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The 1% will own more than the 99% by 2016, report says

JANFU said:
What do you think? The middle class is disappearing. At one time increases in productivity equated to wage increases.
https://fortune.com/2015/01/19/the-1-will-own-more-than-the-99-by-2016-report-says/
The richest 1% of the population will own more than half of the world’s wealth by next year as inequality continues its relentless rise across the globe, a new report out Monday says.

The report, by the U.K.-based charity Oxfam, shows that the top 1% have grown their share of global wealth constantly since 2010. After dipping at 44% in the wake of the 2008 financial crisis, it rose to 48% by the end of last year and is poised to top 50% by the end of next year.
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Be careful with that viral statistic about the top 1% owning half the world
 
mac said:
Be careful with that viral statistic about the top 1% owning half the world
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That does show the stats from a different perspective, doesn't it? I found this interesting:

The statistic Oxfam is using here has deep flaws. But the addition of indebtedness actually does add some value: it points towards who has the ability to use wealth as a discretionary power resource. The top one percent controls an eye-popping amount of global wealth, but more to the point, they're the ones who have much more wealth than they have debt — and so they're the ones who can deploy their excess wealth towards discretionary ends like electing political candidates and lobbying legislatures.
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which is the real problem with great wealth being concentrated. Wealth equals political power, and, unfortunately, political power generates wealth (or can at least.)

Case in point: California's own senator Dianne Feinstien. Guess who's husband just got the multi billion dollar contract to build the train to nowhere, aka the "high speed rail"? Yep, that's right. It was Feinstein.
 
Dittohead not! said:
That does show the stats from a different perspective, doesn't it? I found this interesting:



which is the real problem with great wealth being concentrated. Wealth equals political power, and, unfortunately, political power generates wealth (or can at least.)

Case in point: California's own senator Dianne Feinstien. Guess who's husband just got the multi billion dollar contract to build the train to nowhere, aka the "high speed rail"? Yep, that's right. It was Feinstein.
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There's no arguing that the richer you are, the more you can affect. However, the line being played here is about how much the rich have, or more importantly how little everyone else has. The reality is that "most" of the rest have enough, but the stats are used to say something different. Personally, I don't give a crap how much money Gates, Romney or anyone else has....so long as I have enough to take care of my family properly.
 
Dittohead not! said:
That does show the stats from a different perspective, doesn't it? I found this interesting:



which is the real problem with great wealth being concentrated. Wealth equals political power, and, unfortunately, political power generates wealth (or can at least.)

Case in point: California's own senator Dianne Feinstien. Guess who's husband just got the multi billion dollar contract to build the train to nowhere, aka the "high speed rail"? Yep, that's right. It was Feinstein.
Click to expand...

Wow...Wasn't her husband just revealed in something else she had oversight over concerning defense, or something like that? I tell ya, she is really making a name lately as a corrupt, vengeful part of everything that is wrong with Washington....
 
To me the problem seems obvious, while the answers are obscure. World wide I believe we are seeing the attrition of the middle class as a natural by product of businesses out sourcing. Every first world employee is competing against every third world employee.
While demand for outsourced labor increases, at the cost of middle class jobs at home, the standard of living in those third world nations will also increase while first world nations suffer from stagnant or declining economies. In theory this trend would continue until there is a equalization of economies; a leveling of the playing field, but I find it more likely that businesses will find another source of cheap labor before this occurs.

Remember that publicly held companies have a fiduciary responsibility to maximize profits for stock holders. You are likely that stock holder if you have a retirement account. This also explains why CEOs, CFOs and the stock market are doing so well as the middle class diminishes.
 
mattmcd said:
To me the problem seems obvious, while the answers are obscure. World wide I believe we are seeing the attrition of the middle class as a natural by product of businesses out sourcing. Every first world employee is competing against every third world employee.
While demand for outsourced labor increases, at the cost of middle class jobs at home, the standard of living in those third world nations will also increase while first world nations suffer from stagnant or declining economies. In theory this trend would continue until there is a equalization of economies; a leveling of the playing field, but I find it more likely that businesses will find another source of cheap labor before this occurs.

