Much is being made over what ails the economy and it often comes back to the consumer(s) still reluctant to spend. This is certainly a theory that gained credibility when Americans put their gas savings inside empty coffee cans.

There's evidence now that consumers are picking up the spending at discount stores and on things like cruises. However, the tight-fisted nature of the household remains a puzzle. The Fed has printed up a gob of money under the guise of sparking a virtuous cycle.

Banks, however, have held onto that money without any signs of greater intent to lend to Main Street.

The thing is that households have more cash now than any time in forty years (see table one).  Yes, I know that sounds far-fetched, and it would be if you were doing a top-down analysis. Wages are lower and are now exhibiting signs of a rebound.

We have more money after paying bills because we've pared them. American Households have made enormous sacrifices (see table two). Now, the question is when will government do the same and invest in businesses?

Businesses have been loathing investing money in major projects that speaks to ramping up output. The steady decline in business investment reflects two things in my mind:

 A) Skepticism about the recovery

B) Fear of the intentions of the administration

Consequently, we're looking at billions in buybacks, dividend hikes, and acquisitions. However, that still leaves a heck of a lot of money that is simply sitting there.

This is the new normal, but it reflects Main Street's anxiety as well; hiding a lot of cash inside coffee cans in households and in foreign banks for big businesses.

Moreover, there’s a lot of cash in all pockets of society that won't go to work, in part due to government regulations, threats, and  government spending run amok, as well.

Today’s Session

This morning, oil prices are collapsing again as Iran nuclear talks continue to intensify. The Case-Shiller Home Price Index notes that while home prices rose modestly in January affordability still remains an obstacle for many potential buyers. As such, the major indices are all poised to open deep in the red.