wealth
by
Adam Taggart
David Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider's insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does.
In his upcoming book, Trumped! A Nation on the Brink of Ruin…And How to Bring it Back, Stockman lays out how we have devolved from a free market economy into a managed one that operates for the benefit of a privileged few. And when trouble arises, these few are bailed out at the expense of the public good.
Stockman brings us his report of what 30 years of politics, degenerative crony capitalism and “bubble finance” have finally wrought. The upheaval and crossroads represented by Donald Trump’s candidacy spell economic disaster or resurgence, depending on the steps America chooses to take from here.
David Stockman: America Now Lives Under A ‘Perverted Regime’
by Adam TaggartDavid Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider's insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does.
In his upcoming book, Trumped! A Nation on the Brink of Ruin…And How to Bring it Back, Stockman lays out how we have devolved from a free market economy into a managed one that operates for the benefit of a privileged few. And when trouble arises, these few are bailed out at the expense of the public good.
Stockman brings us his report of what 30 years of politics, degenerative crony capitalism and “bubble finance” have finally wrought. The upheaval and crossroads represented by Donald Trump’s candidacy spell economic disaster or resurgence, depending on the steps America chooses to take from here.
by
Adam Taggart
There are literally thousands and thousands of books that have been written on how to amass wealth. Some excellent, some less so; and too many not worth the paper they're printed on. Each posits its own special strategy, promising a future of riches to the reader. Of course, were there a sure-fire recipe for making millions, it's a safe bet that the last thing the guy who figured it out would do is share it with the world.
But as mentioned, some of these books have real value. One whose lessons have stuck with me in the decades since I first read it is The Millionaire Next Door: The Surprising Secrets of America's Wealthy, first published in 1996 by two PhD researchers, Thomas Stanley and William Danko,
The Importance Of Perseverance
by Adam TaggartThere are literally thousands and thousands of books that have been written on how to amass wealth. Some excellent, some less so; and too many not worth the paper they're printed on. Each posits its own special strategy, promising a future of riches to the reader. Of course, were there a sure-fire recipe for making millions, it's a safe bet that the last thing the guy who figured it out would do is share it with the world.
But as mentioned, some of these books have real value. One whose lessons have stuck with me in the decades since I first read it is The Millionaire Next Door: The Surprising Secrets of America's Wealthy, first published in 1996 by two PhD researchers, Thomas Stanley and William Danko,
by
harnsoper
by
Adam Taggart
by
charleshughsmith
Executive Summary
- Too much of China's wealth is tied up in housing
- The Obvious Risk: Declines in demand will crush prices
- The Less Obvious Risk: housing in China is very illiquid
- China's extraordinary vulnerability
If you have not yet read Part 1: Is China’s “Black Box” Economy About to Come Apart? available free to all readers, please click here to read it first.
In Part 1, we looked at the factors that render China’s economy a black box: the inputs and outputs are visible, but the internal workings are often opaque. Though there is an abundance of data on China’s housing market, it too is opaque in critical ways.
Let’s dig into what makes China’s housing bubble so risky.
Chinese Household Wealth Is Mostly In Housing
The percentage of household assets in real estate varies from source to source, but however it’s sliced, China’s household wealth is extraordinarily concentrated in housing.
This means any reduction in housing values will have an outsized impact on household wealth and the perception of wealth, i.e. the wealth effect: people who own assets that are rising feel wealthier and tend to spend more freely as a result. Those with assets that are declining in value tend to feel poorer, even if their day-to-day life in unaffected by the drop in wealth. This is the negative wealth effect.
While middle-class households’ wealth is in their primary residence, upper-middle class households tend to put the family wealth in additional homes as investment properties. Anecdotally, it is not uncommon for middle-aged people with secure employment to own three flats: one for their residence and two as nest eggs. The practice of buying third homes was subject to restrictions a few years ago, but the resulting drop in housing demand scared authorities into…
Why China Is Extremely Vulnerable Now
PREVIEW by charleshughsmithExecutive Summary
- Too much of China's wealth is tied up in housing
- The Obvious Risk: Declines in demand will crush prices
- The Less Obvious Risk: housing in China is very illiquid
- China's extraordinary vulnerability
If you have not yet read Part 1: Is China’s “Black Box” Economy About to Come Apart? available free to all readers, please click here to read it first.
In Part 1, we looked at the factors that render China’s economy a black box: the inputs and outputs are visible, but the internal workings are often opaque. Though there is an abundance of data on China’s housing market, it too is opaque in critical ways.
Let’s dig into what makes China’s housing bubble so risky.
