Total Debt (Public and Private) in the United States, Euro Zone, China, Japan and the U.K.

This graph shows the total debt (government, households and firms) for the biggest economies in the world. First, what I think is remarkable is that total debt is for the developing world (except Japan) all around 250 percent of GDP. Second, total debt did not decline since the crisis. In Japan and China (perhaps as expected) it is even rising again.

BBVA Research

Banking Sector: Percentage of GDP Across the World

This chart shows the banking sector in terms of assets as a percentage of GDP forcseveral continents. What stands out, are the extremely large banking sectors in European countries.

ZeroHedge

History of EU/Euro Zone (1929-2013)

Large overview of the history of the EU and the implementation of the Euro. From the first suggestion for a common European currency in 1929 until Croatia joining the EU in the beginning of 2013.

EZ Banking Sector As a Percentage of GDP (2000-2013)

This great chart by Thomson Reuters shows the Euro Zone bankings sectors of their respective countries GDP. With Luxembourg leading with a big gap, Ireland and Cyprus follow. Slovenia and Greece have notably small banking sectors.


Click on the picture for a bigger version.

Euro Zone Unemployment Spreads Q4 2012

When people talk about Euro Zone spreads they normally refer to the difference between the government borrowing interest rate of a particular Euro Zone country in comparison to the interest rate for the German government. German government bonds are taken as the benchmark since lending to the German government is basically seen as risk free. When lending to other countries, especially the southern Euro Zone countries, a risk premium is added on top of the German interest rate to reflect the higher default rate of those countries.

Besides this financial interpretation of spreads, a different form of spreads can be constructed to show the differences in the real economy between the Euro Zone countries: unemployment spreads. Unemployment spreads for the Euro Zone are defined as the difference between the unemployment rate in a particular Euro Zone country and the unemployment rate in Germany. As can be expected Euro Zone countries most hit by the Euro crisis have the highest unemployment spreads, with Greece and Spain even above 20 percent. This is a lot higher than the Euro Area average of 5.8 percent and the EU average of 5,3 percent. Austria, the Netherlands and Finland on the other hand have unemployment rates comparable to that of Germany.

World 2013 GDP Forecast: Fastest Growers and Contracters

The Economist constructed this overview of those countries in the world that are forecasted to have the highest GDP growth rate as well as those that have the most negative rate. As you can see the developing countries are forecasted to grow the most. From economic theory this can be explained by the fact that these countries still have a lot growth potential, because their economies are still small. Another reason why countries may see high growth is because they are located near China, as China is growing fast the country invests a lot in neighboring countries. Mongolia and Macau (a small country similar to Hong Kong also inside China) are examples. Another reason why a country may grow fast is that it is recovering from a disaster like a natural disaster or a war, of which Libya is an example. 

On the other hand developed countries are growing a lot less and consequently all the forecasted fastest contracting countries are developed countries. Notice that all the fastest contracting countries, besides Syria and Iran, are located in Europe. 

Due to a request by the Economist this graph has been removed. 

View the graph here

Household Debt Versus Disposable Income (1995-2011)

This graph gives the ratio of total household debt divided by the total of disposable income of the households in countries of the Euro Area and the USA. On average the household debt to income rate was relatively stable in the Euro Area approaching the 100 percent just before the credit crisis from around 70 percent at the beginning of the Euro. The household debt to income ratio was already higher in 1999 in the USA and saw a much bigger increase, but unlike in the Euro Area the ratio has come back quite a lot already in the United States.

The average of around 100 percent currently in the Euro Area is mainly formed by the bigger economies: Germany and France, who have a ratio close to the Euro Area average. There are notable outliners, especially Denmark, The Netherlands and Ireland that have a way bigger ratio of 200 to almost 300 percent.

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Greek Debt Composition 2012

One reason the Northern European countries bailout out Greece was because banks, for example German en French banks, heavily invested in Greek government debt. Since then the European Commission (EFSF) and the ECB have bought quite a lot of debt from the banks. This means that the bond holders of Greek debt shifted from only private parties to mostly public holders now.

This means that when there would be a second round of writedowns on Greek debt the European tax payer will have to pay as well.

Credit Ratings, U.S., Japan and Euro Zone (Oct 2012)

Thompson Reuters created this graph with the long term sovereign debt ratings for the Western countries. For the three major credit rating institutions the ratings are listed.

Thompson Reuters

Government Debt in the EU Countries (second quarter 2012)

This great graph from Reuters shows per EU country the government debt it had at the end of the second quarter, as a percentage of GDP.

