Foreign Investors Undaunted by Prolonged Dollar Weakness(US assets on sale

[papau]

http://www.latimes.com/business/la-fi-foreign19jan19.story
Foreign Investors Undaunted by Prolonged Dollar Weakness
They bought a net $81 billion in U.S. stocks and bonds in November, a report says.
By Tom Petruno
Times Staff Writer

January 19, 2005

The sinking U.S. dollar was supposed to scare foreign investors away from U.S. assets. Instead, it may have whetted their appetite for more slices of the American pie.

Foreigners pumped a net $81 billion into U.S. stocks and bonds in November, up from $48.3 billion in October and the most since June, the Treasury Department said in a report Tuesday.

The wave of buying came as the dollar was falling further against the euro and other key currencies. The greenback's slide sparked widespread hand-wringing that the huge U.S. budget and trade deficits were causing overseas investors to abandon U.S. assets.

Instead, the Treasury's data suggest that the weaker dollar encouraged foreigners to view American securities as being on sale, some analysts said. As the dollar falls, U.S. assets become cheaper for overseas buyers.

Foreigners' net purchases of U.S. stocks totaled $14.5 billion in November, the most since May 2001, the Treasury report said.<snip>

[On the Road]

1. I Never Thought of This

but if you're a foreign entity not wanting to abandon the dollar, it mayu be tempting to stop buying dollars and start buying dollar-denominated stocks, which have a better chance of appreciation. That's the best guess I can make on why the stock market continues to defy gravity.

[papau]

2. The US is on sale - 15% off all assets!

it is great to have a falling dollar!

:-)

[On the Road]

3. Sure, As Long as You've Got a Big Pot of a Strong Currency

This weak dollar policy sucks for all of us who have nothing but US currency.

[DaedelusNemo]

4. Sure, as long as it doesn't eventually fall out the bottom... /nt