Financial stocks, BKX & Citi [Archive]

bart

08-03-08, 03:09 PM

In the blue sky wonderful world of financial stocks and how they've supposedly hit bottom and its nothing but up from here, here's the longer term story.

First, the Philadephia Banking Index (BKX) along with Citigroup stock, and since the inception of the BKX in 1993.

http://www.nowandfutures.com/images/bkx.png

Donald Coxe, US Portfolio Strategist within the Research Department of BMO Nesbitt Burns (http://corporate.bmo.com/publications/basicPoints/default.asp), had this to say in early April 2005:
"Virtually all severe stock market setbacks are preceded by underperformance of financial stocks, and the selloff tends to continue until the financials start to outperform. 1987 was a classic example of this phenomenon. The sharp underperformance of the NYSE Financials was the warning of coming horrors. ... Regrettably, the NYSE Financials Index was discontinued some years ago; it had a nearly perfect warning record. Its successor, the Philadelphia Banking Index (http://stockcharts.com/def/servlet/SC.web?c=$BKX,uu%5Bw,a%5Ddalaynay%5Bpf%5D%5Biut%5D&pref=G) seems to have filled its shoes admirably."

And now, Citigroup stock from 1970-1993 as a proxy for the BKX. Note how it peaked in 1973 about 1.34 and then fell to around .51 - a drop of about 60%... and although it did recover to the .80 area within a year probably due to an almost bearish mania overshoot, it was in a trading range for about a decade. It did not break above the old high until about mid 1985 - and that's before any inflation adjustments.

http://www.nowandfutures.com/images/bkx_long_term.png

metalman

08-03-08, 03:34 PM

http://www.nowandfutures.com/images/bkx_long_term.png

crash of '87 beat the shit out of financials. no one believed greasepan could work his magic and inflate the markets, but he did. everyone thought... here comes another great depression!

bart

08-03-08, 04:50 PM

crash of '87 beat the shit out of financials. no one believed greasepan could work his magic and inflate the markets, but he did. everyone thought... here comes another great depression!

Are you trying to say that the President's Working Group (aka, the PPT) having been formed in early 1988 was a coincidence? :eek: ;)

"Executive Order 12631 - Working Group on Financial Markets - Mar. 18, 1988; 53 FR 9421, 3 CFR, 1988 Comp., p. 559.
By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee.

Section 2. Purposes and Functions.
(a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.

Section 3. Administration. (c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions."

Here (http://www.ustreas.gov/press/releases/hp272.htm) is a 2007 press release from the PWG, for what its worth.

08-03-08, 06:38 PM

bart, citi and bkx are down about 60% now, equaling the loss in '73. any thoughts about where we are in the process?

bart

08-03-08, 07:20 PM

bart, citi and bkx are down about 60% now, equaling the loss in '73. any thoughts about where we are in the process?

I was afraid someone would ask me that.

Best guess, I give it about a 4 in 10 or so that we've seen the final bottom and that all the various "rescue" efforts will succeed. I require at least 7 in 10 to trade or invest, and am also happy to let profits pass me by if I'm incorrect.

For what its worth, I expect the next few weeks to be roughly level in the broad stock markets... and will turn on a dime and give change if there's a significant trend break in either direction.

touchring

08-03-08, 11:00 PM

Is citi cheap? They have raised tens of billions if not a hundred billion of shareholder funds. As i understand, price must drop when the number of shares increase.

I was afraid someone would ask me that.

Best guess, I give it about a 4 in 10 or so that we've seen the final bottom and that all the various "rescue" efforts will succeed. I require at least 7 in 10 to trade or invest, and am also happy to let profits pass me by if I'm incorrect.

For what its worth, I expect the next few weeks to be roughly level in the broad stock markets... and will turn on a dime and give change if there's a significant trend break in either direction.

zoog

08-04-08, 11:41 AM

I was afraid someone would ask me that.

Best guess, I give it about a 4 in 10 or so that we've seen the final bottom and that all the various "rescue" efforts will succeed. I require at least 7 in 10 to trade or invest, and am also happy to let profits pass me by if I'm incorrect.

For what its worth, I expect the next few weeks to be roughly level in the broad stock markets... and will turn on a dime and give change if there's a significant trend break in either direction.

