'Transaction banking' to emerge as a major banking trend in 2009 according to study done by TowerGroup
A recent study into the current and emerging banking trends in the United States indicates that global transaction services (the so-called "transaction banking") are to constitute an important focus of future strategies.
Moreover, the research indicates that 2009 is to be marked by a few clearly defined trends – renewed attention to core competencies, increased attention to small business and corporate and institutional clients, and integrated banking solutions and delivery channels including online banking and electronic bill payment. The report also predicts that banks are to continue their investments in the technology sector, which allows them to improve their relationship management by unifying corporate online banking portals, improving analytics and enhancing automated online client integration and enrollment.
Finally, the study predicts that revenues from retail and investment banking are to continue to fall, causing banks to focus on wholesale and transaction banking revenues for compensation.
The study was carried out by research and advisory services provider company TowerGroup.
Thursday, 20 November 2008
Credit Cards
With all of the information out there about credit scoring, it's hard to know if cancelling credit cards will be good or bad for your credit health. It might seem like a no-brainer to close out credit cards that you haven't used in years, but the truth is, it's usually better to keep them open.
First of all, you should know that just because you cancel a credit card does not mean it drops from your credit report. A closed account will stay on your report for years to come. So cancelling a credit card with a negative history is hardly like waving a magic wand to make it disappear. Only time can do that.
So if credit card accounts remain on your report whether you cancel them or not, what’s the harm in cancelling them? Two answers: Length of credit history and a little term called utilization.
Length of Credit History
The key to a strong credit score is to build up a nice, long history of good credit. Lenders love a consumer with a lengthy proven track record of paying down debt in a timely manner. So it makes sense to keep that first credit card you got as a college freshman back in 1982, especially if the account is in good standing. By keeping the card, even if you never use it, your credit history spans almost three decades. And since length of credit history accounts for 15% of your credit score, that Banana Republic card you opened in 2006 just can’t compare.
Utilization
The other reason to keep credit cards open is to maintain a healthy credit utilization rate (otherwise known as your debt-to-credit ratio). Basically, the idea here is that it's better to have more credit available to you than less. Credit bureaus tend to drop your credit score if you're using too much of your available credit.
Example: Say I have three credit cards with different credit limits of $8,000, $10,000, and $15,000. I never use the first two, but I routinely have a balance of around $7,000 on the third. This means I'm utilizing 21% of my total credit ($7,000 divided by my total credit limit of $33,000). If I were to cancel the two cards I don't use, then my utilization rate jumps to 47%, which in turn would lower my credit score. (Note that credit bureaus look at both the total utilization rate as well as the utilization rate of each card, so I'd be better served to keep my balance lower on the card with the $15,000 limit, and let one of my other cards pick up the slack.)
While the credit bureaus aren't forthcoming with their precise scoring formulas, we do know that lower utilization rates will significantly boost your score.
Still Want to Cancel?
If you've already got a low utilization rate (say, under 30%) and are still itching to cancel some of your cards, here are the guidelines you should follow:
· Never cancel a credit card with a balance. You should always pay off your account in full before closing it.
· Cancel younger cards before the older ones. As discussed above, you want to keep the cards with the good, long histories.
· Cancel the cards that charge annual fees or have really high interest rates.
· Cancel the cards that don't report credit limits. When a credit card company doesn't report your credit limit, the bureaus think you're using 100% of your available credit on that card (which drops your utilization rate). To find out who reports limits, either ask the credit card company directly or just check your credit report.
· Cancel cards if their open lines of credit are tempting you to spend. It may ding your score a bit, but that’s better than acquiring debt you're unable to pay down.
Once you've made the decision to cancel a credit card, make sure you do it the right way. Call the credit card company; don't just cut up the card. And make sure they give you a written confirmation for your records
First of all, you should know that just because you cancel a credit card does not mean it drops from your credit report. A closed account will stay on your report for years to come. So cancelling a credit card with a negative history is hardly like waving a magic wand to make it disappear. Only time can do that.
So if credit card accounts remain on your report whether you cancel them or not, what’s the harm in cancelling them? Two answers: Length of credit history and a little term called utilization.
Length of Credit History
The key to a strong credit score is to build up a nice, long history of good credit. Lenders love a consumer with a lengthy proven track record of paying down debt in a timely manner. So it makes sense to keep that first credit card you got as a college freshman back in 1982, especially if the account is in good standing. By keeping the card, even if you never use it, your credit history spans almost three decades. And since length of credit history accounts for 15% of your credit score, that Banana Republic card you opened in 2006 just can’t compare.
