Thursday, May 27, 2010

Global Financial Leadership shifting

For the past century, the normal headline would have read " Markets stabilize as US makes positive remarks about Europe." But the headline today read "Markets stabilize as China makes positive remarks about Europe." That headline is showing the world how leadership in global finance is shifting away from the US and towards China.

Are we losing our touch or is China simply gaining theirs? I'm thinking it is a combination. Our current financial leaders have shown a personal greed that has endangered our standing at the top. In the last 20 years, China's financial leaders have had a more leadership, less personal profit focus that has put them in a stronger financial leadership position than before. They haven't eclipsed us yet, but it could happen. We need to have a less personal profit, more leadership focus from our financial leaders.

The headline says it all. It would be nice if we could get back to that.

Wednesday, May 26, 2010

Dividend Stock During Downturn

This downturn should be a reminder to us to look to either start or add to positions that carry high dividend yields. Over the long term, this strategy has done very well. The important step is the research you do in finding stable stocks. A few stocks that I have found to have a high dividend yield compared to their average are GE, Exxon Mobil, Johnson and Johnson, and Kraft. I am sure there are others. Please post what you find.

Monday, May 17, 2010

Refund to people works

I am attaching a Bloomberg story about how Bank of America noticed that credit card defaults went DOWN because of tax refunds. This is a great example of how the government made a mistake giving that money to the banks directly and not the people. When money is given to the people, it tends to end up at the banks anyway in the form of mortgage payments or refund checks thereby not only saving the system, but saving credit ratings of consumers also.

A thank you goes out to Peter Eichenbaum from Bloomberg.

Anyway, here is the story.

Bank of America credit card story

Thursday, May 13, 2010

Great Article on B of A

There is a great article on Bank of America's new CEO written by Bloomberg. Congrats to authors Julianna Goldberg and Hans Nichols. Click on the link below:

Bloomberg Article.

Monday, May 10, 2010

Local Banks

Recently, I went to the neighborhood local bank and started a savings account. I did this after researching what the effects of such a move would make on myself, the community, and the bank. I have come to the realization that there is a very important place in the banking industry for local banks. This action is not simply a direct move away from the mega bank. Mega banks also provide a service to the consumer that local banks cannot such as multiple branches and ATM's. It is simply an action taken to provide business to local bankers who keep their plan simple and their mission clear to the community. I encourage everyone to at the very least take a look at your local bank to open up an account.

The savings account was opened for a few reasons. The realization that I will actually see my money at work in the community is exciting to me. Also, local banks make the most of their revenue from banking and stay away from making their profits from other sources like trading. This creates an absolute focus on the business of banking which the megas don't have anymore. The opportunity for future business with the local bank will be made a little easier as their decision makers are in the building.

The idea that my money will be at work providing loans to local businesses is a good feeling. That is the essence of the local bank that the megas cannot match. Since they have a large stake in the community, they will be right there to help when needed. For instance, there is a local bakery right near me that received financing from the local bank. You can bet that I will be frequenting that bakery regularly knowing that people in the neighborhood have put in almost all the equity into the business.

The local banks are focused on banking. The megas have shown a lack of focus on banking and more of a focus on trading. This is clearly evident in their use of TARP funding. It was used for trading profits while lending did not get even the slightest bump. Local banks provide that focus on banking because that is their main source of revenue.

The third reason why I opened the account is that I will actually get to know the bank at a very close level. The decision makers for the bank are either in the same building or at the very least same neighborhood as the tellers and the rest of the bank. That provides an opportunity to create a lasting relationship with individuals of a local bank that I would not have access to at the megas.

So remember to check out your local banks. They provide a laser focus on banking, look to be the principle lender in the community because they are part of the community, and show a level of access that the megas cannot provide.

Friday, May 7, 2010

TCF changing over charge policy


I received an email from TCF stating that they are changing their overdraft protection to mirror that of Bank of America's. Nice!

Yesterday's trading errors should make for some good water cooler talk. The issue I have is that the market still ended down three percent yesterday! It is down eight percent in two weeks! Either this is a great buying opportunity or we are in for some hurt.

An amendment capping the size of banks failed in the Senate last night. I actually think this is a good thing. We are the ones who need to spread the wealth around and keep our assets in local banks.