Still, it looks like the easy money has been made, for those who shorted this stuff. Unless the bank stocks fall significantly below prices from 30 years ago...

http://img369.imageshack.us/img369/381/citi7708un1.jpg (http://imageshack.us)

bart

08-05-08, 07:30 PM

Still, it looks like the easy money has been made, for those who shorted this stuff. Unless the bank stocks fall significantly below prices from 30 years ago...

http://img369.imageshack.us/img369/381/citi7708un1.jpg (http://imageshack.us)

Probably true grasshopper.

There are certainly less risky areas in which to invest or trade, especially given the "special" shorting rules in place.

c1ue

08-06-08, 10:20 AM

bart

08-06-08, 10:39 AM

In general, it is true that the easy money in shorting BKX is gone.

However, I will point out that we still haven't seen the top 10 depository bank fail (or be 'acquired') yet.

I firmly believe we'll see another major drop when that happens - because the general public thinks right now that the problems have been resolved.

Precisely, and that's the one of the reasons I'm only around 40% confident in an ultimate bottom having been seen. Alt-A problems are dead ahead too.

touchring

08-06-08, 10:32 PM

Precisely, and that's the one of the reasons I'm only around 40% confident in an ultimate bottom having been seen. Alt-A problems are dead ahead too.

How about using manhattan real estate prices? I think we'll see the bottom after prices drop at least 50%.

There has NEVER been a financial crisis in which the home prices in the financial capital city does not drop by 50% or more. In Tokyo, it dropped 70-80%.

jimmygu3

08-06-08, 10:37 PM

Lukester

08-06-08, 10:45 PM

touchring

08-06-08, 10:52 PM

Interesting. Any other supporting data?

A few articles:
http://goliath.ecnext.com/coms2/gi_0199-3247625/Searching-for-the-bottom-what.html#abstract
http://www.dailywealth.com/archive/2007/mar/japanese-real-estate.asp

The Asian financial crisis, luxury real estate prices in Singapore dropped about 40% - Singapore was hardly affected by the financial crisis in monetary terms, the banks were not affected. In Hong Kong, luxury prices plunged more than 50%.

touchring

08-06-08, 10:58 PM

Touchring - As promised before, I will have a 5 litre magnum of chilled Champagne (Dom Perignon) shipped to you should this come about, as I will be buying a place in Manhattan then. But I don't expect to see your prediction come true. Nice idea though. That magnum shipped across the world is destined to merely linger ... in your dreams ... :D

Thanks. :)

Well, i thought 50% "correction" isn't a lot considering how much interest rates will rise over the next few years. After accounting for the rate increase, affordability may not improve a lot. So, even assuming there is (and will be) no recession and no layoffs, a correction matching the increase in rate and the downpayment is quite reasonable.

And with the Freddie and Fannie scare, housing credit will be even harder to come by in the following few months. Anyone knows how to calculate how fast and how much more rates will rise because of the scare?

By the way, while the market believes the government can bailout any kind of debt, rates are quietly increasing like nobody's business.

As we speak, <table class="table-border-fulloa" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td class="row1-lpadfull" align="left" valign="middle">30 yr fixed mtg (http://bankrate.com/brm/rate/mtg_start.html?product=1&refi=0&ec_id=brmint_brm_large_new_mpro_mtg_all) </td> <td class="row1full" align="center" valign="middle" width="20"> http://bankrate.com/images_MRA/rates_box/graph_image_v2.gif (http://bankrate.com/brm/graphs/graph_trend.asp?product=1&prodtype=M&ec_id=brmint_brm_large_new_mpro_mtg_all) </td> <td class="row1full" align="center" valign="middle" width="50"> 6.42% </td> <td class="row1-lpadfull" align="center" valign="middle" width="15"> http://bankrate.com/images_MRA/arrows/up_oa2.gif </td> <td class="row1full" align="center" valign="middle" width="50"> 6.09%</td></tr></tbody></table><table class="table-border-fulloa" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td class="row2-lpadfull" align="left" valign="middle">30 yr fixed jumbo mtg (http://bankrate.com/brm/rate/mtg_start.html?product=4&refi=0&ec_id=brmint_brm_large_new_mpro_mtg_all) </td> <td class="row2full" align="center" valign="middle" width="20"> http://bankrate.com/images_MRA/rates_box/graph_image_v2.gif (http://bankrate.com/brm/graphs/graph_trend.asp?product=4&prodtype=M&ec_id=brmint_brm_large_new_mpro_mtg_all) </td> <td class="row2full" align="center" valign="middle" width="50"> 7.42% </td> <td class="row2-lpadfull" align="center" valign="middle" width="15"> http://bankrate.com/images_MRA/arrows/up_oa2.gif </td> <td class="row2full" align="center" valign="middle" width="50"> 7.19%</td></tr></tbody></table>(bankrate.com)

