Balta1701 Posted August 29, 2009 Share Posted August 29, 2009 QUOTE (NorthSideSox72 @ Aug 29, 2009 -> 01:35 PM) You're both right, IMO. I agree. Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 guys.. i work with banks on a daily basis for commercial lending. their goal right now... get customers to a 15-20 day deliquency, charge the 15% per month late penalty and keep them in that range. No new lending unless the owners have a 700 or in some cases 725 credit score with minimal revolving debt ($30k or less) and if you have these scores, you'll be capped at 1/2 of what they'd lend out to you before. All fees are up. (doc fees, filing fees, etc) On top of that, since fewer banks are lending, rates are up about 200bps from this time a year ago for those we are fortunate enough to "qualify". Credit analysts have been instructed to look for "reasons to say no". they absolutely do not want to modify contracts/agreements unless these customers go to 45-60 days past due. If you are a guy struggling to make your businesses payments on time, call and ask for the help, the answer is no, until you hit these magic numbers. if you are fortunate to modify your contract, they will hit you with a multi-hundred dollar "reset" fee. Other banks have changed their mindset, payment structure, to employees on maxing out fees/deposit growth and penalizing them for lending. As bullish as I am about where we are going, we wont be able to get as far as we need to, unless something/someone really gets these banks to start lending again. The biggest problem, in my opinion, is that the 6 to 7 largest banks control 65%+ of the lending in this country. We've let consolidation get out of hand. Remember First Chicago, how big they were. Well they got bought out by Bank One who then got bought out by Chase. Chase then got bought out by JP Morgan. Oh and by the way, JP Morgan/Chase bought Washington Mutual too. LaSalle was bought by ABN AMRO who was bought by Bank of America. (who also bought Countrywide) I hope that once things do get back on track, we break up these large banks like we did with AT&T back in the day. It's not healthy to have so few, control so much of lending. Link to comment Share on other sites More sharing options...
kapkomet Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (jasonxctf @ Aug 30, 2009 -> 10:19 PM) guys.. i work with banks on a daily basis for commercial lending. their goal right now... get customers to a 15-20 day deliquency, charge the 15% per month late penalty and keep them in that range. No new lending unless the owners have a 700 or in some cases 725 credit score with minimal revolving debt ($30k or less) and if you have these scores, you'll be capped at 1/2 of what they'd lend out to you before. All fees are up. (doc fees, filing fees, etc) On top of that, since fewer banks are lending, rates are up about 200bps from this time a year ago for those we are fortunate enough to "qualify". Credit analysts have been instructed to look for "reasons to say no". they absolutely do not want to modify contracts/agreements unless these customers go to 45-60 days past due. If you are a guy struggling to make your businesses payments on time, call and ask for the help, the answer is no, until you hit these magic numbers. if you are fortunate to modify your contract, they will hit you with a multi-hundred dollar "reset" fee. Other banks have changed their mindset, payment structure, to employees on maxing out fees/deposit growth and penalizing them for lending. As bullish as I am about where we are going, we wont be able to get as far as we need to, unless something/someone really gets these banks to start lending again. The biggest problem, in my opinion, is that the 6 to 7 largest banks control 65%+ of the lending in this country. We've let consolidation get out of hand. Remember First Chicago, how big they were. Well they got bought out by Bank One who then got bought out by Chase. Chase then got bought out by JP Morgan. Oh and by the way, JP Morgan/Chase bought Washington Mutual too. LaSalle was bought by ABN AMRO who was bought by Bank of America. (who also bought Countrywide) I hope that once things do get back on track, we break up these large banks like we did with AT&T back in the day. It's not healthy to have so few, control so much of lending. That's a pretty interesting take. So they want to make money off of people in a late position, milk them for everything they can, and ONLY then will they give them help, but at a substantial cost? What a f***ed up world we live in. Link to comment Share on other sites More sharing options...
