Since 2013, the Federal Reserve Board has conducted a survey to “monitor the financial and economic status of American consumers.” ... The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?...
Americans are on thin ice financially. How thin? A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses. A similar study conducted by Annamaria Lusardi of George Washington University, Peter Tufano of Oxford, and Daniel Schneider, then of Princeton, asked individuals whether they could “come up with” $2,000 within 30 days for an unanticipated expense. They found that slightly more than one-quarter could not, and another 19 percent could do so only if they pawned possessions or took out payday loans. The conclusion: Nearly half of American adults are “financially fragile” and “living very close to the financial edge.” ...
Median net worth has declined steeply in the past generation—down 85.3 percent from 1983 to 2013 for the bottom income quintile, down 63.5 percent for the second-lowest quintile, and down 25.8 percent for the third, or middle, quintile. According to research funded by the Russell Sage Foundation, the inflation-adjusted net worth of the typical household, one at the median point of wealth distribution, was $87,992 in 2003. By 2013, it had declined to $54,500, a 38 percent drop. And though the bursting of the housing bubble in 2008 certainly contributed to the drop, the decline for the lower quintiles began long before the recession—as early as the mid-1980s, Wolff says....
The personal savings rate peaked at 13.3 percent in 1971 before falling to 2.6 percent in 2005. As of last year, the figure stood at 5.1 percent, and according to McClary, nearly 30 percent of American adults don’t save any of their income for retirement....
Though household incomes rose dramatically from 1967 to 2014 for the top quintile, and more dramatically still for the top 5 percent, incomes in the bottom three quintiles rose much more gradually: only 23.2 percent for the middle quintile, 13.1 percent for the second-lowest quintile, and 17.8 percent for the bottom quintile. That is over a period of 47 years! But even that minor growth is somewhat misleading. The peak years for income in the bottom three quintiles were 1999 and 2000; incomes have declined overall since then—down 6.9 percent for the middle quintile, 10.8 percent for the second-lowest quintile, and 17.1 percent for the lowest quintile. The erosion of wages is something over which none of us has any control.
Sales of existing homes set a record for a fifth straight year in 2005 even though the year ended on a weaker note with three straight monthly declines, sending a strong signal that the nation's housing boom is beginning to cool.
The National Association of Realtors reported that sales of previously owned homes and condominiums dropped by 5.7 percent in December compared to the sales pace in November. It marked the third consecutive monthly decline, something that has not occurred in more than three years.
Even with the sales weakness in the last three months of the year, total sales in 2005 climbed to an all-time high of 7.072 million units, up 4.2 percent from the 6.784 million homes and condominiums sold in 2004.
The median price of a home sold in December was $211,000. For all of 2005, home prices were up 12.7 percent, the biggest increase since a 14.4 percent rise in 1979.
Sales increased 2 percent to a 512,000 annualized pace following a 502,000 rate in January that was stronger than previously reported, Commerce Department figures showed Wednesday. Demand is in line with last year’s pace, indicating residential construction will remain a source of support for the economy.
The higher dollar will be a drag on Canada’s trade sector, diluting the budget’s stimulative impact. But Canada’s loss is the world’s gain. In fact, Canada is faithfully executing the formula that finance ministers and central bankers from the top 20 economies agreed to pursue at their just-concluded meetings in Washington: namely, rely less on monetary and more on fiscal policy to rejuvenate growth. The problem is that Canada is virtually alone in being both willing and able.....
The International Monetary Fund, the Organization for Economic Cooperation and Development and the U.S. Treasury Department for the past year have urged any country not drowning in debt to stimulate their economies by borrowing. The IMF this month recommended the G-20 stand ready to implement coordinated stimulus equal to 1% to 1.5% of GDP.
Canada listened. “We were influenced by what we heard from the IMF and OECD and around the table at the G-20,” says Bill Morneau, Canada’s finance minister, in particular the greater potency of fiscal policy when monetary policy is constrained by interest rates near zero....
But just 42% of Canada’s stimulus over the next two years goes toward infrastructure. Most of the rest goes to expanded social transfers such as child benefits, unemployment insurance and old-age pensions. All are permanent obligations and some at the margin may discourage work. Canada, with its pristine balance sheet and manageable pension burden, can easily handle it; not so the U.S., much less Japan.
The central bank said on Thursday that it would start purchasing corporate bonds as part of its quantitative easing program in June.
The purchases will be carried out on the ECB's behalf by the national banks of Belgium, Germany, Spain, France, Italy and Finland, according to a statement issued after Draghi's conference.
The purchases will take place in the primary and secondary markets. To be eligible, instruments must be denominated in euros and have a credit rating of at least BBB- or equivalent; they must also have a remaining maturity of between six months and 30 years at the time of purchase
This March alone, US warplanes dropped nearly 2,000 bombs on Iraq and Syria, an increase over the 1,700 bombs dropped by US forces during the previous March. Last November, the US-led coalition set a new record for a single month, dropping nearly 3,300 bombs.
Since the beginning of “Operation Inherent Resolve” in August 2014, Iraq and Syria have been pummeled by a combined total of more than 40,000 bombs, the vast majority of them made by American companies and delivered by American planes.
“The gradualistic, painfully slow, incremental efforts of the current administration undercut the principals of modern warfare, and harken back to the approach followed by the Johnson administration,” retired US Air Force general David Deptula, now with the Mitchell Institute for Aerospace Studies, said Tuesday, defending the expanded air strikes in comments to USA Today