Remember that publicly held companies have a fiduciary responsibility to maximize profits for stock holders. You are likely that stock holder if you have a retirement account. This also explains why CEOs, CFOs and the stock market are doing so well as the middle class diminishes.
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Robots - not being sarcastic.

It's a real (potential) problem, especially how to maintain social stability in a world where the bottom 80% or so of the intelligence/skills scale can be replaced by machines, and those that can't command even greater shares of income.
 
mac said:
There's no arguing that the richer you are, the more you can affect. However, the line being played here is about how much the rich have, or more importantly how little everyone else has. The reality is that "most" of the rest have enough, but the stats are used to say something different. Personally, I don't give a crap how much money Gates, Romney or anyone else has....so long as I have enough to take care of my family properly.
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Exactly true.

I really don't comprehend those who have to cry about disproportion, as if it affects them. I just cannot stoop so low as to understand such mentalities. The rich aren't keeping the people at the bottom from achieving, and as long as they blame others rather than themselves, they are doomed to stay at the bottom.
 
Papa bull said:
I think you're wrong about that because the losses from the mortgage-backed securities WERE the losses from the mortgages. The reason the securities lost their value was because they were backed by mortgages with no value that were backed by homes with no value. Literally, all the bad debt flowed from the mortgage defaults.

Here is an excellent and EXPERT non-partisan explanation: Credit Crisis: What Caused The Crisis? | Investopedia
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Right, but the credit default swaps were where the money was at. One mortgage-backed security = unlimited income because you could bet on it as many times as you wanted. This guy, knowing he could place bets that were easily hedged with a huge payout, made 3.7 billion dollars when the market tanked. And his loss was capped - the cost of the security. If the mortgage-backed securities don't fail, the credit-default swaps are worthless, and you've just lost the premium. You can hedge that with anything, or nothing, since it's got low-loss potential. And there was a lot of money involved:

According to the Journal of Economic Perspectives, the total notional amount of the credit default swap market $6 trillion in 2004, $57 trillion by June 2008, and $41 trillion by the end of 2008.

$57 trillion. From your source, there was about $640 billion to be lost via sub-prime mortgages.

Moreover, because leverage was involved, this set the stage for a spike in volatility, which is exactly what happened as soon as investors realized the true, lesser quality of subprime CDOs.

Because hedge funds use a significant amount of leverage, losses were amplified and many hedge funds shut down operations as they ran out of money in the face of margin calls. (For more on this, see Massive Hedge Fund Failures and Losing The Amaranth Gamble.)
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I personally think Investopedia is underselling this aspect. The leveraging was everything. It's what made a crisis become a catastrophe. It turned a rogue wave into a full tsunami. Then, when you consider these things were sold OTC, weren't regulated, and basically impossible to track... Jesus. And it essentially still works this way!

As I showed earlier, there was about 700 billion to be lost via sub-prime mortgages. AIG was short $441 billion worth of swaps on corporate bonds, and worse, mortgage-backed securities.

That says it all, in my opinion.
 
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JANFU said:
What do you think? The middle class is disappearing. At one time increases in productivity equated to wage increases.
https://fortune.com/2015/01/19/the-1-will-own-more-than-the-99-by-2016-report-says/
The richest 1% of the population will own more than half of the world’s wealth by next year as inequality continues its relentless rise across the globe, a new report out Monday says.

The report, by the U.K.-based charity Oxfam, shows that the top 1% have grown their share of global wealth constantly since 2010. After dipping at 44% in the wake of the 2008 financial crisis, it rose to 48% by the end of last year and is poised to top 50% by the end of next year.
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Can you please elaborate on the comment that I enlarged? Thank you.
 
Lord of Planar said:
Exactly true.

