Looking at the graphs in the article, I don't think the overall picture supports the headline...

goobatrooba 7 hours ago | parent | next [-]

I think you might have misread the graphs as they clearly support the title. There are two types

One type (e.g. chart 1 and 4) showing the holdings by governments and central banks, which are clearly falling. The other shows holdings by foreign entities, which is also explained to include many US offshore funds and foreign subsidiaries, so actually still US entities that are holding these treasuries. Here the picture is more amorphous with overall foreign treasury holdings rising in the past years with a dip basically for a number of countries since last year for most countries.

I read it as clearly governments reducing treasuries with investors in some markets still absorbing some.

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thechao 11 hours ago | parent | prev [-]

Yeah. The headline is utterly divorced from the reality of the charts?

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iamnothere 11 hours ago | parent [-]

How so? Foreign official holdings are flat since 2012.

The headline specifically refers to central bank and government holdings.

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JumpCrisscross 10 hours ago | parent [-]

The only real dumping has happened from Japan, which is fighting to defend the yen, and China, which is obviously repositioning though to a way lesser degree than a nation dumping an adversary’s bonds would.

The story is just another way of saying we’re issuing more debt. Central banks aren’t reducing exposure. They just didn’t increase them with our own finances, which makes sense, our finances don’t increase their reserve requirements.

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iamnothere 10 hours ago | parent [-]

Holdings by France, Taiwan, and India have also decreased year over year. Based on the charts, it could be the start of a reversal, but charts are charts and we’ll just have to see.

Brazil is on a long term downtrend although they may be bottoming out.

Norway just proposed reducing bond holdings in its sovereign fund.

It’s not as clear cut as you’re making it out to be. I think the headline may be overstated, but the article does a reasonable job of making the point.

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JumpCrisscross 10 hours ago | parent [-]

> it could be the start of a reversal, but charts are charts and we’ll just have to see

This is the correct conclusion. Currently, there is no discernable signal. Given American politics, I'd be shocked if we didn't see folks trying to diversify central-bank holdings.

But as long as America runs a trade imbalance, we'll be dumping dollars abroad, and those dollars will work their ways into their countries' banking systems from which they'll work into their central banks, and unless their governments want to strengthen their currency (unlikely for an exporter), they're going to hold those dollars, and if you're holding dollars as an asset, holding the currency type versus the pays-a-yield type is just giving free money to Washington.

> Norway just proposed reducing bond holdings in its sovereign fund

That was explicitly a portfolio-weighting move. They're reducing buying of Treasuries in favour of higher-yielding agency bonds. Their total exposure to U.S. credit isn't being cut. It was just being re-weighted away from Treasuries at a time when they weren't yielding as much as they are now.

	▲	iamnothere 9 hours ago \| parent [-]
		All true and good clarification. There is definitely a phase shift happening that is worth paying attention to, but it’s not yet a crisis, and it may not precipitate one.