Three Must-See Charts on U.S. Household Worth

The video discusses the low returns of the US business sector, highlighting concerns about profitability and growth. It examines the role of shadow banking in the financial system, noting a decrease in credit extension. The video also explores the corporate bond market, emphasizing the risks posed by mutual funds holding a significant portion of these bonds, which could lead to a market crisis if mass withdrawals occur.

What is a major concern associated with the low returns on equity for US businesses?

• High profitability

• Increased leverage

• Rapid growth

• Low profitability

What is shadow banking primarily composed of?

• Commercial banks

• Government bonds

• Insurance companies and pension funds

• Retail investors

Why might regulators be encouraged by the reduced role of shadow banking?

• It indicates a stronger economy

• It suggests less risk in the financial system

• It reflects higher interest rates

• It shows increased demand for credit

What is a potential risk associated with mutual funds holding a large portion of corporate bonds?

• Higher interest rates

• Increased bond prices

• Market crisis if many investors withdraw simultaneously

• Decreased bond yields

Who are the other major holders of corporate bonds besides mutual funds?

• Government agencies

• Households and institutions

• Foreign investors

• Central banks