As crisis deepens, Fed steps up role

The collapse of Bear Stearns sends the central bank scrambling to ease fears.

By Ron Scherer Staff writer of The Christian Science Monitor
from the March 18, 2008 edition

In the wake of the collapse of Bear Stearns, a top investment bank, the Federal Reserve is struggling to reestablish confidence in America's financial system.
The US central bank is guaranteeing loans, taking questionable loans off the books of banks, and dropping interest rates at a near-record pace. Despite the Fed's efforts, the credit markets remain wary. Most economists agree that the Fed has now moved from crisis prevention to crisis management, trying to limit any cascading effect from problems on Wall Street.

More home foreclosures?

The risk of the economy not responding to the Fed's stimulus is daunting, Gramley says. With banks continuing to tighten credit standards, he worries the housing market will sink further. "Foreclosures will continue to rise, and home prices will be further depressed, and since homes are the underlying collateral for many loans, the problem becomes worse," he says. "This will require innovative thinking."

In fact, some Fed watchers worry that more is being done for Bear Stearns than homeowners. "Of all the investment houses, Bear Stearns was the one most deserving of going under because of the subprime crisis, both for its ownership of a subprime lender and its work packaging those loans," e-mails Kurt Eggert, a law professor at the School of Law at Chapman University in Orange, Calif., and a former member of the Federal Reserve Board's Consumer Advisory Council. "The Feds are doing more to help Bear Stearns than the borrowers facing foreclosure because of Bear Stearns's actions."

JustLuxe.com Outpaces Other Online Luxury Publications in Overall Traffic Volume and Growth

With More Than 1.5 Million Unique Monthly Visitors, JustLuxe.com Surpasses Viewership of Concierge.com, ForbesTraveler.com, and Other Online Luxury Guides and Portals

SAN DIEGO, CA, — June 17, 2008 — JustLuxe.com, an online luxury publication, today released Internet traffic statistics denoting that more than 1.5 million unique visitors went to www.justluxe.com in the month of May, exceeding Internet traffic numbers of several other well-known online luxury guides and portals such as Concierge.com, ForbesTraveler.com, and Travel&Leisure.com.


Total Unique Visitors (000)
May 2008
JUSTLUXE.COM
1,511
CONCIERGE.COM
541
FORBESTRAVELER.COM
269
TRAVELANDLEISURE.COM
114

JustLuxe.com is an all-encompassing guide that connects luxury-minded consumers with suppliers of luxury goods and services through an engaging Web site. JustLuxe.com contains thousands of articles and provides insight into 30 categories ranging from luxury automobiles, yachts, real estate, travel, private aircraft, fashion, fine jewelry and watches, art, wine, to state-of-the-art electronics, and much more. JustLuxe.com’s market knowledge and strategic relationships with luxury goods and service providers, along with the depth and breadth of information offered to consumers on every product on the site, helps to explain JustLuxe.com’s rapid growth and tremendous success.
“Our unique combination of deep luxury industry knowledge stemming from our network of partnerships with hundreds of luxury goods, services and travel providers, coupled with our use of state-of-the-art Internet technology to deliver luxury news and information in an appealing format using rich media, leads affluent and luxury consumers to return to JustLuxe.com again and again,” said Gilbert Gautereaux, president of JustLuxe.com. “We have clearly benefited from the viral marketing of our growing readership, who appear to be telling their friends and business associates that JustLuxe.com is the Internet destination for all things luxury.”

“The numbers speak for themselves,” said Kamran Razavi CEO of RGM, Razavi Global Media, which provides exclusive advertising representation for JustLuxe. “Both the growth rate and the number of unique visitors to JustLuxe.com demonstrate the appeal that the luxury portal offers to the affluent online community. Moreover, JustLuxe in a short period of time has successfully created one of the most targeted, far reaching and engaging advertising platforms to target affluent individuals on the web. Often times the affluent consumer demands a more involved interaction with a brand, in order for them to recognize the advertisers desired message. JustLuxe and RGM offers a seamless integrated approach for client’s through a number of customized solutions, (sponsorships, micro sites, video podcasts, widgets, content licensing, sweepstakes, partnerships, integrated editorials, etc…).”

