Banks pump billions to calm the markets

Fed joins global bid to ease credit crisis
www.xginibriere.com
The Federal Reserve and central banks around the world yesterday took the extraordinary step of pumping more than $100 billion into financial markets riven by a credit crisis, the largest such intervention since the September 11 terrorism attacks.
www.xginibriere.com

www.xginibriere.com
In a rare public statement, the Fed said it wanted to ensure financial markets had enough money to continue operating in an orderly fashion.


www.xginibriere.com
"In current circumstances," the Fed said, banks "may experience unusual funding needs because of dislocations in money and credit markets."

www.xginibriere.com

Financial markets are reacting seemingly overnight to the jarring end of an era of easy money, when higher-risk borrowers enjoyed nearly unfettered access to huge sums at low interest rates. The market for subprime mortgages, to people with less than perfect credit histories, cracked first and remains the most seriously impaired, but other types of credit such as corporate junk bonds and mortgages backing commercial property are also under duress.

www.xginibriere.com

So far, the central bankers' strategy of rapid, severe intervention shows signs of working. Earlier yesterday, European stock markets posted losses of as much as 3 percent, and it appeared US markets would follow suit when the Dow Jones industrial average began the day with a 212-point decline. But as the Fed pumped money into the US system through the day, stocks began to rally, and the Dow finished the day down just 31.14 points, at 13,239.54. Despite the tremendous, sudden investor anxiety and wild market gyrations and losses, the Dow actually ended the week up -- just barely -- with a 0.4-percent gain.


www.xginibriere.com
"Within the stock market there has been massive dislocation, and the Fed provided everyone a little room to unwind," said Kevin Cronin, chief investment officer at Putnam Investments in Boston. If lenders had been unable to continue providing credit, he said, then interest rates would have exploded, potentially leading to a widespread reduction in economic activity.


www.xginibriere.com
The Fed "wanted to let the air out of the balloon," Cronin said.

www.xginibriere.com

The Fed yesterday loaned $38 billion to US banks to help them finance credit and lending operations, on top of a similar $24 billion the US regulator provided Thursday. Earlier yesterday, central bankers in Europe, Japan, Asia, and Canada made similar moves.

www.xginibriere.com

The central banks' actions enabled lenders to have enough money available to loan to investors to buy, sell, or hold securities as they would normally. Without such additional funds, a shortage of credit could cause markets to seize and prices to go haywire.

www.xginibriere.com

"Central bankers did two things," said Art Hogan, chief market analyst at Jeffries & Co. in Boston. "They added much needed liquidity to the market and signaled that they stand at the ready for a system that may or may not need more help."

www.xginibriere.com

More problems seem to arrive daily. Yesterday, shares of Countrywide Financial Corp. fell nearly 3 percent one day after the biggest US mortgage lender said credit problems among its own borrowers are worsening, and it anticipated more difficulty funding loans. Separately shares in Washington Mutual Inc., the big savings and loan, were down 2 percent a day after it said it faces risks from lower market liquidity.

www.xginibriere.com

Yesterday's stock swings capped three weeks in which the Dow Jones industrial average often moved at triple-digit levels in each trading session. The turmoil reflects uncertainty about financial markets even though the economy itself appears to remain stable, according to economists and traders.

www.xginibriere.com

"The fundamentals, underlying inflation, economic growth rates, US employment growth, are still robust," said Nariman Behravesh, chief economist at Global Insight of Waltham. "The markets are panicking a little, but it's still a financial story. As long as the central banks succeed in calming markets down, I don't see this spreading to the broader economy."

www.xginibriere.com

The volatility still poses longer-term strategy questions for the Fed. One is whether to lower interest rates, even though this week Fed policy makers elected to keep their benchmark lending rate at 5.25 percent, arguing that inflation is a greater risk to the economy than the credit shortage. But by lowering its interest rate, the Fed would make it cheaper to borrow money. That would ease pressures on the real estate sector and other investments by, for example, lowering the overall cost of transactions such as buying a home or refinancing a mortgage.

www.xginibriere.com

Richard Yamarone, chief economist at Argus Research in New York, said he suspects the Fed will simply try to hold the line on interest rates. He noted that in its statement to the markets yesterday the Fed made a point of mentioning the current interest rate of 5.25 percent.
www.xginibriere.com


"They're saying to the markets, 'Listen, we're giving you some breathing room, but we're still sticking to our guns' " on the interest rates, Yamarone said.

Can Telemarketing Fraud Happen To You?

