Where is all the world’s wealth coming from? – MarketWatch

.....the number of ultra-high-net-worth individuals, those with at least $30 million (and let’s hope they don’t blow it all on a yacht) is rising fast. Last year, the number of members of that exclusive club rose more than 11% to almost 95,000. The total amount of money they represent, according to the World Wealth Report, is just over $13 trillion (yes, with a “t”).

The ranks of people with just a mere million dollars, not including the value of their homes, also are increasing. There are almost 10 million millionaires in the world now, up more than 8% from the previous year. Their total wealth is more than $37 trillion, according to the World Wealth Report.
It notes that their money is growing faster than they are, with assets up more than 11% from a year earlier. Ultra-high-net-worth individuals’ money did even better, up almost 17% year-over-year.

There are about 3 million millionaires in the U.S., according to the report. They have more than $11 trillion and did a pretty good job of managing their wealth: assets rose 10.3% for the year. Europe, with about the same number of millionaires, didn’t do as great a job in terms of asset growth; assets there rose 7.8% in the year.

Baby Boomers:  People born during the period of increased birth rates following World War II.
Baby Busters: People born just after the Boomers but not scheduled to receive any social security payments.
Generation X: 
People born following the peak of the post-World War II baby boom and
charged with purchasing all remaining Baby Boomer vinyl LPs. 
Generation Y:  People born immediately after “Generation X” and who now largely act as their employers.
Boomerangers:  Anyone born after 1977 who owns a tie-dyed t-shirt and a collection of “tobacco pipe” screens. 
Crazy Kids:  Anyone born five or more years after you.
Selfish Bastards:  Anyone born 10 or more years before you.
Twixters:  That 38-year old dude who works in the bookstore part-time while promoting indie rock bands on the weekends.
Millenials:  Actors and extras in Star Trek: The Next Generation television series.
Generation Z:  Future Earth-bound slave colony inhabitants born post 1999

Bloomberg.com: Muse

Yet the question remains: Why are clever young graduates who have neither the taste nor the aptitude for markets choosing to become bankers? There are two explanations, both related to the fabulous amounts of money now being made on Wall Street.

Just 15 or 20 years ago, graduates could chose from an array of careers that would offer different yet roughly equal sets of rewards. That has now changed. Bankers get paid so much these days that it takes sheer will power to resist the business. Why not make all that loot?

Yet many don’t belong in banks and, not surprisingly, they detest the work. One way of taking revenge is to write about it.

Novelists have long lampooned the ways of Wall Street, of course. One thinks of Tom Wolfe’s ``The Bonfire of the Vanities.’’ The difference is that Bledin and Vachon are writing from the inside out, not the outside in. They recognize all too well the power that financial markets hold over their generation.

Which brings us to the second reason why scribblers are becoming bankers, however briefly. Writers like to home in on the most interesting, disruptive things happening in the world. The argument underlying these books is that the 21st century is being forged in the halls of investment banks.

A nasty world it might be. Yet it’s colorful and dynamic. It’s where the future is being made. And people always want to write—and read—about that.

Wrong diagnosis

A British man who went on a wild spending spree after doctors said he only had a short time to live wants compensation because the diagnosis was wrong and he is now healthy—but broke.
John Brandrick, 62, was diagnosed with pancreatic cancer two years ago and told that he would probably die within a year.

He quit his job, sold or gave away nearly all his possessions, stopped paying his mortgage and spent his savings dining out and going on holiday.

Brandrick was left with little more than the black suit, white shirt and red tie that he had planned to be buried in when it emerged a year later that his suspected “tumor” was no more than a non-life threatening inflammation of the pancreas.

Darrin McMahon has a nice article
on ‘Happiness’ in the Cato Institute website. It distills centuries of
wisdom and insight about happiness.  The following is  an excerpt.

In the first place, we would probably do well to remind ourselves that
worrying about happiness is a luxury — the privilege of peoples whose
more pressing needs have been satisfied already. With longer lifespans
and more abundant food supplies, greater security and more creature
comforts than ever before, we are free to contemplate what those
exposed to the miseries of famine, chaos, and disease can only dream.

