Sunday, June 02, 2013
I figured that the "recovery" in personal wealth was a little strange because the single largest asset that most people have is their home. Home prices have stopped dropping but they have not recovered.
(MoneyWatch) Increasing housing prices and the stock market''s posting all-time highs haven't helped the plight most Americans. The average U.S. household has recovered only 45 percent of the wealth they lost during the recession, according to a report released yesterday from the Federal Reserve Bank of St. Louis.This finding is a very different picture than one painted in a report earlier this year by the Fed that calculated Americans as a whole had regained 91 percent of their losses. The writers of the report released yesterday point out that the earlier number is based on aggregate household-net-worth data. However, this isn't adjusted for inflation, population growth or the nature of the wealth. Further, they say much of recovery in net worth is because of the stock market, which means most of the improvement has been a boon only to wealthy families.
The "Obama Recovery" has benefited the upper classes while the "little people" are out of luck. it's almost as if that was the plan all along.
Leaving them poor and needy makes them easier to control.The report says almost two-thirds of the increase in aggregate household wealth is due to rising stock prices. This has disproportionately benefited the richest households: About 80 percent of stocks are held by the wealthiest 10 percent of the population.Much of the total wealth of middle- and lower-income households is based on home values, not stocks. Even though home prices have increased nearly 11 percent in the past year, they remain about 30 percent below their peak.While Americans continue to pay down their debt, the report says debt levels and problems with rebuilding net worth are the main reasons the recovery has been so slow. Also, the people who bore the brunt of the recession through job losses and reduced income were the ones who had borrowed the most.The report found that members of the households that suffered the most financially were less educated, relatively young or black or Hispanic, or some combination of these factors. Those families tended to have low savings and high debt, with much of their wealth based on housing.