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US Household Assets: $78.2 Trillion, Liablilties: $13.5 Trillion; Net Worth: $64.8 Trillion

Tyler Durden's picture




 

Today at noon the Fed released its quarterly Flow of Funds (Z.1) report in which we found the state of the US household as of September 30, 2012, or just after the market had peaked courtesy of QEternity. Not surprising, total household assets, as always driven primarily by the stock market, rose by a total of $1.7 trillion, consisting of $0.5 trillion in Corporate Equities, $0.3 trillion in Mutual Funds shares, and $0.4 trillion in Pension fund Reserves. The contribution from the so-called "housing recovery", which is merely a two-year long (and continuing) instance of Foreclosure Stuffing: a mere $0.4 trillion, or less than 25% of the total quarterly net worth increase.Said otherwise, any drop in the stock market will promptly wipe out any "gains" as a result of the housing "recovery."

Another way of visualizing the household balance sheet: total assets of $78.2 trillion, of which just $24.6 trillion was in the form of tangible assets (Real Estate, Durable Goods and other), or under one third of total.

The balance, or $53.6 trillion, comprising of deposits, corporates, mutual funds, pension funds and other assets, was all in one way or another tied into the stock market and the viability of the financial sector.

One can see why with over two thirds of total household assets embedded in the stock market Bernanke will never allow stocks to go down, even if that means monetizing every last one of them (after he is done with all fixed income of course). On the liability side, total debt remained flat with Home Mortgages declining by $0.1 trillion, primarily as a result of discharges, offset by $0.1 trillion increase in Consumer debt. Net result: household net worth at September 30, 2012 for the world's wealthiest nation was $64.8 trillion, or back to where it was in Q4 2006.

Somewhere, someone's mouth is watering profusely at the mere though of applying a uniform tax on all household assets. After all, it's "only fair".

The change of the household balance sheet over time:

 

And a snapshot of the balance sheet as of September 30.

Source: Z.1

 

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Thu, 12/06/2012 - 18:29 | 3040758 FL_Conservative
FL_Conservative's picture

Which is why one buys lots of PM's and keeps their net worth off of the public radar and safe from the criminal political class.

Thu, 12/06/2012 - 18:34 | 3040769 SilverRhino
SilverRhino's picture

Gold, silver, and platinum group metals don't even show up on that radar (thank God).

 

 

Thu, 12/06/2012 - 18:39 | 3040800 Bastiat
Bastiat's picture

They didn't make that, somebody else did--why, the very presumption and arrogance of ownership!! 

Thu, 12/06/2012 - 18:57 | 3040835 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

National net worth of $60+T works out to an average net worth of around $200,000 per American man, woman, child.

Thu, 12/06/2012 - 22:04 | 3041377 Argos
Argos's picture

Yes, my back of the envelope calculations agree, and I don't believe it.  If about 50% have zero assets and most people are living paycheck to paycheck where do they come up with such a HUGE number?

Fri, 12/07/2012 - 02:43 | 3041823 fourchan
fourchan's picture

leave me out of this.

Thu, 12/06/2012 - 19:03 | 3040857 Antifaschistische
Antifaschistische's picture

"Somewhere, someone's mouth is watering profusely at the mere though of applying a uniform tax on all household assets. After all, it's "only fair".

BINGO BINGO BINGO BINGO BINGO BINGO

"Hide Thy Wealth"  

Thu, 12/06/2012 - 22:02 | 3041367 CPL
CPL's picture

Because Banks don't have to report the loss EVER with the removal of Mark to Market in 2008.   I wonder what the real number is.

 

Thu, 12/06/2012 - 19:06 | 3040861 Mr Pink
Mr Pink's picture

Why not? When you own a business , the county taxes you on your property and everything inside.

Start taxing people for whats in their house and TVs might start getting smaller.

While theyre at it tax my dog, ammo, silver, canned goods, beer.....Damn! I better hide my golf clubs! They might charge me $100 a year just to own them

Thu, 12/06/2012 - 19:12 | 3040881 francis_sawyer
francis_sawyer's picture

I'd like to see them come & try to tax my ammo...

Want some of my caps?... Here, they're yours... I'll go ahead & keep the brass casings...

