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The New York Times reports (and Yahoo! News repeats without any paywall) that the government of Saudi Arabia is threatening to sell $750 billion in treasury securities and other unidentified assets if Congress passes the Justice Against Sponsors of Terrorism Act. The bill would allow foreign governments to be sued by 9/11 victims and their families. The threat was issued by Saudi Arabian foreign minister Adel al-Jubeir to unnamed US lawmakers while he was visiting Washington sometime last month, on the grounds that these assets could be in danger of being frozen by US courts.
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Saudi Arabia Threatens to Sell $750 Billion in US Assets If 9/11 Bill Passes
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New crypt. See /usr/news/crypt.
(Score: 5, Insightful) by Non Sequor on Sunday April 17 2016, @02:15AM
Here's the thing, if they actually tried to move all of their treasury bonds there would be enough buyers to prevent a drastic drop in price/spike in interest rates. Any investor holding corporate bonds or anything else that typically trades in lock step with treasury bonds would be foolish not to sell their corporate bonds and buy treasuries when a major asset holder is offloading them. If there are more sellers than buyers in the market for treasuries, the yield on them goes up. If that yield goes over the yield on corporate bonds, then you can get a safer asset than you're currently holding with the same return by selling your corporate bonds and buying treasuries.
Not to mention that if Saudi Arabia sells $750b in assets, they have to buy $750b of something else (even if it's just currency that they buy). More than likely they would be buying the same assets that other people would be selling to buy treasuries.
Write your congressman. Tell him he sucks.