Job and wealth losses have compressed tax revenues, and stimulus spending has padded the numbers on the expenditure side.
Those sanguine about the impact of large wealth losses, he notes, need only consider the current events in Albania.
In fleeing higher-risk assets these investors are trading in the possibility of loss for the certainty of eventual real-wealth losses in traditional fixed-income securities.
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But it went on to list a litany of headwinds from job losses and lost wealth to tight credit.
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"Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth and tight credit, " said the Federal Reserve in its assessment Wednesday.
Losses in U.S. wealth and self-confidence have been massive, with job conditions still worsening.
Hence, the theory says that people will not be averse to risks involving monetary gains and losses that do not alter lifetime wealth enough to affect significantly the marginal utility one derives from that lifetime wealth.
Disallowing all but a few investors the opportunity to get into the financial markets at a point where the potential to create wealth is at its greatest, while the threat of catastrophic losses has been greatly diminished.
Some Brazilian senators attempted to strike a compromise by amending the legislation to have more of the oil revenues collected by the federal government redistributed to the oil-producing states to compensate them for their losses should a new plan be implemented to spread the oil wealth across all states.
An estimated 28 percent of wealthy real estate investors faced substantial, double digit losses in the housing market last year, according to the latest annual Chinese wealth report from the Boston Consulting Group and China Construction Bank Corp.
Total economic losses from weather-related disasters are higher in developed countries with more property and wealth at risk.
With the advent of UEFA Financial Fair Play and record losses, common sense would dictate that the clubs should use their new (additional) wealth as a way to re balance operations.
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When Bryan Hopkins, president of Hopkins Wealth Management Group, noticed all the volatility in the market, he encouraged his clients to harvest their losses multiple times a year.
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