Discussion

Digital Platforms to Enhance your skills

Welcome to a new edition of the P4Digital Round Tables!

Have you heard about SAS? Do you know how to use it? This week we break down what it is and what other skills and platforms are needed to make you and your company competitive.

Stay tuned and enjoy

Transcript

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Death of the Salesman

Welcome to a new edition of the P4Digital rotating round tables.

Our special guest this week is an expert in sales, and how new technologies are changing how they are being conducted in both corporate and retail locations.

Curious about the future of sales? Well, stay tuned and enjoy.

Stay tuned and enjoy

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Volckers Volley or Folly

Paul Volcker is an American economist who was the chairman of the Federal Reserve, under Presidents Jimmy Carter and Ronald Reagan. He is still working though, and is still making recommendations that could forever change the American banking scene.

The P4Capital team investigates.

Stay tuned.

Transcript


Amanda: Change is never easy – but sometimes it is necessary. In this week’s round table discussion the P4Capital executive team talks about former chairman of the Federal Reserve, Paul Volcker, and changes he is recommending be made to US banking.

Jim: Today’s topic, or this week’s topic, is about Paul Volcker’s recommendation to put US banking and financial industry under one roof.

Shaheerah: Yes, he has outlined a new plan for revamping the way that the US government is going to oversee their financial plans. And he’s going to be publishing a paper soon which is going to talk about consolidating and reorganizing the US financial regulators, so what they’re going to do is create one single agency to supervise the financial institutions, while the Federal Reserve will be responsible for writing these regulations.

Archana: Paul Volcker is not new to devising strategies. When he was the Chairman of the Federal Reserve he actually was the person who in fact tamed inflation at that time. More recently, he also came up with the Dodd Frank initiative itself, where we wanted banks to engage less and less in risky, Wall Street style trading, and I guess this Volcker Alliance, which terms itself as a think tank, was basically set up to improve the way government essentially works at the local state and the federal level in terms of policy making and the financial decision-making.

Jim: With that said is, the current system in the US has a heavy regulation feel to it. The institutions that play in the US are now pushing back at a fairly aggressive rate, of saying “My business is my business. My business is not supporting your regulation.” In fact, the US has leaned heavily on the regulators side over the last seven years since 2008. Some of the legislation is badly needed, but some is over the top and more importantly, in Volcker’s words, is “why is the futures exchange being regulated by the Ministry of Agriculture?”

Shaheerah: This new plan is that the Fed would write the regulations, and then another agency would make sure that these rules and regulations were actually being followed. So this would be a combination of the Federal Deposit Insurance Corporation, the office of the controller of the currency, the Fed and then the other regulators such as the SEC and the CTFC. Paul Volcker was also responsible for proposing the Volcker rule, and the role prohibits short-term proprietary trading that Archana was talking about, of the securities of the securities, derivatives, commodity futures and options on these instruments on their banks’ own accounts. Basically this rule is to prohibit activities that don’t benefit the banks’ customers.

Jim: But in fact benefit the banks themselves, as long as they introduce the element of low to very high risk. Correct Shaheerah?

Shaheerah: Yup. And it was estimated that the banks would have to hire 3000 new employees in order to implement these rules, and another study had already mentioned that it would actually cost 350 million dollars for the banks and the investors in order to implement this rule.

Jim: So a billion dollar overhead put onto the banks by and large by the representatives that may or may not have their voters’ best interests at heart. It’s an interesting conundrum. We are hoping Paul Volcker wins this one.

Archana: So by the way, while we’re on this topic of regulations and compliance, we at P4Capital – we specialize in these kinds of jobs. So if you’re a person, or a capital markets professional with specialization in this area, or any other capital markets area, please do not hesitate to either give us a call or to send us your resume. We absolutely look forward to hearing from you. And that number by the way that we can be reached at is (416)363-9888. And you can either ask for Shaheerah Kayani or Archana Ravinder.

Jim: And the interesting part of what Archana just mentioned there, is not only are we at P4Capital dedicated to this space, we also understand the heavy impact that new legislation, new rules, new governing bodies have on the overall industry, and the complexity of big data coming onto the market from a global sense. So when we look at Chairman Volcker’s think tank recommendation, we understand the very many sides that he is speaking from. Not only from a centralized regulatory body, but the impact on big data, the impact on being able to do very fast high frequency trading, and be extremely competitive in the world.


