Record fall in household net worth

The fact that it is happening shouldn't surprise anyone, considering the housing bust and the stock market crash. But the size and speed of the decline is still breathtaking.

The net worth of American households fell by the largest amount in more than a half-century of record keeping during the fourth quarter of last year.

The Federal Reserve said Thursday that household net worth dropped by a record 9 percent from the level in the third quarter.

The decline was the sixth straight quarterly drop in net worth and underscored the battering that U.S. families are undergoing in the midst of a steep recession with unemployment surging and the value of their homes and investments plunging.

Net worth represents total assets such as homes and checking accounts minus liabilities like mortgages and credit card debt.

Family net worth had hit an all-time high of $64.36 trillion in the April-June quarter of 2007 but has fallen in every quarter since that time.

The record 9 percent drop in the fourth quarter pushed total net worth down to $51.48 trillion, a level that is 20 percent below the third quarter 2007 peak.

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This is why I think that consumers will not be

a reliable source for increased economic activity or growth.

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consumer spending

is just one macro economic indicator. I'm with you, we need more production, but currently the economy is 70% consumer.

Now that's one sad number but if you are referring to NDD's post, he tracks on economic indicators to see what's going on in terms of just the overall recession, etc.

I don't think he is "promoting" the idea that the United States continue to "consumer mass quantities".

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Exactly

I'm glad G posted this note, it's the essential reason why consumers pulled in their horns, especially on big-ticket items.

We'll get out of this, eventually, when consumers have to replace durable goods like cars, etc., and the backlog of overbuilding from the early part of this decade is finally worked through. There's a number of routes from here to there, some a lot worse than others. I do like posting the occasion piece of good news, though!

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property taxes increase

I read earlier that local property taxes are dramatically increasing while property values decline...

Now is that stupid or what for all of these governments to feed off of the housing bubble and now that it has collapsed...adding so significantly to the cost of owning a home.

But the entire net worth story, I kind of winced at these numbers.

I mean fictional wealth, most of it in bubble inflated home price evaluations...

eh....doesn't disturb me. What does disturb me is retirement funds as well as wages, income.

Somehow, of all of the economic indicators out there...

anyone notice the one not monthly reported, never makes the news is actual wages and income?

and as far as retirement funds....anyone ever heard of an economic indicator reporting those monthly totals?

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Competing agendas

Here's the article about property taxes rising.
I can sorta see why cities and counties are raising taxes. Most of them can barely afford basic services like police, firefighters, and schools. However, it directly counter-acts the federal stimulus that is trying to reinflate the housing bubble.

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even worse

those are fixed incomes, who already have their homes paid off, it directly affects them.

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