Crypto does have a future — as a speculative asset that enhances risk for gamblers, the paranoid, and less sophisticated investors, all the while diverting capital from more productive uses.
I have been a pension nerd since I was 20 years old. So I have been hearing for literally decades that there is a simple, magical solution to all our retirement funding problems: Just take more risk! When the investments pay off, the coffers will be replenished and all will be well.
Opinions of the One Big Beautiful Bill tend toward the extreme. One of its main authors calls it “the greatest piece of Republican legislation in a generation,” while one of its most authoritative critics says it makes him ashamed to be an American.
They have been called “the four most costly words in the annals of investing,” and surely that’s true: This time is different. Still — hear me out! — there are reasons to entertain the possibility that, well, this time really is different.
When it comes to inflation, America has reached a “Mission Accomplished” moment. Rule No. 1 of inflation reports is never to read too much into one report, but there have now been several months of fairly low inflation, so it seems safe to call it: The Fed did its job. Pandemic inflation is over.
My unifying theory of finance is that everything goes seriously wrong when people start seeing something — a bond, a mortgage-backed security, a crypto exchange — as risk-free when it isn’t.
The federal government, financial markets and most Americans are all in a state of denial about interest rates.
America’s holiday from history is over: Debt matters again. It is not just that the national debt is so big it cannot be ignored.
Long-term interest rates have become much less predictable, and that means volatile prices for long bonds.
The wise minds at Moody’s Investors Service finally acknowledged last week what the other two main credit rating agencies did years ago.
Markets are desperate for good news about tariffs — or no news at all. It only took a pause on the reciprocal tariffs and vague promises of future trade deals for the bond market to stabilize and stocks to recover.
Practically every financial meltdown or crisis can be traced back to a misunderstanding of which assets are “risk-free.” Investors think they have a risk-free asset — it could be a mortgage-backed security, shares in a Bernie Madoff fund, Greek debt — and are surprised when it turns out not to be.
Despite the talk of austerity — and amid the possibility of a global trade war, the reality of a stock-market correction and fears of a US recession — there is still a chance that President Donald Trump’s agenda could increase economic growth. As usual, it will depend on the execution.
The virtue economy, the only bubble I have ever called, has now completely burst.
Private equity wants access to Americans’ retirement accounts, and is lobbying President-elect Donald Trump’s administration to get it.
I will be looking at a few indicators in 2025 to tell me where financial markets are going. Most of them relate to the bond market, because it is both a window into the overall economy and an important component of how stocks and other risky assets are valued.
People often make a distinction between “good debt” and “bad debt,” in terms of both personal finances and public spending.
I think I finally understand value of cryptocurrencies: They add some volatility to your portfolio. Maybe that’s why they have found such a champion in Donald Trump, who if nothing else adds some volatility to our politics.
Even if he does oversee a soft landing for the US economy, Fed Chair Jerome Powell will not deserve a place in the annals of history as the greatest central banker of all time.
It is hard to be “the most pro-union president in American history,” as Joe Biden likes to claim, while also leading an effort to “reimagine and rebuild a new economy,” as he has also promised. That’s because these goals are fundamentally incompatible: America’s unions no longer fit the modern economy.
Just as the industrial revolution changed the way goods are manufactured and consumed, so the technological revolution will do for services. Once something can be made at scale, the market for it can expand and be segmented. The same goes for financial planning.
America’s financial industry has long had trust issues. Never mind the Great Financial Crisis of 2007-08; mistrust of the markets dates back to at least 1929, if not the Dutch East India collapse of 1769. But this history has an upside: Financial institutions have a lot of experience creating systems to build, maintain and restore trust — and have learned lessons that can be applied across the economy.
Last week’s meeting of central bankers in Jackson Hole was a kind of victory lap for the Fed. It may have also marked the peak of its power.
Decisions made by the Treasury get much less attention than those made by the Federal Reserve, but they can be even more consequential for interest rates — and the entire US economy.
Turmoil in the markets has renewed fears that the US did not escape history after all, that a hard landing — a recession — is coming. Whether this is all a blip from a rising yen or a justified reaction to an actual weakening of the US economy is still unknowable.
