Thanks to Chris Meek for bringing this to my attention – an excerpt from a recent article in the NY Times. Rubio (in red @ 35%) is on top, but the path is choppy compared to the solid upward trends of Cruz (in blue @ 26%) and Trump (in yellow @ 23%). Bush is in gray @ 10%. The vertical lines are the dates of the debates to date.
The Money’s on Rubio — Barely
Prediction markets’ tracking of the four candidates seen to have at least a 10 percent chance of winning the Republican nomination, as of Dec. 24.
From the Times’ Steven Rattner: “While Hillary Clinton appears to be cruising to the Democratic presidential nomination, the sprawling Republican field has felt like a celebrity boxing match in which Donald J. Trump has taken on all comers. But although Trump leads in nearly every national opinion poll, the prediction markets (in which real people bet real money) have been mostly skeptical of a Trump nomination. Throughout most of the spring and summer, Jeb Bush led the pack. More recently, his lackluster campaign caused him to falter in the betting while the star of Senator Marco Rubio has risen sharply. Before despairing about Mr. Trump’s winning his party’s nomination, let’s remember that the prediction markets have a better record of forecasting election outcomes than polls and pundits.”
According to the Financial Times, the amount of fines and settlements paid by global banks since the GFC is US$100 billion. That’s shareholder funds paying for their management’s admission of guilt in rigging foreign exchange markets. Unless the guilty individuals (CEOs?) are taken to court, it appears that their criminality will continue to be just one of the costs of doing business.
I’m with Elizabeth Warren on this one. She’s one of the few to have grilled the chiefs of the Federal Reserve and the FDIC about their not referring anyone to the Department of Justice during this period. That’s in stark contrast with the many hundreds of individuals referred during the banking crises in the late 70s.
Yes – it’s important, but a recent survey about banks’ performance received responses from over 600 Finance Brokers. Of the eleven categories, the most important was turnaround times. Credit policy was #4, interest rates #5, and commission structure #8.
I concur about the relative importance, because I’ve shared my clients’ frustration about slow turnaround times and inconsistent credit policy. My advice and recommendations now include not only an analysis of the current rates, but also emphasis on which lenders are most likely to approve our application quickly.
Brokers rated NAB/Homeside as the Bank of the Year and Westpac’s Rocket Repay as the Product of the Year.
According to a recent Harris poll in the U.S., which ranks the reputation of the top 60 most visible companies, the worst nine included five of the country’s largest banks – Wells Fargo, Citigroup, JPMorganChase, Bank of America, and Goldman Sachs in the order of worse to worst. If it were done here, I’d be willing to bet that the worst would be Bankwest, particularly in view of all the negative press, the most recent being last night’s Four Corners program.
On the plus side, the U.S. companies with the best reputations are Apple, Google, and Coca-Cola.
The RBA’s recent rate reduction of 25 points was ‘passed along’ by the big banks. Or was it?
Prior to the RBA’s announcement earlier this month, the banks had increased the discounts they offer to the most creditworthy. A full 1% discount to standard variable home loan rates was available then, but following the RBA’s move, the best discounts were reduced, and the end result is a cut of as little as 5%.
So, while the politicians (and public?) think they’ve gotten a big break, it just ain’t so.
Bloomberg’s lengthy report this week that the U.S. Federal Reserve secretly gave the big U.S. banks trillions of dollars, not the billions that were reported publicly at the height of the GFC, was shocking. Even worse, the congressional oversight committees didn’t know about it. So, this band of unelected know-it-alls and their Wall Street cronies, the very ones who got us into the mess, dramatically increased the exposure of U.S. taxpayers without reference to the elected officials responsible for their supervision.
Today, the news is that the Fed is pumping more money (billions) into Europe. If that’s the public line, we must now question the magnitude of the real amount(s). The press isn’t helping; CNNMoney offered this ‘reassurance’,
“It’s important to note — the Fed’s funding does not come from U.S. taxpayers, and is independent from the federal budget.”
So, where does it come from? Oh wait, I know, they’re just doing a lot of creative accounting, which cannot be the answer to the unprecedented mountains of unpayable debt around the globe. Something’s got to give, and I’m afraid that it may be ugly in the extreme.
‘Doomsday’ is a term used with alarming frequency in recent articles. The reasons are many, but I only just learned that the global economy is under threat in yet another way: big U.S. banks have something like 15% of their total commercial banking assets at risk in Europe. I don’t see how another financial crisis can be avoided, and my worst fear is that it will be a lot worse than the last one. I hope I’m wrong, but it seems prudent to get out of any connections with the following banks and their exposure to PIGS.
Bank of America – $14.6 billion, Citibank – $20.6 billion, and JP Morgan Chase – $15 billion.
I still can’t believe that Fin Rev’s editors let it go to press yesterday. How can they possibly think that the headline “Home loan discounts close to damaging banks” makes any sense? The banks simply don’t lend unless they know they’re going to make a profit. The author of the article attributed the comment to a bank analyst with JP Morgan, who actually sent it in a note to his clients, saying that discounts to standard variable rates “had quickly climbed in the last 12 months from 0.7 of a percentage point to 0.9”.
There’s also a graph showing the average weighted discount ranging as low as 0.1% in September 09 to over 1.0% now. I wonder where they were when banks were openly advertising discounts of 0.7%? In monitoring the banks closely for the last few years, I’ve noticed that they have and will give discounts of 0.7% to just about anyone with a full-time job and a good credit history. All you have to do is ask or get a good broker.
Medfin and Experien pioneered specialised finance for Healthcare Businesses and Professionals and did it so well that they have been slowly taken over by National Australia Bank and Investec, respectively. The pioneers recognised the very low risk of lending to doctors personally and to their businesses in view of their being highly intelligent, of the highest integrity, among the most affluent, and having government guaranteed incomes. The credit criteria applied was therefore quite flexible, many doctors became accustomed to almost unlimited credit, and defaults were extremely rare.
But, the changes imposed on the banking industry as a consequence of the GFC has resulted in Medfin being now totally absorbed by NAB, and it’s now unclear as to how the bank will view the Healthcare market in terms of credit policy. The situation is similar at Experien, where the name (and autonomy?) has been phased out by Investec.
While this may further extend tight credit policies for financing things like Medical Equipment, it should represent an opportunity for a new lender or lenders to fill the void in Healthcare. It is also a good reason to retain the services of a broker with extensive knowledge of the Healthcare market and with access to private lenders, because without Medfin and Experien, you’re dealing with just another big bank in which the staff is always changing.
Clancy Yeates wrote in last Saturday’s SMH about three ways to level the playing field among the banks. If the federal government were serious about competition for the big four, as was the case before the GFC, they could:
- Extend the support for Residential Mortgage Backed Securitisation. Yeates wrote, “A proposal from the shadow treasurer, Joe Hockey, to extend the government’s credit rating to AAA-rated mortgage-backed securities is worth taking seriously. Banks already enjoy an implicit guarantee on their borrowing, after all.”
- Provide clarity about the bank deposit guarantee. “The government will review the guarantee next October but it is not clear what they will decide, and this uncertainty works against small lenders. As long as this remains up in the air, many savers cannot help but imagine their money is safer with the big banks – giving the majors another advantage over the smaller players.”
- Make it easier to switch banks. “The government is trying here, and unveiled a ”bank-switching” package two years ago. But the latest documents from July showed only 35 people a week had signed up to the scheme – a tiny share of the nation’s customers.”
The big four have had a dream run through the GFC, setting a ton of record profits, despite quite a few write-offs. They continue to make it difficult for SMEs, so why not help the smaller lenders compete for that and other markets with the changes above?