Posted on 01/11/2015 10:06:38 AM PST by expat_panama
Something that snuck by me (and most people) last month was the Fed's quarterly Flow of Funds Report --their bigass number-dump that says where all America's money has gone. My favorite part is the one on household balances (Table B.100 page 117) and the big secret that the press has been hiding is the fact that that total private wealth actually dropped in the third quarter 2014! Ah yes, our unemployment rate's just 5.6% and a good time's being had by all-- yeah right. Then we hear "aw jeeze guys, let's not forget America's wealth is steady --off less than 2/10ths of % of the previous quarter's all time high. So there.
Time to stop and think about inflation and population growth --and we slam into the fact that real average household wealth is still less than it was before all the hope'n'change. What we got is that even after all the work Americans have been doing for the past seven years we've gotten nowhere --in fact we're worse off: the average American household has fallen to a mere ⅔ of a $million. Hmmm. A household w/ a over $113 grand in mortgages/debts on assets (mostly stocks'n'real-estate) totaling $769K. Off hand I don't remember my bank saying I got a balance of $81,497.
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OK, y'all are probably way ahead of me saying that these are averages --all skewed by the fact that the vast majority of us are slogging away and that money-grubbing one percent has the overall numbers distorted way off from how the vast majority lives (more on average/mean incomes here). Maybe.
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The Fed stats picked up from the Census Bur. tell us that median real household income has fallen, but the Bureau of Economic Analysis that average real incomes are twice the median and are increasing. I mean, I can hate the over-achievers as much as the next guy but at some point we need to notice that somehow we left Numberland and we now find we've wandered over into the Fantasy Kingdom of the Political Hacks. |
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In the mean time I'm struggling to find a way to make do w/ only $656,039 to my name. Yeah, I know I don't have $80-some K in the bank but I got this really neat Sox baseball cap that I know I could get a half mil. on Ebay...
This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our-- Open invitation continues always for idea-input for the thread, this being a joint effort works well. Keywords: financial, WallStreet, stockmarket, economy. |
They're already ramping up: With Economy Up, the GOP Wants Some Credit - Jonathan Weisman, NYT
Saudi prince: $100-a-barrel oil ‘never’ again
Maria Bartiromo for USA TODAY 4:23 p.m. EST January 11, 2015
I agree, I watch a lot of CNBC, FoxBiz, and Bloomberg. I didn't hear anybody say it.
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...
Excellent point.
Among other things, yes.
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
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
LONDONOil 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 crudes 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 Londons 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.
--and that's why the stock market is crashing soaring.
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!)
I knew you were kidding cuz I was there in the cave and you never showed up.
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.
(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?
I like it and am grateful for your efforts.
That’s Weak with a capital W, Kirkwood.
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!
The likes of Bill, Warren, Sergey, and Larry, et al, will tend to pull up the mean, making it less interesting.
See here, page 12:
The fattest cats are aged 65-74. And you need about $1.9m to be in the top 10%.
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.
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