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US Households Have Never Been More Reliant On The Stock Market For Their "Net Worth"
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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It is going to sting soon.
If you have any money left in the racket..er market get it out now! Or pretend it's early October 1929...
Note to Floridians: Don't consider your real estate too tangible.
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.
Like when TPTB take over/mandate 401k's?
I've never been more reliant on the stAck market for my net worth.
You must be from BAston.....
You forgot the "h."
Sounds "combstacky."
Be careful.
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...
Boating accidents are 9/10 of the law.
there's a chart for that:
http://research.stlouisfed.org/fredgraph.png?g=gjb
Stockholm sounds pretty good about now
As in Stockholm Syndrom. Two thirds of this country are in love with their captors.
Does that include bonds and money market?
I'm about 10% equities right now and lovin it.
btw: What's Paul Krugman's net worth?
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.
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....
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.
The so called wealth affect has not created any real wealth for most small businesses. The people I call on are struggling big time.
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!!!!!!!
I just sharted from confidence!
Did you have horseballs at Ikea or McEscolar Filet for lunch?
Give the pawn biz a try. It's been booming!
This should end well.
It doesn't feel like cancer when you got QE. The drug that make you feel rich when you're poor.
They're cutting my hours in half, but other than that everything's swell here.
Gee wonder what happens when the Fed stops injecting $85 billion a month of sugar into the markets
Temper Tantrum
They'll inject twice as much?
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]...
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.
And if some event prompts everyone to get out of the markets quickly ... most will be too late.
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.
"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.
Yep. People care about the stock market because of their 401k...
Correct. Thus you have 'skin' in the game, but soon you won't.
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)
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.
Ben will never, ever, ever, get his balance sheet together. Like ever.
Sounds catchy, especially if put to a pop song.
It feels like I'm floating.
Stockholm syndrome or Ikea Syndrome??
Everyone knows it's Helsinki Syndrome, according to Die Hard. As in "Helsinki, Sweden."
CONSUMER CREDIT RISES BILLIONS....LIFEBLOOD OF THE ECONOMY!!
YEAH!! AWESOMENESS!!
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.
Beef stew??
And what percent of the population has these assetts?
And I don't see mobile meth labs listed anywhere.
It should have crashed long ago. But it keeps on going magically. I do not believe in magic except when unicorns talk on TV.
So Ben IS doing the right thing after all by propping up the equity markets?
Depends on your perspective concerning pitch-forks. (metal end, or wooden?)
Housing is NOT an asset in my book, but rather a commod, that is consumable and liability. It does not provide you monthly income, and they only way to see money is to sell it, and live in a card board box... author is delusional....
He did put the phrase "net worth" in quotes.
Well, I don't even consider it "net worth" as to gain anything from it you have to sell, but unless you plan on living in a box, you have to turn around and buy something else. Its only an asset upon your death and your kin benefit...
I agree with you.
It would be like a woman claiming her diamond engagement ring as part of her "net worth".
Yes, it could be considered as such --- but how many women are EVER going to sell their engagement rings, much less do so as casually as they would sell a stock or a bond?
Net worth is only important if you want to get another loan...and that is what they want...your serfdom forever.....loan you to death....
Just wait until they start listing iJunk. I bet you'll really be amused then.
http://philadelphia.cbslocal.com/2013/03/06/study-shows-more-americans-a...
Title from DRUDGE:
Study Shows More Americans Are Raiding 401(k) Accounts To Pay Billshttp://www.nationalseniorscouncil.org/index.php?option=com_content&view=...
And this one.
Nationalization of 401k in USA.
Guess that means the Bureau of Lying Statistics (BLS) will have to come up with a whopper employment number tomorrow morning to keep the party going.
Yup, it can improve just a little when they need it but never get down to where the FED has to stop the kool-aid flowing. I don't think they have to worry for a while cause the GOV will go bust if it happened. Besides, jobs are gone for good.
Goes to show that the government doesn't give a shit about it's citizens. They know what's going on and hope that those in the market feel rich even though most can't touch the money. They want them to buy shit using credit thinking they can afford it. Oh, wait! That's been the way forever. Too bad everybody doesn't read ZH.
The problem with people is not only do they not read articles such as these, they don't read in general.
Reading articles is easy. Reading a text and really understanding and studying its contents is a foreign concept to the sheep.
Even ZH is not immune to the ignorant, logically challenged dimwitted culture. As I have encountered many 'occupy wallstreeters' , Jewish bigots, and various other infantile dipshits on these posts. The problem is more serious then even percievable.
Yes LoF. There is always a handful, but, by and large ZH'ers (in addition to frustration), are a sharp lot and can hardly be said to represent the ignorant, logically challenged dimwitted culture you speak of. Naa uhhh. Maybe at WaPo et al. Not here, because most of those "dimwits" will get their hat handed to them here, for, at Zero Hedge........THERE IS NO MERCY for making a stupid comment. EVER. viva la ZH'ers! You keep it real.
I hope you are correct that these infantile low rents are within the law of averages here on ZH. But I think their numbers are much higher.
