patrick.net

but it is out of date (2006)

I'll say!

The bulk of middle-class wealth is not held in productive capital or equity per but sheer land valuation -- in 2007, 60% of total valuation of principle residences were held by the bottom 90% -- the bottom 90% were over-invested in real estate, as it were.

This paper: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html breaks it down in mind-numbing detail.

The Federal Flow of Funds report: http://www.federalreserve.gov/releases/z1/current/z1r-5.pdf says that home valuation peaked at $22.7B in 2006, and has fallen 25% to $16.5T as of 3Q10 (which is where we last were in 1H04 and 1Q09).

We are so screwed.

Troy says

The Federal Flow of Funds report: http://www.federalreserve.gov/releases/z1/current/z1r-5.pdf says that home valuation peaked at $22.7B in 2006, and has fallen 25% to $16.5T as of 3Q10 (which is where we last were in 1H04 and 1Q09).

Subtract out the debt on that property to get equity and it's even worse. $10.1T of debt leaves only $6.4T in home equity in total. In 2000 that number was $6.2T in equity, so in inflation-adjusted terms the average household has LOST household wealth from RE.

I really, really want to get some of what AF smokes. Great fun post AF.

APOCALYPSEFUCK says

Koch Industries and other large primary industries firms hire mercenary brigades of staving neo-nazis to secure mining and drilling leases that they now secure at no cost with the disbandment of the USA.

Where are all the starving neo-nazis right now? Are these going to be new converts to the "faith" or are they pent up somewhere in Idaho or the Czech republic? You need to get a book deal and then take a huge advance on the movie rights before the crash of the dollar. Is this going to be a prequel to Mad Max or the sequel to Beyond Thunderdome?

If you value net worth in printed dollars US got a lot of it, we print them.
If you value it in happiness and prosperity, we are a lot less prosperous.

I thought purpose of the society was to make it prosperous for as many as it can in it, yet all our society is about meaningless drudgery and making dollars which government prints and hands out to the banks to pass down to us for labor. Perhaps what I'm saying is that value of a house or other consumer good isn't important in dollars, anyone can build a house if they have materials and time to do it. Maybe our society should measure happiness, after all at the end of the day thats the important factor.

APOCALYPSEFUCK says

We’re so fucked! Wait until the Chinese call in the notes, the states defaults and they fly in and start carrying off the women as partial payment.
Then it gets bad.

You always so over dramatic. What will happen is hyperinflation for several years, then the "old" dollar will be replaced with the "new" dollar with a couple of zero's knocked off and life will go back to normal again. This happened before in other countries and society didn't collapse. While many people suffered and many got wiped out financially, the sky didn't fall. In the long run it might actually be better for our country. Unsustainable debt will be wiped out and the government will be forced to live within its means because no one will lend it money again for quite a long time.

The Billion Dollar bill, coming to a ATM near you soon.

TechGromit says

APOCALYPSEFUCK says

We’re so fucked! Wait until the Chinese call in the notes, the states defaults and they fly in and start carrying off the women as partial payment.

Then it gets bad.

You always so over dramatic.

I think that's his point. Many people are over-dramatic and he's taking it to the extreme to show how unlikely it is. http://en.wikipedia.org/wiki/Reductio_ad_absurdum

My own prediction is for a long and boring decline of America, like Japan. But there is potential for excitement, like a sudden surge in interest rates.

Ultimately the very rich will own everything in America, the rest of us will be their slaves, and there will be a revolution, so Apocalypsefuck isn't totally wrong. But I think that's still 100 years away. Here's my theory of history:

http://patrick.net/?p=175

Not much better according to this (2-year-old) article.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/22/AR2009032201506.html

and this thanks to Patrick:

http://robertreich.org/post/3317811319?source=patrick.net

APOCALYPSEFUCK says

We’re so fucked! Wait until the Chinese call in the notes, the states defaults and they fly in and start carrying off the women as partial payment.
Then it gets bad.
Bankrupted, the federal government of the USA disbands.
Wall Street firms, by now all out of dollars and in Swiss francs, hires Russian and South African-led mercenaries to garrison the country while they figure out how to best cash in on the chaos. Millions die in air attacks resisting the imposition of corporate military rule they all knew was coming.
Koch Industries and other large primary industries firms hire mercenary brigades of staving neo-nazis to secure mining and drilling leases that they now secure at no cost with the disbandment of the USA. “A government that interfered with the normal process of industry the way the former USA did was in reality a terrorist organization and deserved its ignominious end,” Koch Industries said in a prepared statement from an air borne office at an undisclosed location in the South Pacific the afternoon that President Jeb Bush closed the federal government and gave the final order for the Capitol to be fire bombed by Halliburton mercenaries.
Goldman Sachs, relocated to Dubai, leads a syndicated deal and sells the former USA to Disney for basis points on its debt.
Disney, operating from the recently declared Republic of Catalina Island, declares the entire country a colossal dystopian theme park and charges the remaining ultrarich from Asia and Europe for the opportunity to rule and rape a village, a city or an entire state or region for incredible fees.
The less august content themselves with entertainments like million-franc hunting licenses that give them the right to shoot Americans to their hearts content. Sarah Palin starts a tour company with her husband that brings these hunters on tours of cities in helicopters with built-in shooting platforms.

Funny as it may, but the way I've seen politics lately I wouldn't be surprised if similar were to occur.

When that last bubble crashed, it was literally mass looting ensuing out there. Every rich guy was getting billion dollar bail outs, all the wall street cronies, all the bankers, all the people with connections in the government were getting bailed out. The rest of us are going to be paying that bill over many years.

Taking advantage of others in order to gain is basically a mentality for those with government connections out there, it's like all the psychopathic people got together and formed K-Street for easy access to public funds.

My own prediction is for a long and boring decline of America, like Japan. But there is potential for excitement, like a sudden surge in interest rates.

I was thinking more like following the decline in the UK, as opposed to Japan. However, that might not be much different.

Check out this one (Thanks Patrick).

http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph?source=patrick.net#content-header

pretending that house is an equity bank and not a costly liability was dumb nationwide.

people all around traded real assets and labor for wooden boxes and at the end realized they are stuck with magical beans. CA is still in denial of course.

Here’s my theory of history:

http://patrick.net/?p=175

Good job. Sounds pretty accurate.

Here's a more cynical take on the same: http://www.whatwethinkweknow.org/2008/12/human-farms.html

A frame of reference I don't completely buy, but interesting all the same.

@Chris,

"are stuck with magical beans"

Instead of the cloud giant with the golden goose and golden harp, there is the golden IRA debt forgiveness and golden TARP.