 

That was the P4Capital team discussing the Volcker Recommendations, and the impact they could potentially have on banks. What to know more? Check out our website  and previous posts at www.planet4it.com or follow us @p4capital. Thanks and see you next time.

Don’t stress the stress test

In this week’s P4Capital discussion, the executive team talks about something most of us try to forget – the great recession of 2008.

The news isn’t bad though; for the first time since they were invoked, all American banks have passed the Stress Test.

The P4Capital team investigates what this means, and how it will protect the world economy should the worst come to pass again.

Stay tuned.

 

Transcript


Amanda: Do you remember the recession of 2008? When the banks all caused the world economy to crumble? When  jobs evaporated like shallow water and dollar values plummeted worldwide? Well, the banks certainly do, and to make sure the Great Recession doesn’t happen again, they introduced a series of stress tests. And for the first time, in 2015 all the American banks have passed.

Jim: This week’s topic is about the American banks passing stress tests, and the significance to not only the North American economy, but the global economy as well.

Jeremy: For those of you that don’t know what a stress test is, the top 30 or so US banks have all agreed to undergo stress testing, in which they will look at different factors and variables and examine how these would affect their capital reserves, and their ability to do business. So for example they might look at what would happen if unemployment was to rise by 2%, inflation were to rise by 3% and interest rates were to be cut by  .5%.

Archana: Just backtracking a bit here, the stress tests were essentially introduced after the financial meltdown of 2008, and it’s seen as a huge step in boosting consumer confidence in the US financial system.  In 2008, we all know how that story played out; the banks had to be bailed out, the government essentially funding about 700 billion to bail out the biggest lenders in the US.

Shaheerah: The whole purpose of these tests is to ensure that the banks will have enough capital, and they will be able to continue to lend to businesses and households even in a very dark economic recession. These stress tests focus on some important risks, and those risks are credit risk, market risk and liquidity risk.

Jim: The interesting part, now the US Greenback is soaring  out there and the banks that support the US dollar are now passed all the latest stress tests, is that it looks like the US economy is now back on extremely firm foundation and footing, and will be the engine that drives the global economy. We haven’t seen that in a while. The argument can be at least 7 years, some argue all the way back to 2000.

Jeremy: It’s actually the sixth year anniversary today of the low of the S&P 500. It’s up over 200% over the past six years, so it’s been one heck of a bull market.

Amanda: The date we are recording this is March 9, 2015 for our listeners who are tuning in at a later date. What does this mean for the Canadian economy?

Shaheerah: Yes, so now bringing that discussion back to Canada, Canadian banks are ranked the world’s soundest for seven straight years by the world economic form. Canadian banks are actually outperforming the US banks even in the midst of the dropping oil prices, and part of the reason is we have fewer regulations and less competition than the banks of the US. And both TD and BMO, among other banks are also expanding in the US because the US will see more economic growth than Canada over the next two years.

Jim: Therefore, expansion equals more jobs and more overall health to the Canadian economy which has in fact had a phenomenal bull run itself for almost a decade, with the exception of that mid, let’s call it September 2008 to September 2009 period, which is very good news indeed. The interesting part was the measurement of risk as well, and watching how the different financial institutions are now responding by getting rid of their archaic technologies and moving into faster engines which are allowing them to monitor risk with more clarity and make better decisions going forward.

Jeremy: Also, if banks in the US don’t pass their stress testd then sanctions can be placed on them such as what happened with Citibank. I believe it was last year they failed some of the stress tests so they weren’t able to have any share buybacks or authorize any dividend increases. They did pass them sufficiently enough so they didn’t have to cut dividends though. Not coincidently there is a new CEO implemented there.

Jim: Yeah, no kidding! How many of the competent Citi people fled to get to financial institutions that would pay them appropriate bonuses and how many should have got fired?

Jeremy: True. Goldman actually didn’t do as well as expected on these tests, so their share price was down 1.7% the day the tests were released, largely as investors are concerned that the similar sanctions may be in the future for Goldman Sachs.

Jim: Well, considering the US government is one of the largest borrowers on the planet, and they’re only going to borrow money from their financial institutions that pass their rules-

Jeremy: and China!

