mass affluent

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pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

While capitalist ownership is about responsibility, entrepreneurship, and control, asset managers are ultimately actors who cannot practice such ownership. He or she simply cannot be a capitalist. In 2012, after the recovery from the Great Recession, the global asset management industry managed 36.5 percent of assets held by pension funds, insurance companies, sovereign wealth funds, high-net-worth individuals, and the mass affluent. Asset managers are not the only form of intermediaries, but they represent a considerable proportion of the gray ownership in Western economies. And as GDP has expanded in the West, the asset management industry has followed – and, going forward, is likely to grow faster than the rest of the economy, according to PwC. By 2020, the industry is estimated to have expanded to manage more than 45 percent of total holdings.

(i), (ii), (iii) Lewis, Michael, Liar’s Poker (i) liberalism classical market liberalism (i) economic liberalism and technology (i) embedded liberalism (i) vs. government intervention (i) neoliberalism (i) License Raj (India) (i), (ii) Lidl (i) Life Magazine, on Milwaukee-Matic (i) life-or-death competition (i), (ii), (iii), (iv) Linaburg Maduell Transparency Index (LMTI) (i) Lindgren, Astrid (i) listed companies and mergers and acquisitions (i) and ownership (i) and predictability (i) Litan, Robert (i) LMTI (Linaburg Maduell Transparency Index) (i) lobbying (i), (ii), (iii), (iv), (v) Locke, John (i) logistics hubs (i), (ii) logistics industry, and lean production (i) London Stock Exchange, and sovereign wealth funds (i) LoopPay (i) Lord Voldemort (Harry Potter books character) (i), (ii) Lyft (i) M&As (mergers and acquisitions) (i), (ii), (iii), (iv) McAfee, Andrew, The Second Machine Age (Brynjolfsson and McAfee) (i), (ii) McCloskey, Deirdre (i) McKinsey (i), (ii) McKinsey Global Institute (i) McLaughlin, Patrick (i) Maddison, Angus (i) Madoff, Bernie (i) Mainelli, Michael (blockchain study) (i) make-or-buy question (i), (ii), (iii) Malkin, Michelle (i) The Man in the Gray Flannel Suit (Sloan Wilson) (i) “man of system” (Adam Smith) (i) managerialism see corporate managerialism Mandel, Michael (i) Mannering, Fred (transportation expert) (i), (ii)n21 Mansfield, Edwin (i) manufacturing (i), (ii), (iii), (iv), (v), (vi) Marconi, Guglielmo (i) market vs. capitalism (i), (ii) complexity (i) concentration (i), (ii), (iii), (iv), (v) dominance by big firms (i) failure and firms (i) liberalization (i), (ii), (iii) and modern portfolio theory (i) uncertainty (i), (ii) see also deregulation; external capital markets; firm boundaries; labor markets; market contestability; public markets; regulation; stock markets market contestability boosting contestability, ways of (i) and deregulation (i) and economic dynamism (i), (ii) and global trade (i) and globalist worldview (i) and globalization (2nd phase) (i), (ii) and innovation (i), (ii), (iii), (iv), (v), (vi) and lean production in car industry (i) and managerialism (i), (ii) vs. market concentration (i) and multinationals (i) and occupational licenses (i), (ii) and oligopolistic (or monopolistic) competition (i) and performance imperatives (i) and performance tools and methods (i) and productivity (i), (ii) and regulation (i), (ii) and services sector (i), (ii) and strategy (i) and telecom network services (i) market socialism (i) marketing (i) Markowitz, Harry (i) Marris, Robin (i) Mars (company) (i) Mars (planet) (i) Marx, Karl (i), (ii), (iii), (iv), (v), (vi) Communist Manifesto (Marx and Engels) (i), (ii) Mason, Paul (i) mass affluent (i) Mauborgne, Renée (i) Blue Ocean Strategy (Kim and Mauborgne) (i) Means, Gardiner (i) mechanistic cognition (i) medical/healthcare sector and regulation (i), (ii), (iii), (iv) and robotics (i) see also corporate medical research; pharmaceutical sector meetings (i), (ii), (iii) MelaFind (i), (ii) Memphis International Airport, Federal Express (FedEx) hub (i) mercantilism (i), (ii), (iii), (iv), (v) Mercedes-Benz cars, French ban on (i) mergers and acquisitions (M&As) (i), (ii), (iii), (iv) MetLife (i) metrics (i), (ii) “Mexican standoff” metaphor (i) Mexico, North American Free Trade Agreement (i) Michaels, Guy (i) Microsoft (i), (ii), (iii), (iv), (v), (vi) Middle Ages, economy and innovation (i) “middle-aged” capitalism (i), (ii), (iii) Mill, John Stuart (i) Millennials (i) Milne, Alistair (blockchain study) (i) Milwaukee-Matic (i) Minsky, Hyman, “money manager capitalism” (i) MIT Media Lab (i) MIT Technology Review, Graylin on e-wallets (i) mobile banking, in Africa (i) mobile phones/technology (i), (ii), (iii), (iv), (v), (vi) see also Nokia mobile subscription market, and globalization (i) modern portfolio theory (i) Modi, Narendra (i) Mokyr, Joel (i), (ii), (iii)n41 “money manager capitalism” (Hyman Minsky) (i) monopolistic (or oligopolistic) competition (i) monopoly, theory of (John Hicks) (i) Monsanto (i) Mont Pelerin Society (i) Moody’s (i) Moore, Wilbert, The Conduct of the Corporation (i) Morieux, Yves (i) Morrison, William (i) Motorola (i), (ii) Mouchot, Augustin (i) moving-target regulations (i) Mr.

