July 2015 - The Bottom Line
LIGHTS OUT AT THE NYSE - Here's
why it was a nonevent
GREEK TRAGEDY OR MYTH Explaining the never ending Euro
Zone crisis
CHINESE STOCK SELL OFF - A
sharp rise followed by a steep
drop...did someone say 'bubble'?
TECH TALK - How to play it safe
and protect yourself from fraud
THE BEST WAY TO MANAGE YOUR
SOCIAL SECURITY ACCOUNT - and
it's all online!
Tech Talk
The New York Stock Exchange
shuts down for 4 hours due to a
Simple steps to play it
safe on the web
'glitch'
Here's why it had no impact on trading
On July 8th all trading on the NYSE came to a halt for nearly 4
hours due to a computer glitch - but it had practically no impact
on the trading of U.S. stocks. How could this be?
Stocks are now traded elsewhere
1. Clicking something you
In 1997 the NYSE and NASDAQ handled over 80% of stock
shouldn't:
trading volume
according to
The first rule is don't click any links if
Bloomberg data.
you receive an email that looks
Today there are
suspicious. Instead, log into the site
about a dozen
independently to verify the email
exchanges and
request.
over 40 private
trading venues,
2. Be careful of public Wi-Fi
commonly called dark pools. Stock trading today is done over
systems:
computer networks and is no longer concentrated in one place.
As a result, the NYSE typically handles about 24% of trading
A hacker could set up a mirroring Wi-
volume these days. The outage was covered as a major news
Fi system with the same name as a
event but trading continued on other exchanges.
connection you intended to use
('Starbucks guest Wi-Fi' for example).
Once you type in a password while on
the mirroring system, your accounts
could be compromised. It's better to
access everything through an online
virtual private network (VPN), which
Everything you wanted to know
about Greece but were afraid to ask
will encrypt your communications.
Problem solved or more trouble to come?
3. Change router passwords:
The past few weeks
When you buy a router, you should
have seen a repeat of
change the default password
the Greek debt crisis
immediately and avoid buying a router
threatening to unravel
off of eBay. Situations have occurred
the European currency
not long ago where criminals bought
union and potentially
hundreds of Linksys routers and
unleash a wave of
reconfigured them to capture
uncertainty upon
everything that goes through them.
financial markets. Recently, an agreement appears to have been
reached to maintain the status quo which came as great relief to
4. Use a password manager:
investors. However, was anything really solved or did the can get
kicked down the road once again?
A password manager will help you
remember your passwords
How did we get here?
and makes it easier for you to use
Greece became the focus of attention shortly after the stock
unique logins for your different
systems, so if a hacker manages to
get one password, your other logins
aren't compromised.
5. Use common sense with free
apps:
Even something as simple and
seemingly harmless as a free phone
app can be treacherous. You have to
market meltdown of 2008. By 2009, the future of our financial
markets were still suffering and Greece announced that they had
been understating their deficit figures for years. Soon after that
Greece was heading towards bankruptcy which threatened
another run on financial markets. By 2010 Greece received a
bailout package equivalent to $264 billion but it came with strings
attached - harsh austerity, belt tightening and tax reform.
If Greece is receiving billions in bailout money, why is there
still a crisis? Critics claim that the bailout money went to
insuring that Greek international loans would be paid rather than
ask yourself, how does a company
injecting funds into the sluggish economy. The Greek economy
make money creating free apps? Most
has shrunk by 25% in the past 5 years and unemployment is at
are legitimate and use revenues from
25%, making a long term solution even harder to accomplish.
advertising. Some of them are selling
whatever data they collect from your
What happens if Greece leaves the Euro?
phone. Many of them ask you for
Now that another loan agreement has been reached it appears
personal information before you can
log in. Proceed carefully if they require
your email address for you to run an
app on your phone.
less likely that Greece will exit (commonly called a 'Grexit'). If
Greece were to go on it's own, it's hard to say for sure what would
happen. For the past 5 years European banks have been
preparing for the possibility and have established many
safeguards. Leaving the Euro would also involve a legal minefield
similar to a state trying to leave the United States and adopt its
own currency.
Social Security:
The best way to
keep track of your
benefits
Create a 'my Social
Security' account and
eliminate paper
statements
China sees sharp correction in
stock prices
Shanghai Composite Index rises 92% in the past
52 weeks - then drops 25% in recent sell off
Chinese stocks
have been on a nonstop tear the past
year. Enthusiasm
surrounding the
prospect of Chinese
stocks being added
to widely followed
indexes gave a boost to buying. Some say that the Chinese
government was encouraging citizens to buy stocks with easy
money and loose regulation.
Chinese government props up sagging stocks
To stem the decline, the Chinese government has adopted
measures that would be unthinkable in our markets. Beijing has
made it easier to buy stocks using borrowed money (margin),
restricted new initial public offerings and has suspended trading in
You probably plan to receive Social
Security benefits someday. Maybe
you already do. Either way, you'll want
a 'my Social Security' account to:
Keep track of your earnings
and verify them every year;
many stocks.
Heavy borrowing by Chinese investors fuels speculation As
the Chinese market soared, margin debt - buying stocks with
borrowed money - fueled the rise. Buying on margin is nothing
new. When used appropriately it does not have to result in a
market correction. Chinese investors are learning firsthand that
margin can be a double edge sword because when stocks fall, it
Get an estimate of your future
exacerbates the decline as loans get called in which results in
benefits if you are still working;
more selling.
Get a letter with proof of your
benefits if you currently receive
them; and
Manage your benefits: Change
address, get replacement cards
and more!
Setting up an account is quick,
secure, and easy. my Social Security
Can the sell off lead to an international crisis?
At this time the selling seems contained to the pocketbooks of
Chinese investors. What concerns many is how the Beijing
government had allowed the markets to surge up in the first
place. Even more troubling are the questionable measures that
are being implemented to address the sell off. If China wants
more international recognition, it needs to act as an honest
regulator rather than trying to please investors and prop up stock
prices.
We look forward to the opportunity in helping
you reach your goals.
Got questions? We're here to help. Please
call or email us
Happy Summer!
.
Carl P Sherr & Co., LLC
446 Main Street
Worcester, MA 01608
508-791-7126
800-25-SHERR (800-257-4377)
Experience you can trust.
Family owned and operated for 50 years.
Carl P Sherr & Co., LLC is registered with the SEC.
Member FINRA and SIPC.
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