Crisis, what crisis? for millionaires

Rich get richer, cartoon

From Reuters:

World’s rich got richer amid ’09 recession

Joseph A. Giannone

Tue Jun 22, 2010 10:18am EDT

NEW YORK – The rich grew richer last year, even as the world endured the worst recession in decades.

A stock market rebound helped the world’s ranks of millionaires climb 17 percent to 10 million, while their collective wealth surged 19 percent to $39 trillion, nearly recouping losses from the financial crisis, according to the latest Merrill Lynch-Capgemini world wealth report.

Stock values rose by half, while hedge funds recovered most of their 2008 losses, in a year marked by government stimulus spending and central bank easing.

In North America, the ranks of the rich rose 17 percent and their wealth grew 18 percent to $10.7 trillion.

The United States was home to the most millionaires in 2009 — 2.87 million — followed by Japan with 1.65 million, Germany with 861,000, and China with 477,000.

Switzerland had the highest concentration of millionaires: nearly 35 for every 1,000 adults.

Also from Reuters:

Millionaires increased spending on luxuries in ’09

Helen Kearney

Tue Jun 22, 2010 10:13am EDT

NEW YORK – As financial markets recovered last year, the world’s millionaires again indulged in their passions for luxury cars, yachts, art and jewelry.

While demand for many luxury items remains weaker than in 2007, spending on so-called “passion investments” increased during the second half last year and is expected to continue to rise, according to the latest Merrill Lynch-Capgemini world wealth report.

“Auction houses, luxury goods makers and high-end service providers, which all reported signs of renewed demand later in 2009, expect spending to be more robust in 2010,” the report said.

The wealthy spent more on cars, boats and jets in 2009 than the year before. …

And with financial markets still in flux, a number of millionaires are investing in art and other collectibles — such as antiques, coins and fine wines — that they believe will retain their value over the long-term, the report said.

In the art world, millionaire investors eschewed contemporary art for works by old masters and modern art from the 1960s and 1970s — art considered more likely to hold its value.

There was less demand for fine art overall last year: Global fine art auction sales totaled $4.6 billion, down 45 percent from 2008.

China was one of the few countries to see an increase in demand for fine art, with a 25 percent increase in auction revenue to $830 million.

Sales of other collectibles started to recover. The Live-ex 100 Fine Wine Index, which tracks the price of 100 of the world’s finest wines, rose 15.7 percent during 2009.

Sales of coins and memorabilia also rose, with a number of high-end items selling at high prices at auctions in late 2009.

Perhaps most notable was a 1795 reeded-edge U.S. penny, one of only seven in the world, which sold at auction for nearly $1.3 million. It was the first time a 1-cent coin had broken the million-dollar barrier, according to the report.

Wealthy investors are also holding an increasing portion of their passion investments as jewelry, gems and watches. …

(Reporting by Helen Kearney; editing by John Wallace)

Recent reports show growth of a stark divide between rich and poor in Africa: here.

The French are being asked to tighten their belts, yet at the same time, 562 thousand taxpayers have made a wealth tax declaration: that’s 23 thousand more than last year: here.

Meanwhile, in Britain: Unions and left MPs joined arms on Tuesday following the bleak Con-Dem cuts Budget targeting the nation’s poorest, describing it as “vintage Thatcher”.

The rich aren’t suffering from the ongoing economic crisis—instead they continue to get richer: here.

Tory Chancellor George Osborne’s swingeing cuts will mean “significant pain” for families and condemn many more children to destitution, campaigners warned on Tuesday.

Chancellor George Osborne’s first Budget will “throw people out of work” and stifle growth, acting Labour leader Harriet Harman warned on Tuesday: here.

Liberal Democrats divided over budget: here.

Half of Liberal Democrat voters ready to defect after VAT rise: here.

£11bn welfare cuts versus £11bn cost of Afghanistan war. The maths is simple: bring the troops home.

4 thoughts on “Crisis, what crisis? for millionaires

  1. Nissan fat cat trousers £6m

    Japan: Nissan chief executive Carlos Ghosn has revealed to shareholders that he receives “annual compensation” of more than £6.3 million.

    He came clean under new government strictures aimed at boosting corporate transparency.

    This means executive pay of more than £700,000 annually has to be made public.


  2. Nobody’s safe

    Friday 16 July 2010

    Steve McGiffen

    A couple of weeks ago the employees of Dutch pharmaceuticals factory MSD were looking forward to seeing a triumphant end to what was shaping up to being a memorable World Cup for their country.

    That hope, of course, went unfulfilled.

    And by the time the national team lost a not particularly memorable final to Spain, MSD workers in Oss had a great deal more on their minds than Arjen Robben’s fatal missed sitter or Nigel De Jong’s attempt to merge the sports of association football and kung fu – 2,175 of them no longer had a job.

