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Tricky

Tricky
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  • Microsoft: 1.5 Million Windows Phone 7 Handsets Sold in First 6 Weeks [View article]
    I am old enough to have started my working career right as the great PC wars were raging. The mobile platform war is even more fun, many more viable players, each with relative strengths and weaknesses.

    Okay, now time for HP/Palm to show its new hand!
    Dec 21, 2010. 10:16 AM | 2 Likes Like |Link to Comment
  • Apple (AAPL) will buy Facebook, Congress will block QE3, and the yield on 30-year U.S. Treasurys will slide to 3% - some of the wild predictions for 2011 offered by Saxo Bank.  [View news story]
    Actually, Google will buy Facebook, to get all those employees back ;-)
    Dec 21, 2010. 10:14 AM | 1 Like Like |Link to Comment
  • The view of incoming House Financial Services Committee chairman Spencer Bachus - "in Washington, the view is that the banks are to be regulated; my view is that Washington and the regulators are there to serve the banks" - is symbolic of the market fundamentalist crusaders who will set the tone for how banking reform is implemented for the next two years, Andrew Leonard writes.  [View news story]
    Sure, let the banks run wild. What's the worst that could happen?
    Dec 16, 2010. 10:01 AM | 6 Likes Like |Link to Comment
  • Wells Fargo (WFC) appears to be the only big bank advocating for banks to hold more of the mortgages they sell, in order to promote more careful lending. "Rather than being something rare or unusual, it should be common in the mortgage industry to align interests of lenders, borrowers and investor," a Wells Fargo mortgage exec tells FT.  [View news story]
    Hi Richard, it's been a while since I was involved in much detail (I know zilch about the minute specifics of recent regs). But in the past, yes, there were differentiations in "riskiness" of loans, I think it was fairly broad based (i.e., nothing that scaled for every 10 points of credit score, for example).

    On your 2nd question, it really depends on the specific tradeoffs of the capital requirements vs. the relative margins between products.
    Dec 15, 2010. 05:15 PM | 1 Like Like |Link to Comment
  • Wells Fargo (WFC) appears to be the only big bank advocating for banks to hold more of the mortgages they sell, in order to promote more careful lending. "Rather than being something rare or unusual, it should be common in the mortgage industry to align interests of lenders, borrowers and investor," a Wells Fargo mortgage exec tells FT.  [View news story]
    It's not just a matter of "trying to screw a stranger". It's mainly an issue of regulations on capital. If bank keeps a loan, it must put aside some of its capital against it. If it sells a loan, that's (almost?) purely "service income" and the bank doesn't have to put ANY (or "practically no") capital against it.

    The regulated capital is THE "scarce resource" at a bank and that's what they optimize their business around.
    Dec 15, 2010. 04:09 PM | 2 Likes Like |Link to Comment
  • Today was the "worst day of the Obama presidency" - the tax deal unraveling, his political capital spent, upstaged by a former president and by the Senate's farthest-left Democrat. Joe Weisenthal says this may mark the day Obama "officially became a lame duck."  [View news story]
    Spot on. For as long as I can remember, my reaction to the choices of Presidential candidates has been "dear Lord, is this REALLY the best our country can do???"
    Dec 10, 2010. 09:10 PM | 7 Likes Like |Link to Comment
  • The ballyhooed convergence between magazines and the iPad (AAPL) isn't going as quickly as it could, with publishers and Apple far apart on how iTunes periodical subscriptions should go. The battle's focused on who's got control over sales and subscribers' data, and publishers don't like Apple's 30% cut - so they're taking fresh looks at Android (GOOG).  [View news story]
    Oh it gets better. Because iTunes doesn't accommodate recurring payments and Apple restricts the info you get on the user -- you basically have to re-sell the f-ing subscription every month, with one hand tied behind your back.

    Imagine the uproar if Microsoft had ever said: you want it on our OS --> must be installed via our store --> we get 30% cut --> and we're going to start shutting off all workarounds
    Dec 3, 2010. 02:36 PM | Likes Like |Link to Comment
  • The Obama administration's new lending fund aimed at helping small businesses may not be enough to overcome banks' reluctance to make loans. Community bankers cite an "unprecedented" level of toughness from regulators, rendering them unwilling to underwrite loans they would normally make since they "could cost [the bank] dearly" in setting aside extra capital.  [View news story]
    I'll take your word for it, but does that have anything to do with CRA? Or even "forcing banks to lend to poor people"?

