Quotes from book-

Cycles of wealth are now much faster and more extreme. The rich are a new “Potemkin Plutocracy” and the important lessons and consequences are brought to light of day in this engrossing book.

Not only do they control more than a third of the country’s wealth, their increasing vulnerability to the booms and busts of the stock market wreak havoc on our consumer economy, financial markets, communities, employment opportunities, and government finances. 

How one couple frittered away a fortune trying to build America’s biggest house —90,000 square feet with 23 full bathrooms, a 6,000 square foot master suite with a bed on a rotating platform—only to be forced to put it on the market because “we really need the money”. 
 
• Repo men who are now the scavengers of the wealthy, picking up private jets, helicopters, yachts and racehorses – the shiny remains of a decade of conspicuous consumption financed with debt, asset bubbles, “liquidity events,” and soaring stock prices. 

• How “big money ruins everything” for communities such as Aspen, Colorado whose over-reliance on the rich created a stratified social scene of velvet ropes and A-lists and crises in employment opportunities, housing, and tax revenues. 

• Why California’s worst budget crisis in history is due in large part to reliance on the volatile incomes of the state’s tech tycoons. 

AND the recent fires…Jumbo mortgages

In the affluent Los Angeles neighborhoods scorched by wildfires, jumbo mortgages on multimillion-dollar homes are commonplace, making the loans a potential pain point for the banks left holding them.

More than 72% of mortgage debt fell into the category of nonconforming — also known as jumbo loans — in the parts of Los Angeles devastated by the fires. That’s nearly five times the nationwide average, and almost triple California’s 26% rate, according to a Bloomberg News analysis of Consumer Financial Protection Bureau data. More than $11 billion of jumbo loans were issued in the affected areas and kept on bank books from 2018 through 2023.

…The banks could face a slew of financial and reputational issues — foreclosing on distressed borrowers, trying to recoup losses from insurance companies should homeowners abandon their obligations, selling off the land to investors and eating any losses if they fail to collect the full value of the real estate.