A young colleague came to me recently with a shameful admission: Despite the lecturing of her friends and family, as well as her own best intentions, she had not yet signed up for the company 401(k) plan. She lives in an expensive city and is nervous about tying up her money for the next 40 or 50 years.
Markets today pose a new existential question: Can there be a bubble in something if it has no price?
My financial education didn’t have the most auspicious start. I suppose I was lucky that in high school I had a class on basic investing and finance.
The last 15 years have been a magical time for the stock market — but don’t count on it lasting. While US stocks may indeed have the bright future markets currently predict, the cost of growth will be more volatility.
One of the best parts of being a young college graduate, and naïve to the grim realities of the working world, is being deluded about how great your career will be. Maybe you’ll found the next Nvidia, or win the Nobel Prize in your field, or start a charity that will make the world a better place.
Retirement is expensive. If you’re lucky, yours will last a few decades, and you’ll be earning no or very little income. So if you want to have enough money when you retire, you basically have three options: Save more, take more risk with your investments, or work longer.
Our holiday from history has come to an end. I am referring not to world peace but to the zero-interest-rate environment so many people expected would last forever.
The bad news is that most of us will need to work longer. The good news is that, if we do it right, most of us will want to.
US markets are doing much better than markets everywhere else, but no one seems to know why. Yes, there are theories: Perhaps it’s the promise of AI, although it remains to be seen how AI will play out and who will profit.
Some big technological innovations promise to make people more productive, but a four-day work week will not be the norm anytime soon. And legislation imposing it over the next four years would harm the economy.
As a retirement economist — not to be confused with a retired economist, which are rare — I often find myself talking to Wall Street types who happen to be in charge of a lot of other people’s money.
Now that gambling has taken a dark turn. Since the Supreme Court’s 2018 decision ending the prohibition on sports gambling in most states, March Madness betting has become easier and more accessible. As a result, more people are betting not against their coworkers, but through online gambling sites.
I was attracted to finance because it promised some order amid chaos. Here was this market, with billions of transactions a day — and yet it managed to set a price for each asset, a price that put a literal number on the value of future risks, or more precisely how much people value those risks in the present day.
There has been a lot of theorizing about why so many Americans feel worse off economically. True, real wages are now finally increasing, the labor market is great, the stock market is up, and consumers are spending.
Like travel agents, real estate agents will need to offer more value and be more available to those willing to pay. They can also be my friend, so long as they don’t charge too high a commission.
If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.
TikTok stands accused of poisoning the minds of Gen Z, making them hate America and giving them a distorted view of history. Without getting into all that, I will say this: TikTok is not the worst place to learn about personal finance.
When it comes to financial markets, nothing is certain. For much of the last few decades, however, it was easy to convince yourself otherwise: Interest rates mostly went in one direction, down, and high inflation was a thing of the past.
Two big things have happened in the crypto world this month: a public validation and a semi-private snub. Both of them bode poorly for its future.
While many things are getting back to normal, the pandemic profoundly changed American life — sometimes just by speeding up prevailing trends. The technology already existed to allow many Americans to work from home, for example, but the pandemic normalized it.
The virtue bubble has not only peaked; it is starting to deflate. For the last few years, the ESG movement has affected both how people invest and what they buy.
Economists did not believe it was possible, but they’ve been wrong a lot lately, and in their defense it has only ever happened once (or maybe twice) before: We may be witnessing that rare achievement known as a soft landing.
Whatever you’ve been told about your retirement, odds are that it’s wrong. Saving enough for your retirement, and investing the right way, are truly among the hardest of all financial problems. In many ways, it’s more difficult than running a large endowment or hedge fund — and yet we all must do it.
Becoming a financially secure adult is hard. Establishing yourself in your career, securing a home, starting a family … it’s a struggle as old as the modern economy, maybe even civilization itself. As is the lament of every generation that they have it worse than their forebears.
The US Supreme Court heard arguments on Tuesday over a dispute over a $14,279 tax bill — and the slightly more consequential question of what counts as income under the federal tax code, a definition the Biden administration would like to expand.