Fri, 12/07/2012 - 11:03 | 3042569 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

only evil and selfish people refuse to share what they own. remember you did not build it so what right do have keeping it from the other people who did not build it either. at some point you have made enough and those who have made less have a fair and equal right to take from you what they see as your "enough". and if you try any type of resistance that appears to be violent the "fair and equal" people will kill you and yours because you will be acting like a terrorist. /SARC.....

Thu, 12/06/2012 - 20:16 | 3041064 Peter Pan
Peter Pan's picture

If net assets are back to where they were in Q4 2006 which was still a period of "good times", why the heck are we in such a mess? Either the statistics are BS or one section of society has been suctioning another section of society of whatever they had left. Then again, someone has been accumulating all of the gains to the exclusion of the other 99% by reaping the gains of successive QE's.

 

Thu, 12/06/2012 - 20:23 | 3041097 whotookmyalias
whotookmyalias's picture

I have never ever heard of BS statistics and manipulation.  Never.

Thu, 12/06/2012 - 18:31 | 3040762 Insideher Trading
Insideher Trading's picture

MUAHAHAHAHAHAHAhAAAAAA

http://research.stlouisfed.org/fred2/series/

rahrahrahcovery

Thu, 12/06/2012 - 19:50 | 3040992 max2205
max2205's picture

50% of fhose so called assets are fantasy value; pensions, right; home equity... Sure; the rest is unfunded ie never will get all of it; and cash in the stock should be hilarious to exit.

Boom

Thu, 12/06/2012 - 20:41 | 3041152 Insideher Trading
Insideher Trading's picture

Must've made a mistake in my link above...

http://research.stlouisfed.org/fred2/series/MZMV

Fri, 12/07/2012 - 01:56 | 3041774 Solon the Destroyer
Solon the Destroyer's picture

The thesis is wrong. The equity market is irrelevant. Yes there is a wealth effect there that forces the hand of the Central Banks to intervene, but when we hit crunch time, and we will, and the Fed has to choose between equities and bonds, they will choose bonds every single day of the week. And we all know this.

The end of the bond market in the reserve currency is the end of everything. Gold will go into immediately backwardation till a working system supersedes the chaos. But we are a long long way from that day. Since the greenback is the reserve paper, for it to collapse will require a flight to safety to it from all other major currencies and then a subsequent event or change in sentiment. That flight is yet another canary for collapse but its one which could take a long time to complete. (Stack!)

The whole non-gold system since Nixon has been dependent upon ever lowering yields (and also ever-pyramiding derivatives to counter the lack of extinguishment in the system), thus giving those who speculate and those who are forced to speculate in government bonds fantastic capital gains. Keeps the game afloat. And it's the same way the bond vigilantes made most of their money during The Great Depression too. Capital gains. Selling into a guaranteed buyer. Front-running has been a 30 year game now and in US terms will continue for some time.

The long bond is doubling in price in shortening cycles. When capital is fleeing to you, despite the low nominal yield, this yield can continue to halve without fear of bid. Cha fuckin ching.

Some don't get that the periphery has to collapse first and Jesus the periphery of Europe hasn't collapsed yet. People say that US bonds can't yield lower... that the rate must go up... fhey miss the flows. Money is going to keep flowing into the US dollar. It's why Barry wants to tax everything... To drive capital out and boost exports and devaluation, but his efforts will. be futile. As the peripheral Ponzi's collapse the dollar will only strengthen... till the world finally trusts no promise in the system -- at which point every handler of wealth will pile into gold.

The question will be sentiment and whether it can give up the system before the system does. I'd like to think the collapse of Europe would shake the faith in US paper but can't know if that will be immediately subsequent. It's going down though either way.

We abide.

Fri, 12/07/2012 - 09:12 | 3042098 Common_Cents22
Common_Cents22's picture

Least worst.

When you are in a bar at last call and there are a few chicks left, you man up and take home the least fugly.

Fri, 12/07/2012 - 11:14 | 3042631 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

+1000
to the point. direct. correct
thanks

Thu, 12/06/2012 - 18:34 | 3040770 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

The implied U.S. Household debt / capitalization ratio of 17.3% seems way too low.

Thu, 12/06/2012 - 19:27 | 3040920 Ookspay
Ookspay's picture

It is low. Couple the fact that the "liquid" derived from said assets is rapidly depreciating fiat and this is not good news at all. Using a truly objective measure Gold is worth $10,000 an ounce.

