Did that ■■■■ just put a capital letter in the middle of a word…
4 Likes
Trump energizes right wing despots around the world.
The reflecting pool guy says he can handle it.
4 Likes
Capital flight is the rapid, large-scale exit of financial assets and money from a country. It happens when investors or residents lose confidence in a nation’s economy or fear that their wealth will lose value due to political or financial instability. … Just saying
Norway’s $2 trillion sovereign fund proposes deep cuts to US Treasury holdings
-
NBIM recommends cutting bond index’s government bond weighting to 50%
-
Changes would mean cutting nearly $80 billion from UST holdings, Reuters calculations show
-
Government bond markets spooked recently by rising inflation, government debt
LONDON, Sept 4 (Reuters) - The manager of Norway’s $2.3 trillion sovereign wealth fund has proposed significantly cutting its exposure to U.S. Treasuries as part of a wider shake-up of its bond investments to improve returns, according to a letter published this week.
Norges Bank Investment Management has recommended reducing its weighting to government bonds within its benchmark bond index to 50% from 70%, with U.S. Treasuries, the biggest holding, getting the biggest cut, according to the letter.
The changes would mean cutting nearly $80 billion from the fund’s current holdings of about $215 billion of U.S. Treasuries as of the end of June, according to Reuters calculations.
Government bond markets have been under pressure recently, with long-term borrowing costs soaring as rising inflation and government debt levels spooked investors.
Norway’s sovereign wealth fund, the world’s largest, owns on average 1.5% of all listed companies globally. Its scale means that portfolio decisions can influence broader market flows. Any cuts to its bond holdings are unlikely to be implemented until several months into 2027 at the earliest.
ANY CHANGES WOULD BE DONE GRADUALLY, NORGES IM SAYS
The letter containing the fund’s proposals was sent in response to questions from Norway’s finance ministry about the wealth fund’s investment strategy for bonds.
Norges Bank IM said it would await the ministry’s response, and any changes would be done gradually to limit market impact and transaction costs.
The proposals will form part of recommendations to the ministry in January. They will be discussed as part of the fund’s annual white paper process next spring, after which the ministry will make a final recommendation to parliament which will then hold a hearing, a Norges Bank IM spokesperson said.
“We recommend that the government subindex of the bond index be reduced from 70% to 50%,” Ida Wolden Bache, governor of Norges Bank, and Norges Bank IM CEO Nicolai Tangen wrote in the letter.
“A government share of 50% will be sufficient to cover the liquidity needs, including in periods of turbulence in financial markets.”
The fund also proposed considering an increase in investments in unlisted assets in a separate letter, in part as a way to reduce concentration risks that have grown in its equity portfolio amid the boom in the share prices of a handful of U.S. tech companies.
Under its current mandate the fund can own unlisted real estate and renewable energy assets, but it has a lower share of unlisted investments than comparable funds.
U.S. TREASURIES REDUCTION
Norges Bank IM said the biggest change to its bond index would be investing in more non-government debt, including mortgage-backed securities, to give it better diversification and exposure to risk premiums.
The spokesperson said total U.S. dollar exposure would remain around 50%, adding: “What changes is the mix inside the dollar market: less U.S. government debt, correspondingly more U.S. mortgage and government-related bonds.”
Under the proposals, the bond index weighting to U.S. government bonds would reduce from 34.1% to 21.9%, according to the letter, with the allocation to euro area debt falling more modestly from 16.8% to 14.1%.
The allocation to Japanese government bonds would increase from 4.6% to 7.4%, while the UK allocation would remain unchanged at 4.2%. The fund said the changes would align the index more closely with the broader market weightings.
While U.S. Treasuries exposure would fall, the proposed allocation to U.S. non-government debt would jump from 16.2% to 27.6%, meaning that the overall bond index’s weighting to the U.S. dollar would fall only slightly, from 52.9% to 52.5%.
Europe’s biggest pension fund, Dutch fund ABP, cut the value of its own U.S. Treasury holdings in the first quarter of this year, Reuters previously reported.
Reporting by Iain Withers and Tommy Reggiori Wilkes; Editing by Jan Harvey and Philippa Fletcher
4 Likes
Great jobs number just announced, breaking all estimates (except mine!) by double and triple - And you haven’t seen anything yet! EMPLOYERS ADDED 162,000 JOB IN AUGUST. Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago! A STRONG COUNTRY MEANS A LOWER INTEREST RATE - IT’S A BETTER CREDIT…Very simple! We should have the LOWEST RATE of any country in the World, like “the old days.” Without the United States agreeing to allow them their big surpluses, and we could stop that immediately, they would no longer be considered financially ELITE! LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged “the President” has an absolute right to do. IT’S BETTER THAN TARIFFS! The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen! President DONALD J. TRUMP
1 Like
10 Likes
As is usual with any President Cankles deal, his pronouncements are devoid of any reality surrounding the actual deal. Here is a bit more research from The Economist:
- It is misleading to say this deal doubles US oil reserves. Well, no it won’t.
- What the US is doing, via the Pentagon, it is taking a 35% stake in the parent company of a private oil producer, North American Blue Energy Partners (NABEP). The Venezuelan government has granted NABEP concessions over 14 oilfields, as well as three it already runs.
- According to the White house (?) : America will have the right to buy 20% of NABEP’s future production at cost, and will have first refusal for its remaining output.
- It will also have veto power over the appointment of any member of NABEP’s board of directors, the majority of whom must be US citizens.
- Trump administration says the contract will be for 100 years and bring in more than $200bn in royalties and tax revenue for the Venezuelan state. The Venezuelan regime says the deal runs for just 25 years.
- President Cankles is striking an agreement not with Venezuela, but rather its unelected leadership led by Ms Rodríguez. Her government was voted out by a thumping majority in 2024.
- The American government insists that the deal with NABEP will involve no investment of public money. It therefore falls to the company itself to raise the $100bn it says is needed to quintuple its oil production to one million barrels a day.
- Both the Trump administration and the Rodríguez regime perhaps now share an incentive to stall democracy, given the risk it presents to their mutually cosy arrangement.
The reality is more complicated. Significantly increasing production from Venezuela’s decrepit oil industry will take years. It is a rusting relic of what it once was after two decades of mismanagement and corruption under the administrations of the incompetent regime led by Mr Maduro and his predecessor, Hugo Chávez. “Venezuela will be completely irrelevant in terms of the global oil market price for the next year or so,” says Francisco Monaldi, a Venezuelan oil expert at the Baker Institute at Rice University in Houston.
5 Likes
no, 100 billion dollars
2 Likes
An historic day!
Australia didn’t vote with the USA.
Marles will be upset.
7 Likes
I’m no expert, but can’t you just make the map anyway?
Edite:
It looks pretty good TBH
7 Likes
I certainly wouldn’t recommend it.
1 Like
3 Likes
Lol. You give lake a bad name.
A bad name.
3 Likes
Someone had to sit on him while the vote was being counted.
And he immediately sent an apology to his puppet-masters.
1 Like
WTF - Australia is upside down.
2 Likes
Tassie on top!!!
6 Likes
