Like all governments, the United States borrows hard cash through treasury bonds. It issues government securities that other countries and institutions buy.

The US national debt — almost $14.35 trillion — is owned mostly in the United States, and the $4.5 trillion foreign-owned debt is owned predominantly by Asian economies, according to Guardian and Business Insider.

First let us take a look how much debt America owes…

(US national debt is owned mostly in the US)

Social security trust fund

Total holdings of US Treasuries: $2.67 trillion

Percentage of US debt that they own: 19

The Federal Reserve

The Treasury owes the Fed $1.63 trillion in Treasuries, much of which were bought for the Quantitative Easing programmes.

That is 11.3 per cent of US debt, much more than China.

China

Total holdings of Treasuries: $1.16 trillion

Percentage of US debt that they own: 8

US households

Total holdings of US Treasuries: $959.4 billion

Percentage of US debt that they own: 6.6

Japan

Total holdings of Treasuries: $912.4 billion

Percentage of US debt that they own: 6.4

State and local governments

Total holdings of US Treasuries: $506.1 billion

Percentage of US debt that they own: 3.5

Private pension funds

Total holdings of US Treasuries: $504.7 billion

Percentage of US debt that they own: 3.5

United Kingdom

Total holdings of Treasuries: $346.5 billion

Percentage of US debt that they own: 2.4

Money market mutual funds

Total holdings of US Treasuries: $337.7 billion

Percentage of US debt that they own: 2.4

State, local and federal retirement funds

Total holdings of US Treasuries: $320.9 billion

Percentage of US debt that they own: 2.2

Commercial banks

Total holdings of US Treasuries: $301.8 billion

Percentage of US debt that they own: 2.1

Mutual funds

Total holdings of US Treasuries: $300.5 billion

Percentage of US debt that they own: 2

Oil exporting countries

Total holdings of Treasuries: $229.8 billion

Percentage of US debt that they own: 1.6

Brazil

Total holdings of Treasuries: $211.4 billion

Percentage of US debt that they own: 1.5

Taiwan

Total holdings of US Treasuries: $153.4 billion

Percentage of US debt that they own: 1.1

Caribbean banking centres

Total holdings of US Treasuries: $148.3 billion

Percentage of US debt that they own: 1

E*Trade, Scottrade, and Ameritrade are today’s leading online brokerage companies that offer a simple way to buy and sell stocks. If you’re not an experienced investor, but still want to take a plunge into the stock market, learning about different options available can help you find out the benefits of each. Still, each brokerage offers different types of accounts and fees depending on the level of activity each period. Some also charge inactivity fees on top of variable commission rates and balance requirements. Knowing where to invest is the first step to building a successful portfolio. Here’s a quick comparison of E*trade, Scottrade, and Ameritrade so you can make the best investment decisions:

E*Trade offers an extensive line of trading and investment services, covering many options in stocks, mutual funds, bonds, IPOs, Futures, and Options. The online resources are substantial, but may be intimidating for the beginning investor. E*Trade does offer a user-friendly help center to guide you through rates, news, and different account options but requires a fair amount of review to get started. Highlights of E*Trade offerings include:

• $6.99-$9.99 flat rates depending on number of stock and options trades with fees up to $12.99 for anything less than $50,000

• Mutual fund transaction fees of $19.99

• 1,000+ ‘no-load, no-transaction fee funds’ for each account (but early redemption fees do apply)

• Asset allocation tools available online

• Access to advisors to help with asset allocation

Bottom line: E*Trade offers a variety of options for the seasoned investor, with premium services available for active traders. However, beginning investors may not find rates competitive enough to stick with them in the long term.

Scottrade is ideal for average and inexperienced stock investors, and offers competitive startup rats as well as low monthly fees. Highlights of scottrade accounts include:

• $500 account minimum requirements

• $7 flat rate for market and limit orders-no extra fees to worry about

• No inactivity fees; you can leave your account alone for a period of time without worrying about stacking up fees

• Three platforms to choose from: Scottrade.com, scottrader, and scottradeElite.

Bottom line: Scottrade is a great place for beginning investors to get started, and can help build a portfolio in a short amount of time.

Scottrade Free Trades Coupon Code:

Referred by: KALLAL PAUL
ReferALL code: DBCP6171

Ameritrade offers a very easy trading platform with its online services. It boasts $9.99 internet equity trades with no maintenance fees, so you don’t have to pay any additional fees to get started with an account. Other highlights of Ameritrade include:

• Easy-to-access reporting and stock analysis each day

• Access to Ameritrade representatives throughout your state if you need advice or guidance

• A ‘Command Center 2.0′ to make trading very easy and simple to follow

• Free trades for $45 and a $100 bonus

Bottom line: Ameritrade offers plenty of options for beginning investors, and is a great choice if you’re looking for something simple and straightforward. The flat-rate is competitive, but do read the guidelines on which types of trades qualify under this program. If you need to speak with a representative or advisor, Ameritrade does make it easy to locate someone to guide you through the process.

Today’s online stock trading websites enable you to buy and trade stocks with ease; you don’t have to depend on a middleman to guide you through the process, and each one offers helpful tutorials to take you through the steps. Still, the services come at a price; be sure to read the terms and conditions of each brokerage to calculate the ‘real’ cost of your transactions. Ameritrade and Scottrade offer convenient accounts for beginners, while E*Trade is best suited for a seasoned investor.

