Why Millennials Don't Save: Top Stories for Monday

TOO BIG TO FAIL TO END? – New rule: big lenders should set aside funds to cover their risk and use them in hard times rather than rely on taxpayers to pick up the bill. That's a proposal from global regulators on the Financial Stability Board, chaired by Bank of England governor Mark Carney, to be discussed at the G20 meeting later this week in Australia. Thirty banks that are "systemically important" would be required to hold bonds or equity equal to 16 to 20 percent of their risk-weighted assets. (That's the extent of my understanding. For further details on how that works, check out this Reuters story.) Carney told the BBC:

Instead of having the public, governments, [and] the taxpayer rescue banks when things go wrong; the creditors of banks, the big institutions that hold the banks' debt - not the depositors - will become the new shareholders of banks if banks make mistakes. Let's face it, the system we've had up until now has been totally unfair." ( Read the full story.)

It's hard to argue here. But would this rule really spell the end to "too big to fail" banks? This isn't stopping banks from getting too big or from failing – it's only saying we won't pick up the tab. That is, we the taxpayers. We the customers and we the shareholders will see that cost somehow, argues The Independent's Jim Armitage. Over at the BBC, Kamal Ahmed adds:

And some economists are not convinced that in a systemic crisis any new regulations will be able to cope. In the teeth of an economic meltdown, could governments and regulators really organise the successful winding-down of failing institutions without the taxpayer once again footing the bill?

As we know, the best laid strategies of governments and regulators can come unstuck at the first contact with the enemy - events in the real world. The markets can gain a life of their own. (Read the full story.)

Which is not to say nothing should be tried, but don't pop open the champagne just yet.

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REMEMBER, REMEMBER, THE 11TH OF NOVEMBER – The world has a bigger shopping event than Black Friday and it's tomorrow. November 11 is Singles Day –an answer to Valentine's in which one gets to dote on oneself – and retailers across China have seized on the opportunity with heavy discounts and advertising. Alibaba, Jack Ma's e-tail empire, started the phenomenon 5 years ago and last year alone processed $5.8 billion in sales on that day. About three times the total sales for Cyber Monday in the US. (But, argues the Wall Street Journal's Kathy Chu, with 25% of those items returned, the numbers should be a bit more conservative.) This year, Alibaba wants to make the event global with partners in 20 countries. The day's sales are expected at more than $8 billion for Alibaba alone. But with large discounts eating into profits and consumers delaying their purchases in anticipation of the sales, merchants have a love-hate relationship with the holiday. And if the shopping is digital, the goods are very much physical. Singles Day is a logistical nightmare with shipping companies having to handle 10 times their usual workload. Just look at the photo here.

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LOOK EAST – While you've got your eye on China, pay attention to the Asia Pacific summit going on in Beijing. Japanese PM Shinzo Abe and Chinese President Xi Jinping shared the most awkward handshake since these but they did meet, for the first time. Russian president Vladimir Putin is among friends there and getting a sweet energy deal with China. (And he needed that since the country's central bank has cut its 2015 growth forecast to zero because of Western sanctions.) China also signed a free trade deal with South Korea and is looking to build an Asian free market to rival the US' sphere of influence in the Pacific. "China wants to redraw the geopolitical map of Asia and place itself at the center," writes Wall Street Journal editor in chief Gerard Baker. Xi Jinping should not discount the ambitions of its equally giant neighbor, India. Prime Minister and LinkedIn Influencer Narendra Modi wrote here before heading to the India-ASEAN Summit tomorrow – he's notably not at the Beijing meeting though he met Xi Jinping earlier this fall – of "our dream of an Asian century in which we envision a pivotal role for India."

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MOMORE – Part 3 of "it's the Asian century after all." Momo is the latest Chinese tech company to announce an IPO on US soil, after Alibaba, JD.com and Weibo. Momo is a location-based dating app (let's be honest, a hook-up app) that boasts 180+ million users, 60+ million of them monthly active users, making it the second largest social app in China after WeChat. (Tinder doesn't publish stats but for comparison, last word on the street is it's approaching 50M active users.) Momo has filed for a $300 million IPO on the Nasdaq, which would value it at about $2 billion.

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401 WHAT? – Few generations it seems have seen their habits so scrutinized by marketers as the infamous Millennials. (At your service.) Today, we look at saving patterns. Americans under 35 have a savings rate of -2% (minus two percent) meaning they are actually burning through assets rather than building a nest egg. That's according to Moody's Analytics and compares to rate of +3, +6 and +13 percent respectively for the 35-44, 45-54 and 55+ crowds. Shortly after the 2008 recession, young Americans' savings rate had shot up to above 5 percent – probably a bout of realization that the future isn't always sunny – but they are now back to their spending ways. That's for now a good thing for the economy (spending = growth, roughly) but can spell trouble in the future, especially in an economy where retirement, unemployment and other bumps in the road are mostly cushioned by personal savings.

The Wall Street Journal's Josh Zumbrun breaks down the many reasons for this. #1 again: student loans. Repaying them eats into this generation's budget like never before, while wage stagnation and a challenging job market have made Millenials comparatively poorer than Gen Xers at the same age. (Not just poorer but significantly poorer: median net worth is 42 percent lower.) Another reason is poor financial education and a general distrust in institutions, banks in particular, for a generation that graduated in a Wall Street crash. And, let's face it, a "live for the moment" state of mind. But hasn't that always been true of youth?

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