China Mortgage Bond Sales Probably Led Tumble in Foreign Holdings of Debt - Bloomberg: "The market has never seen such large declines in the foreign investors’ holdings of mortgage bonds guaranteed by government-supported Fannie Mae, Freddie Mac or federal agency Ginnie Mae, even when countries slashed their investments in corporate debt issued by the companies in the months before and after the U.S. seized Fannie Mae and Freddie Mac in 2008, Crandall said in a telephone interview.
Based on weekly averages, the investors’ combined holdings reached a record $984 billion in July 2008, before falling to $760 billion in November 2009, and then expanding back to $831 billion last month, the Fed data show.
China is “far and away the largest foreign investor” in agency mortgage bonds, so would have led the recent sales, Crandall said. The country held $358 billion of the debt as of June 2009. Japan was second, with $96 billion, according to the most-recent Treasury Department data cited by Crandall."