US Households Have Never Been More Reliant On The Stock Market For Their "Net Worth"

Tyler Durden's picture




 

When it comes to assets, there are two kinds: hard, tangible assets such as real estate, equipment and durable goods, and then there are financial assets, or "things" that only have an actual worth in the context of a capital (preferably rising) market and a smoothly functioning financial system allowing for value-for-value exchanges and mark-to-market: among these are corporate equities, mutual and pension fund shares and reserves, credit instruments and equity in non-corporate businesses. We bring this up because today, as it does every quarter, the Fed released its Z.1, Flow of Funds report, which shows (among other things most importantly the rise and fall of the shadow banking liabilities as Zero Hedge first started showing nearly three years ago) total US household assets and liabilities. Not surprisingly, with the ongoing surge in the stock market courtesy of the Fed's open-ended QE ticking time bomb, and the second housing bubble courtesy of the banking subsidy known as foreclosure stuffing, in the quarter ended December 31, 2012, at least according to the Fed, the US household's total net worth rose by another $1.2 trillion, taking it to $66.1 trillion (consisting of $79.5 trillion in assets and $13.5 trillion in liabilities).

And despite TV propaganda otherwise, the US household still has another $2 trillion to go before it surpasses its historic net worth record set in Q3 2007, or when the stock and housing bubble peaked last time around.This is mostly due to the delay of the housing bubble from catching up the stock market bubble, as total household assets were $19.9 trillion compared to their peak of $25 trillion in Q4 2006.

However, one thing was particularly notable in this latest update, and as implied by the above paragraphs, is that as of Q4, 2012, total US household financial assets hit an all time high of $54.4 trillion, well over the previous peak of $52.8 trillion in Q3 2007, and nearly $1 trillion higher compared to the past quarter.

In other words, as of Q4 2012, the US household's net worth has never been more reliant on the stock market, which by implication means: Ben Bernanke and his centrally printing colleagues around the world. Because should the central banks pull the $15 trillion in house of cards props, everyone, and especially those whose net worth is concentrated in marked to fantasy financial assets on margin, will be wiped out.

Stockholm syndrome anyone?

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Thu, 03/07/2013 - 16:21 | 3309760 localsavage
localsavage's picture

It is going to sting soon.

Thu, 03/07/2013 - 16:26 | 3309782 YBNguy
YBNguy's picture

If you have any money left in the racket..er market get it out now! Or pretend it's early October 1929...

Thu, 03/07/2013 - 17:12 | 3310023 Joe Davola
Joe Davola's picture

Note to Floridians:  Don't consider your real estate too tangible.

Thu, 03/07/2013 - 16:46 | 3309903 NotApplicable
NotApplicable's picture

Wait until all of the pension funds have to report their losses due to AAPL a single year after they've all been crowing about their recovery post 2008. Some of the best run ones (read: conservative) finally surpassed their 2007 level of their funding ratios.

Live by the AAPL. Die by the AAPL.

 

Thu, 03/07/2013 - 17:11 | 3310020 Captain Kink
Captain Kink's picture

Like when TPTB take over/mandate 401k's?

Thu, 03/07/2013 - 16:32 | 3309762 redpill
redpill's picture

I've never been more reliant on the stAck market for my net worth.

Thu, 03/07/2013 - 16:33 | 3309834 IridiumRebel
IridiumRebel's picture

You must be from BAston.....

Thu, 03/07/2013 - 16:39 | 3309854 NotApplicable
NotApplicable's picture

You forgot the "h."

Thu, 03/07/2013 - 17:29 | 3310026 TruthInSunshine
TruthInSunshine's picture

Sounds "combstacky."

Be careful.

