Payments

Some signs of a challenge to traditional wires for sending money

Colin Henderson

Retail payments, and in particular mobile payments have been a long time coming.  The mere fact that Banks still refer to ‘wires’ when sending money, and firing it at a rapid 48 – 72 hours delay around the world is tremendously archaic, and in dire need of rejuvenation.  However there is hope on the horizon, and two examples popped up this week.  The first brought to my attention by the good folks at RBC Applied Innovations. First off, RBC have a limited time trial underway. RBC Mobex Mobile Payment Service is currently just a limited time Trial Program with RBC … Continue reading Some signs of a challenge to traditional wires for sending money

US

Now we see why Lehmans was allowed to fail

Colin Henderson

Not that we care or need to comment on personal circumstances of people, but in this situation it is indicative of the excess that Wall Street Banking had come to represent.  Richard Fuld Jr. and his wife, Kathy, a well-known collector of modern art sell art | WSJ It could also evoke the plight of its owners, Richard Fuld Jr. — chairman and chief executive of Lehman Brothers Holdings Inc., the bankrupt holding company — and his wife, Kathy, a well-known collector of modern art. The sketches were consigned in early August following a competitive bidding process between Christie’s and … Continue reading Now we see why Lehmans was allowed to fail

Japan

Strong Japanese Banks buy up weak American Banks

Colin Henderson

Lots of news coming out of Japan, as they take advantage of their relatively strong position to buy up American Banks. Nomura continues global push with Lehman’s European equities and investment banking businesses Tokyo, London, September 23, 2008 – Nomura, the pre-eminent Asian-based investment bank, today announced it had reached an agreement to acquire the European and Middle Eastern equities and investment banking operations of Lehman Brothers. MUFG, Nomura take advantage of financial turmoil to buy up U.S. strugglers Sumitomo Mitsui Financial Group Inc. is applying the finishing touches to a plan to invest up to 200 billion yen in … Continue reading Strong Japanese Banks buy up weak American Banks

AI2 Comments

"Stop reinforcing the idea that bank leadership is out of touch with reality by delivering your same "plan for retirement" ads"

Colin Henderson

Hard hitting but very relevant post from John over at Socialmediatoday.  The current issues with Banks highlights the lack of credibility in traditional style advertising.  And its not just advertising, its the entire corporate presence.    AIG webs site says this: The industry’s most prominent independent ratings agencies continue to recognize growth in terms of insurer financial strength. Our financial strength is our commitment to you that we’ll be there for you when you need us The main page is running their latest ad here, and it speaks about ‘what we see’, has photo’s of football players, and is generally a … Continue reading "Stop reinforcing the idea that bank leadership is out of touch with reality by delivering your same "plan for retirement" ads"

Japan

Japanese investments in North American Banks continue | MUFG & Nomura

Colin Henderson

Mitsubishi UFJ Financial Group are investing $8.4 bn in Morgan Stanley giving them somewhere between 10 & 20% ownership. MUFJ to Invest Up to $8.4 Billion in Morgan Stanley The Japanese bank will become “a valuable partner as we transition to a bank holding company and build our bank services and deposit base,” Morgan Stanley Chief Executive Officer John Mack said in a statement today.   Apparently the Nomura acquisition of Lehmans Asian assets is close to fruition. Continue reading Japanese investments in North American Banks continue | MUFG & Nomura

US

Report: Nomura interested in Lehman’s Europe unit | IHT

Colin Henderson

I expect we will see many interesting and unexpected developments in the new few weeks and months.  Don’t rule out Japan, which is largely unaffected by the credit crisis, and may be interested in broadening their investment beyond their shores. Report: Nomura interested in Lehman’s Europe unit TOKYO: Japan’s largest brokerage Nomura Holdings refused to comment Monday whether it was moving to acquire the European unit of U.S. investment bank Lehman Brothers, as reported in the media over the weekend. Continue reading Report: Nomura interested in Lehman’s Europe unit | IHT

sub prime2 Comments

What should Banks be required to do to bring confidence back

Colin Henderson

Smithers raises an interesting concept here.  He offers that Banks should value their loans on the balance sheet at market value.  Today loans are shown at face value on Banks balance sheets.  The reduction based on market value would have a dramatic effect on Bank capital, and take many from being highly levered to being hyper levered, or bankrupt.  However he misses the point that Banks already do this in effect by taking allowances for bad debts, and there are substantial reserves in place in most conservative Banks.  However its clear that those reserves are not adequate, and there are … Continue reading What should Banks be required to do to bring confidence back

Uncategorized

Lehmans and AIG can cry in their beer at half price

Colin Henderson

Nice to find one positive albeit offbeat story from this week.  In a brilliant piece of promotion The 50 pub in Chicago is offerring half price beer to Lehman & AIG employees. Lehman, AIG workers get one break in Chicago “Everybody is freaking out. We wanted to do something to make their day a little better,” said Scott Weiner, co-owner of The Fifty/50 restaurant that is offering half-off bar and restaurant tabs for anyone who can prove they work or worked for AIG or Lehman Brothers. Is it a half, or full pint? Continue reading Lehmans and AIG can cry in their beer at half price

sub prime, US

Resolution Trust FAQ | street.com

Colin Henderson

Here is a nice crisp synopsis of Resolution Trust that will be responsible for managing the $700 million in bad loans.  RTC was set up to unwind $394 Bn of bad loans following the Savings and Loan failures in the 1980’s.  There were 747 S&L failures in that period.  America has a history of Bank failures.  Here is the synopsis at Street.com The RTC provided two functions. It shuttered many of the failing institutions, which wound up totaling 747. The total amount of assets equalled $394 billion. It then liquidated those assets over a period of time until it was … Continue reading Resolution Trust FAQ | street.com

Profitability

Banks need more capital – its time to deal with that

Colin Henderson

Nice summary and suggestions here from Raghuram Rajan in a piece in the Financial Times.  I continue to believe that the issue of financial leverage (too high debt to equity ratio) is one of the systemic issues in banking. Desperate times need the right measures The real problem is the financial system has too little capital. Buying assets at the current depressed market price will not help. And overpaying substantially for these assets will reward the shareholders of the most incompetent or risk-seeking banks, who hold the largest amounts of this now-toxic waste, with the most taxpayer dollars. … I … Continue reading Banks need more capital – its time to deal with that