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GCFLASH
Hot Off the Press!
Tuesday, March 4, 2008 - Edition #444
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Weekly Spotlight
With the increasing threat of debit card fraud, you can rest assured that GCF Bank is doing all we can do to protect you, our valued customer. Currently, GCF is implementing Risk Management controls to lessen the inconvenience, embarrassment and potential monetary losses associated with debit card fraud.
Beginning March 20th, all GCF VISA Debit card transactions originating outside the U.S. will be blocked. If you plan on traveling outside the U.S. or using your GCF VISA Debit card for purchases originating outside the U.S., you'll need to notify your local branch and we'll make arrangements to ensure your debit card can be used in the country or countries where you'll be traveling or making a purchase. While we do realize that this new process may be cumbersome, GCF would like to remind you that this pales in comparison to the inconvenience that arises when an account is hijacked using a fraudulent VISA Debit card. Should you have any questions concerning this matter, please feel free to contact either of the following staff members:
For more details about this threat, click here. 1st Flash:
WILL BANKS BE THE NEXT VICTIM OF ECONOMIC TURMOIL?
The continued downward spiral of the U.S. economy leaves many to wonder which sector will be the next victim of the ripple down effect. The subprime mortgage debacle has already brought the housing market to a screeching halt. Realtors, contractors and those in the construction field were among the first to feel the pinch outside of those who could no longer afford their monthly mortgage payment. Then came the credit crunch. If you can't afford to pay for your home, chances are you can't pay credit card bills on time either. The days of easy credit became a thing of the past. Even the fortunate that meet their monthly obligations feel the pain. Manufacturers who entered the credit market in its glory days are now hiking prices on goods to offset losses sustained by delinquent borrowers. If you're planning to buy a GMAC truck or Harley Davidson motorcycle in the near future, be prepared for sticker shock. With loan losses and the credit squeeze, bank profits are dropping. Can they be the next victim of this economic turmoil? Four banks have failed in the past year, and experts expect many more over the next year. Some predict as many as 100-200 bank failures over the next two years. The FDIC list of troubled institutions has grown from 50 at the end of 2006 to 76 at the end of 2007. But that isn't as bad as it sounds. At the end of 1992, the end of the banking crisis, there were 1,063 banks on the troubled list. Geographic areas hit hardest with the housing crisis, such as Ohio, Michigan, California, Florida and Georgia, will see the most bank failures. The good news is that, since the end of the Great Depression, not one depositor has lost as much as a penny of FDIC insured funds. The FDIC is sound and secure. So even if your funds are in a bank facing fiscal problems, your money is not at risk. Make sure your bank is a member of the FDIC. The logo should be prominently displayed at the local branch and on all advertising material. If you don't see it, visit the FDIC's Web site and click on "Bank Find" for a list of member banks. If yours isn't listed, switch to one that is. Certain agencies rate and report the safety and soundness of financial institutions. Learn where your bank stands at Bauer Financial or Bankrate.com. Know the limits of FDIC insurance. Individuals are insured for up to $100,000 in deposits held in an FDIC insured bank. This includes savings, checking, CDs and money market accounts. Joint accounts are insured up to $200,000. IRAs and Keoghs are insured up to $250,000. These retirement accounts are considered separate from deposit accounts. CDARS, available through a group in which GCF Bank participates, offers up to $50 million insurance for funds placed in CDs with their institution. There is nothing to fear, even if your bank does cease operations. Failed banks are usually bought by larger institutions. Your terms will likely change, but your money would remain safe and sound. Every single penny of it. 2nd Flash:
WINDOWS VISTA: ONE YEAR LATER
