Category: Business Models

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

Business Models

Bank directors to receive formal training and capability assessment

Colin Henderson

It appears bank boards will be required to go beyond figure head status under upcoming regulation changes in UK. Sir David Walker to shake up bank boards The City grandee tasked with reforming corporate governance standards at Britain’s banks will this week set out plans for directors to receive formal training and annual re-election to the boards of financial institutions. They will also address boardroom composition by stressing that boards need to have a proper balance of experience and understanding of a company’s risk strategy, and suggest that risk committees should be established alongside audit committees to aid risk management … Continue reading Bank directors to receive formal training and capability assessment

Business Models, Innovation, Social networks2 Comments

Collaboration (1) vs Beaurocracy (0) | Wikipedia & CIA Factbook example

Colin Henderson

Here is a striking example of the power of collaborative ‘wisdom of crowds’ approach to information preparation, versus traditional top down beaurocratic approach. I was reading the Obama speech in Ghana, and his references to the current and previous governments, including Jerry Rawlings which rang a history bell for me, so thought I would read up.  First off I checked what used to be my old favourite the CIA factbook, and it has not been updated since sometime before Dec 2008 [note highlight]. On the other hand a quick visit to Wikipedia had more than enough detail being up to … Continue reading Collaboration (1) vs Beaurocracy (0) | Wikipedia & CIA Factbook example

Business Models2 Comments

“Instead of extracting value, they create it” | Haque

Colin Henderson

Umair continually presses us to think about new types of corporations that are creating genuine value.  The definition is evolving, and you can check back with his earlier posts about the companies mentioned, but the final sentence in this paragraph is a great objective. An Open Letter to 20th Century Business | Umair Haque Who are some of those innovators? We’ve discussed lots of them – Apple, Google, Tata, Threadless. What makes them different is simple. They are more profitable and valuable than rivals because, well, they do stuff that counts. Instead of extracting value, they create it. Continue reading “Instead of extracting value, they create it” | Haque