Several years ago I was asked to speak at a dinner meeting for some customers of a large insurance company.  It so happens that another economist, Gene Stanaland, was the featured speaker in the afternoon session.  Gene turned out to be a professional speaker who bills himself as the “Will Rogers of Economics.”  He was… Read more

During the buildup to the financial crisis, mortgage underwriting standards weakened dramatically.  Although there have long been loans made with low or no down payments, or to people with FICO scores below 660 or even 600, or to people who did not wish to provide full documentation, it was rare to find loans made that… Read more

Financial innovations often involve complex quantitative models that can be used to perform difficult computations, like valuing complex derivatives, and to enable great new products and capabilities, like passive index fund investing, hedging interest rate or credit risk, or developing a sustainable financial plan.  But you have to be careful.  Sometimes the complexity inherent in… Read more

After writing about retirement savings and spending for the past couple of years, I thought it was about time to take a look at what others have written on these subjects; here is what I found. 4% Withdrawal Rate A seminal contribution to this literature was made by William Bengen (1994) with his analysis of… Read more

Ray Dalio is the founder of money manager Bridgewater Associates, the largest hedge fund advisor on the planet.  One of Bridgewater’s claims to fame is the “all-weather portfolio” that is designed to perform reasonably well in any market environment.  The big idea is that there are four possible fundamental economic scenarios based on inflation and… Read more

Tony Robbins has a terrific new book on winning the financial game (“Money: Master the Game”). The highlight of the book is a series of interviews with famous investors, in which Robbins extracts valuable insights into the strategies of the successful. The primary lesson is “don’t lose money” and the second “don’t forget lesson number… Read more

In two recent speeches Federal Reserve Chairman Janet Yellen has highlighted issues of personal finance. In each case she referred to results from the Fed’s triennial Survey of Consumer Finances (SCF), the most recent version of which (2013) was released just last month. In September, Chairman Yellen commented on the meager levels of wealth for… Read more

One of the major stories of recent years is that of rising income and wealth inequality, whereby the rich are supposedly getting richer and the poor poorer. A primary piece of evidence for this is increases in the shares of income and wealth accruing to the top 10% of the distribution, the top 1% of… Read more

In order to better understand the state of household finances, the Federal Reserve has recently conducted a special survey called the Survey of Household Economics and Decision making, or SHED. This is in addition to the tri-annual Survey of Consumer Finances. Key findings from the SHED include the following: (a) most families indicate that they… Read more

Housing is traditionally a very volatile sector of the economy. It tends to lead the business sector (indeed, some economists like Ed Leamer of the UCLA Forecasting Group say that housing IS the business cycle). Housing is subject to booms and busts. A case in point is the major housing boom of the early and… Read more