Amidst all the voyeuristic glee apparent in some market commentaries when the talk turns to the Arab world the real action is in Asia.
Words like inexorable and relentless come to mind when thinking about the latter, not the former,
From Real Time Economics:
A major upward revision of the U.S. Treasury Department‘s assessment of China’s holdings of U.S. securities last year shows the U.S. is far more indebted to the emerging power than originally thought.
Treasury’s preliminary report of foreign holdings of securities is based on better data than its first estimate posted last year, helping to paint a more accurate picture of foreign purchases or sales of U.S. assets. The data are likely to prove fodder for many analysts who have suspected that China has been routing a significant portion of its purchases of U.S. Treasury securities through other major financial centers such as London to play down its debt profile in the U.S., a politically sensitive subject in Washington.
China’s holdings in the month of June 2010 were revised up 32%, around $268 billion, from the previous estimate to $1.112 trillion. The U.K., however, saw a downward revision of almost the exact amount, to $94.5 billion from a previous estimate of $363.7 billion.
Treasury used the revised assessment to help inform a new baseline for the following months, so the department also revised upward its estimate of December holdings by China. Last month, Treasury reported that the biggest buyer of U.S. debt held $891.6 billion at the end of 2010. But now, Treasury says China held $1.160 trillion in Treasury securities such as agency debt, bonds and notes.
“It certainly suggests the Chinese are not divesting, or apt to divest, from the U.S. as they earlier asserted,” said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. “The Chinese position is perhaps more reflective of the status quo than following through on their commitment to rebalance their forex reserves,” he said.,,,MORE