Wealth of most Americans down 55% since recession

[Larry Kudlow]

So how's that recovery workin for ya?

The legacy of 8 years of George Monkey Bush and his "War on Americans (tm)" continues to just keep on giving.

In other news:

America's working mothers are now the primary breadwinners in a record 40 percent of households with children -- a milestone in the changing face of modern families, up from just 11 percent in 1960.

The findings by the Pew Research Center, released Wednesday, highlight the growing influence of "breadwinner moms" who keep their families afloat financially. While most are headed by single mothers, a growing number are families with married mothers who bring in more income than their husbands.

The american male. Being replaced by females. It's the american way.

============================================ MoneyWatch/ May 31, 2013, 12:07 PM

Wealth of most Americans down 55% since recession

(MoneyWatch) Increasing housing prices and the stock market''s posting all-time highs haven't helped the plight most Americans. The average U.S. household has recovered only 45 percent of the wealth they lost during the recession, according to a report released yesterday from the Federal Reserve Bank of St. Louis.

This finding is a very different picture than one painted in a report earlier this year by the Fed that calculated Americans as a whole had regained 91 percent of their losses. The writers of the report released yesterday point out that the earlier number is based on aggregate household-net-worth data. However, this isn't adjusted for inflation, population growth or the nature of the wealth. Further, they say much of recovery in net worth is because of the stock market, which means most of the improvement has been a boon only to wealthy families.

"Clearly, the 91 percent recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45 percent recovery of wealth losses indicated by the average inflation-adjusted household measure," the report said. "Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified," the researchers said.

Household wealth plunged $16 trillion from the top of the real estate bubble in the third quarter of 2007 to the bottom of the bust in the first quarter of 2009. By the last three months of 2012, American households as a group had regained $14.7 trillion.

The report says almost two-thirds of the increase in aggregate household wealth is due to rising stock prices. This has disproportionately benefited the richest households: About 80 percent of stocks are held by the wealthiest 10 percent of the population.

Much of the total wealth of middle- and lower-income households is based on home values, not stocks. Even though home prices have increased nearly 11 percent in the past year, they remain about 30 percent below their peak.

While Americans continue to pay down their debt, the report says debt levels and problems with rebuilding net worth are the main reasons the recovery has been so slow. Also, the people who bore the brunt of the recession through job losses and reduced income were the ones who had borrowed the most.

The report found that members of the households that suffered the most financially were less educated, relatively young or black or Hispanic, or some combination of these factors. Those families tended to have low savings and high debt, with much of their wealth based on housing.

The poorest households have felt the sharpest losses as a consequence of the recession: "While many Americans lost wealth during the Great Recession, younger, less-educated and nonwhite families lost the greatest percentage of their wealth," James Bullard, president of the St. Louis Fed, said in a statement. "Household deleveraging, or paying down debt, has played a key role in the recent recession and the slow recovery."

[gonjah]

Hummm. Never been better.

[nestork]

Larry Kudlow;3071837 Wrote:

That's a lying statistic if I ever heard one. How many single, separated and divorced mothers were there in 1960 compared to now? Did you know that 50 percent of all black children born in the USA today are being born to unmarried mothers? In 1960, it was considered "shameful" to have a child out of wedlock.

Larry Kudlow;3071837 Wrote:

So, the "non-wealthy" working class of America don't own stocks?

While it's true that wealthy people will often have large stock portfolios, it's also true that most working people are completely unaware that they are invested in the stock market.

Some of the largest stockholders in the United States and Canada are union pension funds like the Auto Workers of America and the Ontario Teacher's Association. When you pay your union dues, a lot of that money you pay goes into the stock and bond market to pay for your retirement. Professional money managers invest that money in stocks and bonds so that there's money to support you in your old age (besides what you get from the government. Most people don't count that money as being "theirs", but it's there for their benefit no different if they held those stocks and bonds in a portfolio under their own name.

Larry Kudlow;3071837 Wrote:

There's another lying statistic. It suggests that the "real" value of a house is whatever it was at the height of the housing bubble in the third quarter of 2007. If anything, those were inflated prices because people were buying houses strictly as investments rather than because they needed a house and could afford one.

The situation in 2007 was that people had seen housing prices rise steadily since the end of WWII, and houses became an investment rather than a commodity. People were buying houses not because they needed a house, but because the rising value of real estate made it more attractive as an investment than just earning bank interest on your money. How much would YOU pay for a house if you were confident that you could always sell it for more than you paid for it? Answer: the sky's the limit. And, it was that belief that houses would continue to increase in value no matter what that caused the housing bubble in 2007. The stock market crash of late 2008, early 2009 was precisely because people were so confident that house prices would continue to rise that they were buying houses with "teaser" mortgages of 0.1% for the first three years, and thinking they'd sell those houses for a fat profit at the end if the third year. But, thousands of people were all trying to sell their houses before the mortgage rate went up, it became a buyers market, and house prices fell. That is, their plan backfired, and they found themselves responsible for paying back hundreds of thousands of dollars that disappeared when their house price dropped but their mortgage didn't. That happens whenever ANY commodity is treated as an investment. There was a time when some baseball cards were worth $10,000. Now, you can buy those same cards for $100.