Similar Post:

1. Scottrade Free Trades- Coupon Code

But, the pitfalls while selecting a property, especially for NRIs, are many and it has been seen that people while buying property overlook some important factors and suffer later. As the investment involved in purchasing a property is substantial, it is essential that buyers go about it in an organized and methodical way.

When buying a property, ensure that the title of the land in question is clear. The property title is the legal document that confers ownership of the land on the seller. V Ramesh from California bought a house without checking the title. Soon thereafter he got a legal notice from the actual owner. Rues Ramesh, “I was shocked when I got a legal notice and realized my folly when it was too late.” Cases such as these are common among NRIs who simply grab the first property they like without checking the title.

Not many are aware that the purchase price of the property is not the only cost to be borne. You need to factor in other hidden costs such as brokerage, stamp duty, legal fees, inspection fees, mortgage fees and the like. Ensure that you’ve budgeted for these too lest they spring up unpleasant surprises later.

A commencement certificate is issued by the local authorities to allow the builder to begin construction once all norms have been met. Unless the commencement certificate is granted, the construction is illegal or may never happen. If you don’t verify the project’s commencement certificate, you could end up paying money for a property that will never be constructed. And that’s exactly what happened to Sameer Shah when he paid a huge amount for an apartment in Mumbai which was under construction only to realize later that it was an illegal construction. He says, “I have filed a case against the builder, but I don’t have any hope of recovering my money.”

Another important document is an occupation certificate which is issued by the local municipal body after the builder has provided basic amenities like electricity and water besides having constructed according to the permission granted. Do not sign on the dotted line until you check this document.

Suresh Prabhu bought an apartment in a newly constructed building in a posh locality. But after all the formalities had been completed he got a shock when he found out that the building did not have an intimation of disapproval (IoD). An IoD is a set of instructions that a builder has to fulfil in order to construct the building. It is valid for one year and has to be reissued if the construction is not completed in a year’s time. Unfortunately, Suresh was unaware that the builder had flouted this regulation and that it had got into a legal wrangle. He waited for nearly two years for the possession of this apartment.

There have been several cases in which builders have failed to provide adequate water supply connections leaving residents high and dry. In such instances, residents have no choice but to depend on water tankers. Ensure that your property has adequate water supply connections.

Acute power shortage is a reality in several areas in India, even in metros like Delhi, Mumbai and Chennai. Voltage fluctuations too are common which can damage delicate electrical equipment. Take this into account before you narrow down on a property.

A buyer needs to get the survey number of his property. This is the unique identification number given to a plot of land to help identify the same as an authorized building. Certain areas like forest or agricultural land are out of bounds for residential purposes. Finding out the survey number protects you from being taken for a ride by a builder who constructs houses in a prohibited area and charges you for it. Such a building could be declared illegal and demolished by the authorities without paying you any compensation. So beware!

A background check on the reputation of the builder needs to be done, as you may land up buying a property from a builder with a dubious reputation. There have been instances where builders have constructed poor-quality flats or have swindled people of their money. Ensure that you buy property from a reputed builder.

Buying an apartment not only involves a substantial investment but also has long-term repercussions. It pays to do your homework before embarking on this exercise, to prevent your property from becoming a millstone around your neck.

The dust seems to be settling now after two eventful years that witnessed many financial giants drop out of the top-50 safest banks list. Those banks that showed their grit amid an apparently insurmountable financial crisis topped the chart in this year’s ranking.

At the same time, the big name banks that lost their safest bank ranking during the credit crunch are still absent from the list as they struggle to rebuild their credibility.

How the selection was made

The ‘World’s 50 Safest Banks 2009′ were selected through a comparison of the long-term credit ratings and total assets of the 500 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used.

Global Finance has published its ‘World’s Safest Banks’ listing for 18 years and this ranking has become a recognized and trusted standard of creditworthiness for the entire financial world. Here’s the list of the world’s safest banks with an overview of the top 10. Read on. . .

1. KfW (Germany)

Founded in 1948, KfW is a German government-owned development bank based in Frankfurt. The bank was formed after World War II as part of the Marshall Plan.

Earlier, it went under the name: Kreditanstalt fur Wiederaufbau, or Reconstruction Credit Institute.

The bank’s revenue stood at Euro70.6 billion in 2008. Number of its employees stood at 4,228 in the same year.

Recently, KfW tied up with the Industrial Development Bank of India to help Indian companies identify projects, fund them and help earn carbon credits.

2. Caisse des Depots et Consignations (France)

Created in 1816, Caisse des Depots et Consignations is a French financial organisation under the control of the Frnech Parliament.

The Caisse des Depots consists of the public institution Caisse des Depots and its subsidiaries. Its subsidiaries are involved in the competitive area.

It operates throughout France and in over 80 countries.

3. Bank Nederlands Gemeenten (Netherlands)

The Bank Nederlandse Gemeenten is a Dutch bank which was founded in 1914 in The Hague. It specialises in providing financing for (semi-)publicly owned organisations.