Chance (Being There character) (i), (ii) multinational (global) companies characteristics of (i), (ii) and competition (i) and corporate cash savings (i) and dispersed ownership (i) and firm boundaries (i), (ii) and foreign direct investment (FDI) (i), (ii) and global trade (i), (ii) vs. home-market firms (i) and innovation (i) as logistics hubs (i) and market concentration (i), (ii) and market contestability (i) and private standards (i) and productivity (i), (ii) and R&D (i) and regionalization of Asia’s trade growth (i) and regulation (i) reputation of (i) and “slicing up” of value chains (i) and specialization (i), (ii) and supply chains (i) and transaction costs (i) see also big firms; globalization; globalization (overview) Musk, Elon (i), (ii), (iii) mutual funds (i), (ii) nanotechnology (i), (ii), (iii) NASA (i) Nasdaq, and sovereign wealth funds (i) national accounts (recorded data), vs. real value of improvements (i), (ii) National Science Foundation (US) (i) neoconservatism (i) neoliberalism (i) nepotism (i) net lending see corporate net lending Netherlands exports to China (i) taxi services and regulation (i) “new economy” (i) New England Journal of Medicine, medical devices study (i) New Machine Age thesis background: economic realities vs. technological blitz vision (i), (ii), (iii), (iv), (v), (vi), (vii); historical perspective (i) criticism of thesis: cyclical effects on productivity argument (i); jobs and technology issue (i); productivity/income decoupling issue (i), (ii); recorded data vs. real improvements argument (i), (ii); summary (i) and fear of artificial intelligence (i) and planning machine economic philosophy (i) and Robert Gordon on US labor productivity growth (i) see also The Second Machine Age (Brynjolfsson and McAfee) New York City dockers and containerization (i) taxi services and regulation (i), (ii) New York Stock Exchange (i), (ii), (iii), (iv), (v) see also Wall Street New York Times, on Bell’s telephone invention (i) NICs (newly industrialized countries) (i) Nietzsche, Friedrich (i), (ii) nimby (not-in-my-backyard) attitude (i) NM Electronics (Intel) (i), (ii), (iii) Nobel Peace Prize, and Twitter (i) “noise” (at work) (i) Nokia and corporate managerialism (i), (ii), (iii), (iv), (v), (vi) and Foxconn (i) and specialization (i) and tablet market (i) non-entrepreneurial planning (i) North American Free Trade Agreement (i) Norway, sovereign wealth fund (i), (ii), (iii) not-in-my-backyard (nimby) attitude (i) Obama, Barack (i), (ii) obsolescence see knowledge obsolescence occupational licenses (i), (ii), (iii), (iv) OECD (Organisation for Economic Co-operation and Development) on aging firms and innovation (i) on corporate savings (i) on “diffusion machine” and productivity (i) GDP forecasts (i) on intermediaries and shareholders’ income (i) on pension funds and PPRFs (i) on R&D skill deficiencies (i) on regulatory administration costs (i) on sovereign wealth funds (i) on taxi services (i) OECD countries product market regulation (PMR) indicators (i), (ii) R&D spending (i) start-ups (i) total assets by types of institutional investors (2001–13) (i), (ii) “off-license” sectors (i) “offshore” pattern of innovation (i) oligopolistic (or monopolistic) competition (i) Ollila, Jorma (i), (ii) Olson, Mancur (i) “one percent” (wealthiest group) (i) online services and diffusion of innovations (i), (ii) and recorded economic data (i) and regulation (i) see also internet open source technology, and socialism (i) organic cognition (i) Organisation for Economic Co-operation and Development see OECD; OECD countries organization industrial organization (i), (ii) vs. managerialism/technostructure (i) and multinationals (i) and specialization (i) Organization Man (i), (ii) organizational diversification (i), (ii) Osborne, Michael (i) outsourcing (i) ownership see capitalist ownership; institutional owners Palo Alto Research Center (PARC, Xerox) (i) “Panama Papers” story (i) Parisian taxis, and regulation (i) patents, and knowledge obsolescence (i) pay see incomes payment cycles (i) payment technologies (i) pensions and asset management industry (i) and gray capitalism (i), (ii), (iii), (iv) need for reform (i) pension crisis (i) pensioners vs. working-age households incomes (i) and principal–agent debate (i) private pensions (i), (ii) public/state pensions (i), (ii), (iii), (iv), (v); public pension funds and reserve funds (OECD, 2001–13) (i), (ii); public pension return funds (PPRFs) (i) see also retirement Pepsi (i) performance imperatives (i) performance measurements (i) performance tools (i), (ii) permission-based regulatory culture (i), (ii) permissionless innovation (i) pessimism, and capitalist decline (i) Pessoa, João Paolo (i) Pfleiderer, Paul (i) pharmaceutical sector and price regulations (i)n28 R&D investment (i), (ii) and regulation (i), (ii) Phelps, Edmund (i)n41 Mass Flourishing (i), (ii) Piketty, Thomas (i), (ii) PillCam digestive tract sensor (i) Pippi Longstocking (i) planning and corporate managerialism: planning machines (i), (ii), (iii); strategy (i); uncertainty and risk (i) Cybersyn project (i) and failing companies (i) and globalization (i) non-entrepreneurial planning (i) and regulation (i) and “scientific civilization” thinking (i) and spirit of bureaucracy (i) and Swedish economy (i) plastic cards (i) Pliny the Elder, Naturalis Historia (i) Plouffe, David (i) PMR (product market regulation) indicators (i), (ii) policy uncertainty, and investment (i), (ii) political romanticism (i) political world and capitalism as borderless space (i) cronyism , (i), (ii), (iii), (iv) dirigisme (France) (i) government intervention vs. liberalism (i) governments and globalization (i) governments and mobile technology (i) gray-haired voters (i) lobbying (i), (ii), (iii), (iv), (v) and regulation: 1980s–1990s policy changes (i); case of taxi services and Uber (i); political romanticism (i); social regulation (i); trend