Sunday, February 12, 2017

Where no Arthurian has gone before

I was looking at FGTCMDODNS for the millionth time, looking for something with more recent data actually, looking in the "related content" at the bottom of the page.

Under Sources it says More Releases from Board of Governors of the Federal Reserve System (US). I said okay and it brought me to a page listing 33 categories of the kind of stuff that always seems to interest me, including
Banking and Monetary Statistics, 1914-1941 (1,993)
H.6 Historical Data (6)
G.20 Finance Companies (183)
Mortgage Debt Outstanding (89).

I was like a kid on Christmas. I got a ton of things to open and look at and toss aside.

H.6 Historical Data turns out to be a few discontinued series on M3 and components.

Then there is G.20 Finance Companies, which offers Domestic Finance Companies, Total Assets, Outstanding -- shown here as a percent of GDP:

Total Assets of U.S. Finance Companies
Runs flat from the mid-1950s to the 1980 recession. These are not the "flat" dates I usually find. Then a severe uptrend, with a peak at the end of 2004. That's the earliest crisis-related peak I've seen. That's interesting.

And then in the Mortgage Debt Outstanding category there is Mortgage Debt Outstanding, All holders. Here it is, shown as a percent of GDP:

Mortgage Debt Outstanding as a Percent of GDP
It shows a persistent increase in mortgage debt except in the latter 1960s and -- surprisingly -- in the 1990s. And it shows a "world's tallest volcano" type of peak, the one that erupted in crisis a few years back. It's that peak, I think, that leads people like Dirk Bezemer and Michael Hudson to focus on mortgages as "the center of the bubble economy". The root of the problem, as it were, in their view.

Here is the same Mortgage Debt Outstanding in a less evocative form:

Mortgage Debt Outstanding as a Percent of Total Credit Market Debt Owed
Looking at it as part of Total Debt, mortgage debt was lower at the pre-crisis peak than it was in 1961. Mortgage debt was lower at the pre-crisis peak than it was from 1961 to the mid-1980s.

The crisis was not caused by mortgage debt being too high. The crisis was caused by debt in general being too high. Total debt was too high. Mortgage debt was only part of the problem.

Apparently I have been here before.

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