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Subject: Baby Boomers

A baby boomer is a person who was born during the demographic Post-World War II baby boom. The term “baby boomer” is sometimes used in a cultural context, and sometimes used to describe someone who was born during the post-WWII baby boom. Therefore, it is impossible to achieve broad consensus of a precise definition, even within a given territory. Different groups, organizations, individuals, and scholars may have widely varying opinions on what constitutes a baby boomer, both technically and culturally. Ascribing universal attributes to a broad generation is difficult, and some observers believe that it is inherently impossible. Nonetheless, many people have attempted to determine the broad cultural similarities and historical impact of the generation, and thus the term has gained widespread popular usage.
In general, baby boomers are associated with a rejection or redefinition of traditional values; however, many commentators have disputed the extent of that rejection, noting the widespread continuity of values with older and younger generations. In Europe and North America boomers are widely associated with privilege, as many grew up in a time of affluence. As a group, they were the healthiest, and wealthiest generation to that time, and amongst the first to grow up genuinely expecting the world to improve with time.
One of the unique features of Boomers was that they tended to think of themselves as a special generation, very different from those that had come before. In the 1960s, as the relatively large numbers of young people became teenagers and young adults, they, and those around them, created a very specific rhetoric around their cohort, and the change they were bringing about. This rhetoric had an important impact in the self perceptions of the boomers, as well as their tendency to define the world in terms of generations, which was a relatively new phenomenon.
The baby boom has been described variously as a “shockwave” and as “the pig in the python.” By the sheer force of its numbers, the boomers were a demographic bulge which remodeled society as it passed through it.
The term Generation Jones has been used by Jonathan Pontell to distinguish those born from 1954 onward from the earlier Baby Boomers. (Wikipedia Jan 2010)

Social change:

Thriving without a credit card

The Crash of 2008 is restructuring the availability of consumer credit as well as household spending and saving habits.

Restricted availability of consumer credit and a greater propensity of households to save before spending, may result in less use of credit cards and smaller mortgages. A return, even partial, to saving habits of the 1950s could stimulate economic recovery.

The popular Dave Ramsey radio and TV shows suggest that a societal change in this direction is at least possible. Lower levels of personal debt would boost the economy and make people happier.

Smooth sailing unlikely

Inefficient market portends bumpy recovery

Inefficient markets have consequences that may be prickly for incautious investors.

Markets can be inefficient for different reasons and persist for long periods. The transition between one type of inefficient market to the next is usually a period of strife and uncertainty which may last five to fifteen years. Looking back at how the economy emerged from previous transitions, I note that in each new period, equity prices started at reasonable levels. This was true at the beginning of the Roaring Twenties, the Post WW II Period, and the Reagan Era. It is as if markets, recognizing prior inefficiencies ‘reset’ and start over. However, for the current market to ‘reset’, it will be necessary for equity prices to fall considerably, which will have dire consequences.

Commonsense Economics:

The Inefficient Market Hypothesis

The dead Efficient Market Hypothesis has left behind much harmful junk in financial space

Eventually, at some point, without an efficient market, common stocks become mere baseball cards.

Sooner or later, some Baby Boomer, pressed to pay his bills in retirement, will find that one can’t live off the dividends of common stock and that when everyone is trying to cash out their holdings at the same time, market prices plunge to levels that seemed inconceivable for generations. But it will simply be the cost of allowing an inefficient market to flourish for so long.

This article discusses the concept of inefficient markets and the practical consequences.

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2010-11-10 12:32