World Assets Hit Record $140 Trillion

by: Barry Ritholtz

This is one of those charts -- call it infoporn -- that us junkies find so very telling:

click to enlarge

world assets

Notice that Asia, for its mindshare, is still relatively tiny, and the U.S., despite its plethora of self-inflicted woes, remains globally dominant.

After that picture, words are almost redundant, but anyway, here's a quick Ubiq-cerpt:™

The world's financial system is overflowing with stocks, bonds and other financial assets - $140 trillion worth, to be precise.

The figure was released in a study by McKinsey & Co. that maps financial assets around the globe and seeks to track the flows of these assets as they move from one region to another, putting hard numbers on the oceans of capital washing up around the globe.

At $140 trillion in 2005, the value of the world's financial assets hit a new peak and was more than three times as large as the total output of goods and services produced across the planet that year.

The study, released today, paints a picture of a world in which investors and the banks that manage their money are spreading their bets more broadly. Flows of investment across borders hit $6 trillion in 2005, McKinsey said, above levels reached at the height of the 1990s stock-market bubble and more than double the figure in 2002.

At the epicenter of these financial flows is the U.S., which takes in about 85% of the flows from countries that are net exporters of capital - places like Japan, China and the Middle East. "It's a pretty striking thing," says Diana Farrell, director of the McKinsey Global Institute, an in-house think tank that produced the report. "Of all the savings that citizens world-wide are willing to put outside their countries, the U.S. gets 85% of it."

Fascinating stuff . . .

World's Assets Hit Record Value Of $140 Trillion
WSJ, January 10, 2007; Page C8