Wednesday, June 25, 2008

Blast From the Past

Regular readers are probably bored by recent housing events and financial implosions. This from December 2005:

Wednesday, December 07, 2005
Future History 2005-2012

Mortgage rates are low because of the velocity of money and the lack of risk premium built into the cost structure.

"Foreign investment" has always been around. If you were a rich capitalist pig Nouveau Riche ChiComm would you entrust your money to the mainland financial system? NFW. And balance of payments data are broken. No longer reliable. It isn't as bad as it seems.

What long term is gonna kill low interest rates is the necessity to inflate our way out of paying back all the SocSec money that isn't there but that's 8-10 years away.

In order of occurance:
1 Velocity of money slows down (M3 no longer reported, coincidence?)
2 MBSecs fall out of favor in the secondary markets.
3 Commodities pricing finally honestly shows up in the inflation data.
4 The Republicans (re)capitulate on taxes (again).
5 The Fed screws up one time too many.
6 The boomers start drawing down earlier than ever expected at the same time the extended lifespans of their parents so dearly bought both radicalize health care and push assetst onto the markets. Property and stocks, etc.

Welcome to a short history of 2005 through 2012.

So. How am I doing?


wagga said...

Posted on Dec 7th.?

Same as my First wife's birthday.

Should have been a clue.

Casey Serin said...

Wow, December 2005... before I had committed any overtly felonious acts. Back then I was a shiftless slacker who mooched off my parents and friends, and who had a goal to get out from underneath their roof once and for all.

How far I've come since those dark days... ;-)

Funny Circus Bears said...

Do you know if Lou is ok?

Although it is odd that he is suddenly not blogging after many years, the real concern is - is he alright?

Jean ValJean said...

@wagga: Dec 7th? A day which will live in infamy?

Jean ValJean said...

@FCB: you're right. His blog account is closed, and so is the channel he used on youtube.

Paging Lou! Paging Lou!

Peripheral Visionary said...

Not bad, Rob. I do think the growing gap between (limited) supply and (virtually unlimited) demand in healthcare for seniors will take a few years to reach critical mass, but the direction is inevitable. I typically am not an end-of-the-world-is-nigh person, but I reluctantly agree that the healthcare system is headed for something resembling a collapse.

One other point on the Boomers: they're not going to retire any time soon. The wave of retirement is a myth, the solid majority of them are not ready for retirement and may not ever be. A few government workers (from the Federal level or the few stable municipalities) will retire, the rest will sell what few retirement assets they have as they try to finance a lifestyle they really can't afford. But most will continue to work, because they have to.

That's bad news for the older generation, but it's also bad news for the younger generation, as old people staying around will ossify the company hierarchies. Especially as the job market dries up, people will become very inclined to stay put in their current position, which means that vacancies will be few, and promotions will be correspondingly difficult to get.

Welcome to the gerontocracy.

Rob Dawg said...

Thanks I am particularly proud of calling the MBC secondary collapse in Dec '05. Whocoodanode?

The burden of civil servants in retirement is going to be huge. I think much larger than you indicate.