The wealth effect...such crap..and BAMM...gone faster than before
So... if someone were into conspiracy theories, they might think it would be a good time to yank the rug out from under the stock market, which is levitating on bullshit, in order to roll private retirement accounts under the care of uncle sam for people's own good?
Stranger things..
Too soon. There's still too many weak hands to shake-out before collapsing the whole edifice.
I work as a security guard at $12.00 a hour. With whatever i have in savings, i realised that my money would never grow in a savings account, CD's, or bonds.
So i turned to the Stock Market, cause...i really had no choice with my income.
Yup, that's how it is these days. You gotta give it to Bernanke. He puts a gun to your head without using a gun.
Your post saddened me and angered me against what they're doing, I wish you luck.
there are so few americans who have tangible, non-retirment equity in the stock market, that talk of a wealth effect is idiocy....for those relying on their home values to give them that je ne sais quoi of wealth effect, look at the past 10 years graph of home values and home equity and tell how that retarded math works....let's do it after a kool-aid on the rocks - it will be so much easier.
Yes, but I know many who lost a lot in the crash and went back in and now say " I made most of it back", bragging like they're ok now. I tell them to do what the rich do. Buy low sell high, maybe it's time to get out. They look at me as though I'm nuts and I have to shy away cause I don't really know if TPTB will really push it higher as they probably will. One thing I do know is that when it crashes, it'll be because TPTB will have a jump on the small guy and like always, the small guy will get crushed.
The sheep are raiding the 401k's and wasting their parents/grandparents hard earned savings on Starbucks mocha frappa crappas, and Hollywood babylons mindnumbingly idiotic cinematic productions.
I am not saying all raiders are delinquents. Many are using that money for the neccesities. That is why people saved. For the rainy days,months,years,decades ahead. But I know of so many that are not budgeting themselves and squandering it on worthless unessentials.
They will never learn until they are back on their knees. Then they will eventually forget that experience and then it will be business as usual for boobus-americanus.
Correct. Also to pay bills when unemployed. The ride down the Deleverage hill is gonna be a very bumpy ride for the Economy class. Hang on!
Jesus Christ.
In a sense though, I'm glad that most boomers, and well paid folk, fall for this crap. Because when it finally dives, they'll finally feel the pain most of us experience.
These folks are, for the most part, the enablers of the polticians and the corporate execs and the banksters who have raided the system over and over for their benefit.
It's only fitting that they have their "AAAANNND IT'S GONE" moment.
You reap what you sow, motherfuckers.
+100. Fucking boomers are more left of center ideologues than any other demographic in history. Lets see their fucking pensions (specially those government long ended guarantees for many of them) take a full body blow. I'm sick of them pointing fingers at everybody but themselves. Immoral fucks.
I empathize with your position, but you have to identify the divide and conquer tactic of the rich -vs- the poor. The true enemies are not other, more affluent Americans (banksters excluded). The real enemies are the Federal Reserve System, Global Corporations, and their 'employees' in Congress. It's tough, but you need to keep your eye on the ball...
Greenspan would have pulled the rug out by now !!
Long, lumps of coal. They burn longer then stock certificates.
Yeah. I believe Greecespan would have risen rates by now. Which goes to show how demented this present fed hed is.
You are right and I know little about investing but know about comupter language and coding and we both agree from both areas. I said a while back that we have an imblance with tangibles and intantibles. There's nobody that says it better than Mike Osinski who wrote the software back in the 90s that was sold to all the banks that used and aggregated the data for sub prime loans "With software you can do anything, create a world of fantasy"...well they did it again except we have more players and little different game here. If you never watched it, the quants documentary is great and quants even like the video as they say all the money is mad in the front office and they end up being the "bitches" in the back that do all the work. They make good money but nothing like the front office for sure.
It is video number three on the Algo Duping page of videos.
http://www.ducknet.net/attack-of-the-killer-algorithms/
Also, whatever the GOP has with this digital illiterate virus, it seems the White House staff is catching it...
Homeland Security head who won't use email (an excuse not to particiapte in technology)
HHS director that thinks we have algorithm fairies out there for quick fixes..with bees in her bonnet
http://ducknetweb.blogspot.com/2012/06/hhs-secretary-sebelius-still-look...
DOJ director that's scared of the IT and Quant shadows...should hire some anti quants..
Secretary of State Kerry that says "it's ok to be stupid"...
There's 4 people that worry me with digita illiteracy that don't participate running big department head...
Now we are looking at yet anohter attorney and not a technologist to run the SEC...good partner for Holder who's already shaking with digital illiteracy and now we hear the FBI with investigating will get a chance to hone up on their technology skills to investigate, unless the sequester cuts off their funds and everything stops.
Like I said, whatever the GOP has with digital illiteracy, it's spreading...
I should include this link again as it's one folks should know about with the banks selling our charge, and debit purchases to health insurance companies, so why do they now need this as well as all the other data they have? They will query it with other data they have and re-sell it..and tomorrow you can read some press release about some new analytics program out there for sale.
http://ducknetweb.blogspot.com/2013/03/insurance-companies-are-buying-up...
