Evidence of tighter financial conditions, Total Business borrowings slowed markedly. Yet percentage growth rates don’t do justice late in a Credit Cycle. 1.180 TN, almost the same as Q2. 210 billion) during Q3. 389 billion. Foreign U.S. 11.367TN) since the end of 2007. Treasuries finished the one fourth at 84% of GDP, up from 41% towards the end of ’07. And let’s not overlook the government-sponsored corporations (GSEs). 263 billion, or 3.0%, year over the past.
1.450TN y-o-y), or 128% of GDP. 95.057 TN. Total Securities finished the one fourth at an archive 460% of GDP. This compares to previous routine peaks 379% (Q3 ’07) and 359% (Q1 ’00). Securities market inflation continued to inflate Household Assets through the quarter, as the Bubble in Household Net Worth remains fundamental to the U.S.
8.810 TN (7.6%) within the last year. Still, most would dismissively ask, where’s the Bubble? 50 TN (85%) since the end of 2008, which certainly has backed elevated confidence, spending and economic activity. And it’s clear that booming securities marketplaces have been integral to the record expansion in Household recognized wealth.
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So, what have been the traveling forces behind bubbling marketplaces? Rest of World (ROW) holdings of U.S. 3.830 TN over seven quarters. 5.639 TN) to summarize 1999. Where in the world has all this “money” been via? ROW holdings of U.S. 13 billion. In contrast, ROW holdings of Total U.S. 3.225 TN in Q4 ’07). The jump in Equities holdings masks a pivotal slowdown in ROW buys of U.S. Debt Securities. Though purchases were positive during Q3, ROW holdings of U.S.
190 billion during the first three quarters of 2018. This contraction in ROW U.S. The y-t-d contraction in ROW U.S. 174 billion contraction in U.S. 348 billion in 2016. Indeed, ROW U.S. I would posit that tightening global financing – specifically, the de-risking/deleveraging dynamic that took hold in the speculator community – added to waning international demand for U.S. Corporate Bonds. At exactly the same time, EM outflows and pressure on EM central banks to aid faltering currencies led to sharply lower international demand for Treasuries (not forgetting geopolitical frictions). Overall, it factors for an important inflection point in international financial flows into U.S.
For much of the year, major flows into outperforming U.S. With U.S. equities succumbing to de-risking/deleveraging, marketplaces generally will now confront momentous changes in the liquidity backdrop. If the market liquidity environment has indeed transitioned, the lackluster growth in U.S. Bank or investment company credit now becomes a more pressing concern. 393 billion during Q3 (only two weaker quarters in the past five years).