FRBSF — Global Aging: More Headwinds for U.S. Stocks?

The boomers have had a marked influence economically as they passed through the stages of life. No reason to think that won't happen as they retire and start to draw on accumulated savings. Will this be offset?

The retirement of the baby boomers is expected to severely cut U.S. stock values in the near future. Since population aging is widespread across the world’s largest countries, this raises the question of whether global aging could adversely affect the U.S. equity market even further. However, the strong relationship between demographics and equity values in this country do not hold true in other industrial countries. This suggests that global aging is unlikely to create additional headwinds for U.S. equities.

FRBSF Economic Letter
Global Aging: More Headwinds for U.S. Stocks?
Zheng Liu, Mark M. Spiegel, and Bing Wang

80 is the new 68

Not too long ago a study revealed that most people define old age as 68. What a difference a few years make. This week a new study found that old age really doesn't begin until 80. 

The study, commissioned by comparison website PayingTooMuch.com, asked 2,000 Britons over 40 what they considered old. The average answer -- 80 -- was nearly 20 years later than what previous generations might have responded. Those behind the study say the change in attitude is due in large part to delayed retirement, more active lifestyles, and a familiarity with octogenarians still successfully working.

This is a big deal with the Boomers set to retire. They have affected the entire country at every stage of life passage, and this probably is not going to change in retirement.

The Huffington Post
Old Age Doesn't Start Until 80, Study Finds
Shelley Emling

Dr; Housing Bubble — Will there be a steady supply of homes for sale from aging baby boomers in this decade? Who will they sell to and at what price?

From 2010 to 2020 we are going to have a large number of baby boomers entering into their retirement years. Many will look to downsize and the projections have been, that this would add a steady supply of housing. Issues like negative equity have kept many potential homeowners from actually listing their homes on the market for sale. It is also the case that a younger and less affluent generation is going to struggle to pay top dollar for many of the properties hitting the market. Many are resorting to using loans that are insured by theFHA that allow 30x leverage just to get their foot in the door. It is interesting to see this trend unfold because there is nothing that can be done to stop the momentum of age. Banks can alter accounting rules and hold off inventory to create artificially low supply but there is nothing that can stop our inherent biological aging process. Some interesting data is coming to the surface regarding baby boomers and the demographic changes that will impact housing. Will baby boomers add a significant number of homes to the market in this decade?

Dr. Housing Bubble
Will there be a steady supply of homes for sale from aging baby boomers in this decade? Who will they sell to and at what price?

Outsourcing the Old Folks

Part movie review (The Best Exotic Marigold Hotel), part a look at new markets and new opportunities for innovation as the world ages and boomers retire.

Read it at Harvard Business Review | HBR Blog
Outsourcing the Old Folks
by Marc Freedman | Founder/CEO of Civic Ventures and Encore.org