Replies to post #116362 on Zeev's Turnips Patch-No Politics (ZEEV)

[Smart_Money]

I don't believe it for a minute. Pure Hogwash.

[urmygold1]

its true ...social security and medicare were the bag of goods..the free lunch....that was sold to us by FDR and LYNDON JOHNSON ...government workers until Reagan NEVER had to pay for social security and medicare...but they still received all the FREE BENEFITS(money has to come from somewhere!) FDR,TRUMAN,kennedy,johnson ALL LIED TO US ABOUT THIS SOCIAL SECURITY AND THEN LATER MEDICARE BY JOHNSON...who said it would cost about 2 billion a year at the time...lol...the greatest generation as they were called....have been making their kids and grandkids pay for their pensions and medical costs and social security that they never were taxed at the correct amount in order to receive these BENEFITS,,,ITS THE BIG LIE THAT THE CURRENT RETIRED GENERATION HAS LOADED ONTO THE NEXT GENERATIONS!!!
their reason was political...FDR and the boys couldnt tell the TRUTH about how much all these programs costs!!!!!!!!!they knew they would not have to be their when the bills came due!!!!!!REAGAN tried to cut the federal government and only cut the PERCENTAGE increases in budgets.... TIP ONEIL and TED KENNEDY would not let the actual government departments or budgets themselves to be touched !!!!! ITS TIME TO PAY THE PIPER!!!!! URMY ;o)

[SantaCruz]

$3000 an ounce. Maybe I should get some of that yellow stuff.

[Emptyhead]

Joe

from that article you posted;

"Your typical 50-year old, middle class American isn't prepared to
retire without a lot of help. In fact, most baby boomers will never even pay off their mortgages. Lawrence Capital Management notes in the last 19 quarters total mortgage debt increased by $3 trillion (+58%). To put this in perspective, prior to 1997, it took 13 years to add $3 trillion in mortgage debt. Or, said another way, before 1997, around $50 billion a quarter was being borrowed against homes. Today the run
rate is near $200 billion per quarter, or four times more. Household
borrowings now total $8.2 trillion in America and they continue to
grow at near double-digit rates"

It is amazing how when one first looks at the numbers many things come to mind,but the two big thoughts I have are Lowest interest rates in 35years and immigration. The idea the baby boomers,those who have already paid off homes and those who are very close to doing so,need not to. Borrow against and send kids to college,buy second home,brand new $95K boat,whatever come to mind. Afterall,the cost to borrow with a write off is almost 4%!!! College loans are not that cheap or are they :) This is exactly what the FED whats everybody to do. As for the long term consequences? Oh baby,that is for another discussion another time.

[Train Guy]

This is an interesting way to look at the effect of options.

--Consider Adobe Systems, a leading software firm, headed by a baby
boomer (Bruce Chizen, CEO, was born in 1956). Sales are rebounding.
Earnings are up. But profits genuinely available to shareholders have
all but disappeared.

In the last five years, Adobe's net income has grown from $105.1
million to over $191 million. But stock based compensation in the same
period grew from $50 million a year to over $184 million a year.
Taking into account options expenses, net income shrunk from $54
million to only $6 million. Adobe, a firm valued by Wall Street for $7
billion can only produce $6 million in genuine net income.

[Zeev Hed]

Joe, you know how much I "love" these lengthy dissertations, I can always finds in the doomsday sayers lengthy verbiage a single sentence that negates the whole hollow argument, in this case it is: "The ratio of long-term debt to total liabilities now stands at 68.2%, the highest level since 1959, "

Well after a small relapse into 1962 (the Dow bottomed around 524 or so, 10% under early 1959 values), guess what, the Dow roared ahead to peak around 1000 in early 1966, despite the "dire" imbalance". It is really quite simple, if interest rates are so low that you have to pay only 1/3 of your internal rate of return on assets employed in the business, you want to increase debt exposure. That is what is called making money on OPM. Unless you see a very rapid increase of rates (and all those no interest convertible bonds have no interest charge to them at all, if you can get them, it is stupid not to get some...).

Zeev

[otraque]

Joe--I have been reading that study made by Jagadeesh Gokhale and KentSmetters.
That gives a great deal of data to support my view and OTHERS view that we aren't going to bottom until possibly 2013.
If what they are implying that boomers in the 50 year old level in the main are way behind for arriving at a correct retirement need, this is not good.
Also on reading that article i see a thoughtline that screams out, housing is going to go into a MAJOR/catastrophic bust around 2007 or so as too many are buying or refinancing them now as an asset they intend to convert into cash for retirement, and that in turn will glut the market with supply,imo.
The "old saw", when the middleclass starts going under all hell can break loose.
I see, as George Soros sees and Buffet sees; a rich get richer and middle class gets poorer and poorer scenario.
Their logic here i feel is solid.
<<Your typical 50-year old, middle class American isn't prepared to
retire without a lot of help. In fact, most baby boomers will never
even pay off their mortgages. Lawrence Capital Management notes in the
last 19 quarters total mortgage debt increased by $3 trillion (+58%).
To put this in perspective, prior to 1997, it took 13 years to add $3
trillion in mortgage debt. Or, said another way, before 1997, around
$50 billion a quarter was being borrowed against homes. Today the run
rate is near $200 billion per quarter, or four times more. Household
borrowings now total $8.2 trillion in America and they continue to
grow at near double-digit rates.

And it's not just mortgage debt that's problematic...

According to the Federal Reserve Bank of St. Louis, US household
consumer debt is up more than 12% from last year. Debt service, as a
percentage of disposable income, is above 14%. Only twice in the last
25 years has debt service taken as large a chunk of America's income -
- and that's despite the lowest interest rates in fifty years.

When you look at these numbers you quickly see the problems our
favorite weekly scribe, John Mauldin, hopes we can "muddle" through:
The government is making promises it can't keep without bankrupting
the nation; the individual American has made promises to his bank he
can't keep without bankrupting his family. And we haven't even looked
at the biggest borrowers yet - corporations.>>