US household wealth drops sharply
The third-quarter decline is the biggest since late 2008.
Household wealth fell 4% to $57.4 trillion from July to September, a new report from the Federal Reserve said Thursday. That was the biggest hit to U.S. households since the last three months of 2008. It was also the second straight quarterly decline.
The report measured assets, such as homes, bank accounts and stock values, and figured in mortgages, debts and credit card spending.
Stock performance played a big part in that drop, since about half of U.S. households own stocks or mutual funds. The Standard & Poor's 500 Index ($INX) dropped about 14% in that period, The Associated Press reported, as investors became increasingly alarmed about Europe and a U.S. economy not recovering fast enough. Stocks have come back a bit since then, particularly in October.
Housing values also were factored in, falling to $16.1 trillion in the quarter from nearly $21 trillion in 2007, AP reported. Bank accounts did not fare well either, with unemployment above 9% and consumer spending down.
But even as household wealth dropped, the cash hoards of companies kept growing. Corporate bank accounts climbed for the fifth straight quarter to $2.1 trillion, showing that companies would rather hold on to cash instead of hiring more workers or making new investments.
There was some good news: Household debt fell by 1.2%.
The big question now is whether the fourth quarter will continue this downward trend. It's looking like things will turn around. Bullish figures from the retail sector show improvements in consumer spending. The markets have climbed since the third quarter, and European leaders are trying to make progress. Meanwhile, the U.S. unemployment rate that has fallen to 8.6%. The Federal Reserve expects the rate to range between 8.5% and 8.7% next year.
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I don't need this article to tell me how bad things are...I'm out of work! My neighbor is out of work (and losing his home), my sister is out of work, and my best friend just lost his job. The stock market going up everyday isn't what is happening everyday on main street.
These are scary times!
For those of you that are suffering I feel for you. We all have our bad times to go through. Once you get through them you don't ever want to go back. As bad as it may seem remember two things;
No matter how much thing suck right now, they can suck worse.
If you keep your dignity, honor, and faith. Things will get better.
As far as the government being in the pocket of business. A return to the constitution would fix that.
Every time the stock market falls these days, the liberal media are quick to blame it on the latest round of seemingly never-ending European woes, when, in reality, America has enough conundrums of its own to easily cause the market to go down: high unemployment, inflation, stagnant and falling wages, an out-of-control Federal Reserve, huge deficits caused by wild spending, bankrupt pension plans, endless foreclosures, abandoning the Constitution, etc. How about blaming the latest stock market drop on Obama for a change! Has anyone ever seen headlines that read something like:
Stock Market Falls Again on Latest Obama Incompetence
Obama’s Lack of Leadership Leads to Another Stock Market Drop
Of course, the truth is no one can say for certain why the market falls on any given day; it’s all pure speculation. So the headlines ought to just report that the market is down and leave it at that without bothering to guess why. It’s still interesting, though, that Europe has become the scapegoat for every stock market drop with no mention of Obama’s lackluster leadership, as if stock market drops never did happen prior to Greece going bankrupt or as if Obama couldn't possibly play any role.
I understand your disgust, but look at Ron Paul. He is the sanest man running in either party. I could not vote for Obama is he were the only one running. I think he is only in it for himself and SO out of touch with the common man.
As far as companies cash piles go, that is a good sign. One day Republicans AND Democrats will learn. It isn't about tax cuts and it isn't about more government spending. It is about stability and confidence. Right now there is no stability or confidence. What are those idiots in DC going to do next? Are they going to raise taxes and government spending (Dems) OR cut taxes and government spending (Reps) OR, God help us, cut taxes and raise spending to grow the national debt even more? What are the impacts of this HUGE health care law that people are still learning? Are the courts going to overthrow all of it, part of it, or none of it? Then what will the politicians do? Companies will start investing and spending money once they get a sense of stability and confidence in the market. Sitting on cash doesn't help them make money.
The politicians have got to learn that throwing money at a problem isn't going to fix it at the national level any more than it does at my house. They need to learn cutting taxes alone won't fix the problem. As long as they are fighting and making bad decisions, we will all suffer.
I own my own two bedroom cardboard box outright. Bring in $13.95 a week panhandlin'. Have $19.52 saved up in my sock for retirement. I'm really wantin' that cheeseburger and fries though.
