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Category: Foreign Investors

This category includes articles about the flow of investment from one country to another, either as portfolio investment, short-term instruments, or direct long-term investment.

Deficit spending

Foreigners shun US financial assets

Foreign flows down 99.2%

Foreign flows into US debt markets is down 99.2% from 2006 levels.

In reaction to the profligate behavior of the Pelosi-Reid Congress, foreigners have been moving from financial securities and bank deposits into direct investments and miscellaneous assets, such as real estate.

Continued deficit spending by the Obama administration should drive foreigners to seek safer, non-dollar havens.

The decline of the dollar

Will China become America’s landlord?

Pudong District, Shanghai, China

Foreigners hold $16.9 trillion in dollar financial assets, accumulated through years of selling goods and services to the US. Profligate deficit spending by the Pelosi-Reid Congress increases the probability of dollar inflation.

If foreign governments were to convert their holdings of dollar financial assets into non-financial assets, like US REITs, they can guard against dollar inflation. They might also gain a position that, in the extreme, would be against US national security interests.

World economy

Signs of US losing its groove?

The end of the American Century?

Thirty years ago, about the time the world went off the gold standard, US income from abroad was more than double the amount of income that the US paid to the rest of the world.

This surplus of investment income from abroad has been gradually diminishing. This year, or the next, this foreign income surplus may disappear forever. Does this mean that the US is ‘losing its groove’?

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Featured articles on inside pages

Stock buybacks

The Stock Buyback Era evaluated

The buyback era began when the SEC allowed issuers to manipulate prices to give value to executive options. Stock buybacks since 1982, in 2008 dollars, total $5.77 trillion. More ...

Securities Analysis

Jeff Skilling explains US corporate ethics

Unfortunately for society, Jeff Skilling of Enron told the truth according to tenets of moral relativism learned at the Harvard Business School and with McKinsey and Company, when, on being sentenced to decades in prison, he said, "That's the way the game is played. You win some, you lose some."
More ...

US Politics

The decline of mainstream media

In September 2009, President Obama dominated television in his attempt to sell his government-run health plan, despite massive public opposition. Mainstream media has falling revenues and market share as people turn to unbiased sources. More ...

US equities

Sarbanes-Oxley and the shortage of equities

The Sarbanes-Oxley Act of 2002, by discouraging companies to go public, will exacerbate the shortage of equities, with a negative effect on the US stock market, although this was not the intent of its authors. Poorly drafted, ill-conceived, and unfair this law does little to protect investors.
More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Working off the US trade deficit

Foreigners hold $16.8 trillion in US financial assets as a result of selling more goods to Americans than they buy from them. Since the 'deficit' is in dollars, the US has no problem in 'paying it off'. More ...

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2010-08-11 16:03