Wednesday, November 18, 2020

Liquid global bond and equity market cap now totals $160 trillion

There's a lot of wealth out there. The global market capitalization of large and liquid stocks and bonds has reached the impressive sum of almost $160 trillion. (Note that this number excludes the market cap of ETFs and ADRs, to avoid double-counting.) Since late 2003, when they first started keeping track of this, the annualized rate of growth of US and global equities has been approximately 7%, which is very much in the same ballpark as the long-term total annualized return rate of US equities (not counting dividends). Which is to say there is no prima facie evidence here of any equity "bubble." The world has prospered, and we are all richer and more prosperous.

Chart #1

Bank of America/Merrill Lynch publish extensive statistics covering global bond markets, which now total about $32 trillion. They only include issues which are relative large and liquid (i.e., marketable). Bloomberg publishes the market cap of marketable global equities, and that now totals about $97 trillion. Chart #1 compares the relative sizes of these markets.

Chart #2

Global equity market cap has certainly had its ups and downs, but over time the annualized growth rate of this statistic is about 7%, as shown in Chart #2. Those who were fortunate—or smart enough—to have purchased equities at the bottom in early 2009 have since enjoyed a total return (not counting dividends) of about 270%. Similarly, the market cap of global equities today is about 60% higher than it was in late March at the height of the Covid panic. Needless to say, selling during times of panic is not a winning strategy over the long haul. Buying is. 

Chart #3

Chart #3 compares the market cap of US and non-US equities. Note how both markets have grown by about the same amount over the past 17 years. 

Chart #4

Chart #4 shows the ratio of US to non-US equity market cap. Note how the US drastically underperformed the rest of the world from late 2003 through late 2007. The US then went on to recover most of that underperformance from 2012 through today. 

NOTE TO READERS: In reaction to the very troubling and increasing spread of politically biased censorship on major social networks (e.g., Twitter, YouTube, FaceBook) I have established a presence on the rapidly-growing Parler network. Parler was established with the explicit aim of promoting free speech by avoiding all censorship, something I heartily embrace. I can be followed on Parler as @Sgrannis.


Benjamin Cole said...

Kudos to Scott Grannis on joining Parler.

No matter your politics, independent voices and dissent are needed from your point of view.

Something even darker than mere censorship may be happening in America. The whole Russiagate story, which resulted in the impeachment of a president, seems to come to vapors.

The great need is for independent and skeptical minds, both left-wing and right-wing, and the complete dismissal of PC rhetoric of any stripe.

On another matter, I once toted up global bond and equity markets, and global property markets, and came to a rough figure of about $400 trillion. I guess my figures include some non-marketable or less liquid securities.

Benjamin Cole said...

This is the volatility index for the Eurostoxx 50. It just hit its lowest (best) level post-pandemic.

I don't know what all that means, but I guess it is a good sign. And this while there is a C19 spike in Europe.

If global equities stay strong through 2020, then..sheesh, what will bring down stocks?

randy said...

Republicans are in dangerous territory. The election results actually presented an unexpected and huge opportunity, since voters appeared to reject Trump but more importantly reject the progressives just as strongly. The Republicans now had the chance to frame themselves as the sane ones, maybe even getting some legislation on health care and immigration to show some evidence of ability to govern. They would regain significant voter base for the future. But no. Republicans are one-upping craziness instead - explicitly promoting Q-Anon conspiracies about the election. That Gulliani press conference is a decision point. If the Republican leaders do not loudly denounce this unequivocally - a lot of voters will be convinced the Lincoln Project grifters are right, that the only way to save conservatives is to burn down the Republican party. Write your Republican Senator.

TWD said...

I agree randy. It is said that the Republican party has become the party of Trump, and true conservatism is over. Rudy G. is an extreme embarrassment. Trump refusing to disavow Qanon did it for me. Trump's clown show will likely continue, and it is extremely damaging to our democracy. I miss the old Republican party.

