The Irish Independent reports that Irish investors ploughed €3bn into property market in 2006 as deals rose by massive 50%.

The Irish Independent also reports that we may be strong on the employment front but we need to be careful.

The Irish Times reports that the State experienced its largest-ever influx of inward migration last year with almost 200,000 foreign nationals registering to work or access public services here, new figures suggest.

The number of Personal Public Service (PPS) numbers issued to foreign nationals rose to record levels, driven mainly by an increasing flow of workers from the 10 EU accession states in central and eastern Europe.

Of the 130,000 PPS numbers provided to accession-state nationals during 2006, most were from Poland (87,115), followed by Lithuania (14,805), Slovakia (9,857) and Latvia (7,368), according to figures supplied by the Department of Social and Family Affairs.

The scale of immigration is the main reason the Government opted to place work restrictions on citizens from Romania and Bulgaria, which officially joined the EU yesterday.

Workers from both countries will continue to require work permits, while firms wishing to hire them will first have to prove they cannot get staff from other EU states.

However, Bulgarian and Romanian citizens will be free to travel and live here, even though they will not be able to get a job without a work permit and will not qualify for social welfare. Those who are self-employed will also be free to travel and work here.

Taoiseach Bertie Ahern yesterday said he welcomed both counties into the EU as "equal partners" and was happy to have played a role in their accession during Ireland's presidency of the EU in 2004.

Groups representing Romanians in Ireland, who are seeking an end to work restrictions, estimate that up to 10,000 of its citizens will come here seeking work this year.

Vasile Ungureanu, chairman of the Romanian Society of Ireland, said Romanians living here could not understand why their friends and family were not being allowed to work.

No such work restrictions were placed on the 10 accession states which joined the EU in May 2004. The flow of workers from these countries into Ireland has continued to accelerate over the last two and a half years.

Of the 300,000 people from accession states who received PPS numbers since May 2004, a significant proportion are likely to have returned home. Some migration experts estimate that around 90,000 accession state citizens are resident here at present.

The best measure of immigration into Ireland will be contained in census data due to be published in the coming months, which is expected to show that the proportion of foreign nationals has grown to 10 per cent of the population - its highest-ever level.

Ireland, the UK and Sweden were the only countries of the then 15-strong EU not to impose restrictions on migrant workers from the new member states when the EU enlarged in May 2004.

Since last summer, Spain, Finland, Greece, Portugal and Italy have also opened their labour markets to workers from former accession states. While it is at an early stage, the latest PPS figures suggest that the opening of other labour markets is not affecting the number of eastern Europeans seeking work here.

The majority of EU states - with the exception of Sweden and Finland - are maintaining work restrictions on Romanians and Bulgarians.

The Irish Times also reports that two Irish companies are among Standard Life's top picks for this year, although the Irish market as a whole has lost some of its attraction, according to Stan Pearson, the group's head of European equities.

Drinks group C&C, whose share price more than doubled last year on the back of strong demand for its cider brand, and Kingspan, the building materials group currently benefiting from substantial growth in the housing market, both remain good bets for 2007, according to Mr Pearson. Kingspan stock also doubled in value last year.

"We believe cider penetration in the UK is still underestimated," said Mr Pearson, pointing out that not only has the company had success in the domestic Irish market with its Bulmers cider brand, but that market penetration in Scotland has also been significant. Recent market share statistics from AC Nielsen show that C&C's Magners cider brand, as it is known in the UK, had a 2.4 per cent share of the long alcoholic drinks market in the region in September, though commentators believe the real figure is higher.

C&C recorded a 66 per cent increase in profits in the first half, a gain the group attributed to strong take-up of its cider brand.

Kingspan, meanwhile, operates in several niches that are all growing areas, according to Mr Pearson.

As a result he believes the company has significant potential for growth in 2007.

"They are bringing modern manufacturing technology to house construction," he said, adding that the recent focus on environmental concerns and in particular the introduction of tax incentives for energy efficient housing in the UK would greatly enhance the company's activities.

"We see the overall demand for housing construction in the UK remaining strong, and someone like Kingspan will help meet that demand," he said.

