WEEKEND WRAP: PayPal Credit/Synchrony Update; All About Friday and George Carlin FTW

It was an oddly calm week on Wall Street, as stocks barely budged Monday through Thursday.

Not to disappoint, however, Friday saw the three major indices break through the doldrums and reach all-time record closing highs. Huzzah!

Friday's ramp was due to one thing and one thing only: the promise (again) of a US-China trade deal. There wasn't one. There was the promise of one, and that's all it took to send stocks soaring again.

Being skeptical of the one-day wonder of new highs in the stock market is not a crime. It takes a rational person to recognize that stocks are overvalued, and have been for maybe the past six years. The Fed keeps pumping fresh cash into the system, the corporations continue buying back their own stock and the media continues to promote the breakthrough in trade negotiations between the United State and China.

Presto! New highs.

Without the assistance of Friday's gains, for the week, the Dow would have been up 100 points, but, the NASDAQ would have gained less than four points, the S&P would have been up three points and change, and the NYSE Composite would actually have registered a loss of 15 points. TGIF, indeed.

At the Close, Friday, November 15, 2019:
Dow 30: 28,004.89, +222.93 (+0.80%)
NASDAQ: 8,540.83, +61.81 (+0.73%)
S&P 500: 3,120.46, +23.83 (+0.77%)
NYSE Composite: 13,492.96, +100.96 (+0.75%)

For the Week:
Dow 30: +323.65 (+1.17%)
NASDAQ: +65.52 (+0.77%)
S&P 500: +27.38 (+0.89)
NYSE Composite: +85.16 (+0.64%)

On to more stupid banking tricks, such as Money Daily's recent enquiry into the continuing consumer-fleecing practices of the banking industry. This was covered in the post Scam Alert: PayPal Credit and Synchrony Financial Playing Hide and Seek with Special financing Purchase Offers

It's not enough that banks and credit card companies charge what were once considered usurious interest rates to their customers. No, their 18, 22.5, 26.75 percent interest rates are not enough. They need to offer zero percent interest Special Financing Purchases, of which Money Daily discussed at length last week - to lure consumers into even more debt with these offers. Of the most egregious and widespread is the offer of zero percent interest for six months if the purchase is paid in full, a device employed by PayPal Credit through Synchony Financial, which handles the details online.

Such offers are widespread on eBay and offered via emails to PayPal Credit account holders. These are bona fide offers and they are good, but, as explained in the prior article, they do not fully disclose the details, one of which is actually encoded into law, specifically, by the Consumer Financial Protection Bureau (CFPB), the agency created in the aftermath of the Great Financial Crisis (GFC) of 2008, via the Dodd–Frank Wall Street Reform and Consumer Protection Act, which handed rule-making, incorporated in the 1968 Truth in Lending Act (TILA) over to the CFPB. 12 CFR 1026 Truth in Lending (Regulation Z, section 1026.53(b)(1)(i) and (ii)

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/53/#b

(Editor's Note: Yes, we have far too many laws. "The more corrupt the state, the more numerous the laws." - Tacitus, 56 AD - 117 AD)

Naturally, providing a link to the regulation is not required under the disclosure rules, so the banks don't provide such a link, because doing so might cause consumers to take a moment to consider just what they're getting themselves into. Specifically, the passage does indeed spell out, succinctly, that the lender is not required to allocate payments that are beyond the required minimum payments except in the final two cycles immediately preceding the expiration of the deferred interest offer or Special Financing Purchase.

Here it is, in all its deeply-buried glory:

(b) Special rules —

(1) Accounts with balances subject to deferred interest or similar program. When a balance on a credit card account under an open-end (not home-secured) consumer credit plan is subject to a deferred interest or similar program that provides that a consumer will not be obligated to pay interest that accrues on the balance if the balance is paid in full prior to the expiration of a specified period of time:

(i) Last two billing cycles. The card issuer must allocate any amount paid by the consumer in excess of the required minimum periodic payment consistent with paragraph (a) of this section, except that, during the two billing cycles immediately preceding expiration of the specified period, the excess amount must be allocated first to the balance subject to the deferred interest or similar program and any remaining portion allocated to any other balances consistent with paragraph (a) of this section; or

(ii) Consumer request. The card issuer may at its option allocate any amount paid by the consumer in excess of the required minimum periodic payment among the balances on the account in the manner requested by the consumer.

