'Foreign investors abandon U.S. assets
Reuters News Agency
October 17, 2007
NEW YORK -- 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 yesterday.
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."'
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