Lukester

08-06-08, 11:08 PM

Wow, 7.42%. I have not been keeping up. Well one thing is clear, with rates like this - bye-bye former San Diego stratospheric home prices. I'm seeing a lot of 300K markdowns and the owners beginning to appear in desperate straits. But it's always been a small town with big city pretensions anyway.

As we speak

<TABLE class=table-border-fulloa cellSpacing=0 cellPadding=0 border=0><TBODY><TR><TD class=row1-lpadfull vAlign=center align=left>30 yr fixed mtg (http://bankrate.com/brm/rate/mtg_start.html?product=1&refi=0&ec_id=brmint_brm_large_new_mpro_mtg_all) </TD><TD class=row1full vAlign=center align=middle width=20>http://bankrate.com/images_MRA/rates_box/graph_image_v2.gif (http://bankrate.com/brm/graphs/graph_trend.asp?product=1&prodtype=M&ec_id=brmint_brm_large_new_mpro_mtg_all)</TD><TD class=row1full vAlign=center align=middle width=50>6.42% </TD><TD class=row1-lpadfull vAlign=center align=middle width=15>http://bankrate.com/images_MRA/arrows/up_oa2.gif </TD><TD class=row1full vAlign=center align=middle width=50>6.09%</TD></TR></TBODY></TABLE>
<TABLE class=table-border-fulloa cellSpacing=0 cellPadding=0 border=0><TBODY><TR><TD class=row2-lpadfull vAlign=center align=left>30 yr fixed jumbo mtg (http://bankrate.com/brm/rate/mtg_start.html?product=4&refi=0&ec_id=brmint_brm_large_new_mpro_mtg_all) </TD><TD class=row2full vAlign=center align=middle width=20>http://bankrate.com/images_MRA/rates_box/graph_image_v2.gif (http://bankrate.com/brm/graphs/graph_trend.asp?product=4&prodtype=M&ec_id=brmint_brm_large_new_mpro_mtg_all)</TD><TD class=row2full vAlign=center align=middle width=50>7.42% </TD><TD class=row2-lpadfull vAlign=center align=middle width=15>http://bankrate.com/images_MRA/arrows/up_oa2.gif </TD><TD class=row2full vAlign=center align=middle width=50>7.19%</TD></TR></TBODY></TABLE>

(bankrate.com)

480

bart

08-06-08, 11:39 PM

How about using manhattan real estate prices? I think we'll see the bottom after prices drop at least 50%.

There has NEVER been a financial crisis in which the home prices in the financial capital city does not drop by 50% or more. In Tokyo, it dropped 70-80%.

That sounds about right. The inflation corrected Case Shiller CSXR Index dropped about 33% (about 8% nominal) in the '90s and that's just an average.

The same inflation adjusted CSXR index is off about the same now (about 20% nominal) and is almost certainly far from a bottom. I seem to recall that Shiller believes the bottom in nominal values will be around 30-35% from the peak.

touchring

08-07-08, 12:36 AM

That sounds about right. The inflation corrected Case Shiller CSXR Index dropped about 33% (about 8% nominal) in the '90s and that's just an average.

The same inflation adjusted CSXR index is off about the same now (about 20% nominal) and is almost certainly far from a bottom. I seem to recall that Shiller believes the bottom in nominal values will be around 30-35% from the peak.

If we go by what happened in financial crisises in Asia, the US real estate correction is in early stages.

In Singapore, once the recession started (it hasn't really started in the US i suppose) and companies started massive laying off, the banks start demanding for 30% or more down payment on top of income tax statements from the tax authorities. Can you imagine paying 30%-40% upfront in cash?

