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This is simply not true us as us citizens has not profited from this. The banks has been printing money like crazy and the American middle class has not gotten

by acd 12y ago

This is simply not true us as us citizens has not profited from this. The banks has been printing money like crazy and the American middle class has not gotten richer while the top 1% has gotten really rich. Here is a graph from CNN about it http://money.cnn.com/2011/02/16/news/economy/middle_class/ http://money.cnn.com/2011/02/16/news/economy/middle_class/

adventured 12y ago
The middle class got one of the world's largest bailouts in the form of record low mortgage rates. They were able to buy homes with cheap rates, and they were able to refinance with cheap rates; and that's still true even now, the homeowner bailout continues. The savings for the middle 50% of Americans is staggering. So yes, average Americans profited in a big way. Further, all homeowners got bailed out via a multi-trillion dollar asset inflation program that re-inflated housing prices. If you own a house, you saw a massive benefit from that bailout.
- antidaily 12y ago
  That's not a bailout. Coupled with flat wages and rising costs of living, savings aren't exactly piling up. And home prices are expected to be pretty flat for the foreseeable future.
  - adventured 12y ago
    Would you elaborate on how giving homeowners trillions in wealth by intentionally re-inflating the housing market, and holding down mortgage rates, isn't a bailout? The government & Fed ran programs that directly, by design, benefited all homeowners, to the tune of $5+ trillion.
    - spuiszis 12y ago
      Homeowners aren't benefiting, they've underwater on their mortgages and are selling for pennies on the dollar. It's Blackstone and a number of other clever players who've been at this for years [1]. http://www.bloomberg.com/news/2014-03-14/blackstone-s-home-buying-binge-ends-as-prices-surge-mortgages.html http://www.bloomberg.com/news/2014-03-14/blackstone-s-home-b...
      - adventured 12y ago
        The 80 million homes that are owned in the US, are selling for pennies on the dollar and are underwater? Quite the opposite, only 8% of home owners are underwater, and that's a drastic improvement vs the peak of the real estate collapse. Total home value in the US is near all time record highs, and home equity has skyrocketed the last three years. Home equity has climbed by $4+ trillion in just the last 2.5 years, an increase of 64%; from $6.7 trillion in the first quarter of 2012, to roughly $11 trillion today. Home owners have benefited massively from the Fed bailout, via low mortgage rates and cheap refinancing. Home owners have gained probably $8 trillion since the bottom, across essentially every market in the US.
        spuiszis 12y ago
        Numbers without sources have no value in an internet forum but from what I'm taking from your argument (please correct me if I'm wrong), is that: "TARP worked because, housing prices have increased across the board and as a result, the whole country is richer and everyone is better off" You're definitely right about prices have definitely gone up[1] (side note: Case-Shiller Index isn't close to 64% nationally), but all of this is all on paper. Residential home sales are still at '08/'09 levels; it's hard to translate those paper gains into liquidity [2]. I also agree with the low mortgage rates comment, however, all of the QE money is going everywhere but the housing market. Even if you have a stellar credit rating, it will be incredibly difficult to get a loan. Hell, even Ben Bernanke couldn't refinance his mortgage, which is both ironic and absolutely insane when you think about it [3]. Six years post-TARP, the housing market and American economy, still have plenty of structural issues. TARP was a monumental decision that will forever affect every part of America and housing prices cannot be the only metric or lens that we judge TARP's performance on. [1]Case Shiller Housing Index - http://us.spindices.com/additional-reports/all-returns/index.dot?parentIdentifier=6db38316-fd4f-4b21-9db9-61289d88fc9c&sourceIdentifier=index-family-specialization&additionalFilterCondition= http://us.spindices.com/additional-reports/all-returns/index... [2]https://www.flickr.com/photos/126862837@N04/15451411994/ https://www.flickr.com/photos/126862837@N04/15451411994/ [3]http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tough-market-when-ben-bernanke-can-t-refinance.html http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tou...
- pjmorris 12y ago
  I disagree about the 'middle class bailout'. Interest rates are lower, but house prices are higher (good for middle class wealth if you bought before the crisis, bad if you have to buy after the crisis - look at household formation since the crisis to see how that's working out). On balance, banks collect the same interest, and homeowners have less to spend on anything else.
at-fates-hands 12y ago
And yet, the US is producing more millionaires each year than every country except China. . . https://www.bcgperspectives.com/content/articles/financial_institutions_business_unit_strategy_global_wealth_2014_riding_wave_growth/?chapter=2#chapter2_section3 https://www.bcgperspectives.com/content/articles/financial_i... The total number of millionaire households (in U.S. dollar terms) reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 percent of all households globally. The U.S. had the highest number of millionaire households (7.1 million), as well as the highest number of new millionaires (1.1 million).
- littletimmy 12y ago
  That's what the earlier post is getting at. There is a lot of wealth skew towards the top... so of course there are a lot more millionaires. It is the common man who didn't see any benefit from TARP.
  - adventured 12y ago
    The common man saw a massive benefit from TARP, and all the other programs. Had the government & Fed not intervened, the common man would have seen his housing value vaporized. Mortgage rates would have - properly - skyrocketed to record highs, making it extraordinarily expensive to refinance a home or buy a new home. Such high mortgage rates would have crushed housing values even further, and it's unlikely there would have been any value recovery to this day. The common man would have lost trillions.
    - YokoZar 12y ago
      The common man rents. The better off common man buys a house in a market with now reinflated prices. If you're a buyer, low prices are better than lower interest rates. The winners were the narrower subset of Americans who skewed older and wealthier (enough to have already owned a home).
      - adventured 12y ago
prostoalex 12y ago
This is strictly federal government revenues associated with TARP funds. In a way the middle class has benefited by not having their bank suddenly go down or the local factory shut down due to some giant Detroit automotive contract defaulting on its payment. But strictly speaking, it's a Troubled Assets Relief Program, not Middle Class Enrichment Program, so not sure where those expectations come from.

