Odds & Ends

Its interesting when one of our past discussions comes back around again. Here’s some odds and ends that are just now heating up in the Mainstream Media.

Readers of this blog should recognize them these topics:

Iger’s to-do list: 1. Sign up Pixar
our discussion:  Pixar to Disney: Buh-Bye !

 New Dr. Who Leaked on Purpose?
our discussion:   Was U2’s P2P release a Marketing Ploy?

Pretenders inducted into R&R Hall of Fame

our discussion: A Different Kind of Top 10 Music List For 2004 (Loose Screw)

Who Will Free Fiona Apple?

our discussion: Incredible Machine

There may be others — but it was weird yesterday, running into 4 of these in a row  . . .

Now that I’ve patted myself on the back, let’s look at one I got wrong/missed: 

I had previously noted that overseas net purchases of U.S. securities totaling $91.5 billion in
January, and that was a positive. While that headline may be technically true, drilling below reveals something more troublesome:

The troubling news was that 41 percent of the buying came from Caribbean countries, with much of that from hedge funds based there. The funds could easily reverse their positions and sharply lower the flow of money into the United States in the months ahead.

This possibility appeared to have been partly responsible for the drop in Treasury prices yesterday and the rise in yields. The dollar also slipped against the yen, falling to 104.45, from 104.93 Monday.

Another surprise in the Treasury Department data was that American purchases of foreign stocks and bonds nearly ground to a halt. Because the purchases are counted as an outflow, the slowdown was the other reason net inflows were so big. Like hedge fund flows, this trend could also reverse quickly.

I suspect that this info was at least as much responsible for yesterday’s sell off as was GM’s preannouncement.

It always pays to go beyond the headline and read the actual data  . . .


Foreign Capital Inflows Rise (But Read the Small Print)
NYT,  March 16, 2005

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  1. dsquared commented on Mar 17

    The funds could easily reverse their positions and sharply lower the flow of money into the United States

    Ach, I hate it when journalists don’t keep this one straight in their head. What would lower the flow of money into the United States would be if the hedge funds[1] failed to repeat their purchases next month; if they just sat on the bonds, the inflow would be that much lower. If they reversed their provisions, then that would create an outflow (assuming they sold to US residents, which is probably the wrong assumption)

    [1] and insurance companies and leasing companies, which are the other big financial players who often base out of the Caribbean.

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