Foreign Purchases Of US Securities Drop To New Post-Lehman Low

Tyler Durden's picture


While the domestic euphoria in the stock market bubble has succeeded to sucker in everyone into the biggest multiple expansion rally in 15 years (as was noted earlier today, 75% of the S&P's YTD return has come from its trailing PE expanding to 16.5x now from 13.7x in 2012 - the largest increase since 1998), foreigners continue to vote with their feet. In fact, as today's August TIC data report showed, in August - perhaps due to Tapering fears - foreigners sold $16.9 billion in US equities. This was the fourth largest equity outflow in history. Transactions in other securities were mixed, with $10.8 billion in long-term Treasury sales offset by $16.8 billion in MBS/agency purchases, as well as $2.3 bilion in Corporate Bond buys.


How does this chart look on a trailing 12 month basis? Not good - the 12 month rolling average of net foreign purchases of Long-Term US securities dropped to just $17 billion from $25 billion last month. This is also the lowest average print since the 2009 recession.

Source: TIC

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Mon, 11/18/2013 - 11:24 | 4165145 ParkAveFlasher
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Mon, 11/18/2013 - 11:27 | 4165150 macholatte
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During the past decade, the region added 21,000 households in the nation's top 1 percent. No other metro area came close.

Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation, political scientist Lee Drutman notes in a forthcoming book, "The Business of America Is Lobbying."

D.C. awash in contracts, lobbying wealth

Mon, 11/18/2013 - 11:27 | 4165155 Stuart
Stuart's picture

Maybe they're finally waking up they've been buying nothing but monopoly money.   

Mon, 11/18/2013 - 11:28 | 4165162 CPL
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Mon, 11/18/2013 - 11:43 | 4165216 Sofa King Confused
Sofa King Confused's picture

Need more QE for lack of foreign buyers.

Mon, 11/18/2013 - 11:50 | 4165231 dryam
dryam's picture

It just hit me that it's curious that paper wealth is termed "Securities" implying that somehow they are secure like gold or some other tangible product in your hand or in your physical possession.

Mon, 11/18/2013 - 12:09 | 4165305 CPL
CPL's picture

Yeah it's marketing crap.  A fluffy term to usually indicate the opposite reality of what's being purchased.  Same people tell the world that a house is an investment, instead of what a house really is.  A box with a roof to keep your stuff in that you throw money and time at to keep maintained.

The world is so assbackwards because of spin no one knows if they are coming or going when they reach for the wallet or use their own time on something.  Kind of sad fully grown, rational, educated adults get tricked by it every second of everyday of every year for 100 years until they've forgotten what a real, fair and balanced offer looks like.

Mon, 11/18/2013 - 12:28 | 4165385 SafelyGraze
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this article serves as a reminder of one more benefit that will result from a central, global authority for investments

such an authority will be able to maintain stability in various markets

such as "foreign" "investment" in "us" "markets"

a system of fair and rational allocation of liquid assets, administered by experts

that way, no one has to worry about the performance of any particular sector


Mon, 11/18/2013 - 13:52 | 4165723 CPL
CPL's picture

Using the barrel of a gun or a bag of ideas to pick through so everyone has an idea of what's presented? 

Too many closed doors on actions that effect so many, when using a 'central' authority it's typical it's abused and collusion occurs. 

When someone is sitting in those rooms and they are supposed to be acting on behalf of sense and the people that trust them to deliver something fair...just look at Nigel in the EU.  The man is a tiger and it always looks like he's roaring at a room of stunned cattle.  Whole room of bored rich folks put in those chairs by family ties that neither provide guidance, motivation or a fair offer for anyone but the people sitting in the room.  Round tables need to include all parties effected if discussing resource allocation and distribution if you want a world of 7.2 billion to move.

Everyone needs to have skin in the game and if they fail, it's got to cost them something even if it's a piece of mind.  It can't operate the way it has, literally people avoid their responsibilties to the role given.  Public service is exactly that.  Service to the public.  Elected, nominated or applying like everyone else.  It's a position that should reflect public champions and the best options for the position, at that time because times change.  Either by technology or process or actions.  That's all based on merit with a public's adoption of what they would like their government to do.