Evolutionary
psychologists, for example, extrapolating from the theories of Darwin,
point out that human beings have a tendency to adapt quickly to
pleasures at hand. To be too happy for too long, apparently, is not an
effective adaptive trait. Better to be a little bit anxious — a little
bit unhappy — much of the time, so that we are motivated to continue
our pursuits. The point being that it is by no means clear that humans
as a species have a natural capacity for ever-rising levels of
happiness. Might there not be a limit to how happy human beings can
reasonably become?

John Stuart Mill, realized, “Ask yourself whether you are happy, and
you cease to be so. The only chance is to treat, not happiness, but
some end external to it, as the purpose of life.”

George Orwell, essentially agreed. “Men can only be happy when they do
not assume that the object of life is happiness,” he cautioned in 1944.

Cato Unbound » Blog Archive » The Pursuit of Happiness in Perspective

Immigrants behind 25% of start-ups – USATODAY.com

A team of researchers at Duke University estimated that 25% of technology and engineering companies started from 1995 to 2005 had at least one senior executive — a founder, chief executive, president or chief technology officer — born outside the United States. Immigrant entrepreneurs’ companies employed 450,000 workers and generated $52 billion in sales in 2005, according to the survey.

Their contributions to corporate coffers, employment and U.S. competitiveness in the global technology sector offer a counterpoint to the recent political debate over immigration and the economy, which largely centers on unskilled, illegal workers in low-wage jobs.

One of the study’s biggest surprises was the extent to which Indians led the entrepreneurial pack. Of an estimated 7,300 U.S. tech start-ups founded by immigrants, 26% have Indian founders, CEOs, presidents or head researchers, the study found. Indian immigrants founded more tech start-ups from 1995 to 2005 than people from the four next biggest sources — United Kingdom, China, Taiwan and Japan — combined.

by Alan Fiske:

The most striking characteristic of Homo sapiens is our sociality. Social relationships pervade every aspect of human life and these relationships are far more extensive, complex, and diverse (within and across societies) than those of any other species. And for survival and reproduction we are far more dependent on our social relationships and our cultures than any other animal. But what does it mean to say that we are social animals—and what is a social relationship?

Billionaires:

At the very pinnacle of the New York social scene these days is the billionaire, once a reclusive character who secretively moved world markets from his castle on the hill but now is more likely to be dining at a booth next to you. They’re everywhere: This year, for the first time, everyone on the Forbes 400 list was a billionaire, up from thirteen billionaires in the early eighties. One can imagine them, swathed in Pyrex, looking down from their apartments in new designer buildings at our tenement buildings and bobbing umbrellas, as though the world outside were some vast boho terrarium.

Now that it seems you need a million dollars just to stay alive, the cultural imagination has been captured by a billion.

Michael Lewis (the author of Moneyball) says:

Where I have encountered greatness, there is an ability to go a different direction from everyone else while behaving with confidence and assurance as if you’re just doing it the way things should be done. It’s now very fashionable to be an innovator and to be a change maker. You get lots of people throwing the terms around. People think they are more unusual than they are. Whenever you see someone say, “I like to think outside the box,” you know that they are so deeply in the box that they’ll never get out.

He has a real ability, like a really gifted trader, to act on his own judgments. This is painful for most people to do, because they face ridicule and ostracism. I think intelligence is overrated as a quality central to this kind of innovation. It’s a kind of nerve. It’s the ability to take a risk.

On Wall Street everybody says he’s a contrarian, and nobody is. It is so hard to recognize the moment when you are caving to conventional behavior. I’ve seen over and again in my subjects – and there is greatness in this – a trigger that goes off in their mind, a switch that flips when they sense that everyone is going one way, and it’s stupid. And they take pleasure in taking a bloody-minded stance against it.

This week’s New York Times magazine
has an issue devoted to ‘money’. Nice read.

I am currently reading The True Believer: Thoughts on the Nature of Mass Movements by Eric Hoffer. It was written more than fifty years ago. But it is still very relevant. Eric writes from real-world experience, not from the confines of ivory-towers. I first heard about this book from Paul Kedrosky.

I had always been fascinated by mass psychology (the madness of crowds if you will). I have been astonished by seemingly logical people falling prey to religious and political cults and Godmen’s sleight of hands. The above link to Sundar Iyer’s website points to a number of links displaying the madness of cults.

In capital markets, this is equally visible. Mass psychology makes one understand how we never really evolved from colonies of Ants. Ok, maybe that is a overstatement. But a substantial part of humanity finds solace in going with the crowd, letting other people think for them instead of using their own brain, and finding depth and meaning in an outside cause.

