![]()
- Stronger Yuan Needed for Global Rebalancing: IMF Chief
- Washington Not Trying to Contain China: Obama
- Japan Third Quarter GDP Jumps; 2010 Growth May Slow
- Quiz: How Much Do You Know About Green?
- Citi Rejects Terra Firma's Latest Bid to Save EMI: Report
- JP Morgan to Bid Over $3 Billion for Cazenove Stake
- Buffett: I Haven't Bought AMEX Shares in Years
- Bristol-Myers to Spin Off Mead Johnson Stock
- BlackRock: Central Banks To Be Net Buyers of Gold
- Warren Buffett to CNBC: 'I Haven't Bought American Express In Years'
- CNBC Video: Warren Buffett & Bill Gates - Keeping American Great
- U.S. Stocks Rally for the Second Straight Week
- Dollar is Not Plunging—So 'Calm Down': Market Strategist
- Strategists Say Markets Have More Upside — But How Much?
- Hirschhorn: Risk-Averse Traders
- Roginsky: A Funny Thing Happened on the Way to Financial Reform
- This Year's Biggest Thanksgiving Leftover: Cash
- TV Series Inks Unique Deal For Fight
MOST SHARED
- U.S. May Wind Up Green With Envy
- Warren Buffett to CNBC: 'I Haven't Bought American Express In Years'
- Japan Third Quarter GDP Jumps; 2010 Growth May Slow
- Taking a Page from Obama's Asia Agenda in Investing
- Sustainability Indices Sprouting Up
- For Investors, The New Green Looks To Be White
- The Cost of Thanksgiving Dinner 2009
- EADS Cautious on Full-Year Forecast after Earnings Dip
- Disaster Film '2012' Drowns Rivals at Box Office
- CNBC Video: Warren Buffett & Bill Gates - Keeping American Great
Foreign investors fled from U.S. assets in August as a meltdown in the U.S. subprime mortgage market triggered a global credit crunch, Treasury Department data showed on Tuesday.
Foreigners dumped a net $163 billion of U.S. securities in August, a record outflow.
Net sales of long-term securities such as bonds, notes and equities -- a more closely watched gauge of foreign demand -- hit $69.3 billion, also a record. The last time this measure turned negative was in August 1998, the month when Russia defaulted on its sovereign debt, sparking a global crisis.
Economists had expected net foreign purchases of long-term securities of $60 billion, according to a Reuters poll.
"Investors seem to be moving money outside of the U.S., which leads us to believe they are planning for a continual U.S. dollar decline," said Mark Meadows, currency strategist at Tempus Consulting in Washington.
"What they are saying," he added, "is they are not going to receive as much in return as it will cost them to hold dollars."
The net sales of $163 billion, which includes short-term securities such as Treasury bills, beat a prior record outflow of $42.3 billion in March 2001.
U.S. capital markets would have needed to attract nearly $58 billion of inflows in order to cover the August trade deficit.
"The diminished foreign appetite for long-term U.S. financial assets is alarming, and will weigh heavily on the dollar," said Tu Packard, chief economist at Moody's economy.com in West Chester, Penn.
Credit began drying up across global markets in August as losses mounted on bonds backed by risky U.S. mortgage debt.
The dollar fell sharply during that time. The dollar index, which measure the greenback against a basket of six major currencies, has slipped some 6 percent since mid-August, at one point touching an all-time low. The euro hit a record high against the U.S. currency.
Official Treasury Selling Hits Record
Official foreign buyers such as central banks sharply increased sales of Treasury bonds, unloading a record net $29.7 billion in August. They sold a net $6.9 billion in July.
Japan and China, the top two holders of U.S. Treasury debt, were both sellers in August. By month-end, Japan held $585.6 billion, down from $610.4 billion in July. China cut holdings to $400.2 billion in August from $409 billion in July.
But Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Conn., said this likely reflected a "portfolio reallocation" toward shorter-dated securities.
Foreigners did buy a net $21 billion of short-term U.S. Treasury bills, and Ruskin said that probably helped the dollar from declining even more in August.
Including private foreign accounts, the data showed net sales of Treasuries of $2.59 billion, less than the $9.37 billion of net sales seen in July.
But Ruskin said the data still suggests "considerable dollar vulnerability," especially when short-term dollar financing demands taper off.
U.S. entities, meanwhile, bought a net $21.6 billion of foreign bonds and a net $12.8 billion of foreign equities, showing what Ruskin called "ongoing diversification abroad."
International investors also sold a net $1.2 billion in U.S. corporate bonds in August and a net $40.64 billion in U.S. equities, a sharp reversal from net purchases of $21.2 billion the prior month.
- Where, what, how.
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
- Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
- The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
- Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.











