Tuesday, January 20, 2009

More on South Korea and Treasuries

Went back and checked into the earlier story about the South Korean pension fund getting out of Treasuries. It is, to be sure, not a joke, and as the world's 5th largest pension fund ($166 bln recently), to be taken seriously. But the fund's manager has been a Treasury hawk throughout 2008, so it's not really news that he might want to sell. What doesn't make sense is why he'd want to talk it up if he's gonna sell.

And maybe, if we have to work harder to sell our debt, it will be a good thing. It will pressure the government to actually cut fat and become a more effective steward of it's debtholders' borrowed assets.

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