ContraryInvestor.com has performed an excellent analysis of foreign investment trends in the US. The data shows that it has recently dropped. The article attributes the drop to a loss of confidence in the US financial markets. I believe that this is correct.
Another potential factor is a fear in Muslim countries that their investments in the US would be seized in the event of a suspended Constitution. Wall Street would see this as bad. I see it as healthy.
http://www.contraryinvestor.com/mo.htm
Wednesday, May 7, 2008
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