Thursday, August 6, 2009


The generational groups have been labeled for marketing purposes, yet they're also most valuable for political purposes.

I wanted to dedicate an entire blog just for the Baby Boomers in light of America's disaster economy as of late. The group hated wars and loved collectivist solutions to our country's problems. We don't have a battle between political parties. The collectivist Boomers voted in collective anarchists under the guise of the Republican Party, so there is no republican party. We have an overwhelming democratic majority in Congress and an administration which has a very low approval rating.

The Boomers have an overwhelming voter base in this country. This is notable because they as a group have the ultimate say in what gets voted into office and who gets voted out. This can either work in our favor or work against us. Unfortnately in the last decade this trend has worked against the younger generations. I'll elaborate.

For the years 1940-1994, inclusive, 202 million Americans were born; about 77% of all Americans now living were born after 1939. During the baby boomer years, 1946-1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth.

"Every 7 Seconds"

I believe it was Bill Geist who noted first (in 1997) in his book "The Big 5-Oh" that another boomer turns 50 every 7 seconds. Whew! Is that possible? Well, you don't have to be a math major to check it out. Let's look at 50 years ago - 1959 - when 4,245,000 boomers were born. Now, I suppose that some of them have not made it this far, so let's round it down to 4,000,000. (That's just my estimate, but it is close enough for my purposes here.) So, a bit more than 4,000,000 will turn 50 in 2009. Let's see how that breaks down:

per year: 4,000,000
per day (4.0 mil / 365): 10,958
per hour (10.6 k / 24): 456
per minute (456 / 60): 7.1

And 7.1 per minute amounts to one every 8.5 seconds.

Now let's evalueate this situation.

Back in the days when Boomers became young adults;
-A single earner household could afford a mortgage, a car and to raise a family and save money without a college degree.
-Young adults refused to live with the "squares" and moved out, choosing to live in cheap apartments with their own cars they could afford on the REAL WAGES then.

Since then;
-the cost of living skyrocketed.
-families are no longer cohesive.
-the majority of this country's poor consist of single mother households. (libertarians aka. Mises are misogynists, and this is the reason why I'm not a libertarian. Women should be encouraged to enter the workforce with competative skills, not receiving welfare)
-living standards went down because the muscle determining our economic policies don't come from scholastic economists who work for our country; they come from politicians who take bribes from bureaucrats who are only interested in short term gains and monopolizations for themselves via. cheating at the expense of the taxpayer.
-real wages went down due to Outsourcing and Offshoring.
-The Boomers were really the last group of middle class earners that could save and afford a legitimate mortgage. Therefore most of the Primary owners of Real Estate are Boomers. Many made up the speculative, flippers who took out ARM loans to purposely inflate the price of real estate. Therefore, the price of real estate was unaffordable to the masses with w legitimate mortgage on our REAL WAGES.
-nobody in the Boomer group has shown any disapproval with the bailouts, the fraud in the subprime crisis, generational theft, outsourcing, offshoring, the federal deficit, the Halliburton scandal, etc. Although they want to preach government control over everything. They have the voting power to make it possible.
-illegal immigration increased more than tenfold. Our fiscal budgets can't handle this, over 80 hospitals closed in California alone due to the high cost of illegal immigration.
-the bailouts/collapse of the subprime market demonstrates that the Boomer generation as a whole learned nothing from the S&L Crisis. The greatest financial scandal in the history of the world happened under the Boomer watch.
-Instead of using their political/voting/investing powers to work, the Boomers instead chose to allow their elected politicians to take taxpayer dollars to bailout the bad CEO's. The anger is nothing more than theatrics. They vote with their wallets. Many people in general are nieve on how financial engineering works. Without a job market, there's nobody to pay off a krappy ARM Mortgage to inflate demand and prices on a house.
-During a bad economy when the banks are still refusing to lend money, during a nasty economic contraction the boomer elected politicians want to hinder personal finances, consumer spending power, savings (for investments) and business expenses by imposing a hefty tax called a Cap and Trade policy.
-How in the world do pot/hash/crack/opium smoking, coke/meth sniffing Boomers get the audacity to increase the drinking age and impose regressive taxation on smokers? Again, these policies are imposed by Boomer elected politicians!! They're not taxing the rich, they're punishing people for being born without a silver spoon.
The government lost social security. We have to feel for the Boomers on this one. HOWEVER-this is exactly what the Boomers decided to do about it.
1. 401K's, IRA's and other various retirement accounts. That's what I specialize in. The Dot com was a hit but after vesters were bled dry, they decided to speculate in derivatives/real estate.
2. Instead of calling out the government for mismanaging THEIR money (like the Boomers have the power to do); they instead choose to bailout the bad banks and criminals; impose a stimulus and put our fiscal situation at the mercy of foreign entities (ie. CHINA).
3. Now the Boomers want people like Pelosi (who can't even count) to regulate their healthcare and their retirement pension accounts.

Here's a quote from WikiInvest about Generational theft,
Impact on Medicare and Social Security
Most immediately, the Boomers will begin to draw government benefits such as Social Security and Medicare. Both entitlement programs will be exceedingly costly. In 2006, Social Security cost U.S. taxpayers about 4.2% of GDP, or approximately $554 billion. This figure is expected to increase to 6.2% of GDP by 2030, and to continue rising.

