U.S. investors have lost as much as $7.6trillion since the Biden Administration began. Despite the president's boast that "record after record" has been achieved during his term, the truth is that investments fell from $42 trillion to $33 trillion at the end of the second quarter of this year, as reflected by the Federal Reserve.
This $9 trillion decline in investment is a direct cause of the recession the U.S. economy is suffering under the Biden Administration. For their part, economists and experts put the losses at between US$9.5 and $10 trillion.
Such is the decline in investment and financial market losses that it has caused the Gross Domestic Product (GDP) to fall by 0.2 points, Moody's Analytics chief economist Mark Zandi said:
The loss of stock wealth suffered to date, if sustained, will be a small, but meaningful headwind to consumer spending and economic growth in coming months
In addition, Zandi's estimates pointed to a $54billion decrease in consumer spending by 2023 when associated with the loss of stock market wealth.
Investors do not trust
During the pandemic, investment lows of $20 billion were set. At the end of the confinement, stock market wealth rebounded to almost double that amount ($42 trillion). Now, the decline in investment accompanies the other economic metrics (such as inflation data) that define recession.
As a result of the recession and the poor financial situation, investors are becoming more pessimistic: levels of distrust that have not been seen since the Great Recession of 2009, experts say.
60.8% of investors believe their stocks will decline in value, according to the latest survey by the American Association of Individual Investors (AAII). For its part, Bank of America pointed out that there is less and less investment in the stock market. It also showed investor sentiment itself to be "indisputably" the worst since the 2009 crisis.
The richest, the hardest hit
According to data from the Federal Reserve, the wealthiest Americans are the biggest losers, as they hold the largest number of stocks. Their investment portfolios have lost as much as $8 trillion in value, a 22% decline in wealth.
With the economy in recession, the number of wealthy people is also falling: at the beginning of 2022 they accounted for 32.3% of household wealth and, six months later, 31%.
