A few trends that have caught my attention in the past month:

Credit card offers in the mail are down 77% in the past year.
Gold, bonds, commodities, and stocks are up. It is unusual for all of these asset classes to rise at the same time.
Women now account for 50% of workers, up from 35% thirty years ago.
Only 25% of workers aged 55+ have saved more than $250K for their retirement (excludes house equity and pensions)
On average, the Employee Benefit Research Institute reports that Americans aged 65+ get almost 40% of their income from Social Security. In 2007, the median income for those 65 and older was $18K.
If you had 60% of your portfolio invested in a mix of stocks and 40% in bonds before the banking crisis, you have lost nothing in the past year.
In the past ten years, the Federal Reserve reports (click on debt) that consumer debt has increased 63% and mortgage debt has shot up 135%. Debt in the public sector has almost doubled. Both federal and state debts have risen 95%. For perspective, the Consumer Price Index has gone up on 30% in the past ten years.

Obscene Profits

In any hotly contested debate, it is often difficult to separate the rhetoric from the facts. House Speaker Nancy Pelosi has decried the “obscene profits” of the insurance industry. How obscene are those profits?

Profits are, in fact, obscene – obscenely low, that is. On average, health insurers posted a 2.2% profit margin in 2008. Stodgy railroads made 5 times the profit margins that the health insurance companies did. In a good year, health insurance companies have not made more than 8%.

So why do health insurance premiums continue to rise by 7 – 8% each year, far above the average 3% rise in the Consumer Price Index? Because the insurance companies continue to pay out ever increasing amounts of money to health care providers. Some of that additional money is due to increased tests, more care, and an aging population but some is – dare I say it – fraud?

A doctor who works for a large health organization was recently admitted to an affiliated hospital for several days to have her baby. Familiar with the cryptic billing codes, this doctor noticed many discrepancies between the care she actually received and the care that was billed to her employer. As one example, a “hello, how are you doing” visit from her physician that lasted less than a minute was billed as a 15 – 20 minute check up. Therapies were billed but not received. Over the counter medication was billed at a 100+ times of the retail price. This was not a tale of Medicare fraud but of one member health provider gouging the group it belonged to, an indication that the practice might be both systemic and widespread. How many billions of dollars are “greased” from the system each year?

Stay the Course

In a mid 2009 survey of 3000 investors, the giant fund group Vanguard found that 21% of stock investors had sold some of their holdings during the recent downturn. Almost as many, 17%, had increased their holdings during the crisis. Only 28% of respondents said that they were completely taken off guard by the crisis. Three-quarters of those surveyed said that they would reduce spending in response to any shortfalls in their retirement savings. Half of the respondents said they would save more and almost that many admitted that they might have to work longer before retirement.

Vanguard reported that, in 2008, 401K participants reduced their equity positions from 73% to 61% but that only 2% of participants had sold all their equities.

Job Loss

Since the start of the current recession, the cumulative job loss is 8 million, a staggering figure when compared to past recessions. The 1981 – 82 recession was severe and has often served as a benchmark during the progress of this recession but the total job loss was less than 3 million.

In a 10/17/09 WSJ article, Sara Murray focuses both on the job loss of recessions in the past forty years and the recovery periods, the time it took to regain those lost jobs after the recession ended. The 2001 recession lost almost as many jobs as the 1981 – 82 recession but took a painfully long 47 months to regain the lost jobs. This recession has lost three times as many jobs as the 2001 recession and we are still counting job loss every month.

Consumer spending accounts for more than two-thirds of GDP in this country. Unemployment affects not only the unemployed but those with jobs who become more cautious in their purchases, fearing that they might be next. Those who have been betting on a swift recovery are likely to be disappointed.