A sensible response, indeed. Investing is about finding the right balance of risk vs reward. When a country becomes less reliable, it becomes a less attractive investment, until the interest they pay rises enough to compensate for the additional risk.
> "The decision is rooted in the poor U.S. government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management," Investment Director Anders Schelde said in a written statement.
Not a political decision. Still a bad sign for the US, but not really unexpected.
This divestment is so little and with so little aim.
The whole situation is been caused by a single guy and 400 enablers, whereas the US is a 400 million people country.
The correct form of reaction is a punch in the face during a bilateral meeting, Zelensky came close to doing it but unfortunately he resisted his impulse , that's where the epicenter of all newly generated global problems in the last 10 years lies, in that octogenarian brian of his.
It's symbolism. But it's important symbolism. Far more notable, I think, is Macron saying this morning that Europe needs more investment from China. Canada signing a deal with China to allow their cars to be sold in the country.
It's all a sliding slope until it reaches a breaking point and falls off like a cliff.
EDIT: to quote the Canadian PN earlier today:
“American hegemony in particular helped provide public goods, a stable financial system... this bargain no longer works. Let me be direct. We are in the midst of a rupture, not a transition... recently, great powers have begun using economic integration as a weapon. Tariffs as leverage ..."
Ah no... this is people's money, and they likely came to conclusion the US bonds are inconsistent with the funds goals and risk appetite. Within the first few paragraphs of the article you see this:
> The decision is rooted in the poor U.S. government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management
If you're dealing with peoples pensions, even if there are higher growth portion of the funds allocation, you've got to make sure there are portions of the fund that's stable enough to be regularly liquidated to send out regular payments.
Given the whole hoo-ha with trump trying appoint their own guy into the federal reserve, it isn't that surprising the fund managers have decided to decrease their allocation.
The deliberate push to alienate allies pushing them to the other pole (China), is setting up the stage for confrontation. It can then become self-evident China is out to eat the USs lunch so they need to be dealt with. And all the years of China this, China that, will become true and it will be much more palatable to go hot over China or anything else. China will become the new defacto evil empire and everyone in the US will nod in agreement and decide it's time to do something about it. It's gaslighting at a global scale and it's working fine. Probably something like 2027. I don't know if those Macron messages are real but in Europe we are cooked because it's okay to not want global domination, but it's bad when you're being manipulated and you don't even realize why.
Someone should tell the orange guy that we can also stop respecting our obligations. It’s a two way street. It would be a shame if something happened to your ITAR-protected secrets, for example. The US would lose a lot of leverage if they cannot use European military bases. Let’s see how fast Trump goes to bed with Putin…
I personally have dumped every single US security I held in the last 2 years, US bonds have been the latest to go in the last week.
Mind you I'm a small investor (my portfolio is 100k-ish euros). I'm still exposed to US securities through ETFs though, as I have 3 different ones holding US companies, but that I ain't gonna sell them.
But for new capital I may as well provide it to others.
“I’m a real estate developer, I look at a corner, I say, ‘I’ve got to get that store for the building that I’m building,’ etc. It’s not that different. I love maps. And I always said: ‘Look at the size of this. It’s massive. That should be part of the United States.’”
For context foreign total holdings are around 9T and domestic around 30T. Uk and japan are the largest foreign holders at around 1.7T between them. This is a 100M divestment.
Side topic: I absolutely hate these large “Allow Ads” screen - you can’t even go back on iPhone Safari , which hides the interface unless the user pulls down the whole page - which you can’t because you can only pull down the Allow Ads page.
It's not like the EU can go to China for the $64 to $94bn in mineral fuels and oils (LNG, crude oil) they import from the U.S. Or the aerospace products and parts $35-46bn they import. Or the $45-$52bn in pharmaceuticals and medicines and advanced biologics (unless they go all in on generics, but this is only part of that sum). The list goes on and on. Germany trying to reboot their nuclear energy infrastructure, but it's a bit too late to help this winter, and they're the third largest consumer in the world after the US and and China. India is 8th.