Keep on stackin'!

Thu, 12/06/2012 - 18:34 | 3040773 John Law Lives
John Law Lives's picture

Why is the federal debt not included as a liability for US households?

http://www.foxnews.com/politics/2012/10/02/federal-deficit-increased-by-...

 

Thu, 12/06/2012 - 18:41 | 3040802 Bunga Bunga
Bunga Bunga's picture

Because government ows that money to itself. It is literally zero, does not really exist. Only fearmongers and terrorists claim there is public debt.

Thu, 12/06/2012 - 18:43 | 3040807 John Law Lives
John Law Lives's picture

The annual interest payments made on that debt are real enough.

Thu, 12/06/2012 - 18:53 | 3040829 Bunga Bunga
Bunga Bunga's picture

Interest is paid by the government to the government = zero.

Thu, 12/06/2012 - 19:08 | 3040868 Mr Pink
Mr Pink's picture

Really? Guess they have been selling those T-bills for nothing

Thu, 12/06/2012 - 20:20 | 3041081 Peter Pan
Peter Pan's picture

I don't quite agree. The government debt is largely the dollar figure of accumulated promises made by the government which it cannot keep.

Fri, 12/07/2012 - 06:34 | 3041947 Mario55
Mario55's picture

Bunga Bunga,

 

I think you are wrong.

When the Fed buys Treasurys, it creates money first (liability side of the BS), it buys Treasurys (asset side of the BS)

In the Treasury BS, issue of Ttreasurys = liability, proceeds from the issue = asset (cash)

Then the cash is spent and distributed out by the Treasury, people / banks accounts have the cash which is an asset / credit on the FED.

Result you can net out the Treasury and the Fed  but the Fed's liability towards the people / banks in this case remains.

 

Fri, 12/07/2012 - 09:17 | 3042103 Common_Cents22
Common_Cents22's picture

that cash is sitting in bank accounts of the financial elite in the drag on markets of transaction fees and frontrunning, carry trades,  and politically connected.    None of it gets to citizens or small/medium businesses.   Try to get a loan or LOC for your SME, you can't.   Try get a mortgage, it's nearly impossible.   Real interest rates?  15-20% for hard money RE lenders,  for SME's?   financing their receivables at 2-4% a MONTH. 

Thu, 12/06/2012 - 18:35 | 3040777 unrulian
unrulian's picture

Worth? it's only worth what someone will pay

Thu, 12/06/2012 - 18:38 | 3040788 TheSilverJournal
TheSilverJournal's picture

Not to mention real estate is set to crash 75% when interest rates skyrocket and the broke government is no longer able to back every single newly issued mortgage so down payments will also go to around 50%.

Thu, 12/06/2012 - 18:37 | 3040791 Wakanda
Wakanda's picture

"Somewhere, someone's mouth is watering profusely at the mere though of applying a uniform tax on all household assets."

That mouth can pucker up and very gently and lovingly kiss my ass.

Thu, 12/06/2012 - 18:39 | 3040794 Bunga Bunga
Bunga Bunga's picture

When all that liabilities get paid off, there is little money left. How can one value assets with $78 trln then? But "net worth" makes people feel rich, people wanna hear good news. 

Thu, 12/06/2012 - 18:39 | 3040799 LMAOLORI
LMAOLORI's picture

 

 

Have to agree with John Tamney here our country is being governed by juvenile delinquents who seem to have no real idea of how to budget.

Quantitative Easing: The Monetary Policy Of the Adolescent

http://www.realclearmarkets.com/articles/2012/12/06/quantitative_easing_the_monetary_policy_of_the_adolescent_100027.html

 

Cure for Economic Slumps Seen in Raising Rates: Cutting Research

http://www.bloomberg.com/news/2012-11-23/cure-for-economic-slumps-seen-in-raising-rates-cutting-research.html

Thu, 12/06/2012 - 18:46 | 3040811 MyBrothersKeeper
MyBrothersKeeper's picture

According to USdebtclock.org household assets ar about 62 T and going down evey minute. http://www.usdebtclock.org/#

Thu, 12/06/2012 - 18:46 | 3040812 fonzannoon
fonzannoon's picture

What the fuck is a liability here? The national debt is 16 trillion. We know there is a trillion in student loans. The note on my house is 400k. I live in the northeast...that is LOW.

