A laptop (also known as a notebook) is a personal computer designed for mobile use small enough to sit on one's lap.[1] A laptop includes most of the typical components of a desktop computer, including a display, a keyboard, a pointing device (a touchpad, also known as a trackpad, or a pointing stick), speakers, as well as a battery, into a single small and light unit. The rechargeable battery required is charged from an AC/DC adapter (aka, a wall wart) and typically stores enough energy to run the laptop for several hours.
Laptops are usually shaped like a large notebook with thicknesses between 0.7–1.5 inches (18–38 mm) and dimensions ranging from 10x8 inches (27x22cm, 13" display) to 15x11 inches (39x28cm, 17" display) and up. Modern laptops weigh 3 to 12 pounds (1.4 to 5.4 kg); older laptops were usually heavier. Most laptops are designed in the flip form factor to protect the screen and the keyboard when closed. Modern 'tablet' laptops have a complex joint between the keyboard housing and the display, permitting the display panel to twist and then lay flat on the keyboard housing. They usually have a touchscreen display and some include handwriting recognition or graphics drawing capability.
Laptops were originally considered to be "a small niche market and were thought suitable mostly for "specialized field applications" such as "the military, the Internal Revenue Service, accountants and sales representatives".[2][3] Battery-powered portable computers had just 2% worldwide market share in 1986[4]. But today, there are already more laptops than desktops in businesses, and laptops are becoming obligatory for student use and more popular for general use.[5] According to a forecast by Intel, more laptops than desktops will be sold in the general PC market as soon as
As the personal computer became feasible in the early 1970s, the idea of a portable personal computer followed. In particular, a "personal, portable information manipulator" was imagined by Harrison Beeby.
A desktop replacement computer is a laptop that provides most of the capabilities of a desktop computer, with a similar level of performance. Desktop replacements are usually larger and heavier than standard laptops. They contain more powerful components and numerous ports, and have a 15.4" or larger display. Because of their bulk, they are not as portable as other laptops and their operation time on batteries is typically shorter
Some laptops in this class use a limited range of desktop components to provide better performance for the same price at the expense of battery life; in a few of those models, there is no battery at all, and the laptop can only be used when plugged in. These are sometimes called desknotes, a portmanteau of the words "desktop" and "notebook," though the term can also be applied to desktop replacement computers in general.
In the early 2000s, desktops were more powerful, easier to upgrade, and much cheaper in comparison with laptops. But in the last few years, the advantages have drastically changed or shrunk since the performance of laptops has markedly increased.[13] In the second half of 2008, laptops have finally outsold desktops for the first time ever. In the U.S., the PC shipment declined 10 percent in the forth quarter of 2008. In Asia, the worst PC shipment growth went up 1.8 percent over the same quarter the previous year since PC statistics research started. [14]
Notebook
Although the term Notebook is now often used interchangeably with the term Laptop, it was originally introduced to differentiate a smaller, thinner and lighter range of devices (comparable with a traditional paper notebook) which supplanted their larger counterparts
The design features found in rugged laptops include rubber sheeting under the keyboard keys, sealed port and connector covers, passive cooling, superbright displays easily readable in daylight, cases and frames made of magnesium alloys or have a magnesium alloy rollcage[25] that are much stronger than plastic found in commercial laptops and solid-state storage devices or hard disc drives that are shock mounted to withstand constant vibrations. Rugged laptops are commonly used by public safety services (police, fire and medical emergency), military, utilities, field service technicians, construction, mining and oil drilling personnel. Rugged laptops are usually sold to organizations, rather than individuals,
Saturday, April 4, 2009
GLOBAL FINANCIAL CRISIS
Financial crisis of 2007–2009
The previous major financial crisis occurred in 1928 to 1933. A financial crisis occurs when there is a disorderly contraction in money supply and wealth in an economy. It is also known as a credit crunch. It occurs when participants in an economy lose confidence in having loans repaid by debtors. This causes lenders to limit further loans as well as recall existing loans.
The financial/banking system relies on credit creation as a result of debtors spending the money which in turn is 'banked' and loaned to other debtors. As a result a relative small contraction in lending can lead to a dramatic contraction in money supply. The Great Depression occurred after a dramatic expansion in debt and money supply in the roaring twenties. Total US private credit market debt as a percentage of GDP reached 250% in 1929. The next time debt exceeded this level in the USA was in 1999 reaching a peak of 350% prior to the bubble bursting.
A dramatic contraction then occurred between 1929 and 1933 as debt was defaulted upon and resulted in a 'contraction' in money and wealth. The debt deflation theory coined by Irving Fisher formed the basis of the regulation subsequently introduced by Congress.
The Glass-Steagall Act was passed by Congress in order to prevent this occurring again. It was found that financial firms encouraged debt to be invested in the stockmarket which then overheated the stockmarket. The act was designed to prevent this by separating the advising from the lending role of financial institutions. Following its repeal by Congress in 1999, institutions could advise and lend setting up a direct conflict of interest in many 'deals'.
The framework which created the great depression from a regulatory point of view were 're-created' by the repeal of this act. Financial firms could profit in the short term by simply setting up and lending on deals using others' money.
A sequence of rapid debt expansion occurred including a dot-com bubble, which was followed by an equity and housing bubble and then a commodity bubble. Without the debt expansion which measured $14 Trillion USD some analysts have argued that there would have been no economic growth in the USA between 1996 and 2006.
The Global financial crisis is the unwinding of the debt bubbles between 2007-2009.
Cause of the financial crisis
In August 2002 an analyst identified a housing bubble.[8] Dean Baker wrote that from 1953 to 1995 house prices had simply tracked inflation, but that when house prices from 1995 onwards were adjusted for inflation they showed a marked increase over and above inflation-based increases. Baker drew the conclusion that a bubble in the US housing market existed and predicted an ensuing crisis. It later proved impossible to convince responsible parties such as the Board of Governors of the Federal Reserve of the need for action.[dubious – discuss][9][10] Baker's argument was confirmed with the construction of a data series from 1895 to 1995 by the influential Yale economist Robert Shiller, which showed that real house prices had been essentially unchanged over that 100 years.[11]
A common claim during the first weeks of the financial crisis was that the problem was simply caused by reckless, sub-prime lending. However, the sub-prime mortgages were only part of a far more extensive problem affecting the entire $20 trillion US housing market: the sub-prime sector was simply the first place that the collapse of the bubble affecting the housing market showed up.
