The world is ending. Everything is collapsing. Go hide in a cave and come out in 20 years ..
US Economy Still Reeling From 2008 Aftershocks: Rosenberg By: Jean Chua
The unprecedented wealth destruction in the U.S. caused by the 2008 recession resembles an earthquake of 7 or 8 on the Richter scale and the country is still reeling from its aftershocks, says David Rosenberg, Chief Economist and Strategist at Gluskin Sheff.
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From 2007 to 2009,
median U.S. household net worth collapsed 39 percent and “this wealth collapse was the equivalent of an earthquake measuring 7 or 8 on the Richter scale,” Rosenberg wrote in an editorial in the Financial Times on Thursday.
He added that “earthquakes are followed by aftershocks, which is exactly what has provided the biggest hurdle for the post-recession healing phase we have been in for the past three years.”
Yields on 30-Year Treasurys could plunge to 2 percent, a level unseen since the early 1940s, he predicts, from 2.61 percent on Wednesday.
Suffering the most will be baby boomers, who are now entering their mid-60s and who are at the “epicenter” of this collapse in net worth. Already, household net worth per capita is 15 per cent or $100,000 shy of where it was five years ago and ultra-low interest rates are punishing those who save in bank deposits or money market funds.
“The median age of the boomer is 55 going on 56 and retirement is the darkness at the end of the tunnel,” Rosenberg said. “The trend towards second jobs, do-it-yourself, private labels, dollar stores, maintaining your existing vehicle, downsizing property needs, cocooning and frugality will continue unabated.”
Another uncertainty that will weigh on the U.S. consumers and businesses is fiscal policy.
“Nobody knows what their effective tax rate is going to be next year so they cannot plan,” Rosenberg said. “When you model that uncertainty in economic terms, you end up with higher liquidity ratios in business and rising savings rates in the personal sector. This damps spending growth and spending is what gross domestic product is all about.”
http://www.cnbc.com/id/48455676
It's all about "how much you made when you were right" & "how little you lost when you were wrong"