The Flow of Funds report, covering the second quarter of 2009 (through June), was released today by the Federal Reserve. It revealed yet another retreat in total credit, despite the heroic levels of state and federal government borrowing.
One of the better windows available into the macro credit and borrowing universe is a quarterly report put out by the Federal Reserve called the “Flow of Funds” report. While it is a bit dated already (the report covers through the end of June), it is a great snapshot of the big trends and can tell us much about the general direction in which we are headed. This report was released today (9/17/2009) at 12:00 p.m.
Here are a few of the fascinating findings…
While total credit market debt was down by -$122 billion from Q1 to Q2, or slightly less than a quarter of one percent overall, there was quite a bit of variability across all the sectors.
A quick explanation: The Flow of Funds report has two main sectors; “non-financial” and “financial.”
- In the non-financial sector (about two thirds of the total), we have households, non-financial businesses, and government (state and federal).
- In the financial sector (the remaining third), we have banks, holding companies, insurance companies, and the like.
Interestingly, the financial sector recorded an amazing -$493 billion dollar drop (or 2.9%) in the total amount of credit from the first quarter to the second.
by cmartenson