on the rise (i) and sovereign wealth funds (i), (ii), (iii) see also policy uncertainty; politics politics corporate politics (i), (ii), (iii), (iv) end of and digital age (i) populism (i), (ii), (iii), (iv), (v) see also political world populations aging (i), (ii), (iii) decline (i) populism (i), (ii), (iii), (iv) Porter, Michael (i), (ii) portfolio theory (i) Portugal, lesser dependence on larger enterprises (i) positioning (i), (ii), (iii), (iv) poverty, and globalization (i) PPRFs (public pension return funds) (i) see also pensions precautionary regulations (i), (ii), (iii), (iv) predictability (i), (ii), (iii), (iv), (v), (vi), (vii) see also uncertainty; volatility premature scaling (i), (ii) price index bias (i) Pricewaterhouse Coopers (PwC) on asset management industry (i) on compliance officers in US (i) productivity growth survey (i) on sovereign wealth funds (i) principal–agent problem (i) principal–agent theory (i) prioritizing, and strategy (i) private standards (i) probabilistic decision-making (i), (ii) product market regulation (PMR) indicators (i), (ii) production and computer technology (i) geography of production (i) lean production (i), (ii) and multinationals (i) production costs (i), (ii), (iii) unbundling of: first (i); second (i), (ii), (iii), (iv) see also specialization; supply chains; value chains productivity and containerization (of global trade) (i) and cyclical effects (i) and data economy (i) downward trend (i), (ii) and employment (i) and financial sector growth (i) and foreign operations (i)n46 and globalization (i), (ii), (iii) and ICT intensity (i), (ii) and incomes (decoupling thesis) (i), (ii) key to prosperity (i) low productivity and innovation diffusion problems (i) and market contestability (i), (ii) and multinationals (i), (ii) and regulation (i) and robots (i) total factor productivity (TFP) growth (i), (ii), (iii) and transaction costs (i) UK productivity puzzle (i) professional investment/investors (i), (ii), (iii) see also asset managers professions regulation of (i), (ii) see also occupational licenses profit margins and decoupling (productivity/incomes) thesis (i) and globalization (i), (ii) protectionism (i), (ii), (iii), (iv), (v) public markets and financialization of the economy (i) and mergers and acquisitions (i) public pension return funds (PPRFs) (i) see also pensions public relations campaigns (i), (ii) “put option” (i) PwC see Pricewaterhouse Coopers (PwC) quantitative valuation methods (i) quantum dots (QD) technology (i) R&D (research and development) and corporate net lending (i) and firm boundaries (i), (ii) and multinationals (i) and pharmaceutical products (i), (ii) and policy uncertainty (i) and productivity (i) R&D scoreboards (European Commission) (i), (ii) and regulation (i), (ii), (iii) vs. share buybacks at IBM (i) spending issues (i), (ii), (iii) and sunk costs (i) US R&D investment (i), (ii), (iii) and vertical specialization (i) see also incremental development Rajan, Raghuram (i) rating agencies (i), (ii), (iii) rationalism and globalist worldview (i), (ii) and societal change (i) Reagan, Ronald (i), (ii) real economy, vs. financial economy (i), (ii), (iii), (iv) reallocation of business, and deregulation (i) recorded data (national accounts) vs. real value of improvements (i), (ii) regulation after 1980s–1990s deregulation wave (i), (ii) and bureaucracy brake (Germany) (i) and compliance officers (i) and costs and time lags (i) and decline of capitalism (i), (ii) economic regulation (i), (ii) financial regulations (i), (ii), (iii), (iv) and globalization (i) and gray capitalism (i) and healthcare sector (i), (ii), (iii), (iv) index of regulatory freedom (i), (ii) and industrial policy (i), (ii) and innovation (i), (ii), (iii), (iv), (v), (vi) and labor (i), (ii), (iii), (iv), (v) and lobbying (i) and managerialism (i), (ii) and market contestability (i), (ii) moving-target regulations (i) and multinationals (i) and pensions (i) permission-based regulatory culture (i), (ii) and permissionless innovation (i) and planning (i) and political romanticism (i) and political world (i), (ii) prescriptive vs. proscriptive (i), (ii) private standards (i) and R&D (i), (ii), (iii) and size of companies (i) social regulation (i), (ii) and trade (i), (ii), (iii) see also deregulation; legislation; regulatory complexity/uncertainty regulatory accumulation (i) regulatory bodies (i) regulatory complexity/uncertainty cadmium example (i), (ii) energy sector case (i), (ii) impact on economic growth (i) impact on innovation (i), (ii), (iii), (iv), (v) precautionary regulations (i), (ii), (iii), (iv) regulatory conflicts (i) regulatory/policy uncertainty and investment allocation (i), (ii) rise of regulatory uncertainty (i) see also deregulation; regulation renewable energy see green/renewable energy rent-seeking (i), (ii), (iii) rentier capitalism (i), (ii), (iii), (iv), (v), (vi) rentier formula, resource allocation according to (i) rentiers (i), (ii) reputation management (i) research concept of in corporate world (i), (ii) scientific research (i) see also cancer research; incremental development; R&D Research in Motion (RiM) (i), (ii) retail, and globalization (i) retirement age of (i) savings (i), (ii), (iii), (iv), (v), (vi), (vii) see also pensions Ricardo, David, wine-for-cloth thesis (i) rich people vs. capitalists (i), (ii) high-net-worth individuals (i) mass affluent (i) “one percent” (wealthiest group) (i) risk banks’ proneness to (i) and globalist worldview (i), (ii) and uncertainty (i), (ii) Robertson, Dennis (i) Robinson, James (i) robotics/robots and Asimov/science fiction (i) impact of on society (i) and labor (i), (ii), (iii), (iv), (v); Foxconn example (i) and technology-frustrated generation (i) see also artificial intelligence; automation; driverless vehicles; New Machine Age thesis; technology Rodman, Dennis (i) Rolling Stone (magazine), “Why Isn’t Wall Street in Jail?”


