Select Your Bank In A Wise Way

Most of us will have at least one bank account in a bank. Yes no one will store all his or her money at home these days. However, one thing you should understand is that the function of a bank is more than a place to store your money. As a result, you should try to select your bank wisely.

Choosing a bank is just like shopping. You have to compare prices in various shops. You may need to visit shop after shop before you actually purchase. This is also true when you are choosing your bank. You may also visit bank after bank before you make the final decision. Here are some of the issues you may consider when you are choosing the bank.

When you save the money into your saving account, you may sometimes need to withdraw the money. Nowadays most people will go to the ATM machines in order to withdraw money from the saving account.

As a result, the first thing you need to consider when you select your bank is the network of ATM machines. You have to make sure that it is convenient for you to withdraw money from the machines. The best situation is that there is at least one machine which is located near your home. You will certainly find it very inconvenient if the bank you choose does not have a good ATM machine network.

If you would like to use checks, you may need something more than merely a saving account. You should ask clearly what costs will be involved when you need a check account. In fact, some bank may have offers that you do not need to pay extra and you will be able to have a check account. Be sure you ask clearly all the questions about charges before you make your final decision.

Some bank may also offer you some all in one account which means that you may even use the account to invest in the stock market and Forex market. Again, you will need to ask for the charges involved. At the end of the day it may be a good idea to have such account since you will find it a lot more convenient when you try to invest.

Remember, the function of the bank is more than merely storing your money. You have to choose the bank with great care otherwise you may be wasting money on the charges involved.

The author has great interest in finance. You can check his blog on Financial Planning and Personal Finance. Be sure to check Credit Card Relief Tips and Finance Your Education.

Mortgage Interest Rates Fall Again

For the second week in a row mortgage rates have fallen. For those that don’t read my updates regularly I wanted to give a short background on what rates have been doing. From the end of April to the beginning of June 30 year mortgage rates hovered around 6 percent. Then during the month of June 30 year mortgage interest rates rose peaking out at 6.45 at the end of June. But since then rates have fallen through the month of July ot 6.26. So we are not down to 6 but rates have come down quite a bit from their recent high. Its also interesting rates have fallen although the FED has cut the Fed Funds rate or the discount rate since April 30th. Below are mortage interest rates for the major mortgage products for the last 5 weeks.

July 17,2008
30-yr 6.26 15-yr 5.78 5-yr ARM 5.80 1-yr ARM 5.10

July 10,2008
30-yr 6.37 15-yr 5.91 5-yr ARM 5.82 1-yr ARM 5.17

July 3,2008
30-yr 6.35 15-yr 5.92 5-yr ARM 5.78 1-yr ARM 5.17

June 26,2008
30-yr 6.45 15-yr 6.04 5-yr ARM 5.99 1-yr ARM 5.27

June 19,2008
30-yr 6.42 15-yr 6.02 5-yr ARM 5.89 1-yr ARM 5.19

Mortgage rates are nice to look at but what do these mortgage rates flucatuations mean for a mortgage. Using our free mortgage calculator we can run the numbers and see how these mortgage rate changes would affect the mortgage on a 200k loan.

July 17th
30-yr $1232.73
15-yr $1664.03
5-yr ARM $1173.5
1-yr ARM $1085.89

June 26th
30-yr $1257.56
15-yr $1692.03
5-yr ARM $1197.81
1-yr ARM $1106.88

June 5th
30-yr $1210.69
15-yr $1650.11
5-yr ARM $1136.83
1-yr ARM $1080.98

For a 30 Year mortgage on June 5th the monthly mortgage payment would have been $1210.69. Three week later on June 26th a mortgage on the same amount would have risen 4% to $1257.56. Now another 3 weeks the mortgage payment has fallen 2% to $1232.73

The other major change occuring with mortgages is that banks are becoming more selective in giving out mortgages. We have noticed over the last month that more restrictions from lenders have been coming into play. So although mortgage rates are relatively low it has become more difficult to get a loan. Over the last few years lenders would give a loan to anyone that could walk in the door this has changed over the last year. This is why potential home buyers should start paying more attention to their credit scores. Also lenders are expecting larger downpayments. Lenders are also cracking down on investment loans. The biggest change has been that most lenders are not allowing borrowers to get more than 4 investment loans. This has essentially stopped many investors from purchasing new properties.