Chinese Household Wealth Is Mostly In Housing
The percentage of household assets in real estate varies from source to source, but however it’s sliced, China’s household wealth is extraordinarily concentrated in housing.
This means any reduction in housing values will have an outsized impact on household wealth and the perception of wealth, i.e. the wealth effect: people who own assets that are rising feel wealthier and tend to spend more freely as a result. Those with assets that are declining in value tend to feel poorer, even if their day-to-day life in unaffected by the drop in wealth. This is the negative wealth effect.
While middle-class households’ wealth is in their primary residence, upper-middle class households tend to put the family wealth in additional homes as investment properties. Anecdotally, it is not uncommon for middle-aged people with secure employment to own three flats: one for their residence and two as nest eggs. The practice of buying third homes was subject to restrictions a few years ago, but the resulting drop in housing demand scared authorities into…
by
Chris Martenson
I must confess to a deep-seated anger at just how insultingly stupid the world has become. As a sufferer of crisis fatigue I can be caught exclaiming You have got to be kidding me!!? several times per day, or perhaps shouting How dumb do they think we are?
Three choice outbursts came last week as I read Bernanke’s new blog and came across statements like this one:
The Fed Is Destroying the World One Saver At A Time
PREVIEW by Chris MartensonI must confess to a deep-seated anger at just how insultingly stupid the world has become. As a sufferer of crisis fatigue I can be caught exclaiming You have got to be kidding me!!? several times per day, or perhaps shouting How dumb do they think we are?
Three choice outbursts came last week as I read Bernanke’s new blog and came across statements like this one:
by
Chris Martenson
Executive Summary
- Desperate central banks are dangerous central banks
- Why wealth disparity will get worse
- The list of what comes next as central banks lose control
- What you should do in advance
If you have not yet read When This Ends, Everybody Gets Hurt available free to all readers, please click here to read it first.
What’s really happened since 2008 is that central banks decided that a little more printing with the possibility of future pain was preferable to immediate pain. Behavioral economics tells us that this is exactly the decision we should always expect from humans. History says as much, too.
It’s just how people are wired. We’ll almost always take immediate gratification over deferred, and similarly choose to defer consequences into the future, especially if there’s even a ridiculously slight chance they won’t materialize.
So instead of noting back in 2008 that it was unwise to have been borrowing at twice the rate of our income growth for the past several decades — which would have required a lot of very painful belt-tightening — the decision was made to ‘repair the credit markets’ which is code speak for: ‘keep doing the same thing that got us in trouble in the first place.’
Also known as the ‘kick the can down the road’ strategy, the hoped-for saving grace was always a rapid resumption of organic economic growth. That’s how the central bankers rationalized their actions. They said that saving the banks and markets today was imperative, and that eventually growth would return, justifying all of the new debt layered on to paper-over the current problems.
Of course, they never explained what would happen if that growth did not return. And that’s because the whole plan falls apart without really robust growth to pay for it all.
And by ‘fall apart’ I mean utter wreckage of the bond and equity markets, along with massive institutional and sovereign defaults. That was always the risk, and now we’re at the point where…
The Consequences Playbook
PREVIEW by Chris MartensonExecutive Summary
- Desperate central banks are dangerous central banks
- Why wealth disparity will get worse
- The list of what comes next as central banks lose control
- What you should do in advance
If you have not yet read When This Ends, Everybody Gets Hurt available free to all readers, please click here to read it first.
What’s really happened since 2008 is that central banks decided that a little more printing with the possibility of future pain was preferable to immediate pain. Behavioral economics tells us that this is exactly the decision we should always expect from humans. History says as much, too.
It’s just how people are wired. We’ll almost always take immediate gratification over deferred, and similarly choose to defer consequences into the future, especially if there’s even a ridiculously slight chance they won’t materialize.
So instead of noting back in 2008 that it was unwise to have been borrowing at twice the rate of our income growth for the past several decades — which would have required a lot of very painful belt-tightening — the decision was made to ‘repair the credit markets’ which is code speak for: ‘keep doing the same thing that got us in trouble in the first place.’
Also known as the ‘kick the can down the road’ strategy, the hoped-for saving grace was always a rapid resumption of organic economic growth. That’s how the central bankers rationalized their actions. They said that saving the banks and markets today was imperative, and that eventually growth would return, justifying all of the new debt layered on to paper-over the current problems.
Of course, they never explained what would happen if that growth did not return. And that’s because the whole plan falls apart without really robust growth to pay for it all.
And by ‘fall apart’ I mean utter wreckage of the bond and equity markets, along with massive institutional and sovereign defaults. That was always the risk, and now we’re at the point where…
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