Utilization
The other reason to keep credit cards open is to maintain a healthy credit utilization rate (otherwise known as your debt-to-credit ratio). Basically, the idea here is that it's better to have more credit available to you than less. Credit bureaus tend to drop your credit score if you're using too much of your available credit.
Example: Say I have three credit cards with different credit limits of $8,000, $10,000, and $15,000. I never use the first two, but I routinely have a balance of around $7,000 on the third. This means I'm utilizing 21% of my total credit ($7,000 divided by my total credit limit of $33,000). If I were to cancel the two cards I don't use, then my utilization rate jumps to 47%, which in turn would lower my credit score. (Note that credit bureaus look at both the total utilization rate as well as the utilization rate of each card, so I'd be better served to keep my balance lower on the card with the $15,000 limit, and let one of my other cards pick up the slack.)
While the credit bureaus aren't forthcoming with their precise scoring formulas, we do know that lower utilization rates will significantly boost your score.
Still Want to Cancel?
If you've already got a low utilization rate (say, under 30%) and are still itching to cancel some of your cards, here are the guidelines you should follow:
· Never cancel a credit card with a balance. You should always pay off your account in full before closing it.
· Cancel younger cards before the older ones. As discussed above, you want to keep the cards with the good, long histories.
· Cancel the cards that charge annual fees or have really high interest rates.
· Cancel the cards that don't report credit limits. When a credit card company doesn't report your credit limit, the bureaus think you're using 100% of your available credit on that card (which drops your utilization rate). To find out who reports limits, either ask the credit card company directly or just check your credit report.
· Cancel cards if their open lines of credit are tempting you to spend. It may ding your score a bit, but that’s better than acquiring debt you're unable to pay down.
Once you've made the decision to cancel a credit card, make sure you do it the right way. Call the credit card company; don't just cut up the card. And make sure they give you a written confirmation for your records
Tips for Loan Mortgage
A mortgage refinancing could work in your favor if you’re looking for upfront cash for a large purchase or a major unexpected expenditure. Hey, things like that happen, so, the point is to start thinking and researching a little bit into mortgage refinancing. A loan mortgage refinancing can help you stretch every single dollar of your pay check every month or you could optimize monthly payments towards your auto loan, credit card payments or even college fees for your kids.
What is the best mortgage refinancing option for you?
Generally, a mortgage refinancing can be done by switching to a better, more conducive type of mortgage loan . Let’s say you have a loan mortgage that belongs to the fixed-rate mortgage loan right now, to refinance your home, you can switch to an adjustable-rate mortgage loan. It works the other way round to. The most important thing is that it frees up more cash every single month for you to spend on important things, and tide you over rough financial periods. Some people think the worst when they consider a loan mortgage refinancing, and believe that it’s a mistake and weakness. While you may have to deal with some fees involved in refinancing, it’s not a weakness and a loan mortgage refinancing is not a decision that you should be ashamed of. You’ll be surprised with the number of people who goes for mortgage refinancing every single year especially for bad credit re- mortgage loan .
Research and compare loan mortgage refinancing rates before you sign on the dotted line
If switching to another type of home loan is not conducive for you, you can also accomplish this personal loans mortgage refinancing by getting cash-out finance mortgage. The home mortgage rate for this type of loan mortgage refinancing can be a little heavy on the wallet but it’s better than many other different types of personal loans out in the market. if you’re concerned about the interest rates and hidden costs involved in a mortgage refinancing, the best person to help you eliminate those doubts is the mortgage lender. There’s no standardized rate for mortgage refinancing, therefore, a lot of it depends on your lender and the current market rate. In the ˜cash out’ mortgage refinancing, you’re essentially paying off the old mortgages and then taking cash out from a new mortgage.
Want a fresh start? Get a mortgage refinancing
A mortgage refinancing is logical and practical for those who want a fresh start. Because some people have defaulted payments in the past and have accumulated the interest and penalty charges over some time, the compounded interest is giving them a huge headache. So, in getting a mortgage refinancing, it makes sense. You get to start from day 1 all over again!
What is the best mortgage refinancing option for you?