Ranked by assets alone, it is ranked as the 4th bank in the Netherlands. The company is owned for 50 per cent by the Dutch state, while the remainder is owned by the municipalities and provinces.

In the first half of 2009, the net profit of Bank Dutch Municipalities stood at Euro 114 million compared to Euro 73 million in 2008.

4. Landwirtschaftliche Rentenbank (Germany)

Rentenbank, based in Frankfurt am Main, is Germany’s development agency for agri business. Rentenbank provides refinancing to banks within the European Union involved in financing agriculture, related sectors thereof and rural areas.

Rentenbank’s roots go back to the days of the Deutsche Rentenbank, founded in 1923 to combat the hyperinflation problems of the times. In 1925, it became Deutsche Rentenbank-Kreditanstalt (RKA) and the central refinancing institution for the agricultural sector.

The bank’s total assets in 2008 decreased slightly to Euro 87.9 billion while its total capital stood at Euro 3047.2 million.

5. Zuercher Kantonalbank (Switzerland)

On February 15 1870, the Zurich Cantonal Bank opened its first switch.  Mortgages and other capital needs for workers, artisans and clerks, for agricultural and industrial enterprises and for small and medium industrial enterprises have been largely neglected by the former private banks.

Towards the end of the 19th and at the beginning of last century, the Zurich economy experienced a remarkable boom. The result was an increased demand for housing and rising rents. As a result, the bank saw substantial growth.

In 2008, the bank’s total assets stood at 113 billion francs and its net income at 503 million francs.

6. Rabobank Group (Netherlands)

Rabobank Group is an international financial services provider operating on the basis of cooperative principles.

It offers retail banking, wholesale banking, asset management, leasing and real estate services. The bank focuses on all-finance services in the Netherlands and on food & agri internationally.

Rabobank Group comprises 152 independent local Rabobanks plus Rabobank Nederland, their central organisation, and a number of subsidiaries.

Rabobank’s roots lie in agriculture. In 1898 two separate cooperative banks — the Cooperatieve Centrale Raiffeisen-Bank in Utrecht and the Cooperatieve Centrale Boerenleenbank in Eindhoven — were founded by enterprising rural folk, who, with little access to the capital market, decided to help one another.

The two banks served their rural communities independently for three-quarters of a century, both successfully practicing cooperative banking principles.

Therefore, their 1972 merger was a logical partnership.

In the first half of 2009, the bank’s net profit stood at Euro 1.3 billion.

7. Landeskreditbank Baden-Wuerttemberg-Foerderbank (Germany)

It is a former public-law institution, which is wholly owned by the state of Baden-Wuerttemberg. The bank is headquarterd in Karlsruhe, and a branch office is located in Stuttgart.

The bank was founded in 1922 by Eugen Bolz, interior and finance minister, Wuerttemberg. The bank started its work in 1924 to counter the housing shortage especially after the World War I.

8. NRW Bank (Germany)

This is development bank for North Rhine-Westphalia.

North Rhine-Westphalia is Germany’s largest province and is among the 15 largest economies in the world.

The bank’s net income in 2008 stood at Euro 32.4 million whereas its net interest income stood at Euro 509.1 million.

9. BNP Paribas (France)

BNP Paribasis a major European bank. It was created on May 23, 2000 through the merger of Banque Nationale de Paris and Paribas. As on January 31 2008, the bank’s assets stood at $1,899.186 billion.

It’s history can be traced back to 1869, when a group of bankers and investors, including Adrien Delahante, Edmond Joubert and Henri Cernuschi, founded the Banque de Paris.

The bank employs 162,700 people and operates in 87 countries. The bank is active in the finance, investment and asset management markets.

10. Royal Bank of Canada (Canada)

The Royal Bank of Canada is the largest financial institution in Canada, measured by deposits, revenues, and market capitalisation.

The company’s primary corporate offices are located in Toronto, Ontario, while it is officially headquartered in Montreal, Quebec. The bank was founded in 1864 in Halifax, Nova Scotia.

The bank serves 17 million clients and has 80,000 employees worldwide.

In Canada, the bank is branded as RBC Royal Bank in English and RBC Banque Royale in French

The bank’s revenue stood at $25.34 Billion CAD in 2008 and net income at $4.64 billion CAD.

The other 40 banks that made it to the 50 safest banks’ list are:

