Nothing Saved For Far Too Long

In 1999 as the DJIA was around 11000 James Glassman and Kevin Hassett published Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market. They timed the publication perfectly with the peak of the technology bubble where financial assets were clearly out of line with real assets and within a few months the stock market began to move in the opposite direction to 36000. It illustrates once again how financial commentators and economists (Kevin Hassett has a PHD in economics from the University of Pennsylvania) are little more than confidence tricksters who extract large income from in the main being completely wrong about what they are predicting. Granted they use the elaborate props for their deception, taught to them in the neoclassical economics departments of the world, such as complex evaluation techniques based on the efficient market hypothesis wrapped up in fancy computer modelling clothing, to carry out this charade but as they continually get it wrong it is astonishing they can still command the attention and remuneration they do. Even now six years later as the Dow is actually below 11000 Kevin Hassett is still being listened to as a commentator on Bloomberg and a senior economic adviser to John McCain which doesn't bode well for the future of the US economy post November if John McCain gets into office.

What is serious outcome of the world being misguided by the deeply flawed neoclassical school of economics is the fact that the DJIA is actually below where it was at its peak in 1999 a full nine years ago. The baby boomers are nine years closer to retirement and in reality they have saved very little. In fact adjusted for inflation their savings have actually been negative and if you throw in the recent decrease in house prices, the only recent asset appreciation that was looking good for them, the savings required for the retirement years just aren't there. Sure retirement can be put off for another few years should the employment situation not become too dire but eventually they will need to start drawing down on whatever investments they have left and that can only be another headwind to the DJIA as equities are cashed in to fund retirement. It is hard to know where to start with the problems for the US economy at the moment but this has to be one of the main contenters.