The first two that are highly correlated show that the market cap of global stocks (MSCI) is more or less a function of the cumulated central bank balance sheets (bs it is called I guess). Below it shows the for QE adjusted change of real rates of the Fed Fund Rate that since the GFC never went positive. Comm banks in this model are part of the cumulated MSCI.

TomK

Global Liquidity Is Shrinking

I don't understand the graph - could you help me? It seems like assets as a % of GDP is going up - I take it that's a bad thing, but I don't understand how? Does it mean that banks are hording assets because they think something bad is coming? In a healthy economy do banks have way lower amounts of assets as a % of GDP?