I really don't comprehend those who have to cry about disproportion, as if it affects them. I just cannot stoop so low as to understand such mentalities. The rich aren't keeping the people at the bottom from achieving, and as long as they blame others rather than themselves, they are doomed to stay at the bottom.
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Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.
 
JasperL said:
Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.
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Stop electing the politicians that have enabled free trade. We have lost manufacturing jobs to foreigners, so don't blame such disproportion on the rich. Wages are a result of supply and demand, and an excess of cheap illegal immigrants. People buy made in China over made in USA because it's cheaper.

Blame the cheapskates, and politicians. Not the rich.

I buy USA when I can, even when it's more expensive. I own a Cheverolet and a Pontiac.

I'll bet you own a Toyota, Subaru, etc.
 
Lord of Planar said:
Stop electing the politicians that have enabled free trade. We have lost manufacturing jobs to foreigners, so don't blame such disproportion on the rich. Wages are a result of supply and demand, and an excess of cheap illegal immigrants. People buy made in China over made in USA because it's cheaper.

Blame the cheapskates, and politicians. Not the rich.

I buy USA when I can, even when it's more expensive. I own a Cheverolet and a Pontiac.

I'll bet you own a Toyota, Subaru, etc.
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While I agree with you in general, I've bought three Lexuseseses (is it Lexi?). Toyotas, Nissans, etc, are just vastly superior vehicles to American-made cars.

Personally, I do drive an American made car, but not my wife and daughters because I don't want them stranded on the side of the road.
 
Erod said:
While I agree with you in general, I've bought three Lexuseseses (is it Lexi?). Toyotas, Nissans, etc, are just vastly superior vehicles to American-made cars.

Personally, I do drive an American made car, but not my wife and daughters because I don't want them stranded on the side of the road.
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If you are going to be part of the problem, then don't complain about the rich.

It's hypocrisy.
 
JasperL said:
Disproportion as you call is IS affecting others. Decades long stagnation of wages, declining living standards at the bottom, income and productivity gains all flowing to the top, the rising generation with living standards below that of their parents - those are real effects.

It's perhaps unfair to say the 'rich' are "keeping the people at the bottom from achieving" but the results of policies supported by the political establishment funded by "the rich" and our most powerful corporate interests are devastating to millions of Americans, and no amount of "pull yourself up by your bootstraps" happy talk can change that.
Click to expand...

I would be interested to know what you mean by "declining living standards at the bottom"? It doesn't mesh with reality based on my experience. The quality of life for a poor person is still better than the quality of life for a poor person 50 years ago, assuming of course that they are not going to sleep with a needle in their arm or something like that.
 
whysoserious said:
Right, but the credit default swaps were where the money was at. One mortgage-backed security = unlimited income because you could bet on it as many times as you wanted. This guy, knowing he could place bets that were easily hedged with a huge payout, made 3.7 billion dollars when the market tanked. And his loss was capped - the cost of the security. If the mortgage-backed securities don't fail, the credit-default swaps are worthless, and you've just lost the premium. You can hedge that with anything, or nothing, since it's got low-loss potential. And there was a lot of money involved:

According to the Journal of Economic Perspectives, the total notional amount of the credit default swap market was $6 trillion in 2004, $57 trillion by June 2008, and credit default swap market was $6 trillion in 2004, $57 trillion by June 2008, and $41 trillion by the end of 2008. Credit-default swap contracts that insure default $41 trillion by the end of 2008.

$57 trillion. From your source, there was about $640 billion to be lost via sub-prime mortgages.



I personally think Investopedia is underselling this aspect. The leveraging was everything. It's what made a crisis become a catastrophe. It turned a rogue wave into a full tsunami. Then, when you consider these things were sold OTC, weren't regulated, and basically impossible to track... Jesus. And it essentially still works this way!

As I showed earlier, there was about 700 billion to be lost via sub-prime mortgages. AIG was short $441 billion worth of swaps on corporate bonds, and worse, mortgage-backed securities.

