Household Wealth Rises to Near 2007 High

[Jordan]

http://www.chicagotribune.com/busine...,7743577.story

The net wealth of U.S. households rose in the third quarter to its highest since late 2007, providing a hopeful sign for future consumer spending.

Net financial wealth grew $1.72 trillion to $64.77 trillion, the Federal Reserve said on Thursday.

That left household wealth $1.2 trillion short of where it stood in the fourth quarter of 2007, just as the economy was sinking into a severe recession. Wealth peaked at $67.3 trillion in the third quarter of that year.

Household debt fell $65.5 billion to $12.87 trillion. That reversed a small gain logged over the prior three quarters, a possible sign that households still feel they need to cut debt.

Those who have made financially savvy decisions like:

• Buying a home at record low rates
• Investing in some of the world's greatest businesses via the stock market
• Improving their competitiveness by obtaining valuable skills
• Paying down high interest debts to reduce debt servicing costs

are likely enjoying immense wealth. American household wealth being at 2007 highs is excellent; it shows just how resilient wealth is in the United States and how prosperous we can be if we play by the rules of the game. Doom and gloom is over - we're all getting rich in this rapidly improving economy!

[dannno]

It's hard to have a bad economy with all this technology, but damn the government is trying hard..

Imagine where we'd be if we didn't have huge amounts of wealth siphoned by the banking system and government each year.

[Jordan]

It's hard to have a bad economy with all this technology, but damn the government is trying hard..

Imagine where we'd be if we didn't have huge amounts of wealth siphoned by the banking system and government each year.

America's banking system is the eighth wonder of the world. It's highly efficient, very competitive, and excellent at distributing money to the most productive projects. Also, finance is one of the country's biggest exports. The reality is that our financial industry is a massive competitive advantage. I wouldn't even want to think of what the US would look like without this very valuable industry.

[Zippyjuan]

Lower debt means more money available for other things (as I should know- having just recently going completely debt free!)
Also from the piece:

In the third quarter, total household liabilities were 112.7 percent of after-tax income during the third quarter, the lowest since 2003 and down from 113.4 percent in the second quarter.

Economists are divided over how much further households have to go in this deleveraging process. Further debt reduction would leave less money for spending, slowing the wider economy.

While total debt as a share of income remains historically high, one measure kept by the Fed has shown that monthly debt payments as a share of income in the second quarter were at the lowest since 1993.

[Jordan]

Lower debt means more money available for other things (as I should know- having just recently going completely debt free!)
Also from the piece:

In the third quarter, total household liabilities were 112.7 percent of after-tax income during the third quarter, the lowest since 2003 and down from 113.4 percent in the second quarter.

Economists are divided over how much further households have to go in this deleveraging process. Further debt reduction would leave less money for spending, slowing the wider economy.

While total debt as a share of income remains historically high, one measure kept by the Fed has shown that monthly debt payments as a share of income in the second quarter were at the lowest since 1993.

Yep, all is good!

Monthly debt payments as a share of income are the lowest since 1993...hmm, remember how well the economy performed after 1993 and the recovery from the housing burst in the early 1990s? It did really, really well. Go figure - we're getting back to the setup we need for a decade of pure economic growth. I don't know how anyone can be bearish here.

[Tpoints]

That's not what zerohedge, theeconomiccollapseblog, infowars is saying!

[Petar]

Again, it's like Robert Mugabee but with lots of guns pointed at the whole world. I could be rich too if I could just point a gun at you so that you will pretend that my IOU has value.

[Jordan]

That's not what zerohedge, theeconomiccollapseblog, infowars is saying!

Of course not. Those sites exist solely for negativity porn.

[angelatc]

America's banking system is the eighth wonder of the world. It's highly efficient, very competitive, and excellent at distributing money to the most productive projects. Also, finance is one of the country's biggest exports. The reality is that our financial industry is a massive competitive advantage. I wouldn't even want to think of what the US would look like without this very valuable industry.

Ok. I LOL'd.

[angelatc]

Yep, all is good!

Monthly debt payments as a share of income are the lowest since 1993...hmm, remember how well the economy performed after 1993 and the recovery from the housing burst in the early 1990s? It did really, really well.

You mean while the dot-com bubble was inflating, I guess?