Americans’ wealth plummeted 40 percent from 2007 to 2010, Federal Reserve says

By Ylan Q. Mui

The recent recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with middle-class families bearing the brunt of the decline.

The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were back in 1992.

The data represent one of the most detailed looks to date of how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.

Those findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has only seen a halting recovery.

“It’s hard to overstate how serious the collapse in the economy was,” said Mark Zandi, chief economist for Moody’s Analytics. “We were in free fall.”

The recession caused the greatest upheaval among the middle class. Only roughly half of middle-class Americans remained on the same economic rung during the downturn, the Fed found. Their median net worth — the value of assets such as homes, automobiles and stocks minus any debt — suffered the biggest drops. By contrast, the wealthiest families’ median net worth rose slightly.

Americans have tried to rebalance the family budget but have found it difficult to reverse the damage.
The survey showed that fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16 percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who have no debt rose to a quarter of families.

But that progress was undermined by other factors, leaving the median level of family debt unchanged. The report said more families reported taking out education loans. Nearly 11 percent said they were at least 60 days late paying a bill, up from 7 percent in 2007. And the percentage of families saddled with debts greater than 40 percent of their income stayed the same.

Not only were Americans still facing significant debts, but they were making less money. Median income fell nearly 8 percent to $45,800 in 2010. The median value of stock-market-based retirement accounts declined 7 percent to $44,000.

But it was the implosion of the housing market that inflicted much of the pain. The value of Americans’ stake in their homes fell by 42 percent between 2007 and 2010 to $55,000, according to the Fed.

The poorest families suffered the biggest loss of wealth from the drop in real estate prices. But middle-class Americans rely on housing for a larger part of their net worth. For some, it accounts for just more than half of their assets. That means every step downward is felt more acutely.

Rakesh Kochhar, associate director of research at the Pew Hispanic Center, calls this phenomenon the “reverse wealth effect.” As consumers watched the value of their homes rise during the boom, they felt more confident spending money, even if they did not actually cash in on the gains. Now, the moribund housing market has made many Americans wary of spending, even if their losses are just on paper.

According to the Fed survey, that paper wealth — or what is officially called unrealized capital gains — shrunk 11 percentage points to about a quarter of American’s assets.

The findings track research Kochhar released last year that showed a dramatic drop in household wealth during the recession, particularly among minorities. That study found record-high disparities between whites’ wealth and that of blacks and Hispanics.

“It was turning the clock back quite a bit,” Kochhar said.

The Fed’s survey is conducted every three years. Although there have been some signs that the recovery has picked up — housing prices have begun to stabilize and unemployment has fallen — Fed economists said those improvements largely do not change the survey results.

“Recovery from the so-called Great Recession has also been particularly slow,” the report said.

Wanted: Suspect with 'Vampire Teeth'

Suspect in homeless man's beating described as having "vampire teeth"
By R. Stickney
When San Diego police sent out an alert for a beating suspect early Monday, they included a witness description: the suspect was said to have “vampire teeth.”

A homeless man was attacked and threatened outside a pharmacy in the 8800-block of Villa La Jolla Drive just before 6 a.m. Monday according to officials.

Police say the victim, a 55-year-old man, was kicked in the head and the ribs and left bleeding.

When officers arrived, the victim told them that his attacker also threatened to kill him.

Officers arrested the suspect a short time later and booked him on felony assault charges.

They say the suspect also appears to be a transient.

Beware the spy in the sky: After those Street View snoopers, Google and Apple use planes that can film you sunbathing in your back garden

Software giants will use military-grade cameras to take powerful satellite images

By Vanessa Allen

Spy planes able to photograph sunbathers in their back gardens are being deployed by Google and Apple.

The U.S. technology giants are racing to produce aerial maps so detailed they can show up objects just four inches wide.

But campaigners say the technology is a sinister development that brings the surveillance society a step closer.

Google admits it has already sent planes over cities while Apple has acquired a firm using spy-in-the-sky technology that has been tested on at least 20 locations, including London.

Apple’s military-grade cameras are understood to be so powerful they could potentially see into homes through skylights and windows. The technology is similar to that used by intelligence agencies in identifying terrorist targets in Afghanistan.

Google will use its spy planes to help create 3D maps with much more detail than its satellite-derived Google Earth images.

Nick Pickles, director of Big Brother Watch, warned that privacy risked being sacrificed in a commercial ‘race to the bottom’.

‘The next generation of maps is taking us over the garden fence,’ he warned. ‘You won’t be able to sunbathe in your garden without worrying about an Apple or Google plane buzzing overhead taking pictures.’

He said householders should be asked for their consent before images of their homes go online. Apple is expected to unveil its new mapping applications for its iPhone and other devices today – along with privacy safeguards. Its 3D maps will reportedly show for the first time the sides of tall buildings, such as the Big Ben clock tower.

Google expects by the end of the year to have 3D coverage of towns and cities with a combined population of 300million. It has not revealed any locations so far.

