A Euro China-Syndrome?

By |2017-07-17T12:34:14+00:00September 16th, 2014|Global Market Update|

Is the Euro-zone stuck? It seems like they’re mired in a mess of their own making. There’s no desire to go backward and de-integrate; there’s not much interest in moving forward with stronger pan-European institutions; but it’s economically unsustainable to stay where they are. At present, Europe’s economy is stagnating. As anemic as our post-Crisis recovery has been, theirs has been worse: Source: Eurostat […]

Long Live the Queen?

By |2017-07-17T12:34:14+00:00September 15th, 2014|Global Market Update|

The King is dead. That’s what I thought when I heard that Emilio Botin, Chairman of Banco Santander, had died. Botin had been running Santander—based in Madrid, Spain—since 1986. His father, grandfather, and great-grandfather had all been bankers. He took what was then a sleepy, regional bank and built it into one of the largest banks in the world. He was a canny manager, acquiring Sovereign Bank in the northeastern United States for $3 / share in late 2008, when it might have cost [...]

Ghillies on the Tweed

By |2017-07-17T12:34:15+00:00September 12th, 2014|Global Market Update|

Is Scotland headed towards independence? That’s the question Scottish voters will decide next week. If they vote to secede from the United Kingdom, Queen Elizabeth will remain Scotland’s nominal head-of-state, but pretty much everything else is unclear. Like Quebec’s vote on independence 20 years ago, Scottish independence is an emotional question, as well as an economic and political one. Then as now, a long-standing separatist movement appeared to gain significant momentum shortly before the referendum. Yes/no opinion on whether Scotland should be an independent [...]

Banking on Change (Part 4)

By |2017-07-17T12:34:15+00:00September 11th, 2014|Global Market Update|

The last challenge for banks is technology. Bankers have always had to adapt to new technology—whether it was drive-through tellers or debit cards or ATM machines. But the mobile revolution creates especially significant demands. Now, almost half of all depositors prefer to manage their accounts via PC or cell phone. By contrast, five years ago only a quarter of their customers did their banking this way. […]

Banking on Change (Part 3)

By |2017-07-17T12:34:15+00:00September 10th, 2014|Global Market Update|

The world is getting older and more urban. Source: UN In 1970 the global median age was 21 and there were 70 people per square mile. By 2020 the median age will be 31 and there will be 150 people per square mile. This means bank customers are looking for different kinds of services. Older customers tend to be wealthier and need ways to manage what they have. […]

Banking on Change (Part 2)

By |2017-07-17T12:34:15+00:00September 9th, 2014|Global Market Update|

What’s changing for banks? The easiest changes to see are regulatory. Regulators have massive influence on how banks do business. From standards on loans to borrowing to capital, the overseers have been raising the bar. And it needed to be raised. One of the causes of the Financial Crisis was lenient regulation. Regulators assumed that market discipline would keep the biggest institutions in line—that firms that mark-to-market every day didn’t need as much of a safety net. Well that didn’t work out so well. [...]

Banking on Change (Part 1)

By |2017-07-17T12:34:15+00:00September 8th, 2014|banking, conspicuous consumption, financialization|

Why do people dislike banks? Bankers got a black eye in 2008 when the nine largest US banks took government money to shore up their capital. The US banking system was facing a crisis of confidence that was causing an institutional run on its liabilities, threatening to turn the economy’s recession into a depression. While it was controversial, most people believe that the bailout helped avoid a much worse economic outcome. […]

Big Data Goes To College

By |2017-07-17T12:34:15+00:00September 5th, 2014|Global Market Update|

How important is a big-name college? That’s what I wondered when I read about Jack Ma, a college consultant who sometimes earns six-figure fees for helping kids get into top-tier schools. He looks at what kids are good (and bad) at and tries to sculpt their college applications to highlight their strengths. He also tries to steer applicants towards schools that fit their personalities. In doing this he is very much like a good high-school guidance counselor. Only he charges big fees and offers [...]

Two Steps Forward, One Step Back?

By |2017-07-17T12:34:15+00:00September 4th, 2014|Global Market Update|

Be careful what you wish for. For years economists have been hoping that capital spending will pick up. They look at business spending on new equipment as an indicator that the economy’s animal spirits are getting back to normal. And companies are flush with cash these days, but they’ve afraid they’ll need that money for a rainy day. The Financial Crisis caused a lot of managers realize how dependent on credit they really are. […]

“Once More Unto the Breach”

By |2017-07-17T12:34:15+00:00September 3rd, 2014|Global Market Update|

What should we make of the latest security problem? After a blogger reported that massive new batch of stolen credit and debit cards went on sale Tuesday, Home Depot confirmed that it is investigating a possible data breach. Rumors are that the breach ran from May through August. If true, this could be much bigger than Target’s data breach last fall, when 40 million cards were stolen in three weeks. Home Depot is the fourth largest retailer in the US, with $80 billion in [...]