Now that bonddad is gone, some worry that we'll get only doom and gloom diaries. Well, no! I'll bring only good news in this one!
1) Stock markets have gone up massively!
Almost 50% in just under 6 months!
US STOCKS ended last week at a year high on Friday after a surprising rise in home sales and optimistic comments from Federal Reserve chief Ben Bernanke reassured investors about the prospects for an economic recovery.
The S&P 500 and the Nasdaq hit 10- month intraday highs, while the Dow industrials rose to their highest level in nine months. The S&P 500 is now up 51,7% from its 12-year closing low set on March 9. “The home sales data got the market rolling, but Bernanke really persuaded investors to (keep up) the rally,” John Augustine of Fifth Third Asset Management said. “His comment was optimistic, but also prudent about the quantitative easing ending some time. But the market took it all as good news.” A stunning 7,2% jump in the sales of previously owned homes last month gave stocks a shot of adrenaline.
Which is especially sweet if you're part of the 10% who own 80% of all stock and 60% of all pension assets (and remember that it's probably more than that now, these are only 2004 numbers after all):
And when you consider that the downturn did not hit the rich any worse than the rest (US household wealth fell by 18%, while the wealth of millionaires globally fell by 19% in 2008, it's especially sweet to be capturing almost all of the upturn!
The happy few with liquid assets will probably soon be able to buy at bargain prices the remaining wealth of everybody else:
Cheap Homes Spur Sales Increase
New house hunters searching for inexpensive homes may be the key to resuscitating the ailing housing market.
Sales of homes priced less than $100,000 are up 25 percent from just a year ago.
It's free markets! People willingly selling their main asset on the cheap are exercising their entrepreneurship and indomitable spirit of freedom! It's great news!
2) Bonuses are back!
Goldman may pay out largest bonus pool ever
Looks like things are back to normal, or perhaps even better, at Goldman Sachs Group Inc. (NYSE:GS) as the firm is reportedly on track to pay out its largest bonus pool in the firm's 140-year history thanks to soaring profits in the first half of 2009.
The new City buzzword: BAB (that's Bonuses are Back)
BAB stands for Bonuses are Back, and its arrival in the lexicon of the Square Mile is evidence that bankers are once again looking forward to bumper payouts, just eight months after the sector faced meltdown and governments worldwide were required to prop them up.
It is universally accepted that the vast rewards available to bankers for taking huge risks were the root cause of the crisis, but nevertheless Goldman Sachs's 28,000 staff – 5,400 of them in London – are now looking forward to the biggest payouts in the bank's 140-year history. Credit Suisse, Deutsche Bank, Barclays Capital, JP Morgan and Morgan Stanley are also anticipating bumper profits.
Even Royal Bank of Scotland, which is now 70% owned by the UK taxpayer and was supposed to restrict the way it pays bonuses, is back in bonanza mode. In March, a key executive was awarded millions of shares and options, already worth more than £8m. This week it emerged that the new chief executive, Stephen Hester, has a £15m pay package.
Not that they ever left, of course:
Bank Bonus Tab: $33 Billion
Nine banks that received government aid money paid out bonuses of nearly $33 billion last year -- including more than $1 million apiece to nearly 5,000 employees -- despite huge losses that plunged the U.S. into economic turmoil.
Top employees at nine big U.S. banks that received government aid shared a bonus pool of $32.6 billion.
The data, released Thursday by New York Attorney General Andrew Cuomo, provide a rare window into the pay culture of Wall Street, where top employees typically make 90% or more of their compensation in year-end bonuses.
The $32.6 billion in bonuses is one-third larger than California's budget deficit. Six of the nine banks paid out more in bonuses than they received in profit. One in every 270 employees at the banks received more than $1 million.
Now tha's good news you can bank on!
3) luxury car sales are booming!
Well, you gotta spend these bonuses properly!
LUXURY car maker Bentley has seen UK car sales rise for the first time in months.
According to the Society of Motor Manufacturers and Traders (SMMT), the Crewe manufacturer sold 97 cars during July, up 14 per cent from 85 in the same month last year.
Total new car registrations across the UK rose 2.4 per cent to 157,149 – the first increase since April 2008.
Again rising faster than the market!
Luxury car sales robust in 1st half in China
German luxury car brands, Mercedes, Audi and BMW, posted strong sales during the period in China even though their premium offerings could not benefit from the government's industry stimulus measures, which are basically aimed at smaller cars.(...)
Mercedes-Benz (...) concluded the first half by delivering nearly 27,000 vehicles, a record year-on-year growth of 50 percent.(...)
Volkswagen's premium brand Audi said its sales in China, its biggest overseas market, increased by 11 percent from a year earlier to a record 66,866 vehicles in the first half of this year (...)
In the first half, BMW delivered 37,627 luxury cars in total in China, up 24 percent year-on-year. (...)
Business is global, baby!
3) Wages are down!
Compensation costs have never grown so slowly, as more and more companies manage to impose downright pay cuts to their employees - which is great news if you happen to be amongst the people that have to pay such wages to others! That's yet more money that will be available for payment of interest on corporate bonds or of dividends, spurring further the prices of financial or business assets (almost exclusively owned by the happy top 10% - in fact, mostly by the very happy top 1%).
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In fact, it's very simple: once you understand that economics & business news are for the top 1%, about the top 1% (and, in fact, by the top 1%), then it's very easy to see the happy stuff and not worry about the rest: it's just noise by people that never get anything done.