March 13th, 2009
02:00 PM GMT
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LONDON, England – Few have escaped the impact from the world financial crisis - and week-by-week the accumulation of data showing just how bad it is grows and grows.

Case in point: The United States. According to new statistics from the Federal Reserve, the net worth of Americans - that is the difference between their assets and liabilities - was $51.5 trillion last year, down nearly 18 percent from 2007. That's a massive drop in one year.

To put that in perspective, it's the first decline in net worth for American households since 2002 and one that puts their wealth back to 2004 levels. Four years of gains wiped out in just 12 months.

The value of their stock market holdings, including retirement plans, fell to $12.1 trillion in 2008 from $20.6 trillion the year before. And, of course, we know further losses have been suffered this year.

Add in rising unemployment, and it is no wonder Americans as consumers elsewhere are feeling more uncertain. I suspect a year from now, 2009, will show another drop in Americans' net household worth.

Of course, the wealth destruction we've seen in the United States is being repeated elsewhere. Sharp downturns in housing prices have hit the UK. There, the Bank of England has this week introduced quantitative easing - sometimes called "printing money" - to pump cash into the system. Interest rates, now at 0.5 percent, are at their lowest in the bank's 315-year history and have not much further to fall, hence the need for a new strategy.

Meanwhile Japan, the world's second largest economy - which itself tried quantitative easing earlier this decade - announced this week that it had seen its worst drop in GDP in the last quarter since 1974.

Chinese exports fell 25 percent last month - even Chinese Premier Wen Jiabao has said he was worried about the safety of China's assets in the United States.

But these are the numbers, statistics and data. Behind the figures lurks a massive cost to men, women and children around the globe.

Central and Eastern Europeans who bought homes in other currencies are now facing a sharp increases in mortgage payments because of the fall of their own currencies.

Those workers who came to places like Dubai and Taiwan to find employment on construction sites and in factories have lost jobs - and with it, the pay check and safety net they provided to their families back home.

Even Russian oligarchs have had billions shredded off their wealth with the fall in commodity prices.

The fallout from this financial crisis is not over yet - and for tens of millions the pain being felt across the globe will remain for sometime.

How is the recession affecting you - and what are you doing to deal with it? Tell CNN and tell the world how you are surviving the downturn by posting comments below or sending a video iReport to our Road to Recovery special.

soundoff (26 Responses)
  1. dan in Tucson

    I always do best in a recession. My small business sends more customers looking my way to get a better deal. People don't trust the big business stores like they use to. Customer service from big corps is the worst it has ever been. I love it.

    March 13, 2009 at 3:48 pm |
  2. Chris

    Although it is hard but stil manageable. I hope that the problem will be solved

    March 13, 2009 at 5:37 pm |
  3. Lauro Silva - Brazil

    my theory is this:´´ una barca piccola non ha bisogno di molto vento- a small boat only needs some wind to move on´´. Even during the crises, whichever they are, everybody still needs everything to survive what opens a lot of new opportunities to those who want start out on their own. Everyone knows to do something useful to another one. Start your new activity in the simplest way as possible. The only thing to keep in mind is that any customer or client. ourselves included. is not loyal what demands quality and politeness from you. The governments should encourage and facilitate micro-enterprises openings.

    March 13, 2009 at 8:58 pm |
  4. Dr. Virginia Lubell

    What's the surprise?

    For many years, a great number of us ordinary citizens knew that the 'virtual' financial system, environmental degradation, worsening of labour conditions (and so many other systems) along with a 'grow,grow, grow' economic mentality that shifts to 'things' while decreasing services such as health, education, rail and roads could not sustain itself .

    There is nothing wrong with opening up International trade, however, the type of Free Market that has been put into place for the past 40 years is the cause of the collapse. It will take years to put into place new concepts.

    This leaves us both in a difficult time and an exciting one. We have the opportunity to reconsider how we want to construct our individual, regional, national and international lives in so many areas.

    We have to re-organize for the future. See Greensburg's, Kansas rebuilding efforts and encourage your town to do similar things, organize the development of bike paths, clean up your streams and rivers, develop community and Victory gardens ... we are full, full, full of opportunities.

