Friday, February 20, 2009
Noted with Amusement
by Ken Houghton
He is, however, appearing at the "WaMu Theatre at Qwest Field Events Centre" in Seattle. Hope it's more fun for him and them than it is for WaMu shareholders.
Leonard Cohen, who was born and raised just above Murray Hill Park (or, as Google calls it, Parc King George), has no Montreal dates scheduled for his current tour.
He is, however, appearing at the "WaMu Theatre at Qwest Field Events Centre" in Seattle. Hope it's more fun for him and them than it is for WaMu shareholders.
Labels: banking, bankruptcy, pop music
Tuesday, January 22, 2008
It Depends on your definition of "U.S. Bank"
by Ken Houghton
Nor is it strictly correct that the bank all were profitable in the United States. Citigroup, for instance, only made money due to its international presence (PDF link).
Why is this important? Because if you're going to claim that banks will not "cut lending to the point it might undermine the U.S. economy," then you have to show that it is in their best interest to make those loans.
In Citi's case, the overall answer was clear: It's not. It might be a little better 75 bp lower—or it just might be less of a case of "making up in volume what we lose on price."
Via Mark Thoma, "don't worry, be happy" from John Berry at Bloomberg:
With all the large writedowns and losses announced for the fourth quarter, hardly any attention is being paid to just how profitable U.S. banks really are.
That inattention has raised unnecessary concerns that the banks may be so crippled by losses that they will cut lending to the point it might undermine the U.S. economy.
Some commentators have said the banks are in the worst shape since the Great Depression. That isn't close to being correct.
Nor is it strictly correct that the bank all were profitable in the United States. Citigroup, for instance, only made money due to its international presence (PDF link).
Why is this important? Because if you're going to claim that banks will not "cut lending to the point it might undermine the U.S. economy," then you have to show that it is in their best interest to make those loans.
In Citi's case, the overall answer was clear: It's not. It might be a little better 75 bp lower—or it just might be less of a case of "making up in volume what we lose on price."
Labels: banking, FRBOperations, High Finance
Tuesday, January 15, 2008
Best Line of the Day
by Ken Houghton
You see, I did what I always do with presentations: looked at the numbers. So I looked at page 16 and saw that Commercial Business revenues were down 21% YOY, and Net Income for same was down 15%.
Then a coworker pointed to the text on the right-side:
"Margin compression" apparently translates into English as: "Our business model doesn't work here."*
*I welcome any alternative description of the phrase that explains an 18% rise in deposits and a 21% decline in revenue.
I wish I could write business documents as well as the person who prepared Page 16 of Citibank's presentation today (h/t CR).
You see, I did what I always do with presentations: looked at the numbers. So I looked at page 16 and saw that Commercial Business revenues were down 21% YOY, and Net Income for same was down 15%.
Then a coworker pointed to the text on the right-side:
Commercial Business
– Average loans up 10%, deposits up 18%
– Margin compression
"Margin compression" apparently translates into English as: "Our business model doesn't work here."*
*I welcome any alternative description of the phrase that explains an 18% rise in deposits and a 21% decline in revenue.
Labels: banking, bankruptcy, High Finance, mortgage
Monday, April 16, 2007
What Investment Bank Professionals Do for Fun at Work
by Ken Houghton
"You know what someone should do? Launch a takeover bid for Barclay's."
"Aren't they bidding to take over ABN Amro?"
"Exactly. So most of the hedge funds are short Barclay's."
"And long ABN."
"So they would get squeezed on both sides."
As it turns out, that might have been the right strategy. Wonder how much exposure Jim Hamilton's pension fund has??
Conversation a few days ago:
"You know what someone should do? Launch a takeover bid for Barclay's."
"Aren't they bidding to take over ABN Amro?"
"Exactly. So most of the hedge funds are short Barclay's."
"And long ABN."
"So they would get squeezed on both sides."
As it turns out, that might have been the right strategy. Wonder how much exposure Jim Hamilton's pension fund has??
Labels: banking, hedge funds, investment strategies
