Debt Dr. Green

Debt the percentage of US GDP attributable to corporate profits is near a multi-decade high Corporate gains tend to benefit the affluent through strong dividend growth, capital-gains income and high-salaried jobs, while restraining working-class wage growth. Ajay Kapur of Citigroup calls such economic trends Plutonomy – a global economy disproportionately geared to the rich.

Debt During the five years , nonfinancial debt growth by 32.4% went together with 22.2% real GDP growth. In the following five years , nonfinancial debt grew by 47.3% and real GDP by 13.4%. There has been an atrocious deterioration in the relationship between debt growth and economic growth.

Debt In 2005, real GDP rose $345.1 billion, or 3.2%. Private households increased their total spending by $312.2 billion –$264.1 billion was on consumption –$48.1 billion was on residential building –Together, the two components accounted for 91.8% of GDP growth.

Debt This spending boom compared with current income growth by just $93.8 billion, or 1.2%. Thus, less than one-third of the rise in consumer spending was funded by current income growth and more than two-thirds was derived from additional borrowing. This seems an unsustainable pattern.

Debt Between 2000 and third quarter 2006, the mortgage debt of U.S. private households soared from $4,801.7 billion to $9,497.4 billion. In barely six years, it has, thus, almost doubled." Twice as much mortgage debt!

Debt Private households have drastically curbed their mortgage borrowing It amounted to $672.7 billion in the third quarter 2006, sharply down from $1,223.6 billion in the same quarter of last year. Mortgage equity withdrawal peaked at an annual rate of about $730 billion, or 8.1% of GDP, in the third quarter One year later, in the third quarter 2006, it was sharply down to $214 billion.

Real Estate a 25% drop in new home sales a 35% plunge in housing starts a 16% annualized decline in homebuilding activity over the past three quarters a reduction of 110,000 jobs in the residential construction industry from its recent peak.

Real Estate Foreclosures jumped 35% in December versus a year earlier More than 100,000 properties entered foreclosure

Real Estate—The Future 2.2 million borrowers will lose their homes Up to $164 billion of wealth will be lost in the process. housing market. The bulk of the income effects are yet to come -- especially since the employment declines in residential construction have unwound only about 14% of the hiring boom of over As much as $1 trillion worth of mortgages are set to be adjusted to higher payments over the next 12 months.