Crash Survival Zone

Bond investors are earning more than ever with Treasury Inflation Protected Securities as central bankers around the world set the stage for a rise in consumer prices by deploying unprecedented amounts of money to battle the global recession.

In March, TIPS earned 6.1 percent, the best returns since the Treasury started selling the securities in 1997, [...]

By Nouriel Roubini

I was interviewed on Tuesday on CNBC’s “Squawk Box” on my views on the economy, the stock market, the problems with the banks, the Geithner plan and whether there’s light at the end of the tunnel.

As I pointed out in the interview, the rate of economic contraction will slow from the -6% of [...]

U.S. credit markets are not showing the same optimism on the economy as U.S. equities, suggesting that the recession will run far longer than most expect, Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co., said on Friday.

“For the recent equity rally to continue, markets need a significant and sustained improvement in [...]

Some fear the bear will return in April. Even if the economy has hit bottom, the news may just be ‘less bad’; GM, bank stress tests and earnings are concerns.

March came in like a bear and out like a bull on Wall Street. But will the bull stick around or will the bear return to [...]

When treasury secretary Tim Geithner rolled out his long-awaited plan for buying up toxic mortgage loans and securities on March 23, reaction was split. Financial markets cheered, with the Dow Jones industrial average rocketing 497 points, or 6.8%, on the day. The chattering classes mostly grumbled, with Princeton economist and New York Times columnist Paul [...]

U.S. stocks will fall and the government will nationalize more banks as the economy contracts through the end of 2009, said Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.

“The stock market is a bit ahead of the real macroeconomic and financial news,” Roubini, a professor at NYU’s Stern School of [...]

As Underlying Assets Drop, So Do Returns on Investments; Insurers Grow Leery of ‘Wraps’

Investors are pouring billions into stable-value funds — just as these popular retirement-plan investments are looking less stable than usual.

Stable-value funds, available only in 401(k)s and other tax-deferred savings plans, are designed to preserve capital and generate smooth, positive returns — hence [...]

The crash has forced professional investors and academics to question the theoretical underpinnings of modern finance. The most basic assumptions of the investment industry, and the products they offer to the public, must be reconsidered from scratch. Indeed, the very reason for the industry to exist – a belief that experts make the smartest decisions [...]

US retail investors poured close to $250bn (€184bn) into bank accounts in the first months of this year, sharply accelerating a flight to safety as they continued to flee volatile stock markets.

Bank savings deposits rose by $246bn to a record $4,343bn in the nine weeks to March 9, according to data from the Federal Reserve. [...]

When the economy is in a downward spiral and the federal funds rate is stuck between 0 percent and 0.25 percent for the foreseeable future, you could reasonably assume that you’re stuck with low-yielding deposit accounts if you want an FDIC guarantee.

Bankrate surveys show that the average yield for a three-month CD is 0.86 percent. [...]