Kingspan last month released a very positive trading update for 2006, saying that its operating profit would grow by about 33 per cent, helped by a particularly strong performance in its insulated panels business. This business in particular is benefiting from the trend for energy efficient housing.

Mr Pearson said that while he was optimistic about growth at these two companies, he was less enthusiastic about the Irish market as a whole. "We are not expecting a precipitous collapse, but we are less enthusiastic than we have been in the past," he said.

The Iseq rose 28 per cent in 2006, adding about €24 billion to the value of Irish shares. This compares with an 11 per cent gain in the FTSE.

"Ireland is a great story, but everyone knows about it now so the positives are priced in," he said, adding that there were some local issues such as infrastructure problems that weren't reflected in share prices and that may affect the Irish market in the future.

According to Mr Pearson, following a very good 2006, the Irish banks, which rose on average 25 per cent last year, are now more vulnerable than other sectors, and much better value can currently be found in the Greek and Turkish banking sectors.

He believes that while Ireland has seen phenomenal success compared with other parts of Europe in recent years, the time has now come to either look further afield or to focus on some of the new, smaller growth companies coming through. This, he believes, is the way Ireland can remain attractive to investors.

The Irish Examiner reports that increased powers given to the Revenue Commissioners to combat crime are being used in ways that were never intended and threaten individual rights, a study has claimed.

The flurry of legislation introduced after the murders of Detective Garda Jerry McCabe and journalist Veronica Guerin in the summer of 1996 included the Proceeds of Crime Act 1996, the Criminal Assets Bureau Act 1996, and the Tax Consolidation Act 1997.

A study published in the Taighde, the research journal of UCC’s Faculty of Commerce, by John Considine, Department of Economics, UCC, and Shane Kilcommins, Faculty of Law, UCC, found that legislation had a number of features that characterised the movement in both criminal law and revenue law towards tilting the balance of power in favour of the State and away from the individual.

“It is useful to consider these recent changes —– changes that some recent research suggests might be going too far without associated safeguards on revenue powers,” the authors state.

The UCC academics point out that the “hollowing out of the rights of the individual” is a general trend and not one limited to the taxation arena.

“For example, the Criminal Justice Act 1994 facilitated a wider interpretation of what exactly constituted the proceeds of crime and it reduced the burden of proof to the balance of probabilities from beyond reasonable doubt. The Proceeds of Crime Act 1996 further reduced the rights of the individual by allowing confiscation of property, believed by the gardaí to be the proceeds of crime, without a prior criminal conviction,” they argue.

The authors add that in the rush to increase powers, potentially better solutions have been overlooked.

“The case of interest income taxation is an obvious one. If one is to believe the agencies of the state, then the reason for the differential treatment of resident and non-resident interest income taxation, including enforcement, was the threat to the Irish currency and the exchange rate. It is easy to argue that with the healthy state of public finances and disappearance of the Irish pound, the reasons for the differential treatment are gone. Why not remove the cause of the crime rather than the crime?” they argue.

A third feature of the legislation identified is the tendency for it to be used in ways never intended.

“For example, it would seem that the Criminal Assets Bureau (CAB) has grown to rely more heavily on the power to tax rather than the powers they were granted to seize the assets of suspected criminals,” they say.

“Under the legislation CAB can use a Section Three order to prevent a person from dealing with property that is the subject of the order. It is termed an ‘interlocutory order’ and remains in place for up to seven years. It is granted by the court once it is satisfied that, on a civil standard of proof, a person is in possession or control of property that constitutes directly or indirectly the proceeds of crime.”

The Financial Times reports that the value of companies taken private reached record levels in 2006, with New York and London’s stock markets taking the brunt of the $150bn of de-equitisation, according to figures from Thomson Financial.

However, new listings, especially from Russia and China, meant that the total value of capital raised on world markets outstripped the amount taken private by more than $100bn.

The value of companies taken private has almost trebled since 2004. The New York Stock Exchange saw a net withdrawal of listed capital of $38.8bn after public-to-private transactions are taken into account. Nasdaq suffered a net withdrawal of $11bn – almost twice its loss through de-equitisation in 2005.

