The personal side of the economic situation – people who are not at all accustomed to seeking work. Paul Nawrocki — The Job Hunting Man Paul Nawrocki has hit the front page of CNN.com but he still is looking for a job. Each week he takes his job search serious and heads downtown New York and walks the street wearing a sandwich board. Continue reading Paul Nawrocki – The Job Hunting Man
There is a high degree of irony in this story. We have a bastion of capitalism, Citi requesting a 40% government ownership, accompanied by a Democratic US government stating its belief in private ownership. The impossible inevitability will meet the inevitable impossibility … eventually. Citi presses officials to take 40% stake | ft.com Citigroup is pressing the US government to agree on a new capital injection that would increase the authorities’ stake in the troubled bank to about 40 per cent but stop short of an outright nationalisation … They (US Government) apparently believe that the market response to White … Continue reading The irony of Citi’s request of a Democratic government
In the first real appearance of specific moves towards the inevitable Great Unwinding RBS announce plans to reduce their balance sheet by 25%. RBS to cut balance sheet by 25% | ft.com Royal Bank of Scotland will this week unveil plans to shrink its balance sheet by up to a quarter over the next three to five years as Stephen Hester, chief executive, sets out a strategy to return the state-controlled bank to the private sector. Note the timeframe of three to five years – I suspect this will be on the shorter end of that timeframe or even less … Continue reading UK government, RBS, and Lloyds begin the bad asset removal process
Following the Presidents visit to Canada today, Canadian banks and the Canadian system continue to get attention. Canadian banks prove envy of the world | ft.com “Canada has shown itself to be a pretty good manager of the financial system in ways that we haven’t always been here in the United States,” Mr Obama told a Canadian broadcaster. The president spent Thursday in Ottawa meeting Stephen Harper, Canada’s prime minister, to discuss the economy, trade and the environment, in addition to any talk surrounding the strength of Canada’s banks. In large part because of their conservative culture, one that depends … Continue reading Canadian banks prove envy of the world | ft.com
“Which banks get the web lifestyle”. This tagline is becoming tired. Since I began this blog the tagline was my simplistic way of maintaining focus and relevance for the posts. In effect it was my filter for posts and helped me determine what was in and what was out. It may seem minor, but becomes important to me to manage how and what I think about., and therefore write about. Over the last few years two forces have changed things; the credit/ banking/ economic crisis for one, and the impact that is having on banks corporate ownership and structure – … Continue reading Sub title is too limiting for the blog – need new ideas
Andrew Haldane, Executive Director for Financial Stability, Bank of England diagnoses the failure of bank stress tesing in this speech given at the Marcus-Evans Conference on Stress-Testing. He speaks of the Oct 87 crash, the LCTM hedge fund 98 failure as well as the 2007/8 crash. Why Banks Failed the Stress Test: Bank of England pdf He sees three categories of failure: Disaster Myopia Essentially this is positive thinking that increases the longer since the last disaster. He only somewhat jokingly wonders whether “10 years is the threshold heuristic for risk managers.” Network externalities He speaks of the financial system … Continue reading Disaster Myopia and other causes of banks’ problems
In a fascinatingly shrewd move the Administration has tied the auto crisis and the banking crisis together by appointing a panel to oversee the “revamping” and that panel is chaired by Treasury Secretary Geithner – who obviously also has accountability for the banks. This makes eminent sense. To Fix Detroit, Obama Is Said to Drop Plan for ‘Car Czar’ | NY Times DETROIT — President Obama has dropped the idea of appointing a single, powerful “car czar” to oversee the revamping of General Motors and Chrysler and will instead keep the politically delicate task in the hands of his most … Continue reading US auto and bank crisis pulled together under Treasury Department | 15th Feb, 2009
This is much talk these days of the decline of the United States and a fundamental reshaping of relative world economic clout. It is worthwhile to reflect on the current size of economies before such claims are made. This rambling piece from Richard Florida that I thought was going to deal with the decline of America, actually ends up making the case that the impacts on US cities will be significant. Of that there is little doubt, but the example of Detroit may not be the best to make the point (the Phoenix example is a better one). Detroit has … Continue reading Some perspective on GDP, and America’s ability to “come back”
Fascinating talk by Umair Haque at a conference in Sweden. His topic is the future of business and the failure of business strategy. it is long, but worthwhile. Would love to get a hold of the deck, and if i do will attach. He speaks of new principles for corporate DNA: and the Laws of Constructive Capitalism: Strategy is a commodity Competition is obsolete There is nothing more asymmetrical than an ideal Tomorrow is today Connections not transactions People not product Creativity, not productivity Outcomes, not incomes Advantage is in the DNA The next revolution is institutional Daytona Sessions Umair … Continue reading Constructive Capitalism | Umair Haque, Director Havas Media Lab
In keeping with the theme that bank assets need to be properly valued before confidence can be returned to the system, this piece summarises the next immediate problem. As you read this, bear in mind that the American system for most states employ the non-recourse system. This little known implication just came known to me recently, and further explains the extent of the fear on bank asset value. Non-recourse means the homeowner can walk away from a home where the mortgage exceeds the home value with no recourse from the bank back to that homeowner for the shortfall. This is … Continue reading Bank asset revlauation – unfortunately its the next mortgage crisis
Bankwatch 