Friday, December 21, 2007

RGE Monitor - Brad Setser's scary graph

Doesn't this look like something a bunch of lemmings would walk off of?

Basically a drought in US bond purchases is posing a problem with liquidity.

A big drought.  A really, really big drought.

The fall in demand for US corporate debt (especially from the UK) has been especially sharp.

foreign_demand_for_corp_bonds

The sharp fall in total bond inflows line from the preceding two graphs is, of course, a reflection of the fall in total inflows to the US in my scary graph. It is based on the same underlying data. The higher frequency graph – updated for October – isn’t quite as scary as before, but it doesn’t suggest rude health either.

RGE Monitor

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