400 richest Americans now worth $2 trillion

CNBC's Robert Frank.
The 400 richest Americans are now worth a combined $2 trillion, according to Forbes. That sets a record, Forbes said, and marks a jump from last year's total of $1.7 trillion.

The average net worth of a Forbes 400 member is now $5 billion—also the highest ever. And the costs of being part of the 400 Club rose to $1.3 billion.

But it's the $2 trillion number that remains the most interesting. The 400 richest are now worth more than the GDPs of many nations—and they are worth more than most governments spend or tax.

Here is some perspective on what the 400 richest Americans are really worth.

$2 trillion is more than the combined net worth of half of all Americans. The bottom half, of course.
$2 trillion is more than the annual GDP of Italy, Mexico or Canada.
$2 trillion is equal to the Federal Reserve's holdings of publicly traded U.S. Treasurys.
$2 trillion is the estimated size of the underground economy, mostly unreported income.
$2 trillion would fund all government spending through July of this year.
$2 trillion is equal to about two-thirds of all taxes to be collected in the U.S. for 2013.
$2 trillion would pay for all of the existing home sales in the U.S. in 2012 AND 2013 year-to-date.

Marc Faber Sees Further Downside

There's plenty of room for the stock market to decline, noted bear Marc Faber said Thursday on CNBC. "Yes, I see further downside," said the editor of "The Gloom Boom & Doom Report."

However, Faber said that there were plenty of reasons for stocks to head lower other than what the Federal Reserve was doing in terms of quantitative easing. "I think the markets are worried about something else," he said on "Fast Money."

Faber noted that interest rates have been rising for a year, pointing to the 30-year U.S. Treasury bond and the 10-year U.S. Treasury note bottoming out in July. "So, we've been in an uptrend in interest rates," he added. But that wasn't the whole bear case. "The Chinese economy is much weaker than the official statistics suggest," Faber said.

"My view would be that at the present time, the Chinese economy is growing at something like 4 percent per annum, and without huge credit expansion there would probably be no growth at all."

Other emerging market economies were also poised for poor growth, he added. The outlook for gold and other metals were not great, either.

"Technically, commodities look horrible," Faber said, adding that for precious metals "some technical factiors would suggest that we're approaching at least an intermediate low." Read more >>

Anonymous search engine gets boost From PRISM scandal

DuckDuckGo, a search engine that claims it gives its users complete anonymity, has seen a 33 percent increase in users since the NSA news broke over a week ago, said founder and CEO Gabriel Weinberg on CNBC's Closing Bell Tuesday.

"We always knew people didn't want to be tracked, but what hadn't happened was reporting on the private alternatives and so it's no surprise that people are making a choice to switch to things that that will give them great results and also have real privacy," Weinberg said.

Basically, most tech companies store user information—like searches, email account data, searches on social platforms—in data warehouses, so that it can be accessed again. But DuckDuckGo opts to throw any of that information away and not to save it, Weinberg said.
While the default settings on the search engine are set to not track users' searches or any personal information, if a user changes these settings, information about the user could still leak out, according to the company's privacy policy. Read more >>

World Unemployment to Hit Record High in 2013

World unemployment could top record levels this year and continue rising until 2017, the International Labour Organization (ILO) said on Tuesday in its annual employment report. 2009 currently stands as the worst recorded year for world unemployment, with 198 million people across the globe without work.

In its 2013 Global Employment Trends report, the ILO forecasts unemployment numbers will rise by 5.1 million in 2013 to reach 202 million, topping 2009's record. The report also predicts unemployment will rise further in 2014 to reach 205 million.

"Unemployment remains as dire as it was during the crisis in 2009," Ekkehard Ernst, chief of the employment trends unit at the ILO, which wrote the report, told CNBC.

While the crisis may have originated in the developed world, the report noted that 75 percent of 2012's newly unemployed came from outside it, with East Asia, South Asia and Sub-Saharan Africa being the worst affected.