    No longer are we in the grasp of a ridiculous system that was built to tumble ... irresponsibility (deregulation) does not build healthy interactive systems.

    March 14, 2009 at 12:19 am |
  5. mike moore

    The wealth that has been lost by and large never existed. People became rich on paper because the value of their shares, property etc. became over inflated. Now that the markets have self regulated, as they always do when they become over valued. Those that have been hurt are thos who were sucked into buying shares and property for more than their real wort.

    What this boom bust cycle has shown is that governments need to concern themselves with inflation of values just as much as they do monetary inflation, and that for the good of us all there needs to be mechanisms in place to control runaway booms.

    March 14, 2009 at 12:27 am |
  6. Dr. Virginia Lubell

    We have to think clearly here. Much of the 'money' that created this financial crisis was 'virtual' money.

    Money is a man made mental configuration and is either left to become the basis for unethical practices or for the benefit of our humanity and world.

    We've used money improperly and need to rethink it's use. There is no end of our ability to shift from 'things' into jobs that Renew our environments, stop de-desertification, replant forests, rethink our agricultural processes, our buildings, packaging ... everything is now up for grabs.

    We should take this as an opportunity for positive renewal rather than bemoaning a very, very dysfunctional system that has harmed so many and made a few so very wealthy.

    March 14, 2009 at 12:33 am |
  7. Keith, La Rioja, Spain

    From deep in the heart of rural provincial Spain, I am not talking about big money and hedge funds; I am talking about a province which for over thirty years has had the lowest unemployment levels in the whole of Spain; I am talking about honest workers, with the highest pro-rata level of immigrants in this country; I am talking about the unemployment growing from under 3% to over 11% in just a few months.
    And now, sadly, I am talking about people having to hand in their homes to the banks as they cannot cope with their mortgages, immigrants who have settled in Spain, among others.
    I am talking about high-technology small companies supplying the automobile industry forced to lay off workers because car-makers face a near 50% drop in sales. I am talking about restaurants laying off their waitresses and waiters as business luncheons have flopped disastrously.
    I am talking about the shameless men, like Madoff, among many others, who "invested in air", and multinational banks that "invented" investments so as to keep their share-values up to satisfy their share-holders; but all was built on fictitious assets, and the "bubble" had to burst sooner or later.
    But globalization reaches the farthest corners of the globe, our planet, because of greedy, selfish men who look for massive profits now without concern for the future. Fie on the USA big-money system. So now the new president has to clear up the mess: but he is not a wizard, he is not a magician.
    I hope President Obama in the forthcoming meeting of the "G20" in London can help to put things back in an honest perspective.
    An gi gena.

    March 14, 2009 at 1:27 am |
  8. Maureen Hale

    I am part of a small company in San Diego, we are part of a state energy savings program, whic is funded by ratepayers of San diego Gas & Electric. The program is run uner the ausppices of the State Public Utilities Commission.

    We have twenty seven people in our company.

    The state notified us last Friday that they were shutting down the program on Tuesday. (Through enalasys- the state appointed software Company) Nice notice. So, additionally they said we would get paid, but, it might take two to three months.

    We had to lay off everyone, nice, right?

    Saving energy is our business, but, the PUC could care less. I am thoroughly disgusted.

    March 14, 2009 at 1:54 am |
  9. Phil, Heidelberg, Germany

    China should demand America to pay back its loans which would put American in a position to stop the pork barrel stimulus plans and other junkie plans of donations to the rebuilding of the Gaza. The terrorists are responsible for their own ruins due to their constant rockets into Israel. They still are sending their rockets into Israel. Israel's only recourse is to run the Hama into the sea.

