Category: US

Economy, US3 Comments

China and America economic future – Ferguson/ Fallows debate

Colin Henderson

A summary in NYT of the fascinating Ferguson/ Fallows debate at Aspen on the economic relationship between China and US. Ferguson: US and China are divorcing economically.  China will focus on internal consumption, not exports.  “Depreciation (of US $) is inevitable and the Chinese are working to end the dollar’s role as the world’s reserve currency.” Fallows: “…  doesn’t know what the future will hold, but he believes that Chinese officials still see the dollar as their least risky investment. Domestically, China will not turn democratic, but individual liberties will expand. He agreed that China and the U.S. will dominate … Continue reading China and America economic future – Ferguson/ Fallows debate

US

Morgan Stanley and MUFG in joint push

Colin Henderson

Morgan Stanley hooks up with one of the largest Japanese banks to compete with Citi and JP Morgan. Morgan Stanley and MUFG in joint push | FT Mitsubishi UFJ Financial Group is set to merge its securities subsidiary with Morgan Stanley’s Japanese securities operations, to create one of the top three brokerages in Japan. The Japanese bank and Morgan Stanley have been in talks since MUFG invested $9bn last year into the then-struggling US broker, for a 21 per cent stake. Researched by Nobyuo Henderson Continue reading Morgan Stanley and MUFG in joint push

Canada, Economy, US3 Comments

Consumer mindsets in North America have shifted permanently with regard to finances

Colin Henderson

After my last post, I thought it better to follow up with some facts to support my contention that this economic recovery is L shaped in Canada and US.  This is not meant to be an economic projection, and I leave that to the professional economists.  However in terms of planning, banks ought to consider the high probability of a scenario where the reduction in economic activity will level off but hardly see growth in the near future.  This will be driven by consumer confidence and frankly their financial circumstances. If we go back to the root cause of the … Continue reading Consumer mindsets in North America have shifted permanently with regard to finances

US

“We are less than 50 days away from a meltdown of State government”

Colin Henderson

California might just be the forerunner of a trend here.  The single largest impact of the new smaller world we have entered is reduction in tax revenues, and with Government costs higher than before, the need for deleveraging applies to Government too. MISH’S Global Economic Trend Analysis California State Controller John Chiang says California 50 Days From Financial Meltdown. …. Personal income taxes were $475 million below (-23.0%) estimates in the May Revision. Corporate taxes were down $84.4 million (-25.8%), and sales taxes fell by $109 million (-3.3%). Researched by Nobuyo Henderson Continue reading “We are less than 50 days away from a meltdown of State government”

subprime, US

Option ARM – $98 pm on a $315K mortgage … for now

Colin Henderson

The last time saw a graphic such as this was 2007, when the schedule for mortgage resets on US sub prime mortgages pointed to an inevitable crash beginning end of 2007 and through early 2008. Well here is the next picture that is eerily similar with forward predictions of similar catastrophe in 2011.   The US option ARM.  Apparently these are not necessarily sub-prime at least right now.  The real danger exists in the event that interest rates increase meaningfully to co-incide with the reset dates. Also we must look at this in the context of the Banks rushing to repay … Continue reading Option ARM – $98 pm on a $315K mortgage … for now

Economy, US5 Comments

Bernanke is concerned about budget deficits

Colin Henderson

Fed Chairman Bernanke picks his words carefully here as the US treads that line between economic recovery and much higher interest rates which would produce other unintended consequences such as stifling growth, currency value shifts or inflation. Bernanke calls for action on deficits | FT Ben Bernanke on Wednesday called on Congress to take action now to bring down long term US budget deficits, warning that the bond market was concerned about rising US government debt. The Federal Reserve chairman said the recent increases in bond yields “appear to reflect concern about large federal deficits” as well as improved optimism … Continue reading Bernanke is concerned about budget deficits

Economy, US1 Comment

No consumer driven economy in US | Geithner in China

Colin Henderson

Some important messages within Geithners speech in China today that paint a very different next few years compared to the last 10, and as the ‘G2’ move to manage a transition the American economy into one that is very different, yet stable.  And all this to be managed against the backdrop of  the fear of eventual inflation, which would devalue foreign holdings in US T-Bills, something China is acutely aware of. These macro factors will play a large role in US banks and credit unions strategy design for the next 5 years. no consumer purchase driven economy in US – … Continue reading No consumer driven economy in US | Geithner in China

US

Cyberpsace Policy Review | WhiteHouse.gov

Colin Henderson

The President released the following much anticipated document today.  Item #10 is of particular interest to me.  This aspect has grains of what I happen to think embody the next step in internet beyond where we are. Cyberspace Policy Review | White House 10. Build a cybersecurity-based identity management vision and strategy that addresses privacy and civil liberties interests, leveraging privacy-enhancing technologies for the Nation. … … And this … The Administration should assist international financial institutions, such as the World Bank and the International Monetary Fund, with the necessary information, tools, and expertise and encourage their use of best … Continue reading Cyberpsace Policy Review | WhiteHouse.gov

US

FDIC aggregate bank losses masked by trading gains Q1 – 2009

Colin Henderson

The latest FDIC QBP is out and contains some sobering information on the impact of the recession on bank results. FDIC Quarterly Banking Performance – 31st March 2009 INSURED INSTITUTION PERFORMANCE Net Income of $7.6 Billion Is Less than Half Year-Earlier Level (61% less than previous period) Noninterest Income Registers Strong Rebound at Large Banks Aggressive Reserve Building Trails Growth in Troubled Loans Industry Assets Contract by $302 Billion Total Equity Capital Increases by $82.1 Billion Looking behind the apparently positive net income of $7.6Bn we see that first quarter earnings were $11.7 billion (60.8 percent) lower than in the … Continue reading FDIC aggregate bank losses masked by trading gains Q1 – 2009