This Is Why We Have Occupy Wall Street!

Occupy Maine Protesters Facing Setbacks

from huffingtonpost.com 12-8-11

AUGUSTA, Maine -- Two groups of Occupy demonstrators in Maine have been dealt setbacks, following a trend of Occupy encampments being shut down in other cities around the country. But they vow they'll continue delivering their message protesting what they see as income inequality in America.

The Portland City Council late Wednesday denied OccupyMaine's request to stay in Lincoln Park, where protesters have been camping since October. Attorney John Branson says he'll ask a judge to let the group stay in the park.

Also Wednesday, U.S. District Judge Nancy Torresen denied Occupy Augusta's request to continue camping in Capitol Park across from the State House.

A number of Occupy encampments in other U.S. cities have been shut down in recent weeks as city officials evict protesters from public property.

 

U.S. Household Wealth Third Quarter 2011: Americans Take Biggest Hit Since 2009

by DEREK KRAVITZ and DAVE CARPENTER   from huffingtonpost.com 12-8-11  

WASHINGTON — Americans' wealth last summer suffered its biggest quarterly loss in more than two years as stocks, pension funds and home values lost value.

At the same time, corporations raised their cash stockpiles to record levels.

Household net worth fell 4 percent to $57.4 trillion in the July-September quarter, according to a Federal Reserve report released Thursday. It was the sharpest drop since the tumultuous period after the September 2008 bankruptcy of investment bank Lehman Brothers. And it was the second straight quarterly fall.

Household wealth, or net worth, is the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards.

Lower net worth can hurt the economy. When people feel poorer, they spend less. That slows growth. Businesses typically then cut back on hiring and expansion.

Stock market declines, in particular, have held back Americans' quest to recover losses from the 2008 financial meltdown. The Standard & Poor's 500 stock index tumbled about 14 percent in the July-September period, ending a streak of four quarterly increases. The decline was driven by worries about Europe's debt crisis and the U.S. economy.

Stocks have rebounded about 9 percent since last quarter ended. But the S&P index is still about 21 percent below its peak of four years ago.

"Going forward, you're going to see these ups and downs; the era of volatility is back," said Gregory Daco, principal U.S. economist at IHS Global Insight. "There's greater uncertainty among consumers."

The value of Americans' stock portfolios fell 5.2 percent last quarter. T. Rowe Price Associates estimates that two-thirds of that decline has been recouped in the October-December period. Much of that comes from continuing contributions to retirement accounts.

Home prices remain under pressure, diminishing home equity. Home equity is the biggest source of wealth for most Americans. Last quarter, home values slipped 0.6 percent. Total values fell to $16.1 trillion, down from nearly $21 trillion in 2007, before the recession began.

At the same time, corporations are amassing record cash stockpiles – $2.1 trillion at the end of September. Their reluctance to spend more of that money helps explain why job growth remains modest. The unemployment rate fell to 8.6 percent in November. But it's hovered near 9 percent for more than two years.

Roughly half of U.S. households own stocks or stock mutual funds. Stock portfolios make up about 15 percent of Americans' wealth. That's less than housing but ahead of bank deposits, according to the Fed's report.

Most stock wealth is owned by the richest Americans, who also account for a disproportionate share of consumer spending. Eighty percent of stocks belong to the richest 10 percent of Americans. And the richest 20 percent represent about 40 percent of consumer spending.

The average balance in 401(k) plans managed by Fidelity Investments, the largest workplace savings plan provider, dropped nearly 12 percent in the July-September period.

Thanks largely to workers' added contributions and company matches, about 92 percent of people with 401(k) retirement savings plans now have more money than at the market top in October 2007, according to the Employee Benefit Research Institute in Washington.

As measured by the Dow Jones U.S. Total Stock Market Index, stocks lost $2.6 trillion in the July-September quarter. About $15 trillion remains invested in U.S. stocks.

Most economists expect home prices to fall further, as banks resume foreclosing on millions of homes with past-due mortgages. Many foreclosures have been delayed because of a government investigation into mortgage lending practices.

When their declining wealth is combined with stagnant pay, many Americans are less likely to spend. Average household income, adjusted for inflation, fell 6.4 percent last year from 2007, the year before the recession, according to the Census Bureau. That's a drag on the economy, since consumer spending accounts for 70 percent of economic activity.

The report found that household debt declined at an annual rate of 1.25 percent from the previous quarter. The main reason was a decline in mortgage debt, which has fallen for 14 straight quarters.

But the drop is deceiving. Mortgage debt is declining mainly because so many Americans are defaulting on payments and losing their homes to foreclosure – not just because people are paying off loans.

The Fed report says the average household owes about $121,000 on mortgages, credit cards, auto loans and other debt.

Their debt equals 119 percent of the money Americans have left after taxes. In late 2007, when the country was binging on debt, it was 135 percent. In the healthier 1990s, it was roughly 90 percent.

The Fed's quarterly report documents wealth, debt and savings for corporations, governments and households. It covers most of the financial transactions that take place in the United States.

(http://eye-on-washington.blogspot.com)