Uncategorized2 Comments

RBC update | rbcmobex and other things underway

Colin Henderson

Avi over at RBC Applied Innovation just sent me $1 through RBCMobex.  I just registered, and 3 minutes later I am all set.  The registration process is pretty slick, and once my account has been validated the money will be there.  The beauty of this system is that it can be used with any bank, and its simple to use.  The problem with the banks Electronic Money Transfer system is that it is online banking only.  RBC Mobex is mobile, and you can send to anyone at the moment you need to do it, rather than wait until you get … Continue reading RBC update | rbcmobex and other things underway

Uncategorized5 Comments

Time to rethink the bailout | what will we do after the bailout, when the next crisis hits?

Colin Henderson

I am going out on a limb here, pre vote in the Senate this evening.  I am now wondering if the bailout is the right thing … why?  Here are some reasons: Things to expect post bailout: a major credit card company will go bankrupt in 2009 – you pick the one (I think I know which one) 2,000 – 3,000 regional US Banks will go bankrupt in 2009 ( there are 8,000 banks right now) a non-North American institution will go under So what should we / North America/ EEC do when 1, 2, or 3 happens?  Is the … Continue reading Time to rethink the bailout | what will we do after the bailout, when the next crisis hits?

AI1 Comment

Banks | Today is the perfect day to start a blog – begin the conversation with your customers

Colin Henderson

Confidence in financial institutions has been shaken, and the rules for regaining confidence are not clear.  Part of the reason that the road ahead is unclear, is because the rules have changed.  Its not uncommon for people to suggest that banks don’t ‘get it’, however in fairness to all concerned the new rules are not always clear. One side outcome from the financial headlines has been to isolate some clear rules that anyone can follow, including Banks.  These posts deal with some of the issues for banks, and any company to consider.  Incidentally, this is the heart of step 1 … Continue reading Banks | Today is the perfect day to start a blog – begin the conversation with your customers

US

What about the US regional banks ?

Colin Henderson

American banking lies in an uncomfortable mix of three big banks, and 8,000 smaller ones (with apologies to Wells).  As the dust settles on the last two weeks the realisation of what has occurred with the disappearance of Wachovia, WaMu, and the investment Banks, will settle, and the result will not offer opportunities, and implications not forseen. US regional bank mergers The US banking food chain is a dangerous place to be. The minnows, though, have got off lightly, while bigger fish have made a meal of each other. Where does that leave prospects for consolidation among the 8,000-odd US … Continue reading What about the US regional banks ?

EU, UK, US1 Comment

How much of this is a US bailout for a European problem?

Colin Henderson

Sometimes you have to read something twice because you thought it was a mistake.  I had that moment in an article in the paper version of the Financial Times this morning.  It lists European Banks, and shows the percentage their assets are of their country’s GDP.  Here is a synopsis, with just those that are close or exceed their country’s GDP. For fun I added the North American view, and even more fun I added Microsoft, one of the largest companies in North America.  It shows that the relative size of Banks to the European economies is a significant proportion, … Continue reading How much of this is a US bailout for a European problem?

subprime

Managing leverage combined with sound lending practices are essential for Banks | Wachovia failed on both

Colin Henderson

The Wachovia situation is a good example to illustrate the point I have been making insufficient capital at Banks, and their extended leverage. Citigroup Inc. to Acquire Banking Operations of Wachovia Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk. They are saying in effect that the $312 bn loan portfolio has significant bad debts and that Citi will absorb up to … Continue reading Managing leverage combined with sound lending practices are essential for Banks | Wachovia failed on both

US1 Comment

Emergency Economic Stabilization Act of 2008, and the word that is missing

Colin Henderson

I would have posted this earlier this evening, but the US House Committee on Financial Services site was down due to the overwhelming response to download the act. Here is the full proposed Act emergency-economic-stabilization-act-2008-ayo08c04_xml (EESA) Here is the more useful part for most their one page summary – emergency-economic-stabilization-act-2008-summary-ayo08c04_xml There are five parts: Stabilizing the Economy Homeownership preservation Taxpayer Protection No Windfall for Executives Strong oversight I took away a few thoughts: Much of the rhetoric in the bill worded to protect the US taxpayer and punish the big bad banker, will do much of neither.  There is a … Continue reading Emergency Economic Stabilization Act of 2008, and the word that is missing

Uncategorized

Whose fault is it anyway?

Colin Henderson

Some of the best parts of blogging are in the comments.  Today the Economist had an article on the American attempts to resolve the debt crisis, and whom is responsible.  This comment on an article is worth the read.  What caught my attention was Juntai’s point about “an epidemic of inaccurate thinking”.  If that isn’t a clarion call for our times then I don’t know what is.  Its a non political clarion call for some reality thinking.  I want your money | Economist Juntai wrote: September 27, 2008 23:28 The biggest problem we have as a nation is an epidemic … Continue reading Whose fault is it anyway?

sub prime, US7 Comments

America in hock | who is responsible?

Colin Henderson

A particularly telling graph of US consumer debt / GDP.  The rise from 1995 is almost exponential!  ‘ America in hock A cut in overall lending would be a complete reversal of trend. Morgan Stanley reckons that total American debt (ie, the gross debt of households, companies and the government) has risen inexorably since 1980 to more than 300% of GDP (see chart), higher than it was in the Depression. Consumers, in particular, were encouraged to borrow by low unemployment and interest rates and (until last year) rising asset prices. Their debt jumped from 71% of GDP in 2000 to … Continue reading America in hock | who is responsible?