Governance comes with rewards of making the place that person lives a better place for the people living there, but it's also full of annoyances.  It's the cost of self-rule and the edge is so fine you could slice an electron on it.  Right now, there are so many interesting perspectives out there from all over the place and complimentary technology...everything is here now to do it without a gun and focus on the quorum aspect.  Won't change people arguing about things, but it's a better idea than what's going on now.  No one is happy and it's a mess.

Mon, 11/18/2013 - 12:11 | 4165314 CPL
CPL's picture

That's already been the case for 6 years.  Steam rolled as soon as South Korea pounded on the sell button a while back.  They made out well on it.  The rest of the bag holders are learning though that you don't want to be the last guy at the table enamored with a bag of paper and nothing to show for it.

Mon, 11/18/2013 - 14:12 | 4165843 kralizec
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Progressives - Spend, Spend!, SPEND!!

Fed - Monetize, Monetize!, MONETIZE!!  Print, Print! PRINT!!

Fiat - POOF!!!

Mon, 11/18/2013 - 11:35 | 4165183 tvdog
tvdog's picture

The real money in Washington is the MIC contract money. Washington is the richest metropolitan area in the U.S. by far, with nearly twice the per capita income of the next wealthiest city.

Mon, 11/18/2013 - 11:40 | 4165200 LawsofPhysics
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I think I see the problem.  Better hope all the SNAP, medicare, medicaid, and social security recipients in the rest of the country are not well-armed.  I don't know if I'd take that bet.


hedge accordingly.

Mon, 11/18/2013 - 11:53 | 4165245 forwardho
forwardho's picture

Much has changed in the last 5 yrs.

Used to be, God willing and the dam don't break.

Now its, God help us if the EBT cards fail.

hedge accordingly indeed.

Mon, 11/18/2013 - 12:03 | 4165278 LawsofPhysics
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Humanity has been here before.  Eventually the commodity producers can't make ends meet (just look at how the miners have been decimated).  Once the farmers start shutting down and the food cannot be delivered at any "price", then and only then will shit "get real".  I'll keep buying and stacking on the dips, and wait.  My tribe is ready, I know that eventually the kleptocrats in D.C. and wall street will make the whole farming thing unprofitable, our margins are already razor thin as it is.  The EBT cards won't actually fail, you simply won't be able to buy shit with the fiat that is on them.

Mon, 11/18/2013 - 11:25 | 4165147 FieldingMellish
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Between the Fed, the NSA and FASB, I can't see why anyone would want a piece of this rotten pie.

Mon, 11/18/2013 - 11:25 | 4165148 Sudden Debt
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and the FED is always the highest bidder... it's their home turf so to speak...

Mon, 11/18/2013 - 11:28 | 4165157 ...out of space
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chinese need money to buy  BTC

Mon, 11/18/2013 - 11:28 | 4165158 Sufiy
Sufiy's picture

here where the money goes now in China:


RJ Wilcox: China’s Central Bank Gold Reserves are Growing Rapidly 

 We are monitoring the situation with Gold demand from China as it is the main driver for the Gold market now. So far this demand has backed Gold to withstand the numerous attacks in the paper market to allow Janet Yellen to implement even more aggressive easing polices at the FED.    Rising Gold price indicates FIAT currency debasement, pushes real interests up, which economy and fiscal budget can not sustain at the moment. These official Gold holdings numbers are already out of date and the question is how much Gold China really already holds now and you can add to it the state level encouragement for citizens to accumulate Gold in China.

Mon, 11/18/2013 - 11:28 | 4165160 Max Damage
Max Damage's picture

Print MOAR, buy MOAR, Short gold MOAR, Hitler came to power on the back of this sort of theft........Goldman, Bernanke, Yellen, etc, etc...They give the Jewish a bad name, and exemplify the stereotypes

Mon, 11/18/2013 - 11:29 | 4165163 Occident Mortal
Occident Mortal's picture

It's called de-Americanization and it's real.

Mon, 11/18/2013 - 11:38 | 4165195 CheapBastard
CheapBastard's picture

First Rats off the ship swim the farthest.

Mon, 11/18/2013 - 11:39 | 4165198 Max Damage
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Or fill the sharks bellies

Mon, 11/18/2013 - 12:06 | 4165294 Atomizer
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It’s called tranches, unfortunately you don’t qualify for any slice of the pie. The fraud continues by means of the Media..

