This GaveKal crock about household net worth is pure unadulterated and outrageous crap. Now I'm going to have to write another blog exposing it over the holiday. In the meanwhile for starters, here are the facts using 2004 data (much more unequal now) from the Economic Policy Institute.
stateofworkingamerica.org
And the Fed data:
federalreserve.gov
First Gavekal claims US households hold $54 trillion in net worth. The asset side of ledger is supposedly $67 trillion. I say supposedly, because the Fed claims real estate is $22.4 trillion now versus $20.6 trillion yoy. Anybody paying any attention at all knows prices aren't up 8.7% in the last year, nor has anything close to 8.7% been added to the housing stock.
The larger point is who owns these assets? Financial assets (including pensions) are valued at $40.5 trillion (see Fed data)as of 3Q, 2006. The top 1% plutocrats hold 36.9% (based on EPI's probably now too low 2004 data) of all common stock, or $14.95 trillion. The next 4% Bully class holds 28.4% or $11.6 trillion. In total the top 10% Bully class in America holds 78.8% or $31.9 trillion. The bottom 80% and growing Brazil America class holds 9.4%, or only $3.8 trillion, and that's AFTER a four year bull market, whoppie! The bottom 60% hold 2.3%, or less than a trillion. Again, this includes pensions, and we know what's happened to them in the last three years! It is very unlikely the bottom 80% still holds 9.4% of financial assets today.
That's for openers, I will go over other asset class like real estate, and then liabilities later, but help yourself beforehand. The real picture isn't even remotely what GaveKal paints. Essentially if you factor in last year's 5-10% drop in housing prices, and the additional debt taken on since 2004, the bottom 2/3 of American society have next to nothing in net worth.
And what do the "financial assets" that the Bully class holds consist of? Beside corporate stock, there are a bunch of claims on the debts owed by the bottom 80%. Platform that! |