So what do we expect to happen in the future. The general feeling among mortgage brokers is that lenders are unlikely to return to the free wheeling style we saw in 2006. But at the same time its likely that the current extreme restrictions in lending might ease up some over the next six months.

Ki is a real estate agent in Austin. His website has current information on mortgage interest rates. Along with a free mortgage calculator and information on historical mortgage interest rates

Washington Mutual Bank: Growing Through Good Times and Bad

Washington Mutual (Wamu) Bank is a business that goes by the old adage, “If you’re not growing, you’re dying.” Wamu has a very long history coming into modern times of mergers, buy outs, and the type of expansion that have kept them a growing and thriving business through both good and bad economic times. Any bank that is capable of this type of consistent growth usually shows a history of good decisions and the type of solid foundation that indicates an admirable business model.

The history of this institution reflects this. In 1911, when the predecessor to the bank was barely over a decade old, they recruited Eugene Favre, co-founder of Murphey Favre Inc, and investment firm that was based out of Spokane, Washington. At this point the business was known at that time in the early century as Washington Savings and Loan Association.

It’s easy to keep expanding during good times (not always for the best) but the continued expansion during rougher times is what kept the bank strong. During World War I they managed to continue to expand assets by a mind boggling 68%, setting them up with a solid foundation that would help them to ride out the severe recessions that would later follow and cripple much of the country.

This accomplishment didn’t go unnoticed. After the war years Washington Mutual had a hard earned reputation as one of the strongest and most fundamentally sound savings and investment institutions in all of Washington state.

In 1923, this bank started its now renowned “Saving Their Pennies” program. This program was aimed at schools to help teach children the value in saving money. During that first drive, almost 17,000 school children made deposits. This tradition has since helped tens of thousands of kids to learn how saving money is more important than spending it, a message that you wish more institutions would teach.

Washington Mutual’s first true acquisition came at a time when most banks where facing the pressures of the Great Depression. On July 25, 1930, at the request of Continental Mutual Savings Bank, Wamu Bank purchased their bank to protect their customers and help steer the new combined bank through the very difficult times that were already upon them, and the worse ones yet to come.

Wamu continued to be a pioneer, installing its first computer in 1962 as the technology was just burgeoning, and also creating innovative payment systems for inner city housing to help slow and fight the on going decay of inner city infrastructure.

They went from a private institution to a public one in 1983. Within six years the bank more than doubled in size, proving that even during an entire decade marred by recession, they knew how to not only survive, but to thrive in adverse conditions. There were many mergers in recent years, as well, including with Great Western Financial Corporation, H.F. Ahmanson & Co., Dime Bancorp, Inc., and also a take over of Providian Bank.

Washington Mutual is now one of the largest banks in the United States, and their history indicates that if they continue with their innovative tactics and home based banking, that this company will continue to have a bright future

Thomas Boston, Principal of 825credit.com is a personal finance expert and consumer credit advocate who specializes in responsible credit management and creation. He can be reached online with comments, questions and other inquiries at tboston[at]825credit.com

Washington Mutual Bank: A Long History with the Community

Washington Mutual Bank, better known as WaMu, is one of the largest banks in the United States. Originally based in the Washington state area, WaMu has since expanded to be a national company that even has its stock actively traded on the American stock market. One of the aspects of this history that makes this bank especially interesting is the fact that they are constantly on the forefront of innovation.

There are many examples of Washington Mutual being one of the first banks to experiment with new ideas or practices that are commonplace today among banks and banking institutions in general. Some of theses examples include:

- The first home loan, given in 1890

- The first “shared” network of ATM machines, in the late 1970s.

- Designed a retail store design that was so unique that it was issued a U.S. patent to avoid copycats.

These are just three examples out of many more that show how it can pay to break out of the pack and think creatively. What makes the first example even more amazing, however, is that while they gave what might very well have been the first home loan in 1890, the bank was only founded in 1889.

Washington Mutual was started in Seattle shortly after a devastating fire nearly wiped out the city. During this time of rebuilding this bank become renowned for being extremely involved in the local community. This reputation helped the bank to grow and expand as the city of Seattle recovered, and they did well enough that eventually they continued to grow and go from a local bank to a regional, then national, bank chain.

WaMu’s original name in 1889 was actually “The Washington National Building and Loan Association” and was developed specifically to set up a safe system where investors could lend money to neighbors who needed to rebuild after the Seattle fire. This system which helped to guarantee safe investing and efficient use of the money helped create a bank that would still be growing over a century later.

