Foreigners Wary of Long-Term U.S. Securities

Annie

Diamond Member
Nov 22, 2003
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Can you believe it? Perhaps actions do matter? Not too mention words? (crisis, catastrophe anyone?)

Of course the NYT goes on to 'blame the stupid foreigners', for getting their 'timing' wrong...

http://www.nytimes.com/2009/02/21/business/21charts.html?_r=1&partner=rss&emc=rss

ruary 21, 2009
OFF THE CHARTS
Foreigners Wary of Long-Term U.S. Securities

By FLOYD NORRIS
JUST when the United States really, really needs the money, overseas investors seem to be less willing to buy long-term American securities.

The government said this week that net purchases of those securities fell to $412.5 billion in 2008, less than half the 2007 level and the lowest annual total since 1999, when the federal government was running a budget surplus.

Money did come in, but it was diverted into the safest investment around, albeit one with almost no expectation of profit, Treasury bills. Overseas investors increased their holdings of those securities by $456 billion, an unprecedented flow.

A good part of that cash may have come from investors who would otherwise have invested in bonds issued by Fannie Mae and Freddie Mac, the government-sponsored mortgage lending enterprises.

For many years, those securities, which carried an implicit — that is, not certain — government guarantee, were popular overseas because they yielded more than Treasury bonds but seemed to have little additional risk....
 

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