That says it all, in my opinion.
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I say the great big oil slick on the road right at the sharp corner caused the accident. You say it was the steep cliff off the side of the road that caused the accident. At this point, I've done all I can do by leading you to water.
 
Papa bull said:
I say the great big oil slick on the road right at the sharp corner caused the accident. You say it was the steep cliff off the side of the road that caused the accident. At this point, I've done all I can do by leading you to water.
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A guy is working on a skyscraper, trips, and falls to his death. You say it is because he tripped that he died (because it caused the fall), I say it's because he wasn't wearing a harness (because the fall could have been prevented or at least shouldn't have been so bad).
 
whysoserious said:
A guy is working on a skyscraper, trips, and falls to his death. You say it is because he tripped that he died (because it caused the fall), I say it's because he wasn't wearing a harness (because the fall could have been prevented or at least shouldn't have been so bad).
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Actually your example would be better if the cause of the fall was a whole lot of deadbeat homeowners pushing him off the beam.
 
j-mac said:
Wow...Wasn't her husband just revealed in something else she had oversight over concerning defense, or something like that? I tell ya, she is really making a name lately as a corrupt, vengeful part of everything that is wrong with Washington....
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I don't remember that, but it sounds about right.

John Kerry is another one. Who thinks he'd have the power he has without his wife's fortune?
 
Lord of Planar said:
Exactly true.

I really don't comprehend those who have to cry about disproportion, as if it affects them. I just cannot stoop so low as to understand such mentalities. The rich aren't keeping the people at the bottom from achieving, and as long as they blame others rather than themselves, they are doomed to stay at the bottom.
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It affects the rest of us when they use their wealth and power to gain more wealth and power via government.
 
Lord of Planar said:
Stop electing the politicians that have enabled free trade. We have lost manufacturing jobs to foreigners, so don't blame such disproportion on the rich. Wages are a result of supply and demand, and an excess of cheap illegal immigrants. People buy made in China over made in USA because it's cheaper.

Blame the cheapskates, and politicians. Not the rich.
Click to expand...

Like I said, "policies supported by the political establishment funded by "the rich" and our most powerful corporate interests." I'm not going to pretend that money flowing into campaigns doesn't matter, because the people spending that money KNOW it gets results.

I buy USA when I can, even when it's more expensive.
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I do too, and avoid big box stores and shop local when I can, and I understand this makes no difference in the big picture.

I own a Cheverolet and a Pontiac.

I'll bet you own a Toyota, Subaru, etc.
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I've owned 5 cars and 4 of them were "made in America." But it's a side issue because GM has assembly plants in Mexico and Canada and elsewhere overseas, many/most of the parts for the cars assembled in America are manufactured overseas. Toyota has plants across the SE - Texas, KY, Miss., AL. And Subaru has had a plant in America for 25 years. My car carries a foreign name but was "made in Ohio."
 
Dittohead not! said:
It affects the rest of us when they use their wealth and power to gain more wealth and power via government.
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Only because people vote for the politicians they support.

Still, the bottom line is personal responsibility. The people at the bottom, in general, are there because of their own works in life.
 
Papa bull said:
Actually your example would be better if the cause of the fall was a whole lot of deadbeat homeowners pushing him off the beam.
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Hilarious. I'd love to work for a bank run by you. After I made a bunch of loans to known deadbeats, collected my production bonus, spent it, you promoted me, and then the loans all started defaulting, I'd blame the deadbeats for not paying back the loans I BEGGED them take, and you'd believe ME!
 
Lord of Planar said:
Only because people vote for the politicians they support.

Still, the bottom line is personal responsibility. The people at the bottom, in general, are there because of their own works in life.
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Yes, that's generally true.

and the people at the top are there because wealth begets power, and power wealth.

Those of us in the middle generally are here due to personal responsibility, but then, the middle is getting smaller and smaller all the time.
 
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