A full year has passed since Windows Vista was first released to the public. Without even getting into the failed Yahoo merger, Google's increased popularity, and EU anti-trust lawsuits, it's safe to say that the past year has not been kind to the Redmond-based software giant. Microsoft's latest operating system (OS) has certainly seen its fair share of criticism. Some of the gripes were valid. The steep hardware requirements made upgrading without the purchase of new hardware virtually impossible. Consumers have complained that even newer machines get bogged down by the OS. (A class-action lawsuit has been filed claiming that PCs labeled and sold as 'Vista Capable' in 2006 lack the ability to run some of Vista's more advanced features.) Microsoft's new-found focus on security was a welcome development, but Vista's endless array of security prompts has annoyed countless users. Still, is it fair to label a year-old OS that has sold over 100 million copies a failure? In an attempt to address some of Vista's shortcomings and improve the overall user experience, Microsoft will release the first service pack for Vista later this month. (Some businesses and corporate customers have been reluctant to adopt Vista prior to the release of SP1.) One of the main issues addressed by SP1 will be the overall speed of the OS. SP1 promises to cut file transfer times by 25%; and the time required to view large image files by 50%. Multiple security updates will be rolled into SP1, along with some subtle administration/account management changes to reduce the "nag" factor. To coincide with the release of Vista SP1, Microsoft announced Vista price cuts for more than 70 countries. U.S. consumers will see the Vista Ultimate Edition drop from $299 to $219 and the Home Premium edition reduced from $159 to $129. Microsoft hopes these price cuts will encourage more users to upgrade. Roughly 80% of Vista sales thus far have been OEM versions bundled with new machines. According to the NDP Group, Vista's retail sales figures are 60% lower than those of Windows XP during the first six months of their respective releases. While Apple's OS X has experienced steady gains in PC market share since the company's transition to Intel chips, Microsoft's biggest competitor continues to be… Microsoft. Vista's predecessor, Windows XP, is widely regarded as the most stable and versatile Windows OS ever released. In our current economic climate, many consumers (myself included) are living by the, "If it ain't broke, don't fix it" mantra. The fact that a third service pack for XP will be released alongside Vista's SP is a clear indication that XP's eulogy won't be complete anytime soon. Since Microsoft still holds roughly 90% of the OS market, there's still plenty of time to right Vista's ship. The upcoming year will go a long way in determining whether Vista eventually grows to outshine XP or quietly fades into the darkness as another OS is pushed out to replace it. (Anyone remember Windows ME?) Financial News
Federal Reserve Chairman Bernanke and President Bush both assured the country in speeches last week that though the economy is slowing, we will not plummet into a difficult recession. New and existing home sales showed continued weakness in January with new home sales falling 2.8% in January. Annualized existing home sales fell .4% in January, or 23.4% since January 2007. Existing home prices are at the lowest levels since February 2005. Foreclosure rates continue to climb. Other pressures include oil prices at a high of $102 a barrel. At the same time, mortgage rates have increased despite the much lower federal short-term rates to banks. This lower rate has not translated into lower mortgage rates because many banks tend to match the term of monies borrowed and then lent back out. For instance, it is much riskier for a bank to borrow money short-term where rates can change a lot over time when lending for 30 years at a fixed-rate. Long-term interest rates have not dropped dramatically. The Federal Reserve will continue to watch employment data before the next meeting on March 18th for inflationary pressures. Currently, the unemployment rate remains at 4.9%. an historically low number. However, employment growth is very low. The concern is stagflation: a weak economy coupled with inflation. Bernanke told the Senate Banking Committee, "I don't anticipate stagflation," indicating that the U.S. is "not anywhere near" the dangerous stagflation situation that prevailed in the 1970s. In the coming weeks, updated employment data, consumer and producer data will be published before the Federal Reserve meeting on March 18th. In the meantime, the stock market continues its wild ride! Today's National Market Rates
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In This Issue... 1st Flash: WILL BANKS BE THE NEXT VICTIM OF ECONOMIC TURMOIL? 2nd Flash: WINDOWS VISTA: ONE YEAR LATER Today's Market Rates On the World Wide Web Tip of the Week Financial News Past issues of GCFlash: February 26, 2008 Edition #443 February 19, 2008 Edition #442 February 12, 2008 Edition #441 February 5, 2008 Edition #440 Looking for articles from a past issue of GCFlash not listed above? Find them in our Knowledge Base!
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