The following chart is from the CalculatedRisk blog post of March 10, 2011. It depicts Total Household Net Worth as a Percent of GDP. The underlying data is from The Federal Reserve Flow of Funds 4Q 2010 report:
(click on chart to enlarge image)
As seen in the above-referenced CalculatedRisk blog post:
“According to the Fed, household net worth is now off $8.8 Trillion from the peak in 2007, but up $8.1 trillion from the trough in Q1 2009.
Update: Household net worked peaked at $65.7 trillion in Q2 2007. Net worth fell to $48.7 trillion in Q1 2009 (a loss of almost $17 trillion), and net worth was at $56.8 trillion in Q4 2010 (up $8.1 trillion from the trough).
The Fed estimated that the value of household real estate fell $260 billion to $16.37 trillion in Q4 2010. The value of household real estate has fallen $6.3 trillion from the peak – and is still falling in 2011.”
As I have written in previous posts on this topic:
“As one can see, the first outsized peak was in 2000, and attained after the stock market bull market / stock market bubbles and economic strength. The second outsized peak was in 2007, right near the peak of the housing bubble as well as near the stock market peak.
As seen on the chart, the Total Household Net Worth is making an upturn, but is significantly below the prior 2007 peak.
I could extensively write about various interpretations that can be made from this chart. One way this chart can be interpreted is a gauge of “what’s in it for me?” as far as the aggregated wealth citizens are gleaning from economic activity, as measured compared to GDP.”
A Special Note concerning our economic situation is found here
SPX at 1295.11 as this post is written