pages: 526 words: 158,913

Crash of the Titans: Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America by Greg Farrell

Airbus A320, Apple's 1984 Super Bowl advert, bank run, banking crisis, bonus culture, call centre, Captain Sullenberger Hudson, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, financial innovation, fixed income, glass ceiling, high net worth, Long Term Capital Management, mass affluent, Mexican peso crisis / tequila crisis, Nelson Mandela, plutocrats, Plutocrats, Ronald Reagan, six sigma, sovereign wealth fund, technology bubble, too big to fail, US Airways Flight 1549, yield curve

No one would ever use the word “legendary” in the same sentence as “Lewis,” unless the name “McColl” was squeezed somewhere in between. And now here it was, out of the blue, an opportunity for Lewis to pull off something even the great Hugh McColl couldn’t achieve. In the 1990s McColl saw how the combination of Merrill Lynch’s thundering herd of financial advisors could be grafted on to BofA’s nationwide base of “mass affluent” customers to create a superpower in the industry, a demonstrable advantage for the Charlotte bank against its nearest competitors. The timing wasn’t perfect, since Lewis was about to pay out $21 billion in cash for LaSalle, and had just invested $2 billion in Countrywide Financial, the huge mortgage originator that was hobbled by the real estate downturn. But the acquisition of Merrill Lynch was something Lewis could not pass up.

