The Phaserl


Fed Quietly Revises Total US Debt From 330% To 350% Of GDP, After “Discovering” Another $2.7 Trillion In Debt

from Zero Hedge:

The Fed has managed to kill two birds with one stone: it no longer provides a simple, one-stop-shop way to reconcile the total US credit stock, and it quietly boosted total US consolidated credit by $2.7 trillion to $62.1 trillion as of June 30, 2015.

Everyone has seen the chart of “Total Credit Market Instruments“, which as of its most recent update on March 31, 2015, was just over $59 trillion, or 330% of US GDP.

For those who have not seen it, as well as for those who are familiar with this chart, take a long look, because this is the last update of this particular data series, pulled straight from the Fed’s Z.1 Flow of Funds (section L.1), you will ever see.

So did the Fed spontaneously terminate the reporting of what until the second quarter’s update of the Flow of Funds, was the most comprehensive official summary of Household, Financial, Corporate and Government debt in existence? And if so why?

Many Fed watchers assumed that this is precisely what happened, and indeed, searching high and low for the infamous L.1 Section revealed nothing.

We can only assume that the vocal outcry that emerged in the aftermath of the Fed’s release of its Q2 Flow of Funds statement missing this most critical of data sets on September 18, was so loud that three weeks later, this past Friday on October 9, the Fed released an official follow up explanation what exactly happened.

Here is what happened to the missing so very critical data series, straight from the horse’s mouth:

Q: In the September 18, 2015 release of the Z.1 Financial Accounts of the United States, some tables in the summary section on credit market instruments seem to have disappeared. What happened to these tables and where can I find the equivalent data series?


With the September 18, 2015 Z.1 release, the classic presentation of the instrument category “credit market instruments” has been discontinued and replaced with two new instrument categories, “debt securities” and “loans”. Reporting debt securities and loans separately brings the Financial Accounts more in line with the international standards for national accounts. The debt securities instrument includes open market paper, Treasury securities, agency- and GSE-backed securities, municipal securities, and corporate and foreign bonds. The new loans instrument includes depository loans not elsewhere classified, other loans and advances, mortgages, and consumer credit. Together, debt securities plus loans include all of the financial assets or liabilities previously included in credit market instruments. While the underlying instrument categories that make up the sum of debt securities and loans are the same as those in old “credit market instruments” concept, changes to a few of these categories make the new sum of debt securities and loans larger than in previous publications. 


This change has had three major impacts on the table structure of the publication: (1) summary tables focusing on “credit market instruments” have been eliminated; (2) remaining summary tables have been renumbered; and (3) new instrument tables for debt securities (tables F.208 and L.208) and loans (tables F.214 and L.214) have been created.

That’s the “what”, as for the why, note what the Fed said above: “the new sum of debt securities and loans larger than in previous publications.” Which means that not only did the Fed stop reporting a consolidated total debt series, it admits that the actual debt was higher. Some $2.7 trillion higher.


Here is the Fed’s mea culpa on that particular topic:

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