11. National Australia Bank (Australia);
12. Commonwealth Bank of Australia (Australia);
13. Banco Santander (Spain);
14. Toronto-Dominion Bank (Canada);
15. Australia & New Zealand Banking Group (Australia);
16. Westpac Banking Corporation (Australia);
17. ASB Bank Limited (New Zealand);
18. HSBC Holdings plc (United Kingdom);
19. Credit Agricole S.A. (France);
20. Banco Bilbao Vizcaya Argentaria (Spain);
21. Nordea Bank AB (publ) (Sweden);
22. Scotiabank (Canada);
23. Svenska Handelsbanken (Sweden);
24. DBS Bank (Singapore);
25. Banco Espanol de Credito S.A. (Spain);
26. Caisse centrale Desjardins (Canada);
27. Pohjola Bank (Finland);
28. Deutsche Bank AG (Germany);
29. Intesa Sanpaolo (Italy);
30. Caja de Ahorros y Pensiones de Barcelona (Spain);
31. Bank of Montreal (Canada);
32. The Bank of New York Mellon Corporation (United States);
33. DnB NOR Bank (Norway);
34. Caixa Geral de Depositos (Portugal);
35. United Overseas Bank (Singapore);
36. Oversea-Chinese Banking Corp. (Singapore);
37. CIBC (Canada);
38. National Bank Of Kuwait (Kuwait);
39. J.P. Morgan Chase & Co.(United States);
40. UBS AG (Switzerland);
41. Societe Generale (France);
42. Wells Fargo & Co. (United States);
43. Credit Suisse Group (Switzerland);
44. Banque Federative du Credit Mutuel (France);
45. Credit Industriel et Commercial (France);
46. Nationwide Building Society (United Kingdom);
47. US Bancorp (United States);
48. Shizuoka Bank (Japan);
49. Northern Trust Corporation (United States);
50. National Bank of Abu Dhabi (United Arab Emirates)

Different master traders use different methods and approaches. But what is that one aspect that the greats all agree on, masters ranging from George Angell, day-trader, technical analyst par excellence; Gerald Appel, father of MACD, one of the most widely followed timing tools; Bruce Babcock, developer of trading software; George Lane, father of stochastics and one of the most experienced technical analysts in the world; Robert Prechter, the pre-eminent Elliott Wave analyst whose forecasts are followed by traders throughout the world; Welles Wilder, the man behind Delta and RSI and developer of technical tools that have revolutionized the trading world; and Larry Williams, colorful, controversial – a legend in his own time.

No, it’s not some glamorous or sexy new fail-safe technique. Rather the one aspect of universal agreement among master traders is the importance of discipline. Discipline is probably the most worn-out term in trading. But that doesn’t alter its importance. Also, saying the word is one thing; truly understanding its dimensions on an operational or behavioral level is another. Here are the golden rules of disciplined trading.

Be persistent

This is perhaps the single most important quality a trader can possess. Trading requires the ability to continue trading even when results have not been good. Due to the nature of markets and trading systems, good times frequently follow bad times, and bad times frequently follow good times. Some of a trader’s greatest successes occur following a string of losses. This is why traders must be persistent in applying their trading methods and continue using them for a reasonable period of time.

Accept losses

Another important quality that the market masters emphasise is the ability to accept losses and to take them promptly. Perhaps the single greatest downfall of all traders is the inability to take a loss when it should be taken. Losses have a nasty habit of becoming worse rather than better. Unless they are taken when they should be, the results will not be to your liking.

Avoid overtrading

Too many traders feel that they must trade every day. Such traders are addicted to trading. The fact is that some days offer few if any trading opportunities. The trader who wishes to preserve capital and avoid losses as well as unnecessary commission charges should understand that trading, other than mechanical day trading, is not an everyday event. There will be days when no trades are indicated. This is for the best.

Specialise

Successful trading is a time-consuming undertaking that requires close attention. Which is why many market masters specialize in certain markets. In most cases, successful trading requires diligence, follow-through and persistence. Because most trading techniques require close attention, traders should not be involved in too many markets at one time.

I suggest that five to seven markets are sufficient for most traders. In fact, for new traders, I recommend specialising in one or two markets and attending to them thoroughly to develop your skills and increase your overall profits.

Begin with sufficient capital

Perhaps one of the worst blunders that any trader could commit is to trade with insufficient capital. Virtually all the market masters agree on this point. The argument may be made that the futures trader does not need to have substantial capital in his or her account since trades are closed out at the end of the day and therefore the necessity for sufficient margin to maintain positions is eliminated.

While this may be true, those with limited funds cannot play the game as long as those with larger funds. In any venture it is important to start with sufficient capital so that the trader will not feel pressured to perform and can allow the particular trading system or methods sufficient opportunity to ride through periods of poor performance.

Use news to your advantage

Many a trader has learned the hard way that following the news frequently leads to losses. However, I have discovered ways in which the trader can use the fundamental news or developing international, domestic or political news to his or her advantage.

Do not be a follower of the news; rather ‘fade’ the news. Use the news to exit positions that you probably established before the news became public knowledge. I firmly believe in the old market dictum: Buy on rumor, sell on news.

On an intra-day basis, markets are very sensitive to news well before the news is known by most traders. Insiders buy and sell on expectation, sometimes based on rumor, frequently based on fact. They establish positions before the general public is aware of the news; once the news has become public knowledge, they take advantage of the surge or the drop in prices to exit positions.

Take advantage of brief price surges

At times, markets will drop or rally quickly, seemingly in response to no news. What may be happening is a rumor on the trading floor, a large buyer or buy order, or large seller or sell order of which you are unaware. Such brief price surges or drops are opportunities for you to exit positions at a profit or to establish a new position. It is important to develop this quality as a futures trader since it is entirely consistent with the futures trading objective.

Stick to your goals

Above all, remember that as a trader you have one major goal: to make money. To do so, you must be particularly aware of your net profits at all times. My advice, which is based on many years of trading, is to set yourself specific standards and conditions under which you will begin to liquidate positions. Do so while the trend is still in your favor. You may either begin to close out your positions at that time or you may use a follow-up stop loss procedure to ‘lock in’ existing profits.