This bank made the first monthly-installment home loan, at least on the Pacific Coast, on February 10, 1890, to a Norwegian sailor who borrowed $700 in order to build a hose in Ballard, which was a specific Seattle neighborhood. This “creative” version of a home loan proved to be both wildly successful and poplar, gaining so much press that Seattle ended up being re-built on these loans, as Washington Mutual made more than 2,000 similar loans to help build 250 blocks of housing in Seattle.

In modern times, WaMu continues to strive to be a bank that is known for being a part of every community you can find a branch in. The first open annual shareholder meeting took place in 1984, and has remained an annual tradition since then. Washington Mutual is now a publicly owned bank that is larger than at any other time in its history thanks to continued growth.

No one can know what the future holds, but if the past is any indication, then the forward thinking that has helped Washington Mutual Bank grow in the past will keep them at the forefront of banking in the future.

Thomas Boston, Principal of 825credit.com is a personal finance expert and consumer credit advocate who specializes in responsible credit management and creation. He can be reached online with comments,

Bend Oregon Mortgage Defaults Skyrocket

The Bend Bulletin reported Sunday that the Bend Oregon real estate market is not doing well. There were 788 notices of default filed in Deschutes County for the first six months of 2008.

A notice of default occurs when the mortgage lender files a notice of foreclosure. Lenders generally file notices after a borrower is two to three months behind on their payments. As foreclosures increase lenders tend to file notices sooner to try and cut their losses.

There were 192 notices of default filed in 2007 over the same time period. This year’s defaults show a 410% increase over last year. Prices continue to fall as more bank repossessions come on the market.

The Bulletin reported that 75% of the notices of default filed this year were on homes purchases made in 2006 and 2007 at the peak of the Bend Oregon real estate market. Not all of these notices of default will result in foreclosure. Borrows have an opportunity to bring the loans current. If they do the default notice and foreclosure proceedings will be stopped.

Most homes purchased in 2006 and 2007 are currently worth substantially less now than they were then. If a purchaser bought a home during these years with nothing or little down they cannot sell their homes and pay off the mortgage.

Some lending institutions are allowing owners to sell their homes for less than they owe. The bank takes the loss. These are known as “short sales”.

If a loan is not brought current after 90 days of the notice of default the lender will put the home up for auction on the court house steps. If the home isn’t sold for more that the delinquency the bank takes possession. Thus the name “bank repo”.

The increasing number of short sales and bank foreclosures will add additional lower priced homes to the market and continue the price decreases we are currently experiencing. Prices are currently down approximately 23% from this time last year.

The latest market report for Bend showed that the median prices of homes rose slightly for June 2008 over June 2007. Statistics can be tricky though. There were 22 homes sold over $500,000 and one of those homes was a sale for $3,000,000 during that period. Naturally that increased the median price substantially. The average price per square foot was up also.

The fact is our prices are still falling and will continue to fall until bank foreclosures slow down considerably. A decrease in notices of default will predict a decrease in Bend foreclosures. The current amount of notices of default guarantee more bank repos will be hitting the market this year.

Bank repos can sometimes be a good buy. The banks have to sell them to get them off of their books. Country Wide and other lenders made mortgage loans of question over the past several years and they are now coming back to haunt the banking industry.

There are currently many homes on the market in Bend that are over priced. The values continue to fall and people won’t lower their prices to market value to sell their property.

Inflation is up. Gas prices are up. Unemployment is up and it seems that interest rates are inching up also. I don’t think the Federal government will let interest rates get too high. But you never know. They raised them to 16% in 1981.

Keep an eye on mortgage notices of defaults and they will tell you where the real estate market is headed in Bend Oregon.

Jim Johnson has lived in Bend Oregon since 1981. Call 541-389-4511 or see his web site http://www.bendoregonrealestateexpert.com See more Bend Oregon information at http://bendoregonrealestateexpert.com/bendoregon.asp

How Safe is Personal Online Banking?

As the use of the Internet continues to expand, more banks and thrifts are using the convenience and ease of the Web to offer products and services, as well as enhance communication with customers. According to the Federal Deposit Insurance Corporation (FDIC), the Internet offers the potential for safe, convenient ways to shop for financial services and conduct banking business – 24/7. However, to ensure safe banking, customers need to be educated in making good decisions that protect them from costly surprises or even scams.

Protecting Deposits

Whether seeking a traditional bank or online bank that has no physical offices, the FDIC advises to make sure that the institution is legitimate and that deposits are federally insured.