Money Daily had reached out to various individuals expressing concern over the banking practices regarding allocation of payments. One of the people who was kind enough to respond was the media representative for Synchrony Financial, Lisa Lanspery, who responded thus:

Rick – After reading your piece entitled “Scam Alert: PayPal Credit, Synchrony Bank Playing Hide and Seek with Special Financing Purchase Offers,” I wanted to address the misleading premise of your piece.

Synchrony is committed to transparency and consumer protection. Our advertising, applications, and billing statements provide clear, concise, and comprehensive education around the consumer’s financing options, including popular promotional financing options.

On payments to a PayPal Credit account, our process is to apply any overpayments beyond the required minimum payment due to the highest interest bearing balance -- therefore excess payments are typically applied first to non-promotional balances as required by applicable law to help the customer avoid paying interest. However, if an accountholder prefers the additional payments be allocated across their bill in a different manner, they may contact customer service to do that.

For background, here is the specific language that account holders on payment allocation.

PAYMENT ALLOCATION
We will use each payment in the amount of the minimum payment due or less, first to pay billed monthly plan payments on any Easy Payments purchases, then billed interest, then billed fees, then the principal balance, and then any other amounts due.

However, if you have a balance on a deferred interest purchase, during both the billing cycle preceding its expiration date and the billing cycle in which such deferred interest purchase expires, we may use the payment, after the amount to pay billed monthly plan payments on any Easy Payments purchases, to pay the balance on such deferred interest purchase(s).

We will use any amount in excess of the minimum payment due to pay the balances with the highest interest rate, then the next highest interest rate, and so forth. However, during both the billing cycle preceding the expiration date and the billing cycle in which a deferred interest purchase expires, we may use payments first to pay the balance on such deferred interest purchase(s).

Thanks for your interest in Synchrony and getting the facts correct.

Regards,
Lisa

Lisa Lanspery
SVP, Public Relations
Synchrony

...to which Money Daily responds, "thanks Lisa, for getting the law right. You could have just directed us to Regulation Z, which you did upon request for the specific law, but may I point out that your "background" on payment allocations is incorrect. Please read the following carefully and note the words emboldened:"

during the two billing cycles immediately preceding expiration of the specified period, the excess amount must be allocated first to the balance subject to the deferred interest or similar program and any remaining portion allocated to any other balances consistent with paragraph (a) of this section

While you are correct that the credit issuer is not required, for the most part, to allocate excess payments to the "deferred interest" offering, you are incorrect about the timing of the last two cycles. They are the two cycles immediately preceding expiration of the specified period of deferred interest financing, not "both the billing cycle preceding its expiration date and the billing cycle in which such deferred interest purchase expires..." as you stated in your email correspondence.

If this is indeed the practice by which Synchrony is allocating payments, then Synchrony is in violation of the law. If, however, you simply made a misstatement of Synchrony's policy, then let's just all apologize to one another (Money Daily for being alarmist, Synchrony Financial for being a credit issuer, and you, for making a small error), sit around the campfire and sing kumbaya.

The final point is that banks and credit companies have the consumers over various barrels when it comes to financing, disclosure, rules, and, especially, lawmaking, most likely because most of the laws are written for congressional representatives - who don't understand even a third of what's contained in the laws on which they vote ("we have to pass it to see what's in it" comes to mind) - by lobbyists or lawyers for the corporate interests involved, in this case banking. They write the laws to benefit their clients, the banks, not consumers.

Whew! That's more than enough for a Sunday morning. If any readers have chosen the TL;DR option, that is completely understandable.

Please enjoy the entire 10-minute video of the late, great George Carlin, uncovering, near the end, some truth about America.

Silver Is Testing $14/ounce Again; How Low Can It Go?

Blue line=30 day MA; Green Line=200-day MA

Since my late January burnout, I've been sick, quit a part-time job, plotted a move from New York to Tennessee (more on that later, scheduled for October), and decided to resume writing "Money Daily," employing first person singular style with less of a focus on stocks.

It's something of a relief to be able to write as I speak, discarding the strictures, stultification and distance of the third person.