Johnny Bee Dawg said...

Voters didn't reject Trump. Trump is the only reason for the PUB surge.
There were hundreds of thousands of ballots marked only for Joe other votes for any other contests. And that occurred only in the swing states who stopped counting on Election night. They didn't have time in the middle of the night to mark any other contests. Just brought in the "Joe only" ballots at 4am. Orange Man Bad.

There was massive fraud. Sleepy Joe couldn't draw flies to a single rally. No way Sleepy Joe got millions more votes than Barack did at His peak.
Lets see if the courts agree.

Joe is handled by the same exact people that told Barack what to do and say.
Those Barack handlers gave us the slowest economic recovery since FDR. He left our GDP $3 Trillion below trend.
Trump gave us the fastest economic recovery in US history, and lowest unemployment in 50 years.

Trump policies gave us the biggest Median Household Income increase ever in US history in 2019.
Trump's REAL household income gains in 2019 were more than Baracks gains in ALL HIS 8 YEARS, COMBINED.
Barack launched new military attacks in 6 new countries, while funding ISIS with US weapons and US taxpayer cash (along with John McCain.)
Trump cut off the ISIS funding, wiped them out, and brought our troops home.

Nobody sane rejected Trump.
We will just have to see how it goes in the Constitutional process.

Trump brought back true Conservatism: tax cuts, regulation cuts, reduced government power, more economic opportunity for the most people. Less war. Energy Independence. Fast Tracked vaccines. American exceptionalism. Saved the Party.

steve said...

JBD, you are truly out of your mind and Trump is finished. It may take until states certify results (12/8) but he is done.

I agree with Randy that the GOP is is damn dangerous territory and GA may go to the Dems if they don't back off this insanity of backing a petulant loser who is obfuscating democracy.

Larry said...

Right on!
Tell it like it is!
Nobody sane rejected Trump. SO TRUE!
Keep up the good fight JBD.

Unknown said...

Dido to Larry!! Keep up the good fight JBD...

EHuang said...

Enjoy reading the spectrum of comments here. Disagreements, but not shouting and nothing personal.

The recent censorships on social media has gone too far.

What ever happened to open debate. Even if the president says some outrageous stuff, it should be on display for us to see and decide.

Why has the ACLU been so quiet?

steve said...

What is going on is a national embarrassment. Practically an attempted coup and will have disastrous long term effects on the GOP which may very well lose GA seats as a result. Republican party's humoring Trump on this is perhaps the most ignominious party wide eyewink in US political history. Trump has duped 71M people to vote for him in an attempt to avoid his pitiful business and legal mess he will walk into. No matter. It's almost over. Character Trumps policy.

randy said...


The ACLU Retreats From Free Expression
The organization declares that speech it doesn’t like can ‘inflict serious harms’ and ‘impede progress.’

The American Civil Liberties Union has explicitly endorsed the view that free speech can harm “marginalized” groups by undermining their civil rights. “Speech that denigrates such groups can inflict serious harms and is intended to and often will impede progress toward equality,” the ACLU declares in new guidelines governing case selection and “Conflicts Between Competing Values or Priorities.”

This is presented as an explanation rather than a change of policy, and free-speech advocates know the ACLU has already lost its zeal for vigorously defending the speech it hates. ACLU leaders previously avoided acknowledging that retreat, however, in the apparent hope of preserving its reputation as the nation’s premier champion of the First Amendment.

Fred said...