The following are safety guidelines for those considering Internet banking:

1. Seek key information about the bank posted on its Web site. Read the “About Us” section that describes the institution where a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage is provided.

2. Be on the watch for fraudulent Web sites. Keep an eye out for copycat Web sites that use a name or Web address very similar to that of a real financial institution. These sites hope to lure in unsuspecting customers who might provide personal information, such as an account number and password.

3. Verify the bank’s insurance status. Customers should look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. Some banks operating on the Internet are not insured by the FDIC, such as those chartered overseas. Customers who choose to bank with these types of banks should know that the FDIC may not insure deposits.

4. For insurance purposes, banks may use different names for online and traditional services. This however, does not mean customers are dealing with separate banks. To determine maximum FDIC coverage, deposits at the parent bank are added together with those at the separately named bank Web site and are insured for up to the maximum amount covered for one bank.

5. Only deposits offered by FDIC-insured institutions are protected by the FDIC. Products such as mutual funds, stocks, annuities, and life insurance policies sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.

Protecting Privacy

Bank customers often want to know how their personal information is used by their bank and whether it is shared with affiliates of the bank or other parties. As of July 2001, banks are required to provide customers with a copy of their privacy policy, regardless if business is conducted online or offline.

Customers should be advised that banks may want to share information about their customers to help market products specific to needs and interests. Customers who do not wish to participate in information sharing have the right to prevent the bank from sharing personal information with any parties not affiliated with the bank.

Some companies may also track the Web browsing habits of their customers while at the bank’s site, to better understand interests. Customers can ask whether a specific bank track browsing habits if these practices pose a concern.

Protecting Transactions

Learning how to safeguard banking information, credit card numbers, Social Security Number, and other personal data is of vital importance when conducting business on the Internet.

Customers who want to ensure their transactions are secure should carefully examine a bank’s Web site for information about its security practices, or contact the bank directly. Examples of security features include:

1. Encryption: the process of scrambling private information to prevent unauthorized access. Some browsers display a small icon on the screen that looks like a “lock” or “key” when customers conduct secure transactions online.

2. Passwords or PINs: When customers access an account online, a password or personal identification number (PIN) should be required. Passwords or PINs should be unique and changed regularly. Avoid birthdates or numbers or words easily guessed by others.

3. General security: Virus protection over personal computers and physical access controls should be used and updated regularly.

AmericanMomentumBank.com provides a wide array of personal banking and business banking options and banking solutions tailored to your individual needs. For more information, please visit AmericanMomentumBank.com.

Bradford & Bingley – How To Bungle A Share Issue

The problems besetting Bradford and Bingley started on 14 April 2008 when it denied reports that it intended to raise funds through a rights issue of new shares and sought to reassure depositors, shareholders and the market that it had a strong capital and liquidity base.

On 22 April, Mr Stephen Crawshaw, the Chief Executive, stated that he saw ‘excellent growth’ during the first quarter of 2008 and that the bank was well funded.

However, on 14 May, B&B announced a rights issue, priced at 82 pence a share in an effort to raise GBP300 million from shareholders. Mr Crawshaw apologised.

This attempt to mislead the markets had backfired, and the share price, which stood at around 185 pence at the end of April, went into free-fall.

On 2 June, B&B issued a profits warning. Mr Crawshaw resigned and was replaced by Mr Rod Kent. At the same time, B&B announced that it planned to sell a 23% stake in the bank to TPG for GBP179 million, by way of new shares. TPG, formerly Texas Pacific Capital, is a global financial institution. A further GBP258 million was to be raised via a revised rights issue at 55p per share. The rights issue was to be underwritten by Citigroup and UBS.

On 23 June, an alternative offer was made to B&B by Mr Clive Cowdery, who represented four of B&B’s largest shareholders – Legal & General, M&G Investment Mangers, Standard Life, and Insight Investment. Mr Cowdery was offering to buy stock at 72 per share. The talks stalled due to B&B’s refusal to open its books to Mr Cowdery. At the time, B&B took the view that the proposal by TPG was more attractive and described Mr Cowdery’s bid as ‘uncertain’ and criticised it for ceding too much control to his Resolution investment group.

On 3 July, TPG stated that it intended to withdraw from the deal due to Moody’s reducing the credit rating of B&B from A3 to Baa1. The credit rating agency cited B&B’s obligation to buy mortgages of up to GBP350 million per quarter from GMAC, a global finance company, until 2009.

