[Congressional Record Volume 155, Number 88 (Friday, June 12, 2009)]
[House]
[Pages H6665-H6666]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1245
                     CONTINUING BONUSES FOR BANKERS

  (Ms. KAPTUR asked and was given permission to address the House for 1 
minute.)
  Ms. KAPTUR. Madam Speaker, since January, the American people have 
endured another loss of $1.33 trillion of their wealth, having already 
faced the worst drop in wealth since 1951 in the prior quarter. Yet 
despite being at the root of our economy's tailspin, Wall Street 
continues to issue huge bonuses.
  For example, Merrill Lynch has issued $4 billion in bonuses to the 
very bankers and financiers who created this mess that are now nested 
over at the Bank of America. This is yet another sign that America 
needs to rein in the false money wizards and reward those who create 
real wealth in our society, starting with hardworking Americans.
  So let me ask the question, when will Wall Street's profits translate 
into a better life for everyone else? With wealth declining and 
unemployment rising, America should not be hollowed out by Wall Street. 
Rather, Wall Street's business should translate into a better way of 
life for the American Republic. We have wandered far from that mark.

           Americans' Net Worth Shrinks $1.33 Trillion in 1Q

                          (By Jeannine Aversa)

       Washington.--American households lost $1.33 trillion of 
     their wealth in the first three months of the year as the 
     recession took a bite out of stock portfolios and dragged 
     down home prices.
       The Federal Reserve reported Thursday that household net 
     worth fell to $50.38 trillion in the January-March quarter, 
     the lowest level since the third quarter of 2004. The

[[Page H6666]]

     first-quarter figure marked a decline of 2.6 percent, or 
     $1.33 trillion, from the final quarter of 2008.
       Net worth represents total assets such as homes and 
     checking accounts, minus liabilities like mortgages and 
     credit card debt.
       The damage to wealth in the first quarter came from the 
     sinking stock market. The value of Americans' stock holdings 
     dropped 5.8 percent from the final quarter of last year.
       The stock market began to rally from 12-year lows in early 
     March after Citigroup Inc. reported it was profitable in the 
     first two months of the year. Since peaking in October 2007, 
     it had been the worst bear market since the aftermath of the 
     crash of 1929.
       Another hit came from falling house prices. The value of 
     household real-estate holdings fell 2.4 percent, according to 
     the Fed report.
       Collectively, homeowners had only 41.4 percent equity in 
     their homes in the first quarter. That was down from 42.9 
     percent in the fourth quarter and was the lowest on records 
     dating to 1945.
       The Case-Shiller national home price index, a closely 
     watched barometer, last month estimated that house prices 
     dropped 7.5 percent during the first quarter. Prices have 
     fallen 32.2 percent since peaking in the second quarter of 
     2006.
       The latest snapshot of Americans' balance sheets was 
     contained in the Fed's quarterly report called the flow of 
     funds.
       Despite the drop, the speed at which net worth shrunk 
     slowed at the start of the year. During the recession's 
     deepest point in the October-December period, Americans' net 
     worth fell a record 8.6 percent, according to revised 
     figures. That was the largest drop on records dating to 1951.
       With wealth declining and unemployment rising, there are 
     questions about how consumers--the lifeblood of the economy--
     will behave in the coming months.
       If they continue to spend, even at a subdued pace, the 
     recession likely will end this year as predicted by Fed 
     Chairman Ben Bernanke and other economists. However, if 
     consumers hunker down and cut spending again, that could 
     delay any recovery. In the final quarter of last year, 
     Americans slashed spending at an annualized rate of 4.3 
     percent, the most in 28 years.
       Still, there was some encouraging news on consumer spending 
     Thursday.
       Retail sales rose 0.5 percent in May, following two 
     straight monthly declines, the Commerce Department reported. 
     Meanwhile, the number of newly laid-off workers filing for 
     unemployment benefits fell last week by 24,000 to 601,000, 
     the lowest level since late January.

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