Disasters are usually marked by a number of incidents adding up and leading to the potentially worst outcome.
In this context, we just need to look what happens in the economy. We had a third bailout and unbelievable losses in the case of AIG, last week. This week Citigroup became a penny stock. GM is most likely nearing bankruptcy next week and already today its German subsidiary Opel is declared dead by the press. Then there is GE which might become the next victim. “It´s time for a break”, might be what distressed investors might think. The trend has becomes manifested over the last weeks, we are changing from bad times to worse.
Within the next six months we will be most likely to observe dramatic economic implosions and bankruptcies. The ticking economic time-bomb hidden in Credit Default Swaps might lead to bully-up companies and even countries. I confirm my earlier predictions that the events will turn out bad in Q2, and I had predicted this trend leading to a depression, back in 2007.
However, there are still some individuals who believe in recovery. Some Forex traders told me that I might be wrong and the recovery is in sight. I do not share their hope. The situation is too bleak. We have most likely passed the period of efficient preparation. Now, time runs out.
We are on our way to leave what I call phase-I. Phase-I allows us to prepare for what will happen in the crisis. It allows us to get some accessories, a survival kit, a swimming west and get into a boat. By April, the rescue boats will become scarce, and in case you have not managed to get one than most likely you will sink with the Titanic.
When this happens, governments will attempt to accesses your capital rights. This will happen in parallel to other distortions in the markets. While any kind of investment in the “economy” will be depleted, one will have to start worrying about governments actions. The rate of depletion has taken fascinating speed over the last weeks and is sheer impossible to keep up with the news, but I recommend you watch for signs of accessing your capital rights.
Let me give you some examples:
One of these things is nationalization, which we have seen now in many countries. They drive shareholders directly into losses. AIG´s former CEO Maurice Greenberg is a great example of someone losing a major amount of money. Another example for accessing your capital right is inflation. And inflation is building up. It is like a Tsunami. What you notice at this point of time is that the water pulls back, but you might want to watch out for the wave of freshly printed money. The next way is to tax you out by implementing new taxes. Last but not least there is something called quantitative easing and in my eyes it is the most advanced method of accessing the capital rights of people. By buying government debt or corporate bonds a central bank usually can control the monetary exchange rates. It is a monetary policy tool. Therefore it should not be used as a political tool to stimulate the economy at all. If someone decides to do so, he takes severe market distortions into account. At discretion bond and equity prices will move in one or the other direction. In a situation like this where market participants distrust it is like adding oil to the fire. It increases the level of uncertainty and cause even higher volatility. It´s economic suicide.
Tuesday, January 27, 2009
Tuesday, January 13, 2009
Endowment Turmoil
While employment by university endowments (and other nonprofit endowments) can be an attractive financial career option, jobs may be disappearing as universities are forced to retrench in the face of brutal investment losses over the past year or so. Undoubtedly you've received one or more communications from the presidents or deans of the institutions you attended, discussing their money crunches and trying (lots of luck!) to prise more donations out of alumni like you who themselves have been battered by the market crash.
The March 16 issue of Forbes magazine offers a case study in what went wrong at the biggest endowment of them all, that of Harvard University. After a lengthy run of impressive market-beating results, Harvard's portfolio has taken a nosedive recently. Various strategies that did well in up markets have now blown up. Perhaps most worrisome of all, one of these strategies was pushed by Lawrence Summers during his recent tenure as president of the university. Summers is, of course, a former Secretary of the Treasury under Bill Clinton, and now head of Barack Obama's National Economic Council. Hopefully, he'll give better advice to the President and the nation.
According to Forbes, Harvard has laid off 25% of the staff at its endowment (called the Harvard Management Company). Moreover, there is a game of musical chairs surrounding the top spot: five heads in the last four years. As Harvard goes, so probably do other institutions.
The March 16 issue of Forbes magazine offers a case study in what went wrong at the biggest endowment of them all, that of Harvard University. After a lengthy run of impressive market-beating results, Harvard's portfolio has taken a nosedive recently. Various strategies that did well in up markets have now blown up. Perhaps most worrisome of all, one of these strategies was pushed by Lawrence Summers during his recent tenure as president of the university. Summers is, of course, a former Secretary of the Treasury under Bill Clinton, and now head of Barack Obama's National Economic Council. Hopefully, he'll give better advice to the President and the nation.