Thu, 03/07/2013 - 16:36 | 3309844 francis_sawyer
francis_sawyer's picture

I've never been more reliant on PROPAGANDA TO HIDE THEFT to make me feel like I'm 'actually worth something' in my whole life...

~~~

I'm relying on my latent bullet collecting 'hobbyist' activities to take me through the next round of fun & games...

 

Thu, 03/07/2013 - 16:37 | 3309847 Unprepared
Unprepared's picture

Boating accidents are 9/10 of the law.

Thu, 03/07/2013 - 16:22 | 3309769 realtick
Thu, 03/07/2013 - 16:22 | 3309770 prains
prains's picture

Stockholm sounds pretty good about now

Thu, 03/07/2013 - 17:03 | 3309934 tenpanhandle
tenpanhandle's picture

As in Stockholm Syndrom.  Two thirds of this country are in love with their captors. 

Thu, 03/07/2013 - 16:22 | 3309771 Sweet Pea
Sweet Pea's picture

Does that include bonds and money market?  

I'm about 10% equities right now and lovin it.

Thu, 03/07/2013 - 16:22 | 3309773 timbo_em
timbo_em's picture

btw: What's Paul Krugman's net worth?

Thu, 03/07/2013 - 16:42 | 3309873 Unprepared
Unprepared's picture

On the Asset side he has an intangible PhD asset, NYT column receivables and overvalued Nobel prize goodwill.

On the Liability side is the long term USD destruction and short term moron revolving line.

You can add and substruct.

 

Thu, 03/07/2013 - 16:32 | 3309776 IridiumRebel
IridiumRebel's picture

No shit! My biz has been DEPLORABLE. It has never been slower. Who are my clients? Normal people. I doubt Soros or Buffet will be walking through my doors....

Thu, 03/07/2013 - 16:49 | 3309914 TruthInSunshine
TruthInSunshine's picture

Bro, you need to get out into the "Virtuously Circular" economy more. It's as easy as ping-pong.

Just make sure you have a stable partner.

Thu, 03/07/2013 - 16:50 | 3309916 Everybodys All ...
Everybodys All American's picture

The so called wealth affect has not created any real wealth for most small businesses. The people I call on are struggling big time.

Thu, 03/07/2013 - 17:12 | 3310021 TruthInSunshine
TruthInSunshine's picture

But, but, FHA-Fannie-Freddie backed housing purchases are booming, consumers are confident as shit - to the point of taking on massive debt again...car sales, especially on loans extended to the near 50% of people buying them who are "subprime" credit risks, are flowering, the deficit is only an official 1.2ish trillion (or closer to 5 trillion, depending on who is counting), and big box stores and restaurants are opening all over this land of milk and honey!

This will be Recovery Summer v4.0 bitchez! BELIEVE!!! SPARE CHANGE & A CUP OF HOPE!!!!!!!

Thu, 03/07/2013 - 17:22 | 3310070 IridiumRebel
IridiumRebel's picture

I just sharted from confidence!

Thu, 03/07/2013 - 17:30 | 3310099 TruthInSunshine
TruthInSunshine's picture

Did you have horseballs at Ikea or McEscolar Filet for lunch?

Thu, 03/07/2013 - 17:23 | 3310074 PAWNMAN
PAWNMAN's picture

Give the pawn biz a try. It's been booming!

Thu, 03/07/2013 - 16:25 | 3309781 Charles Nelson ...
Charles Nelson Reilly's picture

This should end well.

Thu, 03/07/2013 - 16:25 | 3309783 bidaskspread
bidaskspread's picture

It doesn't feel like cancer when you got QE. The drug that make you feel rich when you're poor.

Thu, 03/07/2013 - 16:25 | 3309786 Sweet Pea
Sweet Pea's picture

They're cutting my hours in half, but other than that everything's swell here.

Thu, 03/07/2013 - 16:27 | 3309794 km4
km4's picture

Gee wonder what happens when the Fed stops injecting $85 billion a month of sugar into the markets 

Thu, 03/07/2013 - 16:36 | 3309845 ebworthen
ebworthen's picture

Temper Tantrum

Thu, 03/07/2013 - 16:51 | 3309925 NotApplicable
NotApplicable's picture

They'll inject twice as much?

Thu, 03/07/2013 - 17:44 | 3310160 francis_sawyer
francis_sawyer's picture

Jews printing money out of thin air... That a conclave of jews... 100 years ago... in the middle of the night... on a Christmas holiday... passed as legislation... Then subsequently... Co-opted soverign governments... to engage in WORLD WARS... with limitless budgets... & meanwhile... stole their peoples GOLD... & erected unpayable 'social welfare' ponzi schemes... & place JEW representation in all manners of power banking nodes... Worldwide... Leveraged that to BUY politicians... Subvert the media... Propaganzide 'news' & 'entrtainment' for the sheeple masses... PROFIT from the illicit INTEREST PAYMENTS... By virtue of an illegal taxation scheme... Then ~ profit from the collapse of the aggregate system...

