How Have The Numbers Changed?

NET WORTH - The total net worth of U.S residents was $58.5 trillion as of 12/31/11, down 0.6% in the last year (source: Federal Reserve). This suggests that the average net worth per person in the U.S is ~$188,000. This is, in itself not meaningful as the poorest 40% of U.S households collectively have virtually no net worth, thus skewing the “wealth distribution curve” sharply.

BIG DEBT - The total value of home mortgage debt (including home equity loans) held by Americans has decreased 7% in the last 4 years. The amount owed nationwide is $9.8 trillion (source: Federal Reserve). As only ~65% of U.S residents own the home they live in and only about half carry mortgages this suggests that all of this mortgage debt is carried by ~32% of families (~40 million households) in the U.S. leaving households that have a mortgage with a mortgage balance averaging ~$245,000.

MORE PROFITS – Over the past 10 years the companies in the S&P 500 have seen their profits increase ten times faster than their stock price. Surely not overpriced in January 2002, stock pricing is a function of a firms current and future profitability filtered through marked Aggregate (sum total) earnings per share of the companies in the S&P 500 stock index have grown +13% per year on average over the last 10 years (2002-2011), increasing by +253% in aggregate over the decade (source: S&P). While average trading volume has nearly tripled in the past 10 years, and while January 2002 stock pricing reflected a ~24% drop from March 2000 highs, the year end 2011 closing price of the S&P 500 index (~1,267) reflects a stock price increase of ~1.2% per year average over the last 10 years (2002-2011), increasing by ~13% in aggregate over the decade.