Philanthropy and Private Banking Part.III

The theme of philanthropy touches on sincerely seized beliefs of the client. It allows staff to initiate a conversation on an emotional dimension as well as financial. This dialogue can add to the development of an association of trust between a client who is not simply a portfolio of assets, and a banker who does most of the costume vendor products with high margins. This dialogue allows the bank to intensify its knowledge of clientele, and loyalty by contributing a long term relationship on sustainable projects.

Another line of work to dig for private banks: the networking of donors. Philanthropists, especially beginners, express the need to meet other people having launched in the adventure to help and share their experiences. From the perspective of the bank, linking its customer’s philanthropists represents an opportunity to expand its network of prospects. In Europe Wealth Management team understands this challenge.

For the client, a private bank that support its philanthropic investment it would provide a single window for management of its assets, both financial and philanthropic. Several studies have identified the reasons why wealthy people to contact their banks to invest in private philanthropic topics:
1. Tax benefits,
2. Need advice on clearing the jungle of philanthropic organizations,
3. Want to measure and control effectively grants.
Structuring, in the engineering heritage, a philanthropic offer to optimize tax and guide the client through the maze of legal philanthropy takes on its meaning.

Today, private banks gaining momentum on the subject of philanthropy, sensing the potential of loyalty and competitive differentiation behind. But they will fail to fully play this role once they are deemed competent on the subject by their customers. This involves the guidance of management consultants to private customer approach in its personal dimension and not just financial, and reorganizing the supply of products and philanthropic services taking into account the tax aspects, legal and emotional donation.

Philanthropy and Private Banking Part.II

For older donors, donating was good in itself, while for the new, the gift must be effective. The typical modern philanthropist made his fortune quickly, has an entrepreneurial mindset and will firstly give back to society part of what he has won and the other involved in the projects it supports. His archetype is Bill Gates, who created the foundation "Bill and Melinda Gates before his fortieth birthday and whose endowment now stands at over 35 billion dollars. There is currently strong demand from high net worth individuals to invest in philanthropy, both in Anglo-Saxon (which is an old trend) than in European countries (which is newer).

The increasing needs of the poor at local level in developed countries and at global level in some countries remained on the margins of globalization, also explains the renewed media attention to philanthropy.

Philanthropy is a segment whose financing requirements are increasing and in which many actors are willing to commit themselves, wealthy individuals as firms. The challenge in this sector lies in its ability to structure itself to meet the demand (need help finance the public interest) and supply (philanthropists want to give).

This need for structure has been highlighted by a study of Scorpio Partnership in 2007 showing that 90% of European philanthropists expressed the need to be advised on their philanthropic investments. They are looking for sound advice enabling them to make appropriate choices. The study also reveals that most of these philanthropists are willing to pay to dispose of such boards, and opens a huge market for private banks.

By their knowledge of financial products they have, and they affect the public, private banks can take part in the expansion of philanthropy by offering:

* Product socially responsible investment.
* Investments in philanthropic or charitable funds.
* Advice to clients wishing to establish a foundation.

Cont.

Philanthropy and Private Banking Part.I

The world of private banking wake of the financial crisis with a huge challenge: regaining the trust of customers. Meanwhile, global inequality and the needs of the poorest in our societies have never been as visible as the last two years.

Both post-crisis interpretations, seemingly dissimilar, carry within them the basics of the most important challenges of the private bank for the next decade: the development and structuring of philanthropic services.

Why Philanthropy, Is it more relevant today than yesterday? How philanthropy relates to private banks? Why these two sectors have now crossed the issues?

Philanthropy covers the entire process of giving the private sector (companies and individuals) in money, time, information, goods, services, and influences votes spent on the welfare of mankind and the community (general interest) .

To read the business press, philanthropy has never been so placed under the spotlight since the crisis, and for three reasons. The first is the increasing shift of funding the public interest between the public and the private sector. For last few years, various European nations, given the enormity of their deficits, have realized they no longer afford to fund only the national and international needs in the social and cultural rights. These states have therefore developed mechanisms favorable tax incentives for individuals and businesses to engage in philanthropy to finance topics of general interest. The subsequent cause for this rising importance in philanthropy is the change in donor behavior, firms and individuals.

Cont.

