Average US Household Wealth Plunges to Only $656,039!! Details: Jan. 11 Investment & Finance Thread

Weekly investment & finance thread ^ | Jan. 11, 2015 | Freeper Investors

[expat_panama]

the media will be in a full court press about the greatness that is Obama.

They're already ramping up: With Economy Up, the GOP Wants Some Credit - Jonathan Weisman, NYT

[abb]

http://www.usatoday.com/story/money/columnist/bartiromo/2015/01/11/bartiromo-saudi-prince-alwaleed-oil-100-barrel/21484911/

Saudi prince: $100-a-barrel oil ‘never’ again
Maria Bartiromo for USA TODAY 4:23 p.m. EST January 11, 2015

[nascarnation]

Anyone who says they anticipated this 50% drop (in price) is not saying the truth.

I agree, I watch a lot of CNBC, FoxBiz, and Bloomberg. I didn't hear anybody say it.

[expat_panama]

Then again, let's try to remember our words about 'averages' the next time some clown says "the national debt means every man woman and child owes $41,069.16!!!"

[IncPen]

If you thought the fawning over Bill Clintons economy was sickening you ain’t seen nothing yet. When 2016 gets here the media will be in a full court press about the greatness that is Obama.

The economy didn't really start to tank in 2008 until it was clear that Obama was going to win.

If you want to see a tanking economy, wait til you see the traps they lay if Elizabeth Warren doesn't win in 2016...

[conservatism_IS_compassion]

Excellent point.

[MSF BU]

Among other things, yes.

[expat_panama]

A great morning today! --we got an upbeat start on the week w/ futures traders seeing stock indexes +0.51% and metals +0.24%.  Once again  the major econ announcements are weighted toward the end of the week so we'll be free from those wildcards.  Light reading from the media--

• Obama drops the tempered tone of his economic message WASHINGTON (AP) — For most of last year, President Barack Obama tempered his pitch on the economy: It may be improving, he would say, but millions of Americans had yet to benefit from the rebound. Associated Press
• Could oil revisit $35? Jay Richards, Commodity Analyst at Just Spreads, says oil prices could test $35 a barrel - lows hit during the 2008-09 financial crisis - by the end of February or March. CNBC Videos
• Drivers Start New Year With Cheapest U.S. Gasoline in Six Years Bloomberg - 1:25am Drivers paid an average of $2.2021 a gallon for regular gasoline at U.S. pumps last week, the lowest level for this time of year since 2009, according to Lundberg Survey Inc. Prices dropped 26.92 cents in the three-week period to Jan. 9 and are $1.14 a gallon ...
• Mean-Spirited Republicans Launch Day-One Attack on Social Security - Michael Grable

--and threads:

Americans don't want a revolution despite Elizabeth Warren's sounds of alarm for the middle class

Clinton now ready to embrace President Obama on economy

[abb]

http://www.wsj.com/articles/brent-crude-falls-below-50-in-asian-trading-1421039495

Brent Crude Falls Below $50 On Nagging Oversupply Fears
Brokerages Cut Price Forecasts Further

By Georgi Kantchev
Updated Jan. 12, 2015 4:45 a.m. ET

LONDON—Oil prices started the week deep in the red, falling to fresh 5½ year lows as analysts took an even more bearish outlook on crude.

Over the weekend, Goldman Sachs and Société Générale joined the list of analysts who have slashed their oil-price forecasts projecting that crude’s dramatic slide since last summer could continue well into 2015.

Crude futures have fallen more than 50% since a peak in June on the back of strong global supply and lackluster demand.

Brent crude for February delivery on London’s ICE Futures exchange fell 2.5% to $48.86 a barrel, trading near its lowest levels since April 2009. On the New York Mercantile Exchange, front-month WTI futures shed 2.3% to trade at $47.25, after losing 8.2% last week.

[expat_panama]

Crude Falls Below $50

--and that's why the stock market is crashing soaring.

[abb]

Well, you know all of us here on this thread are clueless... Now I’m going back into my cave and refuse to participate in life, because it’s all made up anyway!!

(LOL!! Just kidding!)

[expat_panama]

I knew you were kidding cuz I was there in the cave and you never showed up.

[1010RD]

One of the stories missing from all this income/wealth “inequality” talk is that most wealth is built up in the practice of business ownership. Business ownership comes in the form of the sole proprietorship, LLC, partnership or corporation and their sundry forms.

The stock market allows the average American to be an owner, but the US and state governments make stock ownership expensive and as regards the Social Security retirement fund wholly illegal.

So you can own your own business, but again government makes that very hard. It takes about 32 days to open a business in Chicago and time is money. Toss in local, county and state zoning, permitting and licensing regulation and for most people it’s better and easier to just get on welfare.

So people with little to no assets have a choice. Either they can continue along the incentive path government has created which leads to permanent welfare dependency or they can own a business which government has made nearly impossible for them to do. Some choice.

[1010RD]

(billion)
Corporate equities $12,885
Mutual fund shares $7,620
Security credit $893
Life insurance reserves $1,259
Pension entitlements $20,499
Equity in noncorporate business $9,188

Pension “entitlements” = future taxes/expenses = liability

This chart is a joke.

Here’s what it really should be:

$12,885 + $7,620 + $1,259 + $9,188 = $30,952

$30,952 - $20,499 = $10,453

So Americans hold net assets of $10 billion. That’s 1/5th of the stated total of $50 billion.

Is the expectation that future liabilities or taxes are simply going to come out of future income? At what point does that affect the underlying asset value?

[1010RD]

I like it and am grateful for your efforts.

[1010RD]

That’s Weak with a capital W, Kirkwood.

[ConstantSkeptic]

The stock market allows the average American to be an owner, but the US and state governments make stock ownership expensive and as regards the Social Security retirement fund wholly illegal.

What on earth are you talking about?

It takes absolutely nothing to open a brokerage account and it's dirt cheap to buy stocks. Qualified dividends and long term capital gains for a large portion of the population is taxed, for federal tax purposes, at 0%. I had more than $100K in long term capital gains last year, and I'm not paying more than 15% to the federal government on those gains!

Expensive??? Building wealth by owning stock in the U.S. is a lot easier than running a business and, from my experience, a lot less risky. Hundreds of thousands of small business owners go out of business every year. For a lot of them, it's because they have unrealistic ideas about what it takes to run a business. They don't do their due diligence. They open the 4th pizza parlor in a city of 5,000 and then wonder why they can't make it. It's easy to blame on government regulations. More often, it's unrealistic expectations!

My husband and I have been buying stock in U.S. businesses for more than 30 years, both in taxable accounts and in retirement accounts. We've only been wage earners, but we used our earnings to buy stocks and we are now well situated for retirement. No, you do NOT have to own a business to build wealth. You do, though, have to invest in something. If it's your own business, fine. But if you are buying stock in American businesses, you too can build considerable wealth!

[cynwoody]

For this statistic, the median is definitely more realistic than the mean. Here is a table from another Fed report (page 16), for 2013:

The likes of Bill, Warren, Sergey, and Larry, et al, will tend to pull up the mean, making it less interesting.

[cynwoody]

A sensible statistician with no agenda would adjust for age of the head of household.

See here, page 12:

The fattest cats are aged 65-74. And you need about $1.9m to be in the top 10%.

[cynwoody]

Bill Gates walks into a bar.. The average wealth of the patrons and staff becomes well over a billion $.

But the median stays the same — unless the bar was empty except for Richard Branson and the bartender, in which case, the median would jump from mice nuts to about $4.9b.