Category: US

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

US

Bank of America plan to repay TARP money

Colin Henderson

The scramble continues to get out of hock with the Government and Bank of America speak about repaying $45Bn by end of year.  More power to them … this would be a good thing if they can pull it off. BofA seeks to repay $45bn by end of year | FT BofA is on track to raise more than $35bn in capital by the end of September, say people familiar with the matter, which it must do before paying back the $45bn bail-out money it received under the Troubled assets relief programme. Continue reading Bank of America plan to repay TARP money

US

Bank of America have the right approach – just implementing new things and learning

Colin Henderson

One thing about Bank of America that I like at the moment is that they are just doing things.  I covered their use of twitter the other day, but its worth placing in perspective.  They are trying many things, including applications specific to the top two business smart phones shown below – iphone and Blackberry. To me this iterative small, one thing at a time is essential.  The bank gains learning, and importantly gains the following of the early adopters, who will support momentum towards mainstream usage. Bank of America iphone Bank of America Blackberry UPDATE: Some additional statistics requested … Continue reading Bank of America have the right approach – just implementing new things and learning

US

US Unemployment is not a new problem | industrial revolution underway

Colin Henderson

Here is the US unemployment rate since the 1940’s.  This data says that the unemployment problem occurred in the 1980’s and we have been living a dream in the bubble since 1987. The data says that US unemployment has been increasing steadily since 1975.  Before that the rate was fluctuating in a relatively narrow range of less that 1% based on the 10 year moving average (the red line). The 60 year picture tells us that we are living in a bubble.  Government stimulus will not cure a bubble.  Nor will thinking that we can come out the other side … Continue reading US Unemployment is not a new problem | industrial revolution underway

Uncategorized, US5 Comments

How can a bank with over 2 trillion in assets fail?

Colin Henderson

The headlines surrounding Citi are reminiscent of a wolf pack circling its prey. But how can a bank such as them fail? And how can it go from making a billion dollar offer to purchase Wachovia to failure? Citigroup stock drops to 13-year low, fear grow | Reuters NEW YORK (Reuters) – Citigroup Inc faced a crisis of confidence on Wednesday as investors questioned the survival prospects of the U.S. banking giant, and its shares tumbled 23 percent to a 13-year low. The second-largest U.S. bank by assets has been reeling on concerns that mounting losses from credit cards, mortgages … Continue reading How can a bank with over 2 trillion in assets fail?