I’ve been thinking a lot about unrealized gains and their effect on the global economy. if you remember, I wrote a few weeks ago about a new debit card that lets people tap the money from their 401(k) plan. I think these cards are a bad idea. I don’t like them because [...]

I just picked up on a MarketWatch article about 401(k) debit cards through Tim Iacono’s blog. It marks a pretty astounding trend in financial innovation.
Debit cards are straightforward. You use them for purchases and money is deducted from your bank account. But when the debited account is your 401(k) retirement plan, critics angrily line [...]

You’ve probably heard the adage that the American consumer just won’t quit. And this last month’s retail sales numbers seems to follow that saying. However, if you look beneath the surface, American consumers are cutting back indeed. Paul Kasriel, the Chief Economist at Northern Trust, makes this point.
Don’t write off the U.S. [...]

As you know, the CPI registered a whopping 5% yesterday. Year-on-year inflation hasn’t been this high since the Gulf War. So much for the ‘Great Moderation.’ But the increase in inflation begs another question: why are interest rates so low?
The Fed Funds rate is 2%. While it is unlikely to hit [...]

Last month, in a post called ‘Chart of the day: real hourly earnings‘ I said that U.S. real wage rates were lower today than they were a generation ago on the eve of the first oil hock. hat’s pretty poor.
Today ‘UK Bubble‘ highlights the fact that real wages in the UK have been falling [...]

We knew that didn’t we? Well, in response to a questionnaire by Nationwide, the building society, consumers basically said savings is not important and that they don’t save as a result. I’m willing to bet UK consumers will change their tune after the housing slowdown, stock market fall and recession take hold. [...]

From all accounts, it looks like Australia is set for a wicked slowdown. Four global industrial economies have been protected by commodity prices. They are Canada, New Zealand, South Africa and Australia. This Goldilocks scenario looks to be coming to an end across the board.
There are multiple data points indicating that trouble [...]

The well-deserved euphoria over the European Championship in football has brought welcome relief to Spanish consumers, weighed down by a slow economy. However, global economies have not decoupled from the U.S. slowdown. European economies are suffering, Denmark having already declared recession.
In this piece I am going to take a look at the Spanish economy and [...]

The news that income and spending in the U.S. economy has been resilient must be cheered as good (see news release here). It may result in our seeing a W-shaped recession as opposed to a U- or L-shaped one. The U.S. consumer is much more resilient than I could possibly have imagined.
Whether this ultimately [...]

Hourly wages in the U.S. have not kept pace with inflation in the past 35-40 years. To the degree that U.S. households have been able to maintain higher real household earnings, it is all due to the influx of women into the workforce.
Real hourly earnings peaked at $20.30 per hour in January 1973, on [...]