Taiwan Insurance Companies Told to Cut Down on Fannie and Freddie Debt

The Boston Globe reports:

Amid all the coverage of Barack Obama's victory, this week's financial pages contained some disquieting news from Taiwan. Financial regulators there ordered the country's insurance companies to cut their holdings of bonds issued by Fannie Mae and Freddie Mac - even though these bonds are effectively guaranteed by the US government.

At $278 billion, Taiwan's foreign exchange reserves are the fifth largest in the world, after China, Japan, Russia, and India. At last count, the country held $88 billion of US government and agency securities, making it one of our largest official creditors. So, if the Taiwanese are getting nervous about our credit, how much longer can we go on spending freely and assuming that foreigners will buy up US bonds to pay for it?

You'll want to read the whole article.