Aged populations are ballooning government deficits in most countries.
The Bloc Québécois has threatened to force a snap election if Canada’s federal government doesn’t increase Old Age Security payments for people between the ages of 65 and 74 by 10 per cent. Andrew Chang breaks down the dilemma before the Liberals and why economists say the move could indebt an entire generation. Here is a direct video link.
For those able to hear truth and facts…
Today on the podcast, we’re delighted to welcome back Jeremy Grantham. Jeremy is the long-term investment strategist at his namesake firm, Grantham, Mayo, Van Otterloo & Co., or GMO, which he cofounded in 1977. Here is a direct audio link.
“Bubbles and enthusiasm, ecstasy, they’re all kind of closely related. And I like to say it’s not an accident that the most euphoric periods in the market’s history, all four of them really—1929, 1972, tech bubble of 2000, the great financial crash, 2008, and you could add, 2011, December. Those are the five euphoric points, and the first four, it’s not an accident, they’re all followed, not by the best economic times and the best market returns. They are followed by the four worst economic setbacks and the four worst periods of stock market return. What a strange coincidence.
We all learned at business school that high P/Es are meant to be reflecting the best possible future. And what we find is the highest four P/Es, highest amount of euphoria are precisely followed by the four worst economic outcomes: the Great Depression, the Great Recession of ’73-’74, the worst since the Depression, the crash and the recession after the tech bubble burst, and the real moment of truth when the great financial crash occurred, when the whole financial system of the developed world teetered on the edge of total meltdown. So, what a strange paradox that the market’s predictive power is precisely, perfectly the opposite of what we were taught.”
Danielle was a guest with Jim Goddard on Talk Digital Network, discussing recent world economy and market developments. You can listen to an audio clip of the segment here.
The unemployment rate has climbed a median of 200 basis points through past recessions while central banks were aggressively cutting policy interest rate targets. The consensus is predicting that this time will be different.
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