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Sep 18th 2008 | Russian Missile Crisis – banking crisis version

Colin Henderson

I heard the headline earlier today but only after listening to this video now do I appreciate the depth of this.  We know the Lehman Brothers collapse was serious but only now do we know to what extent.  This was the economic version of the Russian missile crisis. It also explains for the first time, the awkward and otherwise inexplicable overnight shift in TARP approach by Paulson. Listen to the comments at 2 minutes 20 seconds and from then on.  Kanjorski is the Chair of the Capital Markets Committee.  The key comments are: “it was about September 15th [note his … Continue reading Sep 18th 2008 | Russian Missile Crisis – banking crisis version

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The flaw in the House Financial Services hearings \ misalignment on the paradigm

Colin Henderson

The hearings are going on this morning in Washington. After my rant about Wells Fargo yesterday, it is clear to me that apparently ill timed newspaper ad on the weekend was in fact timed to coincide with these hearings. I still think it was ill timed though. Listening to the introduction today from Barney Frank, Chairman and the commentary on CNN, the general view is that Banks are receiving money, using it for perks and not working on “getting the economy back to working again”. On the other hand the banks are listing off how they are increasing lending, keeping … Continue reading The flaw in the House Financial Services hearings \ misalignment on the paradigm

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Wells Fargo loses touch with reality

Colin Henderson

The impression that Bank CEO’s live in the stratosphere came from a source I never would have expected today.  Wells Fargo had an ad campaign on the weekend. “The Value of Team Member Recognition,” included a message from the company’s CEO John Stumpf who wrote “many media stories on this subject have been deliberately misleading. These one-sided stories lead you to believe every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly paid executives. Nonsense!” I have been unequivocally positive and supportive of Wells for years, but this ad campaign has to be the … Continue reading Wells Fargo loses touch with reality

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Inflation will follow the recession and the law of untended conseqeunces

Colin Henderson

Something that has been niggling at me here and here is the law of unintended consequences.  The people architecting the financial stimuli today are first politicians and second relatively young living their maturity post the late 70’s early 80’s. The key statement in this article is at the end, and it was quoted by Geithner today too – that this borrowing is temporary and will be repaid as soon as things are back to normal.  Please stand up if you know: when normal is expected to resume that we will be able to repay the debt at that time?  [ … Continue reading Inflation will follow the recession and the law of untended conseqeunces

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Transcript of Geithner remarks | courtesy Bloomberg TV

Colin Henderson

Here is a transcript of an interview with Geithner on Bloomberg TV following his speech this morning.  MS word file follows. BLOOMBERG TV INTERVIEW WITH SECRETARY TIMOTHY GEITHNER, U.S. DEPARTMENT OF THE TREASURY BY PETER COOK TUESDAY, FEBRUARY 10, 2009 PETER COOK:  Deirdre, thanks very much.  Joined here by the Treasury secretary of the United States, Timothy Geithner, Secretary Geithner, thank you very much for the time.  We appreciate it.  And I know our viewers around the world have been eager to hear about this plan today.  We really appreciate your willingness to sit down and share a few more … Continue reading Transcript of Geithner remarks | courtesy Bloomberg TV

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Liveblogging C-Span | Timothy Geithner, Secretary of the Treasury on bank bailout package 10th Feb

Colin Henderson

Two minutes to go – running a little late.  This set of announcements to talk about the plans for the remaining $250 Bn TARP money. Expect to see these dramatic developments. A public / private investment fund a new pre-requisite requirement for banks before receiving for government aid major expansion to consumer / business lending programme I will update this post every few minutes. Here we go.  Sen Chris Dodd, D Banking, Housing and Urban Affairs Committee Chairman  introduces Geithner. Treasury Department Financial Markets Assistance Plan. Notes listening to him: “Introduction has talked about unfreezing credit 5 times – interesting … Continue reading Liveblogging C-Span | Timothy Geithner, Secretary of the Treasury on bank bailout package 10th Feb

Social Lending1 Comment

Pertuity Direct introduce a differentiated model to US P2P lending

Colin Henderson

I had the opportunity to speak today with the good folks at Pertuity Direct, Kim Muhota, Lisa Lough. and Independent Trustee Charlie Schliebs (details below).  These are interesting times in P2P Lending and financial services in general so its refreshing to chat with some people who have a model, are live and keen to make a difference with their differentiated model. Kim came up with the idea several years ago while at business school and left PNC to form the company.  He brought a dual focus on getting the regulatory package right alongside a smooth and simple customer experience.  He … Continue reading Pertuity Direct introduce a differentiated model to US P2P lending

regulation2 Comments

Bank nationalisation by a thousand cuts is distracting us from the root problem

Colin Henderson

In the series “The Great Unwinding” last week two types of banks, Financial Utilities and Risk Takers were highlighted to appear.  This direction received strong support this weekend with Alistair Darlings order to perform a complete review of bank practices. The review is the not so thin edge of a large wedge when the ramifications are considered. The chancellor said on Sunday that the review would look at risk management by boards including how pay affects risk taking; it would also look at the way boards operate and the role of institutional investors. … Mr Osborne (Shadow Chancellor)  added: “The … Continue reading Bank nationalisation by a thousand cuts is distracting us from the root problem

Innovation3 Comments

The Great Unwinding | part 3 of 3: The state of innovation in financial services

Colin Henderson

The first two parts of this series are pretty gloomy.  I remain convinced they are directionally accurate.  I appreciate that being so specific about the next 12  years does not guarantee accuracy, and in fact guarantees there will be surprises that are not even contemplated.  However the core themes derived in the first two parts have sufficient momentum and credibility to form the basis of the environment for a strategic scan. The impacts on banks will be seen through three broad strategic drivers: Interventionist regulatory framework: all of the scenarios see new regulation. Back to basics banking: survivors will reorient … Continue reading The Great Unwinding | part 3 of 3: The state of innovation in financial services