchange: nox, ngm) with indicated and inferred oz of gold Net Present Value (with an average of extraction cost of $1000 per oz), are at a steep discount to the spot price of gold. Meanwhile, the US dollar (and the loonie for that matter) will indeed eventually sink to its intrinsic value.
Canada buys itself leverage and protection by playing the various powers. Selling a few oil companies to China, in my opinion, is an excellent way to maintain its neutrality. In the last couple of years, billions of dollars are flowing into Canada from Asia. It is keeping our markets liquid in a time when institutional and retail investors have oversold the resources sector in Canada. There are bargains galore in our Canadian market and the Asians know it. I was stockholder of Daylight Energy when Sinopec bought it out at close to double the market price, and that was in my opinion a steal–a fantastic buying opportunity by China. I voted in favor of the arrangement because it helped me de-leverage my portfolio.