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The 1% Is Rolling Over
Submitted by John Rubino via DollarCollapse.com,
Today’s financial world is a tough place for the average person but paradise for rich guys. As easy money raises asset prices, the owners of those assets make effortless profits. Then they buy expensive toys and trophy properties. Hence the recent boom in fine art, high-end real estate, yachts and private jets.
But like all financial trends, this one has a limit, and that limit is now in sight. The 1%, it seems, is rolling over:
Sotheby’s Offers Employees Voluntary Buyouts to Cut Costs
(Bloomberg) – Sotheby’s is offering employees voluntary buyouts to cut costs after a drop in third-quarter revenue grabbed more attention from the company’s investors than its largest ever semiannual auction season.
The auction house told employees in an e-mail Friday that if not enough employees make use of the buyouts, it may have to resort to layoffs. Sotheby’s didn’t say how many jobs it plans to cut.
Shares of Sotheby slumped as much as 16 percent this week after the firm reported a 9 percent decline in third-quarter revenue.
“Sotheby’s costs of doing business – increased staff, more expensive catalogue production, huge marketing and promotional costs, etc. – have to be balanced against the declining revenue from commissions,” said David Nash, co-owner of Mitchell-Innes & Nash gallery in New York and former head of Impressionist and modern art at Sotheby’s.
San Francisco in housing ‘correction’
(CNBC) – San Francisco homes are still some of the priciest in the nation, but sales of those houses are showing significant weakness. September sales were down 19.5 percent in the city from a year ago, according to the California Association of Realtors.
"We’re going through a kind of correction, as we have a lot of new developments being built right now. The supply is definitely on the rise,” said Justin Fichelson, an agent at Climb Real Estate Group in San Francisco. “The market is not going to continue going up like we’ve seen in the past two years, because prices are already high.”
London Mansion Prices Fall 11.5% as Home `Bubble’ May Have Burst
(Bloomberg) – Prices of homes valued at 5 million pounds ($7.6 million) or more fell 11.5 percent on a per square foot basis in the third quarter from a year earlier, according to Richard Barber, a director at broker W.A. Ellis LLP, a unit of Jones Lang LaSalle Inc. Sales volumes across all homes in the best parts of central London dropped 14 percent in the period, the realtor said on Thursday.
“The bubble may already have burst” for the most expensive homes, Barber said. Now, “36 percent of all properties currently on the market across prime central London are being marketed at a lower price than they were originally listed at, with the average reduction in price being 8.5 percent.”
Luxury-Jet Market Value Seen Slipping for First Time Since 2009
(Bloomberg) – Global long-term spending on private jets is starting to slow for the first time since 2009 as slumping commodity prices sap demand in emerging markets, according to an industry forecast.
Deliveries for the 11 years ending in 2025 will be valued at $270 billion, Honeywell International Inc. said Sunday in its annual survey of the luxury-aircraft market. That’s down 3.6 percent from last year’s comparable projection, and snapped a streak of gains since the last U.S. recession ended.
The decline reflects weakness in Brazil, Russia, India and China, the group known as the BRIC countries, and the impact of political conflicts in the Middle East and Africa, according to Brian Sill, chief of Honeywell’s business and general aviation unit. Delays in some new plane models are also pushing back demand, he said.
Jet shipments will drop 2.6 percent to 9,200 planes, according to Honeywell, whose forecast had predicted fluctuations in deliveries but no drop in the planes’ list value in the post-recession years. Large planes that had spearheaded the recovery are now seeing slower growth.
“We’re just slogging along,” said Janine Iannarelli, president of Par Avion Ltd., a Houston based plane brokerage. “There is a shortage of buyers, there’s limited activity and prices keep correcting.”
So the rich are becoming less rich? To an extent, yes. Recent declines in commodity prices and emerging market debt have no doubt taken a bite out of some big portfolios. Meanwhile hedge funds, the preferred investment management vehicle of the uber-wealthy, have done badly for the past couple of years, with some high-profile implosions generating headlines.
These disappointments have lowered the net worth of some big players and made others more cautious. Hence the lessened demand for the most pretentious assets.
The impact on the global economy? Almost certainly bad, since the 1% are the marginal buyers of so many reference assets like blue-chip stocks and government bonds. To the extent that they grow cautious, the bid for a lot of things will be lower, cutting corporate profits, equity valuations and high-end asset prices.
Put another way, when the only healthy part of an already-impaired system turns negative, everyone will feel the resulting pain.
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one can only hope, but everyone strives to be a part of the 1% so it will never go away.. perhaps it's multiple will trade down as a percent of population.. as for credit suisse's take...
Anyone with a house in Canada may be the 1%, and other reasons to fear for humanityGood point. Everyone is inerently an asshole. Given money there isn't a person out there that wouldn't be a complete dick. That's why it's best to stay broke. That's why I put all of my savings into silver and gold instead of going long stocks or buying houses. Sure I could've made money doing those things, but then I would be just another self deserving cunt. Instead I have a few bags of coins that haven't given me any income.