~~~

Yeah ~ My guess is that THEY'LL inject 'TWICE AS MUCH'... Why?... Because nobody has seemed to have learned the lesson thus far [as will be evidenced by the JUNKS that this comments gets]...

Thu, 03/07/2013 - 16:28 | 3309800 ebworthen
ebworthen's picture

Money in the markets = money that can be taxed or vaporized away overnight

No rule-of-law means that "net worth" is a perception, not a reality.

Thu, 03/07/2013 - 17:46 | 3310176 Totentänzerlied
Totentänzerlied's picture

And if some event prompts everyone to get out of the markets quickly ... most will be too late.

Thu, 03/07/2013 - 16:29 | 3309805 insanelysane
insanelysane's picture

We'll know it has gotten bad when the cash registers at Walmart start accepting stocks, bonds, and gold paper.  They already accept the soon to be worthless green paper.

Thu, 03/07/2013 - 16:30 | 3309809 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

"The Lord giveth and the Lord taketh away", but don't forget Lloyd's famous words - "we are doing the Lords work", ergo the squid can withdraw the chalice any time it likes.

When it does,it will be epic.

Thu, 03/07/2013 - 16:30 | 3309815 lolmao500
lolmao500's picture

Yep. People care about the stock market because of their 401k...

Thu, 03/07/2013 - 21:34 | 3310849 Kirk2NCC1701
Kirk2NCC1701's picture

Correct. Thus you have 'skin' in the game, but soon you won't.

Thu, 03/07/2013 - 16:48 | 3309820 Lord Of Finance
Lord Of Finance's picture

If 'boobus-americanus' can not figure out that they need and have to take control of their own destiny,and that especially includes finances, then to hell with them. 

 

They will get what they deserve. 

 

"In the end, were all dead"  (John M Keynes)

 

 

"In the end, we all get what we deserve" (Lord O Finance)

 

 

Thu, 03/07/2013 - 16:31 | 3309823 fonzannoon
fonzannoon's picture

This will be the chart Bernak eventually hold's up when he is at the point of being forced to halt QE. It's the equivelant of pulling the pin on the hand grenade. Everyone will be creaming for him to put the pin back in.

Thu, 03/07/2013 - 16:57 | 3309929 NotApplicable
NotApplicable's picture

Ben will never, ever, ever, get his balance sheet together. Like ever.

Thu, 03/07/2013 - 21:36 | 3310854 Kirk2NCC1701
Kirk2NCC1701's picture

Sounds catchy, especially if put to a pop song.

Thu, 03/07/2013 - 16:32 | 3309826 q99x2
q99x2's picture

It feels like I'm floating.

Thu, 03/07/2013 - 16:33 | 3309835 pezhead
pezhead's picture

Stockholm syndrome or Ikea Syndrome??

Thu, 03/07/2013 - 16:40 | 3309865 McMolotov
McMolotov's picture

Everyone knows it's Helsinki Syndrome, according to Die Hard. As in "Helsinki, Sweden."

Thu, 03/07/2013 - 16:35 | 3309842 PUD
PUD's picture

CONSUMER CREDIT RISES BILLIONS....LIFEBLOOD OF THE ECONOMY!!

YEAH!! AWESOMENESS!!

Thu, 03/07/2013 - 16:38 | 3309851 22winmag
22winmag's picture

A crumbling house in a war zone neighborhood subject to heavy taxes (ie real estate) is considered a tangible asset? I will stick with cases of beef stew and cases of ammunition for my "tangible" assets. If you can't eat it, drink it, harvest it, smoke it, shine it, or fire it, it's not really an asset.

Thu, 03/07/2013 - 16:39 | 3309855 Racer
Racer's picture

Beef stew??

Thu, 03/07/2013 - 16:38 | 3309853 Racer
Racer's picture

And what percent of the population has these assetts?

Thu, 03/07/2013 - 16:53 | 3309936 NotApplicable
NotApplicable's picture

And I don't see mobile meth labs listed anywhere.

Thu, 03/07/2013 - 16:39 | 3309858 are we there yet
are we there yet's picture

It should have crashed long ago.  But it keeps on going magically. I do not believe in magic except when unicorns talk on TV.

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