That means I can mean what I say, say what I mean, directly, closing the space between me, and you, the reader (2nd person).

Enough semantics and style, for now. Let's get right to the subject matter.

Silver has long been a favorite investment of mine, though over the past number of years - since the heady days of 2010-11, when the price rose close to $50/ounce - it has been rather disappointing. My holdings did, however, manage to provide some relief against rising interest rates on credit cards in 2017 and 2018, as I was able to liquidate to cash and pay off the loan sharks otherwise known as banks and credit issuers.

Since my basis was right around $17/ounce and buyers paid a hefty (15-30%) premium on my offerings, I was actually able to cash out at a profit and still maintain something of a stash for future purposes.

As an aside, that's what investments are about.  Generally, people don't hold assets for the sake of holding them, except, of course for precious metals, gems, art, and some real estate. Eventually, they want to convert to cash to spend on something else. In my case, cutting up a couple of credit cards which were obliging me with ungodly - and rising - interest rates was the purpose of some of my silver. The rest, I continue to hold as a store of value, even though that's still a questionable proposition.

As anyone who plays in the gold and silver markets already knows all too well, the metals have been squashed in recent years by central banks because the metals pose competition to fiat currencies. That's all right if one manages to ignore the Sprotts and Caseys of the world who insist with regularity that gold and silver are on the verge of a breakout. Nothing could be further from the truth.

Gold and silver have been in a slow, long, excruciating bear market since mid-2011. They have been and continue to be relentlessly beaten down in the speculative futures markets and they will continue to be for the foreseeable future.

The question, for gold bugs and silver surfers, is "where is the bottom?" The chart at the top suggests that we may be getting close, especially if silver takes another dive into the $14s.

Blue line=30 day MA; Green Line=200-day MA

The most recent bottom came in 2015, when silver struck out at $13.71 on December 14. In 2018, it approached that figure, but never quite made it, bottoming at $13.97 on the 14th of November. This year, the low was $15.025, on April 2.

With no bounce in the charts other than the usual 1-3% noise, silver is headed back in the
14s soon, likely within the next week. Stocks and first quarter earnings will be all the rage for the next three weeks, so there's no interest in shiny metals, presenting a tempting opportunity.

It might be prudent to avoid that temptation, because the commodity will have every opportunity to set a three-year low. Like any asset, the time to buy is when everybody else has given up. Silver may never again get to $48/ounce, but it's also likely that it will never again sell for $6 or $7, which was the norm in the 1990s, prior to the great awakening.

I do believe $12 or even $11 per ounce or lower is possible, and, if you're doing your investing right - buying small amounts on a set schedule - you may be able to dollar-cost average your way to a very low basis for your holdings. Of course, anybody who got in at $16 or $17 last year may still be buying right now, and nobody can blame them for lowering their basis.

What it will take to get silver to some more reasonable valuation - say $20-22 - is anybody's guess and a fool's game. Silver is a hedge and it's certainly better than paying 18% interest on credit cards or blowing your money on dinners out, vacations or other life-changing "experiences."

Having a vault full of 1, 10, and 100-ounce bars is likely to be a more life-changing, exceptional, and satisfying experience.

Per Aspera Ad Astra,

Fearless Rick

Coincidentally, this article on silver - by a (ahem) respected investment writer - popped up right as I was publishing mine. Of course, his conclusive approach is completely incorrect.

Dow Down 100, NASDAQ Up 0.01; Crude Oil the Culprit

From the You Can't Make This Stuff Up Department:

The Dow was down 100 points (and 69 cents, but who's counting), while the NASDAQ finished a hectic day of trading with a gain of 0.01. All told, this was a losing session, as both the S&P 500 and NYSE Composite ended the day underwater.

One might have assumed that Tuesday's losses were an extension from Monday, with Apple leading stocks lower, but, even though the Cupertino computer colossus did finish lower by an even one percent, the biggest losers on the Dow were energy companies ExxonMobil and Chevron, which bracketed Boeing (BA), a 2.11% loser. XOM lost 2.29%. CVX was down 1.74%.

Volatility in stocks is making everybody crazy. The Dow was up 1075 points over the first six sessions in November, but has given back 905 in the past three sessions, leaving it up a mere 170 points for the month, one which traditionally is among the best for long players.

