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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
ebworthen's picture

CottonCandyConomy

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...

ori

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
Boxed Merlot's picture

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.

 

jmlu

Thu, 06/07/2012 - 14:06 | 2504691 sbenard
sbenard's picture

Who needs an economy? Per Bubbles Bernanke, we have PRINTED prosperity now!

Thu, 06/07/2012 - 14:48 | 2504854 Kayman
Kayman's picture

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
ITrustMyGut's picture

ssshhhhh... DO NOT ASK simple relevent questions.. MIB will come down hard!

Thu, 06/07/2012 - 14:09 | 2504700 LongSoupLine
LongSoupLine's picture

 

 

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
Kayman's picture

Facebook

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
Clayton Bigsby's picture

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
Arnold Ziffel's picture

Depression is here to stay for awhile.

Better have a seat or lie down...rest your feet a tad.

Thu, 06/07/2012 - 13:46 | 2504609 WiretapWilly
WiretapWilly's picture

Seems household net worth has been increasing faster than gold-holders.

Thu, 06/07/2012 - 14:09 | 2504704 NotApplicable
NotApplicable's picture

As measured in others' liabilities.

Good luck with that.

Thu, 06/07/2012 - 14:59 | 2504926 Kayman
Kayman's picture

WiretapWilly

Answer my 3 questions above. 

Thu, 06/07/2012 - 13:46 | 2504611 sbenard
sbenard's picture

The weather is also taking a hit on grain production. Prepare for higher food prices!

Thu, 06/07/2012 - 13:55 | 2504647 Al Huxley
Al Huxley's picture

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
Oh regional Indian's picture

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...

ori

Thu, 06/07/2012 - 14:36 | 2504799 LawsofPhysics
LawsofPhysics's picture

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
roadhazard's picture

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
NotApplicable's picture

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? http://en.wikipedia.org/wiki/Sovereign_default#cite_note-forgotten-debt-...

Thu, 06/07/2012 - 13:50 | 2504629 LawsofPhysics
LawsofPhysics's picture

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
TrainWreck1's picture

Yay!

 

* looks in wallet *

 

Fuuuuuuu.....

Thu, 06/07/2012 - 13:57 | 2504651 Sophist Economicus
Sophist Economicus's picture

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
azzhatter's picture

For the last 40 years, the only growing segment of US population has been the underclass.

Thu, 06/07/2012 - 15:06 | 2504958 Kayman
Kayman's picture

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
SheepDog-One's picture

Wow MAGICAL!

Thu, 06/07/2012 - 13:51 | 2504632 EscapeKey
EscapeKey's picture

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
SheepDog-One's picture

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
azzhatter's picture

MMT

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

Thu, 06/07/2012 - 14:01 | 2504675 WiretapWilly
WiretapWilly's picture

So at 330m people, we have a net worth of over 190k for every man, woman and child?  I'ma vote Obama for some wealth re-distribution action! 

Thu, 06/07/2012 - 14:17 | 2504737 NotApplicable
NotApplicable's picture

Better have him on speed-dial, otherwise, you're not gonna care for the direction of the flow.

Thu, 06/07/2012 - 14:23 | 2504760 slewie the pi-rat
slewie the pi-rat's picture

L0L!!! 

in slewienomicsTM we have bankster 'political' strategy:

'vote' early + 'vote' often + 'vote' for everybody = chicken fuking dinnerbankster

Thu, 06/07/2012 - 15:12 | 2504976 Kayman
Kayman's picture

Bank "assets" are your liabilities. Net out all the double counting and the trade deficits and you might find enough for toilet paper to wipe your ass.

Thu, 06/07/2012 - 14:05 | 2504681 eclectic syncretist
eclectic syncretist's picture

The Bernanke fallacy:  If we save the banks from declaring the truth of their insolvency, they will then save us all from economic catastrophe. 

Thu, 06/07/2012 - 14:06 | 2504688 eclectic syncretist
eclectic syncretist's picture

For fucks sake ZH, get some more advertisers besides dinner with obama and sugar daddies before I throw up

Thu, 06/07/2012 - 14:11 | 2504711 eclectic syncretist
eclectic syncretist's picture

You'd think it was a bunch of Paul Krugman and Eliot Spitzer types posting here.

Thu, 06/07/2012 - 14:14 | 2504730 markar
markar's picture

um the ads are just following your cookies.

