Is 2022 becoming another year the nation would like to forget? After learning that US household wealth plummeted by a record $6.1 trillion in the second quarter, it is safe to say that the streak of disappointing years will continue for the US economy. Can 2023 be any better? Perhaps if the bulls trounced the bears on Wall Street, households nationwide could live long and prosper again. So, what did the Federal Reserve data show in the April-June period?
US Household Wealth Craters
According to statistics from the US central bank, household net wealth fell to $143.8 trillion in the three months ending in June. This is down from $149.9 trillion in the first quarter and represents the second straight quarterly drop. Interestingly, the net decrease in US household wealth in the last quarter was approximately $30 billion larger than the previous all-time high that took place in the second quarter of 2020.
So, what triggered the sharp drop in America’s prosperity? When the stock market slipped into bearish territory, the overall valuation plunged by $7.7 trillion. This slide was offset by a $1.4 trillion increase in real estate values. Considering that the stock market’s latest rebound might have been a dead-cat bounce and the country’s housing sector is on a sharp downturn, the Fed’s third-quarter data should be as horrific as watching a Vice President Kamala Harris interview.
In a sign that perhaps too many consumers and companies have exhausted their pandemic-era savings and added to their debt volumes amid soaring price inflation, Fed numbers confirm that total non-financial debt climbed at an annualized rate of 6.5%. In addition, household debt ballooned by 7.4% as business and government debt levels surged.
“Overall, outstanding nonfinancial corporate debt was $12.6 trillion,” according to the latest news from the Eccles Building. “Corporate bonds, at roughly $6.7 trillion, accounted for 53% of the total. Nonmortgage depository loans were about $1.4 trillion. Other types of debt include loans from nonbank institutions, loans from the federal government, and commercial paper.”
The ESG Scam Continues
ESG (Environmental, Social, and Governance) investing is nothing more than a vague grift, designed as a marketing scheme to attract capital from feel-good investors and Wall Street titans. As Liberty Nation has reported, ESG is everything all at once with a cherry on top as it can include companies involved with human rights abuses, businesses accused of harming the planet, and firms that maintain questionable practices.
While America’s ESG problem has been exposed, other major economies have fallen victim to the ESG charm. China, which ostensibly does not care much about what the world thinks considering the global marketplace is dependent on Beijing, is hosting this racket.
According to Bloomberg, fund manager Hou Chunyan recently revealed during a presentation that her Da Cheng ESG Responsibility Investment Mixed Fund does not exclude coal companies or liquor stocks. In addition, the Chinese ESG funds have parked their yuan in chemical makers and green firms maintaining ties to forced labor.
But this is not entirely surprising, as ESG can be anything the power brokers say it is. Boya Wang, an analyst at Morningstar Inc, perhaps summarized it best in China: “The government is bound to generate its own interpretation of ESG, because they want to make sure it will not conflict with the country’s national economic strategies…social inequality and local unemployment top the agenda.”
Investors are ostensibly indifferent, dumping about $50 billion this year, roughly double the intake in 2021. Can anyone blame them? If ESG investing is all the rage, why not take advantage of the situation?
What a week it was for the United Kingdom: A new prime minister arrived at 10 Downing Street, and Queen Elizabeth II passed away. Unfortunately for Prime Minister Liz Truss, there will not be a honeymoon phase, as she will be expected to take the reins from her predecessor, Boris Johnson, and start crushing the issues of the day like a dixie cup. But not too many Brits have confidence that Truss can handle these subjects. You could say that they do not Truss her.
A recent snap YouGov survey revealed that two-thirds of respondents do not have confidence that she can resolve the cost-of-living crisis decimating the British economy. The poll revealed that most people do not trust her in dealing with the Ukraine-Russia conflict, Great Britain leaving the European Union, or housing.
A separate YouGov poll highlighted that many Britons did not share a favorable view of Truss before she was anointed prime minister, calling her dishonest, out of touch, uncaring, and incompetent.
Her opening remarks essentially contained the same tired old tropes that her predecessors and other world leaders aver. “I know that our beliefs resonate with the British people: our beliefs in freedom, in the ability to control your own life, in low taxes, in personal responsibility,” Truss said. “I know that’s why people voted for us in such numbers in 2019 and as your party leader I intend to deliver what we promised those voters right across our great country.”
In just a couple of days on the job, Truss announced a plan to freeze energy bills at around $2,900 as part of a broader $220 billion stimulus package. Whether this is short-term relief that could metastasize into long-term pain remains to be seen.