Household Net Worth
By James Bianco - December 11th, 2009, 9:45AM
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James Bianco has run Bianco Research out of Chicago since November 1990. He has been producing fixed income commentaries with a circulation of hundreds of portfolio managers and traders. Jim’s commentaries have a special emphasis on: money flow characteristics of primary dealers, mutual funds, hedge funds, futures traders, banks, and institutional investors.
Prior to founding Bianco Research, Jim spent time in New York as Market Strategist for UBS Securities, and Equity Technical Analyst at First Boston and Shearson Lehman Brothers. He is a Chartered Market Technician (CMT) and a member of the Market Technicians Association (MTA).
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Household Net Worth
- The Wall Street Journal – A Savings Binge for Consumers
The market’s rebound could lead investors to expect consumers to stop building up savings. It shouldn’t. A fresh look at how U.S. households and businesses are saving and spending in the wake of the credit crisis will come on Thursday, in the Federal Reserve’s “flow-of-funds” data for the third quarter…Particularly interesting will be a likely improvement in the Fed’s measure of household net worth, given this year’s rally in financial markets and recent signs of improving home prices…Fret not, said some observers, as all of this rising wealth eliminates the need for tedious savings accounts. Two popped bubbles later, savings are rising again. Recent market gains might make saving somewhat less urgent, but they don’t eliminate the need. That is partly because household debt surged during those two bubbles and remains high. At 122% of disposable income, it is down from its peak of 129%, but it was 80% before the bubbles expanded.
Comment
Below are a couple of our favorite charts of household net worth. As the story above points out, Q3 data will be released later today at which time all of our Flow Of Funds Charts will be updated.
<Click on chart for larger image>
<Click on chart for larger image>
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December 11th, 2009 at 1:15 pm
It is unfortunate that Bianco does not use a logarithmic scale for the Household Net Worth so that we can more accurately discern the trendline.