Thu, 06/07/2012 - 14:31 | 2504789 slewie the pi-rat
slewie the pi-rat's picture

 

it may be due to projectSiteMayhemsex, too

  • i have heard the gals comspiring to pound that obama ad ruthlessly every time it comes up so tyler can get his haypennies from behind the streamroller
  • and the guys seem to pounding...
Thu, 06/07/2012 - 14:14 | 2504731 Tyler Durden
Tyler Durden's picture

Especially for you: here you go

Thu, 06/07/2012 - 14:18 | 2504743 NotApplicable
NotApplicable's picture

LOL

Sekret Obummer supporter, exposed!

Thu, 06/07/2012 - 15:28 | 2505040 ebworthen
ebworthen's picture

NOW I know why I'm seeing ads for Ruger, Stihl, Rieken Ropes, Sherwin-Williams, and Ames tools!

Thu, 06/07/2012 - 14:08 | 2504698 SheepDog-One
SheepDog-One's picture

'Record 'HOT' winter'....I just got to LOL at this stuff....what was the avg temp 1 whole degree from normal maybe?

Thu, 06/07/2012 - 14:42 | 2504829 Hohum
Hohum's picture

March was a record warm month in the USA, if you believe the data ;)

Thu, 06/07/2012 - 14:10 | 2504703 Bunga Bunga
Bunga Bunga's picture

Net worth is an oxymoron. When all debt is paid back, there is no money anymore. How can you value something in dollars then?

Thu, 06/07/2012 - 14:09 | 2504707 midgetrannyporn
midgetrannyporn's picture

The 1% is included in those numbers. I don't consider billionaire maggots to be "households".

Thu, 06/07/2012 - 14:13 | 2504718 azzhatter
azzhatter's picture

The banksters are included in government wealth, not households

Thu, 06/07/2012 - 14:21 | 2504740 Cursive
Cursive's picture

@midgettrannyporn

Exactly.  What collective households are we talking about here?  This isn't the household wealth of Wal-Mart shoppers.  And what households "own" a pension?  The pension belongs to the employer/former employer.  You can't include crap like that in your net worth.  Does the employer write a fat check upon your retirement?  I didn't think so.  Moreover, the accrued unfunded liability (AUL) of pension plans is massive.  Just do an internet search (h/t to duckduckgo or ixquick) for accrued unfunded liability pensions.  Why are corporate equities included in this when it could be double-counted with pensions and mutual funds?  Only half of U.S. households even own equities and most of that is via 401(k) participation.

Thu, 06/07/2012 - 14:26 | 2504772 Marginal Call
Marginal Call's picture

They are the households that start out "house of...."

Thu, 06/07/2012 - 14:33 | 2504798 NotApplicable
NotApplicable's picture

Fat check? No.

However, I'll be opening an office supply store shortly after my departure, specializing in those giant toilet paper rolls.

Thu, 06/07/2012 - 14:22 | 2504757 unionbroker
unionbroker's picture

other assets 15.4 trillion is that something like the birth/death model where you can put in any number that you want?

Thu, 06/07/2012 - 14:31 | 2504787 Bob
Bob's picture

And what group does that primarily benefit?

 

http://www.zerohedge.com/news/guest-post-if-market-crashes-who-owns-enough-stock-even-care

Virtually all belongs to the top 10% . . . I mean, producers and job creators.

Thu, 06/07/2012 - 14:35 | 2504802 NotApplicable
NotApplicable's picture

Boomers on up are the only middle-class holders of any significance. They will be bled dry though to pay for their dying days.

Thu, 06/07/2012 - 16:11 | 2504823 LawsofPhysics
LawsofPhysics's picture

Pay with what?  Most don't have a lot of physical assets and paper is dying at an exponential rate.  Unfortunately, even the best trained eCONomist fails to comprehend what that really means, but it does explain the exponential growth of debt.  Can you say capital and resource mis-allocation and mal-investment?

Thu, 06/07/2012 - 14:54 | 2504898 Tic tock
Tic tock's picture

'Households' - with the Fed you're never quite so sure what that term signifies

Thu, 06/07/2012 - 15:12 | 2504979 Cursive
Cursive's picture

@Tic tock

Comment of the day!  Nice reference to the mysterious "buyer."

Thu, 06/07/2012 - 15:29 | 2504921 earleflorida
earleflorida's picture

'when a single non-elected entity becomes more powerful than the three branches of government --having co-opted and molded the indivisible appendage fourth branch into 'cupids' golden arrow'- hidden maliciously in a quiver of crooked broken branches, where feathers once fledged  --the lone grand archer pulls his string and plays his game of propaganda with the bulls-eye squarely on democracy-- that is nigh in morrows`past, sequestered amongst petrified laurels seeded once with good intentions, but lacking sense--the laborious skill of preventive maintenance,... complacency be thy epitaph - America!'              jmo

Thu, 06/07/2012 - 15:13 | 2504982 q99x2
q99x2's picture

It looks good on toilet paper.

