Look out for number one.
Buy on margin.
Zero percent interest rates.
It’s your own darn fault.
The big payoff.
Collateralized Mortgage Obligation.
Free market capitalism.
Chances are your reaction to
each, or all, of the above phrases derives from your age, your socio-economic
level, your occupation or your moral fabric.
It’s a good bet that at least one of those phrases evokes a visceral,
emotional response in addition to whatever fact-based analysis you bring to
bear.
In any case, this is the new
reality of our time.
While the tech revolution of 2000 produced its share of
paradigm changes, nothing so changed the economic landscape as an era of misuse
and leverage of the financial system by insiders and outliers alike. Unfortunately,
what we are left with is a decade-past of complex issues, and a decade-forward
of extraordinary remediation. In the
meantime, net valuations of portfolios, homes, and personal net worth have been
readjusted downwards to a “new normal.”
By the numbers.
For those of us “seniors,” the
problems are now owned by the next generations.
For them, it is a striking and overwhelming legacy which, not of their
doing, they must attempt to fix.
If asked by a younger person,
your son or daughter perhaps, “can it get
better?” can you respond with a straight face and without remorse that it might?
I am not a pessimist. I worry, however, about the effect of our
economic transgressions upon the psyche of young adults and children.
Globally, the number of
industrial and manufacturing jobs is ceding growth to technology and “service”
jobs. Cities are experiencing population
and demographic migration. One is more
likely today to relocate from one’s hometown than to stay. Yet statistics indicate that more adult children
are moving back in with their parents for economic reasons than at any time in
the last 60 years.
Move over George
Costanza. You’re not the only one moving
back in with Frank and Estelle.
Get busy.
Some of these demographic
shifts are tomorrow’s investment opportunities.
As I have written, sectors such as biopharmaceuticals, agriculture,
technology, and alternative energy have become the “industrials” for the next
generation. How long can we wait?
To accelerate these phenomena
into trends requires political and fiscal discipline, moral conviction, and
monetary commitment. We’re open for
business, but nobody’s home.
The primary trigger to ignite global economic
renaissance is psychological will, and an abundance of confidence in the
fairness of the system.
Funds? Yes.
Willpower? For certain.
Reality? Not yet.
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