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Monday, September 20, 2010

The Cardinal Crisis - > Mundane Prophecy: Jupiter & Uranus In Pisces > Plus, Forget A Recession: Is The Empire In Decline? And > Are Baby Boomers In Denial? > Also: Venus & Mars Conjunctions - Personal Relationships Highlighted; Plus > President Obama To Jump-Start U.S. Economy, But Experts Say No Economic Growth For Years To Come? > And: Is The Student-Loan Bubble About To Burst?


The Cardinal Crisis
credit: Jesse Lenz

Are Baby Boomers In Denial About Aging?

Also,

Mundane Prophecy: Cetus, The Whale
Jupiter & Uranus Conjoined In Pisces

And,

President Obama To Jump start U.S. Economy

Plus,

Venus/Mars Conjunctions:
Revamping Personal Relationships

Real Estate:
Mortgage Rates To Rise, But Housing Sales Are Worse



Experts Say:
No Economic Growth For Years To Come?


Also,

The Student-Loan Bubble To Burst:
A Generation Of College Students In Massive Debt?
~

And there came to him the Pharisees and Sadducees tempting: and they asked him to show them a sign from heaven. 

But he answered and said to them: 

"When it is evening, you say, 'It will be fair weather, for the sky is red.' 

And in the morning: 'Today there will be a storm, for the sky is red and lowering.'

O you hypocrites! You can discern the face of the sky: but can you not discern the signs of the times?  

A wicked and adulterous generation seeks after a sign: and a sign shall not be given it, but the Sign of Jonah the prophet."

And he left them, and went away.

- Matthew 16
~

By Theodore White, mundane Astrolog.S
Θεόδωρος

The world is now in the second half of the astrological year of 2010 as the planets give the world a celestial light show in the shape of the Full Moon, Jupiter, and Uranus conjoined in the skies in mid-September.

Saturn, fully in tropical Libra for a two-and-a-half year transit, has crossed to the southern point of declination on September 8th, and in kind, the world will correlate and respond.

For those with limited astrological knowledge, this turn of Saturn to southern declination is yet another planetary marker which also points to the historic change in times.

The Sun enters tropical Libra, opening up the fall season in the northern hemisphere on Wednesday, September 22, 2010 at 10:56 p.m., EST.

During the Sun's entry into Libra, both Jupiter and Uranus are conjoined and will be met by a full moon.

This conjunction occurs at the end of tropical Pisces, and continues to mark the change in era by the motions of the outer planets.

The conjunction of Jupiter, and Uranus, and the full moon occurs at the time of the autumnal equinox in the northern hemisphere.

Jupiter, now at its closest approach to Earth since 1963, is shining very bright in the night skies and will not be as big or bright again until the year 2022.

 September 22-23, 2010: The Full Moon, Jupiter & Uranus Conjunct in tropical Pisces over Berlin, Germany. Look to the constellation of Cetus on the graphic above. This is where Jupiter will transit as it passes through Pisces, to be followed by Uranus in the years ahead, and remember what was said about the sign of Jonah.
Click to enlarge

This conjunction of Jupiter and Uranus reconfirms the need to carefully use the transpersonal energies at play worldwide by the use of patience and prudence, but also being keen on the opportunities that present themselves.

I also continue my mundane warnings about the world's climate, its weather - especially floods from sudden deluges, which according to my calculations, will persist from 2010 and into the next decade.

The ingress of the Sun in Libra September 22 shows a 90-day cycle to mid-December which urges us to work on those matters which are coming to an end, while preparing for the emergence of the new astrological year that arrives mid-March 2011.

 October 19-20, 2010: Another Lunar conjunction with Jupiter & Uranus
click to enlarge

The transpersonal energies of the Jupiter-Uranus conjunction in Pisces signifies the need to see and include the "big picture" into our daily lives by realizing the world is undergoing a series of historic shifts which include economic, generational, and societal transitions that opens up the new decade.

 November 16, 2010: Lunar conjunction with Jupiter & Uranus
click to enlarge

Since the onset of the cardinal crisis transits, we've explored the myriad of changes in the world now underway.

The most recent events worldwide:

Trio of Storms Swirl Over The Atlantic 

American Woman Freed By Iran's government

Where's The Oil? On The Ocean Floor Scientists Say

Missing Mexican Police Investigators Feared Dead 

Third Mexican Mayor In A Month Slain

Suicide Attack In Russia

Wildfire in Colorado Foothills Destroys Over 169 Homes

Weeks Of Rain Leaves Thousands Homeless In Mexico

Death Toll Rises In Guatemalan Mudslides

Bomb Blasts In Pakistan Kill 20

Car Bomb Attack In Somalia

Plane Crash in Venezuela

 Mexican Newspaper Stops Drug War Coverage After Slaying

13 From California Religious Sect Found After Tense Search

Thousands Of Yemenis Flee Battle With al-Qaida

France Raises Terror Alerts, Says New Threats Reported

"Mom has gone crazy": 4 Reported Killed in Seattle Shooting

Pakistani Scientist Given 86 Years For Firing At U.S. Troops Sends Message Of World Peace

U.S. Delegation Walks Out On Ahmadinejad's United Nations Speech

Eileen Nearne, French WWII Heroine, Passes At Age 89

Over the next six-to-nine months, global transits show a deepening emotional effect of the planetary bodies relative to the Earth, and in the process, opens the new era of the 2010s.

This new era comes amid global generational transition also in the midst of a deep global recession caused by corruption, graft, and greed not experienced in the history of the modern world.

All of this must be dealt with, and according to the world transits, will be, no matter the desires of some who prefer to stick heads in the sand and pretend the future will not come.

The transits confirm that future is already here.

In this edition of Global Astrology we look at the generational angst of Baby Boomers whom experts say are in denial about aging, as well as in confusion about the impact of their generation as establishment on the world of today.

We look at two countries, the U.S. and Great Britain, and we hear from Baby Boomers who ponder why the world is not as they hoped it would be under their tutelage and management.

We also explore the economy: how President Barack Obama plans to kick-start the American economy. We also look at the disaster that is the real estate market with mortgage rates set to rise slightly as housing values continue to plummet.

We ask why some experts say that little to no economic growth is expected for years to come and ask if the burden of the bubble of student loans will ruin a generation's opportunity for home ownership in the future.

 Now some people consider my views as being a little too harsh on what's been happening in the world of late. You will have to excuse me, but if I told people what I really know, you undoubtedly may call me crazy.

However, I am not crazy. I am a very sober mundane astrologer who prefers to tell it the way it is and hope that enough people will understand what it is that I am saying so they will combine forces to take action to make things not worse than they already are - but better.

I am doing my part, plus more to call celestial forces into action to make that positive change I prefer to see in people's lives, and throughout the globe in general.

So, for the time being, I will not go into my long-range knowledge of what the stars and planets reveal to me, but consider this view of what's current to see what may be on tap for the near future if people do not wake up and change their ways from the negative to positive:

The Cardinal Crisis
Forget A Recession, Is The Empire Crumbling?

By Graham Summers
Phoenix Capital Research

 I look around me and I see an Empire in Decline.

 The US economy is clearly in a depression… not a recession, not a recovery, but a DEPRESSION.

More than 40 million Americans (12%) are on Food stamps.

Nearly one in five of us are unemployed of underemployed.

Folks go to Wal-Mart at 11 p.m. waiting for their government checks to clear at midnight so they can buy baby formula, milk and other necessities.

Three out of every five Americans are overweight. One in five are obese. Indeed, there are only two areas (one state, Colorado, and Washington D.C.) where obesity rates are under 20%.

Nearly three in four of us don’t get enough sleep. Almost one third of us report having trouble falling asleep EVERY night.

And almost half of us report that day-time sleepiness interferes with normal activities including work.

Half of marriages end in divorce. One out of ten married couples report sleeping alone.

The average American watches 28 hours of TV a week (enough to qualify for a part-time job).

Two thirds of us eat dinner while watching TV, preferring the fake, sensationalized lives of others to engaging with our own families.

The TV and media are filled with foul, ungodly images of sex, violence, and hate. 

The most watched shows of the last decade all feature ordinary folks becoming superstars in lottery-esque competitions (American Idol, Survivor, Who Wants to be a Millionaire, etc) OR crime sagas detailing the most sordid and disgusting elements of society (CSI, Law and Order, etc) OR amoral social dramas in which notions of personal responsibility, fidelity, and common decency are unknown (Desperate Housewives, the Bachelorette, etc).

Today, brain dead, vapid human beings who have contributed nothing to society are idolized and followed as though they invented the wheel. 

 We’ve actually got two industries devoted to presenting the illusion and reality of celebrity: Hollywood shows the photo-shopped, CGI-enhanced, scripted version, while the paparazzi and weekly glossies reveal the drug-addicted, affair-crazed, family breaking, soul-less emptiness.

Sex or violence are plastered on virtually every flat surface available.

Even the check-out lines at the grocery store feature endless images of barely clothed women along with headlines sensationalizing gruesome behavior, right out in the open for children to see. 

And if the kid can actually read the headlines… God only knows what ideas this stuff is putting into their heads.

Financially, we’re all pretty much bust or going bust (except those on Wall Street.)

New home sales in July were a RECORD low. Not record as in for the year, but the lowest since 1963.

The talking heads are high fiving because sales improved in August, but failed to note that they were still DOWN 19% from August 2009 levels.

Americans two primary assets for retirement (stocks and their homes) have both been absolute disasters. 

Home prices are down 30%, stocks haven’t produced gains in over a decade. 

Every moron on TV talks about the Dow 10,000 like it’s a miracle.

But when you adjust the Dow for inflation, (using the BLS’ ridiculous CPI measure) the Dow is SUB-500 in terms of purchasing power.

 click on graphic to enlarge

Our money system is controlled by an elite banking oligarchy fronted by academics who have never run a business, invented anything, or had any interaction with commerce aside from vying for tenure.

Our currency is now worth less than 1/20th of what it was a century ago.

And we are ALL in debt up to our eyeballs on a personal, corporate, local, state, and federal level.

Heck, even USA TODAY (not exactly the cutting edge in financial research) notes that in order to pay off our current liabilities, every US family would have to pay $31,000 a year… for 75 YEARS!!!

And we’re talking about an economic recovery?

According to David Rosenberg of Gluskin Sheff:
  •  Wages & salaries are still down 3.7% from the prior peak
  •  
  • Corporate profits are still down 20% from the peak
  •  
  • Real GDP is still down 1.3% from the peak
  •  
  •   Industrial production is still down 7.2% from the peak
  •  
  • Employment is still down 5.5% from the peak
  •  
  • Retail sales are still down 4.5% from the peak
  •  
  • Manufacturing orders are still down 22.1% from the peak
  •  
  • Manufacturing shipments are still down 12.5% from the peak
  •  
  • Exports are still down 9.2% from the peak
  •  
  • Housing starts are still down 63.5% from the peak
  •  
  • New home sales are still down 68.9% from the peak
  •  
  • Existing home sales are still down 41.2% from the peak
  •  
  • Non-residential construction is still down 35.7% from the peak
The American Psychological Association reports that 73% of Americans cite money as a source of significant stress. 

Personal bankruptcies have fallen 8% month over month from July to August. 

However, August 2010 bankruptcies are up 6% from August 2009… so much for the recovery.

And yet, despite all of this, assumptive intelligent people write op-ed articles and appear on TV claiming that things are swell in the US, that we’re actually OK and that the recession is over. Some of these people even have advanced degrees or have won international prizes for economics.

Let’s be honest. Forget recessions, forget even Depressions, the US is an empire in decline.

You can literally see it crumbling right in front of you. Just start looking at how people live, eat, and act on a day to day basis. 

