Market Factors: Three reasons the rich are still getting richer

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Market Factors,Marketfactorsnewsletter

Plus, the dark side of an economic soft landing

With this edition we detail the ongoing insanity of U.S. wealth inequality and how Canada is following the trend. Also, a CIBC economist finds the dark side of an economic soft landing and two new white papers show that the rise of sports gambling is affecting stock market liquidity.Wealth concentration is not a new trend but few commentators have offered an explanation as to why it’s happening, beyond waving at it with inane terms like “late-stage capitalism.

Wealth disparities are also apparent by age cohort. Millennials own roughly nine per cent of U.S. wealth at an age when Boomers owned 20 per cent. Americans under 40 years old own seven per cent of assets now versus 12 per cent in the late 1980s. This makes intergenerational animosity explicable. The strategist lists globalization and the subsequent developed world de-industrialization as another reason for financial inequality. Manufacturing moved to China, Vietnam and, for the auto industry Mexico, leaving developed market workers with much lower paying employment.

Wealth concentration in Canada is less of a problem but it is getting worse. Earlier this year, Statscan reported that the wealthiest 20 per cent of Canadians own 67.4 per cent of assets while the bottom 40 per cent own 2.8 per cent.I’ve written lately but I’m fascinated by the magnitude of U.S. financial polarization. I also believe this era will be known by these trends in future history books.was ostensibly about commodity prices treading water.

 

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