Generally, a mortgage refinancing can be done by switching to a better, more conducive type of mortgage loan . Let’s say you have a loan mortgage that belongs to the fixed-rate mortgage loan right now, to refinance your home, you can switch to an adjustable-rate mortgage loan. It works the other way round to. The most important thing is that it frees up more cash every single month for you to spend on important things, and tide you over rough financial periods. Some people think the worst when they consider a loan mortgage refinancing, and believe that it’s a mistake and weakness. While you may have to deal with some fees involved in refinancing, it’s not a weakness and a loan mortgage refinancing is not a decision that you should be ashamed of. You’ll be surprised with the number of people who goes for mortgage refinancing every single year especially for bad credit re- mortgage loan .
Research and compare loan mortgage refinancing rates before you sign on the dotted line
If switching to another type of home loan is not conducive for you, you can also accomplish this personal loans mortgage refinancing by getting cash-out finance mortgage. The home mortgage rate for this type of loan mortgage refinancing can be a little heavy on the wallet but it’s better than many other different types of personal loans out in the market. if you’re concerned about the interest rates and hidden costs involved in a mortgage refinancing, the best person to help you eliminate those doubts is the mortgage lender. There’s no standardized rate for mortgage refinancing, therefore, a lot of it depends on your lender and the current market rate. In the ˜cash out’ mortgage refinancing, you’re essentially paying off the old mortgages and then taking cash out from a new mortgage.
Want a fresh start? Get a mortgage refinancing
A mortgage refinancing is logical and practical for those who want a fresh start. Because some people have defaulted payments in the past and have accumulated the interest and penalty charges over some time, the compounded interest is giving them a huge headache. So, in getting a mortgage refinancing, it makes sense. You get to start from day 1 all over again!
Credit Card Debt Management
The reason most people end up facing trouble with their finances is simply because of poor credit card debt management. If you are like a lot of other people you may have experienced a time where you just kept spending more money then you make and that is something that can only lead to trouble. While it may be easy to stay a float for a few months, the moment something happens and you miss a payment, you may very well find yourself in a lot of trouble. That is why it is important for everyone to learn about credit card debt management so that can take better control over their financial future.
Whether you work out a credit card debt settlement with your lenders or you find a way to pay off your debt early, it is important that some sort of plan is put into place. Not facing the trouble that you are in is not a good way to go about credit card debt management. In fact, the worst thing you can do is to ignore the situation, as it will only make matters worse. Learn everything you can about credit card debt management and you will be on your way to a much brighter financial future.
Getting Outside Help
While for some people undertaking credit card debt management on their own is no problem, others find it to be nothing but a struggle. Luckily for these people there are different credit card debt management companies out there that can assist you in getting back on track. They can teach you the difference between good spending habits and bad spending habits. The credit card debt management company can also fully explain how exactly your bad habits affect your credit which is something that can haunt you for many years to come.
Outside help for credit card debt management may cost you a little bit of money though depending on where you find the help. Be careful not to be taken advantage of though because there are a lot of places out there offering credit card debt management services but really they are just out to take your money. Knowing that people in your situation are sometimes easy to take advantage of, they will take your upfront money and then do nothing to benefit you in terms of credit card debt management. Be careful of these places so that you do not end up in worse shape then you were in before.
Whether you work out a credit card debt settlement with your lenders or you find a way to pay off your debt early, it is important that some sort of plan is put into place. Not facing the trouble that you are in is not a good way to go about credit card debt management. In fact, the worst thing you can do is to ignore the situation, as it will only make matters worse. Learn everything you can about credit card debt management and you will be on your way to a much brighter financial future.
Getting Outside Help
While for some people undertaking credit card debt management on their own is no problem, others find it to be nothing but a struggle. Luckily for these people there are different credit card debt management companies out there that can assist you in getting back on track. They can teach you the difference between good spending habits and bad spending habits. The credit card debt management company can also fully explain how exactly your bad habits affect your credit which is something that can haunt you for many years to come.
Outside help for credit card debt management may cost you a little bit of money though depending on where you find the help. Be careful not to be taken advantage of though because there are a lot of places out there offering credit card debt management services but really they are just out to take your money. Knowing that people in your situation are sometimes easy to take advantage of, they will take your upfront money and then do nothing to benefit you in terms of credit card debt management. Be careful of these places so that you do not end up in worse shape then you were in before.
Recommendation By Investment
First of all, all investment banks do not really care about their customer making profit or not, instead they just care about generate more revenue and posting more profit. So they will make a lot of "buy" recommendation for their customer. They never responsible for their call and when their recommendation did not work, they will come out with more facts to encourage you to believe their word and make you believe now you can buy it at low price. However they will never tell you how low is low. They seldom make "sell" recommendation since sell mean end of a transaction for a counter.