Use market sentiment to find short-term and day-trading opportunities

I have already discussed the importance of going against the majority opinion to find profitable trading opportunities. I believe that this is one of the most important qualities a trader can possess. While there is certainly a great deal of money to be made in trading with the existing trend, it is also important to know when the existing trend has reached a possible turning point.

One of the best ways, if not the best way of doing this, is through the use of market sentiment. The trader must also be a contrarian. This does not mean that you must buck the trend, but it does mean that you must always be aware of whether sentiment is very high or very low.

This will give you important clues as to whether you should be quick to take profits, whether you can allow profits to run and whether you should look for trading opportunities on the opposite side of the existing trend.

I have learned, after many years of trading, that the major difference between those who are successful traders and those who are not is found in their discipline, their psychological makeup and in the skills they have acquired as traders rather than in the trading systems, they use.

Excerpt from Market Masters by Jake Bernstein.

And the collapse did not stop there. From the United States to Iceland to Kazakhstan, banks and insurance companies were either acquired or merged or went belly-up thanks to a fatal combination of pure greed, bizarre financial instruments, and the sub-prime crisis that swept America. The shocking results left the world gasping.

There was a time when experts, analysts, rating agencies found it very easy to describe the best banks. The bank with the largest asset under management was the ‘best’ bank. But now in banking parlance, large often means ‘bad’.

In a recent study, Economy Watch and the Economist came to a conclusion that instead of depending on the ‘fatally flawed assumption that all assets are created equally, and that they won’t decline in value en masse’, it is better to focus on quality of assets, cash flows and management.

This very unique study threw up an interesting list of which could be the world’s top 10 banks.

JP Morgan Chase & Co

JP Morgan Chase & Co is a leading global financial services firm with operations in more than 50 countries and has its corporate headquarters in New York City. Under the JPMorgan and Chase brands, it serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients.

One of the world’s oldest, largest and best-known financial institutions, the firm is a leader in investment banking; financial services for consumers, small business and commercial banking; financial transaction processing; asset management; and private equity.

JP Morgan Chase & Co is built on the foundation of more than 1,000 predecessor institutions that have come together over the years to form today’s company. The many well-known heritage banks include JP Morgan & Co, The Chase Manhattan Bank, Bank One, Manufacturers Hanover Trust Co, Chemical Bank, The First National Bank of Chicago and National Bank of Detroit.

JPMorgan Chase & Co reported first-quarter 2009 net income of $2.1 billion, compared with net income of $2.4 billion in the first quarter of 2008.

Jamie Dimon is the bank’s chairman and chief executive officer.

Meltdown fallout:
Acquired: Bear Stearns, Washington Mutual (WaMu).

Credit Suisse

Credit Suisse can look back on a history stretching over 150 years.

On July 5, 1856, prominent Swiss politician, business leader, and pioneer Alfred Escher founded ‘Schweizerische Kreditanstalt’. The original purpose of the new bank was to finance the expansion of a railroad network as well as further industrialisation in Switzerland. The founding of the company was a huge success.

What was once just a Swiss investment bank gradually developed into a globally active and integrated universal bank.

Credit Suisse provides companies, institutional clients and high-net-worth private clients worldwide, as well as retail clients in Switzerland, with advisory services, comprehensive solutions, and innovative products.

Headquartered in Zurich, Switzerland, Credit Suisse is active in over 50 countries and employs more than 46,000 people from approximately 100 different nations.

Brady W Dougan is its chief executive officer.

Credit Suisse Group reported net income of *CHF 2.0 billion in the first quarter of 2009

Meltdown fallout:
Credit Suisse was an early victim of toxic assets, but it moved quicker than competitors to get those off its books or write off completely.

*CHF = Swiss Franc

Goldman Sachs Group Inc

Goldman Sachs Group Inc is a leading global financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.

It was founded in 1869 by German Jewish immigrant Marcus Goldman. And when Goldman’s son-in-law Samuel Sachs joined the firm’s name was changed to Goldman Sachs.

It was invited to join the New York Stock Exchange in 1896. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centres around the world.

Lloyd C Blankfein is the chairman and chief executive officer.

The company reported a better-than-expected Q1 earnings of $3.23/share.

Meltdown fallout:

Goldman Sachs got help from Berkshire Hathaway, which bought $5 billion in Goldman’s preferred stock, and got also warrants to buy another $5 billion in Goldman’s common stock.

Goldman also received $10 billion of capital from the American government in October 2008, under the Troubled Asset Relief Program (TARP).

Blackstone Group

In 1985, Stephen A Schwarzman and Peter G Peterson, who retired from the firm in 2008, co-founded the Blackstone Group with a shared secretary and a balance sheet of $400,000.

Today Blackstone is a leading global alternative asset manager and provider of financial advisory services listed on the New York Stock Exchange with total fee-earnings assets under management of $92.2 billion as of March 31, 2009.

Since inception, the New York-based Blackstone has completed investments in such notable companies as Hilton Hotels Corporation, Equity Office Properties, Allied Waste, AlliedBarton, United Biscuits, Freescale Semiconductor, Nielsen Company, Biomet, Michaels Stores and Travelport.