The ultimate point of origin of the great financial crisis of 2007-2009 can be traced back to an extremely indebted US economy. The collapse of the real estate market in 2006 was the close point of origin of the crisis. [12] The failure rates of subprime mortgages were the first symptom of a credit boom tuned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses.[13]
For many months before September 2008, many business journals published commentaries warning about the financial stability and risk management practices of leading U.S. and European investment banks, insurance firms and mortgage banks consequent to the subprime mortgage crisis.[14][15][16][17]
Beginning with failures caused by misapplication of risk controls for bad debts, collateralization of debt insurance and fraud, large financial institutions in the United States and Europe faced a credit crisis and a slowdown in economic activity.[18][19] The crisis rapidly developed and spread into a global economic shock, resulting in a number of European bank failures, declines in various stock indexes, and large reductions in the market value of equities[20] and commodities.[14] Moreover, the de-leveraging of financial institutions further accelerated the liquidity crisis and caused a decrease in international trade. World political leaders, national ministers of finance and central bank directors coordinated their efforts[21] to reduce fears, but the crisis continued. At the end of October a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund.[22][23]
[edit] The role of central banks
Economists of the Austrian School have proposed that the crisis is an excellent example of the Austrian Business Cycle Theory, in which credit created through the policies of central banking gives rise to an artificial boom, which is inevitably followed by a bust. Proponents of this theory have predicted the current financial crises, and argue that central banks should not be involved in debt markets.
The history of the yield curve from 2000 through 2007 illustrates the role that credit creation by the Federal Reserve may have played in the on-set of the financial crisis in 2007 and 2008. Treasury yield is one tool of monetary policy.
The yield curve (also known as the term structure of interest rates) is the shape formed by a graph showing US Treasury Bill or Bond interest rates on the vertical axis and time to maturity on the horizontal axis. When short-term interest rates are lower than long-term interest rates the yield curve is said to be “positively sloped”. This in turn encourages an expansion in money supply and in turn favours debt induced bubbles. When long-term interest rates are lower than short-term interest rates the yield curve is said to be “inverted”. This favours a contraction in money supply. When long term and short term interest rates are equal the yield curve is said to be “flat”. The yield curve is believed by some to be a strong predictor of recession (when inverted) and inflation (when positively sloped).
Other observers have doubted the role that monetary policy plays in controlling the business cycle. In a May 24, 2006 story CNN Money reported: “…in recent comments, Fed Chairman Ben Bernanke repeated the view expressed by his predecessor Alan Greenspan that an inverted yield curve is no longer a good indicator of a recession ahead.”
A positively sloped yield curve allows Primary Dealers (such as large investment banks) in the Federal Reserve system to fund themselves with cheap short term money while lending out at higher long-term rates. This strategy is profitable so long as the yield curve remains positively sloped. However, it creates a liquidity risk if the yield curve were to become inverted and banks would have to refund themselves at expensive short term rates while losing money on longer term loans.
Following the bursting of the Dot-com bubble in 2000 and the Stock market downturn of 2002 the US Federal Reserve reacted by sharply lowering short-term interest rates. The Fed lowered the Fed Funds target rate beginning in January 2001 at 6.5% to a nadir of 1% in June 2003. The Fed also held rates at this low level for an unusually long period of time (1yr) until June 2004. This prolonged period of stimulative Federal Reserve monetary policy created a very positively sloped yield curve. The yield on the 3-month T-bill reached its lowest point (0.88%) for the cycle in the late fall of 2003 while at the same time 30-year T-bond rates were in excess of 5%.
The inflationary effect of the prolonged period of a very positively sloped yield curve resulted in inflation of asset prices rather than a general increase in the price level of all goods and services. The reason this happened was likely due to the cheap goods that were imported from BRIC economies prevented any inflation. The excess money was channeled into various assets. Without a globalised economy this may not have happened. In particular, it led to a United States housing bubble that began to attract attention as early as 2002 but reached its peak in 2005.
In June 2004 the Fed began to slowly increase Fed Funds rates and the yield curve slowly narrowed. Fed Chairman Alan Greenspan notably described this narrowing of spreads between short term and long term rates as a “conundrum” during testimony in February 2005. The chairman expected long term rates to rise in line with short term rates. However, the tightening of monetary policy caused by rising short term rates was slowing the economy and reducing demand for long-term borrowing.
The Fed raised Fed Funds target rates to a peak of 5.25% in June 2006. By October 2006 the yield curve on 90-day T-bills vs 30-year T-bonds was essentially flat indicating neutral monetary policy (neither stimulative nor contractionary). While the Fed maintained Fed Funds rates at this high level, long term rates began to fall causing the yield curve to become more and more inverted. The yield curve was most strongly inverted in March 2007 when concern about current inflation was reaching its peak.
Commodity bubble
The narrowing of the yield curve from 2004 and the inversion of the yield curve during 2007 indicated a bursting of the housing bubble and a wild gyration of commodities prices as moneys flowed out of assets like housing or stocks. A commodity bubble was created following the collapse in the housing bubble. The price of oil rose to over $140 dollars per barrel in 2008 before plunging as the financial crisis began to take hold in late 2008. A similar bubble in oil prices has preceded other historical economic contractions.
Sub-prime lending
Based on the assumption that sub-prime lending precipitated the crisis, some have argued that the Clinton Administration may be partially to blame, while others have pointed to the passage of the Gramm-Leach-Bliley Act by the 106th Congress, and over-leveraging by banks and investors eager to achieve high returns on capital.
Some, like American Enterprise Institute fellow Peter J. Wallison[24], believe the roots of the crisis can be traced directly to sub-prime lending by Fannie Mae and Freddie Mac, which are government sponsored entities. On 30 September 1999, The New York Times reported that the Clinton Administration pushed for sub-prime lending: "Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people."
In 1995, the administration also tinkered with Carter's Community Reinvestment Act of 1977 by regulating and strengthening the anti-redlining procedures. It is felt by many[who?] that this was done to help a stagnated home ownership figure that had hovered around 65% for many years. The result was a push by the administration for greater investment, by financial institutions, into riskier loans. A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage credit poured out of CRA-covered lenders into low and mid level income borrowers and neighborhoods.[25]
Others have pointed out that there were not enough of these loans made to cause a crisis of this magnitude. In an article in Portfolio Magazine, Michael Lewis spoke with one trader who noted that "There weren’t enough Americans with (bad) credit taking out loans to satisfy investors’ appetite for the end product. (Investment banks and hedge funds) used (financial technology) to synthesize more of them. They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans."
On September 30, 1999 The New York Times said, referring to the Fannie Mae Corporation easing credit requirements on loans purchased from lenders: "In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
Deregulation
In 1992, the 102nd Congress weakened regulation of government sponsored enterprises Fannie Mae and Freddie Mac with the goal of making available more money for the issuance of home loans. The Washington Post wrote: "Congress also wanted to free up money for Fannie Mae and Freddie Mac to buy mortgage loans and specified that the pair would be required to keep a much smaller share of their funds on hand than other financial institutions. Where banks that held $100 could spend $90 buying mortgage loans, Fannie Mae and Freddie Mac could spend $97.50 buying loans. Finally, Congress ordered that the companies be required to keep more capital as a cushion against losses if they invested in riskier securities. But the rule was never set during the Clinton administration, which came to office that winter, and was only put in place nine years later."
Other deregulation efforts have also been identified as contributing to the collapse. In 1999, the 106th Congress passed the Gramm-Leach-Bliley Act, which repealed part of the Glass-Steagall Act of 1933. This repeal has been criticized for having contributed to the proliferation of the complex and opaque financial instruments which are at the heart of the crisis.
