Wages have only recently started to recover after months of declines that stretched family budgets thin. Unemployment is stuck near 8 percent, high enough that most Americans still know people who are out of work. Signs of a housing recovery have boosted stocks, yet millions of people face foreclosure.

Here are five reasons why many Americans don't share Wall Street's cork-popping mood:

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Fewer people have money invested in the stock market, so many missed out on the rally.

Americans sold more stocks than they bought for a fifth straight year in 2012, despite unprecedented efforts by the Federal Reserve to juice the market and encourage investment. Americans have sold hundreds of billions of dollars' worth of stock — the first time on record that's happened during a sustained bull market. The market rise has been powered by companies buying their own stock.

The flight from stock markets has coincided with a series of confidence-rattling stumbles: last year's botched initial public offerings by Facebook and BATS Global Markets; the 2010 flash crash that sent the Dow plunging 600 points in five minutes; unprecedented volatility related to European and U.S. fiscal policy debates.

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The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay billions to homeowners to end a review process of foreclosure files that was required under a 2011 enforcement action. The review was ordered because banks mishandled people's paperwork and skipped required steps in the foreclosure process.

Under the new settlement, people who were wrongfully foreclosed on could receive from $1,000 up to $125,000. Failing to offer someone a loan modification would be considered a lighter offense; unfairly seizing and selling a person's home would entitle that person to the biggest payment, according to guidelines released last summer by the Office of the Comptroller of the Currency. Monday's settlement was announced jointly by the OCC and the Federal reserve.

The agreement covers up to 3.8 million people who were in foreclosure in 2009 and 2010. Of those, about 400,000 may be entitled to payments, advocates estimate.

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The Labor Department said Thursday that the four-week moving average, a less volatile measure, increased to 370,250.

Applications for unemployment benefits reflect the pace of layoffs. They have risen slightly over the past three weeks, though they remain lower than in spring, when hiring nearly stalled. Last week's number was revised upward to 374,000 from the 372,000 that was reported initially.

Still, when applications fall consistently below 375,000, it generally indicates that hiring is strong enough to lower the unemployment rate.

The latest applications data suggest that the government's employment report for August, to be released next week, will show job gains near the recent monthly average of 100,000, said Paul Dales, senior U.S. economist with Capital Economics. That isn't enough to drive down unemployment significantly.

"Given some of the indicators seen so far, the August payroll report is not going to look terribly inspirational," said Jennifer Lee, senior economist with BMO Capital Markets, in a note to clients.

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Most bank stocks across Europe were underperforming in already fragile markets, with British bank Barclays and French bank Societe Generale leading the way down, ending the day with losses of 11.5 and 12 percent, respectively. Germany's Commerzbank fell 10 percent.

Analysts said the plunge seemed to be, at least in part, a reaction to increasing signs that banks are struggling with liquidity -- or access to the cash they need to run their day-to-day operations. Banks typically fund their activities with very short-term loans, and the seizing up of the credit markets where they get those loans was one of the hallmarks of the 2008 crisis. First banks refused to lend to one another, and eventually companies and consumers weren't able to get loans.

A number of European banks are already dependent on last-resort credit from the European Central Bank because of a reluctance among financial institutions to lend to one another since many are heavily exposed to bad debt like that of Greece, Portugal, Italy and other foundering countries.

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The Securities and Exchange Commission announced the civil charges against Rajat Gupta on Tuesday. The SEC said Gupta told Raj Rajaratnam, founder of the Galleon Group hedge fund, that Warren Buffett's Berkshire Hathaway planned to invest $5 billion in Goldman before it was publicly announced at the height of the financial crisis.

Gupta also is charged with giving Rajaratnam confidential earnings information from Goldman and Procter & Gamble. Gupta served on Goldman's board from 2006 until last May. He was a P&G board member from 2007 until resigning Tuesday, after the charges were announced.

Gupta was an investor in some of the Galleon hedge funds when he passed the information along, and he had other business interests with Rajaratnam, the SEC said. Rajaratnam used the information from Gupta to illegally profit in hedge fund trades, the SEC said.

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That's the findings of a new survey released Monday by the National Association of Business Economics.

The 46 economists polled tempered their expectations after seeing weak economic data in recent months. The panel reduced its forecast for annual economic growth to 2.6 percent in 2010 and 2011. That's down from its forecast of 3.2 percent in May.

The economists expect the economy will add jobs through the end of 2011, but not enough to bring down the unemployment rate below 9.2 percent. They don't see home prices rising much or the nation's soaring deficit falling much.

The mainly downbeat report comes as persistently high unemployment, weak consumer spending and stagnant wages drag on the U.S. economy. The nation emerged last summer from the deepest recession since the 1930s. But the economic recovery has not yet led to widespread job gains or growth.

"This summer's slowdown has exposed the economy's sensitivity to wealth losses, the unwinding of debt, and the reductions in economic stimulus," NABE President-elect Richard Wobbekind said in a statement.

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Kenneth Feinberg announced Friday that he would not try to recoup $1.6 billion in compensation given to top executives at bailed-out banks because he thought shaming them was punishment enough.

