Tuesday, December 20, 2011

Debt Issuance: Boom to Bust

A short post today.

First of all, may I wish everyone a very Merry Christmas and Happy New Year.

Secondly, a rather interesting chart (click to enlarge) from the Bank of International Settlements (BIS) latest Quarterly Review.

Global Issuance of Debt Securities Has Collapsed

The global boom of floating trillions of new bonds in 2007-08 has - predictably - become an out and out bust this year, as the credit crisis takes a knife to the appetite for more debt. Notice that the amounts in the charts are net, i.e. after accounting for maturities.  

Despite all the talk of massive sovereign bailouts, the figures show that there is very little increase in the total amount of debt outstanding.