Dots and Deeds

Sad but funny.......

Back during the Greenspan/Bernanke heydays, these bozos, along with Kudlow and other characters, used to crow about the balance sheet of Americans. Whenever anyone raised the issue of the lack of savings and excessive spending of Americans, these idiots put them down with the argument that the "savings data" does not represent the huge increase in the assets of Americans, especially the increase in housing prices and stock prices. To these crooks, the "excessive" spending was actually very reasonable when the Americans had such robust balance sheets. Now,
the blighted Fed has released a report that, ummm, says that the "Gain in Family Wealth" was "a Mirage." According to the NYT report, "The leap in wealth that Americans thought they were enjoying over the last several years has already turned out to be a mirage, according to new estimates by the Federal Reserve. In its triennial survey of consumer finances, released Thursday, the Fed found that the median net worth of American households increased by a seemingly healthy 17 percent between the end of 2004 and the end of 2007. But the gains were wiped out by the collapse in housing and stock prices last year. Adjusting for those declines, Fed officials estimated that the median family was 3.2 percent poorer as of October 2008 than it was at the end of 2004. The new survey offers one of the first glimpses of how American families were positioned financially as the roof fell in on the economy, and it provides some sense of how much wealth has been destroyed since then. Indeed, the destruction of wealth is still in full swing: housing prices are still falling, more than two years after the bubble peaked."

Another report from NYT reveals that "Rise in Jobless Poses Threat to Stability Worldwide." The report states that "lawyers in Paris to factory workers in China and bodyguards in Colombia, the ranks of the jobless are swelling rapidly across the globe. Worldwide job losses from the recession that started in the United States in December 2007 could hit a staggering 50 million by the end of 2009, according to the International Labor Organization, a United Nations agency. The slowdown has already claimed 3.6 million American jobs. High unemployment rates, especially among young workers, have led to protests in countries as varied as Latvia, Chile, Greece, Bulgaria and Iceland and contributed to strikes in Britain and France. Last month, the government of Iceland, whose economy is expected to contract 10 percent this year, collapsed and the prime minister moved up national elections after weeks of protests by Icelanders angered by soaring unemployment and rising prices..." Job losses in India are estimated to have exceeded 500,000 during the last quarter of 2008.

This global effect follows many local choices- people in the U.S. bingeing, people in Iceland, Japan, China, and other countries feeding the binge through easy credit terms, and tech people in India and other countries relying on outsourcing that clearly deprives quite a few people of a high-wage salary that was driving binge buying. The collective deeds of all dotting the landscape.