MoneyRates Blog
Unemployment, underemployment and interest rates
If you think unemployment is bad, consider the number of people who are underemployed.
By Gallup’s reckoning almost one in five people — 18.3 percent of Americans — either don’t have jobs or are working part-time and want full-time employment as of mid-August. The research outfit’s numbers are based on on more than 15,000 phone interviews [...]
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Emergency savings accounts need a boost, study finds
About a quarter of Americans think the economy and their personal financial situations will be worse this year than last year, according to The 2010 MetLife Study of the American Dream released July 26.
That sounds pretty grim, considering how bad the last couple of years have been.
But the results actually show significant improvement over last [...]
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FDIC Warns of Bogus E-Mail
At the end of last week, the Federal Deposit Insurance Corporation (FDIC) issued a consumer alert warning of a bogus e-mail purporting to be from the FDIC. The e-mail offers recipients $50 for participating in a survey, and asks them to click on a link to a web site. The FDIC alert states that the probable [...]
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Savings Investors Are “Collateral Damage,” Says Professor
Professor Alan Blinder of Princeton University gave quite a performance on Wednesday morning on CNBC–so standout was this performance, in fact, that many savings investors probably desired, at least momentarily, to jump through the television and punch this fine gentleman in the nose.
The debate on Wednesday was about whether or not the Federal Reserve should [...]
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Big Banks: What Are They Good For?
The obvious answer to the above headline, if you’re a savings investor, is: big banks are good for giving savings investors extremely low interest rates on savings accounts, CDs, and money market accounts.
But there’s a larger, less flippant question here about the large banks, those being Wells Fargo, Bank of America, Chase, and Citigroup. This bigger question [...]
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Bond Rates, Bank Rates, and Safe Money
Low bank rates, especially on CDs, are being used by financial product salespeople to sell other, riskier investments, such as stocks and bonds.
Wait a second. Bonds are risky?
Not necessarily risky, no, but bonds are by no means the “safe haven” that many savings investors suppose–and many salespeople propose.
In fact, it’s entirely possible that there is a giant [...]
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The Latest Import from Asia: Responsible Banking?
Last week, China raised its reserve requirement ratio for large banks. The move was noteworthy because it is a tactic designed to slow growth — something it’s hard to imagine U.S. policymakers doing. However, China’s action may be an example of how policymakers can lead rather than follow.
According to a New York Times story, China’s [...]
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The Fed’s Plan to Stop Inflation: What It Means to CD Values
Conservative investors who hold money in CDs, money market accounts, or savings accounts may feel like they’re between a rock and a hard place:
They by all means want higher interest rates on those deposit accounts, but they also are worried about the poor economic conditions of the country as a whole.
The basic fear underlying these [...]
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Why Bother With a Money Market Account?
As noted by J.D. over at GetRichSlowly.org, money market accounts are often not very well-understood. For some savers, the question arises in a quite blunt format:
“Why should I bother with a money market account?”
Especially for people who already have a savings account and a checking account, a money market account can seem like an extra account [...]
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Would Removal of FDIC Insurance Actually Help the U.S. Banking System?
As we blog, Larry Kudlow is hosting a discussion that includes talk of abolishing FDIC insurance as a way to make the banking system safer. At first this seems totally contradictory, but upon closer inspection, this view may have some merit.
The term coming into use is “narrow banking.” That is, banks that hold money on [...]
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What Will Today’s Savers Teach Their Children About CDs and Savings Accounts?
The sixth annual Wealth and Values survey from PNC bank came out recently, and it is worth a read for anyone who’s interested in the savings patterns and attitudes happening today.
One interesting, potentially overlooked tidbit from the survey came from this statement: “The events surrounding the recession have prompted me to have discussions with my [...]
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Bloomberg vs. The Fed: What It Means for CDs, Savings Accounts, and Mortgages
Possibly the most underreported massively important financial news story occurring today pertains to the freedom of information lawsuit Bloomberg News Service has brought against the Federal Reserve.
The outcome of this case, which is currently in the U.S. appeals court, could have tremendous implications for certain banks, as well as the investors who hold CDs, money [...]
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Can Savers Save the U.S. Economy?
John Tamny wrote a terrific column the other day at Forbes.com noting the vital role that holders of CDs, money market accounts, and savings accounts will play as the U.S. economy recovers from its presently poor state.
Contrary to popular wisdom that sees consumer spending as the best thing for the economy, therefore every time consumer [...]
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FDIC Builds Banking System Credibility With Bank Seizures
It’s easy to assume that a “gotcha” story like this one from Bloomberg, about the FDIC seizing bank assets, should undermine the credibility of the U.S. banking system. The story describes how a rapper’s tour bus, reeking of marijuana, was taken by the FDIC and sold after the failure of an unnamed Atlanta bank.
The Bloomberg [...]
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Citigroup to Be Revalued On Friday
What an interesting time it is to be writing about banks. The latest:
Citigroup, the stock, will be officially revalued at the close of the stock market on Friday for the purposes of the S&P Index.
Longtime bank analyst Dick Bove sees this as further indication that certain major banks will become, in short order, more akin [...]
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Low CD Rates Contributing to Stock Market, Gold Price Rise
Fidelity posted a strong article analyzing the connection between low bank deposit interest rates and asset value increases in the stock market and commodities, most notably gold.
Dirk Hofschire, VP of Market Analysis for Fidelity, does a great job of showing how the low interest rates on CDs, savings accounts, and money market accounts, has caused investors–even conservative [...]
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First Fed Move to Combat Inflation Is a Small, Symbolic One
Chairman of the Federal Reserve Ben Bernanke has been loudly declaring that inflation is not a problem and will not be for at least a year and change. Libertarian Congressman Ron Paul vociferously disagrees.
If you keep money in savings accounts, CDs, and money market accounts, this argument over inflation is most likely at the top [...]
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Will Big Banks Really Be Broken Up Into Bits and Pieces?
Not sure if you’ve been following the latest bank hearings–there have been so many of them over the past year, who could begrudge you for missing out–but these bank hearings may be bigger than most.
The Senate is dicussing what to do about the “too big to fail” big banks and too big other companies that [...]
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Bank Reform Debate Continues Even as Recovery Continues
It’s not surprising that former Fed Chairman Paul Volcker has voiced the opinion that banking reform must include the break-up of large institutions, including the separation of commercial and investment banking operations. However, having John S. Reed’s voice join the same chorus is really reason for pause.
Paul Volcker’s regime as Fed Chairman was strikingly different from that of [...]
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Will New Bank Regulations Protect Your Savings Account? If So, How?
Treasury Secretary Timothy Geithner testified before Congress this morning on the topic of new bank regulations being discussed by the Democrat-controlled Congress, led by Barney Frank of Massachussetts.
Conservative investors who are seeking to protect retirement savings are understandably interested in the outcomes of these discussions. When you have spent your life saving money in savings [...]
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