Stephen A Schwarzman is the chairman and chief executive officer.

Economic net income was a loss of $93 million for the first quarter of 2009, significantly better than the loss of $827 million in the fourth quarter of 2008

Meltdown fallout:

Blackstone Group may be the key mega entrant of the Financial Crisis.

Banco Santander

Banco Santander’s history began on May 15, 1857, when Queen Isabel II (of Spain) signed a royal decree authorising the incorporation of the founding of bank.

Right from the start it was a bank open to the outside world, being initially linked to trade between the port of Santander in the north of Spain and Latin America.

In 2007, Santander held its 150th anniversary as the world’s 12th largest bank by market cap, the 7th in terms of profit and the bank with the largest retail network in the western world, with 10,852 branches.

Emilio Botin is the chairman of the board and Alfredo Saenz Abad is the chief executive officer.

Banco Santander’s net attributable profit in the first quarter of 2009 was euro 2.1 billion, a decrease of 5 per cent from last year, but an increase of 8 per cent compared to the fourth quarter of 2008.

Meltdown fallout:
Acquired:

• British retail and mortgage bank Alliance and Leicester of Great Britain
• British Diversified financial services firm Bradford and Bingley Wyomissing, Pennsylvania (USA) based Sovereign Bank.

Industrial and Commercial Bank of China

Industrial and Commercial Bank of China is the largest bank in the world. It is one of China’s ‘Big Four’ state-owned commercial banks (the other three being the Bank of China, Agricultural Bank of China, and China Construction Bank).

It is the largest bank in the world in terms of market value and one of the world’s top ten banks by assets.

It was founded as a limited company on January 1, 1984. As of 2006, it had assets of RMB 7,055 billion ($893 billion), with over 18,000 outlets including 106 overseas branches.

ICBC was simultaneously listed on both the Hong Kong Stock Exchange and Shanghai Stock Exchange on 27 October 2006. It was the world’s largest IPO to date.

Jiang Jianqing, is chairman and executive director.

Meltdown fallout:

Goldman Sachs recently sold about $1.9 billion worth of shares in ICBC at a discount of 4 to 6 per cent.

Standard Chartered Bank

Headquartered in London, Standard Chartered Bank operations in more than seventy countries and has a network of over 1,700 branches and outlets (including subsidiaries, associates and joint ventures) and employs 73,000 people.

Despite its British base, it has few customers in the United Kingdom and 90 per cent of its profits come from Asia, Africa, and the Middle East.

Standard Chartered is listed on the London Stock Exchange and the Hong Kong Stock Exchange and is a constituent of the FTSE 100 Index. Its largest shareholder is Singapore’s Temasek Holdings.

The name Standard Chartered comes from the two original banks from which it was founded and which merged in 1969 — The Chartered Bank of India, Australia and China, and The Standard Bank of British South Africa.

The Chartered Bank was founded by Scotsman James Wilson following the grant of a Royal Charter by Queen Victoria in 1853, while The Standard Bank was founded in the Cape Province of South Africa in 1862 by another Scotsman John Paterson.

Peter Sands is the current chief executive officer.

On February 29 2008, Standard Chartered PLC announced it has received all the required approvals leading to the completion of its acquisition of American Express Bank Ltd from the American Express Company. The total cash consideration for the acquisition is $823 million.

Rabobank

Rabobank’s roots lie in agriculture. In 1898 two separate cooperative banks – the Cooperatieve Centrale Raiffeisen-Bank in Utrecht and the Cooperatieve Centrale Boerenleenbank in Eindhoven – were founded by enterprising rural folk, who, with little access to the capital market, decided to help one another.

The two banks served their rural communities independently for three-quarters till they merged in 1972.

Rabobank opened branch offices in Europe, North America, Asia and South America and entered into strategic alliances with European partners.

In terms of Tier-1 capital, the organisation is among the world’s fifteen largest financial institutions.

Meltdown effect:

Previously considered a laggard, this Dutch bank is now hailed as far-sighted for his conservation mode of operation.

The Bank of New York Mellon

Established in 2007 from the merger of Mellon Financial Corporation and The Bank of New York Company, Inc, The Bank of New York Mellon is a leading asset management and securities services company. Headquartered in New York, the bank has $19.5 trillion in assets under custody or administration and $881 billion under management.

It helps organisations build assets, enhance performance, improve operating efficiency and reduce risk through a wide range of asset management and securities services solutions.

For individuals, it offers sophisticated financial solutions, including investment and wealth management, private banking and shareowner services.

Robert P Kelly is the chairman and chief executive officer.

On June 9, 2009, The Bank of New York Mellon celebrated its 225th anniversary.

Meltdown effect:

The bank boasts of negative toxic assets, as unlike regular banks it provides custodian services and do not put its own capital at risk.

BNP Paribas

BNP Paribas is the European leader in banking and financial services, with a significant and growing presence in the United States and leading positions in Asia. The Group has one of the largest international banking networks, a presence in over 85 countries and 172,300 employees.

BNP Paribas is the largest bank in the Eurozone by total assets and second largest by market capitalization according to The Banker magazine.

Baudouin Prot is the chief executive officer.