Initial public offerings of US companies at $41bn were less than half the nearly $97bn of so-called public-to-privates where listed companies are bought out by private equity investors.

The emergence of the London Stock Exchange as a listing venue of choice for foreign domiciled companies led it to outstrip almost every other world exchange in 2006 in IPO activity.The value of its new listings was more than double its de-equitisations. However, London’s reliance on foreign business is highlighted by figures for British companies which raised less than $19bn through IPOs compared with $27bn of public-to-privates.

A separate Citigroup study shows the overall UK market continuing to shrink if share buy-backs are counted along with cash bids for companies. Citigroup calculates that the overall UK equities market shrank by about 3 per cent, roughly £40bn ($78bn), in 2006 as a result. Euronext and the Deutsche Börse bucked the mature markets’ de-equitisation trend with IPO growth. Analysts attributed this mainly to economic reform.

The Thomson Financial research, which shows global IPO value topped $253bn by late December, underlines the growing presence of China and Russia. Companies in those countries were responsible for $65bn worth of IPOs.

Analysts said de-equitisation is symptomatic of the credit cycle which makes debt so cheap that investors are encouraged to use it to buy earnings flows.

Consultants at McKinsey & Co, in a forthcoming bulletin to be published in Janaury, conclude that public companies “will need to raise their governance game if they are to compete with private equity”.

While the average private equity investor produces returns that are only equal to those of stock markets over time, the top 25 per cent of them produce returns far in excess of that.

McKinsey forecasts that private equity could eventually rival public stock ownership in size if the disparity in governance remains. “That scenario presents a clear challenge to public companies and their boards; they simply must raise their governance game,” McKinsey concludes.

The Thomson figures do not take account of the equity removed from the public markets via share buy-backs. The public-to-private figures are based on transactions that have completed or are

The FT also reports that even after one of the busiest years for mergers and acquisitions ever, many bankers insist that 2007 will produce at least as many deals. Below are some of areas where bankers, investors and analysts expect to see action.

Aerospace, Defence

The threat of terrorism and conflict has driven governments and individuals to spend more on bolstering their security, fuelling speculation of deals in the sector. Analysts believe Smiths Group, Meggitt, Cobham and Ultra Electronicscould all become subject to bid approaches over the next few months. United Technologies or Honeywell of the US and Italy’s Finmeccanica could all be interested in buying UK assets. Old rumours persist that Invensys is being eyed by private equity and trade buyers.

Chemicals

PwC recently said consolidation in the chemicals sector would continue as companies seek greater strength to combat rising oil prices, competition from developing economies and increased regulation. Top of the list of targets is ICI, which came into the spotlight in November when it sold its Quest fragrances and flavours business to Givaudan of Switzerland for £1.2bn. Some dealers now believe ICI’s coatings division would be a good fit with Akzo Nobel’s. Johnson Matthey, the catalysts and precious metals group, could also attract a predator, some bankers believe. Elementis is also a potential target.

Oil, gas and mining

Although the high oil price has prevented consolidation among the big players, investor focus has stayed on Abbot Group, which is being touted as a potential bid target for Wood Group, and Premier Oil, which may become the latest UK company to be acquired by a Middle East buyer, Dubai Energy. Among the miners, many hope that talks between Lonmin and Gold Fields, the world’s fourth largest gold miner, will be revived.

Retail

J Sainsbury has been the focus of takeover talk for more than a year with private equity thought to be attracted to the group’s property portfolio. Woolworths is regarded by many as one of the most likely targets as it continues to struggle: it issued a profit warning shortly before Christmas. Its shares surged this week on rumours of a bid from Baugur – the Icelanders already own 10 per cent. Analysts have also singled out Galiform, the former MFI Furniture Group, as a target for private equity, although its pension fund deficit may prove an obstacle. Baugur has also been suggested as a bidder for JJB Sports or Moss Bros.