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Mon, 11/18/2013 - 11:32 | 4165171 tvdog
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$10.8 billion in long-term Treasury sales offset by $16.8 billion in MBS purchases

Foreigners are buying U.S. mortgage-backed securities? Really? That didn't work out so well for them last time ...

Mon, 11/18/2013 - 11:35 | 4165184 Al Huxley
Al Huxley's picture

...and look what happened after the low in 2009.  Stupid fucking foreigners, probably they believe all the 'taper' bullshit the FED throws out to maintain their credibility (guess it's having the desired effect in that respect).

Mon, 11/18/2013 - 11:40 | 4165199 OwnSilverPlayMusic
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Welcome to full retard

Mon, 11/18/2013 - 11:42 | 4165209 forwardho
forwardho's picture

Guess that whole "Full faith and credit" thingy is wearing kinda thin.

Mon, 11/18/2013 - 11:42 | 4165210 MFLTucson
MFLTucson's picture

Does this mean another 1000 points on the Dow?  What a sham!

Mon, 11/18/2013 - 11:55 | 4165253 Carl Popper
Carl Popper's picture

It probably does.

Retail and foriegn purchases often are contrarian indicators.

I am firmly convinced this is not a distribution top but a consolidation.

Full retard until january. Then reassess the data.

Mon, 11/18/2013 - 12:04 | 4165284 Al Huxley
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No, not at all.  It means another 1000 on the S&P.

Mon, 11/18/2013 - 11:44 | 4165217 Atomizer
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Wrap all the debt chaos into a SIV [Special Investment Vehicle] and begin the Global auctioning process. They say, there’s a sucker born every day.


Mon, 11/18/2013 - 13:59 | 4165227 Ham-bone
Ham-bone's picture

Tylers - WTF???

not sure why we are talking about Aug data when today Sept data was released completely to the contrary of this stories premise???

Treasury International Capital Data for September


Page Content

?WASHINGTON – The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for September 2013.  The next release, which will report on data for October 2013, is scheduled for December 16, 2013.


$12.5 B in equity inflows and $28 B in Treasury inflows in September.  Foreign held Treasuries (Notes/ Bonds) are flat for inflows for the year...(unless I'm reading the data all wrong)...Foreign held securities are negative $25 B/yr

TIC shows no significant foreigners are selling Treasury debt and maintaining their $5 T + in Notes/Bonds...simply not much left to buy due to Fed's $45 B untapered QE coupled w/ lower Treasury issuance...Foreigners maintaining over 50% of all Treasury debt (notes/ bonds) compared to the Fed's 20% (both about record highs)  (foreign record holdings of all Treasury debt was last March @ $5.721 T and now @ $5.653 T)

Mon, 11/18/2013 - 11:57 | 4165266 q99x2
q99x2's picture

Who needs them. I've been lending money to myself since I was born and I'm doing fine.

Mon, 11/18/2013 - 11:59 | 4165268 JailBank
JailBank's picture

Why would we need forigners to buy stocks? We have the FED and JPM.

Mon, 11/18/2013 - 12:04 | 4165283 LawsofPhysics
LawsofPhysics's picture

Indeed, JPM is the Fed. 

Mon, 11/18/2013 - 12:14 | 4165330 Atomizer
Mon, 11/18/2013 - 12:09 | 4165308 yogibear
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The US fed is owining everything. The stock market, Treasury debt,the housing industry, all courtesy from infinite Fed money.

Only thing that stops the US fed is a US dollar free-fall, which impoverishes the 99%. Instant riots/civil unrest. 

Mon, 11/18/2013 - 12:11 | 4165319 youngman
youngman's picture

I bet a part of this is the problem with the NSA spying on everyone...and they don´t like that

Mon, 11/18/2013 - 12:29 | 4165388 venturen
venturen's picture

We don't need foriegner we are just going to print our way to prosperity with crooked bankers leanding the way!

Mon, 11/18/2013 - 12:40 | 4165436 Mitch Comestein
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This chart tells me that stocks are going higher.  I say this when I hardly own any.  When the black line is at the top of the range I suppose I would worry.

Mon, 11/18/2013 - 13:44 | 4165715 dcj98gst
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Who needs them.  Our central bank can out print their central bank ALL DAY.  That is why we are rich, we can print more.  See so simple.

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