by acd 12y ago

adventured 12y ago

The middle class got one of the world's largest bailouts in the form of record low mortgage rates. They were able to buy homes with cheap rates, and they were able to refinance with cheap rates; and that's still true even now, the homeowner bailout continues. The savings for the middle 50% of Americans is staggering. So yes, average Americans profited in a big way. Further, all homeowners got bailed out via a multi-trillion dollar asset inflation program that re-inflated housing prices. If you own a house, you saw a massive benefit from that bailout.

antidaily 12y ago
That's not a bailout. Coupled with flat wages and rising costs of living, savings aren't exactly piling up. And home prices are expected to be pretty flat for the foreseeable future.
- adventured 12y ago
  Would you elaborate on how giving homeowners trillions in wealth by intentionally re-inflating the housing market, and holding down mortgage rates, isn't a bailout? The government & Fed ran programs that directly, by design, benefited all homeowners, to the tune of $5+ trillion.
  - spuiszis 12y ago
    Homeowners aren't benefiting, they've underwater on their mortgages and are selling for pennies on the dollar. It's Blackstone and a number of other clever players who've been at this for years [1]. http://www.bloomberg.com/news/2014-03-14/blackstone-s-home-buying-binge-ends-as-prices-surge-mortgages.html http://www.bloomberg.com/news/2014-03-14/blackstone-s-home-b...
    - adventured 12y ago
      The 80 million homes that are owned in the US, are selling for pennies on the dollar and are underwater? Quite the opposite, only 8% of home owners are underwater, and that's a drastic improvement vs the peak of the real estate collapse. Total home value in the US is near all time record highs, and home equity has skyrocketed the last three years. Home equity has climbed by $4+ trillion in just the last 2.5 years, an increase of 64%; from $6.7 trillion in the first quarter of 2012, to roughly $11 trillion today. Home owners have benefited massively from the Fed bailout, via low mortgage rates and cheap refinancing. Home owners have gained probably $8 trillion since the bottom, across essentially every market in the US.
      - spuiszis 12y ago
        Numbers without sources have no value in an internet forum but from what I'm taking from your argument (please correct me if I'm wrong), is that: "TARP worked because, housing prices have increased across the board and as a result, the whole country is richer and everyone is better off" You're definitely right about prices have definitely gone up[1] (side note: Case-Shiller Index isn't close to 64% nationally), but all of this is all on paper. Residential home sales are still at '08/'09 levels; it's hard to translate those paper gains into liquidity [2]. I also agree with the low mortgage rates comment, however, all of the QE money is going everywhere but the housing market. Even if you have a stellar credit rating, it will be incredibly difficult to get a loan. Hell, even Ben Bernanke couldn't refinance his mortgage, which is both ironic and absolutely insane when you think about it [3]. Six years post-TARP, the housing market and American economy, still have plenty of structural issues. TARP was a monumental decision that will forever affect every part of America and housing prices cannot be the only metric or lens that we judge TARP's performance on. [1]Case Shiller Housing Index - http://us.spindices.com/additional-reports/all-returns/index.dot?parentIdentifier=6db38316-fd4f-4b21-9db9-61289d88fc9c&sourceIdentifier=index-family-specialization&additionalFilterCondition= http://us.spindices.com/additional-reports/all-returns/index... [2]https://www.flickr.com/photos/126862837@N04/15451411994/ https://www.flickr.com/photos/126862837@N04/15451411994/ [3]http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tough-market-when-ben-bernanke-can-t-refinance.html http://www.bloomberg.com/news/2014-10-02/you-know-it-s-a-tou...
pjmorris 12y ago
I disagree about the 'middle class bailout'. Interest rates are lower, but house prices are higher (good for middle class wealth if you bought before the crisis, bad if you have to buy after the crisis - look at household formation since the crisis to see how that's working out). On balance, banks collect the same interest, and homeowners have less to spend on anything else.

at-fates-hands 12y ago

And yet, the US is producing more millionaires each year than every country except China. . . https://www.bcgperspectives.com/content/articles/financial_institutions_business_unit_strategy_global_wealth_2014_riding_wave_growth/?chapter=2#chapter2_section3 https://www.bcgperspectives.com/content/articles/financial_i... The total number of millionaire households (in U.S. dollar terms) reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 percent of all households globally. The U.S. had the highest number of millionaire households (7.1 million), as well as the highest number of new millionaires (1.1 million).

littletimmy 12y ago
That's what the earlier post is getting at. There is a lot of wealth skew towards the top... so of course there are a lot more millionaires. It is the common man who didn't see any benefit from TARP.
- adventured 12y ago
  The common man saw a massive benefit from TARP, and all the other programs. Had the government & Fed not intervened, the common man would have seen his housing value vaporized. Mortgage rates would have - properly - skyrocketed to record highs, making it extraordinarily expensive to refinance a home or buy a new home. Such high mortgage rates would have crushed housing values even further, and it's unlikely there would have been any value recovery to this day. The common man would have lost trillions.
  - YokoZar 12y ago
    The common man rents. The better off common man buys a house in a market with now reinflated prices. If you're a buyer, low prices are better than lower interest rates. The winners were the narrower subset of Americans who skewed older and wealthier (enough to have already owned a home).
    - adventured 12y ago

prostoalex 12y ago

This is strictly federal government revenues associated with TARP funds. In a way the middle class has benefited by not having their bank suddenly go down or the local factory shut down due to some giant Detroit automotive contract defaulting on its payment. But strictly speaking, it's a Troubled Assets Relief Program, not Middle Class Enrichment Program, so not sure where those expectations come from.