Ernst attributed this to the "spillover effect" of weak growth in advanced economies, and in particular, the recession in Europe.

"The main transmission mechanism of global spillovers has been through international trade, but regions such as Latin America and the Caribbean have also suffered from increased volatility of international capital flows," the report said. Read more >>

Obamacare Could Double Health Care Premiums: Aetna CEO

To provide all Americans with health insurance, premiums will have to rise to pay for it, Aetna CEO Mark Bertolini told CNBC's "Closing Bell" on Wednesday.

"If we're going to insure all Americans, which is a worthy and appropriate cause, then somebody has to pay for it," Bertolini said of the expected premium increases under Obamacare.

Bertolini said that insurance premiums could double in some places just on the basis of what types of policies people buy today.

He also said that when Obamacare is fully implemented, it won't start the way people had hoped and it won't be cheaper.

Over the longer run, the key to bringing down premiums will be controlling health care costs, he added. "It'll be fits and starts, but we'll get there," Bertolini said.

Higher premiums also will not necessarily mean higher margins for Aetna. "The people coming into the system will be sicker because they have not used services," Bertolini said. "So in the initial part of this program it will cost more to take care of people because they have been going without health care for so long." Read more >>

Shiller: Housing Recovery Could Take 50 Years

From housing starts to home prices, renowned economist Robert Shiller acknowledged "there are a lot of positive signs" for the U.S. housing market right now, but told CNBC Wednesday it's still unclear if a recovery is actually in place.

After all, Shiller noted the housing futures market for single-family homes was only "mildly optimistic" before superstorm Sandy struck the U.S.'s East Coast with expectations for just 3 percent growth per year over the next four years.

"If it goes up 3 percent a year that means that, in real terms, housing is just about flat," Shiller said. "It's not a recovery to write home about."

Shiller is probably best known for helping create the Standard & Poor's/Case Shiller index, a widely-followed measure of housing prices, which recently revealed that U.S. home prices rose 2 percent in August compared to one year ago. Meanwhile, the NAHB/Wells Fargo Housing Market Index - a survey of homebuilders - recently climbed sharply higher. Read more >>

More Bank Layoffs Coming: 'Bad as I've Seen It': Whitney

Banks have been behind the curve in terms of downsizing, with their employees paying for it now through a rash of furloughs, analyst Meredith Whitney told CNBC.

The industry has seen a recent spate of big layoff announcements, including 16,000 from Bank of America alone. Though banks already have jettisoned about half a million workers since the beginning of the financial crisis in 2008, Whitney said more are to come as the shrinking big institutions struggle to compete.

"The banks have been overstaffed for a really long time. If you think about all of the other industries that have gotten more competitive, more profitable, the banking sector and the insurance sector have been laggards behind it, and they employ a lot of people," Whitney said on "Closing Bell."

New banking regulations, particularly the Dodd-Frank financial reform bill, have seen the banks shrinking in order to avoid the too-big-to-fail syndrome that caused the industry to push the country into recession. Read more >>

Euro Zone Will Pay ‘Terrible Price’: Jim Rogers

A “terrible price” will be paid for the euro zone crisis eventually, whether the European Central Bank embarks on mass bond purchases or not, Jim Rogers, investor and co-founder of the Quantum Fund with George Soros, told CNBC Monday.

Rogers said: “These guys have been saying the same old garbage for a long time. It’s not a game-changer – it’s good for the market for maybe a month. The debt keeps going higher and higher and eventually we’ll all going to pay a terrible price.”

He warned that the market rally, which many have seen as an opportunity to get back into riskier assets, would only be a short-term rebound.