Balta1701 Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (kapkomet @ Aug 30, 2009 -> 08:40 PM) That's a pretty interesting take. So they want to make money off of people in a late position, milk them for everything they can, and ONLY then will they give them help, but at a substantial cost? What a f***ed up world we live in. That's pretty much what I was arguing a page ago, I think. You should add 1 more thing...also, they get the government to foot a part of the bill somehow. Link to comment Share on other sites More sharing options...
kapkomet Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (Balta1701 @ Aug 30, 2009 -> 10:58 PM) That's pretty much what I was arguing a page ago, I think. You should add 1 more thing...also, they get the government to foot a part of the bill somehow. Which is why I asked what you were trying to say. I don't quite know what to think about all of this, quite honestly. Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 QUOTE (kapkomet @ Aug 31, 2009 -> 03:40 AM) That's a pretty interesting take. So they want to make money off of people in a late position, milk them for everything they can, and ONLY then will they give them help, but at a substantial cost? What a f***ed up world we live in. its kind of like the credit card companies too. they hate customers who pay off their balance every month. They prefer those who rack up lots of charges that they cant pay.... right away. Link to comment Share on other sites More sharing options...
southsider2k5 Posted August 31, 2009 Share Posted August 31, 2009 So out of curiousity, what should happen to the banks when customers don't pay? Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 if you are Bank of America, I'd think you use the $73.8 billion in banked retained earnings that you've earned over time. Link to comment Share on other sites More sharing options...
Texsox Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (southsider2k5 @ Aug 31, 2009 -> 09:25 AM) So out of curiousity, what should happen to the banks when customers don't pay? That is a fair question, and what is in place seems to be the best solution for the banks. What do we do if what is in the best interest of the company/bank/private entity is not in the best interest of consumers and ultimately the US? Link to comment Share on other sites More sharing options...
southsider2k5 Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (jasonxctf @ Aug 31, 2009 -> 10:24 AM) if you are Bank of America, I'd think you use the $73.8 billion in banked retained earnings that you've earned over time. Then the US can use its trillions of dollars in retained earnings (aka tax money) and quit taking any more money from me. Link to comment Share on other sites More sharing options...
Texsox Posted August 31, 2009 Share Posted August 31, 2009 SS, almost every state has limits on fees and interest that financial institutions can charge, what do you think of them? Consumer protection or unfair restrictions on banks? I am uncertain of the history of these laws, but I am assuming they were a backlash against excessive fees that the banks were charging, or shameless pandering for votes by politicians. :-) Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 Discover: Small Business Confidence Hits 18-Month High Monday, August 31, 2009 Discover released the results of its Small Business Watch survey for August, with the data indicating that economic confidence is beginning to return among America's entrepreneurs. "For the past few months, small business owners have shown rising confidence in the overall economy, as well as an increasing sense that the conditions for their own businesses are improving," said Ryan Scully, director of Discover's business credit card. "This month we have a few more signs that they may be ready to start trying to grow their businesses again, and that the worst may be over." According to the survey, the number of small business owners who think the economy is getting worse dropped to 43% in August, the lowest reading on that data point since the Watch's inception exactly three years ago. This month, 38% of owners say the economy is getting better, up from 30% in July; 15% believe that the economy is staying the same, down from 16% in July; and 4% remain unsure. Among the report's other highlights: 48% of small business owners rate the economy as poor, which is the lowest percentage since February 2008, while 41% rate it fair and 9% say it is excellent or good. 30% of small business owners see economic conditions for their businesses improving, up from 29% in July; 44% see their own conditions getting worse, down from 46% in July; and 23% say the climate is unchanged. 27% of small business owners say they plan to increase spending on business development, such as advertising, inventory and capital expenditures, which is up from 23% in July; 43% plan to decrease spending, down from 49% in July; 25% are planning no changes; and 5% aren't sure. 51% of owners say they have experienced cash flow issues in the past 90 days, down from 53% in July. Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 QUOTE (southsider2k5 @ Aug 31, 2009 -> 04:01 PM) Then the US can use its trillions of dollars in retained earnings (aka tax money) and quit taking any more money from me. does the US truly have "retained earnings" as per definition? In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation makes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings. I would think that the US is in a deficit position in their retained earnings portion, and thus is being balanced out by capital infusion. (aka borrowing) Link to comment Share on other sites More sharing options...
southsider2k5 Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (jasonxctf @ Aug 31, 2009 -> 11:08 AM) does the US truly have "retained earnings" as per definition? In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation makes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings. I would think that the US is in a deficit position in their retained earnings portion, and thus is being balanced out by capital infusion. (aka borrowing) That wasn't serious, but it really doesn't help. If any other business had $10 trillion in accumulated losses, it wouldn't be around still. Link to comment Share on other sites More sharing options...