Thus, the answer to the question of what moved markets today is simple: the price of oil, as WTI crude lost ground for the 12th straight day. At $55.19, it's at the lowest level since November last year. Tuesday's decline was also the largest during the recent rout, down nearly eight percent.

Saudi Arabia reduced its estimate for global demand from two million barrels per day to 1.29 million, sending the price sharply lower. Oil peaked on October 3rd, above $76/barrel, and has been on a diagonal course lower since, now officially in a bear market.

While the Saudi's may be fretting over demand and promising production cuts in the near future, the real villain in the oil patch is supply. There's been a glut of oil forever, and the only movement in price was due to artificial crises, forced production cuts, and pure speculation. In June of 2017, WTI crude oil was going for $46/barrel, but was bumped up continuously over the next 16 months before the recent setback. From all indications, reduced demand and oversupply could push prices down below $50/barrel before Thanksgiving and further declines might be a welcome Christmas present for drivers and those who heat their homes with oil.

A lower price for oil, and, consequently, for gasoline and other derivatives, should act to boost the general economy, allowing consumers more disposable income to spend on necessities and/or holiday splurges, all of which should be positive for markets. However, the math isn't quite so simple, as Americans, beset with record credit card and other debt, might tighten their collective belts and pay down some of those nasty, recurring, monthly bills on credit cards with interest rates well beyond what used to be considered usury.

For the pair traders out there, that would mean shorting oil stocks and financials while buying consumer staples and cyclicals.

Fun for everyone.

Dow Jones Industrial Average November Scorecard:

Date	Close	Gain/Loss	Cum. G/L
11/1/18	25,380.74	+264.98	+264.98
11/2/18	25,270.83	-109.91	+155.07
11/5/18	25,461.70	+190.87	+345.94
11/6/18	25,635.01	+173.31	+519.25
11/7/18	26,180.30	+545.29	+1064.54
11/8/18	26,191.22	+10.92	+1075.46
11/9/18	25,989.30	-201.92	+873.54
11/12/18	25,387.18	-602.12	+271.42
11/13/18	25,286.49	-100.69	+170.27

At the Close, Tuesday, November 13, 2018:
Dow Jones Industrial Average: 25,286.49, -100.69 (-0.40%)
NASDAQ: 7,200.88, +0.01 (0.00%)
S&P 500: 2,722.18, -4.04 (-0.15%)
NYSE Composite: 12,328.23, -15.28 (-0.12%)

Debt Notes: Inflation Over The Next 18 Months Is Very Doubtful, Unless...

There's been plenty of chit-chat the past few weeks about how President Trump's infrastructure initiative (we haven't had even a sniff of what this might be, besides the Mexican wall) and tax cuts are going to spur inflation, but there hasn't been any solid data upon which to rest the thesis.

Notwithstanding the minor upticks in CPI and PPI, there's little evidence to suggest that any kind of rampant inflation is on the immediate or even the future horizon, and there are plenty of good reasons for that.

Industry and international trade has been slow since the Great Recession of 2008-09 and our bouncy "recovery" hasn't made any real dent in the actual number of hours worked nationally. Sure, the BLS always tells us more and more jobs are being created and the unemployment figure is near historic lows, but they always fail to point out that people who have dropped out of the labor force aren't counted any more, so those figures are worth about what we all pay to read them... essentially, ummmm, nothing.

Now there is going to be inflation in some things, like it or not, and those things today are, in no particular order, health care, housing, autos, and higher education. Food prices in the USA are, and always have been, relatively stable. Notably, beef prices are far lower than they were just a few years ago.

From all indications, retailers closing up shops nationwide seems to be saying there isn't much demand for clothing. Household goods, ditto. So, where's the inflation coming from if demand is waning?

Simple answer. It's not. The Federal Reserve needs to run the narrative that inflation is upon us so they can jack up their abysmally-low federal funds rate. That's because their experiment in quantitative easing (printing money) and ZIRP (Zero Interest Rate Policy) have proven to be dismal failures. Of course, they will never admit to that, or to the fact that roughly $14 trillion has been wasted or funneled directly or indirectly to the top 1% wealthiest people.

