I’ve seen this factoid before, but lifted this recounting from Monday’s editorial in the Financial Times, “Why finance will not be unfettered“:
According to the McKinsey Global Institute, the ratio of global financial assets to world output soared from 109 per cent in 1980 to 316 per cent in 2005. The value of the global stock of equities and bonds reached about $140,000bn by the latter year. On top of this mountain is piled yet another, made of derivatives, whose face value reached $286,000bn in 2006, up from a mere $3,450bn in 1990.
Keep in mind that derivatives’ cash value is a fraction, usually a teeny fraction, of their notional value. But the ballooning of debt and equity outstandings alone is eyepopping.