Clippings

[patriot1]

World's richest 1% own 40% of all wealth, UN report discovers

In fact wealth is a dynamic, it is constantly created. We should not be asking who in the past has created wealth and how can we get it off them.

This supposes that the current holders of wealth are those who created it. One could make a case against this for people like Sukarno's children, the Saudi royal family, or many other super rich in the 3rd world. And for some in the 1st world too for that matter.

[Nemo2]

Interesting that, at $89K, Canada's mean wealth is only 62% of that of the US.

[2 yen]

Nemo...are taxes the reason?

[Nemo2]

Nemo...are taxes the reason?

I'm sure someone will come up with 'extenuating circumstances', (highly inflated US housing prices, or somesuch), but all the 'information' I have is what's written here:
The rich

"But it turns out, the world distribution of wealth [assets minus debts] is more unequal than the world distribution of income."

The United States is the richest country, with a mean wealth in the year 2000 of $144,000 (U.S.) per person. Canada has a mean wealth of $89,000 per person.

[brucecohen]

I'm sure someone will come up with 'extenuating circumstances', (highly inflated US housing prices, or somesuch)

That gap is well known and has existed for many, many years. It's due to the relatively large number of super-rich in the US: people such as Bill Gates, Hollywood stars, professional athletes and multi-national CEOs.

Using a per capita average to compare US and Canadian wealth is meaningless. If you segment the population and compare middle-income Americans to middle-income Canadians, the gap disappears. In some cases it even tilts in Canada's favor, largely because the US tax system encourages people to go into debt while the Canadian tax system encourages people to save. At lower income levels, Canadians are wealthier than Americans because the Canadian social safety net is broader and stronger.

[richmitch]

Here is the link to the study if anyone is interested.

http://www.wider.unu.edu/research/2006- ... 2-2006.pdf

I am still attempting to download it, either the sight is really slow or my wireless is acting up again.

[Norbert Schlenker]

A Painful Exchange (Wash Post, reg may be required)

While much of the comment is spot on (I'm reminded of Gus's comment re the price of a haircut in Guildford), I laughed my head off at this.

"The poor dollar," moaned George Bernauer, a retired school teacher from the Boston area and regular visitor to Europe, as he headed into the Louvre museum. "Five euros" -- that would be $6.65 -- "for a can of Coke; it's outrageous."

Mr. Bernauer deserves what he gets. Five euros will get him half a litre of vin de maison, maybe even a litre. It's not the exchange rate that has him over a barrel.

[Bylo Selhi]

Mr. Bernauer deserves what he gets. Five euros will get him half a litre of vin de maison, maybe even a litre. It's not the exchange rate that has him over a barrel.

Even better, find an épicerie, buy some local delicacies along with a bottle of wine, hop over to a park bench in one of the nearby gardens or on the bank of the Seine and dine exquisitely for a small fraction of the cost of a meal at an outdoor café.

[Bylo Selhi]

Advice I'll Pass Along to My Daughter

In 1985, I graduated from college. This past August, I dropped off my daughter Hannah for her freshman year. Despite the two decades in between, I can still vividly recall the financial struggles of early adulthood, including grappling with credit-card debt, scrambling to come up with a house down payment and watching as one of my stocks plunged 80% in a few short months. Hannah, of course, will have her own financial struggles, and those will teach her far more about money than I ever could. Still, there are nine key financial insights I'm hoping to pass along -- and most have precious little to do with picking stocks and buying mutual funds...

[kcowan]

Mr. Bernauer deserves what he gets. Five euros will get him half a litre of vin de maison, maybe even a litre. It's not the exchange rate that has him over a barrel.

Even better, find an épicerie, buy some local delicacies along with a bottle of wine, hop over to a park bench in one of the nearby gardens or on the bank of the Seine and dine exquisitely for a small fraction of the cost of a meal at an outdoor café.

Or go to La Gare in any small French town for onion soup, a baguet and a glass of fine red wine. Along with the people watching, there is nothing better (OK maybe the Seine in springtime).

[gouthro]

Or go to La Gare in any small French town for onion soup, a baguet and a glass of fine red wine. Along with the people watching, there is nothing better (OK maybe the Seine in springtime).

One of the great places that I have discovered to eat in France is truckstops. I guess the French like to eat and even at truck stops, at least the ones I stopped at, they had seven course meals for a very reasonable price.
Joe

[Bylo Selhi]

find an épicerie

Or go to La Gare in any small French town

One of the great places that I have discovered to eat in France is truckstops.

That sort of advice applies widely outside of France too.

Get away from the tourist traps. Often prices drop substantially just a few blocks away from the downtown core. Find a grocery store of some type and DIY. Or look for a pub, small bistro, etc. Also many European department stores have cafeterias where you can buy decent (not spectacular) food at reasonable prices.

In short, instead of living and eating like a tourist, do what the natives do. If you're staying at a small, perhaps family-run hotel, ask for recommendations. It's a much more authentic experience than staying at some fancy chain hotel and eating in a restaurant that's designed to reel in tourists (which also includes McD's et al.)

