R-uh, R-oh: TIC data disappoints
* Total foreign purchases of U.S. stocks, Treasury debt, and other bonds plunged to a net $15.6 billion in December from $84.9 billion in November. Forecasters were looking for $60 billion in net purchases.
* A broader measure of international money flows looked even worse -- it FELL by a net $11 billion, vs. expectations for a gain of $70 billion.
* Foreign private buyers were much, much less active buying our assets, while foreign official buyers (central bankers) picked up the pace from November.
* By country, Japanese holdings of U.S. Treasuries rose $6.9 billion, Chinese holdings rose $3.1 billion, and U.K. holdings jumped for a second straight month -- gaining $16.5 billion. There was big selling in the Caribbean region (that's a sign of hedge fund activity, since many operate via offshore banks located there). Other sellers included some smaller countries in Europe, like Switzerland, Ireland, and Italy.
As you might expect, the dollar is getting whacked on the news. Bonds are popping. The pattern lately has been for these two markets to trade inversely -- i.e. when bonds rally in price, the dollar falls in value.