Syntagma Media is now relaunching Moneyizor.com as a tracker of the hottest topic of the moment in U.S financial circles : macroeconomics. Think “credit crunch”, “global financial meltdown”, “economy falling off a cliff”, “new Great Depression”, and your adrenalin may just kick in.

The financial news from Wall Street and Main Street has been so alarming since last summer, Moneyizor has been changed from a magazine-type portal to become a vehicle for this crucial topic.

“On the day when the UK’s biggest mortgage lender, the Halifax, reported a staggering 2.5pc drop in house prices in March alone, the IMF warns governments, central banks and regulators that they now face a test of their mettle unique in modern times.”

Make sure you keep up to date on Credit Crunch technicalities with Moneyizor.

Legendary investor, Warren Buffett — the Sage of Omaha — in a move he says is designed to make money, has offered to take on $800 billion of the liabilities of U.S. municipal bonds.

The offer goes to three “monoline” bond insurers, Ambac Financial, MBIA and Financial Guaranty Insurance. One has already rejected the deal, and he is still awaiting reponses from the other two, although one of them is making favourable noises.

The move breathed new life into global stock markets yesterday. The monolines are seen as the second line of defence against the sub-prime mortgage fiasco by propping up banks’ balance sheets in the event of a repayment meltdown.

Traditionally, the bond insurers concentrate on municipal risk, but they too got caught up in the collective madness of sub-prime lending for the same reason respectable banks did : greed for perceived easy money.

However, the monolines are now short of capital and are being hit by downgrades from the rating agencies.

T J Marta, fixed income strategist at RBC Capital Markets, said it was a coup for bond insurers, which could help them avoid “the doomsday scenario”.

The US has entered its first major economic recession for 16 years, according to investment bank Merrill Lynch.

Merrill is the first of the big banks to declare that a recession in the world’s biggest economy is already underway. David Rosenberg, the bank’s chief North American economist, claims that the weakening employment scene and declining retail sales show that the economy has tipped into its first month of recession. [A recession is defined as two successive months of negative growth].

Rosenberg says,”According to our analysis, this isn’t even a forecast any more but is a present day reality”.

For an analysis of the coming recession on both sides of the Atlantic see John Evans’s article in Syntagma.

He writes, “All banks are now hoarding cash like Ebeneezer Scrooge on a bad day and virtually ceasing to lend. With house price indices slithering down a slope like novice ice skaters, and inter-bank rates running at around 8 percent, this has become a total banking crisis worldwide, and that has the potential for real evil in our economies.”

Read the article here.

It’s not widely known that reinvesting dividends can greatly increase returns on share investment.

Dividends are a welcome addition to investor’s returns on their shares. They represent the portion of profits that companies distribute to shareholders.

Growth in dividends from shares in the UK has outpaced inflation over the last 20 years, according to M&G. Indeed, they have grown by 31 percent over the past three years.

Ben Willis, Head of Research at Whitechurch Securities said, “Volatility in the market can benefit the long-term investor. If you reinvest dividends you get more units for your money, which puts you in a stronger position when markets rebound.”

Reinvesting rising dividends often bring handsome returns. Anyone who invested in, for example, the M&G Extra Income fund 20 years ago will have doubled their capital and would have received total net income payments of 176 percent of their original investment, despite taking the dividends as income. Those who reinvested those same dividends would have seen their investment increase fivefold in the same period.