
US households see biggest decline in net worth since the financial crisis - spking
https://www.cnbc.com/2019/03/07/us-households-see-biggest-decline-in-net-worth-since-the-financial-crisis.html
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AlexTWithBeard
My personal theory is that huge inflation is going on.

We do not notice it's effect that much on household goods and food, because
their manufacturing is getting cheaper every year, which cancels the effect of
inflation. But for things which cannot be made cheaper (houses, education,
theaters) prices have been growing way faster than official inflation numbers.

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javagram
Houses and education both can be made cheaper though? We are just choosing not
to by building bigger houses and spending more money on education bureaucracy.

Prices of healthcare, education, and housing are definitely going up a lot
more than inflation in general though to be sure, I’d just say it’s because of
policy choices we are making not because those items are inherently resistant
to price decreases.

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AlexTWithBeard
It's a good point.

I was thinking more about the cost of the land: no matter how efficient we
are, it's supply is limited.

Same goes for the education: one teacher can handle a class of 30 kids no
matter how advanced our technology is.

Healthcare is a very different beast though...

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dredmorbius
How is this decline distributed amongst households, classified by either
wealth or income?

If the losses are from stock market declines, the most affected will be those
with heavy stock investments, which is to say, the wealthy, and possibly late-
career workers or retirees whose investments (and retirement accounts) are
heavily weighted to stocks.

This is a decline that may _not_ hit the average, or at least median, Joe or
Jane so much.

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wpasc
I frequently wonder how much market volatility is amplified by High frequency
trading and algorithmic trigger fingers. With most of the decline reference in
this article returned (at least from an index perspective) by March, I wonder
how much of this rapid-fire precipitous change was technologically executed
without human oversight.

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AlexTWithBeard
See the Onion Futures Act, which banned trading of onion futures in 1958.

A brief summary is: _experts have been divided on the effect that onion
futures trading has on the volatility of onion prices._

To me it sounds like the effect of trading on volatility is relatively small.

Beware though that this stance tends to piss off people with both left and
right political views.

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dangban
How is this possible during a booming economy and one of the largest growth
spurts in the stock market ever?

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SamReidHughes
Household net worth drops when the stock market drops, and it dropped.

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Fjolsvith
When the government prints money, existing dollars become worth less,
regardless of them sitting in an investment portfolio or piggy bank or real
estate.

