7/2/20: Mapping Real Economic Debt 2019

A neat summary map of the real economic debt as a share of the national economies, via IIF, with my addition of Ireland's benchmark relative to its more accurate measure of the national income than GDP:

Yep, it is unflattering... albeit imperfect (there is some over-estimate here on the corporate debt side).

23/8/19: Counting Trillions: The Unrelenting March of Debt

The never-ending march of leverage:

Between 2001 and 2008, Big 4 Non-Financial Sector Debt rose USD 30.04 trillion or 96.5 percent from trough to peak. Since 1Q 2009 financial crisis trough through 2Q 2019, the same is up USD 37.35 trillion or 62.7 percent.

3/1/2013: Irish Private Sector Credit: November 2013

Central Bank of Ireland published series of data today covering deposits and credit in Irish banking system through November 2013. Here are the highlights.

Overall, household credit outstanding at the end of November 2013 stood at EUR107.763 billion, down EUR1.354 billion on October 2013 and up EUR2.547 billion on November 2012. Compared to November 2011, outstanding credit to Irish households is down EUR3.069 billion (-2.77%). On a more stable, 3mo average basis, Q4 2013 average credit outstanding was EUR2.886 billion ahead of the same period in 2012.

Monthly decline in overall credit supplied to Irish households can be broken down into a decline of EUR1.226 billion in loans for house purchase, EUR119 million decline in consumer credit and EUR9 million decline in other loans. In other words, monthly decline was broad across all three categories of household credit.

Year on year, credit to households fell EUR1.336 billion for consumer credit, and is down EUR110 million for credit extended via other loans. There was a rise of EUR4.680 million for loans for house purchase. However, this increase itself is fully accounted for by a massive EUR6.233 billion jump in credit for house purchase extended in just one month: December 2012. Since December 2012, however, credit remained slightly lower, averaging EUR 83.978 billion over 11 months of 2013 as compared to EUR84.973 billion back in December 2012.

In summary: house purchase loans are slightly down over the 12 months from December 2012 through November 2013, Consumer credit loans are down over the same period, and other loans are also down. In all three cases, declines were moderate, implying that over December 2012-November 2013, overall credit to Irish households declined from EUR111.076 billion to EUR107.763 billion.

Compared to H1 2008:

• Household credit overall was more than 30% down in November 2013 compared to H1 2008 average;
• Credit for house purchases was more than 32% down in November 2013 compared to H1 2008 average;
• Consumer credit was more than 39% down in November 2013 compared to H1 2008 average;
• Other loans were 139% up in November 2013 compared to H1 2008 average.

Non-financial corporations total credit outstanding in November 2013 stood at EUR81.129 billion, down EUR143 million on October 2013 and down EUR3.676 billion on November 2012. Q4 average stock of credit to non-financial companies in Ireland declined in Q4 2013 y/y by some EUR3.734 billion (-4.38%). Compared to November 2011, credit to NFCs in Ireland is down EUR7.225 billion (-8.18%). More than half of this drop took place over the last 12 months.

In summary: credit to NFCs extended in the Irish system is down y/y in November and over Q4 2013 overall and the rate of decline did not decline over the last 12 months, compared to previous 12 months.

Compared to H1 2008:

• Credit to NFCs overall was more than 50% down in November 2013 compared to H1 2008 average.

Next post will cover deposits and loan/deposit ratios.

10/10/2013: IMF's GFSR October 2013: Focus on Corporate Debt Overhang

I'll be blogging out today some interesting charts from the IMF's GFSR October 2013... these will appear in no particular order, with brief summaries...

Here's a start: non-financial corporate sector debt crises in the euro periphery. I always noted that the important issue in the current crisis is not just a traditional sovereign debt crunch, but the debt overhang over what I call the total real economic debt: household, non-financial corporate and government debts.

In the above that Irish banks offer lower rates, based on the bank capital and reserves ratio to NPLs than other banks, including Portugal, Italy and Spain. Also note that 5 years into the crisis and after massive recapitalisations Irish banks buffers are lower than for any other economy, save Cyprus and Greece. That is the cost of delaying resolution of the loans.

Note: my latest article on European and Irish banking systems is available here: http://trueeconomics.blogspot.ie/2013/10/9102013-leveraged-and-sick-euro-area.html

The next four charts show that quality of loans to non-financial corporate sector is deteriorating and remaining poor for firms in the periphery, while improving for German and French firms.

Most worrying is the Italian situation where quality of loans is continuing to deteriorate and the rate of deterioration is accelerating, while Spanish situation remains exceptionally weak:

Things are desperate-to-dire in Greece and Portugal too:

More to come, so stay tuned...