This crisis is about the wealth destruction. Nowhere is this more true than in the United States. According to the latest flow of funds data, US household net worth fell by 19.9 percent between 2007q2 and 2008q4, wiping out some $12 trillion of wealth.
With a hit of that magnitude on household balance sheets, a recession is a virtual certainty, which is of course, what has happened. US households have tried to repair their balance sheets, by consuming less and saving more.
What would the UK numbers look like? Just curious.
ReplyDeleteKeep in mind: the UK is just a few months off from the tsunami of economic shit hitting. I shall give you a taste of what is coming: I was in New York over xmas, so here it goes.
ReplyDeleteDuring the day I landed at a major New York airport. And there were just 75 people there (all the people on my flight). The terminal was empty: at xmas time, in a major city.
The shops? Mostly empty but still trying to flog over-priced stuff (mostly fucked off pretty boys trying to look like they weren't hurting). Streets noticebly quiet.
That's London in two months.
Keep in mind that the US numbers do not take into account the further drop 0f 20% for the stock markets and the ongoing decline in housing prices.
ReplyDeleteThe numbers are substantially worse as of today.
I should have added on going declines since the beginning of the year.
ReplyDeletehiiiii....good work.....go on!!!
ReplyDeleteFrom Oz: I havent done any research on this ,but as this economic crisis stuff hasn't spread much down under yet and we have some of the highest house prices in the world,Gee it looks like right now we must have the highest household net worth in the world today .
ReplyDeleteGood thing we do not have any trouble with housing and other bubbles.
Fundementals and banks are all sound we are told every day so I sleep nights .
No wukkin furies about that.Couldn't happen here!
Don't worry Poms! if it gets really tough we can go back to sending food parcels to friends and relatives as after WW2 during food rationing.so Cheer Up!