Larry Kudlow;3071837 Wrote:

Here we go again. I'd like to see the numbers behind that statistic. In my case, I own a corporation that owns an apartment block, and that corporation has issued 200 non-publically traded shares. I own all of them.

THE VAST MAJORITY of the corporate stock in North America is not publically traded on any stock market. It's corporations like Sunshine Properties that owns a small strip mall in Nebraska, or Paul's Small Engines that owns a lawnmower and snowblower repair shop in Washington State, or Julia's Bakery that makes bread, muffins and cakes that are sold at the local grocery stores in Bangor, Maine. When a person wants to invest in a business, it makes sense to establish a corporation and lend their money to the corporation to buy the business or buy the machinery and equipment needed to start the business. That way, if the business is unsuccessful and goes bankrupt, the shareholders of the company only lose their investment in the company because their shares lose their value, but the personal assets of the shareholders in that business are not subject to seizure. If Julia would have bought the equipment for her bakery herself, and her bakery went bankrupt because she couldn't sell enough baked goods to pay the rent, utilities and employee salaries, then not only would she lose the equipment she purchased for the bakery, but she might lose her own home, cabin at the lake, her Cadillac and her collection of fine wines.

MOST of the corporate stock in North America is privately held stock in privately owned corporations that never sees a stock market, and it makes sense that people that own and operate their own successful businesses are the top 10 percent of the wealthiest people in North America. The business owners in any town or city are generally the wealthiest people in that town or city.

Larry Kudlow;3071837 Wrote:

That only makes sense because poor people don't save much money. But, a large part of the reason why recessions hit the poor hardest is because when you're poor, you tend to buy things you want with money you don't have YET. The poor often buy things they want on credit or on rent-to-own plans. They'll buy a $400 flat panel colour TV set by promising to make 12 easy payments of 40 dollars per month for a year. Then, if they lose their job, they start missing payments and the TV set gets repossessed and they've got nothing to show for the payments they did make. Or, someone's getting married and you need to buy them a wedding gift. So, they buy something on their credit card, and then they lose their job. Better to save up some money so you don't have to go into debt to buy anything. But, as long as there are poor people, that's not going to be feasible for some people.

[Ed Pawlowski]

Great. Made more money last year than I ever made, this year even more.

This has much to do with the divorce rate, little to do with economic recovery. You should start another thread on that.

.

I feel bad for those affected, but I'm back where I was in property, ahead in stocks.

Yes, but the peak was artificial pricing. Wrong, but it happened.

See, that is a problem. Many of those people never should have had a house, but mortgages were too easy to get and the people bought at grossly inflated prices. Combination of poor lending practices, predatory realtors/mortgage brokers/banks and consumers that were willing to pay outrageous prices.

My house is worth 3X what I paid for it years ago. At one time, I could have sold it for 4X, but it was just a bubble. Since it went from 4X to 3X, the government is counting that as a 25% loss of value, but it never truly had that value. The 3X number is about right for normal inflation over the years.

Conclusion: Economists and Pundits can come up with a set of numbers to make any argument you want.

[Larry Kudlow]

How much did you lose in 2007/2008?

Where are you now compared to the crash in 2007?

[Ed Pawlowski]

Lost no income. not sure about property value, but that was all on paper as I was not buying or selling so I was not affected. Mortgage was paid so that was not an issue.

Stocks are ahead now by about 18%, but some of that was new investment, not just growth. Income up by $37,000. My best year ever last year, a bit better this year.

[Stormin Mormon]

Remember, Obama has had seven years to improve on Bush's 5% unemployment rate, and robust economy. After seven years of Obama admin:

| 2/04/2013 @ 8:21PM |1,110 views The Growth Recession On President Obama's Watch Continues

The U.S. economy remains in the grip of a growth recession, and there is no relief in sight. Slow growth means continued high unemployment as workers bear the brunt of the burden of President Obama's failed economic policies. Continued slow growth also means trillions of dollars will be added to projected deficits and more contentious battles over spending and taxes. But, corporations appear to have adjusted to a plodding economy by cutting costs enough to be on their way to reporting record profits, driving stock prices to within reach of their highs hit before the Great Recession.

Economic activity in the fourth quarter was flat, as overall GDP contracted at a teeny tiny 0.1% annual rate. Two one-time events - a

22% annual rate of decline in defense spending and a reduction in inventories subtracted about 2.5 percentage points from the growth rate. But, these were offset by the recovery in residential investment and consumer spending on durable goods which was boosted in part by an aging auto fleet feeding new car sales. Accelerated bonus payments of $45 billion (at annual rates) and dividend payouts of - get this - $317 billion artificially inflated personal income and the savings rate during the quarter as individuals scramble to protect as much income as possible from the Obama tax increase.