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Issues in Online distribution channel for home loans Part.III

A benchmark conducted by a team with 40 European banks shows a great diversity of practices in terms of distribution of mortgage lending by the web channel. Found mostly sites of contact and very few institutions offering the user advanced tools for construction financing plan with pre-approval online. France and US stands out however as the countries with an average of more advanced practices, with two banks offering their customers or prospective users the opportunity to mount their application for funding from home, but with photocopies of supporting documents, so submission e mandatory. So even if the actors historically oriented web services offer the most successful online, no one can apply for funding complete 100% electronically. The flexibility to expand its online offering is important and is still a good differentiators.


Developments in the web channel for home loans suggests, we ultimately opportunities for reconfiguration of the industry and a place for new players. Why not imagine a model of market-place, full service construction financing plan and dematerialization, allowing the user to file a single folder (90% of the data and documents necessary for the formation of a funding application is identical from one institution to another)? This market-place could be facilitated by an intermediary, broker or bank. For a subscription system, banks are accessing the virtual platform and choose the files according to their risk profile to ultimately send their best offer on the reverse auction model. Thinking with enough foresight will offer interesting prospects for banks, especially on aspects of pooling resources or site management for third parties.

Clearly, the outsourcing of customer relationship for housing loans, for what it has advantages for the bank and its customer focus the attention of sales management in the periods ahead, encouraged by the advent of canals Low cost. With this major issue related and related to the sale of real estate loans: Do not lose the client relationship, the product of conquest remains a unique tool for banking services in the retail catalog.

Issues in Online distribution channel for home loans Part.II

Its conquest remains a challenge because it disrupts people's attitudes. The relative complexity of mortgage lending has ruled for a time of digital distribution. Banks still mostly stick to a limited use of the web channel as a simple contact tool prospect, with some simulation tools and online advice. Involved, many documents to provide, the importance of the intermediation of an adviser, the number of players entering the game (underwriters, notaries, ...), the risks of fraud, loss of opportunity for contact client and therefore cross-selling.

The lifting of legal constraints: a condition indispensable not for customer relationship management 100% remote

The law on the protection of the borrower and governing the loan offer and the terms for conclusion of the contract, still imposes a relationship postcard (postmarked authentic) between the client and the bank to the steps of sending the offer to the customer and acceptance by the latter. But it lacks little for a relationship 100% distance and electronic submission is possible until the funding request by the client.

Indeed, while the tools necessary to assemble the financing plan online (sophisticated simulators, engine stand for regulated loans, scoring tools for pre-agreement ...) are now available online, building a complete application for funding still faces barriers to taking legal recognition of electronic documents, and simply the fact that they are still uncommon. But dematerialization at source is a proof of evolution programmed, evidenced by the development of bills or bank statements electronic or upcoming launch of the NIEC (National Identity Card Electronics). Devices associated with electronic safes, these documents dematerialized at the source will forward copies of the disappearance, the latter often requiring agency passages, many manipulations and visual controls, with a controlled level of risk months.
Finally, we can assume that the law limiting Scrivener to date the complete dematerialization chain soften granting the benefit of such electronic signature, recognized for over ten years as having the same value as a handwritten signature.

Issues in Online distribution channel for home loans Part.I

How to make a prospect or client to be autonomous in the construction of its real estate financing plan? Or even how the economy of many supporting documents? These are a few issues of the dematerialization of the customer relationship applied to the distribution of credits by the web channel habitats.

The challenge worth noting, as the benefits are numerous web channel, for both the bank and the customer:

    * Reduce distribution costs by shifting by the user part of the inquiry process 
    * Limiting the use of physical network infrastructure
    * Provide faster response times, major differentiating the market

The benefits are plentiful, and are now well identified.

What are the issues and therefore the remaining barriers to be overcome to capture the opportunity that is developing the web channel for the distribution of housing finance products?

Online brokerage, through everyday banking and savings, operating the web channel for the distribution of financial products has greatly expanded. After the democratization of the device for consumer loans, it is logical to think that home loans will naturally follow the trend.

And since 42% of bank customers will use banking services online by 2013.  Further stress that in 2009, 17.9% of those who are under 30 years had a housing loan, cons about 9% in 1999. Familiar and major users of new Internet solutions, the 18-30 age segments are mature, ready for distribution of product through the web.
Banks must be careful and think about the development of this channel for the distribution of mortgages, especially since it is a technological showcase for a ticket and a relatively modest technology is now well controlled in nationalized banks. 

