The Richest Have Never Been Richer: US Household Assets Rise To Record $97 Trillion (As The Poor Get Poorer)

In the quarter ended September 30, 2014, household net worth did something it hasn't done since 2011: it declined, as a result of the dip in the stock market which pushed financial assets lower by $200 billion. Well, since then ECB announced and then launched Q€, not to mention the expanded BOJ QE in November, and predictably financial assets rose.

Which means that in the fourth quarter, US household net worth jumped by $1.5 trillion to $82.9 trillion, driven by a rise in total assets to $97.1 trillion, even as the long awaited increase in "good debt", that of mortgage debt, remains elusive and Mortgage debt hasn't budged from $9.4 trillion in 8 quarters! This, even as the total US housing market is said to have kept rising, which can only mean one thing (a thing we have explained many times in the past): the bulk of home purchases in the US take place "all cash" with zero incremental leverage (whether because the potential buyers don't want to incur the debt, or don't quality).

Ironically, even as household liabilities remained flat for the second year in a row, real estate assets rose from $23.2 trillion to $23.5 trillion as America's ultra-luxury segment (which is now the New Paranormal's "secret Swiss account") continues to drive housing higher while every other segment is contracting.

But the biggest jump in Q4 assets was once again in financial assets, driven by a $492 billion increase in Corporate Equities as well as $323 billion added from Pension Funds. And as usual, financial assets remained at precisely 70% of total assets (a curious ceiling which we will discuss shortly).

In short: almost $100 trillion in household assets, with the vast bulk of these belonging to America's "1%".

 

This is what the household balance sheet looked like at December 31, 2014.

 

And here is who benefits:

 

For everyone else who is poor enough and doesn't feel like their household net worth is represented by the above, Janet Yellen has some advice: it's important to get rich. Oh, and once that fails, there's always more debt.