Saturday, January 28, 2012

Chart of the Day: 8 Major Central Bank Balance Sheets as a percent of Global Equity Market Cap


That’s from Bianco Research (

Some noteworthy aspects.

The scale of market interventions by global central banks since 2008 has been unprecedented. The ratio of central bank balance sheet relative to global equity market cap has exploded from about 12% to the current range (25% to a high of 37%).

Since the 2008 interventions, the dollar value of global central bank balance sheets continue to balloon but the appearance of the % decline signifies faster growth in the equity market cap than the former.

And since money enters the economy at certain points and at different times (from the leakages of bank reserves), there will be lagged (delayed) effects from the current round of increased central bank injections.

It is simply astonishing to see the evolving dependency of the price levels of the asset markets and central bank actions.

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