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Thread: Household Wealth Rises to Near 2007 High

  1. #1

    Default Household Wealth Rises to Near 2007 High

    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!



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  3. #2

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    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.
    "He's talkin' to his gut like it's a person!!" -me
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  4. #3

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    Quote Originally Posted by dannno View Post
    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.

  5. #4
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    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.
    I am Zippy and I approve of this message. But you don't have to.

  6. #5

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    Quote Originally Posted by Zippyjuan View Post
    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.

  7. #6

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

  8. #7

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    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.

  9. #8

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    Quote Originally Posted by Tpoints View Post
    That's not what zerohedge, theeconomiccollapseblog, infowars is saying!
    Of course not. Those sites exist solely for negativity porn.

  10. #9

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    Quote Originally Posted by Jordan View Post
    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.
    .[QUOTE]"Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won." - Ayn Rand, The Fountainhead[/QUOTE]
    ..
    .

    I blog at Red State Eclectic, and I tweet here,.

  11. #10

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    Quote Originally Posted by Jordan View Post
    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?
    .[QUOTE]"Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won." - Ayn Rand, The Fountainhead[/QUOTE]
    ..
    .

    I blog at Red State Eclectic, and I tweet here,.

  12. #11

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    I finally figured out who Jordan is. He is the champion of all sarcasm posters on zerohedge who goes by the title MillionDollarBonus.

    Seriously, though, your posts lack any deep understanding of the structural problems with our market and economy and in the end just appear to be market chearleading. I think we all agree that anyone can increase their economic wealth in this environment. Work hard, increase your competiveness, cut down spending/debt, etc will all contribute to this. But to completely discount the massive western debts, bond/stock bubble, massive interventions by central banks is truly absurd. If you are such a believer in this amazing recovery, where would your beloved S&P 500 be if the Federal Reserve came out tomorrow and announced a plan to sell 2 trillion in fixed income assets? Would anyone really be foolish enough to make a bid on any fed assets, with a looming 2 trillion dollar sale? Where would home prices be if mortgage rates were at 7-8 percent? These are questons you need to answer honestly. If you do, you will begin to understand that this economy is only being held up by massive interventions and investors dumb enough like yourself to believe in "money for nothing and chicks for free".

  13. #12

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    Nominal wealth is not real wealth.
    “If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”

    - SAMUEL ADAMS

  14. #13

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    Well thank goodness!

    I'll just march on down to my accountants office and explain to him that he's doing it all wrong, I'll tell him how I read on an internet forum that life is grand, business is booming, cars and homes are being sold and by golly there'd better be some money in my accounts when he gets done...

  15. #14

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    Quote Originally Posted by tod evans View Post
    Well thank goodness!

    I'll just march on down to my accountants office and explain to him that he's doing it all wrong, I'll tell him how I read on an internet forum that life is grand, business is booming, cars and homes are being sold and by golly there'd better be some money in my accounts when he gets done...
    lol thats funny.

  16. #15
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    Quote Originally Posted by tod evans View Post
    Well thank goodness!

    I'll just march on down to my accountants office and explain to him that he's doing it all wrong, I'll tell him how I read on an internet forum that life is grand, business is booming, cars and homes are being sold and by golly there'd better be some money in my accounts when he gets done...
    Pick up a little Holiday cash for me too Tod , not sure how much, I trust you .

  17. #16

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    Quote Originally Posted by oyarde View Post
    Pick up a little Holiday cash for me too Tod , not sure how much, I trust you .
    It's not me....If my accountant can pull bunnies out of his rear I'll be happy to provide his contact info so all of us can be rich...

  18. #17
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    Quote Originally Posted by tod evans View Post
    It's not me....If my accountant can pull bunnies out of his rear I'll be happy to provide his contact info so all of us can be rich...
    lol,lol

  19. #18

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    Quote Originally Posted by jclay2 View Post
    I finally figured out who Jordan is. He is the champion of all sarcasm posters on zerohedge who goes by the title MillionDollarBonus.