The general reaction to this news was one of hysteria and an avalanche of criticism from UK institutions. However, B&B admitted that TPG did have an option to withdraw, should there be a downgrading of its credit rating. Therefore, TPG was not only well within its right to withdraw, but probably correctly concluded that B&B had severe problems of which they had not been previously aware.

The quality of this dubious GMAC portfolio continues to attract severe criticism from shareholders. Moody’s also expressed reservations about B&B’s buy-to-let mortgages and self certification loans, although these were overshadowed by the GMAC commitment. Several independent commentators have suggested that B&B could lose in excess of GBP400 million, due to write downs, in a final reckoning of its unwise commitment to GMAC.

In addition, the bank remains tied into deals with Aire Valley Master Trust, who have some GBP13 billion of mortgage assets. B&B has GBP11 billion of mortgages in its Aire Valley securitisation programme, which is triple A-rated.

However, Moody’s downgrade of B&B’s own credit rating means the bank does not enjoy the sufficiently high rating required under the interest rate swap that it provides to the Aire Valley trust.

B&B has to address this matter within 1 month. There are three possibilities – firstly, it could inject an undisclosed amount of extra cash, secondly, it could nominate an intermediary as a counter party, or thirdly, it could find a guarantor.

On 4 July B&B claimed that it had a renewed commitment from the four major institutions who were originally part of the Clive Cowdery offer. This would enable the GBP400 million rights offer to proceed at 55 pence a share.

Behind the scenes, the Financial Services Authority (FSA) was working hard to ensure that B&B did not collapse, as had Northern Rock.

The FSA rescue on Thursday 3 July made an undisclosed facility available to B&B. It has been described as a classic bank of England lifeboat operation. The lifeboat refers to the activities of the Bank of England in lending funds to small financial institutions in the 1970s.

At the same time, the Bank of England has exerted influence, some would say pressure, on some of the largest British banks in an effort to ensure that the underwriting of the rights issue by Citigroup and UBS goes ahead.

At the current market price, which is considerably less than 55p, the underwriters will end up purchasing all the new shares. However, due to the Bank of England’s efforts, these losses will now be shared with HBOS, Lloyds TSB, Barclays, Abbey, RBS and HSBC. This will amount to purchasing some GBP230 million or a 33% share in B&B.

Meanwhile B&B has disclosed that the chaotic rights issue of GBP400 million will now cost GBP54 million. This is because the prospectus is now in its third version. Worse still, Goldman Sachs will receive a fee for introducing TPG to B&B. This is despite the fact that no deal was done and TPG walked away.

It now looks that B&B is safe, for the moment, from bankruptcy or being taken into public ownership. However, the rights issue will place the other leading UK banks into a loss making situation. The disaster at B&B was precipitated by a lack of honesty in the statements of the Chief Executive. Once his attempts to mislead the markets were publicised, the share price went into free fall.

Duplicity, or lying, by chief executives of banks is a most dangerous and unwelcome development. Banks operate on the basis of trust, namely depositors entrust them with their life’s savings. Bank managers have traditionally advised borrowers to be cautious and ensure they can meet their commitments. This is now exposed as a sham. B&B issued self certification mortgages to anyone who could fill out an application form, and engaged in ill considered deals with global giants such as GMAC.

The embarrassment of announcing a rights issue of new shares was unfortunate, but the fact that the prospectus had to be revised on two successive occasions demonstrates incompetence and ineptitude.

The only player who has emerged from this saga with an untarnished reputation is the Bank of England. In the aftermath of their disastrous handling of Northern Rock, they have regained some credibility.

This has not been achieved by the granting of any new powers to the Bank of England. On the contrary, they have reverted to their traditional and historic role as a lender of last resort. Bankers who were in trouble would arrive in Threadneedle Street at 3pm and drink tea with the Governor. After talking about, Ascot, Wimbledon, Eton or whatever, the banker would indicate that his bank was insolvent and would be forced to declare bankruptcy on the next day. At this point, the Governor would offer a loan, and the matter would be concluded with a handshake.

It is gratifying to see that the Bank of England understands its role in turbulent times.

Leslie Hardy is a noted writer on North Cyprus Property
and the UK Chairman of Wellington Estates Ltd.
Read more about North Cyprus Investments

US Banks Are In Trouble

In recent times, the status of our economy has really been questioned. From the weakening of the American dollar to an increasing amount of debt, the countries current financial crisis has continued to dwell and even breed. Now, in recent weeks, concerns are being rose up about the status of our banks. From local institutions to corporate lending companies, companies are feeling the effect all across the board.

