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To: reaper who wrote (211641)	12/27/2002 3:40:21 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 436258

reaper, I was thinking the foreigners would dump the long term treasuries and hold their short term treasuries.

To: reaper who wrote (211641)	12/27/2002 11:53:54 PM
From: Wyätt Gwyön	Respond to of 436258

in addition to the points you mention, M&A activity by foreigners has also fallen off precipitously. equity and M&A investments are the least liquid and most sticky, meaning foreigners have (had) faith in US economy. by contrast, T's are liquid and unsticky and imply lack of faith in US. the heavy move by foreigners into govies, which shows their late and newfound risk intolerance, should persist throughout the crash. if so, i think the foreign bid for T's will be there to stay until they give up on the dollar. but giving up on the dollar is something they can't do if they want the US to maintain current acct deficit at $450 billion. you can sense the Japanese are extremely desperate as they try to talk down the yen to 160 against the dollar, even as they have amassed the greatest net investment surplus of all time--something like $3.5 trillion after their huge string of current acct surpluses. they are not ready for a US that cannot buy their goods! so foreigners are between a rock and a hard place, as is the US. what a mess.