Knowledge is Power: Nouriel Roubini on Insolvent Banks Edition

1.As I write this, the Federal Reserve has announced a huge new program to buy various kinds of debt designed to lower interest rates for home mortgages and other loans (such as securitized consumer loans). This action is another major step in the new era of the proactive Fed that puts large amounts of “Fed-created” money into the economy. The Fed money is intended to restart the seriously sick real economy by providing credit not available from the private sector.Will the Fed’s Medicine Work?

2.Despite America’s move to the left under Obama, it’s still assumed that Europe and America are fundamentally different—in their economies, societies and values. But this is a myth.A narrower atlantic

3.Moody’s discusses some of the characteristics of the world’s largest bank.The rise and rise of ICBC

4.Luxury carmaker Porsche agrees to merge with larger German manufacturer Volkswagen in a new car group. Carmakers Porsche and VW to merge 

5.Joseph Schumpeter famously argued that the essence of capitalism was creative destruction, by which new economic structures are born from the rubble of older ones. The government stress tests on the 19 largest US banks, the results of which are due be announced on Thursday, could have facilitated this process. The opportunity looks likely to be missed. -By Matthew Richardson and Nouriel Roubini Insolvent banks should feel market discipline

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