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Most issues that get referred to as clickbait should not. This publish is.
Right here’s our excuse. Financial institution of America’s funding technique desk right this moment revealed an enormous notice through which Michael Hartnett and crew put some dimension and scope on the worldwide securities markets. The information it offers doesn’t have a lot information worth, however does assist broaden the sum of human data, and by sharing it right here we are able to in all probability harvest some search visitors.
So, for the good thing about 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 the entire shares and bonds globally?
A. $255tn as of July 2024, which is an all-time excessive. For the reason that 2008 low of $104tn the worth of world shares and bonds has risen 2.5 occasions, 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 accomplished 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 a few occasions world GDP. If S&P did credit score rankings for planets then Earth would in all probability 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 thing else, BofA says. In 2008, US Treasuries have been simply 28 per cent of the worldwide whole. Now it’s 44 per cent:
Q. Has world family and company debt grown at an analogous tempo to authorities borrowing?
A. Company borrowing has. Family borrowing has not.
Q. Is there a approach 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 practically 40 per cent in 2008.
Q. Does the mixed worth of Wall Road exceed the worth of Essential Road?
A. Sure. Very a lot so. The “Wall Street” chart under contains every thing apart 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 occasions US GDP. The regular rise because the 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 progress 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. Positive, why not.
All questions might be directed to BofA, whose analysis that is. Due to Hartnett et al, and because of you, for the press.