Look at how our Government runs itself, how it manages our affairs, how it spends our tax Dollars. Look at how our justice system works, who it protects and who it punishes.

It’s all out there, right in the open for you to see. You don’t need an expert degree or some kind of advanced education. 

It’s OBVIOUS to anyone who bothers looking around.

The fact we don’t admit it doesn’t mean it’s not true.
~

All of this, plus more, leads us into just what has happened to the generational establishment in charge during the era when everything went south.

The angst and fear of the 12th American generation that has been the establishment since 1993 has shrouded the American nation under dark clouds not experienced since the Great Depression of the 1930s.

The Baby Boomer generation, now senior citizens of the world, continue to have their heads well below the surface of reality, according to experts who say Baby Boomers are totally unprepared for old age because they have long labeled themselves "always young."

But in reality, the losses of trillions in wealth, and failure to save and prepare for retirement has left many wondering just why Baby Boomers continue to believe that time stands still when it comes to their particular generation?

For time moves on, as always, and, as we shall see in the 2010s, the western world is in deep do-do when it comes to the important question of just whom will pay for the retirements of Baby Boomers.

Consider these views from the United Kingdom:

The Cardinal Crisis
Has Baby Boomer Self-Indulgence Left Britain Financially, Socially & Morally Crippled?

Baby Boomers at a "Love-in" at Woburn Abbey, Bedfordshire in the year 1967. Did boomer hippies begin the cult of the individual that eventually resulted in the severe global recession? 
Credit: Rolls Press/POPPERFOTO

By Dominic Sandbrook
The Telegraph

They are the luckiest people in history: the richest, most secure and most powerful generation the world has ever seen.

While their parents scrimped and sacrificed through the Depression and World War II, they basked in the long boom of an affluent society.

The first were children in the prosperous Fifties and teenagers in the Swinging Sixties.

They bought their first homes in the Seventies and saw their mortgages wiped out by inflation.

Others made their money in the Eighties and Nineties, and are now looking forward to a long, healthy and well-remunerated retirement.

Welcome to the world of the generation born in the two decades following World War II: the baby boomers.

From free school milk and handsome benefits, to cheap holidays, women's liberation and the shopping revolution, they have enjoyed comforts their parents could barely have dreamed about.

For more than half a century, the generation of Tony Blair and Gordon Brown has been living it up, borrowing and spending in the conviction the money wouldn't run out.

But even as the first baby boomers are retiring and looking forward to their hefty pensions, the cost of their 60-year spree is becoming unpleasantly apparent.

As everyone who has ever thrown a party knows, there comes a point when somebody has to clear up.

And, according to The Pinch, a new book by David Willetts - one of the more thoughtful Tories in the Shadow Cabinet - that moment is upon us.

England in the mid-1960s: Beatles fans being held back outside Buckingham Palace

While Britons lucky enough to be teenagers when the Beatles were in their heyday can congratulate themselves on their timing, those of us born after 1960 face a rather more disturbing prospect.

For, if Willetts is right, we will not only be picking up the bill for our parents' surging healthcare and pension costs, we will also be paying off their public debt for decades.

All of this seemed a distant prospect back in the mid-1940s, when the baby boom began. With the war over, reunited couples were planning their prosperous futures.

By 1947, the birth rate hit an unprecedented one million a year and continued into the 1950s. Readers born during that boom may not think themselves particularly blessed. Most have probably had their fair share of disappointments.

And to judge them all by the shallow standards of Tony Blair, born in 1953, the first Baby boomer prime minister, with his affected Estuary accent, fondness for "sofa government" and semi-detached relationship with the truth - would be grossly unfair.

And yet Harold Macmillan's famous remark that "most of our people have never had it so good" (made in 1957 when many baby boomers were turning 10), makes the perfect motto for a generation brought up on heedless affluence.

The baby-boom generation, Willetts argues, never learned to 'defer gratification'.

Brought up in an age of surging living standards, they were not prepared to wait for jam tomorrow. 

They wanted it today, tomorrow and forever - and they raised their children in their own image.

It was the Baby boomers, with their 'me generation' values, who spearheaded the sweeping social changes of the late Sixties and Seventies: when the illegitimacy rate almost doubled from seven to 13 per cent, the annual abortion tally leapt from 24,000 to 170,000, and the divorce rate almost quadrupled.

And four decades on, we are living in the world they created.

Britain has the highest rates for divorce and illegitimacy in the European Union.

And government figures show the proportion of single mothers has surged from ten to 25 per cent in the past 20 years. 

As Willetts points out, the result is that single mothers turn to the state for what they should be getting from their children's fathers. 

A typical teenage mum gets £173 a week from the taxpayer in income support, child tax credit and child benefit  -  but only £25 a week from the father of her child.

The tragedy is that, in the long run, everybody loses.

To handle the number of cases, the state gets bigger; to fund the benefit system, the taxpayer forks out.

Worst of all, the children lose out. Research shows children of single parents are more likely to do badly at school, suffer poor health and be unemployed as they grow up.

Yet the decline of the nuclear family, for all its flaws, is still the best arrangement for love and support ever devised - is only one symptom of the culture of self-indulgence inculcated by the baby boom generation.

For the boomers are not only bequeathing a more individualistic, selfish, atomized society. 

They are also handing over a Britain addicted to spending and crippled by debt, public and private. The figures showing our terrifying national debt are well known. 

In January alone, the Treasury borrowed a staggering £4.3 billion, putting it on course for a record £178 billion deficit by the end of the year. It is hardly surprising that the markets are losing confidence in Great Britain PLC.

And yet behind this, Willetts notes, lies not only Gordon Brown's profligacy and the nightmare of the bank bailouts, but a national culture of living on the never-never.

In 1990, when Mrs. Thatcher, who was born in 1925, stepped down as prime minister, the average British household saved four-percent of its annual income. 

By 2000, it saved virtually nothing and by 2008 the rate was minus 4.4 per cent.

Instead of saving, most people were now borrowing.

We cannot even console ourselves that everybody else is doing the same - we have become the worst savers in the Western world.

Today, French baby boomers save 12 per cent of their income and the Germans 11 per cent.

Even the supposedly gas-guzzling, burger-munching Americans save 2 per cent of theirs  -  making us look like spendthrifts by comparison.

In the medium term, the obvious solution to the debt crisis is to slash spending and raise taxes, an unpleasant diet that might feel awful but would get the deficit down and roll back the frontiers of the centralized nanny state.

And yet, as Willetts notes, the Baby boomers have another nasty surprise in store for taxpayers over the next 30 years.

For this year marks the point when the first Baby boomers are due for retirement, which means that not only will we lose the tax revenue on their incomes, but they will also be looking forward to collecting their pensions.

Nobody, of course, should begrudge people who have worked hard for half a century a prosperous retirement - they were promised it: they deserve it. 

The only problem is somebody has to pay for it.

Quite apart from the yawning black holes in many private pension funds, the reality of Britain's aging population, particularly in the bloated state sector, with its guaranteed, inflation-linked pensions - is a terrifying time bomb for the rest of us. 

But instead of successive governments putting money aside to fund those state pensions in the fat years, we - both politicians and individuals - borrowed and borrowed, spent and spent.

And as families have broken up, so our increasingly elderly Baby boomer population will look to the state for help when they fall ill or become infirm.

Even now, we spend an estimated £50 billion on healthcare for pensioners and a further £75billion on benefits.

The Treasury's projections of future public spending on the Baby boomers is chilling reading. 

Spending on the elderly - from long-term care to public service pensions - is predicted to rise from 20 percent of GDP today to almost 25 percent by 2040 and 27 percent by 2060.

That might not sound like much. But over 40 years, it means an extra £60 billion in public money.

Indeed, in ten years our aging population is likely to suck up an extra £20 billion in public spending: and this at a time when the Government is bound to be desperate to make cuts.

There is not much point in whingeing.

It is the mark of a decent society that it looks after its elderly, even if we might privately wish they had foregone all those rock concerts and ill-advised leather trousers in the Swinging Sixties and put a little more aside for their retirement.

But the unfortunate reality is that the people who will be paying the bills - the young - are the least equipped to do so. 

For, in perhaps what is the most shocking section of his book, Willetts shows how in the world the baby boomers made - our youngsters have been cut adrift.

Thanks to the sheer size and power of the Baby boom generation, they have maintained an unprecedented monopoly on jobs, houses and income: effectively shutting out their juniors.

Since New Labour came to power, the net financial wealth of a couple in their early 30s has fallen by two-thirds, while the wealth of people in their late 50s has almost tripled.

What is more, the baby boomers' monopoly of the property market means youngsters find it harder than ever to get their feet on the ladder.

Most experts recognize that home ownership is one of the keys to a stable, prosperous, hard-working society.

Yet, since 1997, home ownership among people in their 20s has fallen.

On top of that, the baby boomers' enthusiasm for immigration has kept wages for British youngsters at an unprecedented low.

As a result of competition from eastern European workers, income for British 20 to 30-year-olds remains far lower than it was for their parents.

Their Baby boomer employers may be rubbing their hands now.

But who do they think will be paying for their pensions in a few years' time? 

Fast-forward to Britain to 2045, a century after the baby boom began, and you have a disturbing prospect.

With the last Baby boomers still drawing pensions and benefits, paid for by the taxes of millions of immigrants, Britain could be a distressingly hectic, threadbare and overcrowded place.

EU figures project that by then we will have the largest population in Europe, soaring towards 77 million in 2060.

And while optimists insist that more people will mean more money for everybody, the reality may be different. Already the Western economy is beginning to buckle under the pressure for natural resources.

By 2045, total global demand for staples such as meat and water is likely to have doubled  -  meaning prices will shoot up and millions will have to go without.

The most alarming thing of all is that there are few obvious solutions to this chilling combination of debt and demography.

Cuts will have to be made, yet we still have to find the money, somehow, to pay the Baby boomers' pensions.

While Willetts suggests a revival of the family, the most basic and effective welfare system of all, might provide the answer, you wonder whether generations steeped in self-indulgence will be able to learn the self-discipline necessary to turn back the clock.


The truth is the Baby Boomers' party went on too long. 

They ignored the warnings of their parents and were enjoying themselves so much they could barely hear the cries of their children.

They thought they were as rich as Croesus, the ancient king reckoned by the Greeks to be the wealthiest man in the world.

But they forgot what the philosopher Solon said when Croesus asked what he thought of his riches and good luck.

"Call no man happy," said Solon dryly, "until he is dead." 

He was right. Croesus eventually lost his money, his family broke up and he died in squalor.

The Baby boomers have to hope that their story turns out rather differently.

For if their luck runs out, then, like Croesus, they may end up with nothing but their memories to console them.
~

The Cardinal Crisis
Are Baby Boomers In Denial About Aging?

By Theodore White, mundane Astrolog.S
Global Astrology

Beginning August 20, 2010, both Venus and Mars have been conjoined together in the skies.

This is a series of Venus/Mars conjunctions which will take place through to May 2011, taking place in Libra, Scorpio and Taurus.

The conjunctions arrive at a time when the Baby Boomer generation must face what all generations faced when they were at the end of their time as the establishment - growing old.

In these times, as some say there is an inter-generational war ahead, what I have seen is something far worse - the realities of tens of millions of Baby Boomers as the elderly.

While Boomers complain that they are being blamed for the global economic meltdown, their continual cultural wars running over 40 years, and for society's ills, what I see is something that has been hidden by the Boomer generation themselves.

In my cycle runs of world transits what I have seen can only be called a supreme crisis of monumental proportions for a generation that determined it would never age or retire - ever.

The next 10-15 years of global transits are not kind in the least to Boomers who never planned on retirement due to the generational illusion of being young forever while ignoring the passages of time.

