There's an article on the front page of today's Times (here) about the exceedingly low amounts of interest being paid for savings accounts, money market accounts, and CD's at the moment.Many of the large banks are paying between 0.5 and 1.5% on these accounts/CD's, and the conspiratorial theory is that the Fed is keeping interest rates so low in order to compel people to invest in the stock market (as a higher-yield alternative), thereby leading to the continuing upswing in the stock market.
Other news from the business world recently:
- Some AIG employees who orally promised to return some of their bonus payments from March 2009 (which raised such a huge protest at the time) are now arguing that they will not do so unless the federal government makes certain promises of its own about future bonuses. I'm unclear as to what the AIG employees want, but the implicit threat appears to be that if they are compelled to leave the company it will be that much harder to finish "unwinding" all the derivatives.
- An article in yesterday's Times said that Goldman Sachs was simultaneously selling mortgage-backed securities to many of its clients and then short-selling the same securities (or the broader mortgage market).
- The amusement park industry has been hurting in America during the recession, but it's growing at the moment in certain Asian contries (including Singapore and Malaysia).
- There's a good article in today's Business section (here) about how some of the popular microfinance sites work; the big ones include Kiva, Microplace, and Modest Needs. Actually, Modest Needs sounds less like microfinance and more like individually-targeted charitable donations, and it's interesting how they've structured it to make the donations still eligible for the federal tax decuction. One of the main points of the article is that Kiva and Microplace donations do not go directly to the borrowers but rather to the financing institutions as a conduit.
