Stephen Schwarzman: 45 Percent Of World's Wealth Destroyed

Reuters:

Private equity company Blackstone Group LP (BX.N) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.

"Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."

Read the whole story: Reuters

Comments

[Karma7]

Three months before the stock market collapsed in 2008, Stephen Schwarzman, pocketed $684 million from his industry's second IPO -
On the day the World Economic Forum began, Schwarzman said that an “almost incomprehensible amount of cash had evaporated since the financial crisis took hold.”
http://www.howestreet.com/articles/index.php?article_id=8527
http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aWX0tLhaasZM

It did not “evaporate’- .
Schwarzman used 100 million of what he pocketed to have his name carved into the building of New York’s Great Public Library – not once or twice – but 5 times. Our city's 98-year-old beaux-arts building, “The People’s Palace of Learning”, will be renamed as “The Stephen A Schwarzman Building” – in his honor, in return for his 100 million donation to the library - after having scammed billions from the American public http://www.guardian.co.uk/business/2008/apr/25/privateequity.useconomy

It seems Schwarzman has no idea of its priceless value or historic significance as a “ Palace of Learning”. He told Bronx kids that “learning and good grades are over-rated…,” http://www.huffingtonpost.com/2008/03/03/steve-schwarzman-tells-br_n_89668.html

Schwarzman seems to think he owns the Library by putting his mark on building, just like a dog who pisses on the walls of a building as mark of his possession and control.

His name on that cherished landmark defiles it like ludircrous graffiti on a national monument .

[PhilipTaylor]

Don't worry Schwarzman it is safely hidden off-shore or in the Hamptons or CT.

You WS folks told us it was a ZERO SUM GAME so if we lose someone WINS! So the money is somewhere! It is not in our pockets so who is left? Some one is making LOTS OF MONEY!

[TrooAmerican]

"Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed"
Yeah, Schwarzman... went just as you planned it. Now You and Mozillo are teaming up to cash in on the foreclosures, after you cashed in on setting them up to fail.

By the way, for you that dare to blame the common american for wanting something more out of life in this country, you should know that almost all of the loan writers writing fraudulent loans did it on purpose, lied and frauded the customers and were trained to do so.

[PhilipTaylor]

Well SAID TrooAmerican!

[Rog49Thomas]

And personally owned 20% of it so he should know!

[dandypuddin]

If the profits were illusory in the first place, is it really destroyed? Existential economics 101.

[BannedFromCommenting]

Did the money get burned? Or it all was really fake money to begin with??

Or its like water shortages.. there isnt any, it just moves around to a different place, be it downstream, in the clouds or whatever.. Its just lacking in an area that needs it.

So 45% wealth cannot be "GONE" its just somewhere else.

[schatsie]

Really that is not true... Think about the real estate market... The prices of the houses went up whether or not there were debts associated with them... That is a house that someone lived in bought in 1975 for 18,000 is now worth 180,000 and has no debt... The value of that asset is directly tied to no money...

I do agree with you about Madoff's assets, the money came in and went out, there should be a money trail and an audit trail and I think his income taxes should be scrutinized....

[totalliberal]

Then he suddenly had an epiphany and told the truth.
" We destroyed our own wealth because we CEO's became so unbelievably greedy. I don't understand why we destroyed our own money but it has to have something to do with Democrats and Socialism. Anyway, you guys better beware. As you have seen we will burn our own money to get back at anyone who wants to stop us from being greedy....­..........­. I better shut up, because I'm not making any sense. Of course that's what caused this problem to begin with."

[screwedrus]

That's because 45% of the wealth was a total fabrication.

[freddiefreeloader]

This is the perfect time to rent a house.

[joeyfoto]

Stephen Schwarzman now says: "45 Percent Of World's Wealth Destroyed," in the last 18 months. When i playback the things he was saying two years ago while he was soliciting capitol for Blackstone Group, it makes me think of something Camus said about love: "We always deceive ourselves twice about the people we love - first to their advantage, then to their disadvantage." I think this works for economics as well. Over the course of time, pessimism has worked no better than optimism, as investment advice.

[ObjectiveRealist]

Those assets were not "destroyed," they were fictional in the first place and have still not dropped "on paper" to their true free market value. Housing especially takes only a few months to produce and remains badly over-priced; the correct value of a mortgage which cannot be paid is zero.

quote:
U.S. Treasury Secretary Timothy Geithner plans to unfreeze credit markets through a new program that will combine public and private capital in a fund that would buy bank toxic assets of up to $1 trillion.
/quote
... in order to preserve the fiction that Wall Street's value to the people is commensurate to their self-assessed monetary value, circa June 2007.

quote:
"What's pretty clear is that, if you were looking for one culprit out of the many, many, many culprits, you have to point your finger at the rating agencies," he said.
/quote
Complexity is the fig leaf of the complicit. Phil Gramm, George Walker Bush, Rick Rubin, Henry Paulson, Bob Ney, Gary Gensler (sp?) and their fellow bribe-takers in Congress, Treasury and SEC, and their corporate patrons did this.
http://www.msnbc.msn.com/id/3036677/#29604900

[KillTheMessenger]

Exactly. But you need not leave out the greedy homeowners who thought they can cash in on their homes because they neighbors did, too.

:-)

[JScott]

And in some way folks like him are responsible for that destruction.

[OBXartist]

Baloney! As others have said here, that's because the wealth Schwarzman refers to wasn't real. It was some massive group delusion. It was obvious years ago that this wealth inflation was just that...inflated. Nearly five years ago a half acre of unimproved, residentially-zoned land near me sold for $70,000. Just seven months later it was re-sold for $135,000. Just two or three years earlier, similar sized lots in this area had been selling for $35,000-$40,000. That's a tripling of the value of those properties over the course of three years, and you know that that is just not right. There is such a thing as inherent value, and barring the discovery of oil or gold on the land, there's simply no rational reason for that increase in valuation. And that happened throughout our economy from prices for housing to the prices of companies involved in corporate mergers. It was all fantasy.

[walk0nwalls]

To ye people who are all like " but our money isn't even real!"

It's not. That's what's frightening. This is literally all psychic money.

That said, about half of that psychic money has disappeared.

[cyrano1]

So true!!! And if Madoff would only open up, we might get a better explanation as to how all of this was constructed! I suspect your psychic money would require psychic credential­s/credibil­ity, right?

[KillTheMessenger]

Ironically, Madoff was one of the few people who dealt only in real money. He took a million bucks from one person and paid 900,000 to another. The man didn't destroy any wealth because he never invested!

:-)

[freethinking moderate]

Isn't it more likely that the claimed 45% lost wasn't even real wealth to begin with, just smoke and mirrors of illegal accounting?