Only millionaires sitting on cash or gold bars could buy during those times. And with the super high saving rates of 50% in singapore, indeed there were a lot of people buying using cash.

c1ue

08-07-08, 01:25 PM

Lukester,

The reason your offer is a sucker bet is that inflation is on your side.

The prices in Tokyo dropped because Japan chose deflation - hurt the companies but relatively don't hurt the people.

The prices in the US will eventually stabilize due to purchasing power erosion via inflation. Or in other words, help the banks but screw anybody with money.

So prices in Manhattan may not fall 50% or more, but the number of sandwiches you can trade for an apartment will fall dramatically.

Your gold position won't even help unless you catch an overcorrection; long term all gold does is even out inflation.

bart

08-07-08, 01:51 PM

If we go by what happened in financial crisises in Asia, the US real estate correction is in early stages.

In Singapore, once the recession started (it hasn't really started in the US i suppose) and companies started massive laying off, the banks start demanding for 30% or more down payment on top of income tax statements from the tax authorities. Can you imagine paying 30%-40% upfront in cash?

Only millionaires sitting on cash or gold bars could buy during those times. And with the super high saving rates of 50% in singapore, indeed there were a lot of people buying using cash.

I believe the NBER recession started in 4Q 2007, and the real one no later than late 2005 and likely much earlier.

There is lots of cash in Asia and elsewhere that's available for purchasing US real estate and other assets, as soon as a bottom is visible or that they judge the risk to be acceptable.

Lukester

08-07-08, 02:53 PM

... the number of sandwiches you can trade for an apartment will fall dramatically. ... Your gold position won't even help.

So what do I need to do here - Gold won't be any good even when it meets the Dow Jones maybe at $3000 or $4000 on the way down. How about if I stockpile some sandwiches, can I can get a good deal on a Manhattan Condo with those? I'm thinking Airline sandwiches - the ones with a long shelf-life cause they never go stale? I never heard of this strategy, but who knows, if it gets me into a swank Upper West Side condo that's not a bad trade. The Condo I could sure use! What about the sandwich delivery at the escrow office. Does the intermediary escrow bank handle that? :confused: :confused: :confused:

bart

08-07-08, 03:02 PM

Save your Dixie Cups... the South will rise again!?

Lukester

08-07-08, 03:49 PM

C1ue - what do you think about Dixie Cups? Do I get better trade-in value with the Dixie Cups?? Bart seems to think they could work good, and he's a futures guy! But, what if they won't accept the Dixie Cups in Manhattan? Maybe there's a risk of "currency failure" there because they are from the South while Manhattanites are insufferable snobs, so we should look at bags of aluminum pseudo-coin-slugs for the Manhattan parking meters instead? After all, Manhattanites have always been slaves to parking meter change, right?

I got it! How about Canadian quarters - no wait, arent' those more expensive than our own quarters now? :rolleyes: Why can't we Americans catch a break here? I'm thinking the aluminum slugs aren't a bad idea because Aluminum itself has been no slouch of an investment either! Why does this Manhattan Condo buying strategy have to get this complicated? Aww, for Pete's sake, will somebody please tell me what to dump my Gold bullion for here, already?! And here's another thought - what if some really slick operators started hoarding the Gold anyway, as a sort of "contrarian play" here against the smart money that was buying sandwiches instead? :confused: :confused: :confused:

bart

08-07-08, 04:24 PM

And you are asking us? :eek:

http://www.nowandfutures.com/grins/useforce.wav

touchring

08-07-08, 10:26 PM

I believe the NBER recession started in 4Q 2007, and the real one no later than late 2005 and likely much earlier.

There is lots of cash in Asia and elsewhere that's available for purchasing US real estate and other assets, as soon as a bottom is visible or that they judge the risk to be acceptable.

Perhaps for governments that would invest for political purposes, but private investors in Asia would still prefer to invest in China, India, Vietnam, if not even more so since the credit crunch.

The subprime problem in Wallstreet and the bailouts that caused oil inflation has created a very negative image of the Fed, American banks, and both US and European investments.