Over-leveraging, credit default swaps and collateralized debt obligations
For many months before September 2008, many business journals published commentaries warning about the financial stability and risk management practices of leading U.S. and European investment banks, insurance firms and mortgage banks consequent to the subprime mortgage crisis.
This began with failures caused by misapplication of risk controls for bad debts, collateralization of debt insurance and fraud.
Another probable cause of the crisis -- and a factor that unquestionably amplified its magnitude -- was widespread miscalculation by banks and investors of the level of risk inherent in the unregulated collateralized debt obligation and Credit Default Swap markets. Under this theory, banks and investors systematized the risk by taking advantage of low interest rates to borrow tremendous sums of money that they could only pay back if the housing market continued to increase in value.
The risk was further systematized by the use of David X. Li's Gaussian copula model function to rapidly price Collateralized debt obligations based on the price of related Credit Default Swaps.[32][33] This formula assumed that the price of Credit Default Swaps was correlated with and could predict the correct price of mortgage backed securities. Because it was highly tractable, it rapidly came to be used by a huge percentage of CDO and CDS investors, issuers, and rating agencies.[33] According to one wired.com article[33]: "Then the model fell apart. Cracks started appearing early on, when financial markets began behaving in ways that users of Li's formula hadn't expected. The cracks became full-fledged canyons in 2008—when ruptures in the financial system's foundation swallowed up trillions of dollars and put the survival of the global banking system in serious peril... Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees."
The pricing model for CDOs clearly did not reflect the level of risk they introduced into the system. It has been estimated that the "from late 2005 to the middle of 2007, around $450bn of CDO of ABS were issued, of which about one third were created from risky mortgage-backed bonds...[o]ut of that pile, around $305bn of the CDOs are now in a formal state of default, with the CDOs underwritten by Merrill Lynch accounting for the biggest pile of defaulted assets, followed by UBS and Citi."[34]
The average recovery rate for high quality CDOs has been approximately 32 cents on the dollar, while the recovery rate for mezzanine CDO's has been approximately five cents for every dollar. These massive, practically unthinkable, losses have dramatically impacted the balance sheets of banks across the globe, leaving them with very little capital to continue operations . [34]
Boom and collapse of the shadow banking system
In a June 2008 speech, U.S. Treasury Secretary Timothy Geithner, then President and CEO of the NY Federal Reserve Bank, placed significant blame for the freezing of credit markets on a "run" on the entities in the "parallel" banking system, also called the shadow banking system. These entities became critical to the credit markets underpinning the financial system, but were not subject to the same regulatory controls. Further, these entities were vulnerable because they borrowed short-term in liquid markets to purchase long-term, illiquid and risky assets. This meant that disruptions in credit markets would make them subject to rapid deleveraging, selling their long-term assets at depressed prices. He described the significance of these entities: "In early 2007, asset-backed commercial paper conduits, in structured investment vehicles, in auction-rate preferred securities, tender option bonds and variable rate demand notes, had a combined asset size of roughly $2.2 trillion. Assets financed overnight in triparty repo grew to $2.5 trillion. Assets held in hedge funds grew to roughly $1.8 trillion. The combined balance sheets of the then five major investment banks totaled $4 trillion. In comparison, the total assets of the top five bank holding companies in the United States at that point were just over $6 trillion, and total assets of the entire banking system were about $10 trillion." He stated that the "combined effect of these factors was a financial system vulnerable to self-reinforcing asset price and credit cycles."
Nobel laureate Paul Krugman described the run on the shadow banking system as the "core of what happened" to cause the crisis. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realized that they were re-creating the kind of financial vulnerability that made the Great Depression possible--and they should have responded by extending regulations and the financial safety net to cover these new institutions. Influential figures should have proclaimed a simple rule: anything that does what a bank does, anything that has to be rescued in crises the way banks are, should be regulated like a bank." He referred to this lack of controls as "malign neglect."[36]
Systemic crisis
Another analysis, different from the mainstream explanation, is that the financial crisis is merely a symptom of another, deeper crisis, which is a systemic crisis of capitalism itself. According to Samir Amin, an Egyptian economist, the constant decrease in GDP growth rates in Western countries since the early 1970s created a growing surplus of capital which did not have sufficient profitable investment outlets in the real economy. The alternative was to place this surplus into the financial market, which became more profitable than productive capital investment, especially with subsequent deregulation.[37] According to Samir Amin, this phenomenon has lead to recurrent financial bubbles (such as the internet bubble) and is the deep cause of the financial crisis of 2007-2009.[38]
John Bellamy Foster, a political economy analyst and editor of the Monthly Review, believes that the decrease in GDP growth rates since the early 1970s is due to increasing market saturation.[39]
Growth of the housing bubble
The housing bubble[40] grew up alongside the stock bubble of the mid-1990s. People who had increased their wealth substantially with the extraordinary run-up of stock prices were spending based on this increased wealth. This led to the consumption boom of the late 1990s, with the savings rate out of disposable income falling from five percent in the mid-90s to two percent by 2000. The stock-wealth induced consumption boom led people to buy bigger and/or better homes, since they sought to spend some of their new stock wealth on housing.
The next phase of the housing bubble was the supply-side effect of the dramatic increase in house prices, as housing starts rose substantially from the mid-1990s onwards. Baker notes that if the course of the bubble in the United States had followed the same pattern as in Japan, the housing bubble would have collapsed along with the collapse of the stock bubble between 2000-2002. Instead, the collapse of the stock bubble helped to feed the US housing bubble. After collectively losing faith in the stock market, millions of people turned to investments in housing as a safe alternative. In addition, the economy was very slow in recovering from the 2001 recession, the weakness of the recovery leading the Federal Reserve Board to continue to cut interest rates - one of numerous occasions where the Fed cut rates in response to a crisis, a pattern of behaviour that had, by that time, become known as a Greenspan put. Fixed-rate mortgages and other interest rates hit 50-year lows. To further fuel the housing market, Federal Reserve Board Chairman Alan Greenspan suggested that homebuyers were wasting money by buying fixed rate mortgages instead of adjustable rate mortgages (ARMs). This was peculiar advice at a time when fixed rate mortgages were near 50-year lows, but even at the low rates of 2003 homebuyers could still afford larger mortgages with the adjustable rates available at the time.
The bubble began to burst in 2007, as the building boom led to so much over-supply that prices could no longer be supported. Prices nationwide began to head downward, with this process accelerating through the fall of 2007 and into 2008. As prices decline, more homeowners face foreclosure. This increase in foreclosures is in part voluntary and in part involuntary. It can be involuntary, since there are cases where people who would like to keep their homes, who would borrow against equity if they could not meet their monthly mortgage payments. When falling house prices destroy equity, they eliminate this option. The voluntary foreclosures take place when people realize that they owe more than the value of their home, and decide that paying off their mortgage is in effect a bad deal. In cases where a home is valued far lower than the amount of the outstanding mortgage, homeowners may be able to simply walk away from their mortgage.
