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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (100821)	1/25/2009 10:26:46 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 110194

It's not that dire as you forgot to compound at a safe rate, say, 3%. well, actually i didn't forget, since my example specifically pertains to that unhappy case where investment returns are zero. as i wrote, "it would take the average person centuries to pay off their debt and save for retirement if they save 10% of income and get zero investment return." near-zero investment return has been the "acceptable" return in Japan for well over a decade. it has been the reality in America for just as long, but is not yet accepted. one day it will be. of course, even 3% is not very helpful, since as you note the math does not provide chronologically convenient results for most people. Americans, both as individuals and as institutions (pension funds, etc.) rely on the plug: they have certain assets today, and certain liabilities tomorrow, and a certain wherewithal to put away the odd acorn in the meantime (maybe). in order to get from A to B, investors require a certain return, which manifestly cannot be obtained from USTs, so it must be obtained from equities. thus, the return on equities is simply a plug value which is stuck into spreadsheets so that we can all sleep at night. as a soporific, it has no physiological side effects so is better than most. but, eventually we will all wake up and find the plug is just a dream, and we are greatly impoverished in the harsh light of day. Glad I am in a profession where age, experience, reputation and accumulated 'wisdom' count for something. yes, you certainly chose well. almost every other high-end profession has been taken out and shot, but the lawyers remain. makes me wonder how long it will last. probably fine for 40 and overs, but i doubt those under 30 will have such a bright future.

To: carranza2 who wrote (100821)	1/25/2009 10:35:08 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

in keeping with the cheery atmosphere, be sure to check out the latest issue of The New Yorker (the one with Obama in Washingtonion drag on the cover): article on page 40, "The Dystopians", is quite amusing (sorry, no link). some nice face time with Kunstler and his pleasant personality: He was also carrying a long umbrella (the forecast was partly cloudy), which he used to prevent me from crossing the street in front of a car that didn't appear to be slowing down. F**k you, a$$hole!" he yelled at the driver, an unwitting enemy combatant in the new class warfare (transportation division) that Kunstler believes will soon have Lindsay Lohan and Paris Hilton hiding from more than just the paparazzi.