If there was any credible proof of fraud, the Trump legal team would have already been before a US District Judge on a motion for injunctive relief to stop the certification of election results. They would have put up witness after witness with documentary evidence and allowed the Biden team to cross-examine the witnesses and if the Trump teams had enough evidence to show the judge that there was a "strong likelihood of success on the merits", the judge would issue the injunction and move rapidly to a full hearing. I have brought and defended against cases for injunctive relief many times over my legal career and that is how it's done. And I'm not talking about the theoretical possibility of voting machine fraud or dead people sending in mail-in-ballots; I'm talking about credible evidence that it did in fact happen and that there was enough of it to change the results. I believe there were enough anomalies in outcomes to do an investigation and I am open to the possibility that evidence of fraud exists, but unless Trump puts forth sufficient evidence of such, I do not believe any judge will overturn the election. I also seriously doubt any judge (including the US Supreme Court) will overturn election results based on a 14th
Amendment Equal Protection analysis. Remember, Bush v. Gore stopped endless recounts by the Florida Supreme Court. Gore never lead Bush and no court ever invalidated votes that had already been cast. It's time to focus on my home State of Georgia so we can keep the Senate red.

The Cliff Claven of Finance said...

You are completely ignoring the Biden Crime Family selling political influence for decades, and failing to realize Donald Trump has been investigated more than any other president, by far, and no criminal violations were found.

It was a contest between the a crime free president, and an extremely corrupt Delaware politician.

Unfortunately, we now have the most corrupt president in history even bEFORE he takes office.

The fact that your liberal-biased sources of information keep you in the dark about Biden, or lies to you about Trump, SHOULD concern you, but probably does not. Because truth is not a leftist value.

You may begin the usual leftist character attacks now.

randy said...


Can't figure out what your point is. That Donald wasn't nearly as corrupt as Biden? OK... I'm on board doing whatever we can to keep GA senators GOP. Should Biden's character make it reasonable to believe tall tales about massive election corruption involving Venezuela communists, unrelated election officials across multiple states all colluding, all without detection or some whistle-blower, or detection with hand counting 5 million votes in GA? Please.

I'm convinced its just a branding and fund raising exercise. The foundation for his new media company.

If one wants to expand voter support for GOP as protection against the left, supporting even tacitly Donald's conspiracy theories is a bad way to go about it. Yes there will be random fraud, bias and corruption - fine, investigate those. But GOP shouldn't get dragged down his toilet hole.

steve said...

I am NOT a left winger. Not by any means. First time in my life I voted for a democrat. I just cannot stand Trump and am not fooled by his "Make America Great Again" mantra. If Trump cared about the USA he'd concede an election he obviously lost. But he does not. He cares about himself-and BTW always has.

The Cliff Claven of Finance said...

Trump was not corrupt at all
Four unjustified investigations proved that
The "Mueller" team was ALL Democrats investigating only Republicans for almost 2 years.
the fake impeachment charges did not include any violation of any federal statute;
You Democrats are horrible people, but you did prove Trump did NOT commit any crimes except in your own deluded imaginations.

There is far more evidence of 2020 election fraud on affidavits, with the penalty of felony perjury for lying, than in all previous presidential elections, combined, since I was born in the 1950s.

Trump does care about the USA unlike the Biden Crime Family raking in money from Ukraine, China, Russia and elsewhere selling influence and giving old Joe a piece of the action.The most corrupt politician to ever become president.

If Trump only cared about himself, he would NOT have run for president, knowing half the country would oppose him, he would NOT have refused his $400,000 a year salary and he would NOT have cut off all foreign deals for his company while in office, because foreign deals were the primary deals in the past decade.

The GOP did very well in the 2020 election, except Trump, or didn't you bother to notice that Randy?

If you voted for a Democrat, Steven, you ARE a left winger.

steve said...

That's Stephen, the only correct way to spell the name and I disagree with you re labels. In my opinion character is more important than policy and try as they might a POTUS only changes the direction of the economy at the fringes-which is a good thing. The driver of the economy is obviously the American free enterprise system and YES I recognize that a socialist agenda could change that direction which is why the two GA seats are so important. The GSA confirmed Biden's win and it looks like Trump is allowing the transition too begin. I hope I never feel compelled to vote democrat again but there was no way I could look my five grown children in the eye and say "I support Donald Trump".