WTF?

I keep reading the average dude has less than 10k in savings and barely any retirement probably with a loan out against it.

78 trillion vs 13.5 trillion?

Where is my steak I am going back into the matrix. Apparently everything is fine.

Thu, 12/06/2012 - 19:10 | 3040874 CrashisOptimistic
CrashisOptimistic's picture

Something is wrong with this report.  Notice this from just a few days ago:

http://washington.cbslocal.com/2012/11/30/study-american-households-hit-43-year-low-in-net-worth/

 

"WASHINGTON (CBS DC) – The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969."

Thu, 12/06/2012 - 18:48 | 3040815 buzzsaw99
buzzsaw99's picture

oh yeah, the buffett household, the gates household, the dell household...

Thu, 12/06/2012 - 18:49 | 3040820 fonzannoon
fonzannoon's picture

good point buzzsaw. That 64 trillion is probably three households. The rest of us are negative 20 trillion

Thu, 12/06/2012 - 18:50 | 3040822 buzzsaw99
buzzsaw99's picture

you aren't far off my friend

Thu, 12/06/2012 - 18:48 | 3040818 Bastiat
Bastiat's picture

Maybe 10 families own 90% of that net worth?

Thu, 12/06/2012 - 18:57 | 3040827 lolmao500
lolmao500's picture

of which just $24.6 trillion was in the form of tangible assets (Real Estate, Durable Goods and other), or under one third of total.

So in other words, America's credit limit is $24.6 trillion? Well then, spend away, there's 8 trillion left on the credit card!

http://www.wbj.pl/article-61278-prosecutor-tnt-was-found-on-smolensk-pla...

Prosecutor: TNT was found on Smolensk plane wreckage

 

After denying a Rzeczpospolita report in November that claimed Polish investigators had found traces of TNT and nitroglycerin on the wreckage of the TU-154 plane that crashed in Smolensk, Russia in 2010 killing President Lech Kaczy?ski and 95 others, Ireneusz Szel?g, the head of the Military Prosecutor's Office in Warsaw, has now admitted that investigators had indeed found TNT on the plane wreckage.

Mr Szel?g made the statements before a judicial parliamentary commission on Wednesday saying the investigator's equipment had indicated traces of TNT were present on the TU-154 plane.

 

Thu, 12/06/2012 - 22:58 | 3041508 RealFinney
RealFinney's picture

TNT? Were they assasinated by Alfred Fucking Nobel or something?

Thu, 12/06/2012 - 19:11 | 3040830 devo
devo's picture

Oh good, Bernake should be able to raise interest rates any moment now...

*twiddles thumbs*

Thu, 12/06/2012 - 19:00 | 3040847 LMAO
LMAO's picture

There is no spoon!

There are no assets!

Only liabilities and counterparty risk.

Thu, 12/06/2012 - 19:02 | 3040851 Seasmoke
Seasmoke's picture

My biggest asset is my house , if you ignore the 500k mortgage.

Thu, 12/06/2012 - 19:03 | 3040856 Savyindallas
Savyindallas's picture

This is wrong. 64 trillion divided by 330 million people means the net assets of every american is nearly 200 grand  -or 800 grand for each and every family of 4 in America  -most of the 330 million don't own squat  -that means a few own enormormous wealth  -I say we have a 20% tax on all wealth over $20 million per family -and 30% on all wealth over $100 million and 50% over a billion and 70% over 10 billion. . Let's even it all out  -these bastards stoled most of it anyway. We'll call it a theft tax. All these rich crooks are turning me into a socailist. Better than crony capitalism with the rich owning all our degenerate politicians.  

Thu, 12/06/2012 - 19:39 | 3040963 Bear
Bear's picture

Like your idea, but to provide for ongoing health, we must get rid of the FED or we'll be right back in this state 20 years from now. Isn't it great to contemplate these grand ideas ... with not a ice cube's chance in hell of any of it coming true.

Thu, 12/06/2012 - 22:14 | 3041403 Pareto
Pareto's picture

+1 for "ice cube's chance in hell" ha!

