The overall value of the world equity markets has fallen by over 50% from their all-time highs. In US Dollar terms, the MSCI All-Country World index is down 49% from November 1, 2007 through October 31, 2008. For many of us, this is painfully demonstrated in our retirement investment statements. The most common explanation for this (that I’ve heard) is that the entire world economy is de-leveraging. Essentially, the world’s lenders aren’t lending, or are lending at extremely high rates. Without leverage to purchase equities, equities aren’t valued as highly. Levered players of the equity markets will pay more than unlevered players. My question is: Are there any measures available to show just how levered or de-levered the world economy is? My problem is that it’s easy to find out how levered public companies are. For example, the leverage ratios of S&P 500 companies or Russell 3000 companies are publicly available. However, most of the world’s transactions are private deals (e.g. mortgages, private loans, etc.)
I guess the answer is no?
There should be statistics for private lending for at least the industrialized nations. But where to find them (other than at each nation’s statistics bureau), and if someone gathers them all, if have no idea.