Wednesday, May 27, 2009
Disappearing 'wealth'
Bloomberg: U.K. Millionaire Club Shrivels by Half on Housing, Bonus Slump
"The financial crisis cost British households 1.9 trillion pounds of their wealth since July 2007, according to a report in March by PricewaterhouseCoopers LLP. With the property market extending its slump and the economy mired in a recession forecast by the government to be the worst since World War II, the number of millionaires may keep falling this year." It's a pity they don't break that down into components. "Britain’s millionaires, who more than doubled in number between 2003 and 2007 as property prices soared, have seen their wealth drop by almost a quarter in the past year, the CEBR said."
Posted by quiet guy @ 07:44 AM (766 views) Add Comment
9 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. paul said...
It was based on fictitious 'asset wealth' anyway. Quangos love to pump out rubbish about how much the UK's wealth has increased every time house prices go up.
The reality is that the millstone gets larger and we find out that an asset is only worth what people are prepared to pay for it. Hang on though, I think I should show some sympathy - I'll play a sad song on my teeny weeny violin:
2. matt_the_hat said...
Only accounts (overrated profession) can come up with a figure for the total wealth of a country - if everyone tried to sell their house tomorrow the market price would be little over ZERO.
3. stillthinking said...
Debt deflation in popular culture, the rich have less money. But hang on ! Everything those evil rich want to buy has collapsed in price!
Pyrhic victory for the socialists.
Somehow I see the non-productive wealthy doing -extremely- well in the future, almost enough to make you Marxist.
4. will said...
Millionaires half, but Billionaires loose a third? Hhhmm.
5. timmy t said...
If these people are millionaires, then presumably they live in nice houses. If the reason they are no longer millionaires is because their house has dropped in value, then what's really changed? They still live in the same house. They could have sold at the top and had a million quid in the bank - yippee - except they'd have nowhere to live. This is just more evidence of our country's obsession with money. Most of these people got "rich" due to a housing bubble. They didn't work for it and other people suffer as a result. Are we supposed to feel sorry for them?
6. uncle tom said...
"If these people are millionaires, then presumably they live in nice houses."
I know a millionaire who lives in a two bed Victorian semi - it's a very nice two bed semi, but he doesn't need anything larger.
Not everyone seeks to live in the largest house they can possibly afford..
7. timmy t said...
Uncle Tom - I suspect if you took the average value of millionaires houses, it would be worth more than the average as a whole. I don't doubt there are exceptions but apologies for generalising.
"Not everyone seeks to live in the largest house they can possibly afford" No but most do. Particularly in recent times when the more your house was worth, the more you stood to gain.
8. peter_2008 said...
It has disturbed me that since 2001 the UK rich list has increasingly dominated by property riches. Over half of the riches on the list have something to do with properties. If they are not making money from it, they usually made their first fortune from properties and then moved on to somewhere else. An example would be Alan Sugar, who is really just an average business man who made the majority of his fortune from investment in commercial properties.
Interestingly, the richest Americans are an Entrepreneur (Bill Gates) and a Professional Investor (Warren Buffet). The richest German is a Retailing Tycoon (Karl Albrecht, Owner of a chain of 8000 supermarkets including ALDI). The richest German woman is an Industrialist (Susanne Klatten, the owner of BMW). The richest French is also and Industrialist (Bernard Arnault, Owner of LVMH). And so on for the rest of the world. So they all employee a lot of people, pay a lot of tax and importantly “create values” one way or the other.
And guest who is the richest Brits? Duke of West Minster! What does he do? A landlord!! Does he create jobs? No, he just buys properties and collects rent. Does he increase liquidity and cash flow to the market and contribute to wider economy? No, he actually takes liquidity away and traps it in properties. Did he work hard for his fortune? No, his fortunate is largely due to inheritance (consequence of low tax on properties and luck). See the problem?
I believe the richest people in each country actually in a way represent the nation’s attitude towards wealth creation and pursued of happiness. Just like American, Germans and French are somehow inspired by their riches; the British are inspired by and aspired to become… landlords.
9. mander said...
Better to have one million of real money than have 5 million of worthless paper. Hard to accept but that is reality. Enron offered them the opportunity to understand where they are.
I agree with peter_2008 but to add comment on the American economy that allows speculation and creative accounts to take place. See again Enron.
Both Americans and British do not want to listen to their own people who have enough of speculation and want a change. It is all about the wealth they think they still have. They like to speak about free market, less regulation, efficiency and so on but what does this have to do with capitalism, socialism whatever? We are leaving in feudalism and as it has been said we are stealing money from future generations.