Showing posts with label World. Show all posts

Thursday, November 13, 2014

Central Bank's Balance Sheets- Aug 2008 thru Oct 2014

The US Federal Reserve has decided to conclude its Asset Purchase Program (QE), once as high as $85B per month. Over the course of the US Fed's multiple easing programs, its Balance Sheet has grown on a percentage basis much more than any other major Central Bank. Currently, only the Bank of England comes close to the Fed's Balance Sheet expansion, with the Swiss next in line, but only acting defensively to prevent the Franc from appreciation beyond limits, keeping Swiss Industry globally competitive- Courtesy: @axelmerk

Friday, January 31, 2014

One Year Central Banks Balance Sheets Change vs. Currency X-Rate Change: Impotent Correlation On Weak-Inverse-Relationship

Central Banks Balance Sheets- BOJ, Fed, BOE, ECB (courtesy of @AxelMerk)
Currencies denominated in US Dollars- Euro, Pound, Yen:

The weak-inverse-relationship might partially be accounted for by the US Fed paying 0.25% to Federal Reserve banks to hold Reserves, thereby keeping this portion of the Monetary Base out of M2.

Tuesday, January 28, 2014

Top Five Countries by GDP (Representing 50% of World GDP) 20 Year Index of Economic Freedom Score

Progress is disappointing! The US has been on a stead decline since peaking in 2007, after having achieved 'Free' country status (>80) from 2006 through 2010, the highest Economic Freedom grouping. The US has now slipped in the country rankings to 12th place. Germany, and Japan remain in the 'Mostly Free' camp, while France is stuck in the 'Moderatly Free' group. Only China and Germany have improved over the 20 Yrs:

Top Five Countries by GDP (Representing 50% of World GDP) 20 Year Index of Economic Freedom % Change

Only China and Germany have improved over the 20 year span, yet China languishes in the 'Mostly Unfree' bracket of countries. The US, Germany, and Japan remain in the 'Mostly Free' camp, while France is stuck in the 'Moderatly Free' group:

Friday, January 10, 2014

20 Year S&P 500 Valuation Growth vs. GDP Growth

In Nominal terms, the S&P 500 has grown 289% over the past 20 years, compared to 160% for the S&P GDP (approximation based on 50/50 sales mix proportions; World GDP 182%, and US 137%):

Below statement added January 30, 2014: In full disclosure, market capitalization (not presently available) would be a better way to look at this, because there have been unprecedented stock repurchases in the S&P500, which are not reflected in my graph.

I have calculated what I feel is the appropriate factor range, 22% to 48.6%, to subtract from the "20 Year S&P 500 Valuation Growth vs. GDP Growth" chart above. Here is the chart used showing my calculation method- 20 Year S&P 500 Shares Buybacks Estimate As Percent of Market Capitalization: Blog Post

Therefore, the 20 Year S&P 500 Price change of 289.3%, when adjusted for stock repurchases, has a adjusted gain in the 267.3% to 240.7% range, with a mid-point of 254%. Compared to an estimated S&P 500 GDP change of 160%. Expressed another way, over 20 years the S&P 500 Price, adjusted for stock repurchases, changed 94% > S&P 500 GDP.