Friday, September 18, 2009
The Federal Reserve recently updated its Flow of Funds data, which includes the very interesting stuff summarized in this chart. From my perspective, the most important news in the latest report is that the decline in household net worth, which began in early 2008, was reversed in the second quarter of this year. Thanks, largely, to the rise in the equity market, but also to the stabilization of the real estate market.
It's been a painful recession, with households losing about $10 trillion in wealth, but it's over. Debt ratios are up, but households are now beginning to deleverage. So we have weathered the storm, and the healing process is underway.
Posted by Scott Grannis at 9:36 AM