Thu, 06/07/2012 - 15:18 | 2505003 JR
JR's picture

The truth is that the bottom 90 percentile in America owns very little wealth in the markets; the top 10% own approximately 90% of stock and mutual fund holdings.

You won’t read this on Bloomberg, but Mother Jones says: It's the Inequality, Stupid, and presents eleven charts that explain what's wrong with America. According to Mother writing in 2011: “A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.”

And, notes Mother: The 2007 data (the most current) doesn't reflect the impact of the housing market crash. In 2007, the bottom 60% of Americans had 65% of their net worth tied up in their homes. The top 1%, in contrast, had just 10%. The housing crisis has no doubt further swelled the share of total net worth held by the superrich.

Mother goes on to explain “WhyWashington is closer to Wall Street than Main Street.”

http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive  $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). (Citizens for Tax Justice, 2010b).

 G. William Domhoff in September 2005 points this out in Wealth, Income, and Power (updated May 2009) :

“In terms of types of financial wealth, the top one percent of households have 36.7% of all privately held stock, 63.8% of financial securities, and 61.9% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.”

A 2001 release by the Consumer Federation of America showed that the greatest source of wealth for all affluent households (net assets of $100,000 or more at the time) was the value of their homes; 34 percent of the wealth of these families was represented in the equity of their primary residence.   By comparison, only 17 percent was in retirement accounts and only 11 percent in stocks, bonds, and mutual funds (not part of retirement accounts).

Thu, 06/07/2012 - 16:39 | 2505310 tmorris
tmorris's picture

Unfortunately the only thing left that Ben can effectively impact, is that beauty pagent called the stock market.  

His quid-pro-quo with the banks; "I will lend you money at 0% interest, if you can maintain the illusion of a healthy stock market," is being undermined by a lack of participation by traditional retail investors.  The fat finger drop or FLASH CRASH of 1000 points on the DOW a couple of years ago, which basically stopped out the little guys, ensured that the High Frequency Traders and Algorithm jockies could effectively take control of the markets and dish up what THE POWERS THAT BE want to eat.

Their palates will not be satiated until they have effectively dispossessed americans of their $52,500,000,000 (trillion) in household assets.  

The only protection individual investors have from this larcenous cabal, is to invest in gold and silver. Everything else is their fodder.   

Thu, 06/07/2012 - 15:43 | 2505088 lemonobrien
lemonobrien's picture

5.2 trillion in golds, silvers, and artworks ain't bad.

Thu, 06/07/2012 - 15:52 | 2505135 robertocarlos
robertocarlos's picture

This explains Lululemon same store sales up 26%.

Thu, 06/07/2012 - 16:04 | 2505193 Ag1761
Ag1761's picture

Amazing, I don't see Phyzz on that chart of financial assets. Seems like every US home owner takes a canoe trip every year.

Thu, 06/07/2012 - 16:24 | 2505268 JackT
JackT's picture

Funny how we keep matching everything up with 2008.  

Thu, 06/07/2012 - 16:27 | 2505275 ziggy59
ziggy59's picture

How much of those numbers does the FED own?

Thu, 06/07/2012 - 16:28 | 2505279 JackT
JackT's picture

Something is wrong with this chart.  "Home Mortgages" is listed as a "liability" -- and not as an "Asset".  

 

 

Thu, 06/07/2012 - 17:10 | 2505395 Boxed Merlot
Boxed Merlot's picture

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.

 

jmlu

Thu, 06/07/2012 - 17:17 | 2505404 Fix It Again Timmy
Fix It Again Timmy's picture

No need to read, consult charts, turn over rocks, 'cuz it's all good with lovely white unicorns prancing about shitting silver and pissing gold........

Thu, 06/07/2012 - 20:31 | 2505820 Alpha Monkey
Alpha Monkey's picture

Don't take our word for it, listen to your beloved government.

"Precious metals, precious stones, and jewels are easily transportable, highly concentrated forms
of wealth. They serve as international mediums of exchange and can be converted into cash
anywhere in the world. In addition, precious metals, especially gold, silver, and platinum, have a
readily, actively traded market..."

It is just another form of saving, where the middle man is removed after the deal is done.

Do NOT follow this link or you will be banned from the site!