His decision to go easy on 17 banks that made "ill-advised" payments to their executives is likely to fuel concerns about how he will oversee the $20 billion oil spill compensation fund created by BP.

"I'm not suggesting we should blink or turn the other cheek," Feinberg said later in an interview with The Associated Press. "These 17 companies were singled out for obviously bad behavior. The question is: At what point are you piling on and going beyond what is warranted?"

He could not force the banks to repay the money, but the law instructed him to negotiate with banks to return money if he determined that the pay packages were "contrary to the public interest" -- language that he opted not to use.

Still, his leniency is a far cry from the bravado he displayed in the months leading up to his final act as pay czar. In February, he spoke with confidence about his ability to get companies that received taxpayer help to accept less.

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The Securities and Exchange Commission announced the settlement Thursday with the Wall Street titan, just hours after Congress gave final approval to legislation imposing the stiffest restrictions on banks and Wall Street firms since the Great Depresssion.

For Goldman, it was a chance to put behind it a case that had tarnished its reputation after it emerged relatively unscathed from the financial crisis. For the SEC, emerging from the embarrassment of a series of lapses, the charges and the settlement were a high-stakes opportunity to prove it could be tough on Wall Street.

And the agency's sweeping investigation of the conduct of financial firms in the run-up to the mortgage market collapse could bring more cases.

The deal calls for Goldman to pay a $535 million fine and $15 million in restitution of fees it collected. Of the total $550 million, $300 million will go to the government and $250 million goes to compensate two European banks that lost money on their investments.

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Treasury Secretary Timothy Geithner told a special panel investigating the financial crisis that the government should have acted more aggressively ahead of the crisis. He used his testimony to push for the Obama administration's financial regulatory overhaul, which has reached a critical point in the Senate.

His predecessor, Henry Paulson, also told the Financial Crisis Inquiry Commission that a reworking of the regulatory system was needed. But Paulson, who led the Bush administration's response to the crisis in 2008, cautioned that overly stringent regulation could stifle innovation.

A sobering reminder of how fragile the financial system remains came Thursday when stocks plunged on fears that the European debt crisis could spread. The Dow Jones industrials slid nearly 1,000 points in afternoon trading before recovering to a loss of 347 points.

Geithner testified that the financial crisis could have been "less severe" if the government had moved faster to limit the damage. When he became the Obama administration's Treasury secretary, Geithner continued the $700 billion bailout program for the financial system that began in the fall of 2008 under Paulson.

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In opening testimony before the Financial Crisis Inquiry Commission, Greenspan responded to critics who say the Fed failed to regulate risky lending to borrowers who could not afford the debt. Those loans became the toxic assets that sparked the crisis and ongoing bank reform effort.

He said the Fed did not have the authority to regulate the nonbank lenders that issued most subprime mortgages.

Panel chairman and former California state treasurer Phil Angelides said the Fed had issued guidance on predatory lending, but had not regulated it. He referred to internal Fed documents in which staff recommended "broad prohibitions on deceptive lending."

"Why in the face of all that did you not act to contain abusive, deceptive subprime lending?" Angelides asked Greenspan.

Greenspan pointed to a series of actions he said the Fed took, but Angelides countered that the Fed's actions covered only 1 percent of the subprime lending market.

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In testimony prepared for a congressional hearing Wednesday, Geithner says he "had no role in making decisions regarding what to disclose about the specific financial terms" of the deals.

Geithner faces criticism from the House oversight committee for decisions that might have cost billions more than necessary. A bailout watchdog says Geithner should have demanded concessions from banks when he was president of the New York Federal Reserve Bank. Lawmakers are concerned about e-mails that show New York Fed officials demanding the deals be kept secret.

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An hourlong meeting between the president and the nation's top financial firms was shaping up to be a tense White House encounter on Monday, not least because of Obama's description of bankers on the eve of the talks as "fat cats."

Administration officials described the meeting as a continuation of discussions the president initiated early in his tenure and the latest push for lenders to take greater responsibility as the nation combats an economic crisis that began on Wall Street.

Specifically: Wall Street should fall in line with Obama and back a proposal for a consumer protection agency that cleared the House last week.

"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama told CBS's "60 Minutes" in an interview that broadcast Sunday.

Financial industry officials braced for Obama's tough tone. They planned to press a conciliatory message and highlight areas where they agree with the administration while smoothing over their differences.

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Neil Barofsky, the special inspector general for the $700 billion financial rescue program, is expected to answer questions about a new report outlining the official missteps that led to massive bonus payments for executives at insurer American International Group Inc.

In a report released Tuesday, Barofsky wrote that the Treasury Department did not understand AIG's pay structures when it gave the firm billions in aid last fall. The government has committed a total of more than $180 billion to wind down the New York-based insurance and financial services conglomerate, and now owns about 80 percent of the company.

AIG's bonuses sparked a political firestorm earlier this year when it was revealed that the government could not legally stop AIG from paying millions in bonuses even after taking billions in bailout money.

Barofsky's appearance recalls testimony in March by Treasury Secretary Timothy Geithner, who was president of the Federal Reserve Bank of New York when AIG first was bailed out. The Federal Reserve provided AIG's first lifeline.

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