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Right here’s our excuse. Financial institution of America’s funding technique desk right this moment revealed a giant be aware by which Michael Hartnett and crew put some measurement and scope on the worldwide securities markets. The info it offers doesn’t have a lot information worth, however does assist increase the sum of human information, and by sharing it right here we will most likely harvest some search site visitors.
So, for the advantage of college students and journalists on deadline, LLM knowledge scrapers, argumentative folks on social media and our a number of valued advertisers, right here’s what BofA finds:
Q. What’s the worth of all the shares and bonds globally?
A. $255tn as of July 2024, which is an all-time excessive. Because the 2008 low of $104tn the worth of world shares and bonds has risen 2.5 instances, BoA says:
Q. Are bond markets greater than inventory markets?
A. Sure, however the hole has narrowed. Since 2008 worth of world equities has quadrupled whereas bonds have merely doubled, BofA says:
Q. Does the worth of world monetary belongings exceed world GDP?
A. Sure, simply, and it has achieved since 1992. The relative worth of securities peaked at 270 per cent of GDP in 2020 on Covid financial lockdowns and coverage stimulus, BofA finds:
Q. What’s the overall worth of world debt?
A. BofA says $313tn, which is equal to 3 instances world GDP. If S&P did credit score rankings for planets then Earth would most likely be on a BBB-, one notch above junk.
Q. How a lot of the worldwide bond market is government-issued?
A. Most of it. And with the US including roughly $1tn to borrowing each 100 days, Treasuries dwarf every little thing else, BofA says. In 2008, US Treasuries had been simply 28 per cent of the worldwide complete. Now it’s 44 per cent:
Q. Has world family and company debt grown at the same tempo to authorities borrowing?
A. Company borrowing has. Family borrowing has not.
Q. Is there a technique to illustrate in a single chart the worldwide financial system’s handbrake flip from financial coverage extra to fiscal extra?
A. Brrrrrr, says BofA:
Q. Do Individuals run the worldwide fairness market?
A. Sure, by a record-high quantity. In the meantime, Europe and Japan’s mixed share of world equities worth has halved from almost 40 per cent in 2008.
Q. Does the mixed worth of Wall Avenue exceed the worth of Primary Avenue?
A. Sure. Very a lot so. The “Wall Street” chart beneath consists of every little thing aside from actual property, that means money deposits, loans, personal fairness and pension fund reserves in addition to shares and bonds. Its present worth is slightly below the record-high ratio, hit in June 2021, of 6.3 instances US GDP. The regular rise for the reason that Nineteen Nineties “illustrates the ‘financialization’ of the US economy and [its] high degree of wealth inequality”, says BofA.
Q. How a lot of world equities are in rising markets?
A. A fifth by worth. Compared with how a lot different issues are in rising markets, that’s not a lot.
Q. How uncommon is the present degree of investor crowding into development shares?
A. Very uncommon for the US and pretty uncommon globally:
Q. Are US shares overvalued?
A. Dunno, however sure. They’re at an all-time excessive relative US authorities and company bonds (that are additionally at an all-time excessive relative to US authorities bonds). However whereas US authorities bonds dived relative to commodity costs from a post-war excessive in 2020, US shares have held pretty regular.
Q. Is that this good for bitcoin?
A. Certain, why not.
All questions could be directed to BofA, whose analysis that is. Due to Hartnett et al, and due to you, for the press.