Jim: -And China, yeah! I think it’s very important that these FI’s that are on the line get up to speed.

Archana: Incidentally, this is apparently the first year since the Dodd-Frank act stress test, or as it’s called DFast,  that all the 31 US banks actually passed the test. Citigroup actually flunked the test last year and the CEO actually went on record saying that he is quite intent getting the books in order, or otherwise his job is on the line. And apparently they did well this year. Again, this DFast is apparently round one of the new stress test measures that the government has introduced. Part two is to be unveiled this week, which is primarily concerned with whether the Fed will announce whether the capital plans of these big banks are going to be accepted or rejected in terms of their share buyback and dividends. So it’s not exactly clear whether all 31 banks will go through – that remains to be seen.

Jim: Could be a lot of nervous executives wondering if they can get their bonuses paid or not!

 


That was the P4Capital team discussing the Stress Test, and how it will protect the economy going forward. Want to know more? Check out our website  and previous posts at www.planet4it.com or follow us @p4capital. Thanks and see you next time.

Job Revolution: Recruiting in the Digital Age

Welcome to a new edition of the P4Digital Round Tables!

This week we have a special guest star – Nadine Lamothe, one of the officers here at Planet4IT. She will be joining us today, along with Jim Carlson and Andrew Carlson, to discuss Job Hunting and Recruiting in the Digital Age.

Stay tuned and enjoy

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Rise of the Digital Space

Welcome to a new edition of the P4Digital Round Tables!

Who among you would love to work from home. With Digital technologies it’s becoming easier to do. This week the P4Digital executive team examines the rise of the digital space.

Stay tuned and enjoy

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The rise of the cryptocurrency

We live in a cashless society, but are we on our way to a universal digital currency? Bitcoin may seem like a digital currency for a digital age, but is it really? We investigate in this week’s round table discussion.

Transcript


Amanda: We’ve talked about Bitcoin before at the P4Digital Blog. It’s a topic that fascinates us, but 2014 was a rough year for it. In this week’s discussion, we talk about the rise of the cryptocurrency, how it works and speculate on whether or not we’ll all be paid with it in a few years.

Jeremy: Hello, today we’re talking about Bitcoins. Do they now have a legitimate trading exchange?

Archana: Yes, the topic we’re talking about today is the roll out of a new US-based exchange called Coinbase, which hopefully does legalize the cryptocurrency. What are your thoughts?

Shaheerah: Okay, so basically just to define Bitcoin in very basic terms, it is virtual cash that is generated, or rather mined by computers. It is a very sophisticated process. And Bitcoin lives on the internet, and you can use it to buy stuff both online as well as offline. In late January of this year, the Coinbased Bitcoin exchange went live. And this is actually the first one in America. And it could make Bitcoin more of a reality for the average Joe, as well as the corporate financial role. So as of now the exchange has been approved in 24 American states, and previously in the US the Bitcoin traders had to use exchanges that were based outside of the USA. And those exchanges did not have adequate regulations or security and so it made it pretty risky. So for example in February of this year, a Japan based Bitcoin exchange collapsed and they lost 750,000 customer Bitcoins, as well as 100,000 Bitcoins of their own. There are also all these problems with the security hacks. So for example recently Bitstamp lost 19,000 Bitcoins worth 5 million dollars, so that’s a lot. But now what’s going to happen is the Coinbase exchange is set to be a game changer because it is better regulated. They do have better security including insurance, which the other exchanges did not have. They have encryption, and the Bitcoins are actually kept offline so you won’t be able to hack them. There is also a one-time use passcode that you have to use, it’s texted to your phone and every time  you want to log in you have to use that one-time passcode, and you have to use the same computer every time as well.

Jeremy: Yeah, the Japanese exchange that Shaheerah mentioned is called Mt.Gox, which apparently is short for Magic the Gathering, which is a Role Playing – some type of Role Playing Dungeons and Dragons type game. So that’s not really the most credible way to be trading your Bitcoins.

Amanda: Speak for yourself! I’ve played Magic the Gathering and it’s an intense game!

