Hey, America: You Lost $1.3 Trillion!

Feeling poorer lately? You are! A new government report says that $1.3 trillion dollars of American wealth was vaporized in the first quarter of 2009.

CNN says:

Household net worth fell to $50.4 trillion, according to the report by the Federal Reserve. Americans’ stock holdings plunged 5.8% to $5.2 trillion, while their home value dropped 2.4% to $17.9 trillion.

If it makes you feel any better, however, the rate of money zapping is apparently slowing. So there’s that.

Americans’ wealth drops $1.3 trillion [CNN]
(Photo:Weston Alan)

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  1. pecan 3.14159265 says:

    I’m feeling sad, but not so angry like that clown in the photo..probably because I’m really, really tired today.

    But I have to say the clown has extremely whimsical handwriting.

    • bigmil87 says:

      @pecan 3.14159265: I hate clowns. Whimsical writing or not.

      • Guvmint_Cheese says:

        @bigmil87: Especially clowns with bad grammar.

        /grammar police’d

        • rwakelan says:

          @Guvmint_Cheese: It’s a poem. It’s not supposed to have good grammar

        • GuinevereRucker says:

          @Guvmint_Cheese: The grammar really isn’t that bad (apart from the “msg” but that was due to space considerations)! And “got” is incorrect but it kinda had to be one syllable…

          • Guvmint_Cheese says:

            @GuinevereRucker: @rwakelan: Alright fine. I just hate panhandling clowns then.

          • goodpete says:

            @GuinevereRucker: I’m not sure there’s anything wrong with “got” there… He’s using unemployed as a verb. Therefore, he’s saying, “I got unemployed” in the same sense he might have said, “I got mugged.”

            It’s probably not a proper way to use “unemployed,” but this is poetry and he’s being poetic. If e e cummings can neglect punctuation and capitalization, then this guy can re-purpose the word “unemployed” :-)

            • GuinevereRucker says:

              @plamoni: Yeah I guess “unemployed” there would function as the direct object of the verb “got”, which would be synonymous with “received” in this case. It’s kind of a weird noun, as “unemployed” normally is a state or property, not a direct object, but for the purposes of prose I propose we permit it.

              Haha, alliteration.

  2. SergioDingo says:

    It’s better the money is vaporized then propped up with government loans.

    We need to vaporize more of this worthless fake money or we’ll end up with hyperinflation and we’ll be buying bread with a wheelbarrow full of cash.

    Oh who am I kidding. we’ll just buy our 10 million dollar loaves of bread with credit cards!

    • Inglix_the_Mad says:

      @SergioDingo: People are often irrationally fearful of inflation. Don’t get me wrong, it’s not a great thing, but ultimately it’s effect will end up deflationary if allowed to run it’s course (keep the IMF out) so hard assets will be worth more.

      Part of the problem is the desire to over-manage the money supply.

      • SergioDingo says:

        @Inglix_the_Mad: It’s not irrational to fear inflation when we are printing funny money by the truck load.

        Guess what the bailout money and stimulus money is. Money added to the monitary supply by printing it. Of COURSE its going to devalue and contribute to inflation. A 5 year old could figure this out. The problem is that everyone who is in charge is college educated and wouldn’t know the blindingly obvious if it beat them half to death with an economic recession.

        The problem of hyperinflation is very. very real.

  3. Skin Art Squared says:

    I fully expect the recession to drag on for years. I told friends back in the beginning that it would likely drag out for 9+ years.

    I think the people in the media shouting “recovery by late ’09, early ’10” do not actually believe it, but are trying desperately to convince people to go out and consume consume consume to keep the system afloat a little longer. I also don’t believe it’s going to work. The damage is done. The correction will be long and hard.

    This one is for real. The rivers of money & credit from a few years back are not going to fill back up in time for us to go nuts christmas shopping.

    • GuinevereRucker says:

      @BZMedia: That’s fine with me. Hopefully we’ll learn to correct our dismal spending habits and attitudes toward money in general (both the government and everyone else) while the economy recovers.

    • Joe Reilly says:

      @BZMedia: Lol, we’re already on our way back up. The average length of the past 16 recessions in the US was 13 months. People like to sensationalize things, but the fact is that recessions are cyclical and will occur once or twice per decade. They are common and expected in the macroeconomic environment. This time it was banks, but last time it was internet companies, and before that…. there will always be a trigger, but the outcome will always be the same- a speedy recovery. A 1-2 year recovery is a conservative estimate- its expected to recover even sooner, although the massive Gov’t spending may prolong things by causing crushing taxes during the recovery.

