Up in the North Pole, Santa Claus still has time to read a few letters. Here's one with some interesting financial requests:

Dear Santa,

We've been nice most of the time this year (and not very naughty because we've both been working hard), and we hope you can bring us these presents, please:

A savings account A New Economy so we can sleep better at night Some Google shares Two shiny new trail bikes

Merry Christmas,

Holly & Kris Consumer

Santa doesn't usually get requests from adults, but he always tries to help people out this time of year. Let's see what he can do about these wishes.

A Savings Account

It's true that while productivity is up tremendously (4.7% in Q3 of 2005), wage growth isn't keeping up with inflation – which may explain why Holly and Kris Consumer are working so hard but can't seem to get ahead.

Here is some information to digest: The average hourly wage increased 0.2 percent in November 2005, which is below the average inflation rate of recent months. According to Peter Morici, a University of Maryland business professor, wage increases have lagged inflation by about 25 percent over the last 12 months. An article in the Christian Science Monitor puts it this way: "Wages for the most recent quarter were 2.3 percent lower, after inflation, than workers received a year before."

What's more, analysts at Elliott Wave International point to a larger, underlying reason why people find it difficult to save. The December Elliott Wave Financial Forecast includes a startling chart that shows the falling personal saving rate (12-month average) as a mirror image of the rising monthly Dow Jones index from the 1960s to the present. The point? Thanks to the long-term bull market that began in 1982, nobody seems to believe that they need savings, because – and here's the fallacy – stocks only go up.

In the past few years, rising property values have reinforced this attitude about the rising stock market. Even though the stock market has been limited to a trading range since 2000, people tend to think that they can just take some more money out of their appreciating houses to make up the difference.

The problem with this attitude, EWI's analysts say, is that it is "completely unprecedented. In normal times, people keep savings on hand because they realize that stocks and real estate are uncertain stores of value."

It's also true that the savings rate in the United States now stands below $0. In other words, on average, households are spending more than they earn. And at this time of year, credit cards are flying out of wallets to buy holiday gifts that will be paid for later. So unless Holly and Kris can get a pay raise or rein in their spending habits, Santa won't be able to grant them their wish for money in their savings account.

A New Economy

Remember how talking about the New Economy became the vogue in 1999 and 2000? That was when the tide of high tech stocks was rising and taking all boats with it. The idea was that in the New Economy, business cycles no longer followed one after another. Instead, one up-cycle would follow another up-cycle. Forget the corrective, down-cycle in between.

Well, yes, Virginia, people do sleep more soundly when they go to bed at night with the warm feeling that their investments will always increase in value and never decrease. But, Virginia, that would not be the real world – that would be a fantasyland. So, even though there is a Santa Claus, there is no New Economy.

Some Google Shares

Google, the hot search company that dominates the Web, may be most responsible for bringing back talk about the New Economy. It has single-handedly revived dot-com boom memories of five years ago since its initial public offering in August 2004 at a price of $85 per share. But is now the best time to buy a few shares, when it's at the $416-or-so level?

It might be better to remember an investment barometer that was formulated by Paul Montgomery: landing on the cover of a major magazine usually means that an investment has reached its zenith. And what do you know? Google made the cover of Business Week last month. Santa doesn't want to give a gift that doesn't keep on giving.

Two Trail Bikes

But not all is lost for Holly and Kris. Here's what Santa said about their last request:

"Two trail bikes – that's more up my alley. It seems to me that the more this young couple gets outside for some exercise, the less time they will spend trading and buying shares of companies that may have topped out. And that would be a jolly good thing, since the more these whippersnappers trade, the more they seem to make emotional decisions that turn out badly for them and their bank accounts. Yes, indeed, two shiny new trail bikes, it is." And he put a big check mark next to Holly & Kris Consumers' last request.

Once Santa had taken care of that letter, he reached into his mailbag for one more:

Dear Santa,

This year, I've tried hard to be good, so would you please bring me these presents for 2006?

More new jobs

A steeper yield curve

No recession

Yours truly,

The U.S. economy

"Hmmmm," said Santa as he laid his finger aside of his nose.

"This one might be much harder to fulfill, I suppose."

…Then he sprang to his sleigh, to his team gave a whistle

And away they all flew like the down of a thistle

But I heard him exclaim, ere he drove out of sight

"I am not an economist, nor can I fight

The forces of recession from this great height,

Yet I do have a purpose when I take off in flight: To wish

Happy Christmas to all, and to all a good night."

Susan C. Walker writes for Elliott Wave International, a market forecasting and technical analysis company. She has been an associate editor with Inc. magazine, a newspaper writer and editor, an investor relations executive and a speechwriter for the Federal Reserve Bank of Atlanta. She received her B.A. in Classics from Stanford University.