    Or are you now making a different statement about some other issue?
    Dec 3, 2010. 01:26 PM | 1 Like Like |Link to Comment
  • The ballyhooed convergence between magazines and the iPad (AAPL) isn't going as quickly as it could, with publishers and Apple far apart on how iTunes periodical subscriptions should go. The battle's focused on who's got control over sales and subscribers' data, and publishers don't like Apple's 30% cut - so they're taking fresh looks at Android (GOOG).  [View news story]
    I'm involved with a mobile app startup with these exact same problems with Apple. They can be absolutely infuriating to deal with. The recurring subscriptions issue is particularly vexing. The 30% cut is obviously also vexing -- there are workarounds but Apple is trying to shut those down.

    This is why I respect Apple's accomplishments and we certainly can't ignore their user base, but I hope Android keeps making inroads -- otherwise Apple would become even more insufferable for developers.
    Dec 3, 2010. 01:23 PM | 1 Like Like |Link to Comment
  • The Obama administration's new lending fund aimed at helping small businesses may not be enough to overcome banks' reluctance to make loans. Community bankers cite an "unprecedented" level of toughness from regulators, rendering them unwilling to underwrite loans they would normally make since they "could cost [the bank] dearly" in setting aside extra capital.  [View news story]
    A couple of studies have also show that -- in rough numbers -- 50% of subprime loans were originated by entities (i.e., mortgage brokers) that aren't regulated by CRA at all, 25% that are lightly regulated, only 25% by institutions that are fully regulated.

    So if you want to overhaul CRA, believe me, you've got my support. But to then conclude that even the total elimination of CRA would have prevented the crisis just simply isn't correct. I'd rather that energies be focused on fixing the BIGGEST problems (as nice as addressing all problems would be)
    Dec 3, 2010. 12:47 PM | 3 Likes Like |Link to Comment
  • The Obama administration's new lending fund aimed at helping small businesses may not be enough to overcome banks' reluctance to make loans. Community bankers cite an "unprecedented" level of toughness from regulators, rendering them unwilling to underwrite loans they would normally make since they "could cost [the bank] dearly" in setting aside extra capital.  [View news story]
    I'm no liberal, but I am data driven. The claim that "CRA is the root of all the financial crisis" isn't a very strong one. Was it A contributor? Yeah, a bit. But D_Virginia always responds with the same data, that no one ever seems to have a reply for -- the vast majority of subprime wasn't to "the poor" or even in "poor 'hoods". A ton of it was for investment properties, those weren't taken out by "the poor".

    I'm totally sympathetic to the outrage of using big subsidies to tackle a symptom ("poor have lower home ownership") rather than addressing root causes ("why are they poor in the first place"). But to then claim CRA (et al) were the biggest sources of the crisis just simply doesn't fly, when you look at the data and look at all the other issues that got the bubble so big.
    Dec 3, 2010. 11:52 AM | 3 Likes Like |Link to Comment
  • Theatrics were on display in Congress today, as Democrats in the House passed a tax-cut extension for the middle class but not the rich - knowing the bill would die in the Senate. Both parties face pressure from their hard-line flanks to make no concessions, but lawmakers fear the anger that would erupt if they do nothing - so who blinks first?  [View news story]
    Yep, they're both being a-holes. For instance, I have not heard 1 good reason -- actually I haven't heard ANY reason -- out of the Rep's as to why the START treaty isn't being ratified.
    Dec 2, 2010. 05:48 PM | 1 Like Like |Link to Comment
  • For the first time since 2008, Goldman Sachs goes positive on financials, upgrading its rating on the sector to Overweight and making the KBW Bank Index (BKX) a factor in its "top trades." The firm sees improvement in loan demand, capital clarity and capital markets activity, and expects pressure on long-term rates to subside. (earlier)  [View news story]
    And our lobbying dollars are paying off handsomely
    Dec 2, 2010. 11:57 AM | 1 Like Like |Link to Comment
  • The iPhone (AAPL) and BlackBerry (RIMM) are in a dead heat, with each owning about 27% of the U.S. smartphone market, says Nielsen, citing October data. About 22% of U.S. customers use Android (GOOG) handsets. Overall, 30% of all U.S. mobile subscribers own a smartphone.  [View news story]
    Per usual, the story of the smartphone OS wars depends on what story you want to explore -- shipments v installs v rev v profits and then absolute v relative.

    To me, the most important near-term story for investors is that the total pie is growing for everyone, rapidly. No matter what % of the pie, the absolute size of the slices sitting on the plate are growing for AAPL, GOOG and RIM.

    Will be interesting to see if NOK and MSFT have anything to say about it in 2011.

    It's a fascinating war, even more fun to watch than the early PC OS wars were.
    Dec 1, 2010. 11:22 AM | 1 Like Like |Link to Comment
  • Here Comes Europe's 'Lehman Event' [View article]
    To be a little more accurate with analogies, the "Lehman event" for Europe will be when German taxpayers scream so loudly that the German government refuses to rescue someone.
    Dec 1, 2010. 09:09 AM | 3 Likes Like |Link to Comment
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