I have always been curious about how generations approach aging, but never have I witnessed such a level of mass delusion when it comes to growing older than among the Baby Boomer generation.

I knew 30 years ago that it was a disaster in the making just from observations of trends socially, and astrologically about the times to come.

Several years ago, when I warned Baby Boomers who practiced astrology about the world transits related to their aging, many of the responses were hostile, even mean, as if mentioning this fact of human life was irresponsible.

The responses confirmed my fears that Boomers were in full denial mode and would not wake up until it was much too late.

It was as if the planetary transits would not touch this generation based their refusals to accept the passage of time and the natural process of aging, which, in my view, must always be prepared for in advance.

So, as a mundane astrologer I continued to warn about the world transits, and the impact transits would have on this generation in the 2010s.

Those times for the Baby Boomers are now here.

Know this fact:

That 3 out of every 5 Baby boomers are about to face a financial bursting of the illusion bubble in the wake of depressed economic climate.

Consider this recent study on the disaster that is just around the corner.

Baby boomers, aged 57 to 62, have a 47 percent chance of not having enough money to pay even for basic retirement costs, according to the Employee Benefit Research Institute.

Those Boomers older than 62 have about a 45-55 percent chance of running short, the study also noted.

All aging Baby Boomers - who make up a third of all total spenders in the U.S. - are among those who have had their savings already slashed by 18 percent, or by an average of $171,000 per person since the end of 2007.

This trend is expected to accelerate in the 2010s.

Consider the report below, released in August 2010 by the Century Foundation, which says declining housing values, anemic investment markets and scarce opportunities for employment will combine in a perfect storm to force Baby Boomers to tighten their belts in old age.

"As baby boomers head toward retirement, many are facing a financial bust.

Those retirees could face a grim future without the support of strong social insurance programs, according to a new issue brief from The Century Foundation.

“The Impact of Housing and Investment Market Declines on the Wealth of Baby Boomers” shows how the bursting of the housing bubble in 2007, the financial meltdown in 2008, and the most severe recession since the Great Depression have destabilized the economic security of the baby boom generation of Americans, just at the time when they are approaching retirement. 

Although the stock market has recovered somewhat in recent months, the baby boomers have little time left before retirement to rebuild the wealth they lost in the past couple of years. 

As a result, many boomers will be even more dependent than they anticipated on Social Security, Medicare, and, for some, Medicaid, to provide them with a degree of security after they stop working.

The issue brief, written by Greg Anrig, vice president for policy and programs, and Millie Parekh, a researcher at The Century Foundation, finds that prior to the housing and investment market collapse, many baby boomers benefited from a surge in asset prices over the past two decades, enjoying large increases in the value of their homes and retirement savings plans. 

However, savings plans, 401(k)s, Individual Retirement Accounts, and other investments have become depleted, not only because of the market’s decline, but also because individuals withdrew funds during the crisis, often incurring penalties in the process. 

Even more significant for most baby boomers, the housing equity that they counted on as being their major asset in retirement has plummeted in value and remains far lower than it was just a couple of years ago. 

The authors cite studies that show that a large portion of the baby boom cohort has not accumulated sufficient retirement savings and other assets to be adequately prepared for retirement. 

A 2007 McKinsey Quarterly article found that only about a quarter of boomers were prepared for retirement, while other studies estimate that 45 percent of boomers will be “at risk” in maintaining their standard of living during their retirement. 

These studies highlight how stagnating incomes, low savings rates, the shift in employer pensions from defined benefit to defined contribution plans, and weak public knowledge about matters related to financial planning all have left a large share of the baby boom generation poorly positioned to provide for themselves after they have stopped working.

 The declines in housing values and investment markets have greatly worsened the situation for those who soon will be seeking retirement, according to the issue brief. 


In 2008 alone, housing prices dropped an average of 33 percent, greatly depleting the wealth of the majority of baby boomers, who have relatively little savings beyond what they have invested in their home. 

Concurrently, the 40 percent drop in equity markets in 2008 had a devastating affect on higher net worth baby boomers, for whom stock ownership is the predominant form of wealth. 

The net wealth for households with a head aged 50 and over decreased by 25 percent between 2007 and 2009 - amounting to an average loss of approximately $175,000 per household. 

The declines in housing and equity values have had an even more threatening impact on the less wealthy.

The authors acknowledge that spending for Medicare and Social Security is likely to increase as more of the 78 million baby boomers begin to retire. 

They warn that, as the debate over the deficit and the future of these social insurance programs moves forward, these higher expenditures will spur critics of these programs to call for benefit reductions or the elimination of the programs entirely. 

However, they conclude that the recent economic crisis underscores the importance of preserving, and even strengthening, these essential programs."
 ~

For years, I have continued to see in mundane cycle runs that the 2010s will be the decade when all this occurs. We are now at the door of this new decade.

The denial of aging for so long has been a great detriment to Baby Boomers.


Combination of planetary transits during the second half of this astrological year of 2010 confirms that the generational transition is now underway.

There is no turning back.

These transitions typically occur every 18.5 years. This particular cycle now winding down began in 1992-93, when the Baby Boomer generation became the establishment.

That time is now passed, and by March 2011 will have completed itself fully according to world transits.

The Venus/Mars conjunctions also signals a shift in the way personal relationships are viewed, and handled going into the second decade of this new century.

It is a tricky time for the Boomer generation, caught in the middle of having to prepare for retirements long ignored, even denied by many - only to find that this very denial of aging arrives simultaneously as the world economy has sunk to historic lows.

In part, this has occurred exactly because of that denial, and the deliberate ignorance of the passage of time. But the problems to be faced in the near future have not been resolved, nor helped, by ignoring the facts of life - which again: is aging.

Struck by a more than a decade of higher than normal mortgages based on corrupted appraisals, and now by falling housing prices, and devalued pensions, at least 90% of Baby Boomers say they will not be able to afford nursing and residential care in their old age.

This has been known since the 1980s, and yet nothing was done to prepare for what is now just on the horizon.

My advice to Baby Boomers who find themselves in this situation is to come clean immediately, get real, and make concrete plans to prepare not only for retirement, but for being elderly.

Learn to listen and to lean on those who are younger. Do not despise them, nor look upon younger generations with disdain, fear or jealousy - for these are the very people you will come to depend on fully in the years just ahead.

No man or woman is an island.

Daylight is wasting, and once that useful time is gone - it cannot be got back.

I will say once again to any who would listen: forewarned is foretold.
~

Baby Boomers
Powerful & Selfish But Spiteful Of Today's Young?
Have Baby boomers pulled up the ladder from which they themselves climbed up? 
Credit: Jane Bown/The Observer

By Francis Beckett
The Guardian

The one piece of good news in the budget was that George Osborne restored the link between state pensions and earnings, which Margaret Thatcher broke in 1980.

Osborne's decision comes just in time for the baby boomers to benefit.

But for the children of the baby boomers, governments offer only misery.

Higher education minister David Willetts has made it clear that students' fees are going to go up.

A lot.

British Baby boomers, born between 1945 and 1955, paid no fees at all when they were students in the free and carefree 1960s.

Today, because people are living longer, baby boomers are a much more powerful political force than 55- to 65-year olds have ever been before. And they are exercising their political muscle on their own behalf.

Any government that fails to give the baby boomers what they want, even at the expense of younger generations, is in for severe punishment at the ballot box, according to research from the think tank Demos.

I'm a fully paid up Baby boomer. My tonsils rest, no doubt carefully preserved, in an NHS hospital.

When I got polio (from which I made a complete recovery) my parents did not have to worry about enormous medical bills, as their parents would have done.

Aneurin Bevan's NHS – the greatest civilizing measure ever undertaken by a British government – saw me right.

When I went to university, my widowed mother being demonstrably penniless, I received not only free education, but a student grant that I could live on in term-time.

For the first time, proletarian and regional accents were heard throughout the British university system, and their owners were no longer made to feel out of place.

Neil Kinnock, as he famously told the Welsh Labour party conference in 1987, was "the first Kinnock in a thousand generations" to have a university education.

We are the first generation in which pretty well everyone can read and write fairly fluently.

We had the freedom that comes from not having to fear starvation if your employer fires you: there were other jobs to go to, and a welfare state to fall back on.

These things made possible the freedom of the 1960s.

And what did we do with this wonderful inheritance?

We trashed it.

We created a far harsher world for our children to grow up in.

 
Author David Willetts argues the Baby boomer generation took the money and ran, leaving the younger generation with nothing. His stated thesis is that Baby boomers have concentrated wealth, adopted a hegemonic position over national cultures and failed miserably to attend to the needs of the future. Willetts says Baby Boomers have, in effect, broken the inter-generational ­contract and thus are about to experience a severe backlash against them as the new elderly.
Credit: Anna Gordon

It was as though we decided that the freedom and lack of worry which we had inherited was too good for our children, and we pulled up the ladder we had climbed.

Six decades after its birth, Britain's welfare state is in the worst danger it has known.

Commentators and politicians sneer at it and undermine it while legislators chip away at it.

The political will in the Labour party that created it has gone.

More and more bits of the health service cost more and more. The principle that no one should die of a treatable disease was breached long ago.

For years, no politician could safely criticize the NHS without courting the severest electoral punishment, but now some top Conservatives are saying that the NHS isn't "relevant in the 21st century."

The welfare state is starved of money, and struggling under the weight of great, bullying, bureaucratic initiatives designed to give it the appearance of a market, because nothing that does not look like a market is apparently acceptable in the Britain the Baby boomers built.

Most capital expenditure for education and health no longer comes from the present-day taxpayer, but from the next generation, because the baby boomers have been too stingy to pay for it.

This trick is done by means of the private finance initiative (PFI), a scam for getting the cost of public buildings such as schools and hospitals off the present government's books, and placing them on the books of governments 10 or 20 years hence.

The freedoms the baby boomers fought for, they deny to their children.

"Hoodie" was just a name for a garment in fashion with children and teenagers, until it was demonized by people who were young and fashionable in the '60s.

Teenagers under legal drinking age have a dramatically reduced range of options for a good night out. Pubs and clubs are barred to them, far more effectively and efficiently than they were ever barred to us.

We force our children into the school uniforms we rejected, partly because they help the police to recognize those who ought to be at school. It is like making them wear prison uniform so they will be instantly recognizable when they scale their prison walls.

Education is no longer seen as a good in itself, but as the acquisition of the skills required to swell someone else's profits.

New Labour abolished the higher education department, and placed its responsibilities under the department dealing with business and industry, a pretty good indication of what ministers now think education is for.

The new higher education minister, David Willetts, has made several speeches since the election, and has not yet once mentioned any sort of education that does not provide marketable skills.

Harold Wilson saved the baby boomers from having to fight alongside young Americans in Vietnam.

When the baby boomer generation formed a government, its prime minister, Tony Blair, told lies to the young so that he could send them to fight alongside the Americans in Iraq.

Opinion polls show that the now elderly baby boomers will use their increasing voting power to ensure that when the bad times come, the young are hit first, even though it is by a chancellor of the exchequer who was not even born until the 60s were over.

When the baby boomers were young, they believed society could afford student grants; now they are old, they think it can afford pensions.

I say it can afford both – but only if young and old alike learn to care for each other."
~

The Cardinal Crisis
 Baby Boomer Generation:
What Is The Public Price Of Personal Freedom?

By Will Hutton
The Guardian

The Baby Boomers.

Born between 1945 and 1955, they are busy ignoring the biblical calculus that a man's span is three score years and 10.

Having enjoyed a life of free love, free school meals, free universities, defined benefit pensions, mainly full employment and a 40-year-long housing boom, they are bequeathing their children sky-high house prices, debts and shriveled pensions.

