Wealth and Geography

Ih has become rather fashionable to speak about the rise of China in particular and Asia in general as an economic powerhouse. The latest such indicator about the passing of the baton, if you will can be seen in a recent report by Thompson Reuters about the geographical distribution of the high net individuals, the most highly sought after group of consumers in the world.

Asia's Wealthy Surpass North Americans for First Time

WEALTHY, RICH, BILLIONAIRE, MILLIONAIRE, ASIA, GLOBAL, STUDY, POPULATION, STOCK MARKET, VALUATIONS, NET WORTH, ULTRA HIGH NET WORTH, UHNW, ASSETS, NORTH AMERICA, CANADA, US

Reuters

| 19 Sep 2012 | 05:34 AM ET

The number of rich Asians surpassed North Americans for the first time last year, but their fortunes shrank slightly and still trailed total wealth on the other side of the Pacific, Capgemini and RBC Wealth Management said on Wednesday.

The Asia-Pacific region is now home to 3.37 million high net worth individuals (HNWI) — people with $1 million or more to invest — compared with 3.35 million in North America and 3.17 million in Europe, the firms said in a report.
   
Asia's wealthy — 54 percent of whom are concentrated in Japan, almost 17 percent in China and more than 5 percent in Australia - saw their total fortunes slip to $10.7 trillion last year from $10.8 trillion in 2010, and lag North America's $11.4 trillion.
   
The Asia-Pacific Wealth Report, compiled by Capgemini and RBC Wealth Management, is closely watched by wealth managers, high-end property agents, luxury goods retailers and other businesses for signs of how and where the ultra-wealthy are investing and how their fortunes are faring.
   
Many of Asia's rich made their millions and billions through family businesses and property.
   
"We don't see massive shifting in the allocations of portfolio management," Claire Sauvanaud, vice president of Capgemini Financial Services, told a news
conference. 
   
Wealth fell most significantly last year in Hong Kong (20.1 percent) and India (18 percent) and grew most strongly in Thailand (9.3 percent) and Indonesia (5.3 percent). Growth was more modest in Japan (2.3 percent) and in China (1.8 percent). 
   
Weakness in Europe and other global trends played their part in the slight fall in total Asian wealth, the report said, but the "region grappled with its own economic challenges, including inflation, slowing growth and capital outflows."

"Nevertheless, Asia-Pacific is expected to continue showing stronger growth than other regions going forward, and its HNWI population and wealth are likely to keep expanding," it said.
   
As part of that, Asia's rich are looking more to offshore wealth centres close to home, such as Singapore and Hong Kong, in search of wider access to products and services, tax advantages and financial confidentiality, the report said.
   
Challenges for the offshore wealth management industry include a scarcity of skilled talent, lower profitability, and the costs of compliance and restrictions on services due to higher regulatory scrutiny, it said.
   
Diversity of the backgrounds and expectations of rich clients means there is more demand for tailored products and a greater desire to play an active role in managing their portfolios, the report added.

Economic Fundamentals

Economic Fundamentals and the Election

One thing you keep hearing from political pundits is that the state of the economy should lead to a crushing defeat for Obama — no president has ever been reelected with unemployment this high, etc.. But as quite a few better-informed people have pointed out, the political science literature is unambiguous on this point: what matters isn’t the state of the economy, it’s the perception of trend. If the economy appears to be improving, the incumbent tends to do well even if in absolute terms it’s still pretty bad.
By that standard, Obama is in a much better position than the conventional wisdom would suggest; the economy isn’t booming, but it’s growing, and the labor market is moving sideways rather than down. It’s not Reagan’s morning in America (which reflects the different and much more intractable nature of the 2008 crisis and aftermath), but it’s not the political disaster you might imagine.
But wait, there’s more: elections aren’t decided by national popular vote, they’re decided state by state. And it seems likely that this election will be decided in the industrial midwest, Ohio in particular — a region that has bounced back strongly.
Here’s a comparison I haven’t seen made: the unemployment rate in Ohio under two administrations:

Unemployment was still very high in Ohio at this time in the Reagan years. But it was coming down, and most people blamed the previous administration for the surge in unemployment that had occurred before.
And you could say exactly the same thing this time around, with the added twist that much of the good news can be attributed to the auto bailout that Obama carried out in the face of frantic GOP opposition.
Now, national sentiment matters too, and Obama obviously can’t run a campaign on boosterism. But the key point is that the economic background isn’t that bad for him politically; it’s good enough, in particular, for him to try to turn this into a “choice” election that his opponent clearly wasn’t ready for.
From the NYT by Paul Krugman.

Shrinking Middle class

Different ways of looking at a shrinking Middle Class in the US. The arbitrary definition used by Pew research is based on a formula that claims that a House Hold belongs to the Middle Class if its annual income is between 2/3 and double the median household income for 2010. The median : Just under $70,000.00 i.e Middle class is defined to be between about $47,000 and $140,000.00.

Click on the following link view the various graphs and write a comment under your real name.

http://finance.yahoo.com/photos/the-diminishing-middle-class-slideshow/the-diminishing-middle-class-photo-1346780446.html