The war between bonds and stocks

Thursday 5 October 2023

The Market Ear with a bond wrap.

Can the system take it?

DB’s Jim Reid with a serious question, although the calculations are a bit simplified. Things that make you go hmmm: By H1 2023, global debt reached $307tn. Not all is tradable, with the Bloomberg Global Agg peaking at $70tn two years prior. Since then, it’s down 23%, indicating a $16tn global market value loss. Projecting this drop across all global debt hints at a $70tn loss. For context, global equities are worth $107tn, and the 2023 global economy is projected at $105tn. These estimates have caveats, but the scale of losses in the debt markets is historically unprecedented both in dollar terms and relative to GDP, raising questions about the system’s resilience.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.