Slow growth is better than contraction, but otherwise, there is little to celebrate. In the 3.5 years since the economy bottomed in the second quarter of 2009, economic output has grown by a paltry total of 7.5%, or at a 2% average annual rate, only twice posting a quarterly growth rate of 4.0%

Blaming the slow recovery on the severity of the recession is a phony excuse - in every prior recovery, the deeper the recession, the stronger the recovery. For example, in the 3.5 years after the end of the 1982 recession, the economy grew 20% -nearly three times more, posting an average annual growth rate of 5.4%, including six quarters with growth rates above 6.0%.

Sadly, the heaviest burden of the Obama Administration's failed economic policies have fallen on the American work force, who continue to face high unemployment rates and limited opportunity for upward mobility. Jobs grew by 157,000 in January, its slowest rate since last September, and the unemployment rate ticked up to 7.9%. Since the Obama recovery began, monthly job growth has averaged only 98,000. By contrast, during the Reagan recovery, job growth (adjusted for today's economy) averaged

354,000 a month. Comparing the two, the Obama Administration's policies have produced an 11 million jobs gap. Moreover, the brunt of the poor jobs picture has fallen on the least advantaged. The black unemployment rate is 13.8%, and nearly 40% of black teenagers who are looking for jobs out of work.

Inevitably, continued slow growth will intensify the fiscal policy debate. Slower growth and fewer jobs means less income for American workers and fewer tax dollars for governments at all levels. Higher unemployment and lower wages also mean increased spending on means tested transfer payments including unemployment benefits and food stamps. Democrats demand higher taxes; Republicans less spending. But, neither party is offering policies that would spur private sector growth enough to increase revenues and reduce spending through private sector job creation. Instead, the Obama tax increase will continue to weigh on U.S. employment gains. And, a new onslaught of expensive, anti-growth regulations on energy production and financial services will reduce the opportunities to expand high-paying jobs of all kinds. According to the American Action Forum, the cost of regulations increased $236 billion last year. That includes 44.6 million hours of paperwork just to comply with the new rules for ObamaCare, and another 33 million hours of paperwork created by the Dodd-Frank regulations. The millions of hours consumed by these regulations destroy wealth and reduce the resources available for companies big and small to generate revenue and thereby increase investment and employment necessary for growth. As a consequence, the growth recession is likely to persist until the Washington political establishment discovers again the importance of private sector growth as the foundation for prosperity, economic security and fiscal balance in the years ahead.

. Christopher A. Young Learn more about Jesus

. . "Larry Kudlow" wrote in message news: [e-mail]... So how's that recovery workin for ya?

The legacy of 8 years of George Monkey Bush and his "War on Americans (tm)" continues to just keep on giving.

[Stormin Mormon]

During the Reagan recovery years, I had a lot of work, and hired help. Unemployment about 4%.

During the Bush II stability years, I had enough work, and worked alone.

Unemployment was about 5%.

During the Obama recession, I am up to my eyes in debt, and ought to go on food stamps. Unemployment as high as 15% by some estimates.

========================= =================== MoneyWatch/ May 31, 2013, 12:07 PM

Wealth of most Americans down 55% since recession

[gonjah]

Do you think being an incompetent boob who spends way too much time on the internet proving his ignorance has anything to do with that?

[Big Al]

Every time we buy something made in China, another person here in the US loses their job.

So let's all look for that China label, close another US factory and lay off our neighbors. Our grandkids can find jobs at McLowes Depot and Walmart, right?

[gonjah]

My house never lost a penny in value and is now est. to be up $21k over what I paid 8 years ago in a VERY hot sellers market.

401k and IRAs up. Way up.

Income is est to be up about $24k this year.

No debt. Good heath... Never been better.

Shit, if I can do it, anyone should. :-)

[dadiOH]

So you want to start paying triple or more for all your goodies, right? And how about the stuff made in Japan, Taiwan, Malaysia, Mexico, Canada, South America, Europe, etc.? Boycott them too?

No, let them learn Chinese :)

[Stormin Mormon]

Every time we buy something made in China, another person here in the US

loses their job.

So let's all look for that China label, close another US factory and lay

off our neighbors. Our grandkids can find jobs at McLowes Depot and Walmart, right?

[Home Guy]

You people are so stupidly blind.

The root cause of why you buy so much shit made in China is because your congress gives China most-favored-nation status in terms of import and trade.

Ask you politicians why they dropped import taxes on stuff from China years ago.

The answer they won't tell you is that if you don't want a world-war involving China, you'd better find a way to keep a billion people employed. One way to keep them employed is to buy their shit - hand over fist, at a furious rate.

That's what you're doing, and that's really why you're able to do it.

Then the Chinese loan you back that money because your congress is making your national debt balloon to ridiculous proportions.

[JoeBro]

dadiOH wrote in news:kofjjm$f5j$ [e-mail]:

Right on.