[parvus]

Ben Stein on my favourite theme, building social capital:

Now I know that some of my readers are waiting for me to say we should tax the rich more to pay for better medical care for the folks without insurance — and we should. But I am not going to say we that should tax the rich more to pay for better education for the nonrich. It is clear beyond doubt that more money spent per pupil does not necessarily offer better results per pupil. So not every answer is “tax the rich.”

BUT the rich know something. They know how markets work. They know how to get from nowhere to somewhere. They know what kind of work ethic works. They know what savings means. The rich of this country often — not always — know how the world works, as far as money is concerned. They are a vast reservoir of advice and example for how to get ahead.

I wonder if there is a way that these people can be brought off of the fairways of the nation’s country clubs and put before the students of America to tell them how the world works and how to make their way in it. Yes, I want to tax the rich more for military pay, to try to close the deficit, to rebuild the military equipment of the nation. But maybe the rich can offer their minds and their skills to the nonrich, too, to teach them the way up.

[blonde]

Unlike 10%ers, most 90%ers are too dumb to learn about SYSTEMS.

These same 90%ers think that a 'quality' items costs more money. How is it possible to 'educate' this bunch when they just DON'T UNDERSTAND?

In this day and age with the Global Economy in over-drive, it is mandatory to apply guiding principles to achieve a desired outcome...whereas most 90%ers depend on 'rules'. What is the difference, eh? Hmmm!!...guiding principles...!!!

Most 90%ers fail to recognize the power of the Money held by Real-10%ers...Increasing the tax on 10%ers does not change or improve the processes within the System one iota...zilch...zippo...er, ah, the consequence/s must be absorbed by the 90%ers.

Does Money Talk?

Such is life...Suck it up...Get used to it...there is more where that comes from...

Don't Trust Everybody.

BTW, Guiding principles have the potential to stimulate the internal drive...

BTW2, trust me, believe me.

[parvus]

esteemed blonde person wrote:

These same 90%ers think that a 'quality' items costs more money. How is it possible to 'educate' this bunch when they just DON'T UNDERSTAND?

The point, dear blonde, is to get the 90%ers off the TV, off the cheap get-rich-schemes, and make them make their way in the world, reducing taxes (and, perhaps, a whole lot of lucrative government baby-sitting jobs) for the rest of us.

[patriot1]

But maybe the rich can offer their minds and their skills to the nonrich, too, to teach them the way up.

That's making a couple of really big assumptions. First, that the rich want the non-rich to join them. Second, that's it's possible for everybody to be rich (I mean really rich, not just affluent).

I think both assumptions are wrong.

WRT to the second, it is just not possible for everyone to get a lucky break licensing someone else's OS to IBM, or to get a bunch of old ladies in your social circle to help you take over a conglomerate, or to make a bundle betting against the British pound.

Or to put it another way, a lot (not all) of wealth building - I mean getting really rich, not the "Wealthy Barber" - is zero-sum. The only way to make society as a whole richer is to make it more productive. That has certainly worked in places in South Korea and Singapore - and right here in Canada up to a generation ago - but again what you are talking about is the mainstream going from poor to affluent, not rich.

To this end, what would really work is successful middle class people offerring their skills and values to the less successful - provided the latter wanted to listen.

[brucecohen]

To this end, what would really work is successful middle class people offerring their skills and values to the less successful - provided the latter wanted to listen.

My brother -- an engineering graduate of Baltimore Polytechnic Institute and Johns Hopkins University -- recently told me about a wonderful program aimed at doing just that.

JHU and the unaffiliated Johns Hopkins Hospital were founded when a self-made merchant -- poor boy made good -- died in the 1800s and left his entire fortune to endow a new university and hospital in Baltimore. During the 1900s JHU prospered to the point of becoming one of the top US schools in a number of fields -- and a very snobbish place that had lost most of its ties to the city around it. Over the past 20-30 years that city has become largely black, largely poor and very, very troubled.

Last year JHU's Board of Directors decided to re-establish its ties to the city and created the Baltimore Scholars Program. Any new graduate from a Baltimore City public high school is now eligible for a full four-year tuition waiver if he/she meets Hopkins' academic standards.

My brother said the biggest beneficiaries are expected to be "Poly" grads. Baltimore Polytechnic Institute is a specialized public high school for kids who want to be engineers. When my brother went through in the 1950s, it was all male (of course), all white (of course) and one of the toughest and best high schools in the US. It's still a very highly regarded school and now co-ed, but its students -- virtually all black and mostly from poor families -- have had a hard time going to and completing university. JHU is the only engineering school in Baltimore and the full scholarships at away-schools typically only cover tuition. The new JHU program enables these kids to get a first-class education right in Baltimore.

A successfull Poly/JHU alumnus recently donated $5 million to help Poly grads attending JHU as Baltimore Scholars cover books, ancillary fees and room and board. And my brother said one of the few black Poly/JHU engineering alumni just wrote a cheque for $100,000 to create a "give back" fund through which he expects future black Poly/JHU Baltimore Scholars to help the poor kids who follow them.