As he sat with Lewis and Greg Curl in BofA’s corporate apartment, listening to Curl’s outline of how Merrill Lynch would fit into BofA’s corporate structure, he betrayed little interest in the charts and diagrams shown to him. “I just don’t see how we could make this work,” O’Neal said. “I don’t see any synergies.” That statement caught Lewis by surprise. There were legitimate reasons to oppose a merger between Merrill Lynch and Bank of America, but lack of synergies was not among them. A deal between the two organizations would graft Merrill’s thundering herd of retail brokers on to BofA’s “mass affluent” customer base across the U.S. The potential for growth in the category seemed unlimited and would allow Merrill’s sales force, already the industry leader, to put even more distance between itself and its competitors. After Curl left the room, Lewis asked O’Neal what he wanted in order to make the deal happen. “I want to be president,” O’Neal said. “My team will not accept this unless I have an ironclad deal to become your successor.”

“So you’re saying that they wouldn’t like a flashy, highly paid investment banker like you?” “Exactly!” replied Wetzel with a self-deprecating laugh. “I’m not that guy.” Wetzel turned to the next potential acquirer, Bank of America. “This makes sense on the retail piece,” he said, referring to Merrill’s thundering herd of financial advisors, who could be unleashed on BofA’s extraordinary roster of “mass affluent” customers across the U.S. Another good fit was the international business: Merrill had a strong network of overseas offices, but BofA was almost entirely a U.S.-focused bank. But there were problems with such a marriage, Wetzel said. BofA had started its own investment bank and built up its own trading operation in New York. Both had grown from small experiments into thriving midsized operations.


pages: 178 words: 52,637

Quality Investing: Owning the Best Companies for the Long Term by Torkell T. Eide, Lawrence A. Cunningham, Patrick Hargreaves

air freight, Albert Einstein, backtesting, barriers to entry, buy and hold, cashless society, cloud computing, commoditize, Credit Default Swap, discounted cash flows, discovery of penicillin, endowment effect, global pandemic, haute couture, hindsight bias, low cost airline, mass affluent, Network effects, oil shale / tar sands, pattern recognition, shareholder value, smart grid, sovereign wealth fund, supply-chain management

In August 2013, we conducted a consumer survey with 1000 affluent consumers aged 21-74 in the United States (boasting annual household income exceeding $200,000). If consumer confidence deteriorated, more than half of respondents (55%) indicated that they were “not at all likely” or “not very likely” to reduce spending on their physical appearance (hair, skin, make-up). The only category in which they were less likely to reduce spending (among 15) was education. In August 2015, we also conducted interviews amongst 711 ‘mass affluent’ consumers in China with a monthly household income of at least RMB 16,000. If consumer confidence deteriorated, our Chinese respondents indicated that they would, on balance, reduce spend on physical appearance. However, once again this category ranked as the second most resilient category, after education. See P. Peeters, J. Middel and A. Hoolhorst, ‘Fuel efficiency of commercial aircraft.


pages: 261 words: 70,584

Retirementology: Rethinking the American Dream in a New Economy by Gregory Brandon Salsbury

Albert Einstein, asset allocation, buy and hold, carried interest, Cass Sunstein, credit crunch, Daniel Kahneman / Amos Tversky, diversification, estate planning, financial independence, fixed income, full employment, hindsight bias, housing crisis, loss aversion, market bubble, market clearing, mass affluent, Maui Hawaii, mental accounting, mortgage debt, mortgage tax deduction, negative equity, new economy, RFID, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, side project, Silicon Valley, Steve Jobs, the rule of 72, Yogi Berra

According to one national study, 50% of Americans say they’re only one month—two paychecks—away from not being able to meet their financial obligations.14 More than half of those people, 28% of the total respondents, couldn’t survive financially for more than two weeks if they were suddenly without their present regular income.15 And before you think this issue concerns only lower socio-economic Americans, think again. Twenty-nine percent of the “mass affluent,” earning more than $100,000 per year, wouldn’t be able to meet financial obligations a month after losing their jobs.16 So how did we get here? What’s behind the carpe diem spending mentality? America’s Spending Boom Before the meltdown, it didn’t matter as much if we were a paycheck away from disaster. In recent years, most people didn’t even realize they were flirting with disaster, or if they did, they looked the other way.