Current 3D mapping technology relies on aerial images taken at a much lower resolution than the technology Apple is thought to be using. This means that when users ‘zoom in’, details tend to be lost because of the poor image quality.

Google ran into trouble when it emerged that its Street View cars, which gathered ground-level panoramic photographs for Google Maps, had also harvested personal data from household wifi networks.

Emails, text messages, photographs and documents were taken from unsecured wifi networks all around Britain.

Google claimed it was a mistake even though a senior manager was warned as early as 2007 that the extra information was being captured. Around one in four home networks is thought to be unsecured because they lack password protection.

Little has been revealed about the technology involved in the spy planes used to capture the aerial images.

But they are thought to be able to photograph around 40 square miles every hour, suggesting they would be flying too quickly and at too great a height to access domestic wifi networks.

Like Google Maps, the resulting images would not be streamed live to computers but would provide a snapshot image of the moment the camera passed by.

Google pixellates faces and car number plates but faced criticism after its service showed one recognisable man leaving a sex shop and another being sick in the street.

Amie Stepanovich, of the Electronic Privacy Information Centre in America, said she believed Apple and Google would be forced to blur out homes in the same way Street View pixellates faces.

She said: ‘With satellite images, privacy is built in because you can’t zoom down into a garden. Homeowners need to be asked to opt in to show their property in high definition – otherwise it should be blurred out.’

Apple has previously used Google for its mapping services but last year it emerged it had bought C3 Technologies, a 3D mapping company that uses technology developed by Saab AB, the aerospace and defence company.

At the time C3 had already mapped 20 cities and it is believed to have added more with Apple’s backing. Its photographs have been shot from 1,600ft and one C3 executive described it as ‘Google on steroids’.

There are already 3D maps available online for most big city centres, but the images are often low resolution, meaning they are of little use for navigation and users cannot zoom in on detail.

Critics have argued that Apple and Google will face a backlash if they offer detailed 3D mapping of residential areas in suburbs and rural locations.

Obama speeds up limited air strike, no-fly zones preparations for Syria

DEBKAfile Exclusive Report

US President Barack Obama has ordered the US Navy and Air Force to accelerate preparations for a limited air offensive against the Assad regime and the imposition of no-fly zones over Syria, debkafile reports. Their mission will be to knock out Assad’s central regime and military command centers so as to shake regime stability and restrict Syrian army and air force activity for subduing rebel action and wreaking violence on civilian populations.

debkafile’s sources disclose that the US President decided on this step after hearing Russian officials stating repeatedly that “Moscow would support the departure of President Bashar al-Assad if Syrians agreed to it.” This position was interpreted as opening up two paths of action:

1. To go for Assad’s removal by stepping up arms supplies to the rebels and organizing their forces as a professional force able to take on the military units loyal to Assad. This process was already in evidence Friday, June 8, when for the first time a Syrian Free Army (which numbers some 600 men under arms) attacked a Syrian army battalion in Damascus. One of its targets was a bus carrying Russian specialists.

2. To select a group of high army officers who, under the pressure of the limited air offensive, would be ready to ease Assad out of power or stage a military coup to force him and his family to accept exile.
The US operation would be modulated according to the way political and military events unfolded.
Washington is not sure how Moscow would react aside from sharp condemnations or whether Russia would accept a process of regime change in Damascus and its replacement by military rule.

Israelis flock by the thousands to Tel Aviv's annual Gay Pride Parade

Speaking at the event, attended by thousands of tourists U.S. ambassador to Israel Dan Shapiro says: Human rights are gay rights and gay rights are human rights.

By Ilan Lior

Thousands of people participated in Tel Aviv's 14th Gay Pride Parade on Friday, including many tourists arrived in Israel to attend the annual gay pride week-long events.

The parade got underway in Gan Meir park, following an event which marked the conclusion of the week-long carnival in Israel's largest city. Among the speakers were top political and municipal officials, including U.S. Ambassador Dan Shapiro.

Opposition leader Shelly Yachimovich (Labor) said that "on this joyful day there's a need to remember that we have only completed a part of the long way ahead of us." Yachimovich added that the call for gay rights and for social justice is identical: "it's the same fight. You will never march alone."

Meretz chair Zahava Gal-On (Meretz) accused politicians, rabbis and other public figures in discriminating against the gay community, asking them to follow Obama's lead: "next time there's a vote on a bill for civilian marriage, which included same-sex marriage, don't oppose it, endorse it."

Wearing a t-shirt depicting the gay pride flag, U.S. envoy Shapiro addressed the crowd in Hebrew, saying that "this is a day to celebrate and rejoice. Human rights are gay rights and gay rights are human rights." Also mentioning Obama, Shapiro said that the U.S. administration is showing dedication in removing the obstacles on the way to equality.

After marching the streets of Tel Aviv, the parade reached its peak in a huge beach party at Gordon Beach.