{"id":53688,"date":"2020-06-14T16:58:21","date_gmt":"2020-06-14T21:58:21","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53688"},"modified":"2020-06-14T16:58:25","modified_gmt":"2020-06-14T21:58:25","slug":"weekly-commentary-extraordinary-q1-2020-z-1-flow-of-funds","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53688","title":{"rendered":"Weekly Commentary: Extraordinary Q1 2020 Z.1 Flow of Funds"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/creditbubblebulletin.blogspot.com\/2020\/06\/weekly-commentary-extraordinary-q1-2020.html\">Weekly Commentary: Extraordinary Q1 2020 Z.1 Flow of Funds<\/a><\/h3>\n\n\n\n<p>Financial crisis erupted in March. The Fed slashed rates at a March 3rd emergency meeting \u2013 and then began aggressively expanding its holdings\/balance sheet (creating market liquidity). Even from a \u201cflow of funds\u201d perspective, it was one extraordinary quarter.<\/p>\n\n\n\n<p>Total Non-Financial Debt (NFD) surged a nominal $1.597 TN during the first quarter ($6.379 TN seasonally-adjusted and annualized!) to $54.325 TN. This was the strongest quarter of NFD growth on record (blowing past Q1 2004\u2019s $1.234 TN). Indeed, Q1 growth surpassed full-year NFD expansions for the years 2009, 2010, 2011 and 2013. This pushed one-year growth to $3.271 TN (6.2%), significantly exceeding 2007\u2019s record $2.521 TN expansion. NFD increased $20.857 TN, or 59%, since the end of 2008. NFD as a percentage of GDP rose to a record 260%. This compares to previous cycle peaks of 226% (Q4 \u201807) and 183% (Q4 \u201999).<\/p>\n\n\n\n<p>Financial Sector borrowings jumped $963 billion during Q1, surpassing the previous record $656 billion from Q3 \u201907. This pushed one-year Financial Debt growth to $1.247 TN (7.6%), the strongest expansion since \u201807\u2019s $2.065 TN.<\/p>\n\n\n\n<p>Total Credit (Non-Financial, Financial and Foreign) surged nominal $2.391 TN for the quarter to $77.861 TN, surpassing previous record growth from Q1 \u201804 ($1.512 TN). One-year growth of $4.790 TN was the strongest since 2007. Total Credit jumped to 362% of GDP, the high going back to 2010.<\/p>\n\n\n\n<p>Federal Liabilities (excluding massive \u201ccontingent\u201d\/off balance sheet liabilities) jumped to $22.0 TN during Q1. At 102%, Federal Liabilities surpassed 100% of GDP for the first time in at least six decades. For perspective, Federal Liabilities ended the seventies at 50% of GDP; the eighties at 63%; the nineties at 59%; and 2010 at 85%. It would not be surprising to see this ratio approach 150% over the next three to five years.<\/p>\n\n\n\n<p>Outstanding Treasury Securities jumped nominal $500 billion during the quarter to a record $19.518 TN. This pushed one-year growth to a staggering $1.612 TN (9.0%) and two-year growth to $2.472 TN (14.5%). Treasuries ballooned $13.467 TN, or 223%, since the end of \u201907. Treasuries-to-GDP jumped to 91%, more than doubling the 41% from the end of 2007.<\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: Extraordinary Q1 2020 Z.1 Flow of Funds Financial crisis erupted in March. The Fed slashed rates at a March 3rd emergency meeting \u2013 and then began aggressively expanding its holdings\/balance sheet (creating market liquidity). Even from a \u201cflow of funds\u201d perspective, it was one extraordinary quarter. Total Non-Financial Debt (NFD) surged a nominal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7756,195,16861,303,1849,3650],"class_list":["post-53688","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-bubble-bulletin","tag-debt","tag-doug-noland","tag-fed","tag-financial-markets","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53688"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53688\/revisions"}],"predecessor-version":[{"id":53690,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53688\/revisions\/53690"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}