Leisure & consumer

Cadbury Schweppes has been subject to rumours of predatory interest from Kraft Foods and Hershey. Gallaher, the cigarette manufacturer, may have agreed to be bought by Japan Tobacco, but some investors continue to hope for a counterbid: the stock trades at £11.46½, just above Japan Tobacco’s offer of £11.40. Names in the frame include Altria, owner of Philip Morris of the US, Spain’s Altadis or BAT of the UK, although all would have to overcome plenty of regulatory or financial hurdles. Whitbread, the leisure group has also been the subject of intense take-over rumours. Barry Sternlicht, the US founder of Starwood Capital, recently increased his holding to almost 3 per cent. A number of private equity firms are also thought to have taken a look at it.

Pharmaceuticals

The pharmaceuticals sector has come under increasing pricing pressure and large companies have been anxious to fill their pipelines by buying smaller biotech companies. The past few weeks have seen rumours that GlaxoSmithKline may sell its £12bn home-products business. The group has been mentioned in the same breath as Novartis, its Swiss-based rival. AstraZeneca, itself long regarded as a target, has been linked with Shire Pharmaceuticals, which bankers suggest might solve Astra’s pipeline problems. Analysts also predict a trade bidder or one of the new private equity owners of Biomet, the US medical devices group, will bid for Smith & Nephew, which looks vulnerable after losing its own bid for Biomet.

Utilities

Although the utilities sector has been the focus of much M&A activity this year, bankers still believe more is to come. Hopes rest on Northumbrian Water, Kelda and Pennon, owner of South West Water. Of the three, Kelda, which owns Yorkshire Water, is pegged as the most likely because of its relatively ungeared balance sheet. Rumours that Centrica, frequently seen as a target for Gazprom of Russia, will finally receive a bid, have also refused to die down. But perhaps the most imminent deal could be a counterbid for Scottish Power. The UK utility has agreed to be bought by Spain’s Iberdrola, but some analysts believe a counterbid from Electricité de France could still come. EDF has been ambiguous about its intentions.

Financials

Man Group, the world’s largest listed hedge fund manager, has been in the takeover frame for several weeks, with Goldman Sachs and Merrill Lynch suggested as acquirers. The company may demerge its brokerage business. Scottish Widows, the life assurance business of Lloyds TSB, could also be acquired. The bank received several expressions of interest in its closed-life books this year, and it is thought Axa and Swiss Re have expressed interest in buying the whole of Scottish Widows. Some bankers and analysts predict Aviva will return with a higher offer for Prudential after the UK insurer rejected a £17bn takeover approach this year, or be a target itself. Some investors and analysts believe the Pru may sell its UK life business,or Egg, the internet bank in which Citigroup has expressed an interest. They will also be keeping an eye on Alliance & Leicester and Bradford & Bingley, which may attract interest from European banks looking to expand in the UK. One broker has suggested a merger between the two would have compelling industrial logic. Barclayswas the subject of takeover speculation for much of this year, but Bank of America recently played down talk it was planning a move.

Media

When Trinity Mirror announced plans to sell the Racing Post and some of its regional newspapers this month, private equity and trade rivals immediately began considering bids for the titles being sold, for what would be left or even for the whole lot. Montagu, which owns French racing titles Paris Turf and Week End, has been cited as a potential bidder, as have sports publishing groups, such as RCS, which owns Italian daily Gazzetta dello Sport. Gaming and betting companies such as Ladbrokes, Gala and Arena Leisure could also be interested acquirers. Speculation round EMI has been rife for months and, after a £2.5bn sale of the music group to Permira collapsed this month, hopes rest on other buy-out groups coming forward. Informa, the publisher of Lloyd’s List, which rejected a joint bid from Cinven and Candover this year, may also be up for grabs.

The New York Times reports that inside a Philip Johnson-designed office tower in Boston’s financial district, UBS, the giant Swiss bank, is running a “hedge fund hotel.”

Like a few other big investment banks, UBS leases space to ambitious young hedge fund traders as a temporary home, complete with receptionists, espresso machines and consultants to help manage their information systems.

In return, the banks hope the hedge fund hotel guests may become big clients.

Some regulators, however, are growing concerned about the relationship between the banks and their hedge fund hotel guests, looking at whether the banks might be using the real estate relationship as a way to entice hedge funds to do business with them, possibly at the expense of their investors.

