Monday, October 11, 2010


Easy read from Rockwell. Keep your eyes on the target. This market is begging to correct, but they could still push it down the road.

What the Census data indicate is that our mobility has been drastically curtailed from what it was a few years ago. The number of people who have not moved from one home to another, from one community to another, has risen substantially.

From an economic point of view, this makes sense. Maybe people are afraid to put their houses on sale for fear of discovering what price the market will bear. Many people sunk vast sums into their houses under the assumption, alive for decades, that homes would forever go up in price. This turns out to be the great myth that has devastated family finances across the country.

Another factor affecting mobility has been the tight labor market. Jobs are just not easy to come by, and it is especially difficult to transport a boom-time salary to another location during the bust. Market pressures during recessions are always downward. The safest path is to stay put.

Another trend is the delay in marriage. For the first time since the data have been tracked, the share of women 18 and older who are married fell below 50%. The share of the population age 25 to 34 that is unmarried jumped from 34.5% in 2000 to 46.3% nine years later. This is a massive social trend, dictated by economic realities.

There is a general tendency to marry in secure economic times, and to put this decision off during periods of economic uncertainty. Moreover, falling incomes and tighter labor markets give women, in particular, less to gain from a marriage, because there is far less likelihood that a household can get by on a single income.

We've also seen a jump in the number of people working from home, which also makes sense given the tighter labor markets and growing resistance to hiring. Another option besides working at home is one that Europeans know very well: going back to school. This trend has taken hold in the United States in the last two years.

The tendency to plunge back into school is also dictated by economic realities. We are now in the third straight year of college graduating classes whose earnings potential is far less than they had expected during their years in school. During these years, students accumulated six-figure debts that they figured they could pay off in a reasonable time with their high incomes. Those incomes have not appeared. So rather than accepting pay at the prevailing rate, they have re-enrolled in school to defer having to service the loan.

We might as well bring up the striking trend of young people moving back in with their parents after a period of living by themselves. This phenomenon has given rise to the phrase Boomerang Generation. In 2000, some 17% of Americans age 20 to 29 lived at home. Today, some estimates put that figure at 34%. And this compares to 1960, when only 9% of people in this age group lived with their parents.

This Boomerang Generation also turns out to be the Sloth Generation, since many of these people have never held a job in their lives. It's not their fault, for the most part. The economic crisis, child labor laws, socialized educational costs, minimum wages, and a government-imposed culture of prolonged adolescence have combined to deny opportunity to an entire generation.

Tragically, labor force participation among American youth age 16 to 24 continues to fall. Most recently, it fell to 60.5% in July 2010, which is the lowest July ever recorded. Before twenty years ago, the typical labor force participation rate ranged between 81 and 86%. In other words, 4 out of 5 kids in this age group gained hugely valuable experience for a lifetime of work. Now only 3 out of 5 kids do. The most dramatic drops we've seen in these figures have been in the past three years.


  1. EXAR, heheee!

  2. All,

    Are you buying EXAR? Let's hear it.

  3. Homer & Nancy

    Are you buying EXAR?

  4. EXAR is going to be a in dont have to load the boat ...just like sgg....take a position.....and HOLD....its that simple watta ya gonna do gang hold CASH...Benyanke has told you he is going to SCREW your savings....until this casino closes down you gotta play sumthin...

  5. meshit,

    because I am a caring man!

  6. EXAR - You guys pushed it out of reach!!! hahaha - will pick some up in the morning..

    Missed DCTH, never saw the rec and too rich for me at this point, must feed off bottom.

    Still trying to catch up but looks like I never will, issues at work will keep me busy all day.

    Market still scares me though looks like the one account of my better half I was managing is going to go half to a variable annuity as protection. The rest will be fully invested, could never get her fully extricated. Oh well, mine is in good shape but I can't pick individual stocks and short term trading restrictions are a pain.