Bottom line is that without demand for goods and services, there can be no price inflation, because, using the standard metric of inflation being more money chasing fewer goods, while there's certainly more money out there, there's also no shortage of goods and services. In fact, were the economy not in such a dreadful state, more people would be opening new businesses, simply because there would be money to be made and not much in the way of competition.

As it stands today, most of the needs of the average, below average, and above average US citizen are pretty easily met. Food and clothing are cheap, and that's two of the three essentials for survival. The third, housing, is largely dictated by geography, so, in big cities, it's expensive. Out in the boonies, not so much.

All of this brings us to the real question, where is all the money coming from?

Another simple answer: debt, though it's not exactly as cut-and-dried as many would believe. Outstanding credit card debt continues to rise, but it's just a shade below $1 trillion, and, as for home equity loans, many people, and many bankers, learned a lifetime lesson in the Global Financial Crisis (GFC). Where the real money is coming from is debt related to car loans and higher education, aka, student loans, both of which reached all-time highs in the 4th quarter of last year.

Strange as it may seem, both are at higher nominal levels than credit card debt, at $1.407 trillion for car loans and $1.11 trillion in student loans. It seems odd that there would be more in just these two categories than everything that could be purchased with credit cards, which is, actually, everything. You can even pay taxes or register your car with a credit card, so it's readily apparent that there's an oversized appetite for new cars and degrees from colleges.

It doesn't really make sense. The vehicles on the road today may be the latest with all the greatest gadgets and widgets, but they're not much better than cars made in the past fifteen years, many of which are still reliably on the road. as for a college education, that has to be a societal miscalculation, because a degree in liberal anti-establishment cultural studies or whatever isn't going to pay for itself any time soon. It's a conundrum, a mismatch, a MALINVESTMENT, of which there are many, everywhere.

That's not to mention that the median cost of a new home is at another all-time high, but, as mentioned earlier, that's largely a local issue, but it bears notice that the average monthly payment of principle and interest (PI) for that median home is over $1000 a month.

So, if you find yourself all bollixed up over high credit card balances with high interest rates, don't worry. There are plenty of college graduates living in nice, new homes driving new cars who are in much worse shape than you.

If you're one of those people, we're all sorry, and we're having a drink to your ultimate demise, telling the bartender, "charge it."

"Compounded interest is the 8th wonder of the world. Those who don't understand it, pay it, and those who understand it, earn it."

- Albert Einstein

At The Close, Tuesday, February 7, 2017:
Dow: 20,090.29, +37.87 (0.19%)
NASDAQ: 5,674.22, +10.66 (0.19%)
S&P 500: 2,293.08, +0.52 (0.02%)
NYSE Composite: 11,236.17, -27.94 (-0.25%)

April's Fools: Stocks Continue Slide

As noted yesterday, something is not quite right about the US equity markets, and, whatever it is, it's starting to get the attention of the investor class, or, at least the computer algos that make the trades for the investor class.

Stocks continued the slide begun on Tuesday, which already sent the Dow Industrials to negative on the year and is threateneing to do the same for the NASDAQ and S&P 500.

Main among culprits leading to displeasure with stocks is the disconnect between the real economy and the Wall Street economy. In the real economy, people have to make choices, every day, hour by hour, minute by minute, and those choices, magnified by the 300+ million Americans become what are known as statistics. These statistics are not, and have not, jibed with the "recovery" mantra so popular with the government and Wall Street crowd, the one which claims everybody is working and nobody is hurting, when in fact, major segments of the population are suffering from the strains of a controlled and contrived economy that favors only a small slice of very wealthy individuals.

By age group, it goes something like this: teens and college-age individuals can't find decent jobs in many places, and, while college students, generally, as a group, are not working, teens and those in their early 20s are finding the pickings pretty slim and opportunity for advancement a challenge. Wages are low, the work is monotonous or dreary, the bosses are boot-licking jack-asses and the fringe benefits are - in general terms - nil, as in, NONE.

College students, once they graduate, if they are fortunate enough to find gainful employment, are often up to their ears in student loan debt, the average being $27,000 for a four-year degree. Many are not finding work that pays well enough to pay off the loans, rent an apartment and live like a normal human, so many of these twenty-somethings are habitating in parents' basements, smoking herb and playing video games in between their postings on insta-chat or twitter-face or whatever the app du jour happens to be.

