From the Dept. of Things That Sound Totally Illegitimate

New York, NY -- Um, right, so the Chinese Communist Party is now telling Bank of America it can't sell its stake in China Construction Bank, one of China's biggest lenders. The CCP, in other words, has effectively frozen BoA's assets.

That's great. That doesn't sound sketchy in the least. I see a bright future for us all, given that the management of a bank deemed "way the hell too big to fail" is run by people with the decision-making capabilities to allow a significant amount of their assets to be held by the CCP.

(On a side note, I'm beginning to understand how it is that the dumbest lacrosse players managed to get jobs after college with the biggest banks: Because banks aren't morally lacking; they're lacking in brains and sense. Finance, like a Wal-Mart, is full of half-witted, low-skilled salespeople who aren't allowed to unionize.)


Heckuva job, Kenny!

Anyone know of any good Icelandic banks?

And now for your moment of zen: The FT reports the following:

BofA shelves $3bn plan to cut CCB stake

By Sundeep Tucker in Hong Kong and Jamil Anderlini in Beijing

Published: December 18 2008 23:32 | Last updated: December 18 2008 23:32

Bank of America has shelved a $3bn (€2.1bn) sale of China Construction Bank stock following objections from Beijing, igniting fears that some cash-strapped overseas investors could struggle to offload their lucrative holdings in the country’s banks.

The US bank, which in 2005 was part of a wave of foreign investment into Chinese banks, last week hired UBS to help sell a chunk of Hong Kong-listed shares to reduce its overall ­holding in CCB to less than 17 per cent.

The offer was priced at a discount of 15 per cent to CCB’s current share price and was quickly covered by US and European institutional investors, said people familiar with the matter.

However, only hours before it was due to be unveiled on ­Monday morning, the share sale was pulled on the instructions of Ken Lewis, BofA chairman and chief executive, following a phone call with Guo Shuqing, his CCB counterpart, according to people familiar with the situation.

The precise reason for the 11th-hour abandonment remains unclear, but dealmakers in the region believe that the Chinese government was unhappy about the timing of the share sale, the first such attempted divestment by a foreign investor following the expiry of a lock-in period.

The share sale could have triggered a fall in CCB’s share price just as Beijing is trying to garner support for its largest banks and arrest a stock market slide.

Foreign financial institutions, including Goldman Sachs, Dresdner Bank, Temasek and Royal Bank of Scotland, hold shares in China’s leading banks worth billions of dollars and analysts say they could be tempted to sell down stakes to raise capital when their three-year lock-in periods start to expire from next month.

“Bank of America cancelling those trades has made the other foreigners realise they don’t exit at their discretion; they exit at the discretion of the Chinese government,” said one Asian dealmaker who asked not to be identified.

The Chinese government cannot prevent trading of Hong Kong-listed shares, but deal­makers said it was likely that BofA was warned of repercussions to its future business on the mainland if it carried out the sale.