Record Hot Winter And LTRO Sent US Household "Net Worth" Up By $2.8 Trillion In The First Quarter

Tyler Durden's picture


Curious why the Fed chairman has officially long given up on focusing on housing (and of course generating jobs, or worrying about inflation) as the main source of US household "tangible" net worth creation, and is mostly focusing on the Russell 2000 as per his own words? Wonder no more: as the chart below shows, as of Q1 2012, over two-thirds of household assets, or 68.8% to be specific, was financial assets, or $52.5 trillion: assets who value is dependent primarily on the S&P 500.

As noted above, financial assets are those whose values are driven exclusively by the moves in the S&P. Sure enough, of the $2.8 trillion increase in household "net worth", $2.3 trillion came exclusively from the rise in the S&P, which in turn impacted "corporate equities", "mutual fund shares", and "pension fund reserves", which according to the just released Q1 Flow of Funds report from the Fed, rose by $900 billion, $500 billion and $800 billion in Q1 alone, bringing total household net worth to $62.9 trillion, or levels last seen in Q1 2008.

In other words, rises in the S&P 500 is where the US household gets the biggest bang for its rapidly devaluing buck. So why should Bernanke bother with real estate any more which in an ongoing environment of deleverarging will not rise for a long, long time, when he can simply go for boosting the S&P in any way possible?

Only in Q1 it wasn't the Fed: it was the ECB we have to thank, whose combined $1.3 trillion LTRO resulted in a double impact benefiting solely US households. That and the record warm winter, of course, which provided the cover for "economists" to spin plotlines justifying the rise in economic indicators, which were solely driven not by a general improvement in the economy, but by front-loading demand in the first 3 months of the year.

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Thu, 06/07/2012 - 13:46 | 2504594 ebworthen
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Thu, 06/07/2012 - 14:02 | 2504662 Oh regional Indian
Oh regional Indian's picture

Financial Asshats make up what % now? Incredible.

Insurmountable. Irreversible. Unrecoverable.

Terrible. But the finaicialization of everything has been "in-effect" for a long time now.

Human beings are a number, what to speak of their asshats. 

Ex Nihilo Nihil Venit.

It's the technocratic agenda though, everything MUST have a price. Resource Based Economies, FTL...


Thu, 06/07/2012 - 14:47 | 2504856 Boxed Merlot
Boxed Merlot's picture

Ex Nihilo Nihil Venit...


That's not what Hawking says. 

Current theory is the big bang may not have happened quite as fast as once thought, now the smartest in the room believe it took a little longer for something to come from nothing. 


Thu, 06/07/2012 - 15:37 | 2505071 RichardENixon
RichardENixon's picture

They don't actually think something came from nothing, rather they think that our current knowledge doesn't allow us to look any further back than the "Big Bang."

Thu, 06/07/2012 - 17:12 | 2505399 Boxed Merlot
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Even if you choose not to call it "God", the concept of aseity does no harm to logic, in that though an effect needs a cause, a cause needs no effect. And without logic, science has no meaning.



Thu, 06/07/2012 - 14:06 | 2504691 sbenard
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Who needs an economy? Per Bubbles Bernanke, we have PRINTED prosperity now!

Thu, 06/07/2012 - 14:48 | 2504854 Kayman
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3 Questions:

1. How is this netted out ? If Pension funds own public company shares, isn't this double counting?

2. Have liabilities against the Asset classes been netted out ? 

3. Isn't most of this list Paper assets, holding "claims" on some form of income ?

Ergo, no income, no assets.

Thu, 06/07/2012 - 14:56 | 2504911 ITrustMyGut
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ssshhhhh... DO NOT ASK simple relevent questions.. MIB will come down hard!

Thu, 06/07/2012 - 14:09 | 2504700 LongSoupLine
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uhhh, how come Facebook isn't under the liabilities section?

and what about those foodstamp "assets" 10's of millions are holding?

Thu, 06/07/2012 - 14:56 | 2504907 Kayman
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Share "value"    $57 billion. less $16billion IPO, less $1billion book Liabs.

Change in America's "Net Worth" ?   $40 billion and falling.

Wonderful how we count happy times !

Working for a living is for the little people.

Thu, 06/07/2012 - 14:14 | 2504723 TaxSlave
TaxSlave's picture

That looks like low-hanging fruit.  Ripe, too.