It remains to be seen if any of these kids become "rich," but there will certainly be far more upper middle class people.

(I have a soft spot for such programs because my father -- the child of penniless immigrants in New York City -- was able to get a university education at Cooper Union. Cooper Union is an engineering, architecture and art school in NYC that charges no tuition. Access is based on passing the admission test and tough interviews. 19th century inventor Peter Cooper left his fortune for the creation of a free engineering and architecture school for deserving students who could not otherwise pursue their dreams. He stipulated that merit be the only admission criteria. In addition to its ongoing investment returns, the original endowment has been substantially beefed up over the years by grateful alumni.)

[blonde]

The point, ... is to get the 90%ers off the TV, off the cheap get-rich-schemes, and make them make their way in the world, reducing taxes (and, perhaps, a whole lot of lucrative government baby-sitting jobs) for the rest of us

Why the wasted-effort helping the 90%ers with financial matters? Allow these same to do what they enjoy doing best/most...paying tax.

The aim for 10%ers shud be to focus on opportunities for reducing tax (for 10%ers only)...it is the 10%ers who not only tell most 90%ers the what/when/where/how-much but also create real-jobs.

Unlike most 90%ers, 10%ers do have a choice...mega choices...can adapt to any condition/s...

BTW, trust me, believe me.

[kcowan]

I think the idea of the retired rich going into schools to teach is ludicrous. The secrets of getting rich are readily available to everyone. Not taught as any formal curriculum because the teachers themselves don't get it. God if the teachers got it where would we find people to teach the kids the basics.

Most people are happy get back from a day of work without any emotional bruises. They have no interest in leverage. These are sometimes called 90%ers although I think the number is higher. Are there really over 3 million people in Canda who get it? How about a million?

Having said that I think what Gates and Buffet are trying to do through their foundations has the potential to improve society where previous generations of giving money have failed.

Ben Stein should go back to running his game show.

[blonde]

The secrets of getting rich are readily available to everyone.

er, ah,...the 'secrets' are not secrets. The process is not only simple but is continuously improved to reduce cycle time.

...my 5 guiding principles spell SUCCESS. Mega-Money worships those principles...KISS.

Why are so many 90%ers NON-BELIEVERS?

10%ers are BELIEVERS.

Don't Trust Everybody.

BTW, trust me, BELIEVE me.

[patriot1]

Most people are happy get back from a day of work without any emotional bruises. They have no interest in leverage.

That depends on what they are buying with leverage. A house? Everyone does.

So what are you talking about? Stocks? Risky, and negative sum.

Starting and running a business? Sure, that's a way to get rich. It's also a great way to lose your shirt. It sounds good because we always hear about the successes and rarely about the failures.

I think the last thing our society needs is any more encouragement to borrow money for anything. Quite the opposite.

[kcowan]

Most people are happy get back from a day of work without any emotional bruises. They have no interest in leverage.

That depends on what they are buying with leverage. A house? Everyone does...

To clarify, I was referring to their own personal leverage at work: improving workflows, working smarter, suggesting improvements...

[Taggart]

Thailand lifts controls on foreign investment after market selloff

Canadian Press
Published: Tuesday, December 19, 2006

BANGKOK, Thailand -- The Thai government is lifting controls on foreign investment in stocks after the market plunged nearly 15 percent on Tuesday, rattling regional bourses amid worries about a repeat of the 1997 Asian financial crisis .

Finance Minister Pridiyathorn Devakula said that the controls -- announced just a day earlier -- would remain on foreign investments in bonds and commercial paper as part of central bank's measures to stem the surge of speculative investment in the Thai baht, which had risen to a nine-year high versus the dollar on Monday.

Investors dumped stocks in Hong Kong, India, Indonesia, Malaysia, South Korea and the Philippines amid contagion concerns that the plunge might to spread through the region and trigger the kind of slump that enveloped Asia nearly ten years ago.

[Taggart]

Thai Junta Stumbles on Baht

Daniel Ten Kate
19 December 2006

Harsh central bank capital controls lead to a market crash in Bangkok

Thai stocks crashed Tuesday after the central bank imposed the harshest capital controls since the 1997 financial crisis in an effort to weaken the surging baht, prompting the government to quickly reverse course and exclude the stock market from the short-term fund restrictions.

The economic juggling resulting in the crash put the generals who took power in a military coup in September under increased scrutiny. In particular the crash immediately led to increased criticism of the junta’s economic team, which has spent its first few months slashing agriculture subsidies, making ambiguous statements about foreign ownership restrictions and talking endlessly about economic sufficiency — a vague philosophy attributed to King Bhumibol Adulyadej that many in the business community still don’t understand despite countless speeches on the topic.

[Taggart]

Reconsidering The Equity Premium

Posted on Dec 28th, 2006

One of the more talked-about research papers to appear in the literature on financial markets recently is The Worldwide Equity Premium: A Smaller Puzzle, by Elroy Dimson et al. As the title indicates, it is about the equity premium, i.e. the excess return stocks enjoy over the risk-free benchmark of government treasury bonds.