Since the crisis Portugal, Ireland have been accumulating debt at a high rate, while seeing their economy shrink significantly. This is shows in the government-debt-to-GDP measure, for which they are in respectively  the third and the fourth place in having the highest government debt in the EU.

Estonia and Bulgaria have the lowest government debt in the EU.

Some Convergence Actually Took Place In The Euro Zone

This graph, from a presentation of the ceo of the Dutch Central Bank, shows that some convergence actually  took place since the implementation of the Euro. The graph shows the difference in the growth of the listed countries with the growth of Germany. Especially Ireland, Greece and Spain grew a lot faster than Germany. In 2007 that difference was even 40 percent for Ireland, cumulatively. Portugal and Italy were not able to generate more growth than Germany.

DNB

One of the causes for this convergence may be that Ireland, Spain and Greece saw their real interest rate decline significantly. This graph shows that the extra growth was actually partly financed with borrowed money:

DNB

Also this was accompanied by inflation:

DNB

Scandinavia Versus The Euro Zone

The economies Sweden and Norway in Scandinavia grow faster and both have a lower unemployment rate than the average of the Euro Zone. Fiscal positions are also considrably better in Norway and Sweden. The manufacturing indicator is slowing down for these countries lately as well though.

Thompson Reuters

Percent Of Population Over 65 (2011 Versus 1996)

The populations of the less developed countries are clearly younger than the western economies. Especially Japan and Germany have a big elderly population. Note the huge increase in Japan in the last 15 years. Bulgaria, Estonia and Latvia, noticable less prosperous than the most developed countries, are also in the top 15. South Korea and Ireland are relatively young in their population.

Dutch Economy in 8 Graphs

With the Dutch elections today this chart may come in handy. The Dutch economy is doing 'better' for most of the indicators than the Euro zone average. Late tonight (local time) the first estimation of the results are expected. A close result between the right party (VVD) and the left party (PVDA) is very likely. A colation needs to be formed to make the new government.

Reuters

World Map Of Euro Crisis Impact

This graph from research by the IMF shows the global impact of a Euro Area Bank Credit Crunch, which would be likely in case of a further deterioration of the Euro Crisis. As you can see, outside the Euro Area, countries in Latin America, Iceland, in the north of Africa and some countries in the Middle East will probably see a lot of negative effects.

Business  Insider

Big Euro Zone Countries GDP Since 2007

The previous post showed the quarterly growth for selected countries. Here I will show a bigger picture for some Euro Zone countries: the growth or decline of the economy since 2007. As you might have expected the German economy has grown the most since 2007, although it also saw one of the biggest declines during the credit crisis. Italy saw the lowest growth of the big four in the Euro Zone, while France fared slightly better than the Euro Zone average and Spain is doing slightly worse since the credit crisis.

Reuters

Developed Countries GDP Growth (2nd Quarter 2012)

This chart show the quarterly economic growth (second quarter versus the first quarter of 2012) for the countries in the Euro Zone, compared with the United States and Japan. What is interesting is that most Euro Zone countries saw their economic growth far below the U.S. and Japan, especially Portugal and Italy. Not being in the Euro Zone is not a guarantuee for economic growth though, as you can see with the -0.7 percent contraction in the United Kingdom.

http://twitpic.com/aj9dlc

Banks Bring Money From ECB To ECB

Last month the European Central Bank lowered the bechmark interbank rate from 1 percent to 0,75 percent. The lowest interest rate to date, since the creation of the Euro. Together with this the deposit facility was lowered from 0,25 to 0 percent. All the billions of dollars that the banks with excess money held at the ECB where not getting any interest anymore. As you can see in the graph the deposits at the ECB, held by the banks, lowered dramatically when the ECB stopped giving interest.

It seems the banks moved their money to the current account of the ECB, shown in the next graph. The banks don't get interest with their money at the current account, but it's more convenient than the deposit facility. Since, in contrast to the deposit facility, banks don't need to move their money to the ECB every day at the current account.

Biflatie

EU VAT-Rates Compared

The value added tax raises the price on consumer goods. Almost all EU countries had a higher VAT-rate in 2012 compared to 2000. Perhaps surprisingly, Hungary has the highest VAT-rate, followed by Scandinavian Denmark and Sweden. Cyprus, Portugal, Greece, Spain and Romania particularly saw their VAT rising in the last twelve years. Except for Cyprus, all of these countries have now a higher rate than the average for the EU of 21 percent.

Reuters

Financial Markets Reaction to the Euro Zone Bailouts

Reuters made these great graphs which give an overview of the market reaction to the Euro Zone bailouts. The following indicators are shown: euro/dollar, Euro Zone banks, Euro Zone government banks and Euro Zone equities.

Reuters