Boomers Have Their Backs Against The Wall

The Daily Reckoning ^ | 10-14-2009 | Bill Bonner

[blam]

Boomers Have Their Backs Against The Wall

By Bill Bonner
10/14/09 London, England

Two important items in the news today:

First, Bloomberg reports that retails sales fell 2.1% in September – the biggest decrease this year.

Know what that means? It means the “Age of Thrift” is here…and that consumers really are cutting back – just like we said they would.

And it means that the consumer economy is not going to return to robust growth anytime soon. And it means, too, that people will find it hard to find jobs for a very long time.

Another thing it means is that housing prices are not likely to recover – not in our lifetimes. That was a once-a-century bubble and it has blown up.

[snip]

[rbg81]

I think the real recovery is going to take a while too. But color me skeptical when people start using phrases like “never” and “not in our lifetimes”, etc. I think that people will return to their spendthrift ways once times get “good” again. When I look around at my fellow Americans, I don’t see a whole lot of discipline or intelligence.

[dalebert]

no recovery......more bank failures...

[HerrBlucher]

Bummer man. However, with Obamacare coming up they may get their wish to die before they get old and it all be cool.

[Niuhuru]

The ones who have lost their homes will hopefully learn. In all, I think this has been a terrifying experience and a lot of people are going to learn the joys of thrift.

[blam]

"I think that people will return to their spendthrift ways once times get “good” again. "

No money.

Another Great Depression Low, Beware Getting Your Salary Slashed

[Sacajaweau]

I’d like to see companies have TEMPORARY 35 hour work weeks and keep more employees if they can.

[An Old Man]

That one hits home! My neighbor, a former airline pilot, took a pay cut right down to nothing. His solution, becoming a real estate agent. Oh well, some folks never learn.

[KarlInOhio]

Obamacare will push the opposite of that. Why have two employees at 35 hours per week when you can have one at 70. Sure, you have to pay time and a half, but that would still be cheaper than having two insurance policies. And if he's on salary instead of wages Cha-ching! free overtime.

[truth_seeker]

“But color me skeptical when people start using phrases like “never” and “not in our lifetimes”, etc.”

I have 40 years professional business experience (energy, real estate), coupled with some grad school.

To extrapolate that a one month 2% drop in retail sales equates with “never in our lifetimes” is silly nonsense.

But, hey it was on the internet so it must be true.

The internet serves up an almost constant flow of information—it does that well.

But it does little to separate the lowest quality info from the highest quality.

(By the way—statements like this seldom qualify the statistic. Is it a 2% drop from the same month last year? If that is the extent of this most horrific of recessions, then I’d say we got off pretty easily.)

[Oatka]

I think that people will return to their spendthrift ways once times get “good” again.

I agree about the economic "relapsed heretics", but I suspect that they won't have a chance to relapse for YEARS to come.

There was a cool song titled "The future's so bright, I gotta wear shades". Now it's "The future's so dark, I gotta light flares".

[Buckeye McFrog]

I’d like to see companies have TEMPORARY 35 hour work weeks and keep more employees if they can.

Not with this bunch in power. It would become permanent under the French plan.

[Buckeye McFrog]

I guess one great lesson for all of us here is to trust your gut.

If you look at a house, and then see the asking price and your gut says “It’s not worth that much”...more than likely it’s not.

And when your town is losing population, not experiencing tremendous job growth, and salaries are not rising that much...yet you see $400K McMansions sprouting up in every field....be afraid, be very afraid!

[nomad]

Not to be “Captain Obvious” but the Christmas shopping season will be a major key.We`re going Galt this season. The key phrases are second hand and doing without to pay down what little debt we have left,as well as stocking up on consumables like non perishable foodstuffs.

[rbg81]

They didn’t have $$ before—they had credit. Watch that credit will be re-extended to people who declared bankrupcy. We’ve been a “grow at any cost” country since 1984.

[SunkenCiv]

the "Age of Thrift" is here

I've been living in the age of thrift for a while now, but it's currently 51. ;')

[muir_redwoods]

This boomer isn't against the wall. I have never carried much debt and paid off the mortgage early. While my "classmates" were leasing BMW's and using home equity to tour Europe, I was driving old cars and hiking in Vermont.

I have always lived frugally and saved my money. I have invested it conservatively(what else?) and now, a few months away from my 60th birthday, I am in good shape. It's true I am down a bit from a year ago but only about 15% and I can live with that.

Of course this just means that I am a target of opportunity for the Obamanauts because I am an evil rich white guy but I also invested in lead so I may not be as easy a target as they think.

[Freddd]

But, but, but...the DOW hit 10 thousand today, doesn’t that mean everything is o.k.????

Sarcasm intended.

[nascarnation]

The Dow fell 14 points yesterday. It could begin a major drop any day. That’s why our ‘Crash Alert’ flag is flying from our London headquarters.

anybody know what they were signaling a year ago?

or in March?

[TopQuark]

"To extrapolate that a one month 2% drop in retail sales equates with “never in our lifetimes” is silly nonsense."

YOu are correct, of course, but the conclusion is not a mere extrapolation: surveys show that people's risk-aversion has changed.