This Is About The Size Of It

Gotta love the graphs here.

Makes you wonder to what degree this whole crisis thing is demographically driven.  You have this very large baby-boom generation busting the curve and not enough offspring in the pipeline to support them.

Could it be that simple?  Another example of chickens coming home to roost?



Filed under financial crisis

7 responses to “This Is About The Size Of It

  1. bob k. mando

    i’ve been pointing out since ~1990 that:
    a – the Great Stock Market run-up ( that decoupled all previous understandings of what a ‘good’ PE ratio was and that shattered DOW 3000 ) since the late 70s coincides very well with the widespread adoption of 401k and IRA plans.

    b – when the Boomers convert from plan contributors to plan beneficiaries we can expect pretty much the opposite to occur. barring major new revolutionary technologies ( room temp super conductors or viable fusion, etc ), of course.

    the first Boomer became Soc Sec eligible ~3 years ago.


  2. So how about a baby boom to solve the crisis? That’s the implication here.


  3. bob k. mando

    yeah, the only problem being that we’re already well into the Boomer Crash while it would take 20 years for another ‘boomer generation’ to even begin spiking the markets again.


  4. bob k. mando

    oh, i’m not against reproduction per se.

    i’m just pointing out that much of the expected upcoming troubles of the stock market are completely independent of monetary policy, fiscal policy, increases in productive output or anything else that would normally be understood as market analysis.

    large numbers of employees begin contributing to retirement investment plans. those plans MUST invest the money in something. this artificial demand settles into a securities bubble and attracts even more external investment in addition too the weekly payroll contributions ( usually ~1.5 to 5% often with employer matching added on although the limit by tax law is actually $16.5k for 2011 ).

    what happens to the general market when the weekly payroll contribution to the market either goes negative or is significantly reduced?

    and how does having more children have any effect whatsoever on payroll contributions to a securities market? except possibly in a negative way as employees reduce retirement plan contributions in order to service hospital bills for the pregnancy / birthing.


    • Well, how did we have the baby boom to begin with? Short term pain. long term gain, finance in the present so long as you don’t take too much from the future. If you do, you load down your kids and grand-kids and tempt them to eliminate the burden – which of course is you.

      You’re right, though. The demographics of this are under-discussed.


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