we re back. despite the antics of tea party red hots like ted cruz and michele bachmann, the government shutdown was not some game or street theater. the gop s kamikaze strategy has claimed more than just political casualties on the right. $24 billion have been drained from the economy, according to standard & poor s. economic growth predictions have been slashed is, consumer confidence saw its biggest decline since the 2008 bankruptcy of lehman brothers. and thanks to the short-term nature of the deal, the prospects of a credit downgrade are still very much alive out there. and then important workers were furloughed. the national institutes of health had to slash cancer treatment trials and and jim cramer is host of cnbc s mad
red hots like ted cruz and michele bachmann, the tea party was not some game. claim more than just political casualties on the right. $24 billion have been drained from the economy according to standard & poor s. economic growth predictions have been slashed. consumer confidence saw its biggest decline since the bankruptcy of lehman brothers. and the prospects of a credit downgrade is still alive out there. and then there s the untold human toll of all this. thanks to the shutdown, small business loans were stalled, thousands of private sector workers were furloughed. and the national institutes of health had to slash cancer treatment trials. that s just the tip of the iceberg. andrew sorkin is co-host of squawk box and jim cramer is host of mad money. let me start with andrew on this. can you put i guess it s hard to put a price tag to some of this as intangible. but it seems to me if you re out there standing on the cliff for
financial mess and the bankruptcy of lehman brothers? you have world derivatives, whatever that is and all of these things that we don t know anything about, but sound scary they call it the fiscal cliff at the end of the year with the capital gains taxes. that s problems in washington with politicians actually saying, we need to stop spending, we need to cut the deficit and where exactly do you do it? they keep putting it off and now it s put off untilar after the election. so that s separate from this issue. but there is no doubt that this had a tremendous impact and depending on you who you talk to, it had an impact perhaps to the wrong way, the pendulum swung too far and now banks are not lending because there is too much over regulation and the fed is trying to print more money and pump it into the system so the consumers will spend more so basically, we will have more hiring.
has take an hit. we have the new numbers from the federal reserve. americans households net worth in the july to september quarter dropped 4%. that is its sharpest drop since that rocky period we went through after the september 2008 bankruptcy of lehman brothers. so what we saw are essentially during this quarter were stocks, pension funds, they all lost value. the s&p 500 during that period, chris, tumbled about 14%. corporations, however, not quite the same story. in fact, they raised their cash stockpiles to record levels, $2.1 trillion at the end of september. the problem is though it s a vicious circle. lower net worth at the home front can obviously hurt the economy. when people feel poorer, they spend less, and then businesses typically cut back on hiring and expansi expansion. as i said, it is a vicious cycle. well, some new jobs created in new york city. huge apple store opening up. yeah, in the famed grand
if the current system holds, it s probably going to happen again. well, we certainly all hope that it won t, but the really is there are several elements of the financial system that are not really in significantly better shape today than we were before the financial crisis. for example, the top banks held about 58% of the assets of the financial services industry about four years ago. and today, they hold 63% as a result of the merger of bear turns and the jpmorgan chase, the purchase of merrill lynch by b of a and the bankruptcy of lehman brothers. so the consolidations have placed us in a situation where there s even more consolidation and concentration of assets in the financial sector. so the real question is, are we going to face the same difficult choice that the leadership of america was faced with a few