A 60-year-old in 2010 is a very privileged and lucky human being – an object of resentment as much as admiration.

I'm at the heart of all of it – guilty as charged. Born 21 May 1950, I'm the quintessential Baby boomer.

And for the last three months, while most of the rest of the world has been getting on with their lives, I've been wrestling with the implications of my new seniority.

Sixty may or may not be the new 50, but it is a significant milestone; I've been on the planet for an awfully long time.

What sense can I make of the decades I have lived through? To what extent am I and my generation unfairly lucky?

What is the best way to live my life from now on?

To a degree I have some sympathy with the resentment, marshaled in a cluster of recent anti-boomer books.

Individually, we may not have been the authors of today's flux, uncertainty and lack of social and cultural anchors, but we were at the scene of the crime.

The cultural, economic and institutional cornerstones of British life have been shattered - and the way our love of fun was channeled is undoubtedly part of the story.

The upside is that some of the old stifling prohibitions and prejudices have gone, hopefully for ever.

But the downside is that we have become authors of our own lives without society offering us a compass to follow.

What, for example, should men and women expect of each other as they make the lifelong commitment to marriage?

Have families become too child-centered to the detriment of our kids – mollycoddling and overprotecting them?

Social landmarks such as our health service, education and police systems are the objects of near-permanent revolution, fired once again by the coalition government in the name of "radical reform" – as if radical reform is so important that it is worth the accompanying cost and disorientation.

Thus the paradox: more freedom but more angst and uncertainty.

There is no longer any discrimination in our embrace of cultural liberalism; it stretches into every nook and cranny of our lives - from the financial markets to sex - and sometimes with consequences none of us like.

It was Howard Davies, when he ran the Financial Services Authority, who compared financiers to consenting adults; the inference was that he had no more business inquiring into their private business affairs than he would into what went on in their bedrooms.

His liberalism has been proved wrong. The story of the past six decades is in many ways the story of how we threw off our shackles only to discover that we do need some constraints, even in the City.

And in the bedroom? Our extreme liberal stance has seen us deluged under a tidal wave of pornography. The debate in the years ahead will not be about how to continue with our baby boomer liberalism, but over how and where we need restraint around some shared principles and rules.

So, the 1950s. My mother likes to say that these were the last years of the old order. They might have begun with the Korean war and ended with African decolonization, but life in suburban Britain was not just stable and predictable, it was governed by enduring institutions whose friendly grip on our lives seemed unbreakable.

Church meant something, as did Empire Day. My grandfather sang the national anthem lustily after the Queen's Christmas Day message, and insisted as a tenant farmer he was a true English yeoman.

I could tell the days of the week by my mother's almost religious cooking rota - stew on Monday and liver on Thursday.

Companies had been around for decades and would be as much part of our future fabric as they had been of the past. Persil washed whitest.

The pound was worth two dollars and 80 cents and 35 dollars bought an ounce of gold. The US ran the world with Britain as its chief lieutenant.

Everybody would marry and have 2.2 children. It was a time of mottos: better be safe than sorry; carry an umbrella to work in case it rains.

What I had to do was work hard and I would find myself on the conveyor belt that would convey me upwards.

Chief executives of companies earned the same salaries as the permanent secretaries running Whitehall.

That world has gone. The anchors have dissolved or are dissolving. There is neither a monetary nor religious anchor.

The pound floats; Catholicism is mired in the horrifying sexual antics of its priests; CEOs pay themselves salaries without limits.

The great visions of how one might associate with others – in an Empire, a Commonwealth, a socialist economy, a commune, a religious community, a trade union or even a company – have become implausible.

We are individualists in a not very sovereign nation state being buffeted around by economic forces beyond our control.


We madly find meaning in cults and celebrity, over investing in family as the last redoubt of meaning, while reconciling ourselves to fewer public services and cynical companies even while the country is very much richer.

Our liberalism is not only extended to bankers; it extends to families whose members have no serious plan ever to return to work.

The withdrawal of benefit may be so savage that they face a de facto marginal tax rate of 80 or 90%, but the fact remains that the consequence of government action is that they will live for ever on benefit.

Until now this could never be queried because nobody wanted the sobriquet of being callous towards the disadvantaged.

We have lost our capacity to think straight.

 Tony Blair, England's first Baby Boomer Prime Minister.

We pulled down one culture with its rules and imagined that another would spontaneously take its place.

How could we have been so destructive?

One reason is that the Britain of the late 50s and early 60s was a model for nothing you would want to fight for.

At home, we watched the Black and White Minstrels together as a family without a trace of embarrassment – and then my father would roar out the lyrics as we did the washing-up together. It was suffocatingly dull. It needed to change.

Our parents, 15 years on from a world war, loved the order, routine and dullness. Their children could not abide it.

When Paul McCartney and John Lennon sang "She's Leaving Home" about a daughter who slips out of home when her parents are asleep, leaving a farewell note – that she hoped would say more – to meet a man from the motor trade, the wonderful choruses spoke to all of us.
"She (We gave her most of our lives)
is leaving (Sacrificed most of our lives)
home (We gave her everything money could buy)
She's leaving home after living alone for so many years (Bye, bye)."
And signing off...
"She (What did we do that was wrong?)
is having (We didn't know it was wrong)
fun (Fun is the one thing that money can't buy)
Something inside that was always denied for so many years (Bye, bye)
She's leaving home (Bye, bye)."
We all knew there had to be more than our parents' worthy but unexciting lives, and we knew it simultaneously across the west. 

There was a great rising of a new collective consciousness. We wanted to declare our independence, and create something new that was more urgent, more noble and more sensuously alive. 

Wearing your hair long or your skirts short was a way of signaling that you understood and belonged. 

Each university summer vacation I accepted my parents' furious reaction to my not very long hair, and trimmed it just a little. 

I knew exactly what David Crosby meant when he sang with Stills, Nash and Young that he almost cut his hair the other day… but he hadn't because he wanted to let "my freak flag fly."

The more freakish you looked, the more you signaled to yourself and others that you had got it.

The Labour movement that had created the postwar welfare state through a collective force of will, along with universal health and education, and whose power kept capitalism honest, was infected and finally overwhelmed by the new culture.

Socialism no longer meant building great national institutions that enfranchised the mass of citizens, or acting as a crucial countervailing power to capital; it meant fighting for individually rewarding wage settlements and becoming part of the romantic movement for the "revolution."

The shop steward movement of the 1960s and its wildcat strikes were inextricably linked to hippies, smoking dope, the anti-Vietnam war movement and the rapidly growing women's movement.

And paradoxically the same liberal culture fed the desire to dismantle the regulation of banks and the constraints of the postwar fixed exchange rate system. Everyone wanted to escape the dull routines of suburban life and managed capitalism.

Nobody wanted to be a corporation man. We wanted to be on the move – hence all those spontaneous "movements" that came together in the heady days of 1968.

I joined the occupation of the Senate House of Bristol University to object against exams as unfair instruments of social control and bias.

I wasn't entirely sure whether the continuous assessment proposed as an alternative was the gain in the class war that the student leaders insisted upon or worth a night on a hard floor, and soon left the occupation to others.

But the occupation was where the social action was. To protest and agitate were hard-wired into the DNA of the times.

As Mick Jagger – always a closet Tory according to those close to him – sang, "You went down to the demonstration." He knew the score.

Timothy Leary told a generation to turn on, tune in and drop out.

 Timothy Leary stands before the marquee of the Village Theater announcing his lecture on "The Reincarnation of Jesus Christ," New York City, October 1966. He used the pulpit to explain his new found organization, the League of Spiritual Discovery, which viewed hallucinogenic drug use as a religious experience.

Few had the courage to go all the way in psychedelic trips – but you had to be very odd not to be ready to dabble in drugs. They were a political and personal statement.

They underscored the new movements and especially the music.

Some of what was written in the late 60s and the early 70s hit sublime heights – Van Morrison's Astral Weeks, the Stones' Exile on Main Street, the Beatles' self-titled "White Album" – and the succession of stunning bands and artists dazzled us: Roxy Music, David Bowie, the Grateful Dead, the Beach Boys, the Band, Crosby, Stills, Nash & Young, Pink Floyd, Led Zeppelin, the Who…

One of my daughters conserves all my vinyl from the time, and has even bought a faux-period record player on which to play them.

The opening chords of some of the great rock anthems still send shivers down my spine. I was at Olympia, the Roundhouse, Hammersmith Odeon and the Rainbow to see them live.

Yes, I was lucky.

Some of it you couldn't be part of. You needed to be American to be genuinely anti-Vietnam.

And you needed to be a woman to reject the sexual stereotyping, to fight for genuine gender equality and to try to forge new ways of being female.


Men understood the spirit that moved the women, and even those who exploited it by taking promiscuity to Promethean heights knew a man at the very least had to give pleasure as well as take it.

The sexual deal and gender bargain were changing. Women would no more meekly hold the fort in the suburban home while their corporate husbands commuted to the office.

They, too, wanted to be part of the swim, part of the movement, part of the change.

Some called it feminism; I think women's liberation caught the mood better. The trouble was that men had to change, too, as a product of female liberation – a much slower and more hesitant process.

But when I think of how my grandfather's generation thought of their wives and daughters and how my son's generation does, there has been a startling change. There is still misogyny, but nothing like the ghastliness of the 1950s.

The 70s was the crisis decade – when the social impact of the 1960s' movements and the disintegrating structures of managed capitalism fused into stagflation and outright social conflict.

The National Union of Mineworkers were the self-appointed shock troops of what we still called the working class, battling for fair, working-class wages and the acceptance that their jobs were their property, not to be touched or compromised by economic forces or new technologies.

This, apparently, was socialism. The 1960s' romantics felt obliged to make common cause, or at least not undermine them.

It would take Mrs Thatcher to win the year-long miners' strike between 1984 and 1985 — the culmination of a 15-year-long confrontation.

It was an inevitable victory, but it meant that the movements of the 1960s no longer had a political champion for industrial and economic change from below.

The liberalism of the great social movements would transmute into economic liberalism – and when Labour lost the 1992 general election the rout was complete.

Capitalism had lost every check and balance. There was no Labour movement and no idea of socialism. There was no political party committed to reforming capitalism. There was not even the cultural acceptance of restraint, the need for rules and proportion.

Looking back you can see how 1968 led to the futile confusion of the 1970s, the certainties of Thatcherism and the great mindless credit-induced boom of the 1990s and 2000s - credit rolling out of the great deregulated banks and building societies.

There were no financial anchors. The left was impaled on the horns of an impossible cultural dilemma. Naturally it sided with hippies and rock'n'roll and a cultural milieu that kicked against rules.

But what legitimacy did that offer to use the state to remake the economy and society? In any case an unholy alliance of liberal romantics and hard-left unionists thought the task was not to manage, regulate and order capitalism - it was to transform it.

I was working in the City in the mid-1970s, and could scarcely believe British trade unionists protesting against the Bullock Committee's proposals to create a statutory obligation for trade unions to be represented on company boards.

Couldn't they see that the City believed the proposal the work of the devil? But the City could relax. Trade unions thought to sit on boards would represent collaboration, castrate them in their fight against capitalism and undermine free collective bargaining.

Their resistance was an act of supreme folly that would contribute to the decline and fall of meaningful trade unionism while the stock market jumped in delight at their mulish opposition – but it is rare even today to find a leading trade unionist who will recognize the craziness of that decision.

The Labour party could only split under the strain. Thus the Limehouse Declaration of the Gang of Four – Roy Jenkins, Shirley Williams, Bill Rodgers and David Owen – and the creation of the SDP in 1981.

