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Foreigners sold $89 billion in U.S. securities in the final quarter of 2008, the largest quarterly pull-back since 1960

WASHINGTON, Jan. 5 (UPI) -- The global economic slowdown has reversed the current of capital investment from abroad, resulting in a sell-off of U.S. securities, an ecomonist says.

Foreigners sold $89 billion in U.S. securities in the final quarter of 2008, the largest quarterly pull-back since 1960, when the government first began tracking the figure, USA Today reported Monday.

For much the same reason, economist Adam Posen of the Peterson Institute said, U.S. investors sold off $85 billion in foreign investments during the quarter.

"We had a global panic," Posen said. "Everyone is pulling their money home."

Companies that rely on foreign investment and emerging markets that lean heavily on financing from abroad, will feel the impact.

Banks have already felt the pinch. Foreign deposits in U.S. banks reached $79 billion in the first quarter of 2008. By the second quarter, however, the current had reversed, amounting to withdrawals of $256 billion and $147 billion in the second and third quarters, respectively.

http://www.upi.com/Business_News/2009/01/05/UPI_NewsTrack_Bu...

This contradicts what I've been hearing?