William F. Galvin, the Massachusetts secretary of state, has subpoenaed UBS and is examining other banks with hedge fund hotels in Boston to determine how they are charging for their services. He is looking at whether hedge funds are paying higher than normal trading fees to banks to compensate them for the office space and failing to disclose this expense to investors.

“It’s a conflict of interest issue,” Mr. Galvin said.

UBS, which declined to comment, is the leader in this business, with 400,000 square feet of hedge fund hotels in a number of cities. Bear Stearns is also active, with space for rent in New York, Boston, San Francisco and Los Angeles.

While the state investigation is in a preliminary stage and may not lead to any specific charges, at its heart is a thorny issue that has dogged regulators for decades. Money managers, including mutual funds and hedge funds, often pay Wall Street with “soft dollars” — inflated commissions that include the cost of trading (typically 1 to 2 cents a share) plus an additional few cents a share that can be directed to pay for research and other services.

Soft dollars are controversial because clients pay for the higher commissions, while the services often benefit the manager the most. Higher commissions result in greater expenses for the fund and potentially lower returns for investors.

In the late 1990s, the Securities and Exchange Commission cracked down on the use of soft dollars by mutual funds, concerned that investors were being duped into paying for services enjoyed by the manager.

Massachusetts is now investigating whether hedge funds are improperly using soft dollars to pay for space in these hotels and failing to disclose to investors that they are covering a major expense.

“It’s the same soft dollar question,” Mr. Galvin said in an interview. “What kind of quid pro quo might be in the placement of an order? What’s the relationship between the entities?”

As hedge funds have exploded, so, too, have the fortunes of Wall Street, which earns billions of dollars a year in fees executing trades and lending money to hedge fund clients. Hedge funds typically trade more than other Wall Street clients and they trade exotic, high-margin products, like complex derivatives.

Because hedge funds have become such important customers, there are concerns that they may be receiving tips about pending mergers, for example, or other yet-to-be-disclosed news that could affect a stock price. Trading ahead of public disclosure would give a fund an advantage; while it generally would be illegal, it is often hard for regulators to detect or prove.

Trading and the soft dollars used to pay for it are only one part of the business Wall Street does with hedge funds. The main business of servicing hedge funds is called prime brokerage. It includes financing trades; finding and lending stock to allow hedge funds to short stocks (betting that their price will fall); structuring derivatives; and executing swaps. It can also include hedge fund hotels — securing real estate, receptionists and information technology and even managing, say, the risk of trading currencies in Asia.

The global prime brokerage business generates $8 billion to $10 billion a year, according to an estimate by the Vodia Group, a consulting firm for the financial services industry. The business is highly profitable, with a return on equity — a measure of how efficiently the bank reinvests its capital — of a healthy 15 to 20 percent. In 2006, Goldman Sachs made $2 billion directly servicing hedge funds, 22 percent more than the previous year.

Prime brokerage is only the tip of the iceberg when it comes to the fees that hedge funds generate for Wall Street firms: billions of additional dollars come from trading for these funds. Credit Suisse estimates that investment banks made $25 billion in revenue from hedge funds in 2004, $19 billion of which came from sales and trading and the rest from prime brokerage.

Hedge funds now control half the volume traded on the New York and London Stock Exchanges, according to Credit Suisse.

In markets like convertible arbitrage, hedge funds control 70 percent of the trading. (In convertible arbitrage, an investor buys a bond that can be converted into stock and then sells that stock short, betting that its price will fall because of the sale of convertible bonds.)

“Hedge funds generate about 30 to 35 percent of the equity commission volume of the major Wall Street firms,” said Brad Hintz, a securities analyst with Sanford C. Bernstein & Company, a respected Wall Street research firm that manages money for wealthy individuals and institutions. But that is only part of the equation.

“Because a hedge fund has broad investment guidelines — it is not constrained like a mutual fund to invest in certain stocks or certain sectors — it allows the hedge fund to really go after some of the more financially attractive products the Street offers,” Mr. Hintz said.

