BERNANKE TO SAVERS: We Don’t Owe You A Living

Mb50's "Liquid Mud" Rant

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Jeff Miller, A Dash of Insight

While we wait for the employment report, there was another big story yesterday — the Fed treatment of savers.

Fed Chair Bernanke testified before the House Budget Committee, responding to some illuminating questions from Committee Chair Paul Ryan (R. WI).  Joe Weisenthal, who is usually on the track of the biggest story, anticipated this one yesterday:

DEAR SAVERS AND RETIREES: Stop Whining About Those Lousy Rates You’re Getting From The Bank

Here is Joe’s conclusion:

And while we sympathize with people not getting returns on their money, the fact of the matter is that the big problem we have right now is that people have too much debt, not an abundance of cash that’s just sitting there not returning anything.

The bottom line is this: Yes, it sucks that pensioners and garden-variety savers aren’t getting returns, but it also sucks for…

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CHART: Why Savers Are Furious In America

Mb50's "Liquid Mud" Rant

Joe Weisenthal | Mar. 31, 2012, 7:38 AM

Combing through the personal income and spending data (which was released yesterday) reveals all kinds of interesting nuggets.

For example, we observed the big surge in rental income in America, thanks to a surge in both rent prices, and the number of people who are renting homes, rather than buying them.

And then also the data reveals that the savings rate is back to collapsing.

Anyway, here’s another fun one. Check out income earned from interest as a percentage of GDP.

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As rates have declined, interest income as a total share of the economy is back to levels not seen since the early 70s.

It’s interesting to compare this chart with 10-year yields.

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As you can see, interest income as a share of the total economy actually stayed pretty high throughout all of the 80s, even as rates dropped precipitously. And…

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