    • CaptZ says:

      @BZMedia: I agree and I have prepared for the 9+ year correction.

  4. Brazell says:

    This is a little spurious because the “wealth” that vaporized was a lot of “wealth” that didn’t actually exist, in the form of promised loan payments from people or institutions that had no actual means to make those payments; in turn, those promised payments were spent in places and were made to look like actual “wealth.”

    A lot of that $1.3trillion never really existed in the first place…

    • redskull says:

      @MichaelBrazell: That’s what I was thinking too, MichaelBrazell.

      Since most of the wealth that vaporized was pretend money in the first place, why not just imagine a couple trillion more to take it’s place?

      • tinmanx says:

        @redskull: That’s what some folks are doing in NYC. $500+k for a “luxury” condo the size of a closet and renovated with cheapest building material available, if that’s not pretend I don’t know what is. And this is in Brooklyn!

        (I’m wondering where that luxury homeless condo is, I believe they were selling it for ONLY $300+k!)

    • Trai_Dep says:

      @MichaelBrazell: True, but it’s similar to the Madoff numbers. $65 billion is a phantom figure based on his fictitious statements. It’s also the figure most media outlets (sigh) use.
      But that’s not to say a great deal of wealth didn’t get lost. Just the top four entities who entrusted Madoff lost upwards of $7 Billion, which is a real and substantial loss. One could probably multiply that by three or four times and still have a credible loss number.
      You’re right, and great point. But there’s a lot of real losses, too.

  5. pz says:

    1.3 trillion in money that you could argue was all fake to begin with? Weren’t stock values and home values hopelessly inflated to being with?

  6. Eyebrows McGee (now with double the baby!) says:

    I may have lost $1.3 million, but at least I found Jesus. (He was behind the couch with all the missing cat toys.)

  7. hi says:

    AUDIT THE FED. HR 1207.

    • hi says:
      • hi says:

        BTW: remember the stimulus package from last year? Supposed to be 300 billion… it was a blank check and amount has exceded 14 Trillion. Thats 14 Trillion to offshore foreign bank accounts with no transparency. Thats your money America taken by the FED. And it continues to this day. 1.3 Trillion is nothing…

  8. usa_gatekeeper says:

    Okay, let’s keep this “Household net worth fell to $50.4 trillion…” in perspective. According to the .pdf of this on the Fed Reserve website http://www.federalreserve.gov/releases/Z1/current/z1r-5.pdf our net worth was only at $40.5 Trillion in 2002 and ran all the way up to 62.6 Trillion in 2007.

  9. Natalie Markiewicz says:

    US is in debt to China. Ironic.

  10. CosmoBogdan says:

    Hey! I recognize this clown! He’s usually downtown along Nicollet in Minneapolis.
    Alright, the jigs up, who’s from MSP?

  11. mac-phisto says:

    sadly, a good portion of that $1.3 trillion was _actually_ lost. the government printed it, spent it & doesn’t know where the hell it went.

    note to federal government: don’t try saving money by hiring CPAs from 1-800-COUNTIN.

  12. curtisawa says:

    Same house, same stocks in the same company. No wealth lost there. There is some very fishy accounting going on here. I guess if I was a day trader or a house flipper it would suck.

  13. Trai_Dep says:

    I’ve heard that, to date, the Free Market Fundamentalists have cost us around $13 Trillion in lost capital. Yay shadow banking systems and deregulation!
    Can’t wait for four years, when we’ll forget and do it all over again!

    • t-r0y says:

      @Trai_Dep: Me too! Oh, wait, you were kidding? Anyway, I don’t think we’ll have to wait 4 years to get back on the right track.

  14. rickatnight11 says:

    Vaporized? Isn’t that like, you know, deflation? No, no, this is America.

  15. FrankReality says:

    Well, since the government expanded the money supply to cover the bailouts, add in Obama’s increased government spending and the deficit is to grow greatly in the next 5 years, some economists (Arthur Laffer among them) are predicting a long period of no economic growth combined with high inflation – sort of a comeback of the financials of the 1970’s.

    The worst thing we can do now is go through with POs spending plans. The second worse thing is further expansion of the money supply.

    Anyone remember Nixon’s price controls, Gerald Ford’s “Whip Inflation Now” buttons, Jimmy Carter’s “misery index”, mortgage rates above 16%???

    They’ll be back unless the administration wises up real quickly.