Irving Fisher's debt deflation theory
According to the debt deflation theory, a sequence of effects of the debt bubble bursting occurs:
1. Debt liquidation and distress selling.
2. Contractions of the money supply as bank loans are paid off.
3. A fall in the level of asset prices.
4. A still greater fall in the net worth of businesses, precipitating bankruptcies.
5. A fall in profits.
6. A reduction in output, in trade and in employment.
7. Pessimism and loss of confidence.
8. Hoarding of money.
9. A fall in nominal interest rates and a rise in deflation adjusted interest rates.
Global aspects
A number of commentators have suggested that if the liquidity crisis continues, there could be an extended recession or worse.[41] The continuing development of the crisis prompted fears of a global economic collapse.[42] The financial crisis is likely to yield the biggest banking shakeout since the savings-and-loan meltdown.[43] Investment bank UBS stated on October 6 that 2008 would see a clear global recession, with recovery unlikely for at least two years.[44] Three days later UBS economists announced that the "beginning of the end" of the crisis had begun, with the world starting to make the necessary actions to fix the crisis: capital injection by governments; injection made systemically; interest rate cuts to help borrowers. The United Kingdom had started systemic injection, and the world's central banks were now cutting interest rates. UBS emphasized the United States needed to implement systemic injection. UBS further emphasized that this fixes only the financial crisis, but that in economic terms "the worst is still to come".[45] UBS quantified their expected recession durations on October 16: the Eurozone's would last two quarters, the United States' would last three quarters, and the United Kingdom's would last four quarters.[46]
At the end of October UBS revised its outlook downwards: the forthcoming recession would be the worst since the Reagan recession of 1981 and 1982 with negative 2009 growth for the US, Eurozone, UK and Canada; very limited recovery in 2010; but not as bad as the Great Depression.[47]
It was widely argued that an international crisis required an international solution. In The Keynesian Resurgence of 2008 / 2009, the economist John Maynard Keynes was widely cited as providing the best insight into the kind of policy response required, including the need for international coordination of economic policy responses. Keynes recognised that a Fiscal stimulus in the presence of a financial crisis was unlikey to restore growth.
US aspects
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent. Real disposable personal income decreased 8.7 percent.[48]
Nouriel Roubini, professor of economics at New York University and chairman of RGE Monitor, predicted a recession of up to two years, unemployment of up to nine percent, and another 15 percent drop in home prices.[49] Moody's Investors Service continued in October 2008 to project increased foreclosures for residential mortgages originating in 2006 and 2007. These increases may result in downgrades of the credit rating of bond insurers Ambac, MBIA, Financial Guaranty Insurance Company, and CIFG.[50] The bond insurers, meantime, together with their insurance regulators, are negotiating with the Treasury regarding possible capital infusions or other relief under the $700 billion bailout plan. In addition to mortgage backed bonds, the bond insurers back hundreds of billions of dollars of municipal and other bonds. Thus, a ripple effect could spread beyond the mortgage sector should there be a major downgrade in credit ratings or failure of the companies.
Official prospects
On November 3, 2008, the EU-commission at Brussels predicted for 2009 an extremely weak growth of GDP, by 0.1 percent, for the countries of the Euro zone (France, Germany, Italy, etc.) and even negative number for the UK (-1.0 percent), Ireland and Spain. On November 6, the IMF at Washington, D.C., launched numbers predicting a worldwide recession by -0.3 percent for 2009, averaged over the developed economies. On the same day, the Bank of England and the Central Bank for the Euro zone, respectively, reduced their interest rates from 4.5 percent down to three percent, and from 3.75 percent down to 3.25 percent. Economically, mainly the car industry seems to be involved. As a consequence, starting from November 2008, several countries launched large "help packages" for their economies.
Political instability related to the economic crisis
This section's representation of one or more viewpoints about a controversial issue may be unbalanced or inaccurate.
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In January 2009 the government leaders of Iceland were forced to call elections two years early after the people of Iceland staged mass protests and clashed with the police due to the government's handling of the economy. Hundreds of thousands protested in France against President Sarkozy's economic policies. Prompted by the financial crisis in Latvia, the opposition and trade unions there organized a rally against the cabinet of premier Ivars Godmanis. The rally gathered some 10-20 thousand people. In the evening the rally turned into a Riot. The crowd moved to the building of the parliament and attempted to force their way into it, but were repelled by the state's police. In late February many Greeks took part in a massive general strike because of the economic situation and they shut down schools, airports, and many other services in Greece. Police and protesters clashed in Lithuania where people protesting the economic conditions were shot by rubber bullets. In addition to various levels of unrest in Europe, Asian countries have also seen various degrees of protest. Communists and others rallied in Moscow to protest the Russian government's economic plans. Protests have also occurred in China as demands from the west for exports have been dramatically reduced and unemployment has increased.
Beginning February 26, 2009 an Economic Intelligence Briefing was added to the daily intelligence briefings prepared for the President of the United States. This addition reflects the assessment of United States intelligence agencies that the global financial crisis presents a serious threat to international stability.[52]
Business Week in March 2009 stated that global political instability is rising fast due to the global financial crisis and is creating new challenges that need managing.[53] The Associated Press reported in March 2009 that: United States "Director of National Intelligence Dennis Blair has said the economic weakness could lead to political instability in many developing nations."[54] Even some developed countries are seeing political instability.[55] NPR reports that David Gordon, a former intelligence officer who now leads research at the Eurasia Group, said: "Many, if not most, of the big countries out there have room to accommodate economic downturns without having large-scale political instability if we're in a recession of normal length. If you're in a much longer-run downturn, then all bets are off."[56]
Financial markets impacts
2007 bank run on Northern Rock, a UK bank
One of the first victims was Northern Rock, a medium-sized British bank.[57] The highly leveraged nature of its business led the bank to request security from the Bank of England. This in turn led to investor panic and a bank run in mid-September 2007. Calls by Liberal Democrat Shadow Chancellor Vince Cable to nationalise the institution were initially ignored; in February 2008, however, the British government (having failed to find a private sector buyer) relented, and the bank was taken into public hands. Northern Rock's problems proved to be an early indication of the troubles that would soon befall other banks and financial institutions.
Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial. Financial institutions which had engaged in the securitization of mortgages such as Bear Stearns then fell prey. Later on, Bear Stearns was acquired by JP Morgan Chase through deliberate assistance from the US government. Its stock price plunged to $3 in reaction to the buyout offer of $2 by JP Morgan Chase, well below its 52 week high of $134. Subsequently, the acquisition price was raised to $10 by JP Morgan. On July 11, 2008, the largest mortgage lender in the US, IndyMac Bank, collapsed, and federal regulators seized its assets after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures. That day the financial markets plunged as investors tried to gauge whether the government would attempt to save mortgage lenders Fannie Mae and Freddie Mac, which it did by placing the two companies into federal conservatorship on September 7, 2008 after the crisis further accelerated in late summer.
