Five Interesting Facts to Ponder in the New Year

1. AIG is infamous for receiving $180 billion of Federal bailout money during the financial crisis in 2008 and 2009.  I have read that the final sale of the U.S. Government's interest in AIG generated a $22 billion gain for taxpayers.  I wonder what the internal rate of return is on this investment?  We hate bailouts, but this one turned out pretty well financially. In fact the whole TARP fiasco isn't looking like a terrible burden at this point.  It is too early to know if all the TARP money will get paid back, but a lot of it has.  The big risk is that the government will listen to the whiney banks and cancel "in the money" warrants that it received with its TARP investments instead of harvesting gains.  Don't cave in to the banks, Uncle Sam!
2. The U.S. birth rate dropped by 8% between 2007 and 2011.  We are at 63.2 births per 1,000 women of child-bearing age, down from 122.7 in 1957 at the peak of the Baby Boom.  The average woman gives birth to 1.9 kids over her lifetime now and that number is declining.  It takes 2.1 kids per woman to maintain our population. The recent decline is allegedly due to the recession and perhaps that is true.  This demographic trend, if maintained, has massive implications.  A shrinking, aging populace will have higher needs and less productivity.  Think about what this means......
3. Barely half of the adults in the United States are married - this is the lowest percentage ever.  In 1960, 72% of adults were married; now its 51%.  It looks like marriage is playing a less central role in the social/cultural life of the United States - indeed, the group of folks that are most eager to get married appears to be same sex couples!  Think about what this means.....
4. I have read that the United States Government is borrowing 46 cents of every dollar it is spending.  Think about what this means.....
5. Forty-three years ago, China invited a U.S. table tennis team to visit the country, launching "ping-pong diplomacy."  China has become a major economic force and is deeply entwined with the United States (lending much of the 46 cents of every dollar that the U.S. Government borrows to fund its spending).  Is there another seemingly small step in progress that could also mark the beginning of a huge change?

First Snow/Citigroup Bail-out

Those of us who live north of Chicago awoke to the first snow of the season. It was that lovely stuff that the forecasters call "wintry mix" - snow changing to sleet/rain, then changing back to snow. It is sloppy and it doesn't stick. The sweaters are out of the closet and the earmuffs are back on for those of us that trudge downtown in the early morning.

Here is my favorite quote regarding the Citigroup bailout (thus far):

In the news this morning is $20 billion of new capital to Citibank from TARP but still no money for the Big 3. I can already hear the scream out of Detroit. What’s the difference between the two? Well, to put it bluntly, giving cash to Citibank is like performing the Heimlich maneuver on a choking man while giving cash to the Big 3 is like giving mouth-to mouth to a recently dug up corpse.

John P. McNulty, Publisher, Private Equity Professional Digest

Bleah. But quite colorful.