China Buys stake in Morgan Stanley

This time they bought a stake in JP Morgan after JP announced $9.4 billion worth of 4Q write-downs.

Morgan Stanley said Wednesday it is shoring up its capital with a $5 billion investment from China's sovereign wealth fund, after a $9.4 billion write-down related to mortgages pushed the bank into a deep loss for the fourth quarter.

The write-downs were primarily the result of a speculative trading bet that went bad, and their scale -- more than twice the size of the $3.7 billion hit the bank forecast on Nov. 7 -- raise questions about Chief Executive John Mack's consistent push to boost results by taking on more risk.

Mr. Mack's move to sell a stake of just under 10% to China Investment Corp. makes Morgan Stanley the latest damaged U.S. financial institution to seek help from cash-rich funds investing emerging-market government wealth.

CIC, officially launched on Sept. 29, is moving more quickly than expected to find higher returns for China's $200 billion of foreign exchange reserves. Just last month, Chairman Lou Jiwei said the fund would put its money mainly in index products and would set up an advisory board before plunging into big investments. In what has so far been a money loser, the fund paid $3 billion in May for just under 10% of private equity giant Blackstone Group, just before the leveraged buyout boom foundered amid a credit crunch.

I think one of the most intriguing side stories to the credit crunch is that at a time when much of Wall Street is looking for capital infusions Goldman Sachs is actually buying back its own shares at a rapid pace:
It looks like slowly but surely Goldman is planning on taking itself private.