Brad Setser notes down some very big numbers.
The analysis, he says, "also helped me try to think through whether $700b is a lot a money or a little bit of money, relative to the enormous challenges the US now faces supporting a financial sector that is gravely ill. I was reminded just how big the balance sheet of the US financial sector is — and just how much of that balance sheet is tied up in the real estate market."
Here's some figs:
"This math also seems consistent with data indicating that the commercial banks hold $3.7 trillion in mortgages and another $1 trillion in corporate bonds (a category that should include ABS) — i.e. up to $4.7 trillion in exposure. The thrifts report about $1.2 trillion in mortgage exposure (mostly from mortgages, “private” MBS and colateralized mortgage obligations sum up to under $100b). The broker dealers have $270b in corporate bonds (think ABS) — not a huge exposure. But they over half ($1.6 trillion of a $2.8 trillion total) of their assets is just labeled other."
The rest is here.
5 days ago