Some numbers

from article posted on : http://venturehacks.com/articles/speculative-return

The most interesting part showing where we are and what to think about the future. Let the numbers speak...

"2001-2020 will have negative speculative returns

Okay, its 2010. Could the speculative return dynamics since 2001 have ended? Umm — probably not. Take a look at this table of important drivers that compare 1981 (the start of the mega 20 year bull period) to now.

                                                                       1981         Today
CPI                                                                  8.9%        -1.3%
30-year bond                                                    13.65%     4.24%
Fed Funds rate                                                 12.00%     0.25%
Highest marginal tax rate                                 69%           35%
Highest LT capital gains tax rate                      28%           15%
Home ownership rate                                       65.2%       67.4%
Household debt as % of income                         56.1%        114.4%
% of families with retirement accts                   20.4%        52.6%
Personal savings rate                                       11.4%         3.0%
Mortgage debt as % of disposable inc                43.1%         95%
Baby Boomer age range                                   17-35         45-63 
Federal Deficit as % of Nominal GFP                  2.5%          11.2% est
PCE (consumer spend) as % of GDP                   61.9%         70.7%
US debt as % of GDP                                         32.2%        85.8%
Household debt as % of GDP                              47.2%         96.8%


To me, these are very sobering statistics. They paint a completely different picture than at the start of the last bull cycle of 1982-2000. My judgment is that these statistics are going to seriously suppress speculative return. The -6.9% of 2001-2005 will get worse and total returns will suffer. In 2021, statistics will show that the 2001-2020 time period had good fundamental returns. But horrific speculative returns."

(...)

"In closing, here’s the “New York Daily Investment News” front page from the early part of the Great Depression to remind us that history may not repeat exactly. But it does rhyme."