Cont.

Financing your business, Advice from a banker Part.III

Of course, in the professionalism comes experience, knowledge of an industry, a successful career ... The CV is very important.
Bringing complementary skills (technical and commercial, for example) Is of course a plus, as long as you get to know each members.


Work on your project, surround yourself with expert advice, know your industry, customer needs, competition ... Anyway, approach your project with professionalism and clarity: do not believe that your enthusiasm will sweep away all obstacles, do not underestimate the take time for a commercial launch (convince first customers, establish a sales network ...) and a working capital plan accordingly. It is better to delay a project to launch a project badly put together ...

If you can, test your project on a small scale before you start making significant investments. Be ambitious but humble ... Know your skills and shortcomings, others (partners, for example) may be able to fill ... ultimately, the market is always right.



Banks do not invest, they lend. ... To be repaid. It is clear that they prefer to lend to sectors where there is visibility: Sectors in the launch phase, where many companies appear mushroom that will not necessarily be the stage of maturity, are more cautious investors in capital. Banks lend more readily to areas under development or maturity, when the continuity of actors is more stabilized.

Financing your business, Advice from a banker Part.II

- What (s) benefit (s) to go through a bank rather than a business angel or venture capital? What are the main differences?
We must differentiate
- Venture capitalists, who are willing to take a significant risk, financially equivalent to the creator and without warranty, in exchange for a higher expected return, usually at a horizon of 5 years.
Their involvement provides funding needs difficult to finance by banks (research and development, for example), but reduces the profitability of the creator who shares the capital gain by his activity.

- The bank lenders, who accept lower profitability (margin on credit) in return for lower risk that reduced by guarantees.
The use of bank lenders allows you to play the leverage and improve the profitability of capital (return on capital exceeds cost of credit), but a start-up and very innovative can only marginally be financed with banks will have recourse to capital investors.


- How is evaluating a project started by a bank? What is the importance of training courses or the contractor in this assessment? Loan Entrepreneurship

ultimately, the decision to finance a business is about trust: the banker said: "I have confidence in the ability of that person to go through with his plan, I feel good." For the creator, inspiring trust is to first show his professionalism, he knows the area where it will start, he thought his project and was given the resources, including human and financial, to succeed, etc...

Financing your business, Advice from a banker Part.I

Jacques Dumartin, professional customer adviser in a large national bank has agreed to answer questions to explain the solutions offered by banks to support the launch of companies and provides advice to maximize his chances.


The creation of a company share a first idea, a desire of the designer who will have to formalize its project to study the market, competition, quantify the necessary investment (including working capital needs development), building a business plan, evaluate its ability to financial support, to finally see a need for external financing. For these steps prior to the presentation of a banking record, the creator may be assisted by the ICC, accountants, support networks for entrepreneurship ...

Once the project led to the financial plan (financial plan, forecast, plan cash), still have to find bank financing.
These can take various forms: medium-long term credit for financing investments, short-term loans for the period Customer (B to B, factoring is a solution to be studied). The SLA can sometimes use to finance the needs intangible costs (not to mention the launching of working capital) and to facilitate the credit agreement ...

loan business creation Once the project is considered valid, have good chances of success, which is the essential first step, comes the question "what happens if things do not go as contractor and the bank provide? . That's where the issue of guarantees.
The first guarantees obvious, is the guarantees on property financed: pledge of goodwill, equipment ...

These properties undergoing a discount during a possible cessation of activity, additional safeguards are necessary for the bank can expect to recoup the capital lent: OSEO counter-example.
The deposit, at least in part, the entrepreneur is one of those additional guarantees and is a sign of motivation (50% maximum capital if counter-SAH).

Market forces Part.III

Also note that different strategies are possible. If the market is vibrant, there will be a scalper, who will try to buy and sell at 51 to 52 immediately, therefore, be presenting as much as possible on the bid / ask spreads. The scalp is an advocate of short-term, which provides liquidity to the market: this is very useful speculator. We also find longer-term investors, who hold a position and come forth once their target price achieved. Management of losing positions is also very important how each participant will he set his stop loss, that is to say, the maximum loss that agrees to bear. Each trader, according to his temperament, and its market position, establish its own strategy. Some will hold out long large positions, others will have their paper that burns your fingers and come out very soon as a small gain is recorded. The game is an excellent education, to understand how the market works, and learn to negotiate and manage its positions.
To make the game as realistic as possible, we give a number to each participant, so note in front of which is treated. In this way, we can make a real market clearing, and fire at the end the gain or loss each. Ultimate refinement, each point is worth 10 cents (or 1 Euro), and trade for real.
If you dine one evening toward the stock market, and there in the restaurant 10 excited in a circle, screaming: I pay for 10 or 52: I have 10 to 53, you now know what its acts: the Market!