The US imports a lot from Mexico, 15.5% of the total $3.36 trillion of US import, right here in the Americas. The EU about imports are about 18.5%.
Merz's mother-of-all-deals needs to have India lower its imposed tariffs on Germany of 100-150% on autos, which would cut against India if the new FTA goes through by Q2 2026.
May you live in interesting times is a wish or curse coming to fruition...
This sundering of US-European relationship feels like watching a trainwreck in slowmotion. It's all so stupid and avoidable. Is there really nothing that can be done?
Feels like the right direction, pull all European money from the US, hope that financial and economical consequences convince US citizens to deal with their president as he deserves. It will decrease profits short term but certainly will have less negative impact than letting that guy in power.
Keep in mind that there are many such 10 to 100 billion funds and they can move very fast if they have to. If the feeling is that the value of the USD is going to be lower in the near future they will divest and before you know it the threat becomes reality simply because it is predicated on a belief. Kill the belief and the actions will follow automatically. This could be the first and it could be the only or it could be the first of many.
42 comments
[ 4.7 ms ] story [ 55.9 ms ] threadEdit: Yes, I am being sarcastic.
Is that a lot? Seems relatively inconsequential in the grand scheme of things, but perhaps a warning of larger moves to come.
Nobody is reducing spending and delivery continues to go down.
Not a political decision. Still a bad sign for the US, but not really unexpected.
The whole situation is been caused by a single guy and 400 enablers, whereas the US is a 400 million people country.
The correct form of reaction is a punch in the face during a bilateral meeting, Zelensky came close to doing it but unfortunately he resisted his impulse , that's where the epicenter of all newly generated global problems in the last 10 years lies, in that octogenarian brian of his.
- 9/11
- Iraq War
- Covid
The US did recover a bit deficit-wise in Obama years, but have not reset the fiscal picture from Covid.
https://fred.stlouisfed.org/series/FYFSD
The further we get away from that being true, the more precarious things become.
It's all a sliding slope until it reaches a breaking point and falls off like a cliff.
EDIT: to quote the Canadian PN earlier today:
“American hegemony in particular helped provide public goods, a stable financial system... this bargain no longer works. Let me be direct. We are in the midst of a rupture, not a transition... recently, great powers have begun using economic integration as a weapon. Tariffs as leverage ..."
Ah no... this is people's money, and they likely came to conclusion the US bonds are inconsistent with the funds goals and risk appetite. Within the first few paragraphs of the article you see this:
> The decision is rooted in the poor U.S. government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management
If you're dealing with peoples pensions, even if there are higher growth portion of the funds allocation, you've got to make sure there are portions of the fund that's stable enough to be regularly liquidated to send out regular payments.
Given the whole hoo-ha with trump trying appoint their own guy into the federal reserve, it isn't that surprising the fund managers have decided to decrease their allocation.
Without the G7 piling up dollars, there is no American exceptionalism.
Mind you I'm a small investor (my portfolio is 100k-ish euros). I'm still exposed to US securities through ETFs though, as I have 3 different ones holding US companies, but that I ain't gonna sell them.
But for new capital I may as well provide it to others.
“I’m a real estate developer, I look at a corner, I say, ‘I’ve got to get that store for the building that I’m building,’ etc. It’s not that different. I love maps. And I always said: ‘Look at the size of this. It’s massive. That should be part of the United States.’”
Source: https://www.nytimes.com/2026/01/20/us/politics/trump-greenla...
But that's just American hedge funds playing in an unregulated country so you could call that domestic as well
The US imports a lot from Mexico, 15.5% of the total $3.36 trillion of US import, right here in the Americas. The EU about imports are about 18.5%.
Merz's mother-of-all-deals needs to have India lower its imposed tariffs on Germany of 100-150% on autos, which would cut against India if the new FTA goes through by Q2 2026.
May you live in interesting times is a wish or curse coming to fruition...