By solely relying on the printing of money to solve the credit problem, the Fed is losing the PR battle.

bart

08-07-08, 11:17 PM

Perhaps for governments that would invest for political purposes, but private investors in Asia would still prefer to invest in China, India, Vietnam, if not even more so since the credit crunch.

The subprime problem in Wallstreet and the bailouts that caused oil inflation has created a very negative image of the Fed, American banks, and both US and European investments.

By solely relying on the printing of money to solve the credit problem, the Fed is losing the PR battle.

And US or European investors still invest relatively locally, as they usually do. Asian investing can be quite treacherous to them due to the huge cultural and actual significantly larger government barriers.

I also submit that oil inflation caused by excess money creation has been created by central and other banks worldwide - it's far from limited to the Fed and ECB, and is indeed a characteristic of central banks in general.

The Fed and other central banks go through cycles of relative inflation and disinflation and their PR status has not been good for anyone who pays attention to their real and negative both short and long term inflationary effects.

And the Fed itself is also provably not in high money creation mode currently, and hasn't been since roughly last July.

touchring

08-08-08, 12:42 AM

Agree, but everything boils down to PE ratio. If you invest in the top 20 Chinese, Vietnamese and Indian blue chips after the bubble burst (it is bursting as we speak), it will be a very lucrative and also a nobrainer medium to long term investment.

And US or European investors still invest relatively locally, as they usually do. Asian investing can be quite treacherous to them due to the huge cultural and actual significantly larger government barriers.

bart

08-08-08, 12:54 AM

Agree, but everything boils down to PE ratio. If you invest in the top 20 Chinese, Vietnamese and Indian blue chips after the bubble burst (it is bursting as we speak), it will be a very lucrative and also a nobrainer medium to long term investment.

Probably, but I categorically reject that any investment is a no-brainer. I recall a number who said that about the Nikkei in the '90s.

touchring

08-08-08, 02:53 AM

Probably, but I categorically reject that any investment is a no-brainer. I recall a number who said that about the Nikkei in the '90s.

Yes, i'm making a rather sweeping statement, but the situation in china and japan is quite different. Japan being an advanced country by the 90s, whereas china is still Third world as a whole. There's going to be maybe another 2 or 3 more boom and busts before the Chinese real estate bubble reaches the maximum size.

It's difficult to explain in words alone, you really need to be on the grounds, visiting China every few years during the last 15 years, to understand. Perhaps Outback Oracle can share some of his personal opinions. :D

c1ue

08-08-08, 10:29 AM

So what do I need to do here - Gold won't be any good even when it meets the Dow Jones maybe at $3000 or $4000 on the way down.

You're trying to be funny, but the point is still the same: Gold will be worth something, but you're unlikely to GAIN anything by it except in the sense of not losing as much.

The only game for me is to get out of this losing game.

As for Dixie cups, according to Wiki they're made in the North.

Damn Yankees!

They were introduced in 1907 by Lawrence Luellen, a lawyer in Boston, Massachusetts (http://en.wikipedia.org/wiki/Boston%2C_Massachusetts), who was concerned about germs (http://en.wikipedia.org/wiki/Germ) being spread by people sharing glasses or dippers at public supplies of drinking water (http://en.wikipedia.org/wiki/Drinking_water). Luellen developed an ice-cooled water (http://en.wikipedia.org/wiki/Water)-vending machine (http://en.wikipedia.org/wiki/Vending_machine) with disposable cups<SUP class=reference id=cite_ref-Dixie_4-1>[5] (http://en.wikipedia.org/wiki/Dixie_Cup#cite_note-Dixie-4)</SUP>, and with another Bostonian, Hugh Moore (http://en.wikipedia.org/wiki/Hugh_Moore), embarked on a campaign (http://en.wikipedia.org/wiki/Advertising_campaign) to educate (http://en.wikipedia.org/wiki/Education) the public and to market his machine, principally to railroad companies. Professor Davison's study was instrumental in abolishing the public glass and opening the door for the paper cup. Soon, the devices, which would dispense cool water for a cent, became standard equipment on trains (http://en.wikipedia.org/wiki/Train).

The Dixie Cup was first called "Health Kup", but from 1919 it was named after a line of dolls made by Alfred Schindler's Dixie Doll Company in New York. Success led the company, which had existed under a variety of names, to call itself the Dixie Cup Corporation and move to Easton, Pennsylvania.

