Millennium Bank in Caribbean: Ponzi Scheme Shut down by SEC

I first saw this last night (burning the midnight oil for you :O) ) on bankdeals.

Many of our readers and visitors over the years have asked about Millennium Bank and I have always urged great caution. It is alledged that “only” $68 Million is in question. Although that pales in comparison to the Allen Stanford and Bernie Madoff fiascos, real people have been hurt. The question begs, why did it take so long? Certainly, questions have surround this bank for a number of years.

The old adage of “if it is too good to be true…” certainly came into play here. If you are investing in CDs because of their safety and guarantee, then stick with FDIC insured banks and NCUA insured credit unions. If your looking for higher rates of return, then look to the markets. It is just too risky, otherwise.

Bloomberg also has a story on this.

Also, please don’t confuse this Millennium Bank with any of the FDIC insured ones that reside here in the states. The following are FDIC insured banks:

• Millennium BCP Bank, NA (35280)-Newark, NJ
• Millennium Bank, NA (35096)-Reston, VA
• Millennium Bank (57175)-Edwards, CO
• New Millennium Bank (35151)-New Brunswick, NJ

Thoughts on AIG

I would encourage everyone to read the linked article. Michael Lewis lays it out and provides us insight into why we should fear the Gov’t being able to modify contracts. I’m as outraged as the next person, but the problem is not the bonuses. The problem is allowing a company to continue way past its expiration date. Let me know what you think of the article.

Mass Hysteria Over AIG Obscures Simple Truths: Michael Lewis

Looking for the best CD Rates – Introducing MoneyAisle

While searching for the best rates for you guys, I came across MoneyAisle awhile back. After some talks back and forth I felt comfortable with their service. You’ve probably seen their ad on our rates page. They offered to write an introduction piece for us, their blogger, Kevin Cafferty, provide the below information. They have competitive rates. I ran an auction today and a 2.50% APY was the top rate. That is in the top 10 rates that we are seeing. So enough of me, here is Kevin. Please leave any questions in the comments, I’m sure we can get Kevin to come over and respond.

Looking for the best CD Rates?
Recent market volatility has made safe investments like certificates of deposit more attractive to consumers looking to get a steady return on their savings. Rates between different financial institutions may vary to the point where it’s difficult to find out if you’re getting the most out of your cash.

The Solution: MoneyAisle
MoneyAisle takes guesswork and time-consuming comparison shopping out of the equation by providing you with great rates, free of charge. Over 100 banks in the MoneyAisle network all want to acquire you as a depositor and are willing to bid against each other in a live instant auction for that privilege.

Here’s how it works: you enter the terms of your CD (deposit amount and duration) into MoneyAisle and then watch the banks battle it out in a live automated auction – the winning rate at the end of the auction is the highest rate available in MoneyAisle’s system at that time. You’ll be presented with comparison rates on a national and state level to give you a sense of what your return will be and you’ll be provided with information on the bank.

It’s free, and you don’t have to commit until you’ve gone over all the information. The entire auction process only takes a few minutes, every bank in the network is a member of the FDIC, and the banks have been further pre-screened using an independent bank rating agency for additional consumer protection (banks rated in danger of failing are not in the network.)

Will IndyMac Return From the Brink?

In a story on Yahoo today, it is being reported that the Gov’t is in talks to return IndyMac to private ownership.

Many are touting this as a blue-print of succes for potential Nationalization with future banks. Of course the stockholders that were wiped out when the Gov’t took over the bank may disagree and the folks who had uninsured funds would certainly not agree. Another key difference is the size of the bank. IndyMac was about $40 Billion in assets when it was seized. It is now about $23BB. Citibank is $1.2 Trillion dollars. Just a wee bit bigger. :O) Bank of America is a tad larger at $1.47 Trillion. Don’t you love decimals, they can make big numbers seem so innocent.

I honestly think they should break up Citibank and Bank of America. If the Gov’t is of the mindset that they are too big to fail, they shouldn’t be able to get that big. I detest too much Gov’t intervention, but they are already way beyond that. They should set a limit on the size and footprint a bank should have. If banks want to maintain a large ATM network, partner with other banks. That is what credit unions do.

Allow some regional or community banks to purchase branches, assets, and deposits of Citbank or Bank of America that are in their area. I bet service would actually improve. Probably rates, too.

Yahoo also carried another story on whether the FDIC can handle all of the bank failures that will most likely happen throughout this year and into next year. The headline of course was an attention grabber and meant to cause fear. But the underlying story was about the efforts the FDIC is taking to shore up the insurance fund. They are assesing a 20 Basis Point or 0.20% premimum on banks insured deposits. So for every $1000 a bank has on deposit, $2 is being paid to the FDIC. That’s pretty significant. However, at least they are trying to be proactive. They also have facilities to borrow up to $500BB. Just turn the printing presses on. I don’t think you have to worry about not being paid back if a bank fails. I do worry about the future tax burden that will be put on our children, grandchildren, and great grandchildren.

There isn’t much other good news in the financial world or any other part for that matter. How about a quote?

You can shower a child with presents or money, but what do they really mean, compared to the more valuable gift of all — your time? Vacations and special events are nice but so often, the best moments are the spontaneous ones. Being there. Every moment you spend with your child could be the one that really matters. — Tim Russert (Host of NBC’s Meet the Press and author of Wisdom of our Fathers.

What are your thoughts?
cd :O)

What in the World is Going on

It has been very busy around here. I’m sorry that I haven’t posted in a while.

