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Wealth Inequality Accelerates to Worst Level in History

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. . .David Rubenstein has doubled his fortune since 2009. Jamie Dimon has more than tripled his net worth. And Stephen Schwarzman has increased his wealth six-fold.It’s a remarkable showing given the economic and political tumult of the past decade, from Lehman Brothers to Brexit to Donald Trump. The fortunes of a dozen 2009 Davos attendees have soared by a combined US$175 billion, even as median U.S. household wealth has stagnated, a Bloomberg analysis found.

The data illustrate the ever-widening gap between the true haves—those in the 0.1 percent—and the have-nots of a global economy. Data from UBS and PwC Billionaires Insights reports show that global billionaire wealth has grown from $3.4 trillion in 2009 to $8.9 trillion in 2017.Central bank actions to fight the financial crisis—record low interest rates and bond-buying programs—have underpinned this ballooning wealth by driving up the prices of stocks and other assets.“Ten years ago, ironically at the lows of the market, what you wanted to own was capital and if you did own capital you did incredibly well,” said Michael Hartnett, Bank of America Corp.’s chief investment strategist. . .

For those with minimal or no assets, it’s been a more challenging decade. Wages have stagnated and while equity markets have risen, fewer U.S. adults are invested in the stock market than in 2009. Compensation for chief executive officers in America’s largest firms is now 312 times the annual average pay of the typical worker, compared with about 200 times in 2009, 58 times in 1989 and 20 times in 1965, according to a 2018 report by the Economic Policy Institute.

The recent turmoil in the stock markets means some attendees may have discomfiting flashbacks to 2009. U.S. stocks in 2018 had their worst year since the financial crisis while oil ended the year mired in its steepest quarterly slump since 2014. And plenty of risks loom this year, from the U.K.’s impending exit from the European Union to U.S.-China trade talks and the continuing showdown between President Donald Trump and Congress over the budget.

It’s possible this means Davos Man has peaked. Bank of America’s Hartnett detects a transition in which “Joe Six Pack” will benefit relatively more as central banks withdraw easy money, populist politicians win at the ballot box and nationalism tops globalization. (Read more from “Wealth Inequality Accelerates to Worst Level in History” HERE)

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Historian Claims the Wealthy Will Transform Into “God-Like Cyborgs” Within 200 Years

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Photo Credit: Daily Mail By Ellie Zolfagharifard. The rich are set to become God-like cyborgs in what could be the ‘biggest evolution in biology’ since life emerged.

This is according to Yuval Noah Harari, a professor at the Hebrew University of Jerusalem, who believes the radical shift will take place in the next 200 years.

Using biotechnology and genetic engineering, Professor Harari claims the wealthy will transform into a new type of divine, immortal human with complete power over life and death.

He argues that humans are unable to resist the temptation to ‘upgrade’ themselves, according to a report by Sarah Knapton in the Telegraph . . .

‘I think it is likely in the next 200 years or so homo sapiens will upgrade themselves into some idea of a divine being, either through biological manipulation or genetic engineering of by the creation of cyborgs, part organic part non-organic. (Read more from “Historian Claims the Wealthy Will Transform Into a New Type of Human Within 200 Years” HERE)
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Weatlhy Americans “Feel Cornered and Threatened,” Building Safe Rooms for Security

By Matt Chaban. While serving as president of the New School, Bob Kerrey, the former United States senator, needed a residence befitting his station. The university moved him into a red brick Neo-Grec townhouse on West Fourth Street in Manhattan, which was previously owned by the actress Gwyneth Paltrow.

The $20,000-a-month rental had many grand spaces for entertaining, including Mr. Kerrey’s favorite, a rooftop terrace. Yet, its most unexpected amenity was quite private and secretive: a safe room.

