Profitability

“Do investors honestly believe that $45 billion of reserves … control a $6.3 trillion banking system”

Colin Henderson

Fascinating comment on the fragility of the Banking system. The numbers here are American, but the a similar relativity would apply in Europe, Canada, or Japan. This is why the relatively small matter of the sub prime credit crisis, has just an enormous ripple impact across the markets. Hussman Funds – Weekly Market Comment: The Bag Will Not Inflate, And Liquidity Will Not Be Flowing – October 8,2007 Meanwhile, the total reserves of the banking system remain about $45 billion, nearly all of which represents temporary repurchase agreements that are continuously rolled over as they become due. Do investors honestly … Continue reading “Do investors honestly believe that $45 billion of reserves … control a $6.3 trillion banking system”

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“But the Dow keeps chugging along. I can’t figure out why” | Sub Prime is understated so far

Colin Henderson

Some background and stats, indicating the sub-prime crisis is not isolated to lower income people.  I can’t help but feel there is more to come on this situation, and Banks losses are understated at this point. Subprime fallout arrives in the suburbs | FP Passport According to a study by the nonprofit Urban Institute, high-interests loans were indeed popular in low-income neighborhoods. However, they were much more popular in Fairfax County, which has a median income of $100,318—the highest in the country. Many homeowners there used subprime loans to upgrade to a larger house. In fact, these kinds of loans fueled … Continue reading “But the Dow keeps chugging along. I can’t figure out why” | Sub Prime is understated so far

Profitability

Market cap of some interesting companies

Colin Henderson

A Scoble post earlier about the value of Facebook, and Google, got me looking at the current market cap of some well known companies, both technology, and Banks.  Here it is, descending order, with current market capitalisation in US dollars. Google, Ebay, and Amazon have done a decent job of infiltrating amongst the big guys. Microsoft $282,000 BofA $235,320 Google $194,151 IBM $160,480 Amazon $53,135 RBS $52,292 Barclays $43,903 Ebay $37,206 Continue reading Market cap of some interesting companies

AI3 Comments

How not to gain peoples confidence | Rapleaf

Colin Henderson

I find Rapleaf to be quite insidious.  It all began with an email from Vivek [who is Vivek?] asking me …. “How the heck does Rapleaf know if someone is a 28 year old male teacher from Nebraska? Or maybe a 42 year old “soccer mom” from Orlando, Fl. Whatever one’s demographics are, we’re able to find it from publicly available information on the web.” Thats spammy enough to disregard, but here is the punchline: You can now scroll over the info on your profile stats and we’ll highlight where we pull this info from. We call this the “hover … Continue reading How not to gain peoples confidence | Rapleaf

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Prosper commentary on interest rates

Colin Henderson

Prosper released their regular review of results, and the commentary on the marketplace interest rates, and how they reflected market shifts is interesting. Prosper People-to-People Lending Market Survey: Financial News – Yahoo! Finance What is interesting about these percentage drops is how close they are to what was widely anticipated to be a quarter-point instead of a half-point reduction by the Fed. However, what remains to be seen is whether the market will continue to push rates down further in line with the Fed’s surprise move. What is also of note, is the anticipated trend out of sub prime lenders. … Continue reading Prosper commentary on interest rates

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Why is it assumed that the web is entertainment ?

Colin Henderson

 The Big Picture speaks about something even I have noted recently.  More and more Mainstream Media (MSM) are seeking ways to bolster their ad revenue’s.  If I can summarise the The Big Pic’s conclusion it is that these MSM’s value is so low that they are desparately seeking alternative eyeballs to boost their revenue.  When we see this kind of thing, it suggests desperation, and perhaps revenue problems for MSM. The Big Picture | Soon to be worthless: Nielsen Net Ratings and comScore Media Metrix Their business model appears to be essentially a “Seeking Alpha” aggregation approach, with the added … Continue reading Why is it assumed that the web is entertainment ?

Profitability

“If the banks are bad, … will … become worse if the government … encourages them”

Colin Henderson

Fascinating virtual “interview” with Walter Bagehot, Editor of Economist from 1861 until 1877.  Gilbert creatively aligned pertient questions for the current sub-prime situation, with quotes from Bagehot’s book, “Lombard Street,” published in 1873. Bloomberg.com: News Bagehot Had Credit-Crunch Answers 130 Years Ago: Mark Gilbert By Mark Gilbert Oct. 4 (Bloomberg) — Walter Bagehot, an economist and author writing in the 19th century, had the answers to the current credit crunch. In 1866, the U.K. money markets were in turmoil. The collapse of a private bank called Overend & Co. threatened to destroy the fragile trust underpinning the credit system. The … Continue reading “If the banks are bad, … will … become worse if the government … encourages them”

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Brands | Baseball teams, CNN and emotional connection

Colin Henderson

Fascinating post on the value of brands, and importantly how that value is developed. I highlighted the Lou Dobbs section, yet that doesn’t do justice to this thoughtful post. Irving Wladawsky-Berger: The Complex Chemistry between Brands and Customers – Some Personal Experiences As we know, Lou Dobbs has emerged as one of the major spokesmen rallying against illegal immigration. He has embraced what I consider to be a polarizing, red meat style in his tirades against immigrants, blaming them for all kinds of societal ills, some perhaps justified, others not. Clearly Lou Dobbs is entitled to his opinions, as I … Continue reading Brands | Baseball teams, CNN and emotional connection

Open Source Banking

[2.6.22.12.18] an example of the incredible power of Open Source

Colin Henderson

I have been running Linux for 6 months on my Thinkpad, and very happy with it.  I had my first example of what could have been, something of a crisis last night. Every 6 months Xubuntu Linux upgrades, and thats October. Last night a fairly significant upgrade popped up involving the part of the core with the name of 2.6.22.12.18, so I carried on as normal, and installed.  Then the crisis … wireless and some fonts were not working.  But this is Linux … so I rebooted to the earlier version. [Linux always keeps the last two versions available in … Continue reading [2.6.22.12.18] an example of the incredible power of Open Source

AI

Our side of the counter | a must read for every Bank exec

Colin Henderson

This post is brilliant.  Thanks James.  Everyone MUST read it, and I rarely say that.  It speaks volumes to the scalability of Banks, (and Credit Unions), and the conundrum of placing a large percentage of responsibility of customer loyalty squarely on the shoulders of, no disrepect, the lowest paid, least trained, yet often most experienced as in this case, employees. Lloyds TSB – Review – Please Don’t Hate Us Too Much I am unable to comment on the economics, product design and profits of large financial institutions, I’m not that clever (if I was I wouldn’t still be a cashier … Continue reading Our side of the counter | a must read for every Bank exec