pages: 362 words: 83,464

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Bob Noyce, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, creative destruction, crony capitalism, David Graeber, deindustrialization, don't be evil, Downton Abbey, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Gini coefficient, Google bus, housing crisis, income inequality, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, labor-force participation, low-wage service sector, Marc Andreessen, Mark Zuckerberg, mass affluent, McJob, McMansion, medical bankruptcy, Nate Silver, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, Plutocrats, post-industrial society, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Silicon Valley, Silicon Valley ideology, Steve Jobs, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, War on Poverty, women in the workforce, working poor, young professional

Walter Russell Mead aptly describes this perspective as a “Downton Abbey vision of the American future.”55 If left unchecked, this trend will change not only our politics but also our consumer culture. In an environment where wealth is concentrated, companies focus on the affluent minority, as opposed to the middle-class mass, which has increasingly limited purchasing power. Demographer Peter Francese points out that the “mass affluent,” which comprises roughly ten percent of households, boosted spending annually last decade at a seven percent rate while overall household growth remained at a mere one percent. Even in the midst of the worst of the recession, it was luxury brands that did best, while those selling to the middle class did poorly.56 In the years between 1992 and 2012, the share of consumption accounted for by the top five percent of earners grew from 27 to 38 percent.57 Ultimately, we are moving to a society where the very few dominate not only spending but also the entire political economy.


pages: 285 words: 86,174

Twilight of the Elites: America After Meritocracy by Chris Hayes

affirmative action, Affordable Care Act / Obamacare, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, carried interest, circulation of elites, Climategate, Climatic Research Unit, collapse of Lehman Brothers, collective bargaining, creative destruction, Credit Default Swap, dark matter, David Brooks, David Graeber, deindustrialization, Fall of the Berlin Wall, financial deregulation, fixed income, full employment, George Akerlof, Gunnar Myrdal, hiring and firing, income inequality, Jane Jacobs, jimmy wales, Julian Assange, Kenneth Arrow, Mark Zuckerberg, mass affluent, mass incarceration, means of production, meta analysis, meta-analysis, money market fund, moral hazard, Naomi Klein, Nate Silver, peak oil, plutocrats, Plutocrats, Ponzi scheme, Ralph Waldo Emerson, rolodex, The Spirit Level, too big to fail, University of East Anglia, Vilfredo Pareto, We are the 99%, WikiLeaks, women in the workforce

In order to actually effect deep and lasting change, those opposed to the current social order must locate another base of power that can credibly challenge the power of incumbent interests. I think the answer lies in a newly radicalized upper middle class. One of the most interesting features of our current political moment is that a significant gulf has opened up between, roughly, the top 40 percent and the top 1 percent, between the middle class, upper middle class, professionals, and the mass affluent and the genuine plutocrats. In fact, the two most energetic and important political movements of the aughts draw their popular constituency from the upper middle class: people with graduate school degrees, homes, second homes, kids in good colleges, and six-figure incomes. This frustrated, discontented class has spent a decade with their noses pressed against the glass, watching the winners grab more and more for themselves, seemingly at the upper middle class’s expense.


pages: 329 words: 95,309

Digital Bank: Strategies for Launching or Becoming a Digital Bank by Chris Skinner

algorithmic trading, AltaVista, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, bank run, Basel III, bitcoin, business cycle, business intelligence, business process, business process outsourcing, buy and hold, call centre, cashless society, clean water, cloud computing, corporate social responsibility, credit crunch, crowdsourcing, cryptocurrency, demand response, disintermediation, don't be evil, en.wikipedia.org, fault tolerance, fiat currency, financial innovation, Google Glasses, high net worth, informal economy, Infrastructure as a Service, Internet of things, Jeff Bezos, Kevin Kelly, Kickstarter, M-Pesa, margin call, mass affluent, MITM: man-in-the-middle, mobile money, Mohammed Bouazizi, new economy, Northern Rock, Occupy movement, Pingit, platform as a service, Ponzi scheme, prediction markets, pre–internet, QR code, quantitative easing, ransomware, reserve currency, RFID, Satoshi Nakamoto, Silicon Valley, smart cities, social intelligence, software as a service, Steve Jobs, strong AI, Stuxnet, trade route, unbanked and underbanked, underbanked, upwardly mobile, We are the 99%, web application, WikiLeaks, Y2K