In the United States, Goldman Sachs, Morgan Stanley and Bear Stearns lead the pack in prime brokerage, collectively controlling about 75 percent of the market, according to Sanford C. Bernstein, a unit of AllianceBernstein.

But neither Goldman nor Morgan Stanley run significant hedge fund hotel operations. (Goldman inherited a small business from Spear, Leeds & Kellogg, which it bought in 2000.)

Bear Stearns’ hedge fund hotel clients tend to be small. Bear is unusual because it accepts only “hard dollar” arrangements, rather then venturing into the murky area of soft dollars.

Bank of America exited the hedge fund hotel business 18 months ago because of a lack of demand.

Lehman Brothers and Credit Suisse have been building their prime brokerage businesses. Lehman has space that it leases to a select group of clients, but it is not a major player in hotel space. Credit Suisse prefers to cater to a small number of institutional-quality hedge funds that are expanding into high-margin products like structured derivatives and reinsurance.

Jefferies, a bank that caters to midmarket clients, recruited a significant part of Bank of America’s prime brokerage team to build its business. Glen Dailey, head of prime brokerage, said the hedge fund hotel business was too expensive to build at Bank of America.

“It took a lot of resources, especially tech support,” Mr. Dailey said. “Clients would call because there wasn’t coffee or hot water. In the end, we felt like the client service group was spending 80 percent of its time on the real estate.”

The NYT also reports that having enjoyed a year that was better than average in the stock market and a much weaker one in housing, home owners and investors appear neither exuberant nor glum about 2007.

In fact, they are decidedly ambivalent, according to a recent New York Times/CBS News poll. They are split, for instance, almost evenly on whether it is a good time to buy a new home or better to wait, even though a sizable majority expects home prices to stay steady or rise, especially in their neighborhoods.

The poll also showed that Americans had regained some faith in stocks as a safe investment since the market’s crash in 2000, but they were less confident that stocks would rise next year than they were during the depths of the last bear market, in 2002.st bear market, in 2002.

The telephone survey was conducted from Dec. 8 to 10 and included 922 adults nationwide and has a sampling error of plus or minus three percentage points.

The seeming confusion and anxiety is not entirely new or limited to average Americans. Similar worries abounded in late 2005, when some economists and market experts predicted the nation’s long housing boom would come to a screeching halt and inflict damage on the economy and the stock market.

While home sales did plummet from record levels, the stock market rebounded to new heights after a brief stumble last summer. The Standard & Poor’s 500-stock index posted a 14 percent gain last year, its best showing since 2003. The American economy also put up stronger-than-expected performance as job growth and business investment made up for the faltering real estate market.

Still, in follow-up interviews, several of those polled last month said that while they were confident about their personal financial positions, they were preparing themselves for tougher times by either changing their spending and investment patterns or by not taking as many risks.

Christopher J. Pujol, an account manager at a pharmacy benefits company in Texas, said he planned to shift some of the assets in his 401(k) account to cash from stock-based mutual funds because he did not think the market would match its 2006 performance. “The good times can’t go on forever,” he said. “I take a conservative approach and take moave the duraar, frc among them predicg a recession and the most optimistic saying economic growth could be so strong that it may force policy makers to resume raising interest rates to fight inflation.

“People seem to have a fairly balanced view about things,” said Robert T. McGee, chief economist at U.S. Trust, who reviewed results of the poll. “We have had a relatively strong housing boom and people recognize that is over, but at the same time the disappointment in stocks that occurred after 2000 and 2001 is dissipating some.”

The poll is in line with other recent surveys that show Americans are slightly more cautious, even though most of them have stable employment and are seeing their paychecks increase, said Lynn Franco, director of the consumer research center at the Conference Board, which produces a widely followed consumer confidence index. “Over all, it’s this glass half-full/half-empty scenario,” she said.

Mr. Pujol, who lives in Keller, Tex., near Fort Worth, with his wife and their two young sons, thinks that the economy will moderate in 2007. The family bought a new home four years ago and is not planning to move but Mr. Pujol and his wife have other real estate investments in Texas that he thinks will fare better than property on the coasts.

