As we reported
earlier today,
for whatever reason China sold the second biggest amount of US
Treasurys in December. However, that was only part of the story. In
fact, as we also noted, while the two largest US foreign creditors were
net sellers, total foreign bond holdings actually rose in the last month
of 2013 and as the chart below confirms, when it comes to Long-Term
Treasury paper, foreigners were actually buyers of some $18 billion in
Treasurys. It is everything else that they sold in the month when the
S&P hit its all time high: specifically, foreigners were net sellers
of Agency securities ($15.4 billion), Corporate Bonds ($7.5 billion)
and Corporate Equities ($13.7 billion) something which hardly fits with
the narrative of the record stock market high generating confidence in
even more buying down the line.
In the chart above it is the black line -
gross purchases of US long-term securities - that is the most troubling, as its trend is hardly anyone's friend.
So what happens when one smooths out the line to normalize for monthly fluctuations? This:
The chart is very disturbing: it shows that as the S&P rises
higher and higher (on ever declining volumes), foreigners are buying
fewer and fewer US securities.
In fact, on a 12 Month Moving Average basis, foreigners bought less long-term US securities than they did when Lehman crashed!
(Click link below to read more)
READ MORE
Sphere: Related Content
Posts
No comments:
Post a Comment