For example, ABN AMRO organise their customers into five distinct categories: Intensive channel users who use all channels regularly; Personal contact seeking customers, who want advice and face-to-face service; Self-directed people who think they can do everything themselves; Passive hybrid customers who only talk to the bank when they have to; and Inactive channel users who never talk to the bank via any channel The last two categories represent the least profitable and smallest sector for the bank, whilst the first two are the targeted ‘mass affluent’, whilst the mid-category is the majority of the client base. Amazingly, the first three categories all answered the question: I prefer to discuss more serious banking issues in person (89%) and in case of problems, I want to be able to go into a branch and speak to someone (94%). In other words, although the bank knows the branch is dead, the customer does not. This is why, according to research by Forrester in 2012[10], 80% of all current accounts are opened in branches, 75% of Gen Y customers conclude their product purchases in a branch, and 67% of all product sales are made in branch.


pages: 364 words: 108,237

Janesville: An American Story by Amy Goldstein

1960s counterculture, Affordable Care Act / Obamacare, collective bargaining, Donald Trump, job-hopping, mass affluent, payday loans, uranium enrichment, War on Poverty, women in the workforce, working poor, Works Progress Administration

The initial work of converting her corner of M&I bank into BMO Harris is starting to ease, even as her responsibilities at the bank are about to expand. Next month, she will become BMO Harris’s manager in charge of developing teams of “premier bankers” and financial advisors through a swath of Wisconsin that stretches nearly two hundred miles from Green Bay down through Madison and Janesville and into Beloit. Premier banking is offered to BMO Harris customers “in the mass affluent sector,” with savings in the range of $250,000 to $1 million. “At BMO Harris, we believe a higher level of financial achievement demands a higher level of attention,” the bank’s marketing material says. In her work, Mary will be striving to improve service to the well-off. In town, she remains at the apex of the business community, pursuing her considerable volunteer work for nonprofits, attending charity events, continuing Rock County 5.0’s regionally minded efforts to rebuild the local economy.


pages: 401 words: 115,959

Philanthrocapitalism by Matthew Bishop, Michael Green, Bill Clinton

Albert Einstein, anti-communist, barriers to entry, battle of ideas, Bernie Madoff, Bob Geldof, Bonfire of the Vanities, business process, business process outsourcing, Charles Lindbergh, clean water, cleantech, corporate governance, corporate social responsibility, Dava Sobel, David Ricardo: comparative advantage, don't be evil, family office, financial innovation, full employment, global pandemic, global village, God and Mammon, Hernando de Soto, high net worth, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Dyson, John Harrison: Longitude, joint-stock company, knowledge economy, knowledge worker, Live Aid, lone genius, Marc Andreessen, market bubble, mass affluent, microcredit, Mikhail Gorbachev, Nelson Mandela, new economy, offshore financial centre, old-boy network, peer-to-peer lending, performance metric, Peter Singer: altruism, plutocrats, Plutocrats, profit maximization, profit motive, Richard Feynman, risk tolerance, risk-adjusted returns, Ronald Coase, Ronald Reagan, shareholder value, Silicon Valley, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade liberalization, transaction costs, trickle-down economics, wealth creators, winner-take-all economy, working poor, World Values Survey, X Prize

By giving away the bulk of his own $100 billion fortune, plus the other $100 billion handed to him by his old friend Warren Buffett, Gates has helped to save millions of lives and improved the quality of life for hundreds of millions more. He has also inspired many of the world’s growing army of billionaires (there are now 3,500 of them, according to the 2025 Forbes list) to join him in giving their time and money to tackle some of the biggest problems facing humanity. And not just billionaires: a mass-affluent version of Gates’s brand of “intelligent philanthropy” has become a passion of millions at the wealthier end of the world’s ever more prosperous population. Among the guests today are several of his fellow philanthrocapitalists, each of them, like Gates, now a member of the Elders group launched by Branson and Nelson Mandela all those years ago. They had last met at the United Nations special session to learn lessons from their greatest triumph; it was called “Darfur and the Elders: how the genocide was ended.”


pages: 382 words: 120,064

Bank 3.0: Why Banking Is No Longer Somewhere You Go but Something You Do by Brett King