Thu, 06/07/2012 - 15:04 | 2504947 Clayton Bigsby
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Fuck it - Print to Infinity & let's all get rich!  /sarc

Thu, 06/07/2012 - 13:44 | 2504596 Hedgetard55
Hedgetard55's picture

Bernanke put in effect today. He's got the market's back.

Thu, 06/07/2012 - 13:45 | 2504602 Uchtdorf
Uchtdorf's picture

What goes up...

Thu, 06/07/2012 - 13:47 | 2504605 Arnold Ziffel
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Depression is here to stay for awhile.

Better have a seat or lie your feet a tad.

Thu, 06/07/2012 - 13:46 | 2504609 WiretapWilly
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Seems household net worth has been increasing faster than gold-holders.

Thu, 06/07/2012 - 14:09 | 2504704 NotApplicable
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As measured in others' liabilities.

Good luck with that.

Thu, 06/07/2012 - 14:59 | 2504926 Kayman
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Answer my 3 questions above. 

Thu, 06/07/2012 - 13:46 | 2504611 sbenard
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The weather is also taking a hit on grain production. Prepare for higher food prices!

Thu, 06/07/2012 - 13:55 | 2504647 Al Huxley
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No need,  the chairman will say a few of his magic words, and the price of food will drop, while stocks on the shelves will rise.  All hail the all-powerful chairman.

Thu, 06/07/2012 - 14:05 | 2504682 Oh regional Indian
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Juast for the record...crippling food price inflation here in India... crippafriggingling for the lower income groups especially.

Food, it's what NOT AVAILABLE for dinner...


Thu, 06/07/2012 - 14:36 | 2504799 LawsofPhysics
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ORI, every time a paper-pushing asshat wants to talk about "fair taxation" I say only if we can talk about "fair inflation" first.  Just wait until some of the genuinely intelligent folks find themselves out of work and unable to feed their families.  People will do what it takes to survive, period.  And with the crimes that are being commited at the high levels of society, why shouldn't they?  Same as it ever was.

Thu, 06/07/2012 - 15:31 | 2505049 mkkby
mkkby's picture

That's a shame.  Question, why did they have 1 billion babies anyway?

Thu, 06/07/2012 - 16:03 | 2505184 roadhazard
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Those girlz just can't keep their panties on.

Thu, 06/07/2012 - 14:07 | 2504687 azzhatter
azzhatter's picture

Was just reading the Midwest farm report and it isn't pretty. Rainfall 50-60% of normal this year. Concern is mounting. Ungood

Thu, 06/07/2012 - 14:12 | 2504716 NotApplicable
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We've gotten .2" in the last month in one five minute downpour.

On a positive note thought, mosquitos and humidity are both way down, making for tolerable weather.

Thu, 06/07/2012 - 14:16 | 2504734 Marginal Call
Marginal Call's picture

Had about 2 weeks worth of dry weather in Seattle this year.  Wish I could send some of it your way. 

Thu, 06/07/2012 - 14:34 | 2504803 Cupid Stunt
Cupid Stunt's picture

But.. but.. ya can print and twist rain ?  Can't ya..  can't ya !

Thu, 06/07/2012 - 13:47 | 2504615 Jason T
Jason T's picture

I see these details of sovereign defaults and think how is it possible we don't see a wave of sovereign defaults coming given history?

Thu, 06/07/2012 - 13:50 | 2504629 LawsofPhysics
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Humanity collectively thinking it is too big to fail?  Sorry, that's all I got.

Thu, 06/07/2012 - 13:48 | 2504617 CClarity
CClarity's picture

"We're" RICH.  Look at those assets vs liabilities.

Now let's look at the median household.  That will look a lot different in the good 'ol USA. That income disparity thing translates into that dang wealth disparity thing.

Thu, 06/07/2012 - 13:52 | 2504641 TrainWreck1
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* looks in wallet *



Thu, 06/07/2012 - 13:57 | 2504651 Sophist Economicus
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If you have completed your high school education, wait to have children until 21 and are married, you have a 75% chance of being middle class.    If you are a single mom, a male who dropped out of high school and unwed, you have a great chance of living in poverty.

Let's look at the data that way too....

