Cross-posted from Progressive-Independence.org.
According to Reuters, the wealthy are starting to feel the sting of what they’ve done to the American and global economies.
Wealthy Americans like Morrison and Goldberg were relatively insulated from the global financial crisis until just a few months ago. Now, falling stock markets are slashing their investments, and some are even starting to panic.
“I’m a little angry that I didn’t trust my own gut, my own instinct to stay on the sidelines and wait,” said Goldberg, 57, an executive coach who lives in Washington. “I’m angry at myself.”
Of course, reaction to the financial crisis differs from person to person and even from husband to wife.
“My husband’s approach has been ‘Oh my God, I’ve got to sell, we’re mature people and there goes our retirement’,” said Morrison, 59. Morrison, who lives in Alexandria, Virginia, and runs a PR firm, has about $2 million in investable assets.
Why, they’re even having second thoughts about buying those extra yachts and private jets!
GENEVA (Reuters) – The financial crisis is forcing the wealthy to rethink splurges like fancy cars and yachts, private bankers say, threatening to crimp the free-wheeling luxury goods spending bonanza of previous years.
Luxury brands had signaled they were weathering the global financial crisis better than others, with many saying they expected emerging markets in Asia and China to offset flat or declining sales elsewhere.
But investors have been looking for signs the credit crunch and dismal economic outlook are biting into purchases of luxury goods, and bankers to the wealthy say even the super-rich have begun to rein in spending as they fret over their shrinking portfolios.
It’s even gotten so commodities are going out of fashion! See?
GENEVA (Reuters) – Dabbling in commodities markets has fallen out of favor with the wealthy who are abandoning the sector in droves as energy and metal prices slide, private bankers say.
Commodity prices, which have surged for most of the past six years, have imploded over the last three months. Estimates by Citigroup and Barclays Capital put third-quarter losses in the asset class at between $50 billion and $60 billion.
“Commodities were in fashion at the beginning of the year and clients reduced their exposure mid-year,” said Bruno Lebre, head of investment at SG Private Banking, adding he had been advising clients to limit energy and metals exposure in their portfolios.
Rich people everywhere are starting to get skittish, and are now starting to heed the old adage, “don’t put all your eggs in one basket.”
GENEVA (Reuters) – The world’s wealthiest are opening multiple accounts to help spread risk through the global financial crisis, their bankers say.
“Clients who had accounts with three institutions now have six accounts. Clients who had six accounts now have 12 accounts,” Gerard Aquilina, vice chairman of Barclays Wealth (BARC.L: Quote, Profile, Research, Stock Buzz), told the Reuters Wealth Management Summit in Geneva.
Aquilina said he even had one client with 21 accounts with 50 million British pounds ($88 million) in each of them.
You know the Second Great Depression is having a huge impact when even the ridiculously wealthy get nervous. We’re supposed to take notice of this, because it’s not as though anyone else has been adversely affected by the financial meltdown, right?