Then there are those who used to be known as middle class, the folks in their 30s, 40s and early 50s, with or without kids at home or away or actually grown, drowned in debt from auto loans, living in underwater homes they cannot sell, and denied any upward mobility because they are linked to the national ball-and-chain known as a credit score. Some are doing OK, but the hours are long, the taxes never stop and keep going higher, and maintaining an outward appearance of peace and civility is becoming harder and harder.

Following after them are the soon-to-be-retired baby boomers, who hope that the stock market doesn't crash, who long to be soon done with working seemingly forever for less then they're worth, who are told to spend rather than save, and who don't see the point of saving since interest rates are so low, it's simply not worth the effort. Every day, something else annoys them a little bit. A higher price for a staple item, or, what's even more common, less of the same item for the same price. Or a new tax, a new law, some absurd thing like "freedom of religion" or "anti-this-or-that" legislation.

Seniors, those above and beyond the age of 65, are trying to hang on, if at all, with social security and a medical plan they neither appreciate nor understand. Co-pays keep rising, the quality of care declines. Their savings are stuck in neutral, thanks to the Fed's wisdom of keeping interest rates at zero for the past seven years. They're slowly bleeding to death from places they didn't know they had.

Amidst all of the age groups are sub-groups, like small business owners, buried under government paperwork and besiged by regulations and onerous taxes, and, what's become known as the FSA (Free S--t Army), the legions of welfare and disability sufferers who live beneath the general strata of society, seeking nothing more than a monthly rent check, food stamps, an Obamaphone and free health care. Those, and a flat-screen TV covers the extent of their pretty-much worthless lives.

Of course, we have the useful idiots who work for government and its myriad levels: teachers, police, paper-shufflers or all kinds, getting fat on the public expense account, oblivious to the plight of their fellow citizens in the real world economy. These types retire after 20 or 30 years of wasteful spending of taxpayer money, just to waste even more with their lavish pensions.

Striding atop all of these folks are the politicians and financiers of Washington and Wall Street, and state capitols and in municipal government positions.

And they're no longer laughing. At least some of them aren't. They know, that but for the grace of these hordes of individuals suffering under tax slavery and monetary repression, they and their ilk would be hung, burned or somehow disenfranchised. They can only hope to keep the game going another day, another week, another year, another election, because when it ends, they have no skills by which they could fend for themselves. They would be set adrift into a seas of unhappiness and misery, like the rest of the population.

If they're not worried, they should be, because this system is ripping and tearing at the seams, because it is unsustainable. There's only so much fraud and so much money out of thin air that can cover up the obvious defects.

But, give the oligarchs, politicians and financial whiz-kids their due. They've kept the system alive longer than anyone could have expected them to, all the time since March of 2009. Six years is not a long time, but 10 is, and 15 is longer, and there's little doubt there will be changes - for which we all are mutually unprepared - to come.

Dow 17,698.18, -77.94 (-0.44%)
S&P 500 2,059.69, -8.20 (-0.40%)
NASDAQ 4,880.23, -20.66 (-0.42%)

Forget the Sequester; Bernanke Has All the Cards (and all the money)

Nothing like a couple of days in the woods - away from the Sturm und Drang of the neo-rational markets and shrieking media pundits - to offer a bit of perspective on not only the economic realities of the day, but the human condition in general.

What appeared to be the inevitable swoon the naysayers have been long-hoping-for on Monday, with markets taking their most violent downturn of the year, was quickly overruled on Tuesday and absolutely trumped and superseded with the third-best gain (on the Dow, at least) of the year on Wednesday.

Not that there wasn't a good share of associated nonsense and rationale for each of the directional market moves, but, in the end, it was a wash and a win for the erudite chairman of the Federal Reserve, Mr. Ben Bernanke, who availed himself of the opportunity to alternately receive and give both praise and chiseled criticism to both chambers of Congress in his annual Henry Hawkins testimony and the adjoining question and answer periods. We rest assured that the Chairman is content that not only are his policies of ZIRP and QEternity the correct ones for the US and global economies (because as goes the US, so goes the world at this juncture), but also that he has convinced most members of congress that they are working. Besides, there's nothing the congress nor the president nor any other person or assemblages can do about said policies, right, wrong or otherwise.