Data selling contributes big time to the intangible/tangible unbalance as it's all intangibles and the data is geting more flawed all the time and we need to tax and license it as this is out of hand and is an epidemic, nobody wants to build factories anymore when all you need to do is query and buy and sell data and make billions in profit. Walgrees in 2010 selling data made short of $800 million...so use that as an example and add up all selling data and you have billions of profit and why do you think all the companies have so much cash...this contributes to a lot of it.
Then after that, consumers are screwed as the analytics are used out of context, or flawed to begin with and we are all guity of some data flaw that stops us from getting a car, a house or whatever. Huge problem and it's the folks on Wall Street and the other data sellers that are holding back the consumer end of recovery as the algorithms are still moving money in their direction. Nobody has fixed any algos yet, in the markets and in other verticals too, they all execute.
You can watch this video of big companies and their forum discussions on basically saying "we don't know what has value and what we are doing with our data"...
http://ducknetweb.blogspot.com/2012/11/big-dataanalytics-if-used-out-of....
But there are others that know exactly what they are doing with messing with risk, up or down and creating models, partly fiction to make money.
Here is the Fucking Deal, if you are not aware that ALL THE OLD RULES ARE OVER, you are gone, dust, drone bait:
You no longer have rights or protection by due process,
Failure to comply, or worse yet "question" may well result in incarceration,
The digital bank account at E-Trade, CITI, Chase, BOA, Merrill is a total illusion of false security.
I am not bunker, bullets and a Bible guy, but I am far from accepting the Bullshit that is being fed to " Joe Six Pack". Anyone remember him?? That is part of the problem, we are exposed to so much new information and DISINFORMATION every day that we fail to sort the wheat from the chaff.
Develope a core, invest in your core values, support those who think alike and ignore those who do not.
If you feel that there is a real benifit in taking the risk and commitment of a loan, do it.
Best advise I ever got " If I loose $100,000.00 I have a problem, if I loose $1,000,000.00 the BANK has a problem. Never forget it.
The industrial revolution was a technological revolution powered by fossil fuels. It is this technology that created the modern money system and the modern corporation. We are reaching the end of the era of cheap oil, which has been a fundamental element of the money system for a century and half.
We are hurling at tremendous speed into a new era of technology, call it the quantum era, one empirically different than the industrial era, both quantitatively and qualitatively.
Finally, humanity for the first time in its existence is coming to understand we live on a small planet of limited resources and our actions in that regard all have consequences. So we continue, both the US and China, moving head long and full speed in one direction with waves crashing ever more furiously across the bow, along a course in historical terms that is very new. The Great Helmsman looks upon the increasingly frenetic scrambling across the deck by governments, corporations, and it's "elites".......shaking his head saying:
“They have no ‘figures’ in their heads and as a result cannot help making mistakes.”
If we are to look through capitalism’s brief history and try to cut across its myths and propaganda — a thick undertaking for any system that has its own numerous orders of priesthood — nonetheless when we do that, fundamental to the beliefs of the capitalism is the functioning of some sort of quantitative and qualitative accounting mechanism provided by markets and pricing.
Leaving aside the question of what’s a market in a system dominated by a small group of massive corporations, we are led to believe that a pricing system quantitatively gives us some sort of qualitative analysis.
When you have a pricing system where large centralized forces continually intervene in the money system to continue carrying bad debt and continually creating more money to do so, you do not have a very viable pricing system, limiting accountability. The money system becomes increasingly incapable “to determine the qualities of things.”
What we see in China and the US is the morphing of an evolving system of state capitalism, first and foremost protecting established interests, whether they’re financial, technological, or political. The overall health of the economic system is valued solely on the “profits” of massive corporations. Both are centralized systems and ever more unaccountable in monetary value. Essentially their money systems are incapable of helping provide “the basic statistics, the main percentages, and quantitative limits” of the economy.
Especially when people's savings are attached to said market, this new era of "State Captialism" is scarier than you can ever imagine.
Stock market...
The biggest ponzi game of them all!
Next to: 1. Original Sin (Debt), 2. CB & FRB.
Patented and Copyrighted by same bunch.
All violations, infringements and non-compliance shall be prosecuted.
Re-read till you get it.
Holy Mother of God, people are going to get raped up the ass.
And everything else one does to sheep.
My parents have all their money in Rabobank junior stocks and bonds. It is supposed to be the safest bank in the Netherlands but they have a huge exposure to mortgages, they own roughly 1/3rd of the mortgages in the Netherlands, including theirs.
I've been trying to get them to diversify but to no avail, the people at the bank are such nice people, surely there's nothing to worry about.
Should I worry about my inheritance going up into smoke?
Someone said that the market will do whatever will cause the most pain.
Whether it's true or not is open to discussion.
I think that's a corollary to Austrian theory of the business cycle... the higher the hopium takes you, the more painful the withdrawal...
That which is measured in fiat is not measured at all. Mid west farm land is really measured in bushels of grain that it will produce per acre, and western range land is measured in how many acres are needed to support one head of live stock. Wells are valued according to the volume of liquid they produce. Land can lose its productive value if abused and wells can be pumped dry, but they do not lose 50% value in a week. A well managed farm can stay in the family for generations.