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Household Net Worth Hits Record $81.5 Trillion In Q2 Driven By Stock Market Surge
When earlier today, the Fed released its latest Z.1 (Flow of Funds report) for the second quarter, there were no surprises: thanks to the relentless liquidity injections by global central banks (charted here) resulting in record stock market levels, total household net worth rose once more, increasing by $1.4 trillion in the quarter (up from a downward revised $1.2 trillion in the previous quarter) to a new record high $81.5 trillion. This was the result of a $95.4 trillion in total assets, offset by $13.9 trillion in liabilities, mostly mortgage debt of $9.4 trillion, as well as some $3.2 trillion in consumer credit, which may or may not account entirely for the student debt bubble.
The historical chart, net of various extensive revisions to the data, is shown below: on it the impact of the Great Financial Crisis is clearly shown when net worth dipped from $68 trillion to $55 trillion only to ramp in a straight line to the most recent print of $81.5 trillion. Thank you Fed.
But perhaps most importantly, the percentage of financial assets as a percentage of total, just rose to the record high level it has never in the past surpassed: 70.3%. As the chart below shows, this is the highest proportion that financial assets have ever hit in the entire history of modern US society. Every time financial assets hit 70.3% of total, either housing values finally pick up and offset the disproportional increase in financial assets, or there has been a crash in financial asset values themselves.
Why is this important?
Because it means that while in previous wholesale bubbles, at least the general public would also participate in the "wealth effect", when housing assets - spread far more broadly among the US population than equities - rose in value alongside financial assets, which on a discretionary basis are mostly held by some 10% or less of the population. Indeed, real estate assets in Q2 2014 were $22.9 trillion, barely changed from the previous quarter, and well below the all time bubble high of $24.9 trillion as of 2006.
Which means that yet another quarter has passed in which the bulk of "wealth creation" has benefited only the richest component of US society, something that even French economists have finally noticed. As for the non-rich... well, recall: "America's Poor Have Never Been Deeper In Debt."
How much longer can the stealthy wealth transfer of the Fed and its central bank peers, in which only the super rich benefit, continue? The answer is unknown, but if nobody has noticed yet, after some $26 trillion in net worth increases benefiting only the wealthiest Americans, then we doubt anyone will ever notice.
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EAT STOCKS
EAT BONDS
EAT MONEY
EAT SENTIMENT
EAT LOVE
No need for:
Food
Energy
Output
Love is all we need, right?
iPhones too
Surprised we've yet to read an article about the Australian ISIS plot to capture and behead Australian citizens IN AUSTRALIA. News broke last night. Get with it ZH!!!!!
what? the Aussies wanted to sit this one out? not gonna happen if Langley has anything to say about it.
Cash in and hit the casino food buffet.
That's how you win.
Free drinks help too!
Mission accomplished!!!! All we need is Janet to land on an aircraft carrier w aviator glasses on.
My household net worth keeps going up but it sure as shit ain't due to the stock market. It's because I eschew debt, invest in myself, and work like a motherfucker.
What?
You don't live on 'sentiment' and 'love'?
love was hedonically adjusted due to inflation. Now you will settle for infatuation.
lot easier being an Obama cronies, just sell your soul and get rich quick! No hardwork needed....apply for 20 EBT cards, get tax free donation from your fake charity, Obama will "grant" you a couple billion for some fake make work project....just be a regulardemocrat.
Ask the average American, if he has $250k (81trl/316mln) in net assets.
Boy do I feel WEALTH-AAAAYYYY!
Listen. For the next 19 fucking years there will be "NO" major fluctuations in USSA equity prices. Just a slow grind upward which will lead to "MEANS" testing for the retired "FOLKS", which will take the burden off the bankrupt USSA Social Security Administration.
"EASY" solutions provided to "YOU", yes you, by Bangalore!
Lots of chips to rake off the green felt, and homes to be devalued all over again, a la 2008-2009.
Janet is going to do a Greenspan and slowly raise rates to get the party started.
i dont think yellen has the balls for it
Metaphorical, no. Physical, well that is even money.
pods
Listen Pods. You've got some good zingers! Me like.
Don't kid yourself... she has huge balls. Have you not seen that photo of her exiting the back of the limo in a short skirt yet????
Fruit Basket FTW!