The reason they recommend a stock is very ridiculous. The method they use to determine a cheap stock is outdated. Most of the time they will used unsuitable accounting ratio to convince their customer such as Price/Earning Ratio and Price to book ratio. All of these ratio is useless and i will tell you why:
The single most commonly used ratio is P/E ratio. Investment banks will make a "buy" call on a stock when its PE ratio is below 10 or so. PE ratio is useless because it used previous earning level versus current price level which is completely misleading. Current and future earning level might not be as good as before. Just look at all the financials in NYSE earlier this year. They all trade at below 10x PE and look at them now.
Besides, PE ratio determine the outlook of future performance of a company. If a company trading at less than 5x PE, investor think its future is really cloudy. Forget about hidden treasure and greatest story never told, there are no good stock with low PE ratio nowadays. If a company is good, its price is low and its PE is low, i'm sure Mr Buffett, Mr Soros and all the big gun have spotted it.
Price to Book ratio is also useless as the book value, as it is conventionally computed, does not include intangible assets such as intellectual property and brands. Thus the book-value or net tangible assets may not be an appropriate measure for many firms.
Target price is another tool by investment banks to generate revenue. Target price is absolutely useless as nobody in this world can target the price of a stock 12 months from now. Target price real intention is to make investor greedy and buy that stock. I've seen target price for some company set as high as 200% from current price. If a stock can go that high in the next 12 months, why its price traded at current low level? and if that company secure any big project or goes for restructuring, insider of that company should have already know and start buying so its price won't trade at its current price level.
Big Investment Banks such as Goldman Sachs and Morgan Stanley recommendation may have a short term impact but in the medium-long term, company fundamental is what counts. Eg. Goldman Sachs was traded at around 210 January this year and every investment bank recommended a buy for this company. I've seen target price of 250-485 by year end. It's PE is low, It's PB is low, biggest investment bank in the world.......Everything looks great. Well, now it's trade at 62.49 (plunge more than 65%).
So do not believe any recommendation by any investment banks especially a "buy" call with ridiculous high target price. Evaluate and study a company yourself and look at it past performance and future activity. Compare it to other company in the same sector. There are no free lunch in this world so you have to work hard to succeed.
The reason they recommend a stock is very ridiculous. The method they use to determine a cheap stock is outdated. Most of the time they will used unsuitable accounting ratio to convince their customer such as Price/Earning Ratio and Price to book ratio. All of these ratio is useless and i will tell you why:
The single most commonly used ratio is P/E ratio. Investment banks will make a "buy" call on a stock when its PE ratio is below 10 or so. PE ratio is useless because it used previous earning level versus current price level which is completely misleading. Current and future earning level might not be as good as before. Just look at all the financials in NYSE earlier this year. They all trade at below 10x PE and look at them now.
Besides, PE ratio determine the outlook of future performance of a company. If a company trading at less than 5x PE, investor think its future is really cloudy. Forget about hidden treasure and greatest story never told, there are no good stock with low PE ratio nowadays. If a company is good, its price is low and its PE is low, i'm sure Mr Buffett, Mr Soros and all the big gun have spotted it.
Price to Book ratio is also useless as the book value, as it is conventionally computed, does not include intangible assets such as intellectual property and brands. Thus the book-value or net tangible assets may not be an appropriate measure for many firms.
Target price is another tool by investment banks to generate revenue. Target price is absolutely useless as nobody in this world can target the price of a stock 12 months from now. Target price real intention is to make investor greedy and buy that stock. I've seen target price for some company set as high as 200% from current price. If a stock can go that high in the next 12 months, why its price traded at current low level? and if that company secure any big project or goes for restructuring, insider of that company should have already know and start buying so its price won't trade at its current price level.
Big Investment Banks such as Goldman Sachs and Morgan Stanley recommendation may have a short term impact but in the medium-long term, company fundamental is what counts. Eg. Goldman Sachs was traded at around 210 January this year and every investment bank recommended a buy for this company. I've seen target price of 250-485 by year end. It's PE is low, It's PB is low, biggest investment bank in the world.......Everything looks great. Well, now it's trade at 62.49 (plunge more than 65%).
So do not believe any recommendation by any investment banks especially a "buy" call with ridiculous high target price. Evaluate and study a company yourself and look at it past performance and future activity. Compare it to other company in the same sector. There are no free lunch in this world so you have to work hard to succeed.
Subscribe to:
Posts (Atom)
