Foreigners Dump The Most US Stocks Since 2007

December 22, 2014 0 Comments

The treasury may not keep much ‘treasure’ at its facilities, but it does keep a ton of good data. Aside from its bond auction results and the TARP information it collects regularly, we have the Treasury International Capital report, which tracks cross-boarder portfolio investment flows of US and Foreign residents (which also includes jufirms, government agencies, corporations, etc).

One of the most interesting things about the recent report is that in October foreigners sold $27.2 billion in US equities, which would be the largest since June 2013 ($25.2 billion sold), along with $40.1 billion in net sales of US treasuries the same month. This is the largest sell-off of corporate stocks since the August of 2007 ($39 billion US stocks sold).

Its also worth noting in October foreigners managed to purchase a measly $539 million worth of US treasuries, which was the lowest net purchase of US securities since February 2012. Much of that probably has to do with the fact that three large holders of US treasuries (China, Belgium and Russia) were net sellers of US securities, each losing around $28 billion respectively.

Despite all of the selling, the tiny nation of Belgium have quickly become the third largest buyer of US Treasuries. It’s really puzzling because the GDP of that economy is $501.8 billion, with the nation holding a total of $348.1 billion in US Securities. This means that the nation is holding at least 70% of its GDP on debt. Belgium clearly handles buying and selling of US bonds for governments around the world, but it isn’t legally bond by the US treasury department during those trades. Whoever, whatever, is using Belgium as a proxy (my guess would be Russia), it has been dumping lots of long-term securities on their behalf.

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