Consumers needed a little break, what with the tense September to October months and worries about whether the sky is falling down and whether jobs will still be there next year. Thankfully, there have been a lot of good news this week and Christmas seems a lot less gloomy. Here’s your weekly roundup, to help those who feel like they have missed out on some news items this week.

Personal Finance:

Principles the crisis hasn’t changed
INQUIRER.net columnist Johnny Noe Ravalo points out that investors and savers have to understand that crises are part of life and that there is simply no way to perfectly see the future.

“Lehman was after all an AA-rated credit so who would have imagined what would become of such a venerable Wall Street name. This human limitation is the best reason why we should be saving. We should save because it is the only way we can transfer purchasing power from when we have a surplus to when we may suddenly need more of it. In other words, saving during normal times helps us manage the difficult times. When difficult times kick in, our financial plans often shift to prioritizing liquidity over profitability. Unless we have a fool-proof way of either marrying into or inheriting liquidity just at the right time, we simply cannot maximize liquidity when we have no saving to speak of in the first place.”

The other point that you should not miss in Ravalo’s latest column is to remember always that financial values are relative.

“A trader, for example, would have a different mindset from an investor. This matters because ultimately the portfolio of a trader should be different from the portfolio of an investor. There is always that natural urge for any investor to get a bit more but without realizing it, some of us cross over and mimic a trading position and get consumed in the day-to-day changes in market values.”

So what are you? Investor or a trader? Most of the trends you see in the news of the stock market going up and down on a daily basis is because of traders’ movements, and if we are hoping to be an investor, rather than a trader, why do we often get too affected?

A reader also wanted to know whether she should invest in stocks or in mutual funds? , a common question we receive here at INQUIRER.net. The answer depends on your risk aversion and cash flow.

One way to boost savings is to consider limiting Christmas spending by putting your 13th month pay into your investment or savings portfolio. Read this article for more ideas.

If you need help with how to manage your finances, this article tells you how to Find a reliable financial planner that won’t disappear when bad times roll along.

Is the insurance industry in trouble?, asks PDI columnist Honesto General. The long and short of it, he says, is that while they are not in bad shape, insurance companies here must be prepared to put in more capital.

Investing:
It’s not true that investments in art are immune from the ups and downs of financial markets. Financial crisis puts chill in Asian art says why.

The 3-year Treasury bond rate also plunged almost one percentage point to 7.6 percent

Macroeconomy:
Good news for consumers! Things are looking at least a little bit good for consumers this week, no wonder they are upbeat about the economy despite the crisis, according to the latest Nielsen consumer confidence survey. Good news for retailers.

Oil in foreign markets flirted with the $60-level this week, and you have the US recession to thank for that! Remember when it was at $140? How long ago was that?

The Department of Energy is seeking a P191 cut in liquefied petroleum gas prices and if the suppliers do that, the already dropping cost of staple food like rice, fish, chicken and sugar should move even lower in the coming months.

Meralco has also started its deposit refund.

October inflation (the rate by which prices of major consumer goods go up) is already down to 11.2 percent
and will likely drop to single-digit levels come 2009. Yey! Will mortgage interest rates follow? I hope so for those that have fixed interest rates for only a year. The peso has also strengthened this week.

Elsewhere in the world, top economies are already “in the belly of the recession beast” and the IMF has also lowered its growth projection for the ASEAN 5 economies but NEDA Director General Ralph Recto expects the Philippines to grow faster than expected in 2009.

Naturally, Recession fears continued to stalk financial markets. Nothing new there. And the Obama victory added a little bit more excitement in traders’ lives by sparking profit taking on Wednesday. Again, nothing new there. Traders will trade for any reason.

Banks and the financial sector:

There have been plenty of pessimism about banks and the financial sector, lately, and that’s very understandable. It’s hard nowadays to know which opinions about them are to be trusted or not. I’ve been very selective about whose opinion to publish in MoneySmarts, and whenever I do, I focus on the figures and let the figures tell the story.

It was gratifying to see Moodys confirm what these two guys said (though I am not really a fan of credit rating agencies), saying Philippine banks, as well as Asian banks, will not be immune from the crisis but they are likely to maintain these credit ratings.

Nevertheless, the first half report showed that rising interest rates, the weakening peso and risk aversion caused banks’ income to drop 26 percent in the first half. However, they continue to be well-capitalized at an average 15.5 percent capital adequacy ratio and bank lending continued to grow 25.1 percent in the first half.

Banks also got an early Christmas gift this week from the central bank when it cut reserve requirements by two percentage points, which should hopefully urge banks to continue to lend more.

From PF Bloggers:

Frugal Pinoy has a great tip on how to get Ivy Leage lectures for free by accessing them via the Internet.
I used to just buy Business Harvard Review books from A Different Bookstore so that I can speak like I went to Harvard, nyahaha. Now I can watch them for free!

All About Financial Planning talks about the investing wisdom of the world’s wealthiest including Warren Buffett and sums them up in nice little quotes you can repeat again and again when you’re nervous about your mutual fund holdings, heh.

The Serious Nuts finished her Excel worksheet for Household Finance Workbook, congratulations! I guess you aren’t happy with Quicken and other free applications already out there . Great job!

Have a great weekend!