“It looked like any old walk-in closet,” Mr. Kerrey said of the 8-feet-by-12-feet bulletproof space inside the third-floor master bedroom (a space the former Navy SEAL said he had little use for). “There was nothing about it that gave it away as anything but a place to hang your clothes.” (Read more from this story HERE)

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Widest Wealth Gap Ever Recorded in American History

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A Pew Research Center report shows that the wealth gap between America’s middle and upper-income families is the widest ever recorded.

In fact, the median wealth of America’s most affluent families is nearly seven times that of their middle-income countrymen. . .

The chart below shows the wealth gap between upper- and middle-income households over the last 30 years:

Photo Credit: Wall Street Daily

As if that’s not bad enough, America’s upper-income families have a median net worth that’s 70 times greater than lower-income families.

Meanwhile, net income has remained dismal for years now. It’s no surprise that most Americans aren’t feeling the effects of the economic recovery… after all, median income is still 8% lower than in 2007, just before the recession. (Read more about the widest wealth gap ever recorded HERE)

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The American Middle Class Is No Longer the World’s Richest

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Photo Credit: NYT

Photo Credit: NYT

The American middle class, long the most affluent in the world, has lost that distinction.

While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

Read more from this story HERE.

As Average Americans Lose 55% of their Wealth, the DC-Connected Enter the Gilded Age

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Photo Credit: 401(K) 2013

What Sequester? Washington Booms as a New Gilded Age Takes Root

By Elizabeth Williamson. On a bright spring morning, Debbie Driesman and her interior decorator surveyed progress on Norton Manor, the 40,000 square-foot house she’s building with her husband, information-technology entrepreneur Frank Islam. To make way for the French chateau-style manse, the family bought two houses on adjacent 4-acre lots and invited the local fire department to destroy them. For practice.

The manor, in suburban Washington, features a reflecting pool (just as the Capitol does), east and west wings (like the White House) and is configured for easy Secret Service coverage when VIP guests attend the couple’s Democratic Party fundraisers. Decorator Skip Sroka scoured the globe for Norton Manor’s marble fireplaces, hand-loomed carpets and several tons of gilded and Venetian chandeliers. The gardens are modeled, in part, after those of Henry VIII’s Hampton Court palace.

“If there’s something he can’t have that he wants, you have to find a way,” Ms. Driesman says of her exacting husband. “You can’t just tell him ‘no.’ ”

The sprawling compound is a product of Washington’s Gilded Age—a time of lush business profits initially fueled by government outsourcing and war. Some demographers predicted the boom here would ebb as federal spending shrank amid troop withdrawals from the Middle East and efforts to trim the deficit.

Instead, the region has shown surprising resilience, thanks to an economy that has steadily broadened beyond the government. More than a generation of heavy federal spending, it turns out, has provided the seed money for a Washington economy that now operates globally—less tied to the vicissitudes of the capital’s political rhythms. Read more from this story HERE.
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Wealth of most Americans down 55% since recession

By Constantine Von Hoffman. Increasing housing prices and the stock market’s posting all-time highs haven’t helped the plight most Americans. The average U.S. household has recovered only 45 percent of the wealth they lost during the recession, according to a report released yesterday from the Federal Reserve Bank of St. Louis.

This finding is a very different picture than one painted in a report earlier this year by the Fed that calculated Americans as a whole had regained 91 percent of their losses. The writers of the report released yesterday point out that the earlier number is based on aggregate household-net-worth data. However, this isn’t adjusted for inflation, population growth or the nature of the wealth. Further, they say much of recovery in net worth is because of the stock market, which means most of the improvement has been a boon only to wealthy families.

“Clearly, the 91 percent recovery of wealth losses portrayed by the aggregate nominal measure paints a different picture than the 45 percent recovery of wealth losses indicated by the average inflation-adjusted household measure,” the report said. “Considering the uneven recovery of wealth across households, a conclusion that the financial damage of the crisis and recession largely has been repaired is not justified,” the researchers said.

Household wealth plunged $16 trillion from the top of the real estate bubble in the third quarter of 2007 to the bottom of the bust in the first quarter of 2009. By the last three months of 2012, American households as a group had regained $14.7 trillion.

