1.The economic downturn is forcing a return to a culture of thrift that many economists say could last well beyond the inevitable recovery.Shift to Saving May Be Downturn’s Lasting Impact Source: New York Times Related: China Consumer Spending vs. Savings 2. The market is a cruel mistress indeed. Compounding the pain of big swoons, it …

Continue reading ‘Knowledge is Power: US Savings Rate Rises Edition’ »

1.In a switch from the downturn of 2000, retail investors have actually increased their trading volume, a panel of analysts told participants at the annual meeting of the Financial Industry Regulatory Authority Inc. in Boston. Finra is based in that city and New York.Retail investors in buying mood despite downturn. 2.With his 401(k) in ruins, …

Continue reading ‘Knowledge is Power: Bull Market is Back? Edition’ »

1.The power of the three big US rating agencies, Moody’s, Fitch and Standard & Poor’s, remains unbroken. By awarding high ratings to junk securities, they fueled financial market excesses. Now they are taking countermeasures by brutally downgrading securities. In doing so, they are making the crisis even worse.The Power of Rating Agencies 2. The U.S. …

Continue reading ‘Knowledge is Power: End of Stress Tests 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” …

Continue reading ‘Knowledge is Power: Nouriel Roubini on Insolvent Banks Edition’ »