There is no numerically specific definition of a crash but the term commonly applies to steep double-digit percentage losses in a strong market index over a period of several days. Whether you realize a direct or indirect impact, the recession affects you in one way or another. It’s become a dangerous snowball that began with the weeding out of weak or overexposed businesses. As USA faces a visible recession in current times, it is evident that economists are in overdrive to review the fiscal statistics and give expert opinions. The stock markets have already created a panic situation in the country. The biggest lenders are now facing a cash crunch and for the first time they are also admitting it. Recessions have the tendency to touch sore spots of business. Those which are no longer viable are shut off. Even the strongest feel the cracks in the face of an earthquake. The markets are disrupted and the effect is shown by even the millionaires.
Of U.S. households worth $1 million or more, 55 percent are concerned they will not have enough assets to maintain their lifestyles. Most of them are of the opinion that they have reduced all sorts of extra expenditures weather on cars, clothes or Jewelry. Over seventeen percent of the millionaires took hits to their portfolios of more than 40 percent. An internet report conducted by an organization revealed that over 60% millionaires are unhappy with their financial advisers and they will discontinue giving any work. Millionaires have blamed the government and the Wall Street for the current situation.
With the market crunch, it of course has some intense effect on the inflation rate, which is not good for anyone, not even for millionaires. Less money coupled with higher costs means dangerous times. Because of the credit crisis, millionaires are facing difficulty getting approved for more loans or credit from the bank for their new ventures. Ken Lloyd, 47, Vice President at Morgan Stanley said, “I never imagined a financial Armageddon would happen in my lifetime and I think the forces of evil are winning.” He recently bought his retirement home, a 100 year old Craftsman, in San Diego and wonders how he’s going to pay for it. He ponders out loud how many companies will approach flat-line before it’s all over. In a protracted recession only the companies with strong brands and lots of cash on their balance sheets will have sustainability.
More than 75% of the millionaires are today of the opinion that they will be more aggressive in their financial dealings, negotiating harder than ever with vendors, customers, employees and business partners. They are of the view that they will leverage their personal and professional networks more than ever in order to persevere in the face of economic adversity. Some experts believe that there is a 20-25 percent decrease in the stock market left to go. As the value of the dollar falls, the American dream is going bust for many. Whether it is the shoe maker or the food chain or cola giants or even real estate developers, the earning potential has been cut.
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