In a post I wrote yesterday, "Who're You Gonna Believe?" I highlighted a CNN/Opinion Research Corp. poll that revealed 79 percent of Americans believed the U.S. was already in recession. My guess is that those who allegedly know best -- you know, the "smart money" on Wall Street and our "leaders" in Washington -- dismissed the results, because they assume the average citizen doesn't really understand such matters.
Today, however, brings word from the the Wall Street Journal's Real Time Economics blog that the "Wealthy See Recession as Optimism Flags." I guess that makes it real now, right? Maybe that's the reason why the stock market sold off today -- equity traders are suddenly paying attention because those who have the money say that things are looking pretty dodgy.
Whatever the case, it seems like a solid majority of Americans, whether rich or poor, are well and truly aware of something that your average investor hasn't quite picked up on. I suppose a cynic might say that Mr. Market wanted to make sure they were 100 percent invested before the next leg of the bear market began -- lol, eh?
Anyway, here is the report:
Nearly 80% of affluent Americans believe a recession has already hit the U.S., and optimism about the U.S. is at a record low among the well-to-do, according to the Annual Survey of Affluence and Wealth in America by American Express Publishing Corp. and Harrison Group.
“Results demonstrate that America’s ‘leadership cadre’ and successful households believe strongly that we are in a recession. Moreover, confidence in themselves and America’s prospects have fallen six or seven percentage points since December and over 30 points in the past three years,” said Jim Taylor, vice chairman of Harrison Group, a market research and strategy firm in Waterbury, Conn.
Four in five polled in the survey, which examined the opinions of 638 households representing the wealthiest 10% of the U.S., said this perceived recession resulted from the “free and easy” availability of debt, with Wall Street and Washington equally to blame.
Survey respondents, who have an average discretionary income of $342,000, aren’t highly sensitive to recent economic shocks, but the poll found that they are still the same “emotional recession.” As a result they are cutting debt, saving more and scrutinizing spending.
Optimism in America has waned in 2008, with only 24% upbeat in April, down from 30% in December.
The affluent are more optimistic about their own prospects, but still less so than in the past. In April, 62% of respondents were upbeat about their own households, down from 70% in December and 78% in 2006.
The largest worries in the poll concerned the country’s leadership, with 66% of the 638 respondents citing this issue. Other widespread worries included the collapse of the dollar, at 61%, and the war in the Middle East, at 57%.
Six in 10 respondents believe there can be no rebound without a new president. John McCain leads the current field of candidates among the affluent with 37% support, followed Barack Obama at 20% and Hillary Clinton at 15%.
Comments