Is Real Estate Safe?. Are we in a housing bubble, and whether you own or rent, what should you do? [The Motley Fool] If you look at the prices here (Home prices changes in major U.S. markets, LA +17.7%) it seems like we are.
Chicago Fed: The growth of person-to-person electronic payments. "I offer three reasons why electronic payments have failed to capture the C2C market. First, technology limitations have hampered the adoption of electronic C2C payments. Second, most consumers find few problems with the use of cash and checks. Third, providers of electronic C2C payments face a large obstacle in implementing fees for these transactions." [Scott Loftesness] Very true. Third parties cannot provide the service for free (they have to pay their bills), and banks (who can provide the service for free) are hesitant to enter this market. There is probably one more reason, "chicken and egg problem". Checks are widespread, you can pay almost everywhere with checks. Any payment system implemented by third parties is limited in scope, so customers are reluctant to join. Case to the point. Why do we use so many checks? "We have identified several potential drivers of electronic payments, such as greater choice of payment instruments for consumers for different payment segments, greater non-face-to-face shopping opportunities, competition from non-bank payment providers, and a greater role by merchants to offer the low-cost payment alternatives. Anecdotal evidence suggests that U.S. consumers are slowly changing their payment habits, and we would expect this trend to continue."
Two related articles. International Monetary Fund Sees Gloomier Economic Outlook. "Despite that hope for an improving economy, the IMF conceded weak stock prices, exacerbated by accounting scandals and an uncertain corporate profit outlook, could yet undermine consumer and business confidence." Consumer Credit: Is a Crunch Coming. "... people are piling up huge debts. The amount that Americans owe on loans for houses, cars, credit cards, and other purchases adds up to nearly 100% of their annual income after taxes. That's up from 75% in 1992, after the last recession ended. Even if consumers are willing to take on more debt, lenders -- and more important, the investors who buy many of the loans they securitize -- may soon decide that enough is enough. If the credit crunch now squeezing business starts to hit consumers, whose spending accounts for two-thirds of gross domestic product [GDP], the U.S. economy could wind up in a world of trouble."
Worldcom Files Chapter 11 Bankruptcy. "WorldCom Inc. filed the largest U.S. bankruptcy on Sunday after the long-distance telephone and data services company buckled under a $3.85 billion accounting scandal and a mountain of junk-rated debt. [...] WorldCom's bankruptcy filing listed J.P. Morgan Trust Co. National Association as the largest unsecured creditor, with bond debt of $17.2 billion. It said Mellon Bank N.A. holds $6.6 billion of WorldCom debt, while Citibank N.A. owns $3.29 billion." Oops.
CNET News: Report: FDIC not protecting data. "The report from the General Accounting Office identified "new weaknesses" in the FDIC's information systems controls that affect its ability to safeguard electronic access to sensitive data. "These weaknesses place critical FDIC financial and sensitive personnel and bank examination information at risk of unauthorized disclosure, critical financial operations at risk of disruption, and assets at risk of loss," the report says."
One more story well worth reading from Bruce Tognazzini: Good Grisp: Usability before Branding. "The best branding starts with a good quality product that stands out from the pack. [...] Look at your company's recent work with a new eye and see whether you've been branding, instead of building a product people actually want to use. Then change it."
MarketWatch: Jobless rate, stock market don't signal recovery. "The major averages so far are falling for the third year in a row. The last time that happened was 60 years ago. And if the umpire does decide that the recession ended last December, this would mark the first time since the 1920s that the stock market has failed to rise during the first six months of an economic recovery."
CNET: Billpoint failure a lesson for eBay? "Analysts say Billpoint failed because of a poor business plan, aggressive competition from PayPal, and hostility from eBay sellers."