The aim was to represent the social democratic left but without being caught in the crossfire between class-war warriors and the romantic, idealistic left.

The party would manage capitalism, update the postwar social contract and be a purposeful advocate for the EU. Its support soared.

But nobody had calculated that Argentina's General Galtieri would launch an invasion of the Falklands. Suddenly Baby boomer concerns about how to live well and what to do about capitalism became subsumed into something more visceral.

British territory had been violated by a military dictator, and British citizens placed under foreign military occupation. There could only be one response. The country would unite behind a task force and repossess what was ours in the name of democracy.

I had just begun working on Newsnight and our audience soared. When Port Stanley fell, Mrs Thatcher's election victory was sealed – and so would be the liberalization of the British economy.

Privatization and the curbing of the union movement had grown seamlessly out of our revolts of the 1960s – even using our language of freedom.

But the rout of British-style socialism was being matched elsewhere with even more force.

For the first 40 years of my life the Soviet Union seemed a constant; suddenly on Christmas Eve 1991 it was wound up.

Deng Xiaoping would say six weeks later in China that international communism could no longer claim it represented the destiny of history - two and half years earlier he had been the prime mover of the brutal suppression of the student and worker revolts in Beijing's Tiananmen Square and 180 other Chinese cities.

The task now, he declared, was for China to build a socialist market economy and to offer the Chinese material well-being under the benign direction of the Communist party.

The students from Beijing University who began the protests were enthused with the same cultural longing for rock 'n' roll freedoms as we were in 1968.

Yet they would find the regime, like those in the west, would offer them cultural freedoms only as long as the rulers remained in firm political control.

The Chinese, perversely, had arrived at the same unstable bargain as the West. You could dress as you like, make love outside marriage and shop until you dropped.

But what you could not do is challenge the political order – to imagine a new way in which human beings might associate and organize themselves.

Thus when New Labour won in 1997 it won as a defeated intellectual and political force.

It was not in the business of building a secular Jerusalem. It was in the business of being a caretaker of the established economic order while trying to promote the interests of the many, not the few, within budget constraints.

The Baby boomers, now home owners and possessors of defined benefit pension schemes, suddenly became wealthy as house prices trebled.

The earlier fights seemed almost quaint. The deal was that capitalism had won; bankers and directors made fortunes; but the rest of the world got wealthier in their wake - and nobody asked questions about sexual orientation or ethnicity any more.

A politician like Peter Mandelson could declare he was homosexual without damaging his career. What we had achieved, it seemed, was much more tolerance and much more wealth – with a disproportionate amount accruing to Baby boomers.

Collective provision and how we associate as members of society were yesterday's preoccupations. Even David Cameron's big idea – the "big society" – is not aimed at the mass of the British but the excluded minorities.

But when you trace the arc of the past 60 years, I am not so sure that where we have reached is especially stable.

If the launch of the SDP marked the beginning of an era in British politics, the coalition government defines the end. The SDP and Lib Dem politicians who wanted to reinvent the left have ended up reinventing the right.

Yet the big question of our time, after the financial crisis and the prospect of years of low growth and high unemployment, remains what it was in 1968.

Capitalism cannot continue as it has at home and abroad. There needs to be a countervailing force to hold it to account and keep it honest.

CEOs cannot enrich themselves for ever, without limit, with no wider economic and social consequences.

If today's market economies cannot create jobs and prosperity for the mass of the working population, the restiveness will grow.

We Baby boomers have had it lucky, certainly, but the hard questions we asked still remain.

We have been bought off with rising equity in our homes and liberties we once could only dream of.

But we wanted a different economic and social order – to live with each other in mutual respect and to be governed by those genuinely responsive to our needs and hopes.

My hunch is that a new era is beginning with new movements that will ask more searching and fundamental questions again, taking up where my generation left off.

Nor are we baby boomers quite done yet: I'm planning on hanging on in there for a little while more. We still have to deliver on those promises we made ourselves.

Maybe those younger, but with similar ideals, can learn from our mistakes – and together we can really build something new.
~

Baby Boomer Retirements
A Crisis In The Making?

The coming retirements of the boomer generation has concerned experts for years. Alistair How of Bupa Care Home remarks:

“Those who grew up listening to the Beatles and Motown are behaving like Peter Pan. They think they’re living in Never Never Land where people don’t age. 

Boomers are in a state of denial about growing old. If they don’t act soon, their children are going to be left picking up the bill.”

A staggering three-quarters of baby boomers underestimate the average weekly cost of nursing and healthcare.

  • Furthermore, over half (55%) of boomers worry they would have to sell their house to pay for their old age. A further 20% would need to rely on their children.
  • Over two-thirds (69%) haven’t given much or any thought to how to pay for their care in later life.
  • Around a quarter (26%) of those have ignored it because growing old scares them; and another 22% think their old age is a long way away?
Other statistics on Baby Boomers reveal that:
  • Less than half (47%) have planned for their retirement
  •  
  • Almost half (48%) don’t think they will be financially secure in their old age
  •  
  • 43% are worried about being lonely when they grow old
  •  
  • Two-fifths would rather go into a care home than be a burden on their family (41%)
  •  
  • Around a quarter of Baby Boomers think they will no longer be able to lead an independent life in their 70s, and 30% think they’ll be dependent on others in their 80s
  •  
  • Despite predicted public spending cuts 37% still think the government will pay for their old aged care. Two fifths (39%) think they’ll have to pay for themselves
All of this is heading for a disaster according to world transits.

This disaster is the making of the generation itself, as being in denial about aging has led to tens of millions of Baby Boomers refusing to make plans for their senior years, which is now here.

Consider this AP Report from back in 2004:

Associated Press - In 1970, when the law forced Maggie Kuhn to retire at age 65 from her executive position in a Philadelphia church, colleagues gave her a sewing machine as a parting gift.


She never opened it - and instead, rebelled against everything it stood for, leading marches and staging guerrilla theater to protest the widespread discrimination against the elderly.


The Gray Panthers, the group she founded with a name inspired by the Black Panthers, aimed to radicalize older Americans and fight the image of the old as useless, infirm and withdrawn.


Their achievements are many, including the repeal of the mandatory retirement law.


But the group, once a force, is in decline - and sociologists blame tomorrow's seniors, the baby boomers, who are still unwilling to call themselves middle-aged.


"They hear the word 'gray' and it turns them off. I think it's such a juvenile attitude," said May Hollinshead, the 90-year-old president of the North Jersey chapter of the Gray Panthers.


It's a paradox, said Dr. Robert Butler, founder of the National Institute on Aging, since the boomers, a group representing a third of the U.S. population, will put an unprecedented strain on social services when they become too old to care for themselves.


They stand the most to gain from groups such as the Panthers, who continue to fight for nursing home and health care reform.


From a one-time high of 60,000 members, the Panthers number just 22,000 today.


Hollinshead, who has kept her own chapter in Leonia, N.J., alive for 34 years, watched it go from a vibrant, grass-roots network of 50 members, to just half-a-dozen.


Experts point out that the decline in a group which stands for senior power comes as America's demographics are about to shift to gray.


Every 7.6 seconds, a baby boomer turns 50. By 2023, one in five Americans will be over age 65 - currently, the percentage of seniors in Florida.


The Panthers' leadership agrees that the group is at a crossroad.


"We're going to have to do things differently," said Susan Murany, executive director of the Gray Panthers office in the nation's capital.


"The baby boomers have celebrated youth - if you want to attract folks, you can't set it up at the senior center," she said.


But Murany prefers to see the fall in membership as a result of the death of the charismatic Kuhn in 1995. It's also symptomatic of the overall decline in activism since the end of the Vietnam era, she said, explaining that from the beginning the Panthers were actively anti-war.


But the group's troubles are nothing new to the AARP, the nation's largest senior organization with a membership of 35 million.


Several years ago, the AARP underwent a makeover when studies showed it was failing to reach the boomers. As part of that effort, it abandoned spelling out its name, the American Association of Retired Persons, to avoid mention of the word "retired."


"Just a few months ago, we crossed the point where more than half of our members are still employed," said Christine Donohoo, associate executive director of the membership division. "The boomers want to be seen as vibrant - and we need to be responsive to that."


Other efforts included phasing out Modern Maturity and replacing it with AARP Magazine - a publication with three distinct versions, meant to target the three major phases of old age. One is specifically dedicated to the 50-65 demographic.


The irony, the Gray Panthers say, is that unlike the AARP, the Panthers always intended to be inter-generational.


Before a TV talk show producer gave Kuhn the idea of naming the group after the revolutionary Black Panthers, the organization went by the name The Consultation of Older and Younger Adults for Social
Change.


"Our slogan was 'Age and Youth in Action,"' said veteran Panther Joy Spalding, 77, whose sofa at home in Portland is adorned with Panther pins, bearing the motto under a prowling cat.


The group appealed to the young early on because of its stance on the Vietnam War. In 1970, Kuhn sent a delegate to Hanoi to meet with prisoners of war. Soon after, the Panthers began organizing for care packages to be sent to draft resisters in Canada.


Even as its numbers dwindle, the group has continued its fight. Texas Gray Panthers last year tried, but failed to defeat Proposition 12, a constitutional amendment which they argued would put the elderly at risk. In Oregon last month, the Panthers joined with a broad-based coalition supporting a proposed tax increase - one which failed at the polls and will most likely lead to cuts in senior services.


Nationally, the Panthers launched RePhorma, a campaign to hold pharmaceutical companies accountable for the escalating price of prescription drugs.


As the original activists age, however, few in the younger generation are choosing to join, and a different type of organization is taking the world by storm. Its success holds clues to what the boomers are looking for.


The Red Hat Society didn't start out four years ago to be a movement, but a play group for women over 50. Its stated aim is to wear fancy red fedoras and matching boas, have fun and greet age with humor, verve and elan.


It has struck a chord, ballooning to 18,755 chapters in 21 countries.


"We now have 400,000 members. We're adding chapters by the moment - as many as 100 a day," said Sue Ellen Cooper, its 59-year-old "Exalted Queen Mother" in Fullerton, Calif.


Butler sees groups such as these as symptomatic of the boomers' agenda of staying young.


"I really see them as a generation at risk," he said, citing a study which shows that Boomers have not saved for old age, even as census figures indicate theirs is the generation that will break the back of social security."
~

From mundane calculations, it is my assessment that the great majority of Boomers are in denial and simply not prepared for the future that is now on the horizon. 

So, what to do?

Well, the first thing for any Baby Boomer, right now, is to reject the illusion of eternal youth which has been at the center of the denial of aging.

Reject the fantasy that Botox and Viagra or dressing like a teenager will then make you younger, and reject the illusion which has plagued your generation that all is well because "70 is the new 40."

That has been, and always will be a lie.

The global economic depression under the Saturn/Pluto waning cycle over the next 10 years will force all Boomers to get real.

This is something I have been advising for years to Boomer clients who came to me for astrological forecasts because of my strict adherence to wake up and get off the denial train of delusion about growing older.

Others, who complained that there is no such thing as generational problems are now in the very scary situation of having to work another 30 years.

I tell those people - this will not happen.

Transits do not confirm Baby Boomers will be able to redo the last 30+ years in order to avoid retirement and to make the kind of money that is made during the prime working years.

That is a fantasy and those Boomers who have accepted this fact will do better than those that have not.

It is the truth.

So I continue to advise Baby Boomers who will listen, who want to face the truth and who will face aging looking forward - not backwards - to make serious plans right now for their senior years.

Do so practically and prudently with eyes open - not shut - to the change in eras because the planets confirm that times are changing.

These are the people who will function best in the decade ahead.

Those who do not listen, nor heed this mundane advice, should be prepared for the toughest and darkest years of their lives as the elderly.

