Morgan Stanley Posts Loss, Borrows From China

December 19, 2007
Morgan Stanley Posts Loss, Borrows From China

Dec. 19 (Bloomberg) -- Morgan Stanley wrote down its subprime-infected mortgage holdings by a greater-than-expected $9.4 billion and received a $5 billion cash infusion from state- controlled China Investment Corp.

Chief Executive Officer John Mack called the fourth-quarter loss of $3.56 billion, the first in the New York-based firm's history, "embarrassing.'' He'll forgo his bonus for the year, the company said today in a statement.

Mack's strategy of expanding in mortgages and making bigger trading bets backfired as losses from securities linked to home loans more than doubled in November. He ousted Co-President Zoe Cruz, who had overseen the fixed-income unit responsible for the mortgage trades, last month and promoted James Gorman and Walid Chammah, who previously ran wealth management and the New York- based firm's European operations.

China threatens 'nuclear option' of dollar sales

September 10, 2007
China threatens 'nuclear option' of dollar sales

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

China Warns U.S. May Set Off Arms Race

June 5, 2007
China Warns U.S. May Set Off Arms Race

BEIJING -- China joined Russia on Tuesday in criticizing a U.S. plan to build a missile defense system in Europe, saying the system could set off an arms race.

The White House plans to install a radar system in the Czech Republic and interceptor missiles in Poland -- two Eastern European countries that were in the Soviet orbit during the Cold War era.

Chinese Foreign Ministry spokeswoman Jiang Yu said the plan had "aroused great concern and attention."

China hails satellite killer

January 19, 2007
China hails satellite killer

In the first such test since the cold war era, the White House confirmed that China had used a
medium-range ballistic missile, launched from the ground, to destroy an ageing weather satellite
more than 500 miles into space. "We are aware of it and we are concerned, and we made it known,"
the White House spokesman, Tony Snow, told reporters.