“It’s not an opportunity to make money for me. This is not good for the market and it’s not going to last. Every three or four months they zone politicians have a summit and they say: Ok guys, everything is ok now. The market goes up. But we’re getting a little tired of this and the market is getting a little tired of this,” Rogers argued. Read more >>

California Farm Labor Shortage 'Worst It's Been, Ever'

There's a different sort of drought plaguing California, the nation's largest farm state. It's $38 billion agricultural sector is facing a scarcity of labor. "This year is the worst it's been, ever," said Craig Underwood, who farms everything from strawberries to lemons to peppers, carrots, and turnips in Ventura County.

Some crops aren't get picked this season due to a lack of workers. "We just left them in the field," he said. The Western Growers Association told CNBC its members are reporting a 20 percent drop in laborers this year. Stronger border controls are keeping workers from crossing into the U.S. illegally, and the current guest worker program is not providing enough bodies.

"We have 100 fewer people this year," said Sergio Diaz, who provides workers under contract for growers. "We're having difficulty finding people to do this work." The lack of workers is forcing farmers to pay more. In one of Underwood's fields, pickers are harvesting peppers for $9.25 a hour, or $5 a bucket, whichever is more. Craig Underwood said his workforce is aging and starting to retire, and no one is coming in to replace them. Read more >>

CNBC’s Ratings Lowest Since 2005

CNBC likes to tout its tagline that it’s “First in Business Worldwide.” And while it may be true that the financial news network has the biggest reach among its peers, viewers continue to slip through CNBC’s fingers.

In case you don’t like mixed metaphors, I’ll just give it to you straight: Nielsen stats show CNBC’s ratings for the quarter were the lowest since 2005. That says it all about where investors are at these days.

CNBC, part of NBC Universal and now owned by Comcast, is one of the biggest outlets in business news, reaching nearly 100 million households in the U.S. and countless offices, restaurants and hotels. But reach doesn’t matter in a battered market like this and high uncertainty about the eurozone, American unemployment and other issues. A lot of folks have no money, and many more have absolutely no interest in investing news right now. Read more >>

Fireworks: CNBC's Bartiromo vs. Barney Frank On Banks

Source
Barney Frank to Bartiromo: "Maria, if you want to have a serious conversation without mocking me ..."

Frank: "I don't take kindly to being called a non-adult. You know, you remind me sometimes of what your colleague Joe Kernan said when I tried to get the conversation more thoughtful -- he said, 'Oh this is cable TV, not C-SPAN.' I want to talk seriously about the issues. You keep changing the subject."
Scroll down...
 

Financial ‘Armageddon’ Will Happen Despite EU Deal: Rogers

cnbc.com
Even as markets cheered the agreement by European leaders to allow the direct use of the bloc’s bailout funds to recapitalize struggling banks, well-known investor Jim Rogers told CNBC the move does nothing to help solve the region’s biggest problem, which is its high debt levels.

“Just because now you have a way to get them (the banks) to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said on Friday.

“People need to stop spending money they don’t have. The solution to too much debt is not more debt. All this little agreement does is give them (banks) a chance to have even more debt for a while longer,” he added.

More Bank Job Cuts on Way as "Game's Up"

Credit Suisse is rumored to be the latest major bank set to announce large job cuts, and it is unlikely to be the last, Peter Toogood, head of investment at Old Broad Street Research, told CNBC Tuesday. “The game’s up. There’s no transactions, M&A isn’t happening, this is what deleveraging looks like. It’s a decade of austerity and that makes people feel more unlucky,” he said.

“Investment banks are going to struggle. There’s not going to be mass lending going on. The leverage game is over and people can’t accept it. Volumes are declining en masse and their headcounts are too high.” Trading volumes have declined overall since March 2009, with falls in U.S. stock trading volumes in each month this year. In April, there were 6.5 billion trades on average per day, compared with 12.1 billion at the market’s height in 2008. Both the New York Stock Exchange and Nasdaq reported that trading fell in the first quarter of 2012.

