Sovereign Wealth Funds -- the state-owned funds that have been bailing out US companies at a fairly rapid clip -- have a lot of folks scared these days, but the evidence seems pretty strong that their holdings are vastly overstated. If they really had the $3 trillion some say, they could buy up every bank and brokerage in America and still have $1.2 trillion left over to go out for a nice lunch. Rather, you get that $3 trillion number when you include their domestic holdings. But Abu Dhabi's Sovereign Wealth Fund isn't going to sell off Abu Dhabi's oil sector in order to purchase JP Morgan. So that's not really usable, liquid capital. Similarly, I've never quite understood the anxiety over SWFs. Folks seem worried that gulf states will buy our best companies and then do...something with them. Something nefarious. But no one quite knows what. In the dark vision's strongest form, a war in which they turned the resources they bought against us, the question would be who could militarily capture the production plants and oil rigs, not who held the ownership papers. And in the softer version, that they simply run these companies without an eye towards US interests, well, how is that different than what multinationals do now? My hunch, actually, is that we have more control over SWFs then we do over multinational corporations. SWFs are sensitive to American public opinion, as our politicians tolerate them with great unease, and it wouldn't take a particularly talented opportunist to whip up hysteria over other countries outsourcing American jobs. Conversely, multinationals outsource and strip mine with impunity, comfortable that the political system protects their behavior, be it sensitive or rapacious. The only case where I can see the danger is SWFs investing with an eye towards political control, but the likely incarnation of this is SWFs investing so as to curry political favor (much as corporations currently donate to curry political favor). I don't seem them trying to tank our currency so the world economy goes into cardiac arrest.