    Seriously, though, your posts lack any deep understanding of the structural problems with our market and economy and in the end just appear to be market chearleading. I think we all agree that anyone can increase their economic wealth in this environment. Work hard, increase your competiveness, cut down spending/debt, etc will all contribute to this. But to completely discount the massive western debts, bond/stock bubble, massive interventions by central banks is truly absurd. If you are such a believer in this amazing recovery, where would your beloved S&P 500 be if the Federal Reserve came out tomorrow and announced a plan to sell 2 trillion in fixed income assets? Would anyone really be foolish enough to make a bid on any fed assets, with a looming 2 trillion dollar sale? Where would home prices be if mortgage rates were at 7-8 percent? These are questons you need to answer honestly. If you do, you will begin to understand that this economy is only being held up by massive interventions and investors dumb enough like yourself to believe in "money for nothing and chicks for free".
    I don't ever go to ZeroHedge. I'm not "MillionDollarBonus." Let's just keep things clear and not muddy the waters.

    I'm not going to respond to hypothetical scenarios that won't happen. I don't go into the goldbugs' threads and ask "yeah but what happens when someone invents a gold-eating strain of bacteria?" or "what's gold worth if nuclear war breaks out tomorrow?" Waste of time and good brain cells.

    "Money for nothing and chicks for free" is my new life motto. Seriously. You rock for coming up with that...assuming that you did.

  20. #19

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    Quote Originally Posted by thoughtomator View Post
    Nominal wealth is not real wealth.
    How should we adjust it?

    Quote Originally Posted by tod evans View Post
    Well thank goodness!

    I'll just march on down to my accountants office and explain to him that he's doing it all wrong, I'll tell him how I read on an internet forum that life is grand, business is booming, cars and homes are being sold and by golly there'd better be some money in my accounts when he gets done...
    Don't hate your accountant because you missed the boat. There's still plenty of room and the water is warm!

  21. #20

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    Quote Originally Posted by Jordan View Post
    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!
    I'm not sure if there is a touch of sarcasm here or not. I think people that are buying homes at these rates could end up regretting it. When the rates eventually rise it's going to put a whole lot of downward pressure on home prices. Real estate values could definitely gap down significantly still.
    Original supporter of Ron Paul since 2007 and I stand with Rand.

  22. #21

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    Quote Originally Posted by brandon View Post
    I'm not sure if there is a touch of sarcasm here or not. I think people that are buying homes at these rates could end up regretting it. When the rates eventually rise it's going to put a whole lot of downward pressure on home prices. Real estate values could definitely gap down significantly still.
    No sarcasm at all.

    Houses in major markets sell for less than their cost of replacement. Hard to believe that housing prices will fall if rates rise.

  23. #22

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    Quote Originally Posted by Jordan View Post
    Quote Originally Posted by thoughtomator View Post
    Nominal wealth is not real wealth.
    How should we adjust it?
    Adjust? You mean in the context of "Remove the myriad artificial distortions in an attempt to accurately measure wealth?" As in, what pencil sharpener should we feed our skulls into before rolling up our sleeves and applying bullshit hedonics and heuristics and weightings and such? Something along those Very Complicated But Utterly Simplistic Thinking lines?

    Before adjusting anything, we can start from first principles, by simply recognizing that the nominal value of a deliberately and perpetually diluted fiat currency is no standard for measurement at all, and not a valid metric for measurement of wealth. It's like measuring the diameter of everything using a slowly but ever-shrinking balloon as a standard, with morons everywhere exclaiming, "Why, throw a big party, the value of everything seems to be growing--exponentially!" And when they see things that really are shrinking: "But the value of these things are remaining more or less constant!"

    It's far worse than that, however, because at least that kind of shrinkage could be measured and adjusted out directly. It's not that simple. It isn't a simple balloon with a static leak into a vacuum. That would have long deflated into nothingness if that was the case. Air is being actively siphoned from real people (currency holders everywhere) to put air back into (read=THROUGH) that balloon, which will never be reinflated, due to the leaks in it that are growing exponentially in size and number. The leaks from that Fiat Currency Perpetual Wealth Motion/Redistribution Machine is used to inflate the NOMINAL values of myriad selective other parts of the economy -- distorting the REAL values of absolutely everything in it. So any so-called adjustments are going to be rendered moot and meaningless, because how do you "adjust" for something that is artificially, abnormally, in an amplified state of constant flux?

