Forthcoming from Capital Markets Data: An Updated Chartpack and Other Musings

After a few months of hiatus, the CMD chart pack will so be updated.  With this update, a look at the past year propels us with an inspired vision of the future.  Several important updates have been made to the database which adds to the completeness of a singular data point: total U.S. capital market issuance.  The series which help aid in the complete view are that of Asset-Backed security issuance and CMBS issuance at the monthly frequency (beginning around January of 2000).  These are sourced from https://www.abalert.com/market/statistics.pl and https://www.cmalert.com/market/statistics.pl. 

The importance of gathering a complete view of capital market issuance cannot be understated.  Elementary economics texts often cite a circular flow of money from lenders to borrowers, but rarely draw the implications of flow on the real economy.  It is through the various capital markets that we see clearly the effect that financial market prices have on the incentives to borrow.  It is usually the flow of new issuance that gets highlighted as if this is the end-all and be-all of finance.  However important this flow is, in isolation, it cannot explain with adequate purpose the evolution in the stock of debts outstanding.  Prepayment is particularly violent.   

One cannot truly grasp the importance of fluctuating interest rates on debt burdens without a firm grasp of their direct and forceful relation to the incentive to refinance.  

Having a complete picture of capital markets implies understanding the breakdown of private and public issuance.  This breakdown reveals that in order for capital markets to function smoothly over periods of violent credit events, the Federal Agency Guarantee is of critical importance.  When private label MBS collapsed, the housing market would have not rebounded to the level it has without the Federal Agency support for the market.  The same is true in the multifamily space.  These are important truths to consider when considering the privatization or dismemberment of these important agencies. 

Low-hanging Fruit in Government Provided Data 

I have recently been tasked with writing a series of articles for The Property Chronicle on economic data and statistics. My series covers why statistics matter, the major trends behind the declining accuracy of survey-based economic indicators, and the path forward for Government providers of economic data.  My experiences as a data collector have led to one major opinion:  A major facet of the modernization of the Agencies is actually in areas of low-hanging fruit.  Agencies can easily extend their datasets back in time (data entry is cheap repetitive labor).  They can also better organize their data dissemination to make it more easily accessible.   For example, many organizations leave crucial data in pdf format, when it would be trivial to provide for a spreadsheet (i.e. The Treasury Bulletin). Another no-brainer would be to provide one permanent link, instead of changing the name each time an update occurs.   

I do not know when exactly I became the unofficial arbiter of government data best practices, but it takes someone with a holistic view to see that the state of government data practices is disparate. There is an invisible wall that exists between the Agencies - they do not communicate or share ideas.   

Having studied many archival statistical releases through time - I have drawn one important conclusion.  The same data that is collected through time becomes lost in time when statistical releases are not properly archived.  This can happen for a number of reasons, a popular one being when agencies rely on a third organization to disseminate their data and stops reporting it for themselves.