16 replies to this topic

[HiFiGuy]

Is it just me, or are we truly looking through the Looking Glass - ready to descend through the wormhole?

Barrons, 5/28/07

By Gene Epstein
Word Count: 984

IF YOU BELIEVE THE OFFICIAL NUMBERS, personal saving in the U.S. has collapsed: It fell in the late 1990s, tumbled all the way to a 70-year low by 2001, then cascaded off that cliff into minus territory in 2005 and has languished there ever since. It seems like an impending catastrophe. If Americans live beyond their means they can't accumulate the wealth to provide for their retirement, much less create a nest egg big enough to see them through rainy days.

But a look at that nest egg calls into question the whole personal savings story. Household net worth -- ...

Also check out Alan Abelson's piece with numerous biblical references and negative revisions to previously reported unemployment stats, and potential overstatements with April's 16.9% new home sales gains figure.

Something just ain't right. The air's gettin' a bit thin up here.

[CLK]

If personal savings represents CD's and savings accounts that probably is true. I think most people just put their money in mutual funds for their savings instead. I'm not sure if the savings numbers take that into consideration. There has been a big increase in market volume since 2003.

[xe2dy]

Thought I'd practice posting a chart and the process has become much easier.

[tommyt]

na...this speculation not nearly crazy enough yet...you will know it when it occurs..pullbacks yes, the end...stay tuned

[denleo]

Personal savings are in stocks, the asset class that is risk free. Denleo

[Tor]

To not include stocks as personal savings is just crazy and misinformation. Stocks are a liquid and valuable asset.

[pedro]

To not include stocks as personal savings is just crazy and misinformation. Stocks are a liquid and valuable asset.

Folks are confusing stocks with flows. Equity valuation measures belong in cumulative savings, and do not have anything much to do with how much out of income is saved. The correct discussion is all about the incremental additions to those stocks. That's a flow measure.

So, re equity investments as savings, what is the NET addition out of total income being directed into stocks? Funds set aside out of payrolls into stocks, vs. liquidations by retirees or cash short households to finance consumption. Don't have the answer myself, but the question is more complex than some postulate.

pdl

[JAP]

There are so many frivolous, "live for today" type of people in this country. They don't have any ability to save because they want everything they see. The average household has over $6000-8000 in credit card debt. It's bad enough not having any savings and a ton of CC debt, but what's worse is the people who have tapped into and spent all the equity in their homes. Debt piled on top of more debt... yikes! When I tell people that I save and invest 40-50% of my income, and I'm completely debt free they get this wide-eyed, dumbfounded look on their face and their mouth usually hangs open.

[James Quillian]

Is it just me, or are we truly looking through the Looking Glass - ready to descend through the wormhole?

Barrons, 5/28/07

By Gene Epstein
Word Count: 984

IF YOU BELIEVE THE OFFICIAL NUMBERS, personal saving in the U.S. has collapsed: It fell in the late 1990s, tumbled all the way to a 70-year low by 2001, then cascaded off that cliff into minus territory in 2005 and has languished there ever since. It seems like an impending catastrophe. If Americans live beyond their means they can't accumulate the wealth to provide for their retirement, much less create a nest egg big enough to see them through rainy days.

But a look at that nest egg calls into question the whole personal savings story. Household net worth -- ...

Also check out Alan Abelson's piece with numerous biblical references and negative revisions to previously reported unemployment stats, and potential overstatements with April's 16.9% new home sales gains figure.

Something just ain't right. The air's gettin' a bit thin up here.

The personal savings rate is part but not all of the picture.

First, is all savings counted? I can't remember but I am guessing not.
Financial assets are in fact excepted. If stocks an real estate go up without interruption, the personal savings rate doesn't matter.
Also, does it matter whether savings is foreign or domestic? No.

If financial assets drop in value, then the personal savings rate is critical. As long as air is going into the baloon there isn't a problem.

James

[atlasshrugged]

Is it just me, or are we truly looking through the Looking Glass - ready to descend through the wormhole?

Barrons, 5/28/07

By Gene Epstein
Word Count: 984

IF YOU BELIEVE THE OFFICIAL NUMBERS, personal saving in the U.S. has collapsed: It fell in the late 1990s, tumbled all the way to a 70-year low by 2001, then cascaded off that cliff into minus territory in 2005 and has languished there ever since. It seems like an impending catastrophe. If Americans live beyond their means they can't accumulate the wealth to provide for their retirement, much less create a nest egg big enough to see them through rainy days.

But a look at that nest egg calls into question the whole personal savings story. Household net worth -- ...

Also check out Alan Abelson's piece with numerous biblical references and negative revisions to previously reported unemployment stats, and potential overstatements with April's 16.9% new home sales gains figure.

Something just ain't right. The air's gettin' a bit thin up here.

americans have never been more affluent than now simply from owning real estate! Abelson has been bearish since I started reading him in 1990....he just doesnt get it