Here are a couple charts that go nicely together, the first coming in this presentation by David Rosenberg and the second from this new Gallup survey on stock ownership.

Thanks in part to the world’s central banks, a widening gap in income and wealth between rich and poor is now a worldwide phenomenon and some of the most extreme examples are now seen in Asia, for example Mumbai Slumscrapers on a recent episode of HBO’s Vice.

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Peter Schiff of Euro Pacific Capital throws a wet blanket over Friday’s jobs report and new record highs for U.S. stocks in this appearance on CNBC last week.

There’s a lot to disagree with here such as another call for a dollar crash (against what?), but one interesting claim made early on is that part time restaurant hiring due to changing health care rules has made the job numbers look better than they really are.

Labor Department data shows that restaurant workers account for 7.5 percent of nonfarm payrolls but this group has contributed nearly 20 percent of the payroll gains so far in 2013 and data on part-time workers only shows up in the broader U-6 measure of “under-employment” that just rose from 13.8 to 13.9 percent as the narrower jobless rate fell.

The Rich Get Richer – Part 63

The results of this new Pew Research study on changing wealth in America shouldn’t be too surprising as it covers the time period from 2009 to 2011 when equity markets were rebounding from the 2008 financial crisis and the housing market was still struggling.

Pew Wealth StudyDuring the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%, according to a Pew Research Center analysis of newly released Census Bureau data.

From 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.

These wide variances were driven by the fact that the stock and bond market rallied during the 2009 to 2011 period while the housing market remained flat.

Affluent households typically have their assets concentrated in stocks and other financial holdings, while less affluent households typically have their wealth more heavily concentrated in the value of their home.

They note that during the period they studied, U.S. stocks rose by 34 percent whereas home prices actually fell by 5 percent, meaning that, if home prices continue to rise, the lower 93 percent should see a pretty good boost to their net worth the next time around.

Nonetheless, the message remains the same. Paraphrasing Mel Brooks, “It’s good to be rich”.

The Retirement Gamble

A new Frontline documentary premiered last night dubbed The Retirement Gamble and, as is the case for anything Frontline produces, it is well worth a look as it sheds some much needed light on the retirement industry and mutual funds with high fees.

Watch The Retirement Gamble on PBS. See more from FRONTLINE.

The gist of the story is that fees are high, hard to figure out, and oftentimes not disclosed to people who, basically, have no choice other than their employers’ 401k plan where managed funds with high expense ratios are pushed rather than low-cost index funds.

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Dow 16,000!?

This chart from John Hussman’s weekly commentary has been popping up all over the place and it seemed worth sharing here this morning after G20 officials, over the weekend in Washington, have given a clear green-light to more central bank monetary largess.

Dow 16,000

The Barron’s article is here (alt. link here) that begins:

The stock market isn’t the only thing that has set records this spring. Barron’s semiannual Big Money poll of professional investors also is setting a record — for bullishness, that is.

A trio of new surveys from Gallup point to a rapidly changing outlook by Americans on such topics as the economy, housing, and investment classes in general, real estate and precious metals in particular. First, after holding steady in recent weeks as other measures of consumer confidence faded, this Gallup survey is now showing weakness too.

While they may not feel as good about the economy in general, rising home prices have Americans feeling confident about this trend continuing according to this poll.

Given the above, it should come as no surprise that Americans’ preferred asset class is no longer gold, but housing, as detailed in this survey. Since this poll was conducted prior to the early-April sell-off in precious metals, look for recent trends to accelerate next time.

We’re pretty good at noticing trends and projecting those trends into the future…

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