Sunday, May 17, 2009

I feel their pain

Really. I do. Would I lie?

Consider this a sort of footnote to the preceding post:
A new study by Fidelity Investments finds that millionaires don’t feel wealthy anymore....

The study, an online poll of more than 1,000 people with investible assets of at least $1 million, excluding workplace retirement accounts and any real-estate holdings, found that 46% of millionaires didn’t feel wealthy. That is a huge jump from last year, when only 19% of millionaires said they didn’t feel wealthy.
Why not? Well, because they were not immune to the effects of the economic mess. More than 40% blamed losses in the stock market.
The millionaires reported an average household income drop of 19%, along with investment losses of 19% and real-estate losses of 28%. ...

“While many millionaires recognize they are doing better than the average investor, last year’s market volatility and loss of assets have forced them to reassess what the term ‘wealthy’ means to them,” said Gail Graham, executive vice president of Fidelity Investments.
Well, let me offer my assessment, you over-valued bozos. When your "investible assets" - not even counting real estate - are equal to at least 20 years total income for a median American household, then you are wealthy and I don't give a flipping damn how you "feel" about it. And quite bluntly I am not the least bit moved to feel any distress over your wholly illusory, self-imagined, self-absorbed plight.

But no, I didn't lie. Because it wasn't their pain I was talking about. It was the pain of too many of the rest of us, still surrounded by bad economic news and evidence that we are still retrenching and the economy has yet to hit bottom.

For one example of the latter, leading US retailers are seeing shrinking sales and so shrinking profits. JC Penny saw sales drop nearly 6% from a year ago. Meanwhile, who recorded an increase? Wal-Mart, the place marketed on cut-throat prices intended to draw people desperate to cut costs. (Those prices are supported by dodgy deals in repressive countries overseas and crappy treatment of their employees at home, but they still draw bargain-hunters.)

The auto industry, a mainstay of the US industrial landscape, continues to reel. GM has notified 2,000 dealerships that they will be closed and Chrysler has announced plans to close a quarter of its showrooms. And no, it's not just a matter of "crappy American cars," either: Nissan reported a loss for the year with its biggest decline in sales coming in the US and Toyota reported its biggest loss ever and its first since 1963 - and projects a bigger loss this year.

And there's no real hope in the export market, either:
For both the 27-nation European Union and its subset, the 16 countries that use the euro, gross domestic product shrank 2.5 percent in the first three months, a 10 percent annual rate, according to Eurostat, the European Union’s statistical office.
The European Commission predicts the economy of the "eurozone" - the 16 nations that use the euro - will contract by 4% this year, but
[t]he severity of the contraction [in the first quarter] surprised economists.

"The figures came in a bit worse than even we had expected and are significantly worse than the consensus," said Joerg Kraemer from Commerzbank.
So perhaps that prediction of a 4% decline should be taken with a grain of salt.

Meanwhile, back in the US, this is what passes for good news:
The nation's industrial production fell in April by the smallest amount in six months, fresh evidence that the pace of the economy's decline is slowing.
According to this Federal Reserve report, industrial output has dropped in 15 of the last 17 months and is down 16% from December 2007. Over that same time, the overall operating rate for factories, mines and utilities has dropped from 80.6% to 69.1%, the lowest rate on record, dating back to 1967.

That is, over 30% of our industrial capacity is idle, the most in at least 42 years. Industrial output is still declining, it's still going down, which means more idled facilities and more unemployed workers to come - but it's going down more slowly than it was. Good news!

Somehow, I don't feel like cheering.

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