Bohemian Rhapsody, Anyone?

You know that we 'live in interesting times' when the UK government is budgeting on most of us drinking, smoking and driving fast cars so that it can find the extra money to save children and OAPs from poverty.

Next we'll be asked to take on giant mortgages from Northern Rock so that when we default the government can take our homes for public housing.

And after that? When all the money is gone on booze, smokes, fuel duties and high octane interest rates?

I fancy just drifting around...[begins to sing to the tune of Bohemian Rhapsody...]

"Financial landslide
No escape from reality
Open your eyes
And look at your buys and see.
I'm now a poor boy
High-yielding casualty
Because I bought it high, watched it blow
Rating high, value low
Any way the Fed goes
Doesn't really matter to me, to me

Mama - just killed my fund
Quoted CDO's instead
Pulled the trigger, now it's dead
Mama - I had just begun
These CDO's have blown it all away
Mama - oooh
I still wanna buy
I sometimes wish I'd never left Goldman at all.

I see a little silhouette of a Fed
Bernanke! Bernanke! Can you save the whole market?
Monolines and munis - very very frightening me!
Super senior, super senior
Super senior CDO - magnifico
I'm long of subprime, nobody loves me
He's long of subprime CDO fantasy
Spare the margin call you monstrous PB!
Easy come easy go, will you let me go?
Peloton! No - we will not let you go - let him go
Peloton! We will not let you go - let him go
Peloton! We will not let you go - let me go
Will not let you go - let me go (never)
Never let you go - let me go
Never let me go - ooo
No, no, no, no, no, no, no, -
Oh mama mia, mama mia, mama mia let me go
S&P had the devil put aside for me
For me, for me, for me

[guitar bridge]

So you think you can fund me and spit in my eye?
And then margin call me and leave me to die
Oh PB - can't do this to me PB
Just gotta get out - just gotta get right outta here
[guitar solo]
Ooh yeah, ooh yeah
No price really matters
No liquidity
Nothing really matters - no price really matters to me
[instrumental ending]
Any way the Fed goes...

Anon. (circulating on the emails today)

The Open Internet Exchange

According to the FT:

"The new marketplace, called the Open Internet Exchange uses anonymous information about internet users’ browsing activity to serve up more relevant adverts.The system tracks recent sites visited by the user and any keywords they have entered to search engines to identify their interests, but replaces their identifying details with a random number that cannot be traced back.“We cannot know who you are or where you’ve been,” said Kent Ertugrul, chief executive.

The supplier of the technology, Phorm, says that consumers are given an opportunity to opt-out of having their browsing activity (anonymously) tracked.

The service is being promoted by participating ISPs - currently BT and Carphone Warehouse at Webwise.com: as their "response to consumers’ growing concerns and frustrations with the Internet. Webwise can help protect you from fraudulent “phishing” websites that may put your financial and personal data at risk. It also helps reduce the number of irrelevant, untargeted ads you see."

That site it is offering people the opportunity to opt-in as well as opt-out.

Question is will it be defaulted to "opt-in" when users sign up or next fire-up their internet connection?

And what will this mean in terms of advertising revenue?

"...analysts at Investec estimated that BT and Carphone Warehouse could see revenue benefits of £85m and £65m respectively.

The high margin nature of online advertising revenues meant this could benefit their 2010 earnings by about 1.3 per cent and 10 per cent respectively, Investec said."

Predictions for 2008 Revisited - Financial Services 2.0

I reckon my predictions for 2008 are looking like a pretty good bet:

"Gartner warns banks not to attempt to copy social banking practices, unless they can clearly establish a strategic intent centered on social welfare, as opposed to
traditional commercial return. Instead, banks should look to partner financial social networks, offering capabilities like transaction processing and risk management."

;-)

Credit Crunch Reveals Just How Much the Banks are in it for Themselves

The credit crunch is doing a great job of opening up opportunities that the banks can't service because they're too busy lining their own pockets rather than focusing on the consumer.

Resigned to the fact that retail banking “...is going to be less profitable than it is and is going to be growth constrained,” as the Chairman of HSBC put it last November, now the banks have been asking their otherwise idle credit teams to use your credit data in reviewing the current and likely future profitability of their customers.

The results? Rising fees and the withdrawal of products from low risk but unprofitable customers.

Nice one guys.

No wonder Gartner has warned banks "not to attempt to copy social banking practices, unless they can clearly establish a strategic intent centered on social welfare, as opposed to traditional commercial return."

Of course, it's not news that banks are more intent on their own profitability than solving their customers' critical needs. Until 2000, they enjoyed comparative immunity on this front because some of their activities are key to our economic stability. Then the FSA was given powers which reflecting society's concern that banks must minimise consumer detriment as well as systemic risk.

The problem for banks is that Web 2.0 'consumer empowerment' and the run on Northern Rock have unleashed our expectations when they are least able to cope.

B2B Lending

Gartner has recently warned banks that consumer peer-to-peer lending platforms are a force to be reckoned with. Any business with a UK consumer credit licence can lend directly to consumers at Zopa, but the timing also looks good for SME's to get into their own peer-to-peer market without the aid of the banks.

A recent survey commissioned by Belgian bank KBC amongst businesses with turnover of £10m to £1bn suggests that UK businesses are continuing to borrow, even at higher rates.

“The people in the real economy, not the financial economy, are saying: ‘We’re still going, but financial fuel is going to get a lot more expensive for us,’” said Cameron Marr, general manager of the London branch of KBC Bank.

At the same time, however, 70 per cent of respondents expect credit to become less easily available. They foresee the cost of borrowing rising and loan covenants becoming tighter. The number of corporate defaults is expected to increase."

Necessity, as they say, is the mother of invention...