Financial Crisis
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Combating the Cons: Where Should Victims of Financial Scams Turn?
Today's story "Classic Cons: 10 Financial Scams Fair-Minded Investors Should Avoid," describes just a few of the financial scams investors should watch out for. If you have reservations about a potential investment opportunity, or if you've been victimized by a financial scam, you might turn to one or more of the following agencies.
Better Business Bureau - With offices nationally, in every state and most large and mid-sized cities, the BBB can alert you to problems with local businesses, work-at-home programs, distributorships, sales routes you can buy and other one-on-one type rip-offs. They usually have lists of current online offers that are suspect or drawing lots of complaints. You can access the national BBB Web site at http://www.bbb.org/us/
and navigate to your home state or city chapter from there.
U.S. Securities and Exchange Commission (SEC) - Information is available on all securities-related fraud issues and investment scams, and you can file your own personal complaints or suspicions online at http://www.sec.gov/complaint.shtml. You can write them at: Securities and Exchange Commission, Office of Investor Education & Assistance, 450 Fifth Street, N.W., Washington, D.C. 20549-0213, or fax a complaint to 202-942-9634. You also can verify financials and regulatory standing on all publicly traded U.S. companies by accessing the SEC's EDGAR Database at: http://www.sec.gov/edgar.shtml.
Your SEC complaint can be anonymous or you can provide only limited personal data. However, the more information you give them, the more likely they'll be able to help you. Either way, include specific details about how, why and when you were bilked with any contact info you have on the fraudulent person or company involved.
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Classic Cons: 10 Financial Scams Fair-Minded Investors Should Avoid
When Peter Allen and Carole Bayer Sager wrote the tune "Everything Old Is New Again," they were probably hoping for no more than a Top 40 hit. Instead, the song became an oft-recorded classic, mostly because the title proved a truism in so many areas - especially in the seamy world of financial fraud.
Indeed, over the past 40 years, only one new entry has been added to the Federal Bureau of Investigation (FBI) roster of "Top 10" investment scams - the very broad category of "Internet fraud." The other financial rip-offs listed are merely new versions of tried and true swindles that have been around for decades or more - from Ponzi schemes and pyramid systems to phony stock offerings and commodity cons.
The big difference is that the one new category - Internet fraud (and the computers on which the Internet operates) - has greatly increased the frequency, speed and effectiveness of the other types of financial fraud, as well as exponentially increasing the scammers' take.
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Money Morning Mailbag: There's No Way Around the Dangers of Municipal Bonds
Money Morning Contributing Editor Martin Hutchinson last month introduced readers to the dangers of municipal bonds. While many investors assumed munis offered a safe haven in turbulent times, the battered condition of state and local finances has left many munis running the risk of default.
"Brokers will tell you that particular state and municipal bond issues are 'safe,' meaning that they are rated highly by the rating agencies," said Hutchinson. "However, the rating agencies got it wrong on subprime mortgage instruments, and it seems pretty clear that they are getting it wrong on states and municipalities."
On the municipal level, local property taxes are the primary revenue source. Declining home prices and increased mortgage delinquencies are creating a housing market that offers little local revenue. Municipalities are then left struggling to make ends meet.
Hutchinson said the vicious cycle could send municipal-bond defaults soaring past 2009's $6.4 billion.
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Three Ways to Profit as China Causes Gold Prices to Spike
China's growing importance in the world economy is about to have ramifications for the entire commodities market. Specifically, for Gold. Find out why China will push gold prices through the roof - and how to profit now.
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Three Ways to Profit as China Causes Gold Prices to Spike
When recently gold sold off and fell as much as 8% below its record high level of $1,260 an ounce, investors had to be more than a little concerned.
With the huge debt loads top world economies have taken on to rebound from the worst financial crisis since the Great Depression, investors have grabbed onto gold as the best way to hedge against the inflation and other financial calamities they felt were certain to come. So far, those calamities haven't materialized.
But those investors shouldn't be worried. There's another catalyst on the horizon. It's headed directly for us. And, at least as far as gold prices are concerned, it figures to be an almost ideal catalyst: Even if it doesn't spawn the near-term price spikes some gold bugs predict, it's a near-certainty to send the yellow metal skyward in the long run.
I'm talking, of course, about China.
To see just how powerful a gold-price catalyst China figures to be, please read on.
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The Headline You Never Expected: Foreign Growth Could Bail Out the U.S. Economy
During a period of increasingly worrisome headlines about the U.S. economy, there is one bright spot.
The rest of the world appears to be doing much better than we are.
In the long run, that's good news for the United States. Rapid world growth will eventually rekindle the economic fires here, producing a growth that is more balanced than the bubbles of 1995-2008.
Still, getting to that point will be a challenge, since - economically speaking - the home fires don't appear to be burning all that brightly.
To see how foreign growth could bail out the U.S. economy, please read on...
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Question of the Week: Readers Respond to Money Morning's Financial Reform Query
With U.S. consumers still feeling the sting of the global financial crisis, consumer advocacy groups are claiming that they snagged a win with the financial reform measure approved last month by a joint House-Senate congressional committee.
The bill next goes to U.S. President Barack Obama, who is expected to sign the measure into law.
"It's historic legislation," Michael Calhoun, president of the Center for Responsible Lending, told ABC News. "It's a big win for consumers."
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We Want to Hear From You: How Do You As A Consumer Feel About the Financial Reform Bill?
With U.S. consumers still feeling the sting of the global financial crisis, consumer advocacy groups are claiming that they snagged a win with the financial reform measure approved last week by a joint House-Senate congressional committee.
The bill goes next to President Barack Obama, who is expected to sign the measure into law.
"It's historic legislation," Michael Calhoun, president of the Center for Responsible Lending, told ABC News. "It's a big win for consumers."
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G20 Summit Bogged Down by a Shaky Global Recovery
The Group of 20 (G20) countries concluded their weekend summit with an outline for reducing budget deficits and a delay in global banking reform, but failed to create a unified policy as nations find themselves in different phases of economic recovery.
Leaders pushed decisions on global banking regulations to the agenda of the November session in Seoul, South Korea. The meeting's concluding statement expressed unity in countries' desires to reduce debt, but did little to alter austerity plans and stimulus measures countries have already created.
"With the common efforts of G20 members and the international community, the world economy is gradually recovering, but the foundations of the recovery are still not solid, the process is not balanced and there are still many uncertainties," said Chinese President Hu Jintao. "All this shows that the deeper impacts of the financial crisis have still not been surmounted, and systemic and structural risks to the world economy remain very grave."
The G20 communique underscored the countries' focus on achieving "growth friendly" fiscal policies while acknowledging that leaders must reduce the budget deficits, although policies and budget cuts should be tailored to suit each individual nation.
"The path of adjustment must be carefully calibrated to sustain the recovery in private demand," the G20 nations wrote. "There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth."
Analysts said the divergent views on how to sustain economic recovery marked the lack of effectiveness of the G20 forum.
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George Soros: "We Have Just Entered Act II" of the Global Financial Crisis
George Soros gained global recognition when he co-founded the Quantum Fund with Jim Rogers in 1970. That fund generated an average annual return of more than 30% while he was at the helm.
Soros hasn't quit making timely market calls since: From his $10 billion bet against the British pound sterling in 1992 to his April 2008 prediction that we had not "seen the full effect" of the recession and that the situation was "more serious than the authorities admit or recognize."
In February, Soros called the euro's viability into question, and the currency has plunged some 10% since that time.