See also: Federal takeover of Fannie Mae and Freddie Mac
The media have repeatedly argued that the crisis then began to affect the general availability of credit to non-housing related businesses and to larger financial institutions not directly connected with mortgage lending. While this is true, the reasons given in media reporting are usually inaccurate. Dean Baker has repeatedly explained the actual, underlying problem:
"Yes, consumers and businesses can't get credit as easily as they could a year ago. There is a really good reason for tighter credit. Tens of millions of homeowners who had substantial equity in their homes two years ago have little or nothing today. Businesses are facing the worst downturn since the Great Depression. This matters for credit decisions. A homeowner with equity in her home is very unlikely to default on a car loan or credit card debt. They will draw on this equity rather than lose their car and/or have a default placed on their credit record. On the other hand, a homeowner who has no equity is a serious default risk. In the case of businesses, their creditworthiness depends on their future profits. Profit prospects look much worse in November 2008 than they did in November 2007 (of course, to clear-eyed analysts, they didn't look too good a year ago either). While many banks are obviously at the brink, consumers and businesses would be facing a much harder time getting credit right now even if the financial system were rock solid. The problem with the economy is the loss of close to $6 trillion in housing wealth and an even larger amount of stock wealth.
The New York City headquarters of Lehman Brothers.
Economists, economic policy makers and economic reporters virtually all missed the housing bubble on the way up. If they still can't notice its impact as the collapse of the bubble throws into the worst recession in the post-war era, then they are in the wrong profession."
At the heart of the portfolios of many of these institutions were investments whose assets had been derived from bundled home mortgages. Exposure to these mortgage-backed securities, or to the credit derivatives used to insure them against failure, threatened an increasing number of firms such as Lehman Brothers, AIG, Merrill Lynch, and HBOS.
Other firms that came under pressure included Washington Mutual, the largest savings and loan association in the United States, and the remaining large investment firms, Morgan Stanley and Goldman Sachs.[62][63]
The crisis rapidly developed and spread into a global economic shock, resulting in a number of European bank failures, declines in various stock indexes, and large reductions in the market value of equities[64] and commodities.[14] Moreover, the de-leveraging of financial institutions further accelerated the liquidity crisis and caused a decrease in international trade. World political leaders, national ministers of finance and central bank directors coordinated their efforts[65] to reduce fears, but the crisis continued. At the end of October a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund.[22][23]
Risks and regulations
As financial assets became more and more complex, and harder and harder to value, investors were reassured by the fact that both the international bond rating agencies and bank regulators, who came to rely on them, accepted as valid some complex mathematical models which theoretically showed the risks were much smaller than they actually proved to be in practice [66]. George Soros commented that "The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility." [67]
FOREX BROKERAGE
FOREX BROKERAGE
Now, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
Contents
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives. Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account. FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06,
Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[5] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
Unlike a stock market, where all participants have access to the same prices, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the “line” (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.
Retail foreign exchange brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchange scams.[7][8] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.
Internal, regional, and international political conditions and events can have a profound effect on currency markets.
All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in India, Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
Now, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
Contents
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives. Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account. FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06,
Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[5] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
Unlike a stock market, where all participants have access to the same prices, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the “line” (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.
Retail foreign exchange brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchange scams.[7][8] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.
Internal, regional, and international political conditions and events can have a profound effect on currency markets.
All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in India, Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
ONLINE BANK
Online banking or Internet banking
Features(important)
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.
The common features fall broadly into several categories
Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
Electronic bill presentment and payment - EBPP
Funds transfer between a customer's own checking and savings accounts, or to another customer's account
Investment purchase or sale
Loan applications and transactions, such as repayments
Non-transactional (e.g., online statements, check links, cobrowsing, chat)
Bank statements
Financial Institution Administration - features allowing the financial institution to manage the online experience of their end users
ASP/Hosting Administration - features allowing the hosting company to administer the solution across financial institutions
Features commonly unique to business banking include
Support of multiple users having varying levels of authority
Transaction approval process
Wire transfer
Features commonly unique to Internet banking include
Personal financial management support, such as importing data into a personal finance program such as Quicken, Microsoft Money or TurboTax. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions...
History
The precursor for the modern home online banking services were the distance banking services over electronic media from the early '80s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services[1] using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used.
The UK’s first home online banking services[2] was set up by the Nottingham Building Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2007-12-14.). The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Homelink') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly.
Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994.
Security
Security token devices
Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking.
The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using a security token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed.
Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation.
Attacks
Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information.
A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background.
A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states.[4]
Features(important)
Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.
The common features fall broadly into several categories
Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)
Electronic bill presentment and payment - EBPP
Funds transfer between a customer's own checking and savings accounts, or to another customer's account
Investment purchase or sale
Loan applications and transactions, such as repayments
Non-transactional (e.g., online statements, check links, cobrowsing, chat)
Bank statements
Financial Institution Administration - features allowing the financial institution to manage the online experience of their end users
ASP/Hosting Administration - features allowing the hosting company to administer the solution across financial institutions
Features commonly unique to business banking include
Support of multiple users having varying levels of authority
Transaction approval process
Wire transfer
Features commonly unique to Internet banking include
Personal financial management support, such as importing data into a personal finance program such as Quicken, Microsoft Money or TurboTax. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions...
History
The precursor for the modern home online banking services were the distance banking services over electronic media from the early '80s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. ‘Home banking’ can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city’s major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services[1] using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used.
The UK’s first home online banking services[2] was set up by the Nottingham Building Society (NBS) in 1983 ("History of the Nottingham". Retrieved on 2007-12-14.). The system used was based on the UK's Prestel system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system (known as 'Homelink') allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly.
Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in Oct, 1994.
Security
Security token devices
Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Basically there exist two different security methods for online banking.
The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. The most secure way of using TANs is to generate them by need using a security token. These token generated TANs depend on the time and a unique secret, stored in the security token (this is called two-factor authentication or 2FA). Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed.
Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation.
Attacks
Most of the attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information.
A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background.
A recent FDIC Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states.[4]
PRIVATE JETS
Private Jets Private Jets is a power pop quartet from Sweden, founded in 2001 by twin brothers Erik Westin and Per Westin.
The band started out as a song writing project, the brothers curious to see if they could mix their influences of pop, rock and jazz into their own brand of power pop with ambigious lyrics and smart arrangements. When pushed by pop enthusiasts to record some of the songs, they realized that they had to put a band together. Janne Hellman was recruited as lead vocalist together with Mikael Olsson on bass, Olsson who had previous worked with the brothers in the hi-speed pop outfit Revolver Bop Agents.
First release Private Jets released the debut EP “A Four Leaf Clover in E-Major” on May 27, 2002 on Sparkplug Records. It contained four songs and a short snippet and was well received by the power pop community. The songs were written, arranged, produced and to a large extent performed by the brothers. Lead vocals was provided by Janne Hellman on all tracks and Olsson played bass on the song Millionseller.
In a radio interview on Swedish Radio, Erik Westin explained that the band were basically writing what they wanted to hear but couldn’t really seem to find anywhere. He also said that the ambition with the band is to write the ultimate pop song over and over again.