In the first quarter of 2009 BNP Paribas posted a very solid performance enabling it to generate a net profit of euro 1,558 million.

Meltdown fallout:

Once BNP Paribas buys a majority stake in Fortis Bank of Belgium it will become eurozone’s largest deposit holder through its positions in Belgium and Luxembourg.

#1: Lehman Brothers

With General Motors becoming the 99th American company this year to go under, the current year may go into record books with a dubious distinction of having maximum number of public company bankruptcies.

So far, the record is held by 2001, when as many as 263 companies filed for bankruptcy in the entire 12 months.

However, the average for both 2001 and the current year are almost same at about 20 bankruptcies a month or about five in a week. Taking into account the fact that there are only five working days in a week, the average could also be termed as one publicly-held company going belly up every working day.

#2: Washington Mutual

While it remains to be seen whether 2009 would break the record of 2001 in terms of number of bankruptcies, it has already breached all records in terms of the assets of the companies seeking bankruptcy protection.

Already, three of this year’s bankrupt companies — GM, Chrysler and Thornburg Mortgage — have found place among the 10 biggest ever bankruptcies in the American history.

#3: WorldCom

GM’s is the fourth biggest so far, while it is the largest ever industrial bankruptcy in the US.

The biggest bankruptcy in 2001 was that of energy giant Enron, which is now the fifth biggest company to go under in the American history.

#4: General Motors

In terms of employees too, GM, with a staff size of 243,000, is probably the second biggest ever bankruptcy.

It is only next to retailer KMart Corp, now part of Sears Holdings, which had about 10,000 more employees when it filed for bankruptcy in 2002.

#5: Enron

Taking into account the last few months of 2007, the current economic crisis has accounted for five out of the 10 biggest ever bankruptcies in the US.

Making the current crisis even worse, the five new entrants to this dubious league account for more than 80 per cent of the top ten in terms of the asset size of the bankrupt companies.

The five bankruptcies in the current economic crisis together account for assets worth about $1.2 trillion, as against about $250 billion for the rest five.

#6. Conseco

GM is the fourth biggest ever bankruptcy candidate in the US, next only to those of Lehman Brothers, Washington Mutual and WorldCom.

Lehman Brothers and WaMu also went belly up in the current economic crisis itself, while that of once iconic telecom brand WorldCom happened in 2002.

#7: Chrysler

Another auto giant Chrysler fell into bankruptcy about a month ago and is the seventh biggest so far in the US history.

Energy giant Enron in 2001 and insurance and finance major Conseco in 2002 are the fifth and sixth biggest ever bankruptcies respectively so far.

#8: Thornburg Mortgage

Others in top 10 bankruptcy list include residential mortgage lender Thornburg Mortgage Inc (eighth), electricity and natural gas firm Pacific Gas and Electric Company (ninth) and petroleum major Texaco (tenth).

Among these, Lehman, WaMu, GM, Chrysler and Thornburg fell victims to the current economic crisis, while others happened in late 80s or early this decade.

#9: Pacific Gas and Electric Company

Lehman became the first major victim of the current crisis when it went bankrupt on September 15, 2008 with assets worth $691 billion and debt of $613 billion.

It was soon followed by the country’s largest savings and loan holding company WaMu, which went bankrupt on September 26, 2008, and its $327 billion asset was immediately sold to J P Morgan Chase for mere $1.9 billion.

#10: Texaco

The auto sector started falling apart a few months later and Chrysler filed for bankruptcy on April 30, 2009, with assets worth $ 39.3 billion. The very next day, Thornburg Mortgage followed with assets of $ 36.5 billion.

GM has become the latest to join the list as fourth biggest bankruptcy with assets worth $91 billion.

The third biggest bankruptcy candidate so far, WorldCom, had gone belly up in July 2002 with $107 billion.

Besides, Enron had gone bankrupt in December 2001 with $63.4 billion in assets, while Conseco filed for bankruptcy protection in December 2002 with assets worth $65.5 billion.

General Motors Corp filed for bankruptcy on Monday, forcing the 100-year-old iconic car major which has been one of the most visible symbols of American capitalism and economic might into uncharted waters of nationalization or government ownership.

This is the third-largest bankruptcy filing in American history and the largest-ever US bankruptcy in the manufacturing arena.

US Chapter 11 bankruptcy protection gives GM time to restructure its finances while being protected from its creditors.

The bankruptcy is likely to change GM drastically and 20,000 workers are likely to lose their jobs. GM has 92,000 employees in the United States and supports 500,000 retirees under the contract filed with the workers’ union.

So why has the world’s best known car company gone bankrupt?

A killer combination

In a nutshell, very high labour costs, rising competition from foreign car makers, a frightening spike in fuel prices, freezing of credit, the collapse of the American economy, drop in sales caused by lack of purchasing power among Americans due to the recession, et cetera have formed a lethal concoction leading to the bankruptcy of the iconic carmaker.

However, General Motors’s problems run much deeper. Here’s why. . .

Unmanageable labour costs

Over the years, protesting workers’ unions at GM managed to get the company to agree to contracts that provide lifetime benefits to the members. This excessive cost of lifetime benefits pushed labor costs through the roof.