Meanwhile, the potential long-term costs of Medicare are even more severe. Currently, Medicare costs U.S. taxpayers about $230 billion per year, or 3.1% of GDP. However, these figures are expected to rise dramatically over the next 20 years as more Boomers pass age 75. In fact, government analysts estimate that by 2018, Medicare will have surpassed Social Security in terms of its annual cost.

Given these figures, the Social Security and Medicare Boards of Trustees stated in their 2007 Annual Report that, “…currently projected long-run growth rates [for the programs] are not sustainable under current financing arrangements.” Translation: Either long-term-benefits must decrease, or taxes must increase if benefits are to continue at their current levels.

Dependence on Foreign Countries
This quandary poses several difficulties for the U.S. government and for taxpayers. If current budget deficit levels persist, the federal government will be forced to pay for Social Security and Medicare by issuing new debt in the form of U.S. Treasury bonds. While this may lend long-term support to the price of the U.S. dollar, it will also allow foreign buyers—mostly Chinese and Japanese—to exert greater control over long-term U.S. interest rates.

Such a situation could become precarious if foreign buyers perceive that Treasuries no longer represent the best investment for their export-driven foreign currency reserves. For example, if euro-denominated government bonds become more attractive on a long-term basis, foreign buyers may liquidate Treasuries in large numbers, in which case long-term U.S. interest rates would soar. The resulting impact on U.S. credit and real estate markets could be severe.

Labor Burden on Younger Workers
For taxpayers, the Boomers’ retirement means that younger workers will have to bear a much larger burden in order to support the burgeoning ranks of retirees. Currently, there are 3.3 U.S. workers to support each retiree, but by 2030, this number will fall to only two. Given the political clout that seniors have and are likely to retain in the future, an increase in payroll taxes to support the Boomers’ needs seems entirely plausible. Extrapolated over a 10 to 20-year period, such an increase could represent a significant drag on U.S. economic growth. While increases in per-worker productivity may offset some of this burden, it remains to be seen how the U.S. will deal with what is arguably one of the most difficult financial burdens it has ever faced.

The investment advice given regarding the Boomer population are as follows:
Carnival Cruise Lines (CCL) and Royal Caribbean Cruises (RCL) stand to benefit from an increase in senior traffic, as both derive a large percentage of their income from passengers over 55. Royal Caribbean in particular has more than doubled its market capitalization in the last five years, and may continue to benefit as more seniors gravitate toward warmer-weather vacations. Retirement means more time to one’s self, and for many Boomers, that means time to travel. This is the generation of Woodstock and Timothy Leary; they have an expansive worldview and enjoy extending their horizons.
Merck (MRK) and Pfizer (PFE) are pharmaceutical giants that will almost certainly benefit as seniors require more prescriptions and Medicare coverage is expanded. Advanced Medical Optics (EYE), which manufactures products for cataract surgery, laser vision correction, and contact lens care, stands to benefit as well.
Walgreen Company (WAG), Rite Aid (RAD), CVS (CVS) are retail drugstores where senior citizens purchase their drugs.
NBTY (NTY), Leiner Health Products, and Nature's Sunshine Products (NATR) are nutritional supplements manufacturers. As an increasing number of senior citizens consume more healthcare dollars, many of these elderly consumers will also consume more preventive medicines, including the dietary supplements.
AmerisourceBergen Corporation (Holding Co) (ABC), Cardinal Health (CAH), and McKesson (MCK) are wholesalers who distribute branded and generic drugs to pharmacies, where senior citizens purchase their drugs.
Affordable Residential Communities (ARC), which manages more than 350 senior living communities nationwide, has seen solid appreciation over the last five years as analysts anticipate strong growth in demand for senior housing.
Brookdale Senior Living (BKD) offers senior living facilities which cater to independent and assisted living seniors. They also have been selected to assist in many elderly housing expansion projects.
Merrill Lynch (MER), Charles Schwab (SCHW), Principal Financial Group (PFG), and MetLife (MET), all of which have invested substantial resources in developing their retirement services, will likely reap large rewards as retirement assets under management grow over the next decade. For many Boomers, retirement will require specialized financial planning as life expectancies expand and estate planning becomes more complex.
BlackRock (BLK), Goldman Sachs Group (GS), and Lehman Brothers Fin SA (LEH) all manage pension funds for large institutional investors and will likely benefit as companies are forced to commit more capital toward funding their pension obligations.
Stryker (SYK) offers surgical drills, saws, rasps and even cement mixers. Orthopaedic Implants segment manufactures replacement joints, spinal rods, screws, as well as many other implants. Stryker also offers rehabilitation services in over 31 states. Zimmer Holdings (ZMH) offers similar services.
Stericycle collects and disposes of medical waste. An aging population uses more medical services than a younger population and consequently produces more medical waste for companies like Stericycle.

And to end this blog, it seems like the market anymore is the thieving of not just money, but debt and interest. The World Factbook noted that the net worth of America is around $50 trillion dollars, take or give $20 trillion for market/dollar value fluctuations. The projected burden on our country for Boomer Social Security, Medicare and Medicaid is $50 trillion. That's before the stimulus, the omnibus, the current federal deficit, the probably need for military defense, welfare, interest payables on our treasuries and many other administrative expenses.

Just food for thought. We need to get our Boomers aware of their power in our country at this time. I pray that they are on our side in fixing our country's problems instead of robbing future generations of opportunities and a quality of life they might deserve.

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