According to Forbes, Harvard has laid off 25% of the staff at its endowment (called the Harvard Management Company). Moreover, there is a game of musical chairs surrounding the top spot: five heads in the last four years. As Harvard goes, so probably do other institutions.
Sunday, January 4, 2009
Buying Checks Online?
Many thanks to everyone who shared their thoughts on the best places to buy checks online , sounds like I was right to think that $20 for 50 checks was absurd! It appears that there are plenty of affordable options for buying checks and none of them come close to the 40 cents per check that Bank of America’s printers were asking for.
Buying Checks Online
Despite the votes of confidence for Checks Unlimited, the check printing company that is included in the ValuPak mailings, I wouldn’t order checks through the mail because the post office is not 100% secure. We can lock our mail boxes but I believe we are the exception to the rule; it’s simply too easy for a thief to drive by your mailbox and steal your mail when you’re at work. I avoid using the postal mail system for sensitive transactions for this very reason.
Do not order checks from a site that does not encrypt your sensitive information. You can see that a site is encrypted when you see https in the URL and a padlock somewhere on the browser’s status bar. You can click on the lock to find out who is certifying it. Costco, Wal-Mart, and 4checks are secured and verified by VeriSign, ChecksUnlimited is secured and verified by GlobalSign, always confirm that the Certification Authority is one that you trust.
Get the checks shipped to a secure location. Many of you lamented the fact that the post office just dropped the package of personal checks at your front door, where a thief could easily swipe it. If you can, get the checks shipped to you at work. If it’s possible, request a signature guarantee on the package (this may cost extra) so that the package will never be left unattended. If you don’t want to pay the difference or it’s not available, try to talk to your mail carrier beforehand and have him or her hide the package somewhere.
Enter a check number start other than 1. One of the most rudimentary check security features is the check number. Companies used to use the check number as a way of detecting fraud, especially in cases where the company was writing a lot of checks. If the bank knew to expect checks in a certain range, they could detect fraud if strange numbers started appearing. If you wonder why a brand new account starts with checks at 101 or 1001, rather than 1, this is why. I don’t know how important this is anymore but try to continue the check numbers from the last book you had, or start higher.
Double check the data you enter. Many check printers don’t validate the data you enter so make sure you get it right the first time! They are not responsible if you key in your account data incorrectly.
Best Check Vendor Options
The best options appear to be:
* Use Online Billpay: As long as there’s an address and no immediate need for a check, you can always send a check through online billpay. We pay several of our utility bills this way. With online billpay, the bank mails a check to the payee on your behalf, saving you a check and the postage stamp.
* Costco Check Printing - Costco also has a minimum order of 2 boxes. A box of singles has 200 checks, duplicates have 150 checks. Two boxes of singles cost $10.59, $8.47 if you’re an executive member, and duplicates cost $11.59, $9.27 for executives. Standard shipping is 7-14 days and is included in the price!
* Wal-Mart Checks - Wal-Mart’s Classic Blue Secure checks cost $5.96 for a box of singles, $150 checks, plus $2.85 for Standard (10-12 day) shipping. A box of duplicates is only $6.96. If you want one of their Disney designs, the price of singles is only $6.96 and duplicates are $7.96.
* Checks Unlimited - Checks Unlimited, the company that advertises in those blue Valupak mailings, is one of the biggest check printing companies out there. Their minimum order is for 2 boxes with singles costing $21.90 and duplicates costing $31.90, with a Standard (7-14 days) shipping charge of $5.50. The appeal of Checks Unlimited is in their introductory offers and the multitude of check designs.
* DIY - Several of you mentioned printing your own checks using check printing software, such as Versacheck. The prices seemed competitive but I don’t know how much I trust printing my own checks.
