October 09, 2008


Ironically, today (10/9/08) marks the one year anniversary of the Dow Jones Industrials and S&P 500 averages hitting their all time highs. My how things have changed - the housing market has unwound (to put it mildly) due to the high volume of "liar loans" (low or no documentation home loans) and zero down payment requirements (43% of home purchases were made with no down payment). The result of people purchasing homes they couldn't afford - a record number of foreclosures. Poor lending standards (here and abroad) have also led to a precipitous drop in financial company stock values (60% on average) and has impacted all other aspects of not only the U.S. but global markets. All of the major market averages are down about 40% from the high last year, and over 20% in just the last seven trading sessions alone! The result? Panic, fear, and a wide range of financially 'unhealthy' emotions and reactions. I was reading the other day that over 1 in 5 people over the age of 45 have now stopped contributing to their 401(k) plans. While it can be a challenge to maintain a long-term perspective in this type of economic environment, you most definitely need to keep your eyes open as people will try to prey on your vulnerable state ...

USA Today published an article today reminding consumers of cymberscams that are designed to exploit fears. "Cybercrooks are creating fake websites, spam, phishing attacks and malicious software code to take advantage of anxiety during the economic calamity ... A new spin on old tactics."

Most of the scams are centered on phishing (sending spam e-mails in an attempt to get you to go to a "fake" website to request personal information), focusing on recent bank failures, mergers and takeovers. Some easy targets right now are current and former customers of Chase and Washington Mutual (as Chase is currently navigating its acquisition of WaMu). For example, a current e-mail that appears to come from Chase asks customers to go to the "Chase" website (a fake site), and provide personal information (user ID, password, name, address, phone number, Chase credit card number, ...). Phishing attacks on Citigroup soared after it announced its intent to acquire Wachovia (since that has fallen through with a subsequent "better offer" from Wells Fargo, WF customers should be on the look out).

The article doesn't provide any "new" suggestions [as was mentioned, this is not a new problem]. Their suggestions:

1. Be Aware. Be suspicious of e-mail requesting personal info.
2. Don't Click. Don't click the link in the e-mail to visit the website.
3. Be Secure. Use secure websites (i.e., https:// and 'padlock' icon).
4. Don't Fill Out E-mail Forms. Never fill out forms within an e-mail.
5. Keep an Eye on Your Accounts. Monitor your account activity.