While I believe altruism is alive and well, and necessary for humanity’s welfare, the line between individual altruism and a mass movement towards a religious, political cause is very wide indeed. Most adherents to mass movements mistake these two.

Eric Hoffer’s book is a must read for anyone who wishes to understand the contemporary events in the world.

Via Going Private:

The quote of excess. Click on image for higher resolution.

Via WSJ.com:

Finland will play host this weekend to the 11th annual World Championship of Wife-Carrying, a bizarre sports festival held in a country that loves peculiar competitions. (The Finns also hold annual contests in mosquito-killing, sand-skiing, beer-barrel rolling, and “air guitar” playing.)

In the wife-carrying competition, men physically transport their spouses over a grueling 831-foot obstacle course that includes log hurdles, hairpin curves, changing terrain, and a four-foot-deep pool of cold water. Husbands can haul their brides any way they wish—piggyback, fireman’s carry, over-the-transom style—but they are severely penalized if they drop their wives at any point.

After everyone has finished the course, the husband with the fastest time wins an array of prizes, including—get this—the equivalent of his wife’s weight in beer!

I enjoyed reading the book ‘Nation of Rebels: Why Counterculture became Consumer Culture’. The following is a summary from the last chapter in the book. I am inclined to believe that there is definitely a lot of truth in the authors’ thesis.

“...countercultural theorists routinely take concrete social problems and trace them back, in one way or another, to a gigantic “technocratic” apparatus of conformity and repression. For example, environmentalists take straightfowards problems like pollution and blame them on some deep structure of Western rationality (as opposed to an incompleteness of the system of propoerty rights) Antiglobalization activists take the homogenizing effects of trade and blame them on an emerging “Empire” of capital, while ignoring the fact that these same tendencies have been manifest in trade relations since beginning of history. Consumer activists look at the obnoxiously depressing spectacle of brand-consciousness in our society and blame it on a fundamental requirement of the mass production system, rather than simply on the exploitation of a preexisting competition for distinction among consumers.”

The authors cite lively examples to prove the above points. A very thorough debunking of activist progressive left.

Work More, Do Less With Tech:

23 Feb 2006 from Wired News: Top Stories | Read the full story»

Technology is supposed to help office workers be more efficient, but it’s not only speeding up the workflow, it’s interrupting it. So U.S. workers feel they accomplish less in the same amont of time.

Picture This: Family Photographs of Everyday San Francisco:

Here is an insightful slashdotter
on SUV bashing:

It’s nothing more than guilt-ridden scapegoating.

Even the most ecologically correct American liberal lives a life of unparalleled luxury and ease, fueled by cheap energy, and uses up the Earth’s resources by orders of magnitude more than an African villager.

Can you imagine how comical it would seem to a man who has never ridden in a motor vehicle, to see Volvo and Prius owners looking down their noses at Hummer owners? The guy in Birkenstocks, whose footprint on nature is fifty times bigger than the villager’s, sneers at the guy in cowboy boots whose footprint is sixty times greater.

Same goes for Europe vs. America. If the American way of life is unsustainable, so is the European, differing only by a relatively minor degree. It may help the bien-pensant European Left feel better about its own hypocrisy by saying “Look! The Amis are worse!” But it hardly solves the problem.

Unless you are already living off the grid, growing all your own food, and never traveling farther from your home than you can walk, you have no moral standing to criticize my choice of vehicles.

I met Philip way back in the year 2000 when he gave a talk in India. I remember conversing with him later. Here is a insightful post by him on Early Retirement!

Ask a wage slave what he’d like to accomplish. Chances are the response will be something like “I’d start every day at the gym and work out for two hours until I was as buff as Brad Pitt. Then I’d practice the piano for three hours. I’d become fluent in Mandarin so that I could be prepared to understand the largest transformation of our time. I’d really learn how to handle a polo pony. I’d learn to fly a helicopter. I’d finish the screenplay that I’ve been writing and direct a production of it in HDTV.”

Why hasn’t he accomplished all of those things? “Because I’m chained to this desk 50 hours per week at this horrible [insurance|programming|government|administrative|whatever] job.

So he has no doubt that he would get all these things done if he didn’t have to work? “Absolutely none. If I didn’t have the job, I would be out there living the dream.”