About RGM
RGM, Razavi Global Media, provides site-specific media representation to a group of premium online publishers, which are leaders in their respective niches. RGM works closely with its advertising clientele to create unique, customized solutions, building brands and driving results. Serving as more than a standard rep firm RGM also provides creative services and strategic guidance, producing custom technologies and platforms to launch brands. With offices in Venice, Santa Monica, San Francisco, and New York, RGM has its finger on the pulse of the dynamic online environment, constantly innovating to create value for its partners. For further information please visit: www.razaviglobal.com

About JustLuxe
JustLuxe.com, is an all-encompassing guide that connects luxury-minded consumers with suppliers of luxury goods and services through an engaging Web site, thousands of articles, and insight into a range of subjects, including luxury automobiles, yachts, real estate, travel, private aircraft, fashion, fine jewelry and watches, art, wine, state-of-the-art electronics, and much more.

Visa Plans Stock Debut as Demand Fades for New Shares

Visa Inc. will proceed with its $17 billion initial public offering, betting it can pull off the biggest stock sale in U.S. history during the worst year for the Standard & Poor's 500 Index since 2001.

Visa, the world's largest credit-card network, may eclipse AT&T Wireless Group's $10.6 billion offering in 2000, assuming the share price is set at the high end of the projected $37-to-$42 range. San Francisco-based Visa would rank as the world's second-biggest IPO after the Industrial & Commercial Bank of China Ltd.'s $22 billion offering in 2006.

Coping With Losses
The world's biggest financial firms have been battered by $195 billion of asset writedowns and credit-market losses since the beginning of 2007, including $37.1 billion by Visa's six largest holders, according to data compiled by Bloomberg as of March 14.

Visa's IPO aims to mimic the success of MasterCard, whose stock has gained more than 400 percent since the Purchase, New York-based company went public in 2006.

``It's probably a good time for these companies to raise funds,'' said Tunde Kovacs, an assistant professor of finance at Northeastern University in Boston, referring to the banks. ``There are further defaults expected in the mortgage markets and possibly in some other areas like credit cards.''

Proceeds from the IPO will be used to settle antitrust lawsuits, including a case brought by American Express, Visa said in its prospectus. The rest will be used to buy stock from member companies and to run the business.

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Rescue of Bear Stearns 'cowboys' questioned

President Bush said some very nice things about the Federal Reserve's rescue, once removed, of Bear Stearns, the wobbly investment bank.

"... We've taken strong and decisive action," Bush said. "The Federal Reserve has moved quickly to bring order to financial markets. Secretary (Henry) Paulson is supportive of that action, as am I," said Bush, referring to the Treasury Secretary.

Not everyone is joining Bush in singing the Fed's praises. Some say the central bank's actions violate notions of fairness. Why is a large investment bank rescued while homeowners are left to the rough justice of foreclosure and bankruptcy?

This from Kurt Eggert, a law professor at the School of Law at Chapman University. Eggert once served on the Fed's Consumer Advisory Council.
Said Eggert:

"As the Fed rides to the aid of Bear Stearns, there is a growing disconnect between the Bush Administration's willingness to help Wall Street and its willingness to aid the homeowners facing foreclosure. The subprime crisis is largely caused by excessive defaults and foreclosures, and coming up with real plan to reduce foreclosures should be the first point in the agenda.”

“To help Bear Stearns and Wall Street, the Fed, with Treasury Secretary Paulson and Bush's approval, is taking heroic, and historic efforts, lending to non-banks for the first time since the Great Depression. When it comes to reducing foreclosures, the Bush Administration has adopted a "What me worry?" attitude, hoping that the market will fix the problem with some cheerleading by federal regulators.”

“Of all the investment houses, Bear Stearns was the one most deserving of going under because of the subprime crisis, both for its ownership of a subprime lender and its work packaging those loans. However, the Feds are doing more to help Bear Stearns than the borrowers facing foreclosure because of Bear Stearns actions.”

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