Second release After the release of “A Four Leaf Clover in E-Major” the brothers started to work on a new album. The band bio states that they wrote 43 new songs to be able to make an album filled with singles only. It says that they would strive for nothing less than power pop perfection. Of the songs written, the band chose to record twelve, and the result can be heard on the album “Jet Sounds”, released on May 26, 2008.
Voices about Jet Sounds
”Swedish power pop has a great rep. Bands like Private Jets merely confirms why. Believe me, listening to this talented quartet, will leave you with a sugar rush. Throwing in every pop cliche in the book, from show tunes to Jellyfish riffs, enveloped with high-octane harmonies, toe-tapping rhythms, sensual chord changes and sweet sweet tunes, Private Jets don’t give pop junkies much of a chance of losing the habit. And the Beach Boys references are not limited to the album title - I mean, The Fire Academy contains jazz vocal arrangements that Brian Wilson himself would be impressed with. Elsewhere, you will catch the McCartney inflections (Jet!) on tracks like I Wanna Be A Private Jet, Speak Up, Speak Out and Starshaped World. If you’ve got the McCartney/Wilson camp on your side, chances are that the pop underground will adopt you as its own. Beyond that, I don’t know but anyone with a sweet tooth will find it hard to
MORTGAGES
A mortgage is the transfer of an interest in property (or in law the equivalent - a charge) to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is lender's security for a debt. It is a transfer of an interest in land (or the equivalent), from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
The term comes from the Old French "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.
In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than other property (such as ships) and in some jurisdictions only land may be mortgaged. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.
The measurement of a mortgage with regards to cost to the borrower can be measured by Annual Percentage Rate (APR) or many other formulas for true cost such as Lender Police Effective Annual Rate (LPEAR).In many countries it is normal for home purchases to be funded by a mortgage. In countries where the demand for home ownership is highest, strong domestic markets have developed, notably in Spain, the United Kingdom, Australia .
The term comes from the Old French "dead pledge," apparently meaning that the pledge ends (dies) either when the obligation is fulfilled or the property is taken through foreclosure.
In most jurisdictions mortgages are strongly associated with loans secured on real estate rather than other property (such as ships) and in some jurisdictions only land may be mortgaged. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property.
The measurement of a mortgage with regards to cost to the borrower can be measured by Annual Percentage Rate (APR) or many other formulas for true cost such as Lender Police Effective Annual Rate (LPEAR).In many countries it is normal for home purchases to be funded by a mortgage. In countries where the demand for home ownership is highest, strong domestic markets have developed, notably in Spain, the United Kingdom, Australia .
FOREX
The foreign exchange (currency, forex or FX) market is where currency trading takes place. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continuously growing. Traditional turnover was reported to be over US$ 3.2 trillion in April 2007 by the Bank for International Settlement. [1] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.
Central banks
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high — that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.[5] Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.
Hedge funds
Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.
Investment management firms
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.
Retail forex brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail forex brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail forex brokers, while largely controlled and regulated by the CFTC and NFA might be subject to forex scams[6] [7]. At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that
Central banks
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high — that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.[5] Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.
Hedge funds
Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.
Investment management firms
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.
Retail forex brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail forex brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail forex brokers, while largely controlled and regulated by the CFTC and NFA might be subject to forex scams[6] [7]. At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that
INDUSTRIAL COMPUTERS
Industrial & Commercial Terminals
Our rugged human machine interfaces (HMIs) are available in a variety of customizable configurations, and are built to withstand a wide range of environmental conditions. Available configuration features include: handheld, panel-mount or pedestal-mount housings, character or graphic display types, resistive touch screen or tactile keypads, serial, Ethernet and/or Power-over-Ethernet and NEMA 4/12/13 sealing. Many additional options are available allowing you to configure an operator interface terminal to meet your specific needs.
Limits of the Industrial Computer
Posted on Friday March 6th, 2009 at 03:00 in computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial digital signage, industrial display, industrial displays, industrial lcd monitor
Industrial computers face a difficult task. Many are required to work in areas contaminated with the very things that sensitive electronics hate: dust, water, dirt, grease, grime, excessive temperatures and heavy impacts. For these reasons industrial...
Industrial Computer – Using Industrial Computer Enclosures
Posted on Wednesday March 4th, 2009 at 03:00 in computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial digital signage, industrial display, industrial displays, industrial lcd monitor
Industrial computing can be problematic. Often industrial areas contain elements that drastically shorten the life of a conventional desktop PC. An obvious solution if an intrinsically sealed industrial computer but these are extremely expensive and ...
Protective Computer Cabinet for Industrial Applications
Posted on Monday March 2nd, 2009 at 06:32 in computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial digital signage, industrial display, industrial displays, industrial lcd monitor
Whilst a conventional desktop computer may be all that is required to control a manufacturing process, traditionally they have been unable to operate in industrial conditions due to the various hazardous elements present. Computer cabinets that prot...
Industrial Computers – Time for a Change?
Posted on Wednesday February 25th, 2009 at 03:00 in computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial display, industrial displays, industrial lcd monitor, industrial monitor
The industrial PC has possibly been around as the office computer. For generations industry has been automating processes using an industrial computer workstation to control production. The industrial computer UK industry has for many years provided ...
Protecting Digital Signage in Outdoor Locations and Hazardous Areas
March 9th, 2009
Digital signage is currently the fastest form of advertising with the market expecting to double over the next few years. Thanks to the falling costs of displays such as LCD monitors or plasma screens, digital signage is now cheaper than ever.
It is not just for indoor applications either with more and more companies opting to use digital signage in outdoor locations and for industrial applications. The only challenge in using digital advertising in these locations is protecting the LCD screen or plasma display from the hazardous elements, temperatures and being left in public areas.
Fortunately many manufacturers of industrial computer enclosures are now turning their attention to this growing market and are now producing LCD and monitor enclosures ideal for industrial and outdoor locations.
These plasma and LCD enclosures are often designed to the same European and international guidelines as industrial enclosures protecting them to IP65 (waterproof) and IP54 (dustproof) and the NEMA 4 equivalent.
Constructed from mild or stainless steel these LCD enclosures are also designed to prevent vandalism and theft allowing the digital signage to be left unattended in public areas or in outdoor locations.
Whether you have urgent information you need to get across, products you need to push or simply want to find new ways to get your message across digital signage using a LCD enclosure could be the perfect solution for your business.
Limits of the Industrial Computer
March 6th, 2009
Industrial computers face a difficult task. Many are required to work in areas contaminated with the very things that sensitive electronics hate: dust, water, dirt, grease, grime, excessive temperatures and heavy impacts.
For these reasons industrial computers are built as ruggedly as possible. Often they are solid state (without moving parts) and intrinsically sealed to prevent dust and water ingress. This causes problems when the machine needs to be repaired often forcing shut down of production lines until a service engineer has arrived to fix the unit.
For this reason many industrial computers are fitted with old but tried and tested technology. Whilst these components and software are reliable it does mean that the average industrial computer is generations behind their desktop counterparts.
This often means that industrial computer administrators have to weigh up the cost of upgrade with the cost of downtime and often find the industrial computer is not economically viable enough to be upgraded.