  16. Grrrrrrr, now with two buns made of bacon. says:

    Okay, so I lost $1.3 trillion. I’m only human. The real question is “Where the hell did I put my car keys?”

    Just maybe if all of the financial regulations hadn’t been gutted over the last 20 years, and maybe if half the investment firms and banks weren’t run by crooked greedy dishonest scumbags, or maybe if Americans hadn’t been living off of credit-cards and pulling cash out of their home’s equity to buy $50,000 SUV’s, this wouldn’t have happened.

  17. banmojo says:

    Hate to say it, but “a fool and his money….”

  18. vladthepaler says:

    So our national debt is more than 20% of what the entire country is worth? Wow. That’s just staggering.

  19. SayAhh says:

    Vaporized? Not exactly. Americans spent it on oil, which went to the Saudis and Dubai, among others.

    I wonder if this includes homes that lost half of their values. If so, then I lost money too because my car depreciated.

    If all your money in stocks went up into thin air, then you finally know how those people at Enron felt when their 401-k and retirements vanished: and you didn’t give a damn.

  20. Zachary Barr Oberle says:

    I would be astonished if this surprised anyone at this point. This is how an economy works. The perceived value of America’s assets and the real value of our total assets are impossible to correlate in the real world. Because of all the creative accounting that has gone on, coupled with the fact that we’re much more in the business of service industry than actually MAKING anything anymore it was easy for the perceived value of America to go shooting ahead of what is actually there.

    This is a normal part of capitalism and is the lynch pin on the hole idea of having equity. Problems only begin to arise when your perceived value becomes a gross exaggeration of that is real. And honestly, it takes ages for people to realize it anyway. The entire post-dot-com-bubble rally of the new millenium, the years leading right up until midway through 2008, saw a simply unprecedented amount of money being made. The market saw record highs right up until the moment of collapse. All of these amazing profits where based on NOTHING. A few people got mind-bogglingly rich for entirely arbitrary reasons. Buying and selling masses of debt (with LOANED MONEY mind you) coupled with criminally bad credit sales practices was one of the most profitable things in the world for YEARS before this recent economic collapse.

    And now everybody rages that the parts of our industry that got us into this mess have been receiving so much federal aid: the banks seemingly walked off with three quarters of a TRILLION of our dollars without so much as having to explain themselves.

    “Ah-hah!” says anyone with a good firm grasp on the concept of capitallistic markets. Thinking that you can make this sort of issue go away by simply firing up the printing presses as our dear political leaders have chosen to do is completely foolish. Nowhere, ANYWHERE, is the value of ‘one dollar’ defined. It is based entirely on how rare one dollar is and the collective perception of all the people using those dollars. Simply cranking out a trillion new dollars and handing them out doesn’t help the problem at all, it just dilutes the bad spending and everyone hopes that because its been made known what a colossal fuck-up that this has been those receiving the cash will now be on their best behavior.

    And so we come to why I’m ranting about this in the comments of THIS specific post. The hundreds of billions of dollars that where tossed to the miscreants who got us here will get them nowhere in this ugly bear market. The good people on wall-street have already gone out back and BURNED SO MUCH of the value attributed to these companies that they may never recover, with or without bail out money. The deflation that our market has experienced is simply collosal; it will be years before the true tallies are known.

    Which is why I think the news in this post is such a GOOD thing. Our market is smart, it is resisting the inflation. Literally trillions of dollars are dissapearing from our total pool of currency. WONDERFUL. It means that we may yet escape this idiotic meltdown with some potential for growth. A socioeconomic paradigm shift has been waiting to happen in this country for some time. Social upheavals and times of improvement never occur when all is in the system. Its already happening with the California politicians hastening down off of their high horses to start hammering out full-blown cannabis legalization. They where all-too-happy to support the absurd failure called the War on Drugs while they where making sweet real-estate kickbacks in the 90’s. Now however their hilariously overpriced properties are deflating like never seen before and they are quickly realizing that THERE’S NO GODDAMN MONEY!!

    OH GOD NO! How the fuck are we gonna bury the bills for our four-figure hookers when our total budget is rattling around in the bottom of a piggy bank!? FUCK!

    Sad as it is, the slimeballs won’t get up off of their asses to do something potentially beneficial for the PEOPLE until they have to do it for their own gain. Frankly I’m not optimistic enough to believe that it could happen any other way. If this is what it takes to retain some value in our currency while perhaps abolishing absurd cash-wasting governmental practices then bring it on!