In the October 22-23 Wall Street Journal, there was an article titled “The Wild Ride Of The 1%.”
This article discusses the fluctuations, and causes of fluctuations, of the wealth of the country’s most affluent.
While the entire article is worthwhile reading, I found the following excerpts to be particularly notable:
The American rich, who used to be the most stable slice of the personal economy, are now the most volatile, with escalating booms and busts.
The super-high earners have the biggest crashes. The number of Americans making $1 million or more fell 40% between 2007 and 2009, to 236,883, while their combined incomes fell by nearly 50%—far greater than the less than 2% drop in total incomes of those making $50,000 or less, according to Internal Revenue Service figures.
Rising debt plays a role. While the rich are often portrayed as thrifty “millionaires next door,” the era of low interest rates and easy money has turned them into a leveraged elite. The household debt of the top 1% surged more than three-fold between 1989 and 2007, to $600 billion, and grew faster than their net worth.
Add to that the growing arms race in conspicuous consumption and you get big spenders who are only one crisis away from financial ruin.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1284.59 as this post is written