Friday, November 7, 2008

Random Thought

I know like many, I am happy that the whole campaign session is over. We could not watch television without being bombarded by commercials for one politician or another saying Lord knows what about each other. It was sickening, maddening, and annoying.

Now the world is back in order and we can return to watching commericals for Levitra, Cialis, and Viagra.

Three more pricks trying to get your vote.

Friday, October 10, 2008

We Need Leadership

I'm watching Hank Paulson talk about the global economy and the downturn that we have been facing. Here is one issue that I have with Hank...I am seeing the top of his head more than his face. He is reading a script. Now, I know that not everyone is the best public speaker...but come on. Look us in the eye when you are giving it to us.

Is he saying anything worth while...uh, no. It is just a change in plans. They are now going to take an equity stake in banks and not buy up the troubled assets. So this isn't new but it is just a change of plans. But what about the bad debts on the books? Guess that goes into the dark matter world and hopefully everyone forgets about it right???

We need a real leader step forward and state, "This is what we are doing...This is how were going to do it...The banks need to get on board now or they are on their own. This is going to be painful, we can see that it already is. We are a great country. We have past every test that history has thrown before us and this time will be no different."

People are not that stupid. We can handle bad news. For real. Someone, anyone, come up with a path and stick with it. We must come up with a plan that is clear and understandable to the people at home. I know this is difficult. This is some pretty complicated stuff. But it can be done. And if you can explain it and you can tell the people that times are going to get rough (the well duh element) and SET A COURSE, then we can move forward. That is what the markets want, it is what the global economy wants, and it is what we need. The United States of America is still the light of the world. The world looks to us to set a course. We need to set one and soon. And NOBODY, Bush, McCain, Obama, Paulson, and Bernanke have not done it.

Give me a leader! Where are our Lincolns and our Volckers in today's world? That is all that we really need...a true leader. The world is not rainbows and unicorns, we're adults, we understand this. We don't want more spin and spin and spin. I guess that I basically want to say "GROW A PAIR!!!"

Wednesday, October 8, 2008

Rate Cut & Benefits of Credit Unions & Bank That Will Be Around

Okay, so I was early on the global rate cut, by a day. Notice that it did not help? The Fed is firing bullets into the darkness now. This won't be the last domestic cut...I can see them easing again at the end of this month.

Almost every call I take at some point winds around to..."So are you guys going to be around?"

I work for a credit union. Realize that the business model of a credit union is different than that of a bank. Most banks, have to make a profit for their stockholders. They make big bets to make more money (traditionally) so that they can maintain a reasonable level of profitability. Asset classes are falling and if a bank have to raise capital in a market where capital is not available(see yesterdays post)...well we've seen how that ends (think IndyMac, WaMu, and Wachovia). Credit Unions are there for the shareholders, those who actually have their money on deposit with the credit union. It is much more simple business. Credit Unions do not take the same risks for banks. The very nature of the credit union and who it serves, makes the relatively safer bet than some banks.

So, do I think my credit union will make it through this. Absolutely. The only thing that I can see tripping up where I work is large job losses in our area. I don't think it is too big of an issue as my credit union services teachers and medical professionals for the most part. It is a pretty safe bet those jobs aren't going anywhere. But you never know.

As for banks, if you're not at Bank of America (BAC) by the one can be surprised by their price dive. They BOUGHT COUNTRYWIDE and MERRILL LYNCH, Wells Fargo (WFC) which is the only one of these names that I would consider adding (which I'm not)and THEY BOUGHT WACHOVIA (but I bet you they end up with the GOOD part of Wachovia). Or JPMORGAN Chase (JPM), which has purchased BEAR STERNS and WAMU. And maybe Citi...but they have their own problems. I think they fought so hard to get their piece of Wachovia to be in the "too big to fail" category.

Outside that fantastic four, I can't see who will still be around. You are going to have smaller players that will remain because they were much smaller players and didn't go whole hog on the mortgage orgy at the turn of the century.