In effect - the party is over.
~
Venus & Mars
Revamping Personal Relationships In Changing Times

By Theodore White, mundane Astrolog.S
Global Astrology

The cycle of the three Venus-Mars' conjunctions to May 2011 indicate, on a mundane level, the need for populations to revamp, and revise their outlooks and plans for the future.

For the northern hemisphere, I've advised individuals and couples who may have aspects to the transits of Venus and Mars through mid-2011 to take time to carefully consider the future consequences of their choices.

By May 2011's conjunction of Venus and Mars in Taurus - those decisions will become fixed, so it is essential to make decisions with planning, prudence, and patience.

The Venus-Mars conjunctions in the signs of Libra, Scorpio, and lastly Taurus by Spring 2011 shows a time where personal issues of individuals can either make or break all kinds of important relationships that will be much needed in the 2010s to survive.

Venus' retrograde in Scorpio (Oct. 8 - Nov. 18, 2010) brings with it a time of endings, and potential signs of new beginnings on the horizon.


Venus will turn to morning star at the end of October 2010, and signals a fresh start for billions of people worldwide. The ten-month morning star cycle of Venus to August 2011 features a time to get it together.

After the series of events during the historic year of 2010, from natural disasters to wars, to criminal violence and generational transition - many lives are changing at the end of the first decade of the 21st century.

Moreover, the Baby Boomer generation, held responsible for the great global decline - economically and socially in the world - is at the end of its time as establishment.

This generational sea change comes at a time after valuable resources were wasted by the very generation that will demand ever more resources as senior citizens.

From my calculations of world transits, I urge individual Boomers to give up re-fighting the same old cultural battles, but rather to concentrate on how they will survive as seniors in a world moving at a faster pace than at any other time in history.

Planetary transits continue to confirm my findings regarding generational change, and preparing for retirement. The 2010s will present challenges to many Boomers who are  wholly unprepared for the natural process of aging.

My forecast on the economy over the years also focused on the real estate market collapse, driven by corruption, greed, and fueled by excess and stupidity has led to the worldwide collapse of the residential and commercial real estate market.

Even as late as 2009, my forecasts for even deeper falls in the value of real estate properties were either ignored, or criticized by people who just did not want to see the truth of what was happening on the ground, inclined as always, by planetary transits.

This is a serious problem among those who, for some reason, seem to believe opinions somehow trump out transits. That never has happened, and it never will.

The real estate market is far from bottom. This is a scary thought, but it is true according to mundane transits.

The Baby Boomer establishment bubble created in the 1990s, and acted on throughout most of the decade of the 2000s, was a false economic "miracle" designed to simply blow up the market to such heights as to boggle the mind.

It was like filling a giant real estate balloon with too much gas based on forecasts that called for ever rising values. Once that bubble popped, the balloon deflates, not instantaneously, but painfully slow over years.

The combination of the most recent cardinal transits, along with the waning Saturn-Pluto cycle through the 2010s, told me some time ago that a deep, and persistent deflationary climate will continue to choke the economy until real estate values return to real world levels.

That was my forecast years ago, and it remains my forecast now.

Consider this:

The Cardinal Crisis
Rates Rise Slightly, But Housing Market Dives Again

By Matthew Craft & Daniel Wagner
AP Business

Sept. 9, 2010 -- New York - Record-low mortgage rates failed to pull the housing market out of its funk.

Now rates are inching higher, but don't blame them if home sales stay sluggish.

Just as bargain financing couldn't save the housing market, analysts say, a gradual rise in rates won't necessarily crush it.

Cheap money matters less than the larger forces at work, especially a 9.6 percent unemployment rate, which keeps would-be home buyers in fear of losing their next paycheck.

"What's hurting the housing market right now isn't mortgage rates," said Michelle Girard, senior economist at the Royal Bank of Scotland.

"It's a lack of confidence about the U.S. economy. It's concern about losing a job."

On Thursday, Mortgage buyer Freddie Mac said the average rate for a 30-year fixed loan was 4.35 percent, the first weekly rise since mid-June.

That's up from 4.32 percent the previous week, the lowest number since Freddie Mac began tracking rates in 1971.

Rates have been falling since spring as investors have shifted money into safe Treasury bonds. That influx of money has lowered Treasury yields, which mortgage rates tend to track.

Even the lowest interest rates in memory couldn't entice buyers from the sidelines.

Sales remain abysmal. The National Association of Realtors reported sales of previously occupied homes plummeted 27 percent in July, the worst showing in 15 years.

Record-low rates combined with falling prices mean houses are now more affordable than in decades. In better times, that might fuel a surge of home buying.

But Americans seem to have taken one lesson from the housing bubble, Girard said: Home prices can fall.

The lowest rates in history had almost no effect on sales, said Guy Cecala, publisher of the Inside Mortgage Finance, a trade publication.

"Home sales went down when mortgage rates went down. These aren't normal times."

Improved economic news this month has drawn some money out of Treasuries, pushing up their yields.

If rates continue to climb, making mortgages less affordable, will the housing market get even worse?

Not necessarily. At 6 percent, rates would still look cheap by historic standards, Girard said.

And a large jump in rates would signal a much stronger economy. A decade ago, mortgage rates were about 8 percent.

"If the economy improves and employment improves, the demand for housing would rise even if positive economic developments lead to higher rates," she said.

Some economists say the weekly uptick in mortgage rates could be temporary.

Celia Chen, a senior director at Moody's who covers housing, cautioned against reading too much into the recent uptick in rates.

She expects they will fall again as the economic recovery's slow pace drags home prices down through the third quarter of 2011.

Cecala said economists spend too much time looking at measures of affordability and remain baffled when people fail to go bargain-shopping.

"If you just stare at mortgage rates, you'll miss what's going on in the housing market," Cecala said.

"Talk to the average person. They'll tell you they don't want to take on more debt. They can't sell their existing home. They're worried about their job."
~

The Cardinal Crisis
President Obama Seeks To Jump-start U.S. Economy

By The Associated Press

September 7, 2010 -- Milwaukee, Wisconsin -- A combative President Barack Obama rolled out a long-term jobs program Monday that would exceed $50 billion to rebuild roads, railways and runways, and coupled it with a blunt campaign-season assault on Republicans for causing Americans' hard economic times.

GOP leaders instantly assailed Obama's proposal as an ineffective one that would simply raise already excessive federal spending.

Many congressional Democrats are also likely to be reluctant to boost expenditures and increase federal deficits just weeks before elections that will determine control of Congress.

Jim Manley, spokesman for Senate Majority Leader Harry Reid of Nevada, cautioned, "If we are going to get anything done, Republican cooperation, which has been all but non-existent recently, will be necessary."

That left the plan with low, if not impossible, odds of becoming law this year.

When Congress returns from summer recess in mid-September, it is likely to remain in session for only a few weeks before lawmakers return home to campaign for re-election.

Administration officials said that even if Congress quickly approved the program, it would not produce jobs until sometime next year.

That means the proposal's only pre-election impact may be a political one as the White House tries to demonstrate to voters that it is working to boost the economy and create jobs.

At a Labor Day speech in Milwaukee, Obama said Republicans are betting that between now and the Nov. 2 elections, Americans will forget the Republican economic policies that led to the recession.

 Milwaukee, Wisconsin: U.S. President Barack Obama gives a fiery speech at a Labor Day rally September 6, 2010. Obama unveiled a six-year, $50 billion proposal to repair the nation's highways, airports and railways in a long-term effort to create jobs and improve the American economy. Obama blamed Republicans for the economic crisis and then for trying to block his recovery efforts.
Credit: D. O'Malley

He said Republicans have opposed virtually everything he has done to help the economy, and have proposed solutions that have only made the problem worse.

"That philosophy didn't work out so well for middle-class families all across America," Obama told a cheering crowd at a labor gathering.

"It didn't work out so well for our country. All it did was rack up record deficits and result in the worst economic crisis since the Great Depression."

He said Republicans have consistently opposed his economic proposals and seem to be running on a slogan of "No, we can't," playing off his 2008 presidential campaign mantra of "Yes we can."

"If I said fish live in the sea, they'd say no," Obama said.

Republicans made clear that Obama should not expect any help from them.
Senate Republican Leader Mitch McConnell of Kentucky said the plan "should be met with justifiable skepticism."

He said it would raise taxes while Americans are "still looking for the 'shovel-ready' jobs they were promised more than a year ago" in the $814 billion economic stimulus measure.

The House Republican leader, John Boehner of Ohio, added "We don't need more government 'stimulus' spending.

We need to end Washington Democrats' out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses."

Administration officials are hunting broadly for ways to revive the economy. But they are likely to drop a separate proposal to renew a law exempting companies from paying Social Security taxes on any unemployed workers they hire, according to a White House official who spoke on condition of anonymity because the decision was not final.

Casual in brown slacks and open-collar white shirt with rolled-up sleeves, Obama took a populist tack in his speech, mixing attacks on Republicans with praise for working-class and middle-class Americans.

He said he'd "keep fighting, every single day, every single hour, every single minute to turn this economy around."

He said interest groups he has battled "talk about me like a dog."

He also acknowledged that the past eight months of modest private-sector job growth hasn't been enough to bring down the unemployment rate.

He said economic problems facing families today are "more serious than ever," and seemed to ask the audience in Milwaukee – and voters nationwide – for patience.

"Now here's the honest truth, the plain truth. There's no silver bullet, there's no quick fix to these problems," he said, adding that it will take time to "reverse the damage of a decade worth of policies" that caused the recession.

Administration officials said the transportation plan's initial $50 billion would be the beginning of a six-year program of transportation improvements, but they did not give an overall figure.

The proposal has a longer-range focus than last year's economic stimulus bill, which was more targeted on immediate job creation.

The plan calls for rebuilding 150,000 miles of roads; building and maintaining 4,000 miles of rail lines and 150 miles of airport runways, and installing a new air navigation system to reduce travel times and delays.

Obama also called for a permanent funding mechanism, an infrastructure bank, to focus on paying for national and regional infrastructure projects. Officials provided few details of how the bank would work.

Obama said the proposal would be fully paid for. In an earlier briefing for reporters, administration officials said Obama would pay for the program by asking lawmakers to close tax breaks for oil and gas companies and multinational corporations.

The infrastructure spending is part of a package of economic proposals to be announced this week by Obama, who is feeling heat from fellow Democrats and a jittery public to show that he is focused on pumping life into the economic recovery and shrinking an unemployment rate long stuck near 10 percent.
~

The Cardinal Crisis
No Economic Growth For Years To Come?

By The Automatic Earth

There is no shortage of analysts and experts out there who see and recognize some part of what’s ailing our economies.

There is, however, a huge shortage of those who can connect the parts.

Often the American people themselves look to be better judges of reality than all those who make a good living telling them what that reality is.

Still, Ian Bremmer & Nouriel Roubini start out promising enough:
Paradise Lost: Why Fallen Markets Will Never Be the Same
Crises breed denial. 
"Whether a crisis concerns an individual’s health, career or marriage, a company’s reputation or market share, or a nation’s place in the global pecking order, powerful incentives exist within the stricken entity to aspire to a return to normalcy - and to proceed as if that result represents the only option. 
However, as we all know from human experience, some setbacks are irreversible. We believe the recent meltdown suffered by the U.S. and its partners on the liberal side of the global economy is one of them.

Still, many policymakers and economic thinkers in the U.S., Europe and Japan remain shrouded in denial.
 
They assume that after a period of healing, high growth will return and the rules of global capitalism will restore the preeminence of the U.S. economy and the appeal of a chastened (yet only slightly less freewheeling) laissez-faire Anglo-Saxon model.

