The Good News About Retirement

With all the concern we hear over people who are planning and preparing for their retirement, it's nice to learn that, once you get through all that strife, people who reach retirement are pretty darn happy to be there. More than three-quarters of all retirees say they are happier now that they've retired, according to a survey from The Hartford and the MIT AgeLab. Significantly, that figure is much higher than the 64 percent of working folks who say "I will be happier after I retire." In other words, retirement is even better than most people expect it to be.

In a similar finding, 27 percent of the retirees described themselves as feeling "peaceful." A slightly smaller percentage of pre-retirees described themselves as "hopeful" about their retirement.

The biggest regret among retirees? No one answer stood out, although the most-cited answer, named by 32 percent of the respondents, was that they wish they had been better prepared financially for their retirement. It's never too late - or too early - to get started on those preparations.

Americans Are Borrowing Again

A couple of weeks ago, we talked about how American indebtedness had been growing as a result of increases in mortgages, despite the fact that consumer credit hadn't kept pace. But now we have news that Americans have started borrowing for consumer items as well. Consumer borrowing increased by $7.65 billion in October, reaching a total of $2.46 trillion, the highest it's been since October 2009.

Revolving debt, which is mostly credit cards, increased by $366.2 million in October. Non-revolving debt, which includes car loans increased by $7.28 billion. The driving force behind this was car loans; auto sales just had their best month since August 2009.

The other side of increased borrowing, of course, is that people are saving less. In the third quarter of 2011, the savings rate fell to 3.8 percent, the lowest it's been since the recession started at the end of 2007. While saving is always a good idea, given the state of our economy, the increased indebtedness might be a little more helpful right now.

Great Company, Bad Stock

A new stock issue went on the market yesterday, offering investors a chance to buy equity in a highly successful firm currently on top of all its competitors. The stock moved quickly, with 1600 shares sold in the first 11 minutes they were available, at a cost of $250 per share. The only catch: It's a terrible investment.

The shares are being sold in the Green Bay Packers, who are the best team in the NFL right now with a perfect 12-0 record. The franchise is currently owned by some 112,000 stockholders who claim a total of 4.75 million shares. The new offering put another 250,000 shares on the market, with the proceeds going toward a renovation of Lambeau Field, the Packers' 54-year-old stadium in Green Bay.

Stockholders can expect no dividends or appreciation, and the shares can't be sold. They don't even get you a special place on the Packers' season ticket waiting list, which is now 93,000 names long. The sole perks that come with being a team owner are the right to attend an annual shareholders meeting and some special deals on Green Bay Packer apparel. And some very special bragging rights come Super Bowl time.

$10 Trillion in the Bank

The American banking system reached a milestone late last month: For the first time, there was more than $10 trillion in deposits at our nation's banks and savings institutions. Maybe the most interesting thing about this is that it's not normal consumer accounts, like CDs and savings accounts, that are accounting for the growth. In fact, interest-bearing deposits actually fell by 1 percent over the past year, according to the Wall Street Journal.

So what's the reason for all that growth? It's actually non-interest-bearing accounts of the type used by businesses to put their cash short-term. Those types of accounts increased by 30 percent over the past 12 months, reaching a total of $2 trillion.

We've discussed many times the amount of cash that is sitting in the coffers of many American corporations; these are those coffers. The Journal points out that we can expect these deposits to disappear from retail banks' bottom line just as quickly as they showed up there.

2011's Biggest Winner

Of the 500 stocks listed in the Standard & Poor's 500, only one has doubled in share price this year: Cabot Oil & Gas. Cabot finished 2010 at $37.85, and entered December at $88.59, for a year-to-date increase of a whopping 134.06 percent. The Houston-based natural gas company, which has only been in the S&P 500 since June 2008, has been by far the biggest winner in 2011, outdistancing another Houston natural gas company, El Paso Corp., which is in second place with a year-to-date gain of 81.76 percent.

Before you get too excited about Cabot, though, note that in 2010, its stock lost 13.17 percent on the year. As they say, past performance is no guarantee of future results.

No stock on the S&P has been nearly as bad this year as Cabot has been good. The worst performer has been Monster Worldwide, which runs the job-search Web site and has dropped by 69.06 percent. Hot on its heels is Netflix, which has lost 63.27 percent in the wake of its disastrous, now-aborted split into two separate businesses. Like Cabot Oil & Gas, Netflix has seen some quick turnarounds lately: In 2010, its stock had grown by more than 200 percent.

An Encouraging Jobs Report

The November unemployment report came out from the Bureau of Labor Statistics this morning, and it continued the trend we've been seeing for a couple of months now: Job creation for the month was relatively solid but unspectacular, at 120,000 new jobs added to the economy. But there's a difference this time. Although that's about the number of new jobs economists say we need to tread water in the employment figures, the official unemployment number dropped in November from 9.0 percent to 8.6 percent. That's the lowest unemployment has been since March 2009.

What happened? The rate dropped in large part because the number of jobs added in October got officially revised upward, from 80,000 to 100,000, as well as the number from September, which went from 158,000 to a whopping 210,000. That makes four straight months in which the government has ended up revising the new-jobs figure upward.

Perhaps even more encouraging, the broadest measures of unemployment are dropping as well. Adding part-time workers seeking full-time work to get to the government's U-6 figure, which includes both the unemployed and underemployed, that number dropped in November to 15.6 percent, from 16.2 percent the previous month. All told, today's report continues a string of good economic news from the past week or so that should bring some cheer to everyone as we head into the holiday season.

The Central Banks Take Action

The markets had another big day yesterday - the Dow Jones average posted its biggest single-day gain since March of 2009, and European markets were up strongly as well - and the financial press rushed to give credit for the upswing to coordinated action on the part of the world's central banks. But what exactly did they do?

Two things happened: First, the Federal Reserve and the central banks of Europe, England, Canada, Japan and Switzerland announced that they would coordinate efforts to reduce the cost for banks around the world to borrow money from their nation's central banks. The idea is to keep money flowing freely throughout Europe, and trying to sure that the banks there don't get caught short and they end up with another Lehman Brothers collapse on their hands.

At the same time, China announced it was cutting the reserve requirements for its banks, after raising those requirements six times earlier this year. That should permit China's banks to lend money more freely, which is ultimately good for economies around the world. While it's always risky to read too much into one day's market moves, it does appear that investors around the world do like these developments.