Category: Business Models

Business Models, Economy

Mortgage regulation in US has worked judging by dramatic impact on brokers

Colin Henderson

Here is one set of regulation that seems to have worked. The article recounts one broker who is down from 85 on staff to 3. What is intriguing is that the bankrate article seems to suggest this is a bad thing. The reasons provided in the quote below just sound like back to basics banking process that provides lenders and customers protection. In fact it suggests brokers can only operate in a loose credit/ no diligence environment. I do not believe that and surely there is a model for brokers that involves lending discipline. http://www.usatoday.com/money/economy/housing/2010-08-28-mortgage-brokers_N.htm Credit histories must be dutifully … Continue reading Mortgage regulation in US has worked judging by dramatic impact on brokers

Business Models

Greece and what it means

Colin Henderson

I cannot but help believe there is a deeper problem relative to the situation in Greece. Three people died in a central Athens bank that was set ablaze by Greek protesters on Wednesday during a march against government austerity measures, aimed at saving the country from bankruptcy At one level it is a financial crisis and it should get sorted out with banks involved taking losses eventually as debt will have to be written off or at least placed on such terms as to make repayment unlikely. But this situation is altogether different and deeper than Argentinean or Thai defaults … Continue reading Greece and what it means

Business Models

You truly know when a country is dysfunctional when its AIR FORCE goes on strike

Colin Henderson

The always insightful John Mauldin speaks about the crisis that is Greece and the steps towards another banking crisis.  When you have full countries falling apart this is not good for anyone.  The degree of failure inside Greece is astounding, and will only lead to worse before it gets better.  The larger impact is on currencies, interbank lending (again) and banking system confidence if it is first Greece, then Spain and Portugal … then? MACRO-EUROPE: The Titanic is SINKING | Investorsinsight.com There are no good solutions here, only very difficult ones. In order to get financing, Greece must willingly put … Continue reading You truly know when a country is dysfunctional when its AIR FORCE goes on strike

Business Models, regulation

The Magnetar Trade – otherwise known as ‘The Black Hole”

Colin Henderson

This is a complex article at ProPublica that in simple terms illuminates all that was wrong with CDO’s and synthetic CDO’s. These instruments allowed investment bankers like Magnetar to circumvent insider trading rules.  The story of Goldman Sachs being charged by the SEC for fraud is only the beginning.  Financial reform is the last thing many financiers and bankers will have to worry about as this story takes hold. Magnetar involved all the big names and most are listed here.  You will see many recognisable names, eg. Citi, Wachovia, Deutsche, Lehmans, UBS, Mizuho, JP Morgan.  At this point it appears … Continue reading The Magnetar Trade – otherwise known as ‘The Black Hole”

Business Models1 Comment

The Impact of the Internet on Institutions in the Future | PEW

Colin Henderson

There is lots of wishful thinking contained in this PEW report which is not one of their better ones imho.  The people interviewed are by PEW’s admission skewed and several silicon valley names are included.  However the views follow the predictable linear thought process, such as, we have social networks therefore tomorrow everything will be social.  Clearly there are themes and directional indicators, but there are competing themes such as organisational inertia, shareholder needs, economic crises and last but not least, human nature.  Some extracts. The Impact of the Internet on Institutions in the Future | PEW Some 26% agreed … Continue reading The Impact of the Internet on Institutions in the Future | PEW

Business Models5 Comments

The coming media crisis and parallels with the financial crisis

Colin Henderson

A general thread that has been building for me for some years now is highlighted in a few things I have seen recently. The thread is my hatred of advertising and in particular online advertising. For me it lies in the same category as junk (paper) mail except worse. I can simply throw paper junk mail out as one package, so it is not intrusive. Online advertising is horribly intrusive because it is pervasive. I use lots of things to ensure my online experience is minimally interrupted by ads In 2004 people were asking about blog business models. Now it … Continue reading The coming media crisis and parallels with the financial crisis

Business Models

Book | Business Model Generation: Osterwalder and Pigneur

Colin Henderson

It was exciting to open the mailbox tonight and see my copy of Business Model Generation. I first met co-author Alex at LIFT in Geneva. He and his colleagues have performed much work focused on the aspects of business model creation, and in particular financial services. I was fortunate enough to be involved in a small way when Alex opened up the creation of the book online to what became 470 other online participants. The result is fabulous and a different kind of book … its more of a handbook for your business model. I have been speaking here for … Continue reading Book | Business Model Generation: Osterwalder and Pigneur

Business Models, Innovation2 Comments

A Sure Sign that we are at a Turning Point in Mobility and Use of Internet

Colin Henderson

I noticed an ad on CNN this afternoon, that really shows the gap that lies between old business and new business. The topic here is personal use of technology – how individual managers and executives use it. This reflects personal,and therefore institutional effectiveness. It reflects the difference in things happening over days, versus over months. The ad was for GotoMyPC that “allows you to access your PC from anywhere in the word”. Its a funny ad that begins with a travelling executive who realises the information he needs is on his PC back at the home office, so he sends … Continue reading A Sure Sign that we are at a Turning Point in Mobility and Use of Internet

Business Models, Profitability

Mullenweg’s Safe Bank Could not just Survive but it could Prosper

Colin Henderson

When Matt wrote his post the other day about starting a bank it got me thinking about the effect of what he is saying relative to profitability when we introduce a policy to be safe and carry capital reserves of 2 – 3 times more than todays banks. Assumptions: – demand deposits = demand loans – GIC (CD) = Mortgages – incremental investment in higher returning mortgages is funded from cash Relevance to Bankwatch: A $4 increase in gross profit results in a 15% higher Return on Equity when a lower capital ratio of 10% is accepted.  Note the stock … Continue reading Mullenweg’s Safe Bank Could not just Survive but it could Prosper

Business Models1 Comment

Conservatives propose radical changes to banking regulation in UK

Colin Henderson

There are some dramatic proposals contained in the upcoming white paper from the Conservatrive opposition [UK] this week. They make sense and go to the core of the flexibility that allowed banks to become too speculative. They address leverage, and the investment banking/ retail banking integration challenge. The Conservatives are larely expected to win the next election, sometime in the next 12 months. Tories say break up the big banks | The Times He will be clear, however, that the Bank should have powers to order banks and other financial institutions to hold more capital when times are good, so … Continue reading Conservatives propose radical changes to banking regulation in UK