Why Is It?

Why is it that you can buy $50 or $60 worth of gasoline with a credit card without showing anyone the card or signing, but still have to sign, say for $15 worth of pizza?

There’s actually a reason. The credit card companies have exempted certain categories of merchants from the signature requirement and, after all, those gasoline purchases are authorized electronically.

Credit card companies do not require you to show ID. In fact, their rules prohibit a merchant from denying a credit card transaction because you refuse to show ID. They do require your card to be signed and they do expect the cashier to verify some commonality between the card signature and the signature on the receipt (ha, good luck with that).

Putting “Ask for ID” on your credit card instead of your signature is not acceptable and your card should not be accepted without a signature according to the credit card companies. Besides, who wants to be flashing their driver’s license (with your address, etc.) to every Tom, Dick and Sally that asks for ID? You don’t have to according to Visa, Master Card, etc. The credit card companies discourage the use of ID because the ID and the card taken together provide not only the card number but, more than likely, the billing address. And nearly everyone these days has a camera in their pocket if they get a moment with the card and ID out of your sight.

None of the above applies at Best Buy however, which requires a DNA sample for a credit card purchase.

More on the Celebration Over December’s Job Report

An excerpt from Beat the Press, always a good source for understanding the day’s economic news:

So we’re supposed to be happy about 200,000 jobs in December?

Another way to think about this is that we currently have a shortfall of around 10 million jobs. If we generate 200,000 jobs a month, then we are cutting into this shortfall at the rate of 100,000 a month, since we need 90,000-100,000 jobs a month just to keep pace with the growth of the population. This means that in 100 months we should expect to be back to full employment. So the champaign bottles for that happy occasion will be dated 2020.

Okay, but this puts too bright of a picture on the data. The 200,000 jobs number reported for December was distorted by unusual seasonal factors, the most obvious of which was the 42,200 job growth reported in the courier industry. This is primarily companies like Fed Ex and UPS who hire additional workers to deal with holiday demand.

Line of the day

“The value of household real estate has fallen $6.6 trillion from the peak – and is still falling in 2011.”

Calculated Risk

Household real estate peaked at $22.7 trillion in 2007. It is now worth $16.1 trillion (or down about 30%).

There are 52+ million households. Nearly a third have no mortgage. About a fifth have negative equity (are under water to use the colloquialism).

Numbers from Federal Reserve Flow of Funds Report.

A Hero?

But on Tuesday, we heard something different. American Airlines, once the largest airline in the United States, declared bankruptcy. This is not surprising news for the beleaguered airline industry; what is different is what is emerging from the wreckage. Gerard J. Arpey, American’s chief executive officer and chairman, resigned and stepped away with no severance package and nearly worthless stock holdings. He split with his employer of 30 years out of a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path.

Read more about A Departing C.E.O.’s Moral Stand.