The growing anxiety between the rich and the poor is a fact, although it is not the story of a handful of money-grubbers who sucked up all the cash in 1979, and then
Watch Payne's Playbook Charles explains how investors can assess and adjust for downside risk in the market. Catch the show tonight at 6 on Fox Business.
kept taking more. It is a story about successful people who simply make a lot more money for their skills. LeBron James will sign a record-breaking contract somewhere to play professional basketball. I am guessing he will pull in around $30,000,000 a year, unless he defers income for the sake of the team and only takes $25,000,000. This will put the "King" in the same income category as someone earning $394,000 annually.
Yes, LeBron will probably make more money in three hours than his fellow members of the "rich" club. In spite of this, LeBron could stroll through a ruckus Occupy protest and be treated like the common man. However, the guy who is making less than a million dollars driving to work through the gates of his own community could be pelted with eggs and insults. This is the upside down world, in which we live. We tell pollsters that the self-made get a free pass on hate, but in reality, if they were wearing a suit and tie, the crowd would cry foul.
I saw this first-hand when Russell Simmons got the royal treatment during Occupy Wall Street, even though his main source of income comes from charging people a fee for having access to their own money. Still, he is self-made man, but the same mob would never think that a well-dressed woman, berated as she walked to her job at Goldman Sachs, might have worked in a Dairy Queen to help pay for college.
Earlier in the week, consumer confidence numbers came in ahead of Wall Street consensus, and the news was seen as a good sign. Beneath the surface, however, the details tell a different story. People earning less than $50,000 had a Confidence reading of 79.6, the highest in over four years, but the reading was still far below earners of more than $50,000. In fact, the confidence gap between the two groups is the fifth highest ever. All five of the record differences, between the two groups, have come over the past 17 months. Ouch! It's what happens when we spend too much time looking at someone else's plate and being told we could never have what they're having.
|$35,000 to $50,000||79.6||32.0|
There is no doubt that people are angry for good reasons. Median household income is lower than it was back in 1989. It is the perfect backdrop for the politics of envy and has been exploited masterfully. Unfortunately, pointing out the shortcomings of people, actually makes them feel worse about themselves, and trying to convince them that someone else is responsible for their misfortune, does not help.
Idol Worship & Diva Behavior
|Ghana Prima Donnas:|
Yesterday, Ghana was forced to charter a private jet carrying $3 million in cash to its football team playing in the World Cup.
The Black Stars threatened not to play, unless payment was made immediately- and refused payment via wire.
Ghana has seen its economy grow by leaps and bounds - much of the continent envies Ghana, but its mismanagement of the cash has left the nation with a big budget deficit, inflation woes, and weakening currency.
There was a time when the American public celebrated the wealth and success of most people. Yet today, the public claims that we admire self-made millionaires, though, unless they trade in their pin-stripe suits for trading cards, they will never get the same love lavished onto others who are much richer and famous.
However, this ridiculous affection of celebrities is not only an American phenomenon.
All around the world, celebrities get free passes from the envy and animosity aimed at other rich people. In France, footballers have demanded exemptions from taxes levied on the wealthy. Moreover, one of the greatest examples of idol worship is the book "Tendulkar Opus," a book full of pictures of the former Indian cricket star, Sachin Tendulkar.
A special edition of 1,500 pictures and drops of his actual blood cost $75,000, while those without can buy for a mere $3,000.
The curious love-hate relationship of rich people will be poked, stretched, and tested as long as the wealthy are cast in bright lights for all to see and are told to dislike.
The hot camera company goes public today. There is huge anticipation and its IPO is going to be as exciting as watching one of the videos routinely taken with its products. I would not chase the stock. I usually ask investors to wait. In this particular case, I am not thrilled with certain revenue trends and I wonder about their second act.
- 2011 $234.2 million
- 2012 $526.0 million +125%
- 2013 $985.7 million +87%
- 1Q14 $23.0 million -7.6%
The company has 530,000,000 views online and 2 million subscribers to its YouTube channel, so its valuation of $3.0 billion is easy to handle coming out the gate, but I would rather record the action on one of their cameras than go along for the first-day ride.
With the right amount of anxiety and optimism layered on top of a mountain of fear, it looks like another summer session.
Data out this morning, once again, has me wondering if Americans have hit their own personal wall of worry with respect to spending money they don't have. Except automobiles people didn't buy a lot of stuff last month. Moreover, the rate of savings is really beginning to climb much higher. This could be really bad news for the economy. I can't pinpoint any particular reason why the almost yearlong trend of lower savings has abruptly reversed.
We do know the consumer is 2/3 of the economy and has been reluctant to use credit. Credit card debt peaked at more than one trillion July 2008 before tumbling to $833 billion by April 2011. It's only been edging higher in baby steps with the last read at $870 billion.
The American public was burned badly, the memories are long, and fear is persistent. We are not people of the Great Depression generation that saved every nickel they made for the rest of their lives, but it's clear that the Great Recession generation has its limits, too.