Rex Kickass Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (southsider2k5 @ Aug 31, 2009 -> 12:14 PM) That wasn't serious, but it really doesn't help. If any other business had $10 trillion in accumulated losses, it wouldn't be around still. Clearly you've never flown Alitalia. Link to comment Share on other sites More sharing options...
Texsox Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (southsider2k5 @ Aug 31, 2009 -> 11:14 AM) That wasn't serious, but it really doesn't help. If any other business had $10 trillion in accumulated losses, it wouldn't be around still. Could you imagine the late fees on that debt? Link to comment Share on other sites More sharing options...
southsider2k5 Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (Tex @ Aug 31, 2009 -> 11:19 AM) Could you imagine the late fees on that debt? The interest alone is over a billion dollars a day. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted August 31, 2009 Share Posted August 31, 2009 QUOTE (Rex Kicka** @ Aug 31, 2009 -> 11:19 AM) Clearly you've never flown Alitalia. Italians are not exactly known for highly successful international business. Not really their thing. And I have indeed flown Alitalia - worst European flight I've ever had. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted August 31, 2009 Share Posted August 31, 2009 By the way, I saw reported today that on top of the realization that TARP only actually used less than half of the $700B they were allocated, but early returns so far are showing a 15% profit. Still lots of money out there of course, and some of it (AIG, I am looking at you) may never come back. But at the very least, we have clearly seen that the most dire of predictions - that the money would all be gone, all $700B, with no profit and no principal - were very wrong. Link to comment Share on other sites More sharing options...
jasonxctf Posted August 31, 2009 Author Share Posted August 31, 2009 QUOTE (NorthSideSox72 @ Aug 31, 2009 -> 06:05 PM) By the way, I saw reported today that on top of the realization that TARP only actually used less than half of the $700B they were allocated, but early returns so far are showing a 15% profit. Still lots of money out there of course, and some of it (AIG, I am looking at you) may never come back. But at the very least, we have clearly seen that the most dire of predictions - that the money would all be gone, all $700B, with no profit and no principal - were very wrong. great point. its funny, 6 months ago we were worried about the Great Depression II. Link to comment Share on other sites More sharing options...
Balta1701 Posted September 3, 2009 Share Posted September 3, 2009 I'm not going to find the Madoff thread, but this would have been great. Madoff told them that Christopher Cox was going to be the next Chairman of the SEC a few weeks prior to Cox being officially named. He also told them that Madoff himself "was on the short list" to be the next Chairman of the SEC. Link to comment Share on other sites More sharing options...
mr_genius Posted September 3, 2009 Share Posted September 3, 2009 QUOTE (Balta1701 @ Sep 2, 2009 -> 07:12 PM) I'm not going to find the Madoff thread, but this would have been great. gold. Link to comment Share on other sites More sharing options...
southsider2k5 Posted September 3, 2009 Share Posted September 3, 2009 Ah yes, governmental regulatory oversight at its best. Put the Wolves in charge of guarding the lambs. Link to comment Share on other sites More sharing options...
Texsox Posted September 3, 2009 Share Posted September 3, 2009 QUOTE (southsider2k5 @ Sep 2, 2009 -> 08:17 PM) Ah yes, governmental regulatory oversight at its best. Put the Wolves in charge of guarding the lambs. And free enterprise at its best. Let Madoff operate without oversight. Ah, the eternal struggle for a balance that protects the public. Link to comment Share on other sites More sharing options...
NorthSideSox72 Posted September 10, 2009 Share Posted September 10, 2009 Better than expected jobless claims, and better than expected imports. Its funny, the market feels its bought too far out into an assumed recovery, but the good news keeps coming, so we just continue to hover where we are. Sort of an odd place to be. Link to comment Share on other sites More sharing options...
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