"High Net Worth Individuals (Rich Folk) Lost $7.3 Trillion"

"The global financial crisis has caused the assets of the world's high-net-worth individuals to fall by an unprecedented 19.5% to $32.8 trillion. Everyone knows 2008 was an extremely tough year, with the global financial crisis shaving off hundreds of billions of dollars in global wealth. The latest World Wealth Report attempts to measure those losses, at least for the world's richer population which bore the brunt of the impact of the crisis.

The wealth of the world's high-net-worth individuals (HNWIs) fell by 19.5% to $32.8 trillion in 2008 from $40.7 trillion in 2007. That's an unprecedented decline in HNWI assets in the 13 years that Merrill Lynch and consulting firm Capgemini have collaborated on this report. All regions suffered losses in HNWI assets, with North America (down 22.8%), Asia Pacific (down 22.3%), and Europe (down 21.9%) leading the decline. The US remains the single largest home to HNWIs, with a population of 2.46 million in 2008 (down from 3.019 million in 2007). Also a record is the 14.2% drop in the population of HNWIs worldwide to 8.6 million in 2008 from 10.1 million in 2007. North America also suffered the most in terms of the number of people that fell off the rich list (down 19%), followed by Europe (down 14.4%) and Acsia (down 14.2%). The fate of the ultra-rich was much worse, with their population down by 24.6%.

Stock market losses were largely responsible for the loss of wealth. Although HNWIs have a diversified portfolio that includes financial assets from property to art, the bulk of their wealth has been diverted to equities over the past years. Global stock market capitalisation plunged 49% to $32.6 trillion in 2008 from a historic high of $63.4 trillion, which is a flashback to levels last reached in 2003. Valuations of equities "turned from challenging to extremely distressing" in 2008 and how share prices perform from here on will have a major effect on wealth trends because the relationship between HNWIs and stock markets is "very correlated", says Francis Liu, market managing director for Greater China at Merrill Lynch Global Wealth Management.

This latest report brings the HNWI asset and population levels back to their end-2005 levels, virtually wiping out any collective gains made in 2006 and 2007 when stock markets worldwide were mostly in a state of delirium over their extended rallies. Merrill Lynch defines HNWIs as those with net assets of at least $1 million (excluding primary residences and consumables) and ultra HNWIs as those with net assets of at least $30 million."

- http://www.businessweek.com/globalbiz/content/jun2009/gb20090626_735497.htm

My, my, how these poor unfortunates are suffering, down to their last $100 million...