FYI ---- (Panic starting to drive foreigners to US paper) ----
December foreign investment in US turns positive
By CHRISTOPHER S. RUGABER – 3 hours ago
google.com
WASHINGTON (AP) — Overseas demand for U.S. financial assets rebounded in December after dropping for the prior two months, the Treasury Department said Tuesday.
Foreign governments and private investors in December purchased a net total of $34.8 billion in long-term securities held in the U.S., the department said in a monthly report. That's after two months of net sales by foreigners, totaling $25.6 billion in November and $400 million in October.
The United States needs large amounts of foreign capital to finance its trade deficit, which stood at $677.1 billion in 2008. That was down from $700.3 billion in 2007 and the second annual decline after five consecutive increases in the deficit.
For all of 2008, net long-term purchases of financial assets by foreigners totaled $514.6 billion, down from $776.6 billion in 2007. Long-term investments are securities one year or longer in duration.
Long-term and short-term net investments last year totaled $597.8 billion, down from $616.7 billion in 2007. That figure doesn't include fixed investment in U.S. property, factories and other direct investment.
The December increase in foreign investment largely occurred in Treasury securities and corporate bonds, the government's report showed. Net overseas buying of Treasury bonds and notes rose to $15 billion in December, from net sales of $25.8 billion in November.
Foreigners also showed much greater appetite for U.S. corporate bonds, buying up $41 billion worth. That's after five months of net sales by overseas investors.
Foreigners continued to dump securities issued by mortgage giants Fannie Mae and Freddie Mac and other government agencies such as Ginnie Mae. Net sales of agency debt by overseas investors totaled about $37.5 billion in December, the fifth month out of the last six in which investors have sold off the agencies' debt.
China remains the biggest overseas holder of U.S. securities with $696.2 billion, up $14.3 billion from November. Japan is second with $578.3 billion, the report said, followed by the United Kingdom at $355 billion. |
