Can I Sign Hawaii Banking Presentation

Can i industry sign banking hawaii presentation safe

the next question is well if you have if you find out that your bank is not up to speed is not to the grade where do you go well fortunately the good news is that for every week bank in the United States there's also a strong bank so not all banks are in danger and in fact these 11 are the strongest banks among the larger banks they're not huge gigantic banks like a citibank or JPMorgan Chase or wachovia washington mutual or bank of america but there are pretty substantial banks with at least 10 billion dollars in assets and they're kind of scattered around the country we have deutsche bank america's which is in new york with an a-minus that's a very good rating gmac bank Utah as a b-plus new york community bank in New York City as a B+ and so on there are strong banks in this country but they're not gigantic they're not huge Wells Fargo it did not make it on this list that doesn't mean it's a week bank the criteria for this list was d plus or better as I said earlier look for Becky banks with a B+ or better and at least 10 billion dollars in assets we do not know there are no ratings on credit unions know that at this time to my knowledge no one in the country is giving you a strength financial strength rating on credit unions so so the next the next issue is what about how set yes yes it had you can pull up a list by rating so you can search in your commute area your state and then pull up a list of the strongest banks in your state and you can specify a rating range so you want be or better for example and then you can go through and hunt and peck for the ones that are nearest you have branches near you any other questions about banks yes huh the data is updated quarterly and it has a data lag of maybe six months as long as conditions are not changing very rapidly it's very very accurate if we get into a situation where you know the economy is deteriorating at a rapid pace which it looks like it may then the data becomes less and less reliable and then you would want to err on the side of safety which is at least a b-plus maybe an a-minus any other questions about banks and bank ratings yes yes the the control of the currency supervise a certain segment of banks and they are actually the ones that have done a good job in trying to get a handle on this derivatives risk their data on the derivatives risk they're only on the derivatives they're looking at only the top 25 or 30 derivatives players in the in the banking industry and their data is available on the web and they updated quarterly if you go to google and type in just two words OCC and derivatives it'll come up straight it'll be at the top of the search item at the very top of the screen if I if I can connect the internet I may even be able to show you that go ahead make the next question what about brokerage firms issue CDs and money market similar to banks unfortunately the the data available on brokerage firms is not as complete and not as readily available to the public as the data on banks so what we've done for brokerage firms is we've compiled a list based on a single variable this one here called the capital multiple the capital multiple is as a very simple formula it says how much capital is the brokerage firm required to have as a minimum capital requirement of the SAS SEC and how much capital do they actually have so what this is saying is that in the case of Edward Jones for example Edward Jones has almost 20 times more in capital than it is required to have by the regulator's bank of new york mellon Pershing which runs the purging brokerage firm has almost 16 times more capital than it's required to have so that gives you two layers of protection the first layer of protection is the required capital which the SEC mandates and then the second layer of protection is the any additional capital that the brokerage firm may have yes yes exactly so so this is just one measure okay does this gentleman saying but in addition to this issue of capital there's also the issue of how much risk they're taking and how many what games they're playing and that's that's a sticky issue the fact is that some of these firms are big players in in a high-risk marketplace like derivatives and some of them are strictly or pure brokerage operations that do not take risks of their own with their own principal and so those who actually you pivot pin you hit it right on the nail on the head these are the two factors we look at the first one we look at is once on the screen and the second factor we look at is do they take positions for their own account these some of the the online brokerage firms like for example Schwab fidelity are virtually have virtually no positions of their own there's prickly doing the brokerage whereas Merrill Lynch which on this on this list is actually looks like it's higher than fidelity is very heavily involved in in those high-risk casinos called the derivatives market and sure enough Merrill Lynch has run into difficulties and has has was forced to sell out whereas fidelity and some of the other firms are in much better shape I I when we presented this list three or four months ago I said I much prefer fidelity over Merrill Lynch I'm concerned about Merrill Lynch I'm not concerned about fidelity and sure enough Merrill Lynch has had difficulties yes questions about brokers yes hmm Scottrade scottrade is is is not it's purely a brokerage firm i am not aware if they have any of their own positions is probably minimal and they also have very substantial additional capital beyond their minimal requirements for two almost fourteen times so I'm not concerned about scottrade I would be concerned about morgan stanley and goldman sachs again this is a list we put out three months ago and since then there have been questions raised been raised about morgan stanley for sure sure had there not been a heavy investment from japan i'm not sure if Morgan Stanley would be alive today and even with that investment I'm concerned that Morgan Stanley may not exist the next time you and I speak as an independent entity two reasons number one it's at the bottom of the list in terms of its a capital and number two as this gentleman said Morgan Stanley is heavily involved in the high-stakes game of derivatives they're low on the list but they have the advantage that that is strictly a brokerage operation yeah