Dixie merged with the American Can Company in 1957. It is now part of a subsidiary of Koch Industries (http://en.wikipedia.org/wiki/Koch_Industries), the largest privately owned company in the United States.

The Dixie Cup logo was created by in 1969 by Saul Bass (http://en.wikipedia.org/wiki/Saul_Bass), a graphic designer (http://en.wikipedia.org/wiki/Graphic_designer) known for his motion picture title sequences.

bart

08-08-08, 10:47 AM

Yes, i'm making a rather sweeping statement, but the situation in china and japan is quite different. Japan being an advanced country by the 90s, whereas china is still Third world as a whole. There's going to be maybe another 2 or 3 more boom and busts before the Chinese real estate bubble reaches the maximum size.

It's difficult to explain in words alone, you really need to be on the grounds, visiting China every few years during the last 15 years, to understand. Perhaps Outback Oracle can share some of his personal opinions. :D

Fair enough.

Although its not the same as being there, my daughter has been there on & off during the last 4 years and is just completing some Mandarin studies at Tsinghua University in Beijing, so I do have much more than average understanding of the area.

As for Dixie cups, according to Wiki they're made in the North.

Damn Yankees!

:eek:

The company is probably owned by Rockefeller and the Bilderbergers... ;)

touchring

08-08-08, 11:49 AM

Fair enough.

Although its not the same as being there, my daughter has been there on & off during the last 4 years and is just completing some Mandarin studies at Tsinghua University in Beijing, so I do have much more than average understanding of the area.

I've gone to China in the 80s, 90s, and every 1 or 2 years the last 10 years, some leisure, some business trip. There is productivity growth, improvements in transport, and working culture over time.

Beijing doesn't have a strong business culture, and the Hebei region is rather improverished.

Shanghai and Zhejiang cities like Ningbo and Hangzhou are better for investment. The business culture over these places are better than in Hong Kong, and Taiwan, and way better than in Singapore. I see no reason why they won't do just as well in the medium to long term.

I would expect to see just the Zhejiang and Guangdong region alone beating Japan GDP output by around 2035 or earlier.

bart

08-08-08, 12:15 PM

I've gone to China in the 80s, 90s, and every 1 or 2 years the last 10 years, some leisure, some business trip. There is productivity growth, improvements in transport, and working culture over time.

Beijing doesn't have a strong business culture, and the Hebei region is rather improverished.

Shanghai and Zhejiang cities like Ningbo and Hangzhou are better for investment. The business culture over these places are better than in Hong Kong, and Taiwan, and way better than in Singapore. I see no reason why they won't do just as well in the medium to long term.

I would expect to see just the Zhejiang and Guangdong region alone beating Japan GDP output by around 2035 or earlier.

In deference to my daughter and her privacy, I won't comment on any specific areas or locales but will just note that we disagree on some of them, as well as note again that I'm nowhere near as positive as you about future Asia or China returns especially over a multi-decade period.

touchring

08-08-08, 12:22 PM

In deference to my daughter and her privacy, I won't comment on any specific areas or locales but will just note that we disagree on some of them, as well as note again that I'm nowhere near as positive as you about future Asia or China returns especially over a multi-decade period.

I'm positive only in the long term. In the short to medium term, i see problems like the current real estate bubble, extreme nationalism, and widespread unemployment.

In the long term, i think emerging economies in Asia will do better than developed nations just solely on demographics alone.

In just about 20 years time, the developed world will need an enormous amount of money to fix aging infrastructure, provide healthcare and retirement money for almost a billion aging citizens.

Where is the money for this? Even if we don't talk about money - then at least - what is the plan?

bart

08-08-08, 12:40 PM

I'm positive only in the long term. In the short to medium term, i see problems like the current real estate bubble, extreme nationalism, and widespread unemployment.

In the long term, i think emerging economies in Asia will do better than developed nations just solely on demographics alone.

In just about 20 years time, the developed world will need an enormous amount of money to fix aging infrastructure, provide healthcare and retirement money for almost a billion aging citizens.

Where is the money for this? Even if we don't talk about money - then at least - what is the plan?

A society reflects the sum total of its citizen's responsibility and irresponsibility.