Of course the hope is that everyone of those idiot assholes gets what's coming to them and the bottom falls out of the economy, but hey, maybe the meek will inherit the earth.
Well said on the last sentence.
Yeah, like a well is just another hole in the ground, that well?
Do you have a point, or just a question.
He's right. Faith is a lot like credit. It can build you up well (that word again) past your means. It can also evaporate into nothing.
Not your junk.
giddy up
Just as long as once they inherit the Earth, they don't turn into assholes.
Beware of time that is come where rich beneficiary of QE is begin convert soft asset (financial instrument and derivative) to hard asset (commodity)
Yes, because in that instant, everyone will be trying to sell tulips to each other. It's happened before, it'll happen again.
It's happening right now.
Title: The 1% Is Rolling Over
No, they are not. The contrary is happening. How do I know?
I just got this on my RSS feeds, by B9K9:
I couldn’t possible mount enough enthusiasm to repeatedly explain over and over again why corporate profits don’t matter, taxes don’t matter, debt service doesn’t matter, ad infinitum.
I mean, what’s the point? Where’s the margin? It’s like patiently trying to explain something to a child – you know you’re right, but they’re convinced they’re correct. So, you end the conversation and that’s that. But in the doom space, they keep coming back for more – always a new generation with the same, basic grasp of the issues, but still lacking a complete macro view that incorporates history, finance, technology, politics, etc.
So, good luck guys. But perhaps I might say that it’s best to focus on COG: continuity of government. All issues – and I mean everything in totality – flows from this perspective. Once people understand that there are standing emergency powers acts in every country, and that they can be executed upon meeting only a few conditions, then the entire discussion regarding econ 101 goes out the door, and we’re dealing with exactly what I’ve been saying for some time:
– directed expenditures
– currency modification (ie devaluation)
– wage/price controls
– rationing
– travel limitations
– assembly/speech restrictions
http://ourfiniteworld.com/2015/11/03/oops-low-oil-prices-are-related-to-a-debt-bubble/comment-page-6/#comment-72318
All nations fall, all governments collapse, and the rich die like the poor.
While everyone may strive to join the 1% they will soon realise that more and more of our needs are met by big business, international mega-corporations. They fill every nook and cranny of business, as soon as a niche market opens up big business moves in. So naturally there will be fewer and fewer people joining the 1%.
Not rocket science if you keep your eyes on the road: You want a real economy in the age of mega corporations? Give people proper wages so they feel confident spending - as opposed to lock their purse because they cannot be certain if they have an income in 3 months time.
You want a higher birthrate? Give people some kind of income/job security. Is it rocket science that you don't feel like having offspring when the job situation is so uncertain that you don't know if you can feed them in 12 years time?
Why are people so stupid? Or as we used to say in the old language, why can't people see beyond the tip of their nose?
Well,I certainly agree that David Suzuki needs to be seized and shamed.
That slime-ball probably owns lakefront property, too.
Oh no not the 1%!
Sothebys? Isn't that where you can bag your own canned goods?
Yes, and you pay a 50 cent cart deposit but you get it back when you return the cart.
A fellow I know in the art and antiques trade has deep pockets. He has been very successful over the past 5 years while most of his colleagues below his price level and considerably smaller inventory are not doing well or have given up. He said he was thinking about expanding his retail space and inventory and asked me if I thought it was a good idea. I told him he might want to hold off for a year or two to see how the economic disruptions begin to play out.
"Dangerous times", says I. "Stay safe."
Another antiques dealer who specializes in early American formal furniture has been vacuuming up all the "bargains". Prices at the wholesale level are down at least 50% while he still asks top 10 year old prices. He thinks he is going to live long enough to make an 2nd fortune. I'm waiting for his liquidation sale when he finally gives up.
If history is any indication, the 1% get too overconcentrated in the hottest assets, and ka-boom their portfolios go. This is why there are very few examples of wealth lasting more than a few generations.
The old saying is "shirtsleeves to shirtleeves in three generations."
Grandpa built it, dad ran it, and junior squandered it.
Yep. Anybody in B2B sales sees what happens when the founder retires. Some jackass takes over and runs the business into the ground. If it is not completely dead by the time his retarded son takes over it soon will be.
I had a client who passed at age 80 this summer. The business was ran..if you can call it that for a few more months by his stupid middle aged son for a few months. At least this retard had the good sense to sell before the business became worthless.
You could probably generalize such over the entire US economy. Jackasses at the helm indeed.
Reminds me of working at this machine shop years ago, owner won a few mil in the lottery, ran a decent business, but his cokehead son would constantly come steal parts from production (especially the ones that barely failed QC) and sell them on the side, taking it straight to his own wallet. Apparently $175k/yr for doing absolutely nothing as vice president wasnt quite enough for him.