Such thinking is either dangerously naive or the result of epistemological blindness. A scenario can be charted in which the U.S. and its liberal market adherents not only return to pre-crisis "potential growth" but even exceed it.
But the political, economic, financial and psychological hurdles standing in the way of this scenario suggest it would require divine intervention to make it so. [..]

After a few more years of lackluster growth — unavoidable due to the deleveraging needs of households and the business sector — financial institutions and governments will seek a return to growth and even demand that national governments move, or move out of the way, to increase it.
 
This will be a dangerous moment — one that war correspondents refer to as "survivor’s euphoria." The illusion, of course, is of invulnerability, and too often lessons learned in previous brushes with mortality are cast aside."
"A scenario in which the U.S. not only returns to pre-crisis "potential growth" but even exceeds it?"

If you have enough fantasy, well, perhaps.

But what about all the other scenarios, why not talk about those?

Roubini's problem is he can't shake off the notion of growth, in this case posing as "lackluster growth."

And everything he says, and presumably thinks, falls in that light.

Maybe he’s so happy to be invited and celebrated everywhere in the world as Dr. Doom that he doesn't want to take the risk of scaring his benefactors away.

"Doom" thus comes to mean low growth, while flat-out contraction is off the agenda.

But how realistic is that? Even allowing for the fact that the GDP is "not a very accurate" way to measure growth, it's already "officially" at 1.6% and heading down short term (a correction to 1.2% is in the works.)

So what are the short to mid-term prospects? Well, 70% of GDP is the American consumer, so there's where to look.

The 91-day trailing Growth Index of the Consumer Metrics Institute has gone all the way down to -5.79%, while official GDP remains at 1.6% for the moment.

That’s a difference of 7.39% that will have to be explained away somehow.

Ten days ago, when I last discussed the CMI Growth Index in One more time: GDP and CMI, it was at -5.43%.

It is therefore sinking at roughly 1% per month.

And this, don't forget, is a leading indicator, for which I devised the following graph back then, based on Doug Short's great work:

click on graphic to enlarge

No matter where you stand, that graph provides at the very least a very stark warning. Then again, it’s just a graph, and perhaps somewhat crudely juxtaposed at that.

What will actually drive the real US economy, 70% of which is driven by consumers, forward? The latest report from Comstock Partners lifts part of the veil:
The Significance of Consumer Deleveraging
"Consumers have only begun to cut back on their severe debt burdens, and the process will take a number of years. Household debt relative to GDP soared from a range of 43% to 49% in the 20-year period between 1965 and 1985 to a peak of 97.3% in 2009. 
As of March 31st (the latest data point) this dropped only slightly to 92.7%. To provide some more perspective, Ned Davis Research estimates the mean to be 54.2% over the past 58 years. The percentage climbed gradually to 65% in 1998, and then really accelerated to its recent peak.

To be conservative, let's assume that the household debt/GDP ratio falls back only to the 65% level of 1998 rather than to the lower level between 1965 and 1985 or to the long-term mean.
Under that assumption household debt would have to be pared back by about $ 4 trillion (from the present total of $13.5 trillion), an amount that constitutes about 40% of current consumer expenditures.[..]

".... last week the ECRI Weekly Leading Indicator was down 4.11% from a year earlier.  We searched the historical data to determine what happened to the economy at other times when the index was down 4.11% or more year-over-year.
Over the last 42 years this has occurred seven times, and in all seven instances a recession started shortly before or shortly after the signal.  We also note that all of these instances were accompanied by bear markets in stocks.
Although no indicator is certain in economics or stock markets, seven for seven is nothing to sneeze at."
That is to say, even under a rather rosy scenario, which ignores the long term trend in favor of a short term one, households will have to decrease their debt levels by $4 trillion.

Under the long term trend, it would be more like $6 trillion.

The question then of course arises how much time households have to pare back this debt.

Jim Quinn, below, says that under the rosy scenario, a drop in household debt to GDP from 92.7% to 65%, this would force consumer spending down by $800 billion per year; Jim assumes consumers will have 5 years to wind down their debt.

But this could easily be 4 years, and we could hit the $6 trillion long term trend, which would mean a forced deleveraging of $1.5 trillion per year.

How you would get a positive GDP growth number under these circumstances is, frankly, beyond me.

Quinn writes on a topic that we easily overlook, but one that defines our communities in many ways, jobs being a big one among them: retail.

And you guessed it: it ain't looking good. Not at all.

If consumers have to get rid of some $1 trillion in debt per year over the next few years, that means they have much less money to spend in stores.

So scores of those will close, and scores more will lay off scores of people. Who will then have less money to spend in stores.

You’ll be hard pressed to find a more vicious circle. And with nothing in sight to stop it.
Retailers – Reality Check Time
"The population of the US has grown from 281 million in 2000 to approximately 308 million today. We’ve had a 10% population increase in 10 years. 
Consumer expenditures have grown from $6.7 trillion in 2000 to $10.3 trillion today. This is a 54% increase over the course of the decade. Amazingly, real average weekly earnings have only gone up by 6% in the last decade. [..]

Consumer credit has advanced from $1.5 trillion in 2000 to $2.4 trillion today.
This 60% increase in consumer debt has allowed workers who have barely increased their earnings to spend like they made a lot more money. 
This debt fueled consumption binge led major retailers to expand in order to keep up with the delusional consumers.
  
Retail America has run directly into a brick wall. Lowes grew their store count from 600 to 1,700 over the course of the decade, a 183% increase.
Wal-Mart grew their store count from 4,000 to 8,500, a 113% increase. 
Target grew their store count from 1,000 to 1,750, a 75% increase. 
Kohl’s grew their store count from 300 to 1,050, a 250% increase.

Lowes has 500 more stores today than it had in 2005, $4 billion more sales, and $1 billion less profits.
 
Target has 340 more stores today than it had in 2005, $12 billion more sales, and the same profit. 
Kohl’s has 240 more stores than it had in 2006, $1.6 billion more sales, and $100 million less profit. 
Only Wal-Mart has kept the profits flowing, mostly due to its international expansion. The tough times have only just begun for these retailers.

Using your home as an ATM is history. Home equity is at an all-time low and 25% of homeowners are underwater. Home prices are destined to fall another 20%.
There are 15 million people unemployed. Consumer expenditures still account for 70% of GDP.
In order for the US economy to achieve equilibrium, consumer spending will need to regress back to 65% of GDP. This will require an annual reduction in consumer spending of $800 billion.

There are three major errors that have been committed by every retailer in America. They failed to recognize that the spending per household was 30% over inflated due to debt financed demand.
 
They then extrapolated the spending per household using a 5% to 10% growth rate. Lastly, they ignored the fact that their competitors had the same strategy.

Lowes, Wal-Mart, Target, and Kohl’s have yet to recognize their predicament. They are still blinded by their hubris.
The point of recognition will occur within the next year. Each of these retailers will be closing hundreds of under-performing stores in the next two years."
We're talking thousands of additional retail outlets that are bound to shut their doors. There are already plenty malls in the U.S. that have huge amounts of vacancies.


There will be many more.

The number one driver behind all this deleveraging is consumer debt, and most of that is mortgage debt.

Incidentally, when you read that US savings rates are up, don't imagine someone with money in the bank. Paying down debt is included in savings numbers, and Americans pay down a lot, voluntarily or not.

The mortgage situation is bound to get a whole lot worse.

Michael David White does an admirable job of keeping inventory, even if he's still probably way too positive:
HousingStory.net predicts a 9% fall in property prices nationwide in 2010
"A stat which may be of great interest is the prediction by the average of the indexes that our fall in prices is only half-way accomplished – a forecast which, if true, will elicit fear in the hearts of homeowners, buyers, bankers and government officials.
A natural fall-back in prices is a matter of the highest gravity to the Federal Reserve Bank and the Treasury and to current and future homeowners. 
The federal government has massively intervened in the housing market. It funds nearly 100 percent of new mortgage loans originated today.

Fed and Treasury are attempting to preserve bubble values for homeowners and save mortgage investors. Absent government intervention, housing prices would have fallen 50 percent or 75 percent by now.
 
Probably one-of-three or one-of-two mortgages would be in default. Global depression would surely have followed such a fall.

We believe an ambitious destruction of credit-bubble debt investments would and will allow the economy to roar back to life.
This camp says the creative destruction of debt following a credit bubble is the silver bullet, the radical magic, the Holy Grail, the gift of life."
White's last point sounds reasonable, if daring. Why not aggressively take on the project of debt destruction, so we can have a clean start and build our world back up again?

Well, he sort of provides the answer himself, doesn't he? "Absent government intervention, housing prices would have fallen 50 percent or 75 percent by now. [..] Global depression would surely have followed such a fall."

It's easier to understand such an apparent contradiction coming from Michael David White than it is from someone like Joseph Stiglitz, who's after all an eminent economist.

Still, Stiglitz says essentially the same, after an excellent analysis of the economy. Which, by the way, makes it even harder to see where he gets lost along the way:
A better way to fix the US housing crisis
"Curiously, there is a growing consensus on both the left and the right that the government will have to continue propping up the housing market for the foreseeable future.
This stance is perplexing and possibly dangerous.

It is perplexing because in conventional analysis of which activities should be in the public domain, running the national mortgage market is never mentioned.
Mastering the specific information related to assessing creditworthiness and monitoring the performance of loans is precisely the kind of thing at which the private sector is supposed to excel.

It is, however, an understandable position: both US political parties supported policies that encouraged excessive investment in housing and excessive leverage, while free-market ideology dissuaded regulators from intervening to stop reckless lending.
 
If the government were to walk away now, real-estate prices would fall even further, banks would come under even greater financial stress, and the economy's short-run prospects would become bleaker.

But that is precisely why a government-managed mortgage market is dangerous.
Distorted interest rates, official guarantees and tax subsidies encourage continued investment in real estate, when what the economy needs is investment in, say, technology and clean energy. 
Moreover, continuing investment in real estate makes it all the more difficult to wean the economy off its real-estate addiction, and the real-estate market off its addiction to government support.

The Federal Reserve Board is no longer the lender of last resort, but the lender of first resort. Credit risk in the mortgage market is being assumed by the government, and market risk by the Fed.
No one should be surprised at what has now happened: the private market has essentially disappeared.
The government has announced that these measures, which work (if they do work) by lowering interest rates, are temporary.
But that means that when intervention comes to an end, interest rates will rise – and any holder of mortgage-backed bonds would experience a capital loss – potentially a large one.

No private party would buy such an asset. By contrast, the Fed doesn't have to recognize the loss; while free-market advocates might talk about the virtues of market pricing and "price discovery", the Fed can pretend that nothing has happened.
 
With the government assuming credit risk, mortgages become as safe as government bonds of comparable maturity.

... government policies to support the housing market not only have failed to fix the problem, but are prolonging the deleveraging process and creating the conditions for Japanese-style malaise.
Avoiding this dismal "new normal" will be difficult, but there are alternative policies with far better prospects of returning the US and the global economy to prosperity.

Corporations have learned how to take bad news in stride, write down losses, and move on, but our governments have not.
 
For one out of four US mortgages, the debt exceeds the home's value. Evictions merely create more homeless people and more vacant homes.
What is needed is a quick write-down of the value of the mortgages. Banks will have to recognize the losses and, if necessary, find the additional capital to meet reserve requirements.
This, of course, will be painful for banks , but their pain will be nothing in comparison to the suffering they have inflicted on people throughout the rest of the global economy."
Yeah, banks will have to recognize losses, and that will be painful. Stiglitz manages to give it all such a benign veneer.

The reality is though, and it's sort of hard to believe Stiglitz doesn't see this, that if mortgage values are written down to realistic levels, i.e. levels that a nation of debt ridden consumers would buy a home at, it wouldn't just be painful to the banks, it would kill them outright.

