Canadian insurer Sun Life recently announced that it will exit the variable annuity and individual life insurance markets in the United States.

Continued equity market volatility has resulted in a variable annuity business that is plagued with uncertainty and higher costs.

Insurers such as Sun Life offer guarantees that are linked to the performance of underlying equity portfolios.  These guarantees are a liability for the insurance company, and equity market volatility contributes to the cost of these liabilities.

Recent data indicate that wages and salaries as a share of national income have fallen to the lowest level since 1948—a time when the government began to collect the data.

During the third quarter of 2011, wage and salary compensation represented 49.4 percent of national income.

Meanwhile, Bloomberg reports that the profit margins of U.S. companies are at the highest level in 40 years.

The profit margins of non-financial companies in the United States reached 15 percent during the third quarter of 2011.  This is the highest level since 1969.

Will the European Central Bank choose to step-in and put a stop to a potential run on the euro zone bond markets?

The ECB has ramped-up its purchases of Italian and Spanish bonds over the past couple of months, but the acquisition of $300 billion+ in sovereign debt is not having the desired effect.

Austerity measures are not a viable alternative as even the most draconian and unrealistic measures would not get budgets where they need to be.

This leaves many questioning whether they European Central Bank will come to the rescue as the lender of last resort.

Congress is considering an alternative inflation measure as part of its deficit reduction initiatives.

The alternative inflation measure is known as the chained consumer price index or chained CPI.  The chained CPI includes an adjustment mechanism that presumably accounts for consumers switching to substitute goods and services when a similar category of goods or services experiences rapid price increases.

The overall result of this adjustment for substitutes is a price index that that increases at a slower pace than other price indexes such as the CPI-W or CPI-U.