The rich get richer and the poor …

… get better off, too. The economic growth in the developing world is proceeding at such a pace that the poor probably are better off on average, despite the deep recession in the developed world and the continuing disparity in wealth in different regimes. But this is a story about the other end of the spectrum. For more than 20 years the consultants at Capgemini and the bankers at Merrill Lynch have been studying the trends at the top. This year's version of their World Wealth Report makes pretty clear that there's room at the top, but you have to be doing pretty well to get there. Their annual study has generated a couple of unavoidable acronyms, the HNWIs and the UHNWIs: high net-worth individuals and ultra-high net-worth individuals. And recession? What recession? "Globally, HNWIs' financial wealth grew 9.7% in 2010 to reach US$42.7 trillion, surpassing the 2007 pre-crisis
Peak," the firms report. "The global population of HNWIs grew 8.3% to 10.9 million." The rich are richer. And there's more:

• Rise of Asia: The population of HNWIs in Asia-Pacific, at 3.3 million individuals, is now the second-largest in the world behind North America, and ahead of Europe for the first time.
  
• Europe not particularly slow: Europe's HNWI wealth totalled $10.2 trillion after growing 7.2 per cent in 2010, while Asia-Pacific HNWI wealth was $10.8 trillion, up 12.1 per cent.
  
• North America in fine shape: North American HNWI wealth hit $11.6 trillion in 2010, up 9.1 per cent.
  
• Latam: Latin America saw another modest gain (6.2 per cent) in its HNWI population in 2010 and HNWI wealth rose 9.2 per cent.

These figures have been tracked for years as a measure of the state of the economy and a leading indicator of demand for financial services, in particular hedge funds. A few people even reckon that the roots of the financial crisis lie in the explosion in size of these portfolios over the years. According to this line of thought, demand from individuals for large volumes of low-risk investment with high returns is the demand-side of the excesses in supply of derivatives of mortgage-backed securities. It's worth noting in these figures that wealth is rising faster than the number of wealthy people. In the words of the famous foxtrot from 1921 (tune by Richard Whiting, lyrics by Raymond Egan and Gus Kahn), Ain't we got fun!

Source document: The Capgemini-Merrill Lynch World Wealth Report is a 40-page pdf file.