I'd be very surprised if the business still exists, I cant see that pops wouldnt have retired ~10 years ago.
(and then his son pays the price for his cokiness, and is autistic. I dont know about anyone else, but the only people I know who are autistic, their pops were on mad coke binges around the time of their conception.)
Sigh. My family did it in two. Grandpa and grandma built it, mom and uncles sold it and spent the proceeds, grandkids likely won't see a dime.
The rich have already bought all the nice cars, homes, boats, art, jewelry, planes, and women they need. We've reached Peak Rich.
Why do I have the feeling that Soros is short the rich and Buffet is buying up all the media outlets to document their doom? ;-)
Soros is institagting race riots so there's that.
Well, if he were giving a product or service that a majority of the people wanted or needed I'd call him a capitalist.
But cuz he's not...well...we all know what he is ;-)
Satan.
lol...I don't give him that much "credit", he's a pretty transparent douchebag, not much deception in anything he does.
He doesn't really care who lives or dies as long as he profits from it, so, just your garden variety sociopath.
Satan's ass wiper then.
If I were Satan I wouldn't want the SOB anywhere around my shit pipe.
You just can't trust the man ;-)
The problem with expensive estates, cars, etc. is the insurance and taxes they must pay EVERY year. They must continue to lie and steal just to maintain their positions, but the uptake keeps getting smaller.
Most sports "stars" don't see the effects of legacy cost until it is way to late, by the time they realize where their diminishing income is outgoing they are broke ass beggers pawning off their autographed shit stained skiveys.
Not to mention how expensive jets are to maintain. Then there is that pesky annual inspection.
Without the 1% creating "wealth," where would we be? Oh wait, I am thinking 1895, not 2015.
time to default and steal more from the 90%
"global long-term spending on private jets is starting to slow"
So much for that cushy corporate gig I was need'n.
DollarCollapse.com? Geez, did this guy get any sleep?
They buy trophy wives too, and they trade them in for new models every few years just like they do with their SUVs.
They lose their value in depreciation as soon as you drive them off the lot.
The top 1% may be hurting, but the top .01 percent (which is what really matters) doesn't give a damn. They write the "laws" own the government, control the central banks and actually do print their way to prosperity.
They must be found and brought to justice in an international war crimes court and charged with crimes against humanity. They are evil. If they don't get justice in this world, they'll definitely get it in the other.
Going once. Going twice. Going .....
Remember, everything goes to hell, unless YOU prop it up!!
Lads, lads. Very few of the one percent ever enjoy a private jet or shop for a trinket for their mistresses at Sotheby’s. There's only a few tens of thousands of people who enjoy that kind of wealth, worldwide.
The 30,000 are actually quite happy to see fewer Russians cluttering up Knightsbridge and Gstaad. Lower prices for them---and they consider the Russians lowlife for having actually earned their wealth.
Why, not one living Russian billionaire inherited his wealth! Imagine that!
'earned'
I don't think that means what you think that means...
in merica we call it "the old fashioned way".
Way down at the bottom there is this hard, irreducible reality. The biggest oligarch has the same problem with that as anyone else, which is why crony capitalism is so preferred.
https://thinkpatriot.wordpress.com/thinking-about-thinking/
The failure rate of civlization is very high. Words as a way of conveying meaning from one mind to another are quite poor, from all evidence, the many, many, many failures of every size from world wars to cops killing citizens.
This is a fight for government to expand their power, to continue the kleptocracy. I think we are winning, they can't control the agenda any longer, and running out of borrowing power is soon to be a constraint. They can't deal with the constraints now, things will get much worse in every way.
" The 1%, it seems, is rolling over"
Bullshit
BFD - I roll over several times every night -
more like the 0.001%
Not really 1%. IN England, the 1% is anyone who earns over £34,000, or was it £40,000.
0.1% or even 0.001%
I have a good 30 yo friend who was diagnosed with a bad case of cancer a few weeks ago.
The first thing he said to me when I called was, "Ya know something? When they tell you that you have cancer, nothing is worth anything."
Best wishes to your friend for a much hoped for, speedy recovery.
The Greatest Treasure
The World Can Hold -
Search as you will - End to End -
It is not Power -or Fame - or Gold
But - Just the Love of A Friend
(Mabel Lucy Atwell)
x
When the only thing holding up their hard assets is printed funny money and the funny money hyperinfllates to keep their shit up then EVERYTHING they own is nothing more than MALINVESTMENT. When the dollar goes down they lose lots.
If you're filthy Rothschield-rich you can buy up countries like Palestine and finance lots of fun wars
I'll consider it parity when the 0.1% are bending over...not rolling over...
You forget that they all got rich on qe, now the idiots are thinking "I'd hate to lose my chunk to buy the next dip."