Saturday, September 18, 2010

AMERICANS STRUGGLE as the LA RAZA DEMS work for amnesty & BIG BANKSTER PROFITS!

Americans struggle to regain their shrunken wealth
By JEANNINE AVERSA
AP Economics Writer
Americans' long journey to regain the wealth they lost in the recession is stalled.
Households failed even to run in place during the April-June quarter as sinking stock prices eroded wealth. Stocks have since recovered about two-thirds of those losses. But based on last quarter's data, household net worth would have to surge 23 percent to reach its pre-recession peak.
Net worth - the value of assets like homes and investments, minus debts like mortgages and credit cards - fell 2.7 percent last quarter, or $1.5 trillion, the Federal Reserve said Friday. It now stands at $53.5 trillion.
That's above the bottom hit during the recession, $48.8 trillion in the first quarter of 2009. But it's far below the pre-recession peak in wealth of $65.8 trillion.
The drop from April to June was the first quarterly decline in Americans' wealth since early 2009. Before then, net worth had risen slowly for four straight quarters.
Economists generally think household wealth has ticked up in the July-to-September quarter so far, because of higher stock prices. Yet given last quarter's setback and expectations of scant gains ahead, some economists have pushed back their forecast for when Americans will regain all their lost wealth: Not until the middle of this decade.
Their stagnant wealth will likely keep Americans from spending freely - and the struggling economy from picking up strength. Consumers tend to spend according to how wealthy they feel. And their spending accounts for about 70 percent of the economy. In the meantime, people are saving more and paring debt, Friday's data showed.
The decline in net worth from April to June amounted to an average drop of $12,941 per household. Average household wealth now amounts to $455,173. That's up from $415,185 during the recession. But it's down from a peak of $563,438 in 2007.
One reason why economists foresee only slight gains in wealth is they expect real-estate values to stay weak. Residential real-estate accounts for 32 percent of net worth; individual stocks make up 13 percent. The balance includes retirement accounts, taxable mutual funds, bank accounts, bonds and possessions such as cars and jewelry.
During the recession, sinking home equity and stock prices made shoppers skittish. More than a year after the recession is thought to have ended, the housing and stock markets remain fragile. That's why most Americans aren't spending as much as they typically do after recessions.
Consumer spending grew at an annual rate of just 2 percent last quarter, about the same pace as in the first three months of this year. Most economists think Americans will spend at about the same pace, or only slightly better, in the current quarter.
By contrast, after the 1981-82 recession, consumer spending averaged a robust 6.5 percent pace during 1983.
"Consumer spending is going to show only stunted growth this year because the wherewithal to spend - jobs, income, wealth - are only inching higher," said Ken Mayland, president of ClearView Economics.
Another reason shoppers are unlikely to ramp up their spending: Their faith in the economy is sagging. Consumer confidence dropped in September, according to the University of Michigan/Reuters' consumer sentiment index fell released Friday.
Carla Fehribach, a retired airport ticket agent in St. Louis, said the stock market's failure to generate any real growth this year has made her more cautious about spending. "I'll feel a little more comfortable about spending more if the stock market and the economy turn around," said Fehribach, 67.
She and others are instead saving more. Americans saved 6.1 percent of their disposable income from April to June, the highest quarterly total in a year.
And they are slowly trimming their debt.
Overall household debt dipped to $13.45 trillion from April to June. That's a 3.2 percent decline from a peak in early 2008. People, on average, are carrying around $43,000 in debt - from mortgages and credit cards to auto loans and home equity lines.
People who defaulted on mortgages and other loans accounted for some of the decline in debt. But many other households have been paying down debts and are reluctant to take on new loans, analysts said.
The decline in net worth underscores how much household wealth depends on stock values. About a fifth of household financial assets are in stock-market holdings. And the value of those holdings fell 12 percent in the April-June period compared with the first three months of the year.
Americans' home equity isn't making up for the loss in their stock values. Last quarter, U.S. real estate values ticked up a scant 0.3 percent compared with the January-March period.
And many economists expect the home market to weaken further, especially since a federal home buyer tax credit has expired. Most expect home prices to decline, on average, 5 percent to 10 percent by the middle of next year.
Some optimism about stocks has been sparked by the gains they've made since June 30. The Standard & Poor's 500 index, a broad gauge of the market, has recovered about two-thirds of its losses from the April-June period. That translates into modest advances in household wealth since June 30. Still, for the year, stocks are up just under 1 percent.
Though the S&P 500 remains 28 percent below its October 2007 peak, employees who have stayed invested in 401(k) plans and continued to contribute have fared better. About 78 percent of them now have more money in those accounts than before the market top three years ago, according to estimates by Jack VanDerhei of the Employee Benefit Research Institute.
Still, so many people have seen their overall wealth diminish since the recession that they lack confidence to spend much.
Scott Nieberg, a St. Louis veterinarian, for example, says his retirement account is worth about what it was a decade ago. Nieberg, 53, says he's all but given up hope his nest egg will grow significantly any time soon.
His business would have to improve significantly for him to feel comfortable enough to take a vacation, he said.
"In a down economy, you just work hard," Nieberg said. "We used to take vacations. Now, we take weekends."
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WELLS FARGO and BANK of AMERICA are two of SEN. DIANNE FEINSTEIN’S MOST GENEROUS DONORS!
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ERGO, SHE AND BOXER HAVE VOTED FOR ANY AND ALL OF THE BANKSTER PRESIDENT’S NO-STRINGS BANKSTER BOUGHT WELFARE THAT HAS COST US….
4.7 TRILLION……!!!!
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MEANWHILE FEINSTEIN HAS ACCUMULATED $40 MILLION IN MANSIONS SCATTERED AROUND THE COUNTRY, NONE IN FORECLOSURE, INCLUDING HER $16 MILLION BUSH WAR PROFITEER MANSION IN S.F.
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WELLS FARGO – BANKSTERS TO THE MEX DRUG CARTEL… and where NO American need apply for a bankster job!