Lending has also shrunk, both because of worries about bank capitalization and because of reluctance to borrow money on the part of companies. When acquisitions happen, they are often based on cash rather than leverage, which means that banks have a smaller size of the pie. Moody’s mass downgrade of the world’s biggest investment banks last week showed the increasing worries about the sector. Read more >>

Marc Faber: Global Recession Dead Ahead

 

Faber warns that economies of the world may be on the brink of a serious slowdown. Faber indicated that while investors remain focused on Greece and Europe – other issues, bigger issues are looming.

And they’re more threatening. “As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.” The latest reports from Beijing would support Faber's assertion. The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.

Faber also cited weakness in the high-end as another key catalyst that’s very negative. “There are more and more stocks that are breaking down – economic sensitive stocks and companies that cater to the high-end,” he said. "That suggests to me the economy is likely to weaken and the huge asset run is likely to come to an end with significant asset deflation.” Read more >>

Factory Orders Post Biggest Decline in Three Years

CNBC reports new orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, government data showed on Wednesday.

The Commerce Department said orders for manufactured goods dropped 1.5 percent after a revised 1.1 percent rise in February. Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February. 

Zero Hedge claims the prior February increase of 1.3% was revised lower to 1.1%, netting out as a negative two month change. "Where this number was troubling is that this 2.6% swing brought the index to its biggest decline since March 2009 when the pumping of trillions started"

We Are in Age of ‘Late Great Depression’: Shiller

The world is in a state of “late Great Depression,” well-known economist and author Robert Shiller told CNBC Monday.

The Yale economics professor, who helped devise the Case-Shiller index for housing market trends, and famously called the dotcom bubble of the early 2000s and the housing market bubble later in the decade, told “Squawk Box Europe” that the world is in a “new age of austerity.”

“Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller said. Shiller, the co-creator of the Standard & Poor's/Case-Shiller home price index, also said there would be no housing rebound for a generation.  More...

Realtors: We Overcounted Home Sales for Five Years

Image via WikipediaData on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

"We're capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list." More...

US to Experience Stagflation Worse Than 1970s: Jim Rogers

Image via WikipediaThe U.S. economy is likely to experience a period of stagflation worse than the 1970s, which would cause bond yields to spike, commodity bull Jim Rogers told CNBC on Friday in Singapore. Rogers said governments were lying about the inflation problem and the recent rally in Treasurys was a bubble.

"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down."

Between 1974 and 1978 average inflation in the U.S. was at 8 percent, while unemployment hit a peak of 9 percent in May 1975. Currently, unemployment is at 9.1 percent while CPI is at 3.8 percent.

Rogers believes inflation will get much worse this time because, he said, in the 1970s only the Fed was printing money, whereas now many global central banks have been easing monetary policy. More...

Marc Faber: Obama's Job Package 'a Complete Joke'

Image by twid via FlickrThe package is “another complete failure of Keynesian economics and corrupt interventions,” Faber told CNBC.com on Friday morning.

Other economists have welcomed the plan as it attempts to boost employment.

Faber's major problem is that governments around the world should be attempting to cut spending, not spend more.

“This all amid talk of deficit reductions,” said Faber. The package is a “complete joke.” More...

Gold May Top $6,000, Silver $600: Asset Manager

Image via WikipediaGold prices may reach $6,200 per ounce in a bull run which will “end all major bull markets,” Urs Gmuer, asset manager at Dolefin, a Swiss investment advice firm, told CNBC.

Gmuer’s prediction is based on analysis of the last major gold boom of the 1970s, during which gold prices rose from $35 per ounce to $850 per ounce. Gmuer said that in the current bull run, prices would be pushed upwards by a protracted period of global economic difficulty—potentially lasting years—during which investors would continue to search for so-called safe havens.

“Gold prices have risen over the last few years, as the macroeconomic picture has become worse. The deterioration of the fundamental situation has now gone even further.

“Purchases by investors of gold will be based on fears of systemic risk or banking crashes,” Gmuer said. More...