Telemarketing fraud victims are of many different ethnic and socio-economic backgrounds and range from those with little formal education to those with professional degrees. All ages are affected, although seniors receive a large percentage of the calls. The problem with telemarketing fraud is that it is difficult to tell whether a caller is legitimate, and it is sometimes difficult for people to hang up on telemarketers. Certain individuals, and especially seniors, are targeted relentlessly by telemarketers. This is especially true if the person has already given money to a telemarketer or has been victimized in the past. Common Telephone Scams Prize offers: "You are eligible to win the grand prize!" "You have won the lottery!" There is no prize, or the prize is worthless or overpriced. You are usually told that you have to pay something in advance to get your "free" prize. In most cases, you are told to pay "taxes", or "handling fees" or "delivery charges" or are forced to buy vitamins or some other product in order to receive your prize. Chances are you will never see any prize or winnings. In some situations, the offer of a prize is merely a ruse to obtain your credit card or checking account information. It is against the law for a telemarketer to require you to pay ANY money or buy anything to enter a sweepstakes or contest. In Hawaii, it is against the law to participate in a lottery, whether the lottery is located in Hawaii or in another state or another country. Charities: "You have given money to XYZ Law Enforcers Federation in the past, and we are asking for your annual contribution to our Children's Fund. We fight drug abuse, sponsor sports events for poor children, and publish a magazine. How many tickets can you buy?" Con artists often label phony charities with names that sound like better-known, reputable organizations. They won't send you written information or wait for you to check them out with Consumer Protection or the Better Business Bureau. Because these organizations may not be actual charities, your contributions may not be tax-deductible. Credit repair/loans: "We can repair your credit and get you a loan!" Many companies promise, for an up-front fee, to repair credit or lend money, and then fail to provide the advertised services. It is against the law for a telemarketer to ask for an advance fee to repair your credit or get a loan. Recovery rooms: "We know you got taken by a telemarketer and for a fee, we can help you recover the money you lost!" You may be scammed a second time. It is against the law to ask for an advance payment to recover monies lost to telemarketers. Tips to protect you from telemarketing fraud Tell the caller that you do not wish to be called again, and hang up the phone. It is illegal for interstate telemarketers to call you if you have asked to be placed on their "do not call" list. Calling times are restricted to 8:00 a.m. to 9:00 p.m. local time. Interstate telemarketers must tell you if they are making a sales call, the name of the seller, and what they are selling before they make their pitch. If it's a prize promotion, they must tell you that no purchase or payment is necessary to enter or win. Never buy at the time of the sales pitch. Always take your time making a decision. Legitimate companies won't pressure you to make a fast decision. Never respond to an offer you don't thoroughly understand. Never send money or give out your credit card or bank account number to unfamiliar companies. Don't believe that giving some money to a telemarketer "just one time" will make him or her go away. You will probably receive even more calls. Don't do business by phone with unfamiliar companies. Legitimate businesses understand when you want more information about their offer or company. Always ask for and wait until you receive written material about any offer or charity. If you feel the telemarketer is pressuring you, hang up. Check with the Better Business Bureau and the State of Hawaii Office of Consumer Protection to determine whether other consumers have filed complaints against the telemarketing organization you are investigating. Unfortunately, not all-bad businesses can be identified through these organizations.

3 Tips For Choosing A Payment Gateway: Collecting Money Online

As a consumer, when you check out of your local convenience store, you may swipe your credit card through a point-of-sale device and your gas, coffee, and donut are paid. But what if you are the retailer and your business is online? It’s not like you have a card-swiping device at every customer’s PC! There must be a way for you to process that information. Essentially, that is the job that a payment gateway does for online retailers. Roy Banks, president of http://Authorize.net, a leader in the payment gateway industry, describes his company’s function as “the digital version of a hardware point of sale terminal.”

What is a Payment Gateway?
Payment gateways allow online merchants such as eStore owners or auction sellers to accept credit card payments over the internet. They authorize the cardholder’s credit—that is, they check to ensure that the customer has enough money on their credit card to cover the charges. They then place a hold on that amount so the buyer can’t turn around and spend that same money elsewhere before it gets transferred to the retailer’s merchant account. Banks describes this as “the technology…necessary to consummate a payment transaction.”

A Payment Gateway is NOT a Merchant Account.
Many people confuse merchant accounts with payment gateways but they are not the same. Merchant account services act, for the most part, as a liaison between your business bank account and the payment gateway. When a customer orders a product from your online business their card is processed via the payment gateway. The money is then moved over to the merchant account service. The merchant account service then moves those newly captured funds to your business bank account.

3 Tips for choosing a Payment Gateway:

1. Is it PCI-compliant? That means that the company’s security has been audited by a third party and found to be up to industry standards. Since payment gateways store all your customers’ credit card information (sparing you the stress), it also means you can sleep better at night, knowing your customers’ valuable information is safe and sound.

2. Good customer support. ‘Nuf said.

3.Lastly, it is important that the payment gateway you choose be integrated to the third-party solutions you are planning to use. That means things like store front platforms and shopping carts—you want them to be compatible with your gateway.

Payment gateways will not only allow you to collect the monies from your sales, many also offer an array of security features, some of which will help you avoid becoming a victim of fraudulent orders! In the end, they will make your ecommerce business a less-stressful, more pleasant experience—for both you and your customers.