The World's Money Went Poof!

"This is unprecedented in our lifetime."

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    NEWSLETTERS

    �� Josh Westrich/zefa/Corbis
    Burned U.S. Dollar Bill --- Image by �� Josh Westrich/zefa/Corbis

    Private equity group Blackstone Group LLP confirmed our worst fears, the credit crisis has left us broke.

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

    He says credit agencies are to blame for the wipeout.

    Those agencies have been under the microscope ever since it became clear they were awarding the coveted "AAA" rating for bonds that were pretty much junk.

    Schwarzman says too many people bought into the agencies rating system.

    The other culprit was mark-to market accounting rules. Those ask financial institutions to price assets based on an estimation of what they would be worth on the open market.

    He did offer a bright spot, in the form of investment advice. He suggested buying into cyclical names for long term growth.

    Read more about this here.