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Outstanding corporate bond debt still trending upward

I’ve blogged before on the boom in bond issuance by the U.S. nonfinancial private sector. Here is a figure that uses data from the new (2015Q4) Federal Reserve flow-of-funds data release of this past week:

Link to figure at St. Louis Fed site. https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=3M4g
In the figure, the amounts outstanding are divided by nominal GDP. This transformation provides an interesting stock-flow ratio, with the amounts of debt displayed in relation to the overall size of “the economy.”
When such ratios are very high in relation to historical levels, there is reason to worry about a possible crash. As I have noted previously, many parts of the U.S. bond market have been experiencing a tough and volatile era, with negative 12-month returns and elevated yields observed in the high-risk “junk bond” categories. I also mentioned some coverage on the flow-of-funds release by Calculated Risk in yesterday’s post, which featured a roundup of recent links.

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