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Visualizing The Slow Death Of The Listed Equity Market And The Explosion Of The Monetary Base

Stock markets worldwide are faced with the same issue of declines in listings that surfaced in the U.S. a decade and a half ago. The reasons for the contagious collapse in publicly listed entities is unclear (increasing acquisitions, LBOs, filing for bankruptcy, and declines in IPO volumes) but as Bloomberg reports, “the decline in public equities is unquestionable and should be of grave concern to both investors and policy makers alike,” CFA Institutes’ Jason Voss noted adding – crucially, “having fewer listings may hamper asset allocation, make stocks too expensive and send improper signals to companies looking to go public.”

 

 

European markets listed the most stocks in 2007, when a bull market ended. The total fell 23 percent during the next five years.

Asia-Pacific listings peaked in 2010, and last year’s figure was 4.7 percent lower.

Stock listings in the U.S. reached their highest total in 1997, in the midst of a bull market fueled by demand for shares of Internet companies. Last year’s figure was 47 percent lower than the record.

 

In the United States, total stock listings hit a peak of 9,253 in 1997 and has since declined to 4,916 at the end of 2012 — down, as the article states, by 46.9%.

Since 1997, the M2 Money Supply has increased from $4 trillion to almost $11 trillion. Even assuming less % dollars being allocated to equities from the money supply, we have more than twice as many dollars chasing half as many listings.

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