Archana: Again, sort of going back to what Shaheerah mentioned, primarily the lack of regulation, inadequate security and the difficulty in getting US dollars in and out of these exchanges being the primary reasons why Bitcoin hasn’t really taken off. Coinbase really seeks to make a difference because it’s being backed by some thoughtful investors and financial venture capitalists, including the NYSE and the Citigroup CEO and Thompson Reuters ex CEO as well, so it obviously does lend a huge deal of credibility. And like what Jeremy mentioned, the Japanese company – a lot of luster was lost of Bitcoin amidst all these scandals and different scams. Case in point would be the Japanese Bitcoin exchange. And also more recently a Slovenia Bitcoin exchange also collapsed. So Coinbase does seek to differentiate itself from the rest of the crowd. What remains to be seen is how successful they’ll be.

Jeremy: And right on the heels of Coinbase is another exchange that is going to be launched later this year, which is backed by the Winklevoss twins of Facebook fame, called the Gemini exchange. So they’re not narcissistic at all! Anyway, this exchange is going to be partnered with a major US bank, which means your US cash deposits will be eligible for FDIC insurance, although I’m sure the Bitcoins held in there will not.

Amanda: It’s interesting. Amazon and I believe PayPal also are accepting Bitcoins as of last year for payment for certain transactions.

Archana:  Yes, just like what Amanda just mentioned, apparently Coinbase also already accounts for about 2.2 million consumer wallets, and nearly 40,000 merchants already use their services. So from this point on it’s really a matter of them consolidating their position and building the business.

Shaheerah: Yes, and I also wanted to share some other facts about Bitcoin, which were published in an infographic from whoishostingthis.com. The FBI actually owns 15% of all the Bitcoins in the world. 65% of the world’s bitcoins are inactive – so they’re just left in the Bitcoin ewallets, and the remaining bitcoins are what are actually used for the transactions. You can get stuff like Pizza and plane tickets and university tuition using your Bitcoins. And even former Spice Girl Mel B, she was the first artist who started accepting Bitcoins as payment for her music. There’s also a maximum number of Bitcoins that can ever exist. The last Bitcoin is predicted to be mined in the year 2040.

Amanda: Make myself sound like a bit of a Geek here, but Mel B was always my favourite Spice Girl.

Laughter

Jeremy: Jim too

Laughter

Jeremy: Well, the problem with Bitcoins is they’re really too volatile right now to be used as an integral part of our trading economy. I mean, it would be kind of foolish to ask for your pay cheques in Bitcoin because the value fluctuates so much. I really think that if they built a good, secure system and a means of transactions- I think they’re going to around for a while, it’s not going to be worthless, it’s always going to be worth something. But to make the jump between something that you horde and something that you use to spend money on, the question is when that’s going to be.

Amanda: I have a general question for the executives here. If it was more secure, would you ever consider accepting your salary in Bitcoins.

Jeremy: I would not accept my salary in Bitcoins right now – not the way it fluctuates.

Archana: Not right now, but really whether we like it or not I think digital currency is definitely going to be a part of our lives in the coming future. Whether its Bitcoin o some other form of digital currency, I don’t know but for sure, salary one day would be in the form of Bitcoins.

Shaheerah:  And I just wanted to add, that actually Bitcoin has been known to lose up to 80% of its value in just a few days, so yes it is very volatile. And in fact both Thailand and China had put bans on Bitcoin back in 2013 for this reason.

Amanda: So that’s a no on accepting it on your salary, huh Shaheerah?

Shaheerah: Yup, that’s right.

Amanda: I have to say, after hearing that last statistic, I have to agree.


 

That was the P4Capital team discussing the rise of Bitcoin and Crytopcurrency. Apparnetly, none of us want to get paid with it in the near future. Want to know more? Check out our website  and previous posts about Bitcoin at http://www.planet4it.com or follow us @p4capital. Thanks and see you next time.

Hedge Funds: The Wild West

Welcome to the wild, wild west. Have you heard about the Canarsie Hedge fund? More money was lost in three weeks than most of us will see in our entire lifetimes. How did this happen and why? The P4Capital team examines this in this week’s Round Table Discussion.

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Robbing the Bank

Ever wonder how easy it would be to rob a bank? Well, it happened recently at RBC in Vancouver by two ex-employees of the company. Find out how they pulled it off in this week’s Round table discussion.

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The next industrial revolution – The Conclusion

This week, the P4Capital team continues it’s discussion into the Next Industrial Revolution.

Stay tuned.

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