Final Thoughts
If you’re like me and you use checks infrequently, Wal-Mart is probably the best bet at $5.96+$2.85 S&H for a box of singles. At 150 checks, that’s a personal check about every two days. I go months without writing a check! If you can handle the two-box minimum or you want special designs, then it doesn’t really matter which of the three vendors you choose because they start getting to be about the same. The only downside of Costco is that you’ll need a membership to order checks (they ask you for your membership number as part of the checkout process), which you can get around by finding a friend who has a membership.
Did I miss a better option out there?
Buying Checks Online
Despite the votes of confidence for Checks Unlimited, the check printing company that is included in the ValuPak mailings, I wouldn’t order checks through the mail because the post office is not 100% secure. We can lock our mail boxes but I believe we are the exception to the rule; it’s simply too easy for a thief to drive by your mailbox and steal your mail when you’re at work. I avoid using the postal mail system for sensitive transactions for this very reason.
Do not order checks from a site that does not encrypt your sensitive information. You can see that a site is encrypted when you see https in the URL and a padlock somewhere on the browser’s status bar. You can click on the lock to find out who is certifying it. Costco, Wal-Mart, and 4checks are secured and verified by VeriSign, ChecksUnlimited is secured and verified by GlobalSign, always confirm that the Certification Authority is one that you trust.
Get the checks shipped to a secure location. Many of you lamented the fact that the post office just dropped the package of personal checks at your front door, where a thief could easily swipe it. If you can, get the checks shipped to you at work. If it’s possible, request a signature guarantee on the package (this may cost extra) so that the package will never be left unattended. If you don’t want to pay the difference or it’s not available, try to talk to your mail carrier beforehand and have him or her hide the package somewhere.
Enter a check number start other than 1. One of the most rudimentary check security features is the check number. Companies used to use the check number as a way of detecting fraud, especially in cases where the company was writing a lot of checks. If the bank knew to expect checks in a certain range, they could detect fraud if strange numbers started appearing. If you wonder why a brand new account starts with checks at 101 or 1001, rather than 1, this is why. I don’t know how important this is anymore but try to continue the check numbers from the last book you had, or start higher.
Double check the data you enter. Many check printers don’t validate the data you enter so make sure you get it right the first time! They are not responsible if you key in your account data incorrectly.
Best Check Vendor Options
The best options appear to be:
* Use Online Billpay: As long as there’s an address and no immediate need for a check, you can always send a check through online billpay. We pay several of our utility bills this way. With online billpay, the bank mails a check to the payee on your behalf, saving you a check and the postage stamp.
* Costco Check Printing - Costco also has a minimum order of 2 boxes. A box of singles has 200 checks, duplicates have 150 checks. Two boxes of singles cost $10.59, $8.47 if you’re an executive member, and duplicates cost $11.59, $9.27 for executives. Standard shipping is 7-14 days and is included in the price!
* Wal-Mart Checks - Wal-Mart’s Classic Blue Secure checks cost $5.96 for a box of singles, $150 checks, plus $2.85 for Standard (10-12 day) shipping. A box of duplicates is only $6.96. If you want one of their Disney designs, the price of singles is only $6.96 and duplicates are $7.96.
* Checks Unlimited - Checks Unlimited, the company that advertises in those blue Valupak mailings, is one of the biggest check printing companies out there. Their minimum order is for 2 boxes with singles costing $21.90 and duplicates costing $31.90, with a Standard (7-14 days) shipping charge of $5.50. The appeal of Checks Unlimited is in their introductory offers and the multitude of check designs.
* DIY - Several of you mentioned printing your own checks using check printing software, such as Versacheck. The prices seemed competitive but I don’t know how much I trust printing my own checks.
Final Thoughts
If you’re like me and you use checks infrequently, Wal-Mart is probably the best bet at $5.96+$2.85 S&H for a box of singles. At 150 checks, that’s a personal check about every two days. I go months without writing a check! If you can handle the two-box minimum or you want special designs, then it doesn’t really matter which of the three vendors you choose because they start getting to be about the same. The only downside of Costco is that you’ll need a membership to order checks (they ask you for your membership number as part of the checkout process), which you can get around by finding a friend who has a membership.
Did I miss a better option out there?
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