#ShePacksHeat
Of course throw in Fed's stated debt of just about $18 trillion, off balance sheet debt, committments, & obligations of let say $100 trillion (estimates range from $50 trillion to $200 trillion), then account for all of the state, city, and other municipal debts, along with the unfunded portion of pension obligations (not accounted for anywhere do to the magic of modern day accounting), and we get a clearer picture of the real wealth of the United States. Maybe this analysis should also account for everyone's share of all of these debts to provide just a little more insight on where we all stand. Nothing like not accounting for all of the liabilities to make everyone feel a little wealthier, healthier, and wise!
Is the US just running up the credit card before they skip out on the bill? Looks that way anyways. What about the last bankruptcy that they are currently managing according to Trafficant? Is there really gonna be a day that "The Company" shows up and takes the property that all these people with grant deeds think they own?
I'm feeling so wealthy. I think I will go out and buy a Lamborghini.
What......me worry?
Dont forget those pesky derivitives out there.
Want to get ZHers investment advice: if you were in your 20s with $10k to invest, where would you put it?
Buy put options, fartherst out year possible, on the uvxy, but only after it spikes up to a double, which may take a year or so.
PMs of course.$9500 in Ag and and $500 in Pb.
Emulate success - buy hookers and blow. Seems to be working well for Jamie and Lloyd.
If you are good at what you do or like...start a small business. Yep, 10 grand is enough. Start small off the books and see if it is something you can handle.
Call some potential clients....like 500...and see if you can handle 499 nos. If you can....you are off to the races. No sarc.
You're young, take a risk on yourself. Find something no one else is doing yet and pour your soul into it.
Yes, find something you love and make money doing it while in the back of your head hope and pray that no fuk face liberals regulate it to death or small dick feds like kevin henry and Bernanke manipulate it, before you can reap the rewards of your hard work. Hope the government moves more towards staying out of everyones shit so they don't plan your destiny for you, because if they stay out of your way you are destined for whatever you want.
Spend 99% to put up a sign calling yourself a Bank. That gives you the ability to print whatever money you want.
The remaining 1% should be carried around in case you need TP.
So if you believe that the world economy is indeed booming, then silver appears to be relatively undervalued based solely on its industrial usage. If, however, you believe that the gargantuan sovereign debt loads will threaten to collapse the financial system just like in 2008 (because nothing has been truly fixed), then silver should appear undervalued given its "precious" characteristics as a store of value. Either way you look at it, silver is attractive at these levels.
http://www.goldsqueeze.com/technical-analysis/market-has-completely-disc...
Only on paper. Let's see you sell thise assets at a turnover rate we saw in say, 2007?
There won't be enough buyers to soak up those assets.
So true.
Get out early.
Before the NO - BID.
an anecdote
i've kept a spreadsheet since 2007 for houses in a vacation area. Inventory for sale steadily dropped after the recession started. Bottomed in 2012. Up slightly for 2013. 2014 race for the exits.
this time last year 1850 properties listed
current 2160 (back to 2010 level)
setting up for (another) nice bust in "value"
A cabin in the middle of fucking nowhere. Use the next 10 you save for solar and food. There is a big storm coming.
Truth!
They can eat and crap their stock holdings.
so stop buying gold or buy buy buy - am I the only sucka that still doing so?
"total household net worth"?????
what a lying hoot !
Break that down into blocks
by net household income,
and see what it looks like.
All the "gain" has gone to the
top 1% and most to the top .01%.
US has printed so much bogus fiat
and kept interest rates so low that
the fattest cats have totally run out
of forklifts to handle their cash and
rational places to store it, so
the only place left to put it is the market.
The bogus media then points out
to J.Q.Public how great the market
is doing, and somehow convinces
the sheep that everything is going great.
Isn't QE wonderful??
(at least when you ignore the
"collateral damage" to the 99%)
"total household net worth is $81.5 billion "
no fucken comment!!!!!!!
The grand illusion continues. I feel like i live on planet stupid.
Yeah... these paper millionaires living in McMansions with a jar of pickles in the fridge are sooooooo wealthy.
VERY IMPORTANT: The really big earners in recent years have benefited greatly from the surging stock prices as much of their income has come from financial markets and gains in equities. Many people seem to think this is the hope of our future.
When you have more than you need or want to put money away for a rainy day where do you store it? If you rated people on a "wealth chart" by how many tangible assets they owned you might be shocked to find much of the wealth people own is in paper and this is full of risk. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/08/where-wealth-is-held.html
Real wealth can be distilled down to whatever produces value that can be hidden from all the various taxmen.
Odd with incomes dropping and record low labor particpation....this would have to do with printing $5 Trillion dollars and giving it to banking criminals while running a trillion dollar deficit every year.....what would this chart look like if you deduct liabilities?