3D printing, additive manufacturing, Airbus A320, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, asset-backed security, augmented reality, barriers to entry, bitcoin, bounce rate, business intelligence, business process, business process outsourcing, call centre, capital controls, citizen journalism, Clayton Christensen, cloud computing, credit crunch, crowdsourcing, disintermediation, en.wikipedia.org, fixed income, George Gilder, Google Glasses, high net worth, I think there is a world market for maybe five computers, Infrastructure as a Service, invention of the printing press, Jeff Bezos, jimmy wales, Kickstarter, London Interbank Offered Rate, M-Pesa, Mark Zuckerberg, mass affluent, Metcalfe’s law, microcredit, mobile money, more computing power than Apollo, Northern Rock, Occupy movement, optical character recognition, peer-to-peer, performance metric, Pingit, platform as a service, QR code, QWERTY keyboard, Ray Kurzweil, recommendation engine, RFID, risk tolerance, Robert Metcalfe, self-driving car, Skype, speech recognition, stem cell, telepresence, Tim Cook: Apple, transaction costs, underbanked, US Airways Flight 1549, web application

There are two other core drivers that need to go into branch design and placement. For branch banking and design, different strategies need to be adopted for customers who are financially and cognitively less resourceful, and those who are wealthier, but time-poor. If you are catering for those customers who are less profitable but also less inclined to use digital channels, you have a cost burden for carrying legacy behaviour. If you are targeting mass-affluent and high-net-worth customers with $100k+ or more in ready cash to invest, the very nature of their busy lifestyles means that coming to a “space” is a luxury they can rarely afford. For many bankers this might seem counterintuitive. The dilemma then is that the most profitable customers you want to get into a branch are increasingly likely to try a direct channel first because their time is their most valuable commodity, which prevents them from seeking out a rich, face-to-face experience.


pages: 349 words: 134,041

Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das

accounting loophole / creative accounting, Albert Einstein, Asian financial crisis, asset-backed security, beat the dealer, Black Swan, Black-Scholes formula, Bretton Woods, BRICs, Brownian motion, business process, buy and hold, buy low sell high, call centre, capital asset pricing model, collateralized debt obligation, commoditize, complexity theory, computerized trading, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, currency peg, disintermediation, diversification, diversified portfolio, Edward Thorp, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, financial innovation, fixed income, Haight Ashbury, high net worth, implied volatility, index arbitrage, index card, index fund, interest rate derivative, interest rate swap, Isaac Newton, job satisfaction, John Meriwether, locking in a profit, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Marshall McLuhan, mass affluent, mega-rich, merger arbitrage, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mutually assured destruction, Myron Scholes, new economy, New Journalism, Nick Leeson, offshore financial centre, oil shock, Parkinson's law, placebo effect, Ponzi scheme, purchasing power parity, quantitative trading / quantitative finance, random walk, regulatory arbitrage, Right to Buy, risk-adjusted returns, risk/return, Satyajit Das, shareholder value, short selling, South Sea Bubble, statistical model, technology bubble, the medium is the message, the new new thing, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, volatility smile, yield curve, Yogi Berra, zero-coupon bond

The profitability of the business declined as price became the primary basis of competition amongst all the dealers. Smarter investors cunningly played them off to get better deals. Dealers began to seek new ways to improve profitability and started to market structured products directly to retail customers, the widows and orphans of legend. Retail customers were now HNWI (high net worth individuals); there was the ‘mass affluent’, surely an oxymoron. Structured product marketers set out into suburbia and strip malls. The logic was compelling – you had less sophisticated clients, the margins would be richer. In short, you could rip them off blind. In Europe individuals, when not dodging tax, were worrying about reduced investment returns. The creation of the euro brought new opportunities. Investors in Italy, Spain and Portugal had to adjust to a sudden drop in returns; traditional double figure interest rates fell to microscopically low single figures.


pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"Robert Solow", 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, disruptive innovation, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low cost carrier, low earth orbit, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, plutocrats, Plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

Russian students in Europe joining American banks, a Malaysian Googler in Africa, and Serbian consultants around the Balkans are all examples of a new generation that finds its calling beyond national boundaries and pledges allegiance to the Independent Republic of the Supply Chain. CITIZENSHIP ARBITRAGE Individuals, much like nations, can multi-align their loyalties in the marketplace of identities. Tycoons hedge against turbulence in their own economies by holding foreign passports even if it is against the law. This global tribe for whom mobility supersedes nationality is growing with the rise of what Credit Suisse calls the “mass affluent” (those with investible assets of up to $500,000). As a result, the citizenship market is booming, with loyalty as much a matter of where one puts one’s money as what passport one carries. It is difficult to think of citizenship as the basis of identity when it is up for sale worldwide, with countries engaged in a tug-of-war to recruit wealthy and talented individuals. European “golden visa” programs from Portugal to Cyprus offer citizenship in exchange for real estate investments that can be sold after five years of guaranteed 5 percent or higher returns: Foreigners are effectively getting paid to trade up to European nationalities.