With the U.S. now firmly in recession, Syntagma looks at the causes of this spectacular downturn and speculates that the Iraq war may have a lot to do with it.

“The American economy is now in recession. A slew of new data clearly reveals both a marked downturn in activity, combined with a rise in inflation — something not seen since the stubborn “stagflation” period of the 1970s. Some economists expect a robust return to growth later in the year off the backs of aggressive rate cuts by the Fed…”

Read the article here.

In another piece today, our sister site examines banks’ attitude to risk and how securitization let the side down, handing huge advantages to authoritarian Asian regimes.

“In the old days, banks took the risk of lending money on themselves and ensured that borrowers would be able to pay it back over time. Securitization means that they can lend to any Tom, Dick or Harriet, package up the debts into large parcels of small slices from many borrowers, and sell them onto other banks and finance houses.”

Read the article here.

That may seem a silly question since most people would answer : “In the local shopping mall”. But, if you’re reading this, you would probably give a different reply. Here’s our U.S. finance correspondent to give his answer :

What should you do with your idle cash? Let’s say you’re responsible and you’ve accumulated an emergency fund. This is money that you can’t take risk with, but it would be nice to earn something on it, right? Depending on what you want, the world is full of options.

You can always leave it in a checking or savings account. Of course, you won’t earn much. Most brick and mortar banks are still paying almost nothing on deposits. However, the internet bank accounts make it more appealing. HSBC, INGDirect, and Capital One all have competitive rates these days – with no fees or minimum balance requirements. Whatever bank you use, make sure it’s FDIC insured.

You can also use money market funds. These are technically mutual funds that invest in short term issues. The advantage of a money market fund over a bank product is that the interest rate will likely change more rapidly (of course, that’s only an advantage if rates are going up and not down). The disadvantage of a money market is that there’s technically a possibility that you can lose your money if the underlying “money markets” fall apart. Read the fund’s prospectus to see what it invests in, and how you feel about that risk.

With a money market, you can sometimes get a checkbook to access your cash. They don’t like for you to write small checks, so they impose a minimum check size (like $500 per check). With a bank product, you usually link your account to a checking account and move money electronically when you’re ready to spend it. With either type of account, you can make deposits by check or electronically.

Which is better? It depends. Look them both over, compare rates, and figure out what suits your needs.

How best to invest your cash in the UK is always a tricky problem, especially if you don’t have specialist knowledge.

Here are a few pointers that may help :

* Check out the internet-only accounts, which often pay the highest rates.
* You can put £3000 ($5640) in a cash Isa account every tax year. Interest, which is currently over 5pc, is tax-free.
* Some accounts offer guarantees — e.g. Investec’s Hi 5.
* National Saving’s index-linked certificates are definitely worth considering if you pay higher-rate tax.
* Spread money over several accounts. If you opt for a one-year account for some of your savings, you could earn 5.5pc or even more.
* You should be able to earn at least 5pc at today’s rates. Don’t settle for less. Monthly-paying accounts pay around 4.75pc.
* Less fashionable banks sometimes pay more. You can check if an institution is registered here: fsa.gov.uk/consumer.

Finally, be aware of rate changes and read the financial press.

Here’s a trick question: What’s the retirement age in the U.S?

A) 55
B) 59 ½
C) 65
D) 67

Since you knew it was a trick, and I can’t type upside-down, this isn’t much fun. Anyway, the answer is none of the above. You can retire whenever you feel like it. The question is: can you afford to? If you want to retire today, go for it. Best of luck to you…

The numbers above look familiar, right? Where do they come from?

• Age 55 is sometimes the “retirement age” for 401k plans, where you can take money out of the Plan without tax penalties.
• Age 59.5 is the age at which you can start to take money from IRA’s and other accounts without penalty or restriction. There are ways, but it’s tricky.
• Age 65 is when some folks get full Social Security benefits
• Age 67 is when anybody born after 1960 gets full social security benefits

Based on where you will get your income from in retirement, these numbers might help you figure out what your retirement age is.