An Industrial computer enclosure gets around this problem by simply housing a normal desktop PC in a protective industrial cabinet. They afford the exact same protection as a normal industrial machine, protecting against dust, dirt, water and temperatures etc but offer the flexibility to repair or upgrade the units when it needs it.
Tags: computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial digital signage, industrial display, industrial displays, industrial lcd monitor, industrial monitor, industrial pc, industrial pc enclosure, industrial pc enclosures, industrial pcs, industrial touch screen, industrial touch screen pc, industrial touchscreen, lcd cabinet, lcd enclosure, lcd enclosures, monitor enclosure, outdoor plasma enclosure, pc enclosure, plasma enclosure, plasma enclosures, plasma screen enclosure, waterproof pc
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Industrial Computer – Using Industrial Computer Enclosures
March 4th, 2009
Industrial computing can be problematic. Often industrial areas contain elements that drastically shorten the life of a conventional desktop PC. An obvious solution if an intrinsically sealed industrial computer but these are extremely expensive and the area in question or the task it is required to do may not merit it.
Also industrial computers are often intrinsically sealed units are fitted with older components and software versions. This is done to ensure reliability but it can be infuriating if the industrial computer it is not running your applications as efficiently as a standard PC despite costing ten times the price.
Another problem with an industrial computer is there very design. They tend to be solid state and intrinsically sealed an engineer needs to be called of the fail, need upgrading or replacing, which could cost in downtime.
Industrial computer enclosures are an ideal solution for those wanting to use computers for industrial applications. They are just as protective as industrial computers, many of which are even rated according to European IP rating and the International NEMA equivalent, but as they contain a standard PC this can be changed, repaired or replaced extremely easily avoiding the problems of downtime.
Tags: computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial digital signage, industrial display, industrial displays, industrial lcd monitor, industrial monitor, industrial pc, industrial pc enclosure, industrial pc enclosures, industrial pcs, industrial touch screen, industrial touch screen pc, industrial touchscreen, lcd cabinet, lcd enclosure, lcd enclosures, monitor enclosure, outdoor plasma enclosure, pc enclosure, plasma enclosure, plasma enclosures, plasma screen enclosure, waterproof pc
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Protective Computer Cabinet for Industrial Applications
March 2nd, 2009
Whilst a conventional desktop computer may be all that is required to control a manufacturing process, traditionally they have been unable to operate in industrial conditions due to the various hazardous elements present.
Computer cabinets that protect from these hazardous elements have been designed to allow standard computer hardware to be used in the most hostile environments. The main problem of using computer equipment n industrial areas has been the high prevalence of dust.
Dust has multiple affects on computers; it clogs up filters and hard drives and also acts as an insulator causing the machine to overheat. Dust can also short circuit printed circuit boards, particularly if the dust contains conductive material.
Other elements in industrial areas exist also such; in some industrial environments such as food production areas water is used liberally to wash down equipment and work areas. Even the smallest splash of water is enough to permanently disable an office computer.
Industrial computer cabinets are designed to keep out the dust and dirt prevalent in industrial areas and to allow a standard office suited computer to be used in a manufacturing or production environment.
Industrial computer cabinets can offer other protection too. Most are built from steel and can protect from heavy impact and sudden shocks such as a careless forklift driver but also they can be built with additional cooling or heating to allow the enclosure and standard office computer to be used in areas where there are extreme operating temperatures.
Industrial computer enclosures can be built from food grade stainless steel but also can adhere to European and International guidelines such as NEMA 4 (National Electrical Manufacturers) IP 65 (European Rating for ingress protection).
Industrial computer cabinets allow you take standard office grade computer equipment on to the shop floor; safely and practicably, allowing greater flexibility and cost saving than a standard industrial computer.
Industrial Computers – Time for a Change?
February 25th, 2009
The industrial PC has possibly been around as the office computer. For generations industry has been automating processes using an industrial computer workstation to control production. The industrial computer UK industry has for many years provided reliable machinery for businesses wanting to have automation on their shop floors.
But industrial Computers and other industrial PCs come with a price especially when it comes to upgrading. Any production line that is down for even a short amount of time will lose a company money and when it comes to repair or upgrade of industrial computer systems that downtime can be solely reliant on a service engineer who will be needed to reinstall or repair an older unit.
Industrial PC enclosures work in a totally different way. These industrial PC cabinets are designed to house any standard PC. A combination of keyboard, monitor , computer , touch screen and even a printer can be installed in these industrial computer enclosures.
These industrial PC cabinets are designed to shield the standard PC’s from the hazardous elements such as dust, dirt, water, grease and oil that are so prevalent in industrial areas.
An industrial PC enclosure will offer greater flexibility than a conventional industrial computer workstation allowing you to repair, upgrade, replace or move a system when you want to without the fear of losing essential production time.
Tags: computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial display, industrial displays, industrial lcd monitor, industrial monitor, industrial pc, industrial pc enclosure, industrial pc enclosures, industrial pcs, industrial touch screen, industrial touch screen pc, industrial touchscreen, lcd cabinet, lcd enclosure, lcd enclosures, monitor enclosure, outdoor plasma enclosure, pc enclosure, plasma enclosure, plasma enclosures, plasma screen enclosure, waterproof pc
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Industrial Display Solutions
February 23rd, 2009
An industrial PC or standard computers kept in an industrial PC enclosure are quite commonly used in industrial applications, the industrial computer or the PC cabinet can protect a PC from the elements. They can also be placed out of the way, ensuing that are well defended from the hazardous elements.
However, industrial displays or an industrial touch screen PC cannot be stashed away. The very nature of an industrial touchscreen, industrial LCD monitor, industrial TFT or other industrial displays and industrial monitors mean they have to be seen.
Industrial touchscreens have long been the preferred method of industrial displays primarily because they do away with the need for a separate keyboard and/or mouse. However, the dramatic decline in cost of plasma screens or LCD monitors mean they are now being utilised in shop floor environments.
However, these devices are not well equipped to deal with the hostile elements of an industrial environment and need to be protected. This is why LCD and industrial plasma enclosures have been developed to house these display types. Such is the dramatic decrease in cost of the technology that industrial plasma and industrial LCD enclosures are now being used as a method of digital signage and these industrial enclosures offer the ideal solution for any industrial or outdoor digital signage needs.
Tags: computer enclosure, enclosure with lcd, enclosures for plasma, industrial computer, industrial computer uk, industrial computer workstation, industrial computers, industrial computers uk, industrial display, industrial displays, industrial lcd monitor, industrial monitor, industrial pc, industrial pc enclosure, industrial pc enclosures, industrial pcs, industrial touch screen, industrial touch screen pc, industrial touchscreen, lcd cabinet, lcd enclosure, lcd enclosures, monitor enclosure, outdoor plasma enclosure, pc enclosure, plasma enclosure, plasma enclosures, plasma screen enclosure, waterproof pc
FX TRADING
Foreign exchange market
(Redirect Forex Trading)
The foreign exchange market (currency, forex, or FX) market is where currency trading takes place. of foreign currenciesFX transactions …
Exchange ratesCurrency band Exchange rateExchange rate regimeFixed exchange rateFloating exchange rateLinked exchange rate
MarketsForeign exchange marketFutures exchangeRetail forex
ProductsCurrencyCurrency futureNon-deliverable forwardForex swapCurrency swapForeign exchange option
See alsoBureau de change
The foreign exchange market (currency, forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Now, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives. Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account. FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).
Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[5] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.
Retail foreign exchange brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchange scams.[7][8] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.
Non-bank Foreign Exchange Companies
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.
It is estimated that in the UK, 14% of currency transfers/payments[9] are made via Foreign Exchange Companies.[10] These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
(Redirect Forex Trading)
The foreign exchange market (currency, forex, or FX) market is where currency trading takes place. of foreign currenciesFX transactions …
Exchange ratesCurrency band Exchange rateExchange rate regimeFixed exchange rateFloating exchange rateLinked exchange rate
MarketsForeign exchange marketFutures exchangeRetail forex
ProductsCurrencyCurrency futureNon-deliverable forwardForex swapCurrency swapForeign exchange option
See alsoBureau de change
The foreign exchange market (currency, forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.
Now, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.
As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%. In addition to "traditional" turnover, $2.1 trillion was traded in derivatives. Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account. FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).
Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[5] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.
Retail foreign exchange brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchange scams.[7][8] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.
Non-bank Foreign Exchange Companies
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.
It is estimated that in the UK, 14% of currency transfers/payments[9] are made via Foreign Exchange Companies.[10] These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
FOREX FUTURE TRADING PLATFORM
FOREX FUTURE TRADING PLATFORM
MetaTrader 4 is an online trading platform designed for financial institutions dealing with Forex, CFD, and Futures markets.
The platform includes all necessary components for brokerage services via internet including the back office and dealing desk.
Currently, over 250 brokerage companies and banks worldwide have chosen our solution to meet their high standards of business performance.
A trading system (TS) is a set of instructions which advise opening or closing trading positions based on the results of technical analysis. A trading system allows to exclude randomness in the trading process. Strict adherence to the system permits to rule out the emotional factor in the trade. For this reason, one must follow all recommendations of the system strictly even if for all that a potentially profitable position will not be opened.
The first thing you need to do when creating a trading system is to select time periods, or working timeframes, you will work with. A lot of restrictions in this respect come from the starting deposit and principles of capital management. Long-term periods are accompanied by lesser "financial noise" than shorter periods. Technical analysis performed for long term periods is more accurate and provides a lesser number of false incitements. Long-term periods are preferable in terms of successful working, but, however, they require a larger starting deposit. Shorter timeframes are characterized by greater noise, but, hence, the technical analysis is less accurate and gives out more false signals.
In cases of a modest starting deposit, it is not recommended to direct one’s attention in trading to long timeframes, it is better to try medium and short ones first. On longer time periods price fluctuations are not as evident, but, in fact, these fluctuations may be significant enough so as to "eat up" the entire starting deposit. Thus, the first restriction for the trading system is the starting deposit that determines the choice of the working timeframe. Please bear in mind that the settings of analytical instruments for each of the periods are to be selected individually. Besides, if performing analysis for short timeframes, the requirements to the analytical instruments have to be as exacting as possible.
The second task of the trading system is to define the entry point with the help of technical analysis. In any TS, irrespective of analytical instruments, the analysis must be started from a large timeframe and pass gradually to shorter ones. The first thing to be defined is the current market conditions as a whole.
For instance, if our trade is guided by the trend, we first determine the global trend. Even if a signal to buy comes at the time of a downward trend, a position should not be opened in such a trading system.
After that, the market conditions for periods of lesser order are analyzed. Eventually, the working timeframe is analyzed. If there appears a signal confirmed on long timeframes, one can open position immediately. However, to define the optimal entry point one can perform additional analysis on shorter timeframes.
The most important task of TS’s is to determine the exit point. Any system must provide not only the signal to open a position, but estimated levels of profit, as well. Order Take Profit should be placed next to this level. It is also necessary to identify the level of stop loss for the case when the market starts to move in an opposite direction. Place the Stop Loss order at this level. In other words, the TS must define exactly, up till which level the position should be held open in order to receive maximal profit, and define mechanisms for loss stopping in case of an unfavorable development of the market.
GLOBAL HEALTH INSURENCE
Global Health Insurance
We provide you with advice, quotes and comparisons to help you to choose the right medical plan. Find out more about our service.
Interested in a quote?
Click Here to Receive a Free Quote from our team.
Buying the right International Medical Insurance Plan
To ensure you make the right informed decision, our expert advisors study the global health insurance market so they can quickly give you personalised, comparative quotes. We will also help you to understand the different types of medical coverage, making your choice as transparent and as easy as possible.
Global Health Insurance Companies
We work with the most respected and trusted International Medical Insurers who are dedicated to servicing the needs of the growing worldwide expatriate population. Our long term relationships with them have been built on trust, and we can often obtain more competitive quotes than if you went direct to the insurer.
Global Expertise and Local Knowledge
Plans are most important in China, Hong Kong, UAE, Dubai, Singapore, Thailand, Japan, and the USA. As insurance brokers, we have specialist knowledge of all the major countries and can advise you on the best coverage wherever you live.International Medical Plans for TeachersWorking in an international school, wherever you may be in the world, expat health cover can no longer be viewed as a luxury, it is an absolute necessity. The last thing you will want to do is to take a chance on medical cover overseas. We all value our health and it makes sense for us to take care of it by taking out expat health cover.
Working at an International School means that you can buy an International Medical Plan for Teachers. These plans are very good value for money and have lots of advantages. For an overview of the Teacher Medical Plan advantages click the link.
Our medical consultants can provide you with information and quotes on expat health cover with discounted rates for teachers and staff of international schools. Our expat health cover for teachers is flexible and comprehensive, cover can be chosen in one of four regions:
Worldwide
Worldwide excluding USA
Europe
Australia and New Zealand
At one of three levels of cover:
Teachers /Plans
Hi, My mom will be coming from north africa to visit me in the USA and stay for acouple of weeks. Recently she has been having a heavy hand and legs feeling. She has been prescribed a medication that is usualy prescribed for patients with mild parkinson's. I would like to get some second opinion and test(scans) performed on her in the USA. I don't think that she has parkinson's and I would like to confirn this in a center/hospital that I trust. My mom has an inssurance coverage with mutuelle Maroc,which is a partner with SwissLife and AXA. I wonder if she can get an international coverage with your company that will covers specialist evaluation, MRI, and oether scans if necessary. Thank you
Hi, We (Doanldson Europe BVBA in Belgium) are looking for a hosptal & medical insurance for one of our families (family van den Enden) we are relocating to Brockville, Canada. Up till now we haven't found an insurance compay willing to cover the pre-existing condition of Mrs. van den Enden which is bronchial asthma. Would you be able to offer us a solution with an insurance who is willing to cover also the pre-existing condition. Thanks in advance for your reply, Veerle Matthijs
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