Market forces Part.II

Now look what happens to the market opening, where one side to the top 49 to 51. Each participant takes its trading book, where he notes the quantities bought and sold, and courses. If two participants are large buyers, this means that for each market is 55, as they scored 10 of their paper and if it's reality, the market is actually 60. Unless there is immediately a big seller, who then entered a small figure, and is ready to bring down the market. If the seller is an observer, he can let up the market with buyers and sell them on what he considers to be the high point. Within seconds, the market can be very animated, change direction, experience significant estimated that each is of the opinion of others, etc. ... 10 people, 10 figures on pieces of paper, and it's like in Chicago, on the floor of the CME.
Put some rules to govern the listing. For example, processing a maximum of 10 contracts by negotiation set a maximum open position of 100 contracts, purchase or sale. It is also fun to publish a regular figure, as if that came out was 2:30 p.m. ET in the U.S. CPI or the trade balance. To do this, simply draw a paper hat and announce the number.

 Almost instantaneously, the market will adjust to the new value: If 10 was published, the market must rate 55; if it's 3, it is 47, according to the same principle. Once the information is public, it is immediately incorporated into lesson: it is the principle of market efficiency.

Market forces Part.I

For the uninitiated, the financial market often resembles a black box which we do not understand much, and especially what makes it go up or down. Hence the temptation erroneous to equate to a casino, which is statistically a negative sum game since the state, takes on each win. And yet it is simple to create a game market, where it likes to quote a fictitious contract for, while playing, better understanding how the market works, evaluate the strategies used, and feel the stress of holding a position.

I also used this game as educational courses in finance schools. In this context, the challenge is to create a market rather lively, with many transactions. The wise course students have a little more trouble letting go as traders in the evening, somewhat watered it is true.
How to play? Very simple! Take 10 people, each note on a paper a number between 0 and 10, without showing it to others. We put all the papers in a hat, we form a circle to recreate a floor trading, and we score the sum of 10 numbers. It sounds stupid, but I assure you playing for hours with it, in an atmosphere worthy of the notional floor in the heyday.
Some statistical explanations:  If everyone wrote a number between 0 and 10, the mathematical expectation of the sum is 50, an outside observer. But each participant in his own opinion on the market: if I wrote the number 10, the market is for me 55: my 10 plus the expected value of the remaining 9 digits or 45. I'm ready to buy up to 55. Conversely, for those who put 0, its estimated market value is 45, so he agreed to sell up to 45.

Sell ​​in May and go away

 

I am a big fan of stock sayings, and Sell in May and go away talk to me particularly. I started working on the Exchange since May 1990, and I would have been better advised to sell or to abstain rather than buying at all is to celebrate my arrival. The period May to October was not the most flamboyant for shareholders.
According to this dictum, the semester from May to October is unfavorable, in contrast to the period from November to April. For a follower of the theory of efficient markets, the effect of seasons on the Bourse smile. Who thinks about behavioral finance, the question deserves to be dug.
A study by the U.S. broker SSB gives inconclusive results, economic growth over the period is a more important factor.
By cons, research conducted by Dutch researchers published in 2001 by the Social Science Research Network states that 36 of the 37 cases studied, the period from May to October has been worse than the other, and without an explanatory factor is set identified.
What prognosis for 2011? We just finished a semester beaming back interest rates, oil remains very expensive, geopolitics is hardly serene, and the effect may not have been very sensitive in the last 2 years. If we find good reasons to sell, no need to rack their brains for a long time. We will certainly have a chance to talk

China Shakes The World

I recently read a book recently published by James Kyng, former Financial Times correspondent in China, under the title "China Shakes the World, The Rise of a hungry nation."
Some ideas to be learned from this fascinating book:
- The Chinese labor force increases by 25 million people each year who must find work. This is without counting the internal population movements, with the influx from the countryside to the cities. The strong long-term growth of the economy is a vital necessity. To simplify, China said the jobs to us, the West said to us profits.
- The vastness of the Chinese domestic market is a dream, not only the West; the Chinese as well. In fact, the Chinese domestic competition in all segments of consumer products is intense, especially since the producers are on equal terms. The consequence is that the margins are very low, and profits are sought for export.
- At the cultural level, the numbers of very great importance. The official slogans are an illustration. This is a consequence of the permanent situation of overpopulation, and the difficulty to feed every mouth. China is a country that really hungry, in every sense of the word. We can better understand the speed with which China has integrated science and technology.