He is, for all intents and purposes, master of the financial universe. So be it.

Noting the chairman's unadulterated power to influence and control the economics of the world, skeptics still advertise their discontent, brining up the untidy details of the unwinding of his easy money regime, but this argument is a chimera, a cloak for ineptitude, a misunderstanding, a falsity, an impotent attempt to fleece power from the unbridled king of money, because the chairman and his cronies at the Fed are not at all concerned with unwinding anything. Their policies will remain in effect until the next chairman and governors are appointed/elected, and then such unwinding - if there ever is one at all - will be their problem.

For the rest of us, who do not enjoy the luxuries of appointments or elections, but rather suffer the daily slings, swings and arrows of outrageous fortune (or misfortune), a plan is a necessity, though those offered by the shysters and criminals populating the financial services industry might not always be in our own self-interest, if only because they contain the notion of conceit that markets are always optimized and correct, risk is always contained and humans always make rational decisions.

History will prove all three of those basic financial tenets absolute falsehoods. That is why we have booms and busts, successes and failures, joy and tears. Existence is not guaranteed and a fruitful existence is only attainable at some others' expense, such is the basis of capitalism.

So, a note, as the congress and the president sit upon their fattened hands awaiting the monster of their own creation - sequestration - which commences on March 1st, but in reality is more a boogie-man-in-the-closet apparition than an actual threat to the economy, especially on a local, individual, human level. It's something on the order of a two percent cut in the discretionary budget - domestic programs (not welfare, Social Security Medicare or Medicaid) and defense spending - thrown against the background of a baseline budgeting process which automatically increases the spending on these programs by three to ten percent in the upcoming continuing resolution process (which has displaced the budget process for five years now) due to commence by mid-March. In effect, the sequester is a non-sequitur - it is utterly meaningless.

Still, a plan one must have for the Ben Bernanke era, so make one, and make sure it includes not buying a new car unless you are willing and able to pay for it in cash or can get 0% interest for the life of the loan (hey, the banks get that rate, why not you?) which should be no longer than five years. Your plan should also include the paying down or clipping up (or maybe both) of all your credit cards except one for dire emergencies, unless you have $10,000 or more in cash safely hidden away in your back yard or sock drawer (though a safe would seem a more prudent place).

Those are the starting points, but check to see if you are playing more than 1/3 of your net income (after taxes) on housing. If you are, move. Downsize. There are plenty of deals available at excellent prices, even though the housing market in many places has yet to bottom.

And here's something that bugs the heck out of some people: It doesn't matter if you make $20,000, $200,000 or $2,000,000 a year. Spending four to five dollars on a cup of coffee is stupid. Stop it. Put Starbucks out of business. And stop all the other dumb, extravagant, ludicrous things like lottery tickets, day spas, dining out and "entertainment." Well, you don't have to stop them altogether, just be sensible about your spending. A very wise man (my father, RIP) once said, "it's not how much you make, but how much you spend." That kind of depression-era advice can go a long way these days (since we're in another depression but don't really know it. Shhh... the banks are faking it).

Remember at all times that financial news - even news on specific stocks - is marco-news, and, thus, will have little effect on your own personal condition.

Save. Don't invest. Save 5-10% of your gross income and put it into cash or physical gold or silver or tangible assets which will hold their value no matter what (a tough find).

Grow yourself some herbs, fruits or vegetables. Seriously. There's nothing like the taste of something you've nurtured from seed or seedling or sapling to a ripened delicacy. And, it's relatively easy. Nature does most of the work. Wall Street has nothing that compares to the return you get from a handful of seeds, sunshine and rain. Beyond that, you will be the envy of your neighbors, who aren't nearly as smart or thrifty or nature-loving as you. There's something to be said for that.

All hail the great Bernanke! Amen.

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Gold: 1,595.70, -19.80
Silver: 28.94, -0.317

Payment Processing for Small Business

In order to keep one's business functioning smoothly, with so many different ways consumers spend and receive money, a variety of payment processing services and products are key to prospering in a rapidly-changing environment.

