Will boomers finally get their comeuppance? Or is this just more wishful thinking from Gen Z?

Photo above - this . . . is . . . NOT . . . Sparta. In related news, investors may be having second thoughts about their asset allocations.

The sky is falling! Maybe, but stock indexes aren't. I’ve posted several columns over the past month highlighting painfully large stock market pullbacks. Yet here we are again this morning with the S&P 500 index within 1% of it’s all time highs. Bitcoin and Oil are way down though. Apparently fake peace deals and constantly broken ceasefires no longer rank attention from the real world, no matter how many tweets per second reverberate from the White House at 1am.

MSN this morning link below) sez that “the US economy is running off a cliff”. Because of consumer debt. Too much stuff bought on credit cards. Home prices and mortgage payments too high. MSN says it can't last. I’ve been saying this for at least a decade too. The difference is I don’t expect an increase in bankruptcies, car repos, and home evictions to result in a post boomer financial paradise.

If you haven’t heard the term “the wealth effect” before, you can find it in the MSN piece below. In short - we’re all gonna die. This is a theory that people are irrationally exuberant in their spending when the stock market is high. They not only upgrade their cars and homes, they charge junkets to Vegas, weeklong wedding trips to Palermo Italy, and $4,000 just for group stage tix Mexico's group play World Cup cheap seats. Don’t forget the $151 for parking!

People from overseas are definitely spending too much to come to the US and watch hometown hero teams from places like Bosnia, Haiti, and Tunisia. (no insult intended. I'm sure there are some very fine neighborhoods and affordable homes there). And over charged fans might indeed file bankruptcy when they get home and open their credit card statements. But that’s unlikely to send Wall Street, Citibank or Bank of America to the cellar. But if your broker urged you to diversify your holdings into foreign companies like Societe Generale de Haiti (a leading bank in Port au Prince) someone could actually end up running off a cliff.

US boomers are already NOT visiting Vegas, or arriving en masse in Palermo for the wedding the daughter of a retired coworker. Many retirees are fretting about the drop in their home values, here in Florida at least. Property insurers are in a race to see who can send premiums the highest and fastest.

Super el-Nino might be coming! The biggest Super El Nino on record was 1875 (150 years ago) which caused mass starvation. But mostly in China and India. If there's mass starvation in the next year, I'm blaming the Iran war, which brought fertilizer production to a halt. But to be fair, fertilizer inventories was probably not a strategic question that got asked on the day Israel asked us to bomb the Ayatollah.

Can we all agree that there aren’t enough houses being built in the USA? That we have $39 trillion in national debt and little to show for it? That credit card rates are too high. And that people should stay away from Vegas? Can we agree on that much, without taking satisfaction in someone else’s misfortune?

I’m just sayin’ . . .



'Running off the cliff': An explosion of household debt has put the US economy in a tough spot

https://www.msn.com/en-us/money/economy/running-off-the-cliff-an-explosion-of-household-debt-has-put-the-us-economy-in-a-tough-spot/ar-AA26bJRW?ocid=BingNewsSerp