Big question. I wish I had big answers. Fed funds will most likely remain at the current level (0.00 to 0.25%) for the remainder of the year. CDs will probably continue to slide to levels around 1.5% to 2.00% for 1Y and 3.25% to 3.50% on longer-term CDs. Those are the levels we saw back in the lows of 2003 when Fed funds were at 1.00%.

Assuming the economy is beginning to make some recovery in 2010, the Fed could start to raise rates in early 2010 to Mid 2010. They tend to raise rates slower than they brought them down, so rates will probably remain relativley low through 2010.

The unknown is how much all of the bail-outs will affect higher inflation fears. Certainly, it would seem that at some point, the Piper is going to have to be paid. However, the Fed will be very leary of rates getting out of hand.

Housing probably won’t get much better this year. There are a lot loans that re-setting this year. Even though re-fi rates are down, many people still can’t re-fi because of the value of the home is way below what they purchased at. This will still leave many homeowners unable to pay their mortgages and more foreclosures. And of course, many more people have lost their jobs this year. 2010 will remain tough for housing.

The Gov’t is planning massive “bail-outs” that don’t amount to much more than pork heaven. I urge you to contact your representatives and tell them to take the pork out or be thrown out of office. This is just crazy.

I thought I would leave you with some positive thoughts.

The world bursts at the seams with people ready to tell you you’re not good enough. On occassion, some may be correct. But do not do their work for them. Seek any job: ask anyone out; pursue any goal. Don’t take it personally when they say “no” – they may not be smart enough to say “yes.” — Keith Olbermann (Broadcast journalist and host of MSNBC’s Countdown with Keith)

cd :O)

P.S. Here is a site with more best cd rates.

Merry Christmas and Happy New Year

Just wanted to wish you all a Merry Christmas. May your Christmas be filled with the Spirit of Christmas, family, and fun.

Thank you for spending time with us.

Looking forward to 2009 and all the possibilities that it holds.

Update 2/2/2009. It has been crazy busy around here, but I came across a site with some good solid posts on it. Give it a read, Private Banking

cd :O)
Chris Duncan

New Historic Lows

Today the 30-year treasury bond dropped to below 3% (2.95%) for the first time in history.

The Fed is also poised to lower the target rate for Fed Funds to 0.5%. Some think they might even go lower, but I think they want to leave room for another cut if the economy doesn’t start improving.

6-month CD rates will most likely fall to the 2.00% to 2.50% range. 1-year rates will probably be between 3.00% to 3.50%. The yield curve will probably be somewhat flat on the 2-Year to 4-Year, topping out around 3.70% to 3.80%. Finally the 5-year will probably slip to 4.25% to 4.50%.

One strategy that we have helped people with is investing in low penalty CDs. You may want to consider investing some funds in 5-year CDs, but look for 90-Day Early Withdrawal Penalties. You’ll pick-up some yield over the shorter-term CDs and if rates turn around in the next year or two, it won’t be that expensive to close the CD and move it to one with a better rate.

Hopefully, I’ll have a couple of more posts before the New Year. If not, have a Merry Christmas.

Countrywide Bank has slowed down their first mortage program, but are beginning to offer a Countrywide Reverse Mortgage program. I’m not sure how thrilled I am by that.

cd :O)

It’s Refer Your Corporate Friend Day — Get Paid $150

Update: 12/09/08 — This offer is still good. But rates went down a little since last week.

We’ve seen rates continue to fall this week. But one rate has remained high, and it doesn’t have a fee. However, there are a couple of catches. First, you have to be a Financial Institution such as a bank or credit union, or you have to be a corporation. The bank doesn’t accept personal funds.

So here is the deal. The rate for 3-years is 4.50%, the rate for 4-years is 4.80%, and the rate for 5-years is 5.05%. The bank requires $100,000. It is FDIC insured. I can’t give out the name on the blog, but the bank is very healthy. They have a 5-star rating on BankRate.com.

If you refer a bank, credit union, or corporate friend to us and they open up a $100,000 CD for one of the above terms, we’ll pay you $150.00. That’s right, we’ll pay you $150.00. If for some reason, they already have a CD with this bank, but they do a future trade with us, we will pay you when the future trade is completed.

I don’t know how long the rate will be good for, but I do know it is good for today.

Our number is 800-234-4605. We can also be reached using our contact page. As you can tell from the number of blog posts of late, I’ve been very busy, but I hate to see people miss out on a great rate.

This offer is good for 12/5/08. We’ll extend it if the bank keeps the rate up.

What Really Happened on Thanksgiving

Caroline Baum publishes an annual column on what really happened with the Pilgrims and Thanksgiving. I invite you to check it out.

Thanksgiving Story Resonates in Year of Crisis

Happy Thanksgiving!!! May you and yours be blessed.

cd :O)

Rates Have Been Coming Down

CD Rates on terms of 2-years or less have been trending down. For about a week after the last rate cut, there wasn’t much movement. However, as it looks like the Fed Funds will remain low for sometime and some have predicted it may even go to 0.5%, the CD Rates have been going down.

A couple of weeks ago we had a 1-year CD rate at 4.40% APY. Today the highest is 4.25%. On the 2-year, we had a 4.50% APY and today it is down to 4.45%. The 3-year and longer rates seem to be holding. The 3-year rate of 5.00% APY remains good as does the 5.25% at 5-years.

As we get closer to the next Fed Meeting, look for rates to come down further. The next meeting is December 16. As it is, the yield curve between the CD Rates and Fed Funds is quite steep.

BankVibe is a new site posting some of the highest CD Rates.

cd :O)

PS — Are you looking for some investment tips. Check-out Smart retirement investing tips for beginners.