by
Adam Taggart
bubble
by
Adam Taggart
by
Adam Taggart
by
Gregor Macdonald
Executive Summary
- Fertility rates are experiencing a "natural decrease" at record levels across the U.S.
- Poverty rates are rising across the country, despite the "recovering" economy
- What exactly is "powering" U.S. economic growth? Perhaps much less than realized.
- Why we are likely in the calm before the storm when corporate profits peak right before an economic downturn
- The 3 most likely scenarios for the stock market from here
If you have not yet read Part I: Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?, available free to all readers, please click here to read it first.
One of the challenges the U.S. stock market will increasingly face in the years ahead is continued growth in the Dependency Ratio. The U.S. Census Bureau alerted us to this trend back in 2010. For keen observers of demographics, this couldn’t have been a surprise). The rate at which the Dependency Ratio is growing, and is set to grow further, is accelerating:
The U.S. Census Bureau reported today that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030. This time period coincides with the time when baby boomers are moving into the 65 and older age category…The expected steep rise in the dependency ratio over the next two decades reflects the projected proportion of people 65 and older climbing from 13 percent to 19 percent of the total population over the period, with the percentage in the 20 to 64 age range falling from 60 percent to 55 percent…“This rapid growth of the older population may present challenges in the next two decades,” said Victoria Velkoff, assistant chief for estimates and projections for the Census Bureau's Population Division. “It's also noteworthy that those 85 and older — who often require additional caregiving and support — would increase from about 14 percent of the older population today to 21 percent in 2050.”
This is precisely one of the key, ongoing headwinds that faced Japan's stock market for 20 years. When Japan's economy moved steadily into its low-growth phase, unable to generate sufficient jobs, fertility rates and household formation declined rapidly. As I explained in The Arrival of Japan's Sunset, these will not be cured by the current devaluation of the yen, despite naïve cheerleading. And neither will they be solved here in the U.S.
But in contrast to Japan, the United States is only just embarking on its slow growth phase. Its demographically challenged culture and economy will reinforce each other as we move ahead in time. And, it's not just the retiring class of workers that will massively increase the Dependency Ratio in the U.S. in years ahead…
Why This Recovery Is Coming to an End
PREVIEW by Gregor MacdonaldExecutive Summary
- Fertility rates are experiencing a "natural decrease" at record levels across the U.S.
- Poverty rates are rising across the country, despite the "recovering" economy
- What exactly is "powering" U.S. economic growth? Perhaps much less than realized.
- Why we are likely in the calm before the storm when corporate profits peak right before an economic downturn
- The 3 most likely scenarios for the stock market from here
If you have not yet read Part I: Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?, available free to all readers, please click here to read it first.
One of the challenges the U.S. stock market will increasingly face in the years ahead is continued growth in the Dependency Ratio. The U.S. Census Bureau alerted us to this trend back in 2010. For keen observers of demographics, this couldn’t have been a surprise). The rate at which the Dependency Ratio is growing, and is set to grow further, is accelerating:
The U.S. Census Bureau reported today that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030. This time period coincides with the time when baby boomers are moving into the 65 and older age category…The expected steep rise in the dependency ratio over the next two decades reflects the projected proportion of people 65 and older climbing from 13 percent to 19 percent of the total population over the period, with the percentage in the 20 to 64 age range falling from 60 percent to 55 percent…“This rapid growth of the older population may present challenges in the next two decades,” said Victoria Velkoff, assistant chief for estimates and projections for the Census Bureau's Population Division. “It's also noteworthy that those 85 and older — who often require additional caregiving and support — would increase from about 14 percent of the older population today to 21 percent in 2050.”
This is precisely one of the key, ongoing headwinds that faced Japan's stock market for 20 years. When Japan's economy moved steadily into its low-growth phase, unable to generate sufficient jobs, fertility rates and household formation declined rapidly. As I explained in The Arrival of Japan's Sunset, these will not be cured by the current devaluation of the yen, despite naïve cheerleading. And neither will they be solved here in the U.S.
But in contrast to Japan, the United States is only just embarking on its slow growth phase. Its demographically challenged culture and economy will reinforce each other as we move ahead in time. And, it's not just the retiring class of workers that will massively increase the Dependency Ratio in the U.S. in years ahead…
by
Chris Martenson
Executive Summary
- The three main signs presaging a bond-bubble collapse are now evident
- Why the Fed will fail to get new credit debt growth at the rate it needs
- The return of CDOs and other risky tactics that show market participants have returned to reckless thinking
- How a bond market collapse will play out
- How to product yourself and your wealth during the extreme pain of a bond market collapse
If you have not yet read Part I: Investors Beware: Market Risks Today Are Higher Than Ever, available free to all readers, please click here to read it first.
The dangers growing in the bond market are, of course, all the result of the Fed, et al., cramming the real rate of interest on Treasury bonds into negative territory, starving investors for income, and forcing them to chase yield whenever and wherever it can be found. Given a long enough time without a serious disruption in the markets, you eventually find yourself exactly where we are, with everyone chasing yield because they have to. Hey, everybody else is, and nothing bad has happened yet, right?