CA MORTGAGE LICENSE REVOKED FOR WELLS FARGO!

“Wells Fargo said last month that first-quarter profit jumped 53 percent from a year earlier as borrowers rushed to refinance mortgages amid record-low interest rates.”
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Lou Dobbs Tonight
Monday, November 12, 2007

Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these
companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners.
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DEPARTMENT OF CORPORATIONS
The San Diego Union
By Craig D. Rose May 3, 2003
Wells Fargo mortgage license is revoked - State takes action over interest dispute
Citing a pattern of overcharging borrowers, state regulators yesterday revoked the mortgage lending license of Wells Fargo, but the bank will continue to make and service loans under federal jurisdiction.
The California Department of Corporations said Wells Fargo, the state's largest mortgage lender, has been charging consumers interest for days disallowed by state regulation.
"Wells Fargo charged consumers interest on their mortgages more than one day before being recorded, an admitted violation of California law," said Demetrios Boutris, state commissioner of corporations. "If Wells Fargo is not going to abide by California's laws, it has no right to California's licenses."
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Drowning in debt: top 15 states for underwater mortgages

Last week, The Chronicle reported that underwater mortgages are on the decline: that because of increased foreclosures on distressed properties, the number of American homes with mortgages that exceed the properties' value has dropped. But again, foreclosures, rather than rising home prices, accounts for the drop--not then a positive sign.
For a more detailed look at this phenomenon, here is a list of the top 15 states in our union for underwater mortgages.

1. Nevada: 69.9% of all mortgages
2. Arizona: 51.3% of all mortgages
3. Floria: 47.8% of all mortgages
4. Michigan: 38.5% of all mortgages
5. California: 35.1% of all mortgages
6. Georgia: 27.8% of all mortgages
7. Virginia: 24.3% of all mortgages
8.-13. South Dakota, Maine, West Virginia, Wyoming, Louisiana, and Mississippi: 23.8% of all mortgages
14. Maryland: 22.9% of all mortgages
15. Idaho: 22.7% of all mortgages
Though we've heard the term "bail out" more times than we care to, we might be hard pressed to see what, if any, real help is being offered to drowning homeowners. Cavan Hadley, a homeowner and father of two in Morro Bay, California, put the situation-- sadly-- as follows:
"On the verge of losing my house in Morro Bay. Been working with Bank of America for over a year. But apparently the loan modification program wasn't aimed at people, just press releases."
Posted By: Anna Marie Hibble (Email) | August 31 2010

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