The primary ways people pay are cash and credit/debit cards, so a if a business has retail space it must also have robust POS systems capable of handing all manner of transactions smoothly and seamlessly, and, hopefully, all though one provider. Choice and flexibility are what consumers seek in their payment options.

That means merchants should rely on not many, but one single company to handle all credit/debit card transactions - online, by phone or in-house - with credit card processing services that won't confuse your customers or employees and can provide detailed, instantaneous processing and also offer the merchant an interface for reviewing and downloading transaction report data.

Along with credit-debit card POS systems and processing services, any business handling cash might want to investigate the availability of having ATM machines at retail locations, again providing the customer with choice, while at the same time helping to increase add-on sales. The ability to access additional cash while still inside the merchant location spurs impulse buying and helps bring in extra foot traffic with potential cash in hand.

Today's business challenges are various and complex, but there's no need for business owners or managers to make their lives more difficult by choosing more than one provider for payment services and products. While it's anathema to business to have only one main customer, when it comes to payment processes, having one source for everything from credit to cash to analytics is not only desirable, but ultimately, profitable.

The new store

Guest post from: Constance Rodgers

My new store did really well the first three years we were open, and then the recession hit. Since we were mostly a referral outfit things were great without much marketing at all but when the economy dried up, so did our business. We had to pour thousands of dollars into an advertising company so they could get things back on track and it turns out all we did was waste our money. I wish I had listened when my mother told me to save for something like this! Anyway, we’re still doing okay with the loyal clients we have but I’ve recently had to let two employees go and go to BANK-CARD-Processing.com to start taking credit cards for the first time. I know this market has been tough on everyone but I can’t help feeling like we got it worse than most. Wish me luck in the coming months since only time will tell if our little business is able to survive this awful, awful time in American history.

Safeguarding Against Identity Theft

Because our world is so digitized, with everything from banking to credit cards to stocks and futures trading taking place over the internet, hackers have found a gold mine in digging up and exploiting personal data.

Everything from your social security number to automobile registration and brokerage account data is online, and it's only a few clicks or an inadvertent error away from falling into the hands of unscrupulous types who would do harm to one's financial and personal life.

In the increasingly complex world of internet security a few simple tasks can help one steer clear of the villain hackers who steal everything from credit scores and bank accounts to one's personal identity, and the outcomes of having insufficient identity theft protection can be consequential and painful.

Most online accounts, like banking and credit cards offer a level of encryption and security as a first line of defense. Some offer additional information to be imputed before access is granted to an account. The easiest ways to avoid being hacked is to use difficult passwords, especially using characters and numbers, and to use any secondary security - like additional questions to grant access - as a further safeguard.

Even more effective are online identity security companies, which monitor and scrutinize data flows to guard against unlawful intrusions. One such company is IdentityHawk, which offers a comprehensive solution including social security number monitoring, 24/7 identity security scanning, risk assessment via an identity health score and $1 million in identity theft insurance.

The company offers a 30-day, no-obligation free trial and also provides credit score monitoring and even can help in recovering one's identity if it's already fallen victim to identity theft.

While it pays to be thrifty and frugal in these turbulent economic times, a few dollars spent protecting ones identity and valuable assets should be money well spent.

Switching Credit Cards May Prove Fruitful

Despite the downturn in the economy, most Americans are still using credit cards due to their versatility, worldwide acceptance, loyalty rewards and overall ease of use.

A handful of issuers have upped the ante on the competition, offering more competitive rates, better points systems or other inducements to get people to apply for a credit card. Balance transfers have also become important in deciding which card is the right choice.

Many people have turned to popular credit card ratings web sites to sort through the various offers, discounts and online availability. Some sites offer very basic advertisements, while others provide deeper detail, including the ability to search by FICO score, check application status and even calculate the amount of savings provided by a balance transfer.

Tools such as these can help consumers save hundreds, if not thousands of dollars over just a few years by finding the right card with the best interest rate to suit their needs.

While it's true that American consumers are paying down debt at a very rapid rate, it hasn't taken the issuers long to adjust to this shift in sentiment and respond with more competitive rates for serious savers. Naturally, one's credit score always plays a crucial role in acceptance, and lowering one's balance owed is now more important than ever. With finances in flux, however, now might be a very good time to consider switching cards or consolidating debt into one card at a lower rate.

The savings could be substantial.