Economy

The $3.6 Trillion Leveraged Loan Wall of Debt | MISH’S Global Economic Trend Analysis

Colin Henderson

I happen to believe in the L shaped recovery theory.  Recovery will be based on a stop in the reduction of growth, and will flatline there.  We will not go back to the GDP $ levels of 2007 ( a return to 2007 would require a V shaped recovery).  This post from Mish summarises why, quite well. The $3.6 Trillion Leveraged Loan Wall of Debt However, the clock is ticking on many things at once: Leveraged loans, boomer retirements and subsequent downsizing, Pay Option ARMs recasts, Alt-A recasts, and last but certainly not least, a jobless recovery that ensures massive … Continue reading The $3.6 Trillion Leveraged Loan Wall of Debt | MISH’S Global Economic Trend Analysis

Payments

Bell, Rogers, Telus to launch mobile payment service | Canada

Colin Henderson

Canadian Telco’s beat the banks out with the first serious country wide example of mobile payments in Canada, and frankly one of few in the world.  This is just one more example of disaggregated financial services, that cip away parts of what was previously banks’ territory. The use of NFC technology is also worth noting here.  NFC (Near Field Communications) permits wireless data transfer over distances up to 10 cm.  This is designed to eliminate accidentally purchasing Dave Birch’s coffee for him. In all seriousness while this has been a long time coming, my sense has always been that the … Continue reading Bell, Rogers, Telus to launch mobile payment service | Canada

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

AI

Deloitte Report – “The New Financial Services Marketplace” | How are you redesigning your Bank?

Colin Henderson

This new report (12 pages) with the subtitle ‘Restoring Broken Markets’ deals with the new reality of frozen securitization markets and the renewal of traditional banking – re-intermediation – as the backstop point along with 5 others including industry consolidation, government ownership, and consumer protection.  This is the first in a series, and I for one cannot wait. Its a fantastic read, and ideas just start leaping off the page as you work through it.  But before we get into design, lets look at current state. The Deloitte Center for Banking Solutions The Deloitte Center for Banking Solutions is pleased to … Continue reading Deloitte Report – “The New Financial Services Marketplace” | How are you redesigning your Bank?

Profitability

“We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

Colin Henderson

As banks rush to repay TARP money, driven by the desire to remove government control rather than any reflection of improved financial standing, here is a sobering statement from Elizabeth Warren.  Just as GM didn’t ‘get it’ in terms of the world will look like on the other side of this recession, many banks appear to have similar blinders.  Instead of arguing that they are not in bad shape and that they are secure, why not make changes now that display the recognition that the future is not going to be anything like the past.  I say again, and blame … Continue reading “We’ve already blown past the worst-case scenario on unemployment” | repeat stress tests

Social Lending

LendingClub announces some new trend results

Colin Henderson

Lending Club are announcing today some new numbers that show they are gaining traction since their relaunch following SEC approval.  There is no-one else to compare them to now, but the trend is positive, and getting more so all the time. LendingClub 53% growth in quarterly loan originations, from $5,374,850 in Q4 2008 to $8,239,950 in Q1 2009 From January 1st  to May 31st 2009: 60% growth in total loans issued by Lending Club, from $25M to $40M 70% growth in total Lending Club membership from 82,000 to 140,000 72% growth in loan applications, from $212M to $365M The average … Continue reading LendingClub announces some new trend results

AI

Long Term Evolution (LTE) – next level for mobile

Colin Henderson

Just when we thought we were getting there with 3G here comes LTE in Japan, the next level. Its not clear what the individual phone download rate would be, but it will be fast. DoCoMo To Invest Y300-400bn In LTE Network Tuesday, June 9, 2009 NTT DoCoMo President Ryuji Yamada TOKYO (Nikkei)–NTT DoCoMo Inc. (9437) will spend 300-400 billion yen over the next five years to develop LTE (Long Term Evolution), the next-generation high-speed cellular network it plans to launch in the second half of 2010, said President Ryuji Yamada on Tuesday. “The mobile phone market is entering maturity, but … Continue reading Long Term Evolution (LTE) – next level for mobile

UK

Lloyds moves to regain independence

Colin Henderson

This is nice to see.  Lloyds is was the most risk averse bank before the crisis.  Yet after the Government intervention and Lloyds ‘takeover’ of HBOS with all their self inflicted mortgage problems, the situation altered dramatically. I hope Lloyds will be a survivor, and can remove government ownership. Lloyds repays £2.3bn to UK Treasury Lloyds Banking Group has repaid £2.3bn to the UK Treasury after strong support for its open offer and placing aimed at repaying the government’s £4bn of preference shares. Lloyds is believed to be the first major western bank to repay state equity in the round … Continue reading Lloyds moves to regain independence