Of course, the odds of this ending well are practically zero.
How ridiculous has it become? How about a company currently in bankruptcy proceedings able to sell bonds at investment-grade yields?
AMR Bankruptcy Yields Record-Low Bond Coupon
Mar 13, 2013
American Airlines is selling investment-grade debt even as it spends a 15th month in bankruptcy while bond buyers look ahead to the merger with US Airways Group Inc. (LCC) that will create the world’s largest carrier.
The AMR Corp. (AAMRQ) unit issued $663 million of so-called enhanced equipment trust certificates yesterday that included a portion paying 4 percent, matching the record low coupon for similar airline debt, which was first awarded to United Continental Holdings Inc. in September, according to data compiled by Bloomberg. American is also seeking to refinance about $1.3 billion of bonds backed by aircraft after receiving court approval to do so in January.
By the time you have 'investors' offering money to a perpetual basket-case like AMR – a company that also happens to be in bankruptcy proceedings at present – at investment-grade 4% yields, you know you are in the midst of a crazy bubble. Consider this anecdote to be the bond market equivalent of a hairdresser from Las Vegas buying her 19th house…
How to Survive the Mother of All Bubble Burstings: A Collapse of the Bond Market
PREVIEW by Chris MartensonExecutive Summary
- The three main signs presaging a bond-bubble collapse are now evident
- Why the Fed will fail to get new credit debt growth at the rate it needs
- The return of CDOs and other risky tactics that show market participants have returned to reckless thinking
- How a bond market collapse will play out
- How to product yourself and your wealth during the extreme pain of a bond market collapse
If you have not yet read Part I: Investors Beware: Market Risks Today Are Higher Than Ever, available free to all readers, please click here to read it first.
The dangers growing in the bond market are, of course, all the result of the Fed, et al., cramming the real rate of interest on Treasury bonds into negative territory, starving investors for income, and forcing them to chase yield whenever and wherever it can be found. Given a long enough time without a serious disruption in the markets, you eventually find yourself exactly where we are, with everyone chasing yield because they have to. Hey, everybody else is, and nothing bad has happened yet, right?
Of course, the odds of this ending well are practically zero.
How ridiculous has it become? How about a company currently in bankruptcy proceedings able to sell bonds at investment-grade yields?
AMR Bankruptcy Yields Record-Low Bond Coupon
Mar 13, 2013
American Airlines is selling investment-grade debt even as it spends a 15th month in bankruptcy while bond buyers look ahead to the merger with US Airways Group Inc. (LCC) that will create the world’s largest carrier.
The AMR Corp. (AAMRQ) unit issued $663 million of so-called enhanced equipment trust certificates yesterday that included a portion paying 4 percent, matching the record low coupon for similar airline debt, which was first awarded to United Continental Holdings Inc. in September, according to data compiled by Bloomberg. American is also seeking to refinance about $1.3 billion of bonds backed by aircraft after receiving court approval to do so in January.
By the time you have 'investors' offering money to a perpetual basket-case like AMR – a company that also happens to be in bankruptcy proceedings at present – at investment-grade 4% yields, you know you are in the midst of a crazy bubble. Consider this anecdote to be the bond market equivalent of a hairdresser from Las Vegas buying her 19th house…
by
Adam Taggart
by
Adam Taggart
by
Adam Taggart
Bob Wiedemer, author of the best-seller The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy, regards the 2007 puncturing of housing market prices and the 2008 financial market swoon as the precedents to two much larger and much more dangerous bubbles.
These more pernicious threats are the dollar bubble ("printing money") and the government debt bubble ("borrowing money"). While both are expanding at a sickening pace, in the near term they deceptively make things seem much better than they are.
But, like all bubbles, they are unsustainable. And when these collapse, they are going to take the entire financial system, and very possibly the currency, with them (a.k.a. the "aftershock")
Bob predicts that the rupture of both these bubbles will most likely happen in the next 2-4 years and accelerate astonishingly rapidly once it begins.
Robert Wiedemer: Awaiting the Aftershock
by Adam TaggartBob Wiedemer, author of the best-seller The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy, regards the 2007 puncturing of housing market prices and the 2008 financial market swoon as the precedents to two much larger and much more dangerous bubbles.
These more pernicious threats are the dollar bubble ("printing money") and the government debt bubble ("borrowing money"). While both are expanding at a sickening pace, in the near term they deceptively make things seem much better than they are.
But, like all bubbles, they are unsustainable. And when these collapse, they are going to take the entire financial system, and very possibly the currency, with them (a.k.a. the "aftershock")
Bob predicts that the rupture of both these bubbles will most likely happen in the next 2-4 years and accelerate astonishingly rapidly once it begins.
Total 72 items
Community
by blaggers 
GoldCore
Learn more