One of the nations largest companies to close in recent history, Indymac, symbolizes the sorry state of our economy and the dwindling industry. This company contained almost 32 billion dollars in assets off of savings and loans accounts. In addition to, it was also connected to the Countrywide Financial Corporation. Such a giant taking a K.O is not good news for us American citizens and for the companies that utilize us to make profit.

Two other financial giants that are in much trouble is Fannie Mae and Freddie Mac:

Fannie Mae is a government sponsored organization also known as the Federal National Mortgage Association and is said to own approximately (with the help of Freddy Mac) half of the US trillion and trillions dollar mortgage market. Initially created in 1938 as part of Franklin Roosevelts New Deal program in an effort to provide stability to the nations economy and mortgage market, Fannie Mae has since been converted to a private organization.

Also known as the Federal Home Loan Mortgage Corporation, Freddy Mac is also a government sponsored company which holds major responsibilities when it comes to authorizing loans and loan guarantees. Founded in 1970, Freddy Mac was in a sense added to provide competition to Fannie Mae, which from 1938 to 1968 held a monopoly over the mortgage market. Thus, the US government chartered the corporation in order to expand the mortgage market and provide multiple options to homeowners.

When you see the importance of these companies and how they hold such a strong foundation when it comes to the American economy and the mortgage market, one has to ask what is going on when these companies are reportedly in risk of closing and needs government assistance to stay afloat.

Despite the fact the US has issued the FDIC act to insure our money within savings accounts it has been reportedly stated that there is approximately only 50 billion dollars within the account. Including the fact that Indymac, which recently closed will eat up anywhere up to 8 billion dollars of the fund the government can be in trouble and might have to find new ways of backing up the savings accounts of millions of consumers.

Industry analysts have stated that this economic pinch might effect anywhere up to 90 banks. Even though lists compiled by experts have not been publicized stock markets and traders have definitely been paying attention and trading and buying to keep in step with the recent rumbles within the business and financial world.

When looking into the future, we have to ask ourselves what is the future for our economy. The Great Depression, is that a possibility? Will our stock markets shut down and trading with foreign countries cease, one has to ponder. Maybe its safe to say that we might have to start keeping our funds with us where we sleep at, under our mattress!

Article provided by S-Proprietor.com. A website dedicated to entreprenuers, work at home business opportunities and resources.

IndyMac Bank Failure is a Clear Warning

Hard times are on the way as evidenced by the collapse of IndyMac. In what will probably turn out to be the most expensive bank failure ever, troubled mortgage lender IndyMac Bank was taken over by federal regulators on Friday, July 11, 2008.

All operations of the Pasadena, Calif.-based bank, once one of America’s largest home lenders, were shut down at 3 p.m. by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp ( FDIC). It is estimated that with the takeover the FDIC will incur costs of up to $8 billion.

“It’s possible this will be the most costly bank failure in history, but it’s too soon to say,” FDIC Chairman Sheila Bair said in a conference call Friday evening. She added that the IndyMac failure could also affect premiums paid by all banks for deposit insurance.

According to FDIC records IndyMac marks the largest bank collapse since 1984, when Continental Illinois Bank, which had $40 billion in assets, failed.

When a FDIC bank shuts down, traditional bank accounts are insured to at least $100,000. Some accounts such as annuities and mutual funds are not insured at all. Individual Retirement Account funds are insured to $250,000. According to the FDIC, 10,000 IndyMac customers could lose as much as $500 million in uninsured deposits.

If you are a large depositor it is a very good idea to spread your deposits over several banks. In addition, it is an excellent idea to hold some important percentage of your assets in gold. No one knows for sure what financial carnage is on the way but you can bet that it likely will not be pleasant.

The fractional reserve banking system that we usually think of as a sound banking and financial system is looking more and more shaky. Regulators never expected a run of black swan events as we are now experiencing. If Fannie Mae and Freddie Mac fail and are taken over by the government the stress that would cause in financial markets would be difficult to control.

Certainly there is a high risk for additional high profile bank failures this year and next. Since the FDIC only has a relatively small amount of funds to cover a huge amount of deposits even with an insured account you can not completely rely on the FDIC to make you whole in the event of widespread bank failures. The FDIC could run out of funding.