    March 14, 2009 at 12:34 pm |
  10. Sam

    Todd, Glad to have you back on the blogs, I was listening this morning to Paul Krugman in Spain. He is of the opinion that Spain will suffer a serious recession (they already are in it) or a VERY SERIOUS one. when asked a further question, he was of the opinion that they would have been better off NOT JOINING THE EURO and of course living in Spain I am seeing the effects.
    Higher costs of all foods, changes to Car Hire Insurance, and of course the collapse of the £. What can a pensioner do, when the UK Government Pension is the worst in the EU and Greece has the best and we have no way of increasing Income as the Interest rates are so low that it has caused a further reduction in Income. Stock Markets have tanked as have dividends and going back to the UK is not a solution but only further problems would await.

    March 14, 2009 at 1:46 pm |
  11. frank c.


    March 14, 2009 at 2:54 pm |
  12. Lauro Silva - Brazil

    I guess the practice I´ve mentioned above really works. Please, give a glance to THE NEW YORK TIMES, Saturday,March 14- ´´Weary of looking for work, some create their own, what could be a boon for the economy´´.

    March 14, 2009 at 5:51 pm |
  13. Joe Smitjh of Iowa

    I’m honestly tried of the games of these big corporation, they really have to think the American people are the stupidest people alive. The government is steadily pumping billions of dollars into theses companies, and their steady pumping out pink slips, while giving millions to CEO's and Executives. Why as American are we going for them stealing us blind, what is wrong with our thinking? Who is the bail out helping? It sure isn’t helping me and you the working class, it is clear as day we as a people are being take avenge of. We sit by idly saying nothing at all, are really a nation of cowards, something wrong with us. When do we fight back when our kids are sitting on the street homeless?

    March 15, 2009 at 8:07 am |
  14. Allen Gulka

    Regarding the AIG bonuses, if the bonuses already distributed in prior years by AIG attracted the best and brightest, they might as well stop all bonuses. This best and brightest arguement to justify bonuses and exhorbitant salaires just does not wash anymore, given that the most remunerated people have run their respective companies into the ground. Lets get more ethical people in management today, not a series of millionaires.

    March 15, 2009 at 7:23 pm |
  15. f j wlas

    im behind 2 and a half months on my morgage and home equity loans on the verge of being forclosed. i pay taxes yet i cant get any help from the gov , the gov is giving AIG bale out money from taxpayers and they give it to co's? i put myself in this position and if i lose my house i accept it but this is so far from fair and just that srew saving these companys they just abuse and abuse! hel[p the people get out of debt! we will start the economy!!

    March 15, 2009 at 10:49 pm |
  16. Lebohang Polinyane

    I think this financial turmoil did some good in unearthing Madoffs, mini-Madoffs, the cricket guy and those who thought they'd fake their deaths/ hide and never get caught. We are now aware of world class financial regulators' short comings and thankfully they are being worked on. Painful yes I agree to lose your savings/ investments but it is even scarier for us in the 3rd world to even contemplate what the knock on effect it will have on our lives!! Finally there must be an (int'l) body to protect genuine Harry Markopolos and that is just what we need here in Africa; whistleblowers and their protexion.

    March 16, 2009 at 8:24 am |
  17. ann

    Washington should take a stand for our rights and withdraw every penny spent by AIG on bonuses to its executives from our taxpayer-funded bailout. Can't afford to 'lose' these 'talented' men? Given the results of their efforts to date, the US economy should have lost them before they were found.

    March 16, 2009 at 1:41 pm |
  18. Cheryl Petty

    I am a very small, micro sized business, Window Box Bonsai Accents and Art Gallery in Dunsmuir California, a seasonal retail nursery and artist, and I usually finance my purchases of inventory and supplies using my own credit cards or savings. My credit is excellent, and I have been paying cash for a long time.
    Recently I received a small $8000 line of credit from US Bank, a smaller regional bank in my area. At first I was denied but then it was discovered that they had categorized my business as agricultural or farming. Once that was corrected my application was processed in one day.
    I plan to use this money to import Japanese bonsai tools for resale.
    Can I hear from other very small businesses some success stories?

    March 16, 2009 at 4:20 pm |
  19. LE Manley

    I believe that the answer to this crisis isn't that difficult to come up with. The changes that we need has to be that: a change. We can't expect change by doing the same things that we have been doing. I am 24 years of age, graduated a couple of years ago, and had a corporate job and thought that was "making it", but apparently I was wrong. When the economy slowed and layoffs came, I was devastated and thought that this "job" cared. To say the least I was wrong.