Mr. Pujol reflected the view of most Southerners, 57 percent of whom said local housing prices would increase in the coming year and the same number said it was a good time to buy a house. Only 47 percent of people surveyed nationally said it was a good time to buy a house and 45 percent said local prices would increase. The difference may reflect the relative strength of housing in Texas, on the Gulf Coast and in the Carolinas.

Not surprisingly, home owners were also more upbeat on housing — 52 percent said it was a good time to buy a home — than renters, 60 percent of whom felt it would be better to wait. (Similarly, 65 percent of people who owned stocks or mutual funds said the stock market would go up next year compared with 39 percent of people who did not have investments.)

Laura Koepnick, a lawyer for the state of Massachusetts, said she and her partner would like to move to a bigger home from their condo in Boston but think home prices may fall further still.

“It’s more of a buyers market, but it has been so up and down that I am not comfortable making a huge investment at this time,” said Ms. Koepnick, 36, who is still paying off law school loans and owns a mutual fund in a retirement account.

Darla K. Bundy, who works for the state of Pennsylvania, would also like to move but she faces an entirely different set of challenges. So many homes are on sale in Ridgway, the small industrial town two and a half hours northeast of Pittsburgh where she lives, that Ms. Bundy said she could not make as much as she and her husband, a welder, owe on the property.

In 2001, Ms. Bundy lost an $18-an-hour job making specialty light bulbs for Sylvania when the company moved some production to Mexico. After taking a two-year computer training course paid for by the government, she has a $12-an-hour clerical job at the state transportation department.

“My husband and I would love to make financial investments to prepare for retirement,” Ms. Bundy, 42, said. “But to even take $20 out of our budget and put it somewhere else is unthinkable.”

Like several other people, Ms. Bundy pointed to Sept. 11, 2001, as a critical turning point for her family — she lost her job shortly before the attacks of that day and her husband has had a hard time finding work ever since.

The brief recession that followed the technology bust in 2000 ended before the attacks of 2001, but many Americans view the attacks as an important historical marker in the nation’s and their personal economic lives. That may be a function of the weak employment and wage growth that characterized the economic recovery from 2002 to 2004.

The economy was “pretty good until 9/11, and then it took a major dive,” said Dawn E. Owsley, a 33-year-old who owns a spa business in Olympia, Wash. “And then it picked up a little. But I feel that we have not yet caught up.”

Over all, a majority, 52 percent, said they were making enough to pay bills and obligations and a sizable minority, 35 percent, said they earned enough to save and buy extras, while 12 percent said they did not make enough to meet their household expenses. By comparison, 17 percent of those who answered that question in early 2005 said they did not make enough, 48 percent said they did and 33 percent said they could save and buy extras.

Most Americans, 71 percent, said if they had extra money to invest they would put it in real estate rather than stocks, which were favored by 22 percent of the respondents. By comparison, during the peak of the housing boom in the spring of 2005, an NBC News/Wall Street Journal poll found that 80 percent preferred real estate and 13 percent stocks.

Of those polled, 77 percent said they owned their own home and 21 percent said they rented. But only 44 percent said they owned stocks or mutual funds, down from 56 percent in the first half of 2000.

That shift away from stock ownership is not surprising given that many investors are still smarting from the technology-led crash of 2000 and the two-year bear market that followed. And in spite of the recent rally, mutual fund flows indicate that investors remain skeptical of American stocks. As of Dec. 27, investors poured $15 billion into domestic equity funds in 2006, compared with $134 billion in nondomestic funds and $305 billion in money market funds, according to AMG Data Services.

Edward A. Kellerhals, a retired municipal electrical inspector who lives near Fresno, Calif., said his investments in stocks and real estate had provided a comfortable retirement for him and his wife. Though he has long thought that land is a better investment than stocks, he became convinced that real estate prices in California had become outlandish when he and his wife were looking to buy a home at the end of 2005.

“This piece of junk we saw was selling for $300,000,” Mr. Kellerhals, 76, said. “The roof was leaking all over the place and there was a trailer with a caved-in roof in the back.”

He has become more bullish on stocks, but says that at their age he and his wife “don’t buy much stock anymore.”

“We are just slowly going to sell it all,” he said.