The latest release of the Federal Reserve Statistical Release Z.1, Financial Accounts of the United States – Flow of Funds, Balance Sheets and Integrated Macroeconomic Accounts or just “flow of funds” has a new table B.1: Derivation of U.S. Net Wealth.
The release states:
The measure of U.S. net wealth also includes the market value of domestic nonfinancial and financial corporations, and is adjusted to reflect net U.S. financial claims on the rest of the world.
The stock of net wealth ("the wealth of nations") is highly volatile under this construction, fluctuating with market capitalization. I wonder if anyone will make a "wealth clock" similar to the "debt clock" so we can see it fluctuating trade by trade.
3 comments:
Land vs shares
"houses have some more advantages than stock market speculation:
* A margin account called "mortgage" is available nearly to anybody, with leverage ratios of 4x or even 20x with "Help to Buy", and is sold by several shops in most high streets. This can turn a yearly rental yield on the property of 5% into a yearly gross return on capital invested of 20% or even 100%. More as the house appreciates and the rent goes up.
* Not only the 4x or 20x leverage can boost *rental* ROI by as much, but for the main dwelling there are no capital gains taxes at all, and capital gains of 5-10% per year can double or quadruple the gross rental yield of 5%, and rather more than that after tax and expenses.
* The margin account called "mortgage" has no margin calls on the borrower after she pays the initial deposit.
* Offering a margin debt is quite safe for the lender too, even without margin calls on the borrower, because if the collateral goes down in valuation the *government* will provide extra margin to the lender in the form of extremely generous bailouts; plus the borrowers vote and the government will have a strong incentive to boost up again the collateral valuation, or change accounting rule to let lenders value the collateral to fantasy."
More stupid metric based on fluctuating balance-sheet prices measured in units of account you can manufacture, exactly what we need...
Picketty' s source of funds....
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