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The Cybersecurity Play That Doubled Once – Will Double Again

Not long ago, a relative of mine was the victim of identity theft. And I have to tell you that I really felt for the entire family.

The thief ran up nearly $20,000 in charges, opened new accounts and tried to open others.

And I can tell you that the frustrations over the losses (most of which ended up being covered) were dwarfed by the helplessness that came whenever new charges showed up – and the worry that was spawned by never finding out how the whole mess started.

As we watch the headlines about data breaches and cybercrime – and watch as the violations move closer and closer to home – those worries only escalate.

  • Featured Story

    The Power of Today's FOMC Meeting

    Get ready for more volatility this week as the two-day Federal Open Market Committee (FOMC) meeting kicks off today (Tuesday) and investors wait for a sign of more quantitative easing, or QE3.

    The Federal Reserve announces what will happen with interest rates eight times a year at FOMC meetings. FOMC meetings are scheduled well in advance and receive a great deal of attention from the media and markets, but it wasn't always this way. It was not until 1994 that the Federal Reserve started publicizing the actions of the FOMC.

    Now the FOMC announcements have become trading opportunities.

    In fact, under Federal Reserve Chairman Ben Bernanke, the Federal Reserve has become the most influential market maker in history.

    Bob McTeer, the former president of the Dallas Federal Reserve, wrote in Forbes that investors are so glued to Fed actions they even react when minutes are released from an FOMC meeting - even when the meeting's outcome was already known.

    "It used to be "buy on the rumor, sell on the news' or vice versa. Now it seems to be "sell on the news and sell again on the same news in slightly greater detail,'" wrote McTeer.

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  • fomc meeting live

  • Fed Preview: Today's FOMC Meeting Will Prove That Team Bernanke is Out of Ideas If you're handicapping the U.S. Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting that concludes today (Wednesday), you can make the following two predictions - and you'll almost certainly be right:

    • U.S. Federal Reserve Chairman Ben S. Bernanke will announce some form of economic stimulus.
    • But the short-term benefits will be small, and any long-term benefits won't be enough to help out-of-work Americans or jump-start the wheezing U.S. economy.
    "I do think the Fed will intervene," Money Morning Chief Investment Strategist Keith Fitz-Gerald said in an interview. "But I don't believe for a second that the central bank's intervention will help the U.S. economy."

    Troubling Trends

    If anything, the nation's economy looks worse today than it did on Aug. 9, which is when central-bank policymakers last met. The "official" unemployment rate remains at an alarming 9.1% - with no jobs added in August - and true joblessness may range from 17% to 23%. Housing starts declined last month by the greatest amount since April. And the International Monetary Fund (IMF) just downgraded its U.S. growth forecast to 1.5% from 2.5% [To see related story in today's issue, please click here].

    The spreading European sovereign debt crisis continues to whipsaw stocks, oil prices and gold. And several dramatic single-day plunges - in stocks and in gold - spooked investors for days after the event.

    Bernanke feels pressure to act, but the odds that Federal Reserve policy can make a meaningful splash are low indeed, Money Morning's Fitz-Gerald says.

    What to Expect From Today's FOMC Meeting

    Since the Fed's actions have so far done little to ignite economic growth, investor expectations were muted ahead of today's FOMC meeting conclusion.

    "It looks like the market is baking in an announcement of some kind of quantitative-easing strategy," Deirdre Dennehy, portfolio manager at Rockland Trust, said in an interview. "[But] for them to announce a QE3, I'm not sure how impactful that's going to be. The more times they do that, the less the effect in the market."

    Analysts expect the Fed will attack longer-term rates by adjusting its $1.7 trillion portfolio of U.S. Treasury securities.

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