Foreigners boost buys of long-term U.S. securities: Treasury

NEW YORK (Reuters) - Foreigners increased purchases of long-dated U.S. securities, including government bonds, in March, the U.S. Treasury said on Tuesday, but lightened up on short-term assets such as bills.

Overseas investors bought a net $36.19 billion in long-term assets in March, above February's inflow of $10.14 billion. They increased Treasury holdings by $20.47 billion after buying a net $15.35 billion the prior month.

China, the largest foreign U.S. creditor increased its Treasury holdings to $1.170 trillion from a downwardly adjusted total of $1.155 trillion in February. Brazil increased its holdings by $9 billion to $237.4 billion.

"We are struck by the buying from Brazil, which we suspect is about intervention," said David Ader, head of government bond strategy at CRT Capital in Stamford, Connecticut.

Both Brazil and China regularly buy dollars in currency markets to prevent excessive appreciation of their own currencies and stash the money in U.S. government bonds.

Private overseas investors were actually net sellers of Treasuries in March, though they did snap up $2.25 billion of U.S. corporate debt. Official institutions such as central banks were modest net sellers of corporate debt to the tune of $425 million.

Including short-dated assets such as bills, however, foreigners unloaded $49.99 billion overall after having snapped up $92.65 billion in February, down from an initial estimate of $107.67 billion. March's net outflow was the biggest since July.

(Reporting By Steven C. Johnson; Editing by Chizu Nomiyama & Theodore d'Afflisio)

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U.S. sees long-term profit on financial rescue

WASHINGTON (Reuters) - The U.S. Treasury Department said on Friday that the many programs that it, the Federal Reserve and banking authorities implemented during the darkest hours of the 2007-2009 financial crisis likely will end up making a profit for taxpayers.

At a background presentation for reporters, a senior Treasury official who spoke on condition of anonymity said the department wanted to get word out about the success of the financial bailout before myths developed about it.

The senior official emphasized that rescue of the tottering financial system, which was on the verge of collapse in 2008, had been a bipartisan effort undertaken initially by the Bush administration and continued when President Barack Obama took office in 2009.

There were various pieces to the rescue that caused the Treasury to make investments in some big banks in return for bailout money, and they now are turning out to be profitable. The Fed is also remitting excess earnings from programs it ran to the Treasury.

Earlier this week, the Treasury scaled back the ultimate estimated cost of the centerpiece program, the Troubled Asset Relief Program, or TARP, to around $60 billion from a previous estimate of $68 billion.

It cited rising share prices for two of the companies it rescued, General Motors Co and American International Group. More than three years after TARP was launched, the government still has a 70 percent stake in AIG and a 26.5 percent holding in GM.

The senior Treasury official said it was important that future government officials have a clear picture of how the overall rescue program had worked in case they were confronted with a similar situation.

In response to questions, the senior official said he was confident that government officials had taken the right decisions in implementing the rescue and doubted that a much better outcome could have been achieved.

(Reporting By Glenn Somerville; Editing by Dan Grebler)

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