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Five Things You Need to Know: Dollar Dilemma?, Robbing Pee Wee to Pay Grandma, We Invented Everything, Chin Up, Grandpa... We're Selfish Too!, Generation Who?


What you need to know (and what it means)!


Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Dollar Dilemma?

How high is too high for the U.S. dollar? While we remain committed to our higher dollar in 2007 view, nothing goes up in a straight line.

  • Suddenly the rising dollar is back on everyone's radar.
  • Already this year the U.S. Dollar Index is up nearly 2% and beginning to work its way back on to the front pages.
  • Meanwhile, the dollar is approaching a couple of important technical inflection points, just as its 2007 rise attracts more noise and attention.
  • Below is a chart of the U.S. Dollar with the DeMark TD-Sequential indicator overlaid.
  • TD-Sequential is a price exhaustion technique designed to anticipate tops and bottoms using pattern recognition based on comparing the closing price to the close four price bars earlier.
  • A TD-Sequential buy setup is a series of nine consecutive price bars where the close is lower than the close four price bars earlier.
  • A TD-Sequential sell setup is a series of nine consecutive price bars where the close is higher than the close four price bars earlier.
  • A completed TD-Sequential buy or sell setup is indicated on the chart with the number 9.
  • A 9 below the price series is a buy setup. A 9 above the price series is a sell setup.
  • You can see the prior inflection points on the chart marked and identified by 9s (as well as one last Spring that didn't work at all).
  • In the chart below, the U.S. Dollar Index nearing a potential TD-Sequential sell setup (by next Tuesday, if the rules are completed).
  • Interestingly, on a point and figure chart it also appears that 85.50 is an important resistance level.
  • A move down from the resistance level should be enough to bring dollar bears back out of hiding prior to a longer-term move higher in 2007.

2. Robbing Pee Wee to Pay Grandma

An interesting piece this morning from the Op-Ed pages of the Washington Post. Robert Samuelson says, "Shame on us. We are trying to rob our children and grandchildren, putting the country's future at risk in the process."

  • At issue is Entitlement Spending, specifically for Social Security and Medicare.
  • The implications are dire but, according to Samuelson, "On one of the great issues of our time, the social and economic costs of our retirement, we have adopted a policy of selfish silence."
  • The 65-and-over population will double by 2030 (to almost 72 million, or 20 percent of the total population), Samuelson notes.
  • To put it in perspective, consider that on 2005, Social Security, Medicare and Medicaid cost $1.034 trillion, twice the amount of defense spending and more than two-fifths of the total federal budget.
  • By 2030 that share is projected to be about three-quarters of the total federal budget.
  • So, baby boomers are incredibly self-centered and lack a certain element of... forward thinking. (Look, you don't earn a moniker like "The Me Generation" for selflessness.)Tell us something we don't already know.
  • Ok, how about this: You know that long-term structural shift we sometimes write about here - the secular transition from excessive consumption, ostentatious displays and accumulations of "things" to a focus on savings and on the accumulation of intangible "experiences"?
  • What makes that transition secular, as opposed to something along the lines of a cyclical and temporary mean reversion away from buying more and more stuff, is an underlying necessity.
  • And how about this for a necessity?
  • The next generation of income earners (including those of us under 40 already in the workforce) are about to be saddled with an Entitlement Spending tax bill the likes of which have never been seen in the history of the world.
  • Looking in the mirror, while we may not presently feel the need to curb spending, reorder our priorities of "goods" accumulation and rethink our views of what truly constitutes wealth, the real elephant in the room is that the necessity is now upon us... whether we want to acknowledge it or not.

3. We Invented Everything

Maybe one of the hallmarks of a society driven by a veritable mania of self-focus and personalized reference* is the pervasive system of belief we, perhaps even subconsciously, operate in, which simply assumes that we invented everything.

  • Let's take something that feels thoroughly modern; something we must have invented... like celebrity worship and obsession.
  • Only a few years ago the American Bar Association, of all organizations, took up celebrity obsession as an issue related to privacy rights. "How do we reconcile the growing interest in "celebrity" (in the U.S. and other countries) with heightened concern for privacy? How much privacy is possible in societies obsessed with celebrities?"
  • In that particular issue, Judith Wagner Decew assumes, "celebrity status has grown, curiosity and obsession with celebrities have grown, and the intrusiveness of the press has grown."
  • I mean, we did invent celebrity obsession, right? Surely we can take credit for that!
  • Sorry, but Judith Wagner Decew actually makes a pretty hefty assumption there.
  • It turns out we didn't actually invent celebrity obsession. In fact, we didn't even invent tabloid journalism.
  • A recent article in The Economist magazine (which, incidentally, was a double issue devoted to (what else?) personal happiness and how to measure it - how very baby-boomeresque!) describes the culture of celebrity obsession and tabloid journalism so popular in Britain... more than 200 years ago.
  • "[I]n 1818 the publisher spent six months in the House of Correction at Clerkenwell after putting out a penny broadside suggesting that a local butcher by the name of Mr Pizzey was filling his sausages with human flesh."
  • Could have been written yesterday.

* While you snort with derision at the audacity of this statement, keep in mind that there is likely no more poetic climax to this era of self-referential mania than the Time Magazine person of the year for 2006, i.e. You.

4. Chin Up, Grandpa... We're Selfish Too!

The views of young people today on politics, social attitudes and life goals are far different from their baby boomer parents', according to a national survey of 18- to 25-year-olds reported in the USA Today.

  • A Pew survey asked more than 75 questions, on issues from world events to politics to tattoos and binge drinking, to 130 18-to-25-year-olds, the so-called Millenial Generation.
  • The group was surveyed on cellphones because they don't have a landline.
  • The findings that this generation's top life goals are to be rich (81%) and famous (51%).
  • A similar study conducted in 1967 found that 85.8% said it was essential to develop "a meaningful philosophy of life," while 41.9% thought it essential to be "very well off financially."
  • Suckers!

5. Generation Who?

Like you, we have some questions about these generational squabbles. Baby Boomers? Millenials? Generation X? Generation Y? What do these generation names really mean?

  • What distinguishes a Baby Boomer from a Generation Xer?
  • Why are Millenials seemingly asking for Generation Xers to imprison them?
  • Below Minyanville takes a look at some key generational demographics and characteristics:

Baby Boomers: People born during the period of increased birth rates following World War II.
Baby Busters: People born just after the Boomers but not scheduled to receive any social security payments.
Generation X: People born following the peak of the post-World War II baby boom and charged with purchasing all remaining Baby Boomer vinyl LPs.
Generation Y: People born immediately after "Generation X" and who now largely act as their employers.
Boomerangers: Anyone born after 1977 who owns a tie-dyed t-shirt and a collection of "tobacco pipe" screens.
Crazy Kids: People born more than five years after you.
Selfish Bastards: People born more than 10 years before you.
Twixters: That 38-year old dude who works in the bookstore part-time while promoting indie rock bands on the weekends.
Millenials: Actors and extras in Star Trek: The Next Generation television series.
Generation Z: Future Earth-bound slave colony inhabitants born post 1999.

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