IB's 25% of US GDP????!?!?!

CFA General
#1

Interesting column from the FT on Lehman’s demise… The interesting quote is at the end: “US investment banks have had a glorious run. Some 20 years ago, their balance sheets were equivalent to 3 per cent of US GDP. Now - bloated by low interest rates, irrational exuberance and poor lending – they account for almost 25 per cent of gross domestic product, Andrew Hunt economics estimates.” CAn someone confirm this?

#2

CFABLACKBELT Wrote: ------------------------------------------------------- >– they account for almost 25 per cent of > gross domestic product, Andrew Hunt economics > estimates.” > > > > CAn someone confirm this? That seems like an INSANE number!!!

#3

whoa

#4

looks wrong

#5

he says the balance sheets are 25% of U.S. GDP, why is this so shocking? GS alone has over a trillion dollars in assets on its balance sheet

#6

I suppose if you count BAC, JPM and C, which all have trillion dollar B/S, sounds about right (US GDP running around 14T). Meaningless measure though, as those are all commercial banks, not investment banks.

#7

NakedPuts Wrote: ------------------------------------------------------- > I suppose if you count BAC, JPM and C, which all > have trillion dollar B/S, sounds about right (US > GDP running around 14T). Meaningless measure > though, as those are all commercial banks, not > investment banks. ditto

#8

Also it’s comparing assets to an income statistic, its not like it’s saying the earnings of IB’s make up 25% of US GBP.

#9

GDP*