For the future, let us ask some questions about the future role of China in the world of finance. With 1.2 trillion dollars in foreign reserves, increasing rapidly, and a large domestic savings, the raw material does not fail! For now, the asset allocation is not optimal. But it is likely that major Chinese banks will quickly integrate the tools of modern finance. With the size of their balance sheets, they will become formidable competitors. Moreover, the government plans to create an investment agency, with $ 200 billion to begin with, history of investing a portion of foreign exchange reserves of more optimally, a little on the model of Singapore's Temasek. This will be an institutional investor interest. The time is not far distant when China initiated the takeover bid will win over European and U.S. exchanges.

Are The Banks Illiquid?

To understand the current financial crisis, it is good to keep in mind the following concepts:
- The real business of a bank is to make the transformation: to transform short-term resources into long-term jobs. By definition, a bank is illiquid. The maturity of its assets is always longer than its liabilities, that resources are deposits of customers or funds borrowed from the market. Transform the asset into a negotiable instrument in any market changes nothing; it merely shifts the problem.
A bank and the banking system generally work only on trust: if the bank cannot find resources on the market, or if depositors fearing for their money, liquidity risk materialize. You can create all the regulations, regulations, national supervisory bodies and international as you want, it makes no difference.
And on this point, the structure of bank capital is of little influence.
On 29 September, Dexia and Natixis lost over 25% in stock. DEXIA is owned by Belgian public authorities and the CDC, NATIXIS is not owned banks, mutual insurance group, and Caisses d'Epargne, in the bosom of the CDC still. These are no short-term shareholders or speculators eager to immediate profits.

Investment Safety Net

Where is the safety net in the financial system? In fact, every bank has, more or less formal, more or less explicit. A bank is not actually a business like any commercial company: its transformation function of financial flows on the one hand, the leverage of its balance sheet on the other hand, make a bank failure involves systemic risk significant. The existence of the safety net is in itself an element of risk, since it can reduce the sense of risk among investors as among bank customers. And when risk aversion raises abruptly loud reaffirmation of the existence of safety net policies and the monetary authorities do not help to restore confidence. This question is not new: Alan Greenspan had raised the subject in May 2001.
Currently, the market requires less risk, which is materialized by the requirement for reduction of bank leverage: decrease in assets, so credit crunch, increasing equity, so severe dilution of existing shareholders, and the final stage being nationalized with an elimination of shareholders earlier.
Strengthen regulation is a double edged up capital ratios exacerbates the credit crunch. We can see the confusion that exists between minimum standards and the assessment in the market. The crisis is not over, and the political and monetary authorities are preparing a few more to rescue financial institutions, illiquid and / or insolvent.

Stocks and Bonds Together

There is no surprising that the rising stock market has since been held in conjunction with the rise of the bonds, the yield of government bonds to 10 years back from 4% to 3.50%.
In my opinion, the phenomenon is rather healthy. It is true that in times of intense crisis, we see the fall of actions coincide with the rise of the bonds, in a movement of flight to quality. This divergence implies then a very strong rise in the risk premium on equities.
In an assessment of market shares made by discounting future cash flows, the relevant discount rate is the rate "risk free" government bonds plus the risk premium on the market. This means that the increase of joint stocks and bonds is reflected, side actions, lower the discount rate as a result of lower risk-free rate. Looking back a little, we know that rising stock between 1995 and 1999 could be largely explained by lower bond yields during this period.
In recent months, there was again a decline in risk premium, which can be read for example in the course of corporate CDS and in reducing the implied volatilities of options and that improved earnings expectations.
Decrease the risk free rate, reducing the risk premium, higher earnings forecasts: These three elements combine to explain the current rally in equities.
Whether it goes well in the optimism is that another story.