As it would the US government, which has untold trillions in both mortgages and securities bet on the notion that it can keep those levels up.

Neither the government nor the banks, assuming there’s much of a difference, have any intention of letting that happen.

That is, until and unless it becomes inevitable. By which time they wager they’ll have secured as much and as many of their own interests at the cost of the American people as they possibly can.

And the American people feel this coming, whether they know about it or not. StrategyOne has a survey out:

65% of Americans Expect Double-Dip Recession, Brace for 2nd Hit Worse Than the 1st


"Almost two in three Americans (65%) say a double-dip recession — defined as a recession followed by a short-lived recovery, followed by another recession — is now likely to happen. 

Among those who expect a double-dip recession, nearly half (44%) fear it will be worse than the first one, with 21% worried it will be "much more severe." Just 24% think the second recession will be less severe.

... Americans are certainly not holding their breath for a full recovery coming anytime soon. Just 5% think there will be a full economic recovery by the end of this year, and only another 21% see recovery taking place by the end of 2011.

Half of all Americans polled (50%) see a recovery not coming until sometime after the end of 2011, and about a quarter (23%) doubt our economy will ever fully recover.

... fundamental doubts and concerns are being raised about America. The country is split on whether America's best days lie ahead of us or behind. A slim majority, 52%, say they are ahead of us, while 48% say they are behind us.

There is however consensus around another point –  71% agree that America is fundamentally broken and not working.

Facing a scary and uncertain financial future, Americans are watching their wallets:
  • 41% are planning to cut back on their spending over the next 3–4 months, compared with 8% who plan to increase it.

  • 35% say they will plan to cut back their online spending over the next to 3–4 months, compared with 12% who plan to increase it.

  • 79% say they are planning to spend less money for Christmas this year.

  • 87% say they do not plan to make a big-ticket purchase (such as a house or car) in the next 3–4 months.

  • 49% have already delayed making a big-ticket purchase during the past few months.

  • 26% of Americans don't expect their personal finances to fully recover from the downturn until after 2011, and just as many (26%) think their personal finances won't ever fully recover.
Now, you tell me how a nation of people who feel that way will turn around an economy that's based to such an extent (70%) on their spending habits?

It's just very simply not going to happen.

Which is why a government made up of wiser, smarter and less conflicted people would take, and have taken, completely different measures from the one you have in front of you now.

But that's a subject we’ll leave till next time. And by government I mean all of them: White House, Congress, Senate, what have you, Republicans as well as Democrats. They're one and the same side of the same coin, trying hard to look distinguishable for power and monetary related purposes.

Not an interesting distinction, not when you’re out of a job and homeless or close to getting there.

America's economy is the accumulative spending power of its people. And the American people are broke. That's the whole story.

And as long as we continue on the present path, all that will happen is they get more broke.

Economic growth, for better or for worse, is not in the picture, not for years to come. Paying off debt is - for governments, companies and individuals.

And since their respective debts are so high, many will go bankrupt trying to pay for them.

Impossible to grow an economy in the face of that.

You may claim that nobody can foresee the future, but you'd be no more than partially right.

As Marguerite Yourcenar said a long time ago:
"On the whole, however, it is only out of pride or gross ignorance, or cowardice, that we refuse to see in the present the lineaments of times to come."
~

The Cardinal Crisis
Is The Student-Loan Bubble About To Burst?

Removing A Generation Of College-Educated Students From Purchasing Homes

By DoctorHousingBubble

The net worth of U.S. households fell by $1.5 trillion in the second quarter of 2010.  Recent data from the Fed shows that even during the recovery, U.S. households continue to move backwards in making financial progress.

Who are we really kidding here?

Does this feel or have the taste of a recovery to anyone? In fact, new data now coming out from the Census shows that from 2008 to 2009 the U.S. lost 1.3 million households.

That’s right, because of the economy people have had to consolidate households. Yet as we will show later, much of this was shouldered by renters.

Another thing that will impact the housing market going forward is the student loan bubble.

That is right, higher education is in one giant inflated blue debt bubble and thankfully the mainstream media is now picking up on this.

Many young potential buyers won’t be able to buy a home because theoretically they already did with the cost of their education.

The numbers don’t look pretty for recent graduates with red all over their balance sheets before they even start their professional life.

New Generation saddled with debt not seen in the past

College students are facing skyrocketing college tuition that recently surpassed credit card debt:

 click graphic to enlarge

Credit card debt has contracted down from reaching close to $1 trillion because many have filed for bankruptcy and banks have written the debt off.

But with student loan debt, it just inches higher because this debt is permanent.

Like the toxic mortgage debt that pushed home values higher, we now have toxic student loan debt allowing students to pursue degrees even at paper mills for $20,000 a year or more.

Is it any wonder why these predatory institutions prey on students in targeted areas? And that is only one segment of this shady market.

You also have people going to top ranked universities and getting degrees that provide little viable path to employment:
Yahoo! Finance reports - "Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle.
For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning.
They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill.
Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.”
$100,000 in student loan debt from four years of study only!  This is pure madness.

Do we need to do a Real College Degrees of Genius series?

Now I have heard some say, 'well, when I went to school, I walked through the snow in shoes made of paper bags and worked to pay for my tuition.'

College costs have changed since that time and just like the housing bubble at its peak, even the crappiest home in the worst part of town was selling for a premium because everyone qualified for a toxic loan.

As things stand today in the student loan market, that is still the case with loans covering virtually any college.

And just like Fannie Mae and Freddie Mac the government subsidizes the bulk of student loans. We even have nice old Sallie Mae.

We know student loan debt is immense.

Over $829 billion in student loan debt is outstanding. The implication for housing is large. It is safe to assume that this debt isn’t with households that have paid off their mortgage long ago.

These are people entering their household formation years. The average student loan debt is now the price of a brand new car:

Atlanta Post reports - "According to a recent study by the College Board, I am in plenty of good – or unlucky – company as almost one-out-of-five graduates with bachelor degrees will not be able to make payments on the average undergraduate loan debt, which now stands at a whopping $30,500 (pre-interest). If that’s not disheartening enough, consider that for the first time ever, student loan debt now outranks credit card debt.”

So right off the bat, a good portion of disposable income is going to go to servicing this debt.

Unlike a bad mortgage, you can’t walk away from student loan debt. So there is a major liability already on the books for many prospective buyers.

Compare this to a blue collar worker back in the 1960s with no debt purchasing a home.  No need for a college degree to buy a home with one income.

Today, you have this new college graduate that is probably making less on inflation adjusted terms from this blue collar worker and is unable to purchase a home without taking on more debt or combining two incomes.

You have to wonder how many college graduates with large amounts of debt are unable to purchase homes because of their student loan debt?  Keep in mind that 1 out of 4 Americans have a 4-year degree so this is supposedly a group that is prime for purchasing real estate.
 
As is the case with most anything where the banking industry has gotten its crony hands on, there is definitely a major bubble in higher education.

Banks are lending away because the government backs up their crappy loans with no oversight. Think of FHA insured loans or GSE backed mortgages (basically the entire mortgage market).

The long-term repercussions will be felt in many different ways. Nothing is being done here so higher education costs keep growing exponentially like an expensive green pine tree:

 click on graphic to enlarge

One bubble after another and when they pop, it is usually the taxpayer that pays the bill.

Disappearance of 1,300,000 households – Renters shoulder bigger impact

From 2008 to 2009 U.S. households shrunk by 1.3 million. Yet one group took the brunt of this:


We actually added owner occupied households yet renter households declined by a stunning 2.3 million. Why did this occur?

A few reasons:
a)  The long drawn out foreclosure process. With government gimmicks, banks ignoring non-payments, and other loan modifications a “home owner” can stay put for much longer than a renter that will be out in the street in a few weeks from their missed payment.
b).  Bias and subsidies to home buying. Tax incentives and low interest rates are subsidized by taxpayers. Banks influence legislation and they rather have a hot body in a home than another vacant property.
The decline in households is troubling and shows weaker macro trends.

How many recent college graduates with massive debt unable to find jobs moved back home?

This is a group that would be out getting their first apartment and creating a new household.

The decline is significant and shows the real structural challenges facing our economy.  It is also a reason why multi-unit commercial properties have record vacancy rates.

Poverty Rate

43 million Americans now fall into the poverty category:

 click on graphic to enlarge

This is horrible news on many levels. Where are these people coming from?

Many are coming from the middle class. For many in this group they were part of the 1.3 million reduction in households.

This housing and debt bubble has deeper societal ramifications that are now playing out.

This goes beyond stabilizing home prices but reshaping what we want out of our economy.

For too long the focus has been on housing and keeping prices inflated. Yet the latest household income data shows that U.S. households now make less than $50,000.

With that said, home prices should be lower to reflect what people can afford.

Sadly, many of the poor get sucked in the web of the for-profit education debt paper mill system.

I was up late one night and saw an ad talking about a video game degree from a fly by night school. The youth was sitting on what appeared to be a La-Z-Boy playing an Xbox or Playstation.

Now I’m no computer programmer but do know a few and I can tell you that you don’t program a video game by playing on a recliner the latest version of Guitar Hero.

Yet it’ll cost you $20,000 a year to get this degree with debt you’ll never be able to pay off.

Are we creating a new class of people that will be stuck in perpetual poverty because of debt?

Shifting Demographics

The Baby boomers are coming!

The shift in demographics is not pretty for the future of housing.

I ran a few scenarios with Census data and what we find is a growing older population:

 click on graphic to enlarge

Talking with many Baby boomers, many haven’t thought about their entire stock portfolio scenario in a deep way.

What is the purpose of a nest egg?

To have money in retirement. But the only way to extract the money is by selling it in the market.

What happens when millions of baby boomers start selling into a stock market with low volume because younger workers are flat broke or have no money to invest after servicing student loans, credit card debt, and other commitments?

We already have a giant amount of property on the market plus another enormous amount in shadow inventory. Many boomers will want to downsize and sell their homes in this market.

The above scenario would work perfectly if we had a giant comparable group to the baby boomers that were affluent and giant in size.

That is not the case at all.

In fact, earning potential is down even with advanced credentials and we already know about the two income fallacy.

There is a forced austerity built into the cards.

Summary

We are reaching peak debt with higher education.

Many are catching on that simply having a 4-year degree in any major from any school will no longer be a ticket into the middle class.

In fact, even going to a good school but choosing the wrong degree may leave you with a good education but no earning potential.

Try explaining that to the student loan collectors.

This is only another bubble but the implications are deep for housing. Without any reforms, you have a large cohort of younger Americans that will put off home buying for many years because of other debt commitments.

What will this do to future projections of housing? Just like the toxic mortgage funnel, we have new factors that change the calculus of housing for the next decade.

The shrinking household number is a reflection of our massive misguided bias to home buying.

Who really wins here?

We already pointed out that the net worth of Americans fell by $1.5 trillion in Q2 of 2010, a supposedly good time for the economy.

It is clear that massive debt pushed by the banks is the issue here.

The same too big to fail banks are also the top pushers of student loan debt (and credit card debt).

It would be one thing if they pumped out their own money, but they are now wards of the country and have mismanaged so many things that we are setting ourselves up for another crisis soon.

That is why the student loan bubble is now converging with the housing bubble.

No wonder why the Federal Reserve is doing everything it can to inflate itself out of all the bubbles it has helped to create.

The only problem of course is that it isn’t working as they would like and their taxpayer experiment is failing miserably for the country overall.
~

1 comment:

Anonymous said...

Wow Theodore,enlightening, and at the same time quite depressing. Fortunately there are cliffs nearby.