It's the latest Wall Street parlor game: parsing the effect of Brexit on the U.S. economy.
While the effect on U.S. stocks has been fairly muted so far, with the S&P 500 down only roughly 1 percent since the vote, we can already see broader effects on the global economy. Notably, we have seen tighter financial conditions, some bank contagion, and some dramatic currency moves, with the British pound down 13 percent against the dollar, and the yen up 5 percent.
But there's one other effect of Brexit that has been little discussed: The effect on direct foreign investment in the U.S.
I'm not talking about buying or selling U.S. stocks or bonds. Those are indirect investments. Direct investments are when a foreign company sets up a subsidiary in the U.S., or merges with a U.S. company, or engages in a joint venture.
In 2015, the U.K. was the largest single source of foreign direct investment in the U.S. It accounted for $483 billion of the $3.1 trillion in foreign direct investment in the U.S. that year. That's about 16 percent of all foreign investment.