Do not assume that the federal government can control events. The dominoes have started falling. Black Swan events that are statistically not supposed to occur in a hundred thousand years are spinning out of control.

We live in an age of financial linkage all across the world so one disasterous event occurring can set off additional black swan events that can cause a financial system meltdown.

The IndyMac bank failure is a clear warning.

Learn more about the coming banking and energy crisis and its consequences for the way we will live and work at Crisis News Analysis

Online Banking and E-Commerce: Terms and Definitions

Access to information and entertainment, credit and financial services, and products from every corner of the world is greater than earlier generations could ever have imagined. Thanks to the Internet, consumers may order products, download games and music, or conduct online banking 24 hours a day.

However, the flip side is that the Internet also affords online scammers, hackers, and identity thieves access to personal computers, information, finances, and much more. According to the Federal Trade Commission, there are millions of victims of identity theft a year. It’s often difficult to know how thieves obtain a victim’s personal information, but instances of ID theft often start when online data is stolen.

The following is a glossary of terms, provided by the Federal Trade Commission, aimed at educating consumers on various software and computer scams used to steal and protect individuals from ID theft:

Anti-Virus Softare

Protects personal computers from viruses that can destroy data, slow a computer’s performance, cause a crash, or even allow spammers to send email through a private account.

Bizopps

Shorthand for “business opportunity;” some schemes involve extravagant and unfounded earnings – claims and are actually fraudulent business ventures.

Browser Highjacker

A common spyware program that changes a web browser’s home page automatically, even if the owner changes it back.

CAN-SPAM Act

A law that prohibits senders of unsolicited commercial email from using false or misleading header information or deceptive subject lines, and requires they identify each email as an advertisement, among other provisions.

Download

To copy files from one computer to another; to view a website or other web material with a browser.

Drive-by Download

Software that installs on a computer without the owner’s knowledge when he or she visits certain websites. To avoid drive-by downloads, make sure to update operating system and Web browser regularly.

Encryption

The scrambling of data into a secret code that can be read only by software set to decode the information.

End User Licensing Agreement (EULA)

A provider’s legal terms. An “end user” may be required to “click” to accept before downloading software.

Exposure

When sensitive data is released to someone without authorization.

Filter

Software that screens information on the Internet, classifies its content, and allows the user to block certain kinds of content.

Firewall

Hardware or software that helps keep hackers from using a personal computer to send out personal information without permission.

Hacker

Someone who uses the Internet to access computers without permission.

Hidden Dialers

Programs that a user may unknowingly download that can use a computer to silently dial expensive phone calls which later show up on a phone bill.

IP Address

A computer’s “address,” which consists of a series of numbers separated by periods.

Keystroke Logger

A device or program that records each keystroke typed on a particular computer.

Malware

Criminals sometimes use malware, programs like viruses and spyware, to get into a personal computer. Once there, the criminal can steal information, send spam, and commit fraud

Online Profiling

Compiling information about consumers’ preferences and interests by tracking their online movements and actions in order to create targeted ads.

Personal Information

Information that can identify someone, such as bank and credit card numbers; income; Social Security Number; or name, address and phone numbers

Phishing

A scam that involves Internet fraudsters who send span or pop-up messages to lure personal information from unsuspecting victims.

Spam Zombies

Home computers that have been taken over by spammers who then use them to send spam in a way that hides the true origin.

Spam

Unsolicited commercial email, often sent in bulk qualities.

Spyware

Software program that may be installed on a personal computer without the owner’s consent to monitor his or her use, send pop-up ads, redirect the computer to certain websites, or record keystrokes, which could lead to identity theft.

Trojans

Programs that, when installed on a computer, can enable unauthorized people to access it and sometimes send spam from it.

Virus

A program that can sneak onto a computer – often through an email attachment – and then make copies of itself, quickly using up all available memory.

Wi-Fi Protected Access (WPA)

A security protocol developed to fix flaws in WEP. Encrypts data sent to and from wireless devices within a network.

Worm

A program that reproduces itself over a network and can use up a computer’s resources and possibly shut the system down.

With awareness as a safety net, computer users conducting online banking or other activities that require the use of personal information can minimize the chances of identity theft. Vigilance is required when it comes to protecting personal information, a computer, and even yourself.

AmericanMomentumBank.com provides a wide array of personal banking and business banking options and banking solutions tailored to your individual needs. For more information, please visit AmericanMomentumBank.com.

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