ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Tuesday, October 16, 2007

 

first sign of real foreign capital flight


uh oh

more from ft:

Until now, US policymakers have appeared relatively relaxed about the dollar's decline, since there has been little sign to date that this has been been triggered by a broader global aversion to US assets. However, that attitude could change if signs emerge in the coming months that non-US investors are becoming more nervous about holding dollar assets, as a result of the recent credit squeeze.


foreign holders bailed out of the united states in a huge way in august as dollar devaluation compounded asset deflation. note that august 2007 was the first month of significant net selling of dollar-denominated securities since 1995.

some rebound, as noted by kevin depew, is likely in september -- but this kind of flight from the dollar is deeply unnerving for a financial system that is heavily dependent on foreign credit. it could suggest a material tipping point is near.

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