Thu, 06/07/2012 - 14:10 | 2504712 azzhatter
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For the last 40 years, the only growing segment of US population has been the underclass.

Thu, 06/07/2012 - 15:06 | 2504958 Kayman
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And how much real Net Worth is leaked to China everyday ?

Our .000001 % are clueless as to what they are doing to the nation. Unless, of course, they admit to Treason. 

WANTED: Leader  (must be able to read Teleprompter, boyish grin preferred)

Thu, 06/07/2012 - 13:48 | 2504619 SheepDog-One
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Thu, 06/07/2012 - 13:51 | 2504632 EscapeKey
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I thought the warm winter was STRONGLY BEARISH since oil volumes were low?

At least, that's what the establishment propagandists told us just a few months ago.

Thu, 06/07/2012 - 14:06 | 2504683 SheepDog-One
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220...221....whatever works!

Thu, 06/07/2012 - 15:51 | 2505131 BeachBummed
BeachBummed's picture

+1 for vague reference to Mister Mom


Thu, 06/07/2012 - 13:51 | 2504634 unionbroker
unionbroker's picture

wow only 7 trillion to create 3 trillion thats not too bad 

Thu, 06/07/2012 - 13:58 | 2504654 Al Huxley
Al Huxley's picture

Well, since it's all free now, it doesn't matter anymore whether it's 7 trillion to create 3 trillion or 7000 trillion to create 1.

Thu, 06/07/2012 - 14:07 | 2504693 azzhatter
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Thu, 06/07/2012 - 14:13 | 2504722 NotApplicable
NotApplicable's picture

With a hefty dose of ZIRP.

Thu, 06/07/2012 - 13:51 | 2504636 El Oregonian
El Oregonian's picture

The man (Bernank), at the VERY LEAST, should be tarred and feathered... then a match gets struck...

Thu, 06/07/2012 - 14:09 | 2504701 sbenard
sbenard's picture

Is that a recipe for a "poof" or a "boom"?

Thu, 06/07/2012 - 14:21 | 2504754 Marginal Call
Marginal Call's picture

That, is a recipe for fun my friend. 

Thu, 06/07/2012 - 14:31 | 2504795 Paul Atreides
Paul Atreides's picture

Can we replace the tar with fuel oil and the feathers with ammonium nitrate? Now that's fun!

Thu, 06/07/2012 - 13:53 | 2504640 RiverRoad
RiverRoad's picture

And there's an IRA/Pension "pot" the Fed gov. can't wait to "pick" as the Boomers retire....No wonder they're keepin' the market up.  More for them!

Thu, 06/07/2012 - 14:24 | 2504727 NotApplicable
NotApplicable's picture

You leave my dogfood fund alone!

edit: just looked at my 401 acct, which I've had entirely in MM funds the last few years, seeking that "safe-haven." My current rate of return?

One basis point. W00t! I'm rich, bitch!

Thu, 06/07/2012 - 14:39 | 2504657 slewie the pi-rat
slewie the pi-rat's picture

in Q1, fungicideTM won the horse race?

Yay!!!  whata week, BiCheZ! 

check this out from counterPunch: VIJAY PRASHAD
Convulsions in Libya

zeroHeads who have followed this NW0 take-down/over will be able to understand the article which includes this para [Paste}:

The black vomit of oil profits seep into coffers that are absent popular control. Oil contracts have to be doled out with the NATO member states first in the queue. A salty Islamist, Belhaj, is the most popular figure amongst the masses and his political ambitions must be denied. There is too much at stake for the US, its European allies, and the neoliberal clique that runs the National Transitional Council. They are alert to their responsibilities to themselves as the political grammar is written for Libya. Considerations of geo-politics prevent the views of the Libyans from coming to the surface. Bans on political parties are only one part of the muzzle. An amnesty for the crimes of the thuwars means that their victims feel like strangers in their land, and they hold tighter to their guns. This amnesty is of a piece with NATO’s refusal to allow an evaluation of its bombardments on Libya. {oomph: ~slewie]

>>>so it is a heluva read, imo...the piece itself is the story of [Paste}: the commander of the Awfeya battalion from the town of Tarhuna, Abu-Ajilah Habshi [and ends with}  ~~~vanished into the pit of the Libyan prisons. He joins the almost seven thousand detainees who have not been brought before a court

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