    Long story short, we need to start our own businesses. In my eyes, who is gonna work harder for your own growth more than you. I was inspired by checking out This site has been extremely resourceful. Maybe you should check it out as well.

    March 16, 2009 at 6:13 pm |
  20. Henry Kulczyk

    Let me get this straight...

    The mortgage market colapsed bringing down mortgage-backed securities and the banks and companies that issued them and owned them.

    TARP funds go to the banks to cover losses on the actual mortgages.

    TARP funds go to AIG to cover losses in the mortgage-backed security market – same mortgages/different package – second time losses covered.

    Banks are now to negotiate relief for the "homeowners" which will allow them to continue to pay on their mortgages at a reduced rate or extended time thus reducing the original losses on the mortgages/securities – partial coverage of losses for third time.

    No wonder the AIG executives are getting a bonus. Their losses have been covered, they are holding paper that is getting more valuable every day and money is coming at their banker buddies from all sides. All in all a job well done.

    March 16, 2009 at 8:01 pm |
  21. John

    The best thing that could happen to the economy would be that CNN (and other news sources that are of "the sky is falling" genre) stop reporting on it. Headlines such as "Depression Fears" don't serve anyone but the fear mongers.

    March 17, 2009 at 1:30 pm |
  22. azhar

    It is the time for those who buys more than 1 house to sell all except the one they are living in. These people are the one that push up the house price. God will all of us can buy their properties at a very much discounted price soon.

    March 17, 2009 at 3:19 pm |
  23. Fred Bowers

    Can CNN kindly consider scaling back its coverage of the financial crisis. If coverage were halved, I would still consider myself adequately informed. The media, and CNN in particular, is really overplaying this. More often than not, I find myself turning off CNN's coverage. Enough is enough!

    Fred Bowers

    March 17, 2009 at 3:21 pm |
  24. richard

    Obama will fix all our money problems with his Cap & trade bill. Do you think? What about the coal workers union, rail union,and all the oil and gas unions that will lose their jobs when people can't buy energy.If you listen to OBAMA anyone making $250,000 or less will not pay a penny more in taxes. Just the Cap & trade part of his bill will raise taxes, fees, prices for everything we buy and will affect every man, women, and child for many years

    March 17, 2009 at 4:50 pm |
  25. Patrick from Bäle

    This global crisis is telling us and giving us a chance to do something about a major 'imbalance' and a need for fundamental 'change' in the social order.

    The major imbalance of our time has precipitated a 'working class' crisis. This crisis is fundamentally about 'jobs' and job security.

    In the past, in the progressive development of society, the 'nobility' had their day in the sun. They provided the basis for the modern social order, and with the help and wealth of the church, education became the defining social factor.

    Then, the educated class found their place in the social order. It is the situation we have today. However, all of this activity was born and is carried on the shoulders of the working class. I don't think they want to take anything away from others in society, but it's time and they are feeling the need for their role to be recognized.

    If their contribution is recognized and justly secured, this crisis will resolve itself and will be recognized as a necessary adjustment to one of the critical imbalances in our modern day social order. If not, this global crisis will undoubtedly continue and leave a legacy of social and economic instability for our future.

    How can this situation be affectively changed? Those in position of responsibility, the educated, have an opportunity to "do-the-right-thing." What is the "right" thing? Change the primary purpose for economic activity from 'profit' to providing jobs for human beings,'job creation,' and put 'profit' second. If business has the insight and the courage to bring about such a 'change,' the effect will bring about an end to this crisis and society will be better able to more affectively deal with all the other changes facing our future on this planet.

    March 19, 2009 at 10:05 am |
  26. Randall Harris

    Newscaster: So, in your opinion, will the stock market go up or down?

    Economist: Yes. But not immediately!

    (Please visit my "The Mathematician's Guide to the Real World" at

    March 25, 2010 at 3:54 am |

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