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$7.1 Trillion In Global Sovereign Wealth Fund Assets: The Infographic
On Saturday, we argued that if one focuses narrowly on official FX reserves, the effect may be to underestimate the total size of accumulated petrodollar assets.
As Credit Suisse notes, "oil exporting countries hold about $1.7trn of official reserves but as much as $4.3trn in sovereign wealth fund assets." And while the composition of the SWF asset pool is likely to be far more multifarious than the makeup of official FX reserves making it more difficult to assess i) how quickly they could be liquidated in a pinch, and ii) what effect that liquidation would have on USD assets, especially USTs, the important point is that if we have indeed entered a new era in which crude and commodities are destined to trade at comparatively depressed levels, the pressure on exporters to adapt to the new reality could force them to begin drawing down the vast store of SWF assets. Thus, if one wants to understand how large the petrodollar unwind could potentially be in the worst case scenario, it’s important to take stock of SWF assets.
With that in mind we present the following infographic from TheCityUK which should help to show how critical sovereign wealth funds are to global investment and liquidity.
And some further color on the effect low crude prices are having on SWF asset accumulation, from the report:
The first three months of 2015 only saw a marginal increase in SWF assets in the headwind of falling oil prices. TheCityUK expects that SWFs’ assets will increase by 4% in 2015 to $7.4 trillion, well below the 12% average annual growth seen over the previous five years. Flows into some funds could turn negative. Growth in SWFs’ assets is closely related to the price of oil, as around 60% of SWFs’ assets originate from commodity exports. For years, major oil producing exporters funneled foreign exchange reserves into funds aimed at stabilising economies and paying for pensions. The fall in oil prices since mid-2014 has left some of these countries with a cash shortfall. If oil prices remain low for an extended period, some oil rich countries may divert money from SWFs to stabilise their domestic economies and finance budget shortfalls. Slower GDP growth in China is also likely to constrain growth in assets during the year.
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The collapse continues. Around every corner, under every rock lives a black swan. We're so fuct.
Way way way too much paper.
Way way way to few hard assets.
yes..these "soverigns" are wealthy because they have MOUNTAINS of fiat wealth.
...at least some of them still believe in the value of education and work ethic. The US gave up on both of those decades ago.
God i wish i had a printer
Buy our magic debt paper so you can be magic too.......
"Liquidity" is monetary heroin.
Unwind, collapse, burn to the ground; please.
http://www.zerohedge.com/news/2015-08-26/here-we-go-again-us-equities-su...
"And their foreign investment from sovereign funds is pointed directly at you know who!"
7.1T + 1.8T -> $8.9T
I said 'make it rain' not cause a 40 year flood!
This is how an implosion looks like, in a Money Market Fund.......they said it was all of a sudden! LOL.
Managers sleeping at the wheels and making free bucks with no responsibility towards investors, while the investors suffer! LOL
Amtek fund crunch hits JP Morgan MF
Redemption from JP Morgan's two India schemes becomes difficult for large institutional clients
Last Thursday, the credit rating of a bond holding in these two schemes was downgraded from A+ to C, as a result of Brickwork Ratings down grading similar bonds by the same issuer. This resulted in the valuation agencies CRISIL and ICRA reducing the valuation of the bond held by these two funds by about 25%.
So many tendrils, so little diligence.
When you give too few people too much money, then expect mal-investments. Asset inflation and speculation in EM fit into this category.
I just watch how my friendly US Govt invests. $20 billion over 10 years in energy subsidies, that doesn't include Solyndra, Tesla, etc.
Another $20 billion each for the war against Climate change.
Untold $billions to the MIC.
After all that investment, do you see anything actually productive?
Except the middle class and lower income getting skull fucked.