Calendars for Charity

The promotional gift items are the corporate give ways by most of the companies to promote and popularize their brand and their image. These could be anything from calendars to a simple key chain. These could be gifted to potential customers to please them and thereby keeping them abreast. The utility item such as calendars are regularly used and valued by all. The bright colors and the designs of calendars register your logo in the minds of potential customers. Creating a calendar is something you can start on your own but attracting your viewers needs some expertise. Here The Calendar Company extends their helping hands to you.

The Calendar Company is the one stop for the best personalized calendars. They are experts in calendars printing of various sizes that include slim line calendars to booklet calendars. They are the masters in printing charity calendars too. The calendar company keeps your budget in mind and gives you a maximum benefit for your well spent money.

The company which gifting charity calendars are not only gives more exposure to their company logo but also serve for a noble cause. Yes, the charity calendars helps to raise funds for a noble cause. The company which uses charity calendars as promotional gifts indirectly donates to the worthy charities there by using charity calendars as promotional calendars.

The calendar company will assist you in creating a charity calendars. They help you to choosing the right subject for your charity fund raising calendar. They will assist you in getting and arranging the right pictures or the art work for your charity calendars. If the charity fund raising calendars are ordered by organization itself then the calendar people assist you in marketing too. Creating a calendar with Calendar Company is an excellent pleasing experience. Last but not the least the customers will enjoy your novel creation every day of the year.

Euro fears the fear of contagion from the debt crisis

After stabilizing euro, the euro does not escape the fears in financial markets. Last week the European currency dropped below $ 1.40 in session, a level it had not reached the past two months, which could provide some contagion of debt.

It may be that the Euro has slipped because of the spectrum of contagion those folds once again on Europe. Until the debt crisis seemed confined to the three countries most vulnerable to the euro area, Greece, Ireland and Portugal, the euro seemed to regain its natural color.

For about two months, the euro had not reached such a level. The slump in the currency of 1.59% to 1.3969 dollar is a sign that can be described as disturbing. The crisis of European sovereign debt threatens to turn into a crisis for the euro, says an economist at RBS.

However, political leaders want to dampen the atmosphere by ensuring that this phenomenon is a crisis affecting some countries of the monetary union but say, otherwise there are several reasons for thinking a resurgence effects contagion more brutal.

In terms of the following reasons, the market no longer believes that the tools established by the government to stop the debt crisis are sufficient, the restructuring of the Greek debt undermines the stability of other countries and political risk remains very high.

Despite this climate very offensive, the European commission recently  raised 4.75 billion Euros of bonds to 10 years and this, through the mechanism of financial stability (MESF) to fund aid to Ireland and Portugal.

What is SubPrime Crisis? Part.2

Credit agencies specialize in subprime collapse and the financial world follows. What relationship there between the U.S. housing market and the global economy? The answer lies in the word "securitization" To summarize; securitization is to transform its debts or other financial assets into securities that can then discuss the financial markets.

To finance these loans, the specialized agencies transformed risk loans granted to their client’s financial products that would be traded on financial markets. Financial products created were classified as high-risk products and products like any risky potential gains are much greater than other products without risk. As the U.S. housing market had risen in real estate related products for more money but since the summer of 2007.


Anyone wishing to generate significant capital gains has to accept this kind of high risk. Excluding finance against certain products, most of financial products sold, were fairly opaque to the "fill" of various financial products without specifying its nature as subprime "securitized." Banks and institutional investors bought financial products without knowing that they contained subprime-related products.

     A large number of banks have in their portfolios of subprime-related products leading to the fall in the value of their portfolios following the sub prime crisis.  Unable to identify clearly the financial products purchased containing products related to subprime, no Bank, no investor is able to measure the real impact of the crisis on their portfolios. The defaults of subprime loans in the U.S. are at the early, early impairment placed by investors are only the beginning of the crisis.

   Banks do not assess their knowledge related to subprime losses, bankruptcies of several dozen organizations credit risk and market stress pushing banks to conduct extremely suspicious and dare them to lend more money for fear of not being reimbursed following a hypothetical bankruptcy of the borrower.

The crisis of summer 2007 caused many challenges and pointed out the following discrepancies.
     One of the key players in finance is singled out, these are the rating agencies that failed to anticipate the decline in U.S. housing market and lower the rating agencies to credit risk.
     Non-transparency of financial products linked to subprime mortgages and bad categorization are also challenged: Some products were produced in monetary corresponding to products of low risk.