Well Suzie, can I afford it????
the only politician i have heard really get it so far is Romney! he said the other day "we need to control COSTS" finally! someone who gets it.
2 things that are going to be the next devastating bubbles:
(1) health care costs (doctors, providers, hospitals and insurance co.s)-with 10-15 % greedy increases each year and personal income either stagnant or negative each year, health care costs will make the recent credit debacle/scam and resultant financial meltdown seem like childs play! thanks to carter (CRA-view "burning down the house, version 2" you tube), and clinton (repeal of Glass-Stiegel and initiating sub prime mortgages) and greenspan with his reckless policies to perpetuate the mad supply of cash to fuel the fire, we are in this fine mess. not to mention obama's incompetence to keep us here and dig the hole deeper!
(2) federal and municipal government's pension systems and health care premium coverage (including teachers). they are anachronisms, dinosaurs which should be changed to defined contribution plans (aka: 401k or TSA's). we have become a nation of people supporting the public employee. and they hold us up hiding behind the children, trying to make us feel guilty if we don't give them a cola raise every year and pay 100% of their health costs while giving them 3-4 months off paid each year not to mention exuberant pensions. if we don't, they tell us that we are not being fair to the kids! get real-more $ do not equal better education only wealthier teachers! and those that pay their salaries and perks are loosing their jobs in grand scales or taking massive pay cuts while having their taxes increased in the name of "budget shortages".. when in fact, it is the municipalities that got so complacient in how to spend the hugh tax revenues from artificially constant increasing home values! pensions should be frozen and teachers and government employees (all) should have to fund their own retirement like the rest of the population! health care premiums? they should have to pay a portion of them too (50% seems like a fair amount) and then maybe they will realize (with a good copay like other private sectors pay) how much health care is increasing each year and be more proactive about controling it and not going to the dr. with every little cough or hangnail and hanging the bill on the taxpayer who is unemployed or struggling to keep his/her home or pay their (constantly increasing) insurance premiums or pay their Dr. bill or even be able to put food on the table.
i hope the other politicians will finally realize that it's time to control costs and expenditures (keep your damn hands off social security and medicare and stop calling them "entitlements-they are bought and paid for by the taxpayer) and not keep talking about "how to pay for it". yea, i'm talking to you obama!
Corporate bank accounts climbed for the 5th straight quarter. I thought corporate taxes were killing companies? How are the accounts climbing in a recession? Easy, companies keep screwing their workers. Eliminate the pensions or company matches on 401K's. Make employees pay more for their healthcare - tell them it is too expensive, don't mention the increasing pile of money in the bank. Don't give annual raises, tell your employees they're lucky to have a job. Reduce time off, make them work longer days. Or just lay them off and send the jobs overseas.
Read this article then the one on the 10 richest Americans. Warms my heart to see 3 Waltons on there. They raised the workers health care premiums and eliminated health care for part timers. With the lousy wages they pay, many full timers couldn't afford health care anymore. No problem, they can go to an ER and have the government pick up the tab. Solid Americans those Waltons.
Middle class is on the way out and it ain't the governments fault. American workers just let companies abuse them. Time to start demanding more of the pie. Time for companies to start dipping into those bank accounts and treat their employees as assets and not an unwanted expense.
lets all stop paying taxes see how far gov't goes then i am disabled losing house can not afford
my medicine or hospital give 1929 again we were better off
Ricky.....Not really sure where you live; Don't need to know.
But there seem's to be a lot of opportunities,several other places.
The area we are in, within the Midwest is still depressed in areas, but people seem to be getting jobs every week if they apply themselves...And they are looking "hard" for a job.
Maybe you could move to a different location temporarily, if it's real bad there, and always go back.
GOOD LUCK !!
John Q., How the hell could you be"paying 50% more in taxes," you have lost your home,you live in your car and you are working very little? I hope you are living in an American car and not some foreign piece of crap? Only, because of what you said about foreign trade.
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Equities indices started the day with modest gains and spent the first two hours of action in the neighborhood of their flat lines. Although the early trade lacked clear sector leadership, that could have been overlooked due to the strength among heavily-weighted sectors like health care (-0.3%), ... More
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