Thu, 12/06/2012 - 19:49 | 3040985 riphowardkatz
riphowardkatz's picture

plenty of more wealth to redistributed. let the charade continue

Thu, 12/06/2012 - 19:50 | 3040989 Dre4dwolf
Dre4dwolf's picture

Bernanke, just let it go... let things correct, you are only going to make the pain worst later on, or just stop playing around, lets liquidate all this garbage debt, seriously are you clowns gona cry about some made-up funny money you lent out 8 years ago? just let it go... it was never a material loss anyway, inflation already de-valued that lent out money already.... just forgive it and move on.

Fri, 12/07/2012 - 07:42 | 3041998 Tic tock
Tic tock's picture

Exactly! everyone, subconsciously or not, is 'waiting' for the 'something' to happen - in terms of markets - this is the point at which fair value is found. Which we know is about 200 S&P pts lower from here. The other half - there is no Trust in bankers or banks, splice the cake anyway you want - that's not going away, and for good reason - there is overwhelming evidence that these Bankers really, honestly, don't know enough about Banking and a little too much about Bribery. ..literally, that's what some newsletters espouse - choose a company based on its capacity to Bribe; and while that's a truism - people just need a little leeway to imagine it's still okay - the FED, itself, is saying, echoed from London, "we are the Heart of all Bribery", as is the BIS. ...wtf! ...and it's only a question of time before the Western-economies become marginal - US has maybe 30 cities, CN has 130 cities. Leaner, Faster, Sharper, Smarter economies., nothing of the sort, Bankers in the US and the UK are too stupid to do anything but suck at the teat - and M.King knows this ...unbelievable! People are not against Merchant Banks, but this is, for men who have understood and experienced the suffering of the real world, a killing joke.    

Fri, 12/07/2012 - 07:56 | 3042007 smacker
smacker's picture

Or as Ron Paul has said for years: "let the markets clear".

I assume the fear in the minds of Ben 'Banana' Bernanke et al is that perception of wealth would plummet and consumer spending completely collapse, leading to a real depression and rapidly rising sales of rope, piano wire and of course, guns.

Thu, 12/06/2012 - 20:45 | 3041166 Darkness
Darkness's picture

You hate Apple, yet you make all your charts on Keynote.

See the irony in this? 

 

Thu, 12/06/2012 - 22:12 | 3041398 Tyler Durden
Tyler Durden's picture

Is Keynote how the Borg collective calls Excel?

Fri, 12/07/2012 - 07:49 | 3042004 smacker
smacker's picture

The two charts in this article appear to have Adobe Photoshop metadata embedded in them...

Thu, 12/06/2012 - 20:46 | 3041168 Tall Tom
Tall Tom's picture

I have read elsewhere that the total assets of the USA were valued at $38 Trillion. I guess that the FED is now applying the abandonment of Mark to Market evaluations, not just to the Banks, but to the rest of the USA.

 

Just dream up a number. That is what your house and car is worth.

 

Oh...That closed down factory over there? If it were producing it would be worth this much so, therefore, it is.

 

Isn't it nice that we can dream up a price and it manifests?

 

This is not for me. I choose not to live in Fantasyland, a suburb of Disneyland, also known as...JAIL.

Thu, 12/06/2012 - 21:24 | 3041274 Tom Green Swedish
Tom Green Swedish's picture

That's Statue of Liberty's encased in stacks of hundos.  Not Bad.  But still would rather not have the government get their corrupt grubby hands on it.

Fri, 12/07/2012 - 07:23 | 3041983 Tic tock
Tic tock's picture

'Household' also, as previously mentioned by ZH, refers to a portion of the equites et.al, purchased by the FED

Fri, 12/07/2012 - 10:36 | 3042465 dizzyfingers
dizzyfingers's picture

http://www.realclearpolitics.com/articles/2012/12/07/thinking_about_the_unthinkable_116363.html

What Obama is really trying to do is to force Republicans to finance – through higher taxes and increased borrowing – the size of the federal government Obama thinks appropriate. And Obama likes his government supersized. Obama’s budget proposes locking in federal spending at 23 percent of Gross Domestic Product, an unprecedented level since the end of World War II. Obama has proposed no constraints that would bring spending below that level and consistently dismisses as non-starters any such proposals by others.

 

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