World’s rich got richer, so how about a break?
|July 6, 2010||Posted by Joel S. Hirschhorn under Progress Report, The Progress Report|
World’s rich got richer, so how about a break?
A Paper Asks Banks to Relieve Mortgage Crisis
Banks must accept a fair deal if were all ever to prosper and be happy. We trim, blend, and append seven 2010 articles from: (1) Reuters, Jun 22, on the richest, by Joseph A. Giannone; (2) the Associated Pres, Jun 23, on home sales by Alan Zibel; (3) The Economist, Jun 24, on a double-dip; (4) Joel Hirschhorn on misery; (5) The Street, Jun 26, Alix Steels interview of Peter Schiff (who warned against the impending subprime mortgage crisis in 2005); (6) Los Angeles Times, Jun 25, on cutting mortgages by David Lazarus; and (7) Christian Science Monitor, Jul 1, on happiness by Jeanna Bryner.
by Giannone, by Zibel, by The Economist, by Hirschhorn, by Steel, and by Bryner
- Worlds rich got richer in 2009
A stock market rebound helped the world’s ranks of millionaires climb 17% to 10 million, while their collective wealth surged 19% to $39 trillion, nearly recouping losses from the financial crisis.
Stock values rose by half, while hedge funds recovered most of their 2008 losses, in a year marked by government stimulus spending and central bank easing.
The fastest growth in wealth took place in India, China, and Brazil, some of the hardest hit markets in 2008. Wealth in Latin America and the Asia-Pacific soared to record highs.
Asia’s millionaire ranks rose to 3 million, matching Europe for the first time, paced by a 4.5% economic expansion. Asian millionaires’ combined wealth surged 31% to $9.7 trillion, surpassing Europe’s $9.5 trillion.
JJS: If theres a rising tide, its not lifting all boats.
- Sales of new homes hit record low
Sales of new homes in May sank 33% from April to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits. That was the slowest pace on records dating back to 1963. It also was the largest monthly drop on record. Sales have now sunk 78% from their peak in 2005 July.
- Double-dip drama
Despite a year of government effort, US home prices have now fallen for the past six months, after rising from their nadir for the five months before that.
Foreclosures have been running at a rate of over 300,000 filings a month for the past 15 months. By some estimates, it will take more than eight years of normal sales to clear the stock of houses now held by banks. This overhang holds down prices.
Historically, sustained housing recoveries are far more dependent on job growth than on factors like interest rates — nearly 15m Americans are out of work.
- US Economy Stuck in Misery
Talk about a possible double-dip recession misses the larger reality: For millions of Americans the recession is still here; there has been no recovery for them.
Forty percent of adults have tapped savings and retirement accounts to make ends meet. Nearly 25% have had to borrow money. Ten percent have moved back with their parents — that rises to 24% for the 18 to 29 year olds.
Upper-income Americans’ self-reported spending rose 33% to an average of $145 per day in May — up from $109 per day in April 2010 and May 2009, and the highest monthly average since November 2008. The rest of the populations self-reported spending averaged $59 per day in May. Tiffany reports sales up 17% in the jeweler’s most recent quarter. Luxury sales jumped 22.7% in March, over the previous year.
In 2009, the typical working American with a four-year college degree took home $1,025 per week, $5 a week less than in the year 2000.
- US is in a Depression
If the Chinese are going to let their currency rise, they won’t have to buy as many [US] dollars and Treasuries. They won’t have to export as much because their own consumers can purchase their own products. American consumers would pay higher prices for Chinese goods. Treasury [will] have to pay higher interest rates if they want to go out and borrow. That’s would disrupt the phony recovery.
As the RMB appreciates, it brings down the RMB price of gold, creates a dip. It makes gold cheaper for Chinese investors and savers. The Chinese want to protect themselves from inflation by buying gold.
Gold is telling you our politicians are most likely to print money. That’s when well have runaway inflation. I am running for US Senate in Connecticut to start making decisions that benefit the country, not just the people ruling the country.
- Banks can give homeowners a break
At what point do banks finally accept that they’ve got to reduce people’s mortgages if they want to ease the foreclosure crisis?
A record 1 out of every 10 homeowners nationwide was at least 90 days behind on home payments during the first three months of the year, up from 1 in 14 a year ago.
Breaks of the game, you could say. But isn’t there a point where it can reasonably be asked whether banks shouldn’t be taking a bath on some loans?
JJS: Our economic condition affects our contentment.
- The US may be the richest nation, but it’s not the happiest
There are two major categories of happiness: overall life satisfaction; and more moment-to-moment enjoyment of life (by measures such as laughing and smiling).
The United States, which had the highest GDP per capita, came in at No. 16 for overall wellbeing and No. 26 for enjoyment (positive feelings). The No. 1 spot for overall wellbeing went to Denmark, and New Zealand landed the No. 1 slot for positive feelings.
Overall satisfaction with life went up with both personal and national income. But positive feelings, which were slightly higher in relation to higher income, were much more strongly tied to feeling respected, having autonomy and social support, and working at a fulfilling job.
While Northern European and Anglo societies are most successful in the economic area, Latin American societies scored relatively high in enjoyment. Sierra Leone scored consistently low, but other nations diverged. Russia and South Korea had substantially lower scores for meeting social-psychological needs and in positive feelings than for income.
Since most people want money, they use their financial success as a measure of overall success and a reference for how “good” their lives are. The study also showed the income-happiness link was tied to a persons ownership of luxury conveniences and their satisfaction with standard of living.
Editor Jeffery J. Smith runs the Forum on Geonomics.
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