The report says almost two-thirds of the increase in aggregate household wealth is due to rising stock prices. This has disproportionately benefited the richest households: About 80 percent of stocks are held by the wealthiest 10 percent of the population. Read more from this story HERE.

Little Recovery from Americans’ Massive $16 Trillion Loss in Wealth

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Photo Credit: Washington Post

American households have rebuilt less than half of the wealth lost during the recession, leaving them without the spending power to fuel a robust economic recovery, according to a new analysis from the Federal Reserve.

From the peak of the boom to the bottom of the bust, households watched a total of $16 trillion in wealth disappear amid sinking stock prices and the rubble of the real estate market. Since then, Americans have only been able to recapture 45 percent of that amount on average, after adjusting for inflation and population growth, according to the report from the St. Louis Fed released Thursday.

In addition, the report showed most of the improvement was due to gains in the stock market, which primarily benefit wealthy families. That means the recovery for other households has been even weaker.

“A conclusion that the financial damage of the crisis and recession largely has been repaired is not justified,” the report stated.

The study is part of a growing body of research on the role of household wealth — or lack thereof — in amplifying the impact of the recession and slowing the rate of recovery.

Read more from this story HERE.

Wealth Gap Between Whites and Blacks Has Grown Sharply Under Obama

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Photo Credit: Tax CreditsMillions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.

“It was already dismal,” Darrick Hamilton, a professor at the New School in New York, said of the wealth gap between black and white households. “It got even worse.”

Given the dynamics of the housing recovery and the rebound in the stock market, the wealth gap might still be growing, experts said, further dimming the prospects for economic advancement for current and future generations of Americans from minority groups.

The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

Read more from this story HERE.

Those “Evil, Rich People,” are mostly Democrats

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From the, “you never hear about that from the media” file – Those “Evil, Rich People” that Democrats are always wailing about are actually – Democrats.

In fact, the Top 3 on the list: Bill Gates, Warren Buffett & Larry Ellison are all Democrats. Together, they are worth $126 Billion Dollars.

An analysis of the Top 20 Richest People in America (from Forbes Top 100) reveals that a full 60% are actually Democrats. Furthermore, if you look at it from a “family” point of view and not as indivisuals, thereby eliminating duplication caused by people from the same family being included in that Top 20 list (Wal-Mart & Koch) that ratio widens even further to: 25% Republican / 75% Democrat.

Analyzing the data takes us even further. Not only are there more Democrats in the Top 20 list, but those Democrats are a lot more stingy with their money when it comes to campaign contributions. Republicans coughed up $5.2 million while Democrats squirted out only $2.1 Million. These statistics would indicate that the more you have, the less you give.

Contributions paid to special interest groups are a little harder to track. But we have no reason not to assume that the money these Top 1% of the population contribute to Special Interest groups wouldn’t match (or closely match) those of their chosen political affiliation. So when you add in the money contributed to these groups, you end up with Republican Contributions at $10 million while Democrats contributed only $6 million. Again, it appears that the Democrats are a bit more stingy with their money.

Read more from this story HERE.

Canadians richer than Americans for first time in history

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Americans may enjoy teasing and taunting their neighbours to the north but now the jokes on them.

For the first time in recent history, the average Canadian is richer than the average American.

The net worth of the average Canadian household in 2011 was $363,202 compared to the average American household’s $319,970 worth, according to data published in Canada’s Globe and Mail last month.

That gives the average Canadian $43,232 more than the average American. And the Globe and Mail pointed out ‘these are not 60-cent dollars, but Canadian dollars more or less at par with the U.S. greenback.’

In a column for Bloomberg View, Stephen Marche, a Canadian novelist, sets out to explain how his country has stealthily crept up to overtake the U.S. in terms of a household’s average net worth.

Read more from this story HERE.

Photo credit:  _Shward_