Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Three Frightening Economic Trends

I have recently noticed three frightening economic trends that might be harbingers of a serious downturn.

I am scared because these trends affect ordinary people. Disturbingly, these trends show that some supposedly prosperous groups in our society are facing money troubles.

Investors need to watch these trends closely because they point to interesting opportunities. Smart people that stay on top of these trends can make a lot of money from them.

The three frightening economic trends you should monitor are:

Baby Boomers Cannot Sell their Homes

Baby Boomers will soon create a huge glut of unsold homes in the real estate market.

No market exists for many of the homes Baby Boomers (persons aged 53 to 73) will try to unload, Chris Nelson observed. Nelson is professor of urban planning and real estate development at the University of Arizona.

Boomers will have a hard time downsizing to smaller homes because of difficult to sell homes, Nelson predicted. Unsellable Boomer domiciles include ranch houses and homes in many suburbs.

Homes in distant suburbs will be especially hard to sell, Nelson noted. “Young families typically want to be a little closer in, closer to schools, shopping and so forth,” Nelson said.

Boomers problems will be real estate investors’ opportunity in Nelson’s scenario. The professor pointed out an interesting opportunity created by Boomers’ troubles.

“So the seniors are going to have to sell the homes to syndicates that rent the homes, to renters, or sometimes, especially in the northern states, leave the homes and let them fall to the ground,” Nelson told KGUN TV.

Baby Boomers that expect to finance their retirement by selling their home are in for a nasty surprise. If Nelson is right, many Boomers face a bleak future with nothing but Social Security to live on.

Investors should take notice. People with cash will pick up great bargains in the residential real estate market in a few years.

Senior Bankruptcy is a Growing Problem

Senior citizens’ bankruptcy rates are exploding. A new study found vast numbers of people over 65 are cannot pay their debts.

“Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system,” professors Deborah Thorne, Pamela Foohey, Robert M. Lawless, and Katherine Porter wrote.

Many seniors have little or money their study Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society indicates. The average Senior declared bankruptcy with just $17,390 in debts. The average bankrupt American reported $250,000 in unpaid debt.

Debt is a huge problem for seniors. The average senior debt load more than doubled in 12 years, Civic Skunk Works writer Paul Constant revealed. The average senior owed $18,000 in 2001 and $40,000 in 2013.

Senior bankruptcy will have profound economic and political consequences. Real estate prices will collapse as desperate Baby Boomers sell their homes for peanuts. Raising Social Security payouts and expanding Medicare will become the only political issues.

Understanding seniors’; especially Baby Boomers’, growing economic insecurity will be critical to risk assessment.

Medical Debt Out of Control

One out of six Americans has unpaid healthcare debt, The PBS News Hour reported.

Disturbingly, the younger an American is the more likely he or she is to have an unpaid medical bill. Persons under 27 made up 11% of those with unpaid medical debt.

America’s unpaid medical debt totals $81 billion. The poor owe most of that healthcare debt, a study in Health Affairs suggested.

Over half, 53%, of the unpaid medical bills are under $600, the study found. These finds verify reports that 40% of Americans are incapable of covering a $400 expense.

The amount of healthcare debt indicates that the level of poverty in America is higher than commonly thought. Average Americans have far less spending money than they would like to admit.

Politicians should take note. These studies tell us that singer-payer healthcare and Medicare for All will be major issues in upcoming elections.

Economic insecurity in the United States is growing dramatically. This insecurity will soon lead to major economic and political changes.