The economy must be better, because the rich are spending more. I have to wonder how much of the increase in spending is the result of direct benefit from financial services industry subsidies (ie, people working for large financial firms spending more because they are confident they will have a good to great bonus this year) versus indirect (people feeling better because their stock portfolios have recovered somewhat).
From Bloomberg:
Spending in the U.S. on luxury goods and services spurted 29 percent in the third quarter from the previous three months, as consumers with the highest incomes unleashed pent-up demand, according to Unity Marketing.
Spending among 1,067 consumers with average annual income of $228,800 rose to $18,826 each in the three months ended in September from $14,554 a quarter earlier….
The increase was driven by consumers with the highest income levels, starting at $250,000 a year….The wealthy curbed purchasing earlier this year because of Wall Street job cuts, lower home values and volatile financial markets.
“No question that this quarter’s spending increase is good news for luxury marketers,” Danziger said in a telephone interview today. “Many affluent consumers returned after sitting on the sidelines for a year. However, the richest are few in number, 2.5 million households, so competition will be fierce to win their attention.”…
Gains in confidence among luxury consumers, meanwhile, slowed, Unity Marketing said.
The researcher’s luxury confidence index rose 1.6 points to 75.9, after jumping 18.6 points to 74.3 in the previous quarter. That index peaked at 113.2 at the end of March 2006. Its low was 40.3 in September 2008. It started at 100 in January 2004.
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They are being rational. They want survive.
The great thing about Democracy is that it does not need
physical capital, but physical capital requires Democracy.
The Laws of Physics requires a magnetic leading edge.
Capital is gravitational by nature; left to its own
devices, it would quickly become inert.
You are watching re-coherence on the event horizon, as the
speed of disclosure accelerates, and you haven’t seen
anything yet.
The oil economy went into deficit as a result of the
Vietnam War, resulting in the oil embargo. The structural
problem with oil as a economic hub was not addressed, the
American Enterprise System became technically bankrupt in
1996, and Wall Street was employed to paper over the
problem with financial leverage.
When the experiment to eliminate the social safety net
failed in Argentina, the financial blackhole was born. The
best business practices were already well embedded in the
enterprise systems, and the historical practice of
objective-based management accelerated the fire. It’s easy
to deploy Pavlovian behavior modification, but difficult
to rescind it.
Initially, it was more expedient to pay off the few who
knew, but, as the problem grew, the entire political
system was corrupted. Now, that blackhole is fully loaded
with $500T in non-performing assets, and the circuit is a
direct short due to the latest policy response, the
too-big-to-fail, global economy.
It’s all in the platform. No sooner is a new platform
deployed and they start building an inverted financial
pyramid on top, through the tried and failed mechanism of
holding companies. Paper profits increase as they rise,
and they are swapped for hard currency with the
uninitiated masses who seek something for nothing in the
associated Ponzi pyramid. At some point, the last fool
enters, and the entire fulcrum collapses.
The non-performing assets are going to be burned in the
recycling process, but you can burn with them if you want.
Don’t expect us to jump in after you.
What, you thought we were doing nothing while the multi-
nationals were bleeding the system dry with nation / state
population control measures. For every force applied ….
Follow your talent; step up and get on the train, or be
left behind. The choice is yours. All you need is the
instrument in your head.