What is SubPrime Crisis? Part.1

The subprime crisis hit the world of finance in August 2007. The consequences have been immediate and impacts on the economies of societies and countries are still not clearly known.  Before returning to the origin of the crisis and its ripple effect, Let us first understand what is subprime.
The subprime mortgages are subprime.  In simple words, the principle allows a person to purchase a property for a fixed interest rate particularly low the first 2 years (e.g. 1.45%) and then switch to a floating rate contains a risk premium (e.g. 8%). In return, the property is mortgaged.

In this case, credits are awarded after consideration of the desired value of the property contrary to practices where banks extend credit after the creditworthiness of the borrower. The monthly payments increase significantly after the second year, making it impossible for most buyers to repay their loans.
The latter sold their property with a capital gain (the U.S. housing market growing 10% per year) enabling them to repay the loan and interest. In 2007, Beneficiaries wishing to sell their subprime real estate at the end of second year was leading a face down in the U.S. housing market.
The property value has decreased since purchase and no longer allows the sale to repay the subprime credit. The borrower's credit subprime personal files for bankruptcy, the bank gets the house and put on sale. It will be sold with a significant loss may go beyond 20%.

At least, nearly 1.5 million procedures were personal bankruptcy during and after the U.S. Senate nearly 3 million households could lose their homes. Credit agencies are faced subprime loan defaults pile up and generate huge losses due to losses made on the sale of foreclosed homes. These significant losses have caused the bankruptcy of more than thirty credit agencies; they always present provisioning amounts of losses of hundreds of millions of dollars.

Leasing Advantages and Disadvantages

The principle of leasing is simple: the company who need a well-form application to a leasing company that buys the specified property and leases it for a given period. Leasing may involve equipment (equipment leasing), or property leasing.


The advantages of leasing for the company are numerous. First, it provides full funding of the property value without any input from the business, and enables companies to acquire property without incurring costly debt alleged purchase of the product. Rents paid by the company are also operating expenses deductible from income tax.
The use of leasing also allows the company to avoid cash flow problems generated by the VAT. Indeed, early activity, the input tax on purchases often exceeds the VAT collected on sales, and requires the company to meet this need cash.

However, the main obstacle to the use of leasing is cost. Indeed, it is superior to that of a conventional bank loan, since the leasing company is compensated by its margin on the rent of the lease. On the other hand, it is more difficult to rent property very specific (obsolescence of the property, equipment not resalable ...), the leasing companies were reluctant to acquire such property.

The second risk is default by the tenant. The leasing contract is in effect a final commitment to time-limited undertaking that requires the user to pay rents fixed date. Otherwise, the company will be forced to return the property but will also be required to pay all rent yet due until the end of the contract.

Car Loans Part.3

Long Term Rental:

The leasing allows the borrower to sign a lease with stable monthly payments without an option to purchase the vehicle at the end of the contract. In recent years this type of credit can be offered by banks. LLD can change the car but will not become the owner. This is a simple car rental.

Personal Loan:

Personal loan is the specialty of banks and credit institutions. It is rather for persons wishing to receive an immediate cash reserve, which can quickly become the vehicle owner, or make another use of money lent. It requires little or no personal contribution. The interest rate, duration and amount of stipends are known input. However, this type of auto loan has many disadvantages. First, the credit contract is not related to the purchase of the vehicle, so if the car purchase is not made, refunds of credit are required. Second, interest rates are excessively high (around 15%). This type of car loan remains a last resort in case of refusal of financial institutions or banks manufacturers.



And the last one often used by car manufacturers. It is to pay low monthly payments for several months and at the end of the credit if the borrower wishes to purchase the vehicle, it pays a higher amount.

* Before getting a Car Loan, consider your budget!

The need for a new car may be acute in many circumstances of life: birth of a child, moving, education, inheritance, changing jobs, etc.. But everyone must remain vigilant in its budget and its operating margins, particularly when the credits begin to accumulate. If you already have a mortgage, consumer credits, but you are thinking of buying a new car, a credit solution is not to give up your projects: the purchase of credit. The purchase of credit will allow you to keep your monthly payments at a reasonable level and keep control of your various loans.