Tag: geithner

Sociology2

The Far Right Threatens the Unity of Germany, and the West

Colin Henderson

The Far Right Sept. 4, 2024 By Serge Schmemann Editorial Board Member Historical memory is bound to shape the first reaction to the powerful showing of a far-right party in two German state elections on Sunday. Nonetheless, there is nothing specifically German in the appeal of populism and extremism, especially among populations confused and threatened by a complex, unstable and vaguely threatening world. It’s endemic in the former Soviet satellites, but familiar, too, in the most venerable democracies. It was populism and extremism that won in Sunday’s elections in the neighboring states of Thuringia and Saxony, both in what was formerly … Continue reading The Far Right Threatens the Unity of Germany, and the West

Economy, US1 Comment

No consumer driven economy in US | Geithner in China

Colin Henderson

Some important messages within Geithners speech in China today that paint a very different next few years compared to the last 10, and as the ‘G2’ move to manage a transition the American economy into one that is very different, yet stable.  And all this to be managed against the backdrop of  the fear of eventual inflation, which would devalue foreign holdings in US T-Bills, something China is acutely aware of. These macro factors will play a large role in US banks and credit unions strategy design for the next 5 years. no consumer purchase driven economy in US – … Continue reading No consumer driven economy in US | Geithner in China

Business Models, Innovation1 Comment

Where are the bank visionaries when we need them?

Colin Henderson

As we watch for bank stress test results in the US and other countries efforts to deal with Banks’ asset valuation and capital levels, its useful to keep a track on the economic back drop, and assess the bank’s efforts to address their real problem, which is over-valued assets. The US stress tests specifically address the impact on banks under certain sets of future assumptions for economic growth and stability. Spring forecasts 2009-2010 | European commission The Commission forecasts a sharp contraction of the EU economy by 4% in 2009 (relative to a positive growth of 0.8% in 2008). Almost … Continue reading Where are the bank visionaries when we need them?

Uncategorized

SIGTARP report and report to Congress on stress tests | Apr 19th, 2009

Colin Henderson

The only word for this document is breathtaking.  It is breathtaking because it touches a large amount of the US economy, and the largest businesses in the economy.  It deals with: Banks Auto sector executive compensation Executive replacement ‘luxury’ purchases, (eg corporate jets) SIGTARP administration And the detail contained in the 247 pages is work that is substantially net new since January this year.  I say this in defence of Geithner, and his quiet approach at first.  He has been rather busy.  But to the report to Congress today. The report sigtarp-april2009_quarterly_report_to_congress:   SIGTARP site. Summary of Geithners testimony at FT. … Continue reading SIGTARP report and report to Congress on stress tests | Apr 19th, 2009

Economy

A lesson from Japan in management of toxic assets planning

Colin Henderson

Christian Caryl points out just how little Japan is both misunderstood and underestimated, particularly with regard to the 1989 bubble economy.  Feel free to read at your leisure. Mr  Koizumi government too charge in getting the banks to clean up their act, and after that the economy responded with remarkable speed. By contrast, the present U.S. slump is the result of a culture of financial profligacy that enmeshed consumers and homeowners as well as major financial institutions This lesson is one that must be considered as the PPPIP (Geithner) plan is implemented in the US, and European governments should take … Continue reading A lesson from Japan in management of toxic assets planning

Uncategorized

“Hold your nose, however. Mr Geithner’s proposal is worth a try” | Geithner

Colin Henderson

This weeks leader in the Economist sums up my perspective well.  Its not great that taxpayers have to include those pesky Wall Street types in the scheme to sort out the Banks, but its better than all the alternatives of  flat out bankruptcy, flat out nationalisation, or doing nothing.  Each of those three alternatives have significant knee jerk ramifications for US and the world economies. Banks, and particularly US banks are perceived to be over-valued on their assets, and no amount of debate can cure that impression now.  With asset values down by 60% (Equities) to 30% (real estate) its … Continue reading “Hold your nose, however. Mr Geithner’s proposal is worth a try” | Geithner

Uncategorized

“But the big ‘if’ is the speed of the cleaning up of [bank] balance sheets”

Colin Henderson

The head of the IMF continues to rightly focus on the need to clean up bank balance sheets.  To ignore them remains a central cause of lack of confidence which will hinders economic prospects due to the uncertainty caused by doubtful asset values. The more reason to adopt and move forward with Geithners measures right away. Hard times call for hard measures | Financial Times While there is no doubt that the forces for recovery are powerful, risks remain. Dominique Strauss Kahn, managing director of the IMF, told the Financial Times yesterday he expects recovery during the first half of … Continue reading “But the big ‘if’ is the speed of the cleaning up of [bank] balance sheets”

Uncategorized2 Comments

Disaster Myopia and other causes of banks’ problems

Colin Henderson

Andrew Haldane, Executive Director for Financial Stability, Bank of England diagnoses the failure of bank stress tesing in this speech given at the Marcus-Evans Conference on Stress-Testing.   He speaks of the Oct 87 crash, the LCTM hedge fund 98 failure as well as the 2007/8 crash. Why Banks Failed the Stress Test:  Bank of England pdf He sees three categories of failure: Disaster Myopia Essentially this is positive thinking that increases the longer since the last disaster.  He only somewhat jokingly wonders whether “10 years is the threshold heuristic for risk managers.” Network externalities He speaks of the financial system … Continue reading Disaster Myopia and other causes of banks’ problems

Uncategorized

Bank asset revlauation – unfortunately its the next mortgage crisis

Colin Henderson

In keeping with the theme that bank assets need to be properly valued before confidence can be returned to the system, this piece summarises the next immediate problem.  As you read this, bear in mind that the American system for most states employ the non-recourse system.  This little known implication just came known to me recently, and further explains the extent of the fear on bank asset value.  Non-recourse means the homeowner can walk away from a home where the mortgage exceeds the home value with no recourse from the bank back to that homeowner for the shortfall.  This is … Continue reading Bank asset revlauation – unfortunately its the next mortgage crisis

Uncategorized

A future that has hope for banking innovation only in North America?

Colin Henderson

In something that is a bit ironic, the Democratic US government is looking the most conservative in management of banks amongst the G-7 scheduled next week in Italy.  Geithner is also looking the most thoughtful of the finance ministers, alongside Lagarde in France. This is seriously not a time for grandstanding as Brown and Darling continue to do too often.  Time to get it right with a sustainable approach that will not relegate banks to becoming permanent financial utilities which I fear is happening when you read this dire summary of the current state. Could we have a system in … Continue reading A future that has hope for banking innovation only in North America?