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Sovereign Wealth Funds

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HONG KONG (Reuters) - Absent from a last minute deal to scoop up Bear Stearns (BSC.N: Quote, Profile, Research) on the cheap was an investor group that's spent a lot of money on Wall Street lately.

Sovereign wealth funds appear to have steered clear of the deal to rescue the bank, which JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research) agreed to buy for a mere $2 per share on Sunday -- or one-fifteenth of Bear's stock price on Friday.

With no money coming from the Middle East or Asia in the latest deal for a struggling Wall Street bank, analysts said on Monday that sovereign funds are likely to keep away from U.S. financial assets for now.

Given the hundreds of billions of dollars these funds control, that's bad news for Western firms or any other company hit by the credit crunch that's tightening its grip on the United States and Europe.

It's also a grim prospect for Wall Street workers hoping a foreign investor will help keep their jobs.

"There's no way that anybody's going to catch a falling knife. Why come in now?" asked Craig Russell, Beijing-based chief market strategist at Saxo Bank. "There's no one in the market place willing to re-establish confidence apart from the Fed, and that scares everyone. The U.S. dollar is the hot potato."

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  • 295 Brexit, House prices and Summer 2020

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