    The total population of Oss is less than 80,000. Alongside those directly affected by the redundancies it is estimated that 2,000 more local people and 3,000 elsewhere will end up unemployed as firms supplying the pharmaceutical plant are hit.

    That’s not counting the impact of removing thousands of euros in wages from the local economy.

    Factory closures are always unpleasant for those affected, but if a firm is losing money it is hard to see how it can continue to operate indefinitely.

    Under such circumstances the workers’ plight becomes a social responsibility and the state must step in to ensure adequate unemployment benefits, retraining and so on.

    This can happen in any kind of society, but it is not what has happened in Oss.

    As Paul Ulenbelt, MP and employment spokesman for the radical left Socialist Party (SP) says, “Everyone understands that a firm which is no longer able to sell its products must close, but Organon is very much alive and kicking. It’s totally unacceptable that a company should close because shareholders can make a few more percentage points of profit elsewhere.”

    MSD used to be called Organon. And Organon is no ordinary firm. Based in Oss since 1925, it was one of the first companies to manufacture insulin. In the 1960s it played a major role in the development of the contraceptive pill, and in 1981 it introduced the low-dose pill.

    Since then it has continued to be at the cutting edge of contraceptive pharmacology and technology. Oss is, according to the firm’s own website “the company’s principal knowledge centre for research and development, and production.”

    So why is MSD, a firm with a relatively clean reputation in the dirty world of pharmaceuticals, a modern company making genuinely useful products which save and improve lives, about to sack half of its workforce in Oss?

    What’s certain is that it is not a result of the global financial crisis. This collapse looms over all of our lives, but these jobs are being sacrificed to a quite different monster, one which has been around longer. Neoliberalism.

    Organon-MSD may have a better ethical reputation than other pharmaceutical manufacturers, but it is a capitalist enterprise in a capitalist market. And it’s a highly successful one. In the last quarter of 2009, the firm made global net profits of over £4 billion.

    The Oss closure is part of a “restructuring” exercise designed by people in the conglomerate headquarters in New Jersey on the other side of the Atlantic. These people do not make their livelihoods researching and manufacturing pharmaceuticals or anything else of value, but by trading in companies, in productive facilities and, ultimately, in other people’s livelihoods.

    However this time they may have bitten off more than they can chew. Oss is not just the home of Organon, it is the birthplace of the SP and home of its charismatic former leader Jan Marijnissen. And the SP, Marijnissen, the MSD workers and the people of Oss are gearing up for a fight.

    Marijnissen says that to the faceless men who took the decision to close the plant “Oss is only a spot on the map, a speck of fluff that you can blow away. But we’re no speck of fluff. We have a duty to use every means possible to resist this injustice, to counter this scandalous decision.

    “Organon belongs to us. It was built by our grandfathers and grandmothers and our parents.”

    The firm had done much to benefit humanity and at the same time enjoyed good labour relations, he says. But since the company was taken over by a US transnational “it has been obvious that another wind was blowing.”

    It had then been sold “like a cow at market” to MSD and things had gone further downhill, says Marijnissen.

    This, then, is a tale of our times. It is not just crisis-hit firms going to the wall or public employees losing their jobs as governments fuel recession by cutting spending. Profitable firms are also closing as capitalists seek greater and greater profits.

    This is not because of “greed,” but because the onset of capitalism’s third great depression means that more and more capital is chasing fewer and fewer investment opportunities, driving down the rate or profit and forcing firms to cut production costs to the bone.

    Organon-MSD is just the kind of company that the Dutch state and the European Commission claim they want to see more of. If this company does not represent the “knowledge economy,” if it is not high-tech, forward-looking and innovative, then what is?

    But none of that matters. Capitalism is engaged in a fight for survival. Nobody’s livelihood is safe.

    The people of Oss, however, are showing us how to fight back. An action committee has been formed and Saturday witnessed a huge demonstration in the town under the slogan “Organon belongs to Oss.”

    At the same time, the SP has won cross-party support for a recall of Parliament to debate the matter with the employment minister.

    The party, which led the successful campaign for a No vote in the European constitution referendum of 2005, has long demonstrated masterly organisational skills and the determination to succeed.

    These qualities will be needed in Oss. They are needed in Britain too. The question is, where can they be found? Or will we all simply be led like lambs to the slaughter as government and opposition collaborate in the destruction of everything we have gained?


  3. Japanese firms told to up wages

    China: Premier Wen Jiabao told a visiting Japanese delegation yesterday that transnationals should boost wages to address the cause of a series of recent labour disputes.

    Mr Wen issued the advice after Japanese Foreign Miniter Katsuya Okada called for “transparent policies” governing workers in China, saying that the strikes that halted work at dozens of factories were troubling to Japanese bosses.


  4. Pingback: Austerity, but not for billionaires | Dear Kitty. Some blog

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