    Even then, there is one way that you can adjust for it. It will not be perfect, but only because it will UNDERSTATE the adjustment that needs to be made, and that is to "price" everything in a basket of hard commodities only, for which there are real-time nominal prices going back a long, long way. Raw precious metals and base metals, NOT including gold and silver, which have also been artificially distorted along the way. That won't adjust for every distortion (including whatever distortions that gave rise for an artificial need for more of those minerals in the first place), and it won't say anything about the real wealth that NEVER WAS CREATED due to wealth-siphoning distortions that prevented private capital formation everywhere, but it will give you a better look at the relative values of real vs. nominal wealth.

  24. #23

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    Quote Originally Posted by Jordan View Post
    "Money for nothing and chicks for free" is my new life motto. Seriously. You rock for coming up with that...assuming that you did.
    Either you're waaay older than me or from another galaxy...But here ya' go;


  25. #24

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    Quote Originally Posted by Jordan View Post
    I don't ever go to ZeroHedge.

    I go there daily. It's a collection of sensationalist headlines, misleading articles, and actual substance. Its home to every Economic Depressive who needs a constant influx of bad news.

  26. #25

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    I'm in less debt, but I also have less income. So I guess it balances out?
    [P]eople of

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    Quote Originally Posted by jllundqu View Post
    god damn vipers, all of them.

  27. #26

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    Quote Originally Posted by KingNothing View Post
    I go there daily. It's a collection of sensationalist headlines, misleading articles, and actual substance. Its home to every Economic Depressive who needs a constant influx of bad news.
    It's not hard to drill down into the actual substance, which is far more substantial than anything you'll get from any mainstream financial news. That it is willing to entertain guest articles that contradict the site owners' perspective is to its credit, even if a good number of guest articles are less than solid. As far as headlines go, what's the point in writing one if you're not going to tease the reader into the story?

    Oh, also - their commenters are more reliably libertarian than people here. As far as its politics are concerned, it may as well call itself the Ron Paul Financial Forum.
    Last edited by thoughtomator; 12-07-2012 at 03:30 PM.
    “If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen.”

    - SAMUEL ADAMS

  28. #27

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    Quote Originally Posted by thoughtomator View Post
    It's not hard to drill down into the actual substance, which is far more substantial than anything you'll get from any mainstream financial news.
    That's why I read everything they post.

    Oh, also - their commenters are more reliably libertarian than people here. As far as its politics are concerned, it may as well call itself the Ron Paul Financial Forum.
    Yes, but they focus solely on bad news. Even when news is not bad, they spin an article to paint things in a negative light. Not every piece of information that is released by every entity that releases information is a sign that the world is about to end.

  29. #28

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    Quote Originally Posted by ShaneEnochs View Post
    I'm in less debt, but I also have less income. So I guess it balances out?
    According to Jordan, definitely. You're now in a prime position to "create wealth", not to mention jobs in the economy, by assuming more debt and buying a new car! There's your chicks for free, because chicks dig that. Then, hopefully, if the government would spend more, or Bernanke would get off the dime (dollar, hundred dollar, gajillion dollar, whatever) and inflate a little harder, as your nominal debt remains the same, you should eventually have more nominal wealth (due to the wealth and jobs that you created by buying that car), and you can pay off that loan with the inflated currency! There's your money for nothin, baby.
    Last edited by Steven Douglas; 12-07-2012 at 04:05 PM.

  30. #29

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    Quote Originally Posted by Jordan View Post
    Don't hate your accountant because you missed the boat. There's still plenty of room and the water is warm!
    Well wise and optimistic one I have some assets left so tell me please, should I liquidate? If so what's a sure fire investment?

    See all I really know is building stuff out of wood, this new-math used to figure wealth eludes me...If I sell off all my tools for pennies on the dollar what should I do to show these profits of which you speak?

  31. #30
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    I think the best Dire Straights on that album ,is, One World.....

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