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To: coug who wrote (532)	12/15/2005 10:38:02 AM
From: coug	Respond to of 3961

Wild ride on Coldwater creek this morning..If I was running the river, I would be....... Maybe I still will be in the stock.. We will see.

To: coug who wrote (532)	12/15/2005 6:11:46 PM
From: stockman_scott	Read Replies (1) \| Respond to of 3961

Oct. Foreign Holdings of U.S. Assets Rise a Record $106.8 Bln Dec. 15 (Bloomberg) -- International investors increased their net holdings of U.S. assets in October at a record pace for the second straight month as soaring growth and rising interest rates lured funds to the world's largest economy. Net holdings of Treasury notes, corporate bonds, stocks and other financial assets increased $106.8 billion, exceeding September's revised $101.7 billion record, the Treasury Department said in Washington today. October's net gain exceeded the $54.4 billion monthly average for the last five years. The U.S. economy grew at more than twice the rate of its European rivals in the third quarter and rising U.S. interest rates helped the dollar rally against the yen and the euro this year. Economists surveyed by Bloomberg News predict the economy will expand at an annual rate of more than 3 percent for at least the next five quarters, trumping any concerns over a widening trade gap. ``The demand for U.S. securities from investors overseas continues unabated,'' said Chris Rupkey, senior financial economist at the Bank of Tokyo-Mitsubishi in New York. ``This demand couldn't come at a better time because the trade imbalance with America's trading partners just hit record levels.'' Economists surveyed by Bloomberg News predicted a net increase of $75 billion, the median of five estimates. The U.S. economy grew by 3.7 percent in the third quarter from a year earlier, faster than any country in the Group of Seven industrial nations. Japan grew by 2.9 percent, and France, the U.K. and Germany all expanded by less than 2 percent. Canada grew 2.8 percent. Investors monitor the Treasury data as a gauge of demand for dollars. The currency swung by about an average of three-quarters of a cent against the euro on the day of each monthly report in 2004. Corporate Securities Foreign investors were confident enough to invest in U.S. corporations even as U.S. stock indexes trailed some other countries' benchmarks. The Standard & Poor's 500 Index fell 1.8 percent in October while Japan's Nikkei 225 Stock Average rose 0.24 percent. Overseas investors added to net stock holdings by $10.6 billion, while demand for U.S. corporate bonds rose by a net $34.1 billion. The total net figure in today's report comprises Treasury notes and bonds; debt of so-called agencies such as Fannie Mae and Freddie Mac; corporate bonds and stocks; and the stocks and bonds of foreign companies bought from U.S. investors. The report is one measure of U.S. capital flows and doesn't include foreign direct investment and bank deposits. Total purchases of domestic securities were $1.47 trillion in October, while total sales were $1.36 trillion. Treasuries Purchases of Treasury securities rose by a net $30.4 billion, while demand for agency debt increased by a net $35.2 billion. U.S. Treasury Secretary John Snow said yesterday there is ``no reason to be concerned'' about the high level of foreign investment in the U.S. ``People invest in the U.S. because the U.S. is the best place to invest,'' Snow said in an interview. ``It's just a reflection of their confidence in the U.S. markets.'' Investors abroad held $2.1 trillion of the $4.11 trillion marketable U.S. Treasury securities outstanding during the month, according to Treasury figures. Excluding the foreign bonds and stocks, the total investment in long-term domestic securities was $110.3 billion in October, with private foreign investment accounting for $97.3 billion of that. Central banks and other agencies accounted for the rest. Interest Rates U.S. interest rates are higher than in most industrial countries, making U.S. assets more attractive. Among major central banks, only the Bank of England, at 4.5 percent, had a higher benchmark interest rate in October than the U.S. Federal Reserve's 3.75 percent. The official target rates of the European Central Bank, the Bank of Canada and the Bank of Japan were all lower. The ECB and the Canadian central banks raised their main rates this month, although they remain below the U.S. rate, which the Fed increased to 4.25 percent two days ago. The U.S. needs foreign capital to fund its current-account deficit, the broadest measure of trade because it includes investment income and transfers. The deficit rose to a record $394.3 billion in the first half of this year from $312.7 billion a year earlier. ``There's no question the trade deficit is important, but it's not the only number,'' said Carlos Gutierrez, the U.S. Commerce secretary. ``It's not a proxy for the economy, not the indicator for the health of the economy.'' The U.S. budget deficit in the fiscal year ended Sept. 30 fell to $318.6 billion, the third highest ever, from last year's $412.8 billion. Better growth in European countries may increase their appeal to international investors. ``German companies continue to be in a phase of restructuring, focusing on costs,'' said Carsten Klude, head of strategy at M.M. Warburg in Hamburg. ``We expect the economy to do well. All in all, profits should significantly rise again next year.'' Regions Japan, the largest foreign holder of government securities, sold a net $5.7 billion in assets in October. China sold a net $4.6 billion in U.S. debt. Japan accounts for $681.6 billion of Treasuries held by overseas investors, followed by China with $247.6 billion and the U.K. with $187.1 billion. China had been buying dollars to ensure its currency, the yuan, stayed at about 8.3 to the dollar. China's government ended the peg in July, allowing the yuan to appreciate by around 2.1 percent against the dollar. Greater flexibility in China's currency policies may result in fewer purchases of U.S. securities over time. Caribbean holdings, which analysts link to hedge funds located in the region, rose by $10.6 billion to a total of $113.5 billion. The Organization of Petroleum Exporting Countries increased their holdings by $9.2 billion, to a total of $63.8 billion. To contact the reporter on this story: Kevin Carmichael in Washington at kcarmichael@bloomberg.net Last Updated: December 15, 2005 09:01 EST bloomberg.com