These costs have now reached an unmanageable proportion and the automotive giant just does not have enough money to either make these payments or to keep the company afloat, given the decline in sales and plummetting profits. Expansion, upgrade, new investments were totally out of the question.

No cash, few receivables and huge expenses

Reports suggest that GM is paying more than $1,500 per car that is built as just benefits to people who are not even working for the auto giant any more. An interesting bit of statistics says that the cost of steel used in a car made by GM is less than what it pays its retired union members in terms of benefits.

Added to this is the huge pay that GM workers draw even for low-level jobs at the company.

The company does not have much cash and even if it adds receivables to this, it accounts payable and accrued expenses are many times higher than that figure. Even adding the company’s current assets (inventories, equipment on lease, etc) to this still leaves it way behind it current liabilities.

Government aid

The United States government, mindful of the impending death of GM, gave it over $19 billion from taxpayer money to keep it alive. It also sacked its legendary chief executive Rick Wagoner and decided to monitor the company’s restructuring itself.

However, that has not helped revive the fortunes of the world’s second-largest car company, after Toyota.

Once it goes into bankruptcy, the US government will infuse yet another tranche of about $30 billion to refinance and restructure GM.

The first signs of trouble

The first signs of GM’s gargantuan financial troubles began to surface in early 2008. When by mid-2008, the prices of furl touched a historic high, there was a stunning change in consumer behaviour with Americans deciding to keep off big fuel-guzzling cars and SUVs in favour or smaller, fuel-efficient vehicles.

The sudden rise in the price of oil, the deepening recession and the falling sales led to Detroit’s Big Three – GM, Chrysler, and Ford Motor Co – almost throwing in the towel.

Hard-to-get car loans and crazy fuel prices hurt GM

Car loans too were difficult to come by as banks, already reeling under the world’s greatest financial crisis, decided to freeze credit. More and more people failed to qualify for loans, leading to a huge drop in car sales. Companies like GM found it almost impossible to raise funds or borrow from the market to keep from going belly up.

A study conducted by the car firms said that the historic spike in fuel prices was the ’500-pound gorilla’ that almost single-handedly kayoed GM and other carmakers.

By the end of the year, car giants were begging for help and the then George W Bush-led US administration decided to extend carmakers a lifeline and pumped in taxpayer money to keep the companies from collapsing.

US govt may own 70% in GM

Reports say that the US government may own 70 per cent stake in the restructured General Motors, the ailing auto maker which is battling to avert a possible bankruptcy.

Under the GM restructuring plan, the United Automobile Workers union would hold up to 20 per cent through its retiree health care fund, and bondholders and other parties will get the remaining share. Shareholders would be virtually wiped out.

Some thorny questions

The prospect of GM being effectively owned by the government raises a number of thorny questions: Countless policy decisions — on matters such as fuel economy standards, tax incentives to replace aging cars and green technology initiatives — will present conflicting interests.

President Barack Obama’s aides, meanwhile, have consistently said they would be reluctant shareholders, and they plan no operating role in the company. The day-to-day running of the firm would be left to professional managers and the government would not be involved in decisions about closing factories, renegotiating contracts or selecting product lines.

A news report said that the auto maker expected the UAW’s health care trust, called Voluntary Employee Beneficiary Association or VEBA would receive 39 per cent of the company, bondholders 9 per cent, shareholders 1 per cent, and the rest going to the Treasury.

The Treasury Department which has lent GM about $18 billion since December, required the company to make deals with the union and bondholders to cut debt and expenses by June 1, the report said.

In these extraordinary times, card issuers’ plan to erase up to 40% of some customers’ debt would also be good for those who pay their bills on time.

By David Lazarus

When I heard last week that banks want to forgive up to 40% of some customers’ credit card debt, my first question was, “What’s the catch?”

“There’s no catch,” answered Scott Talbott, chief lobbyist for the Financial Services Roundtable, an industry group that helped concoct the debt-relief program. “There’s no hidden agenda. These are extraordinary times and the industry is aggressively working to help customers.”

He’s half right. As best as I can tell, the banks’ offer comes with no strings attached.

However, this isn’t pure altruism. Credit card issuers would enjoy some significant benefits under the plan, making it an act of self-preservation that just so happens to be in the best interests of potentially millions of cardholders.

In a letter to the Office of the Comptroller of the Currency, which regulates national banks, the Financial Services Roundtable and the Consumer Federation of America called for a change in federal rules regarding payment and taxation of credit card debt.

The Financial Services Roundtable represents most of the leading credit card issuers, including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Capital One Financial Corp.

The banks are proposing that consumers who qualify for partial debt forgiveness be given five years to pay off their remaining balances, rather than the current three to six months.

They’re also proposing that consumers not have to pay taxes on any debt forgiven for five years, as opposed to the current requirement that such taxes be paid immediately.

To qualify, a cardholder would first have to see a credit counselor, who would use criteria provided by lenders to determine how much of the consumer’s balance could be waived — anywhere from 10% to 40%, depending on income, assets and other financial considerations.

No interest would be charged on the remaining amount of credit card debt.

The banks want to test the program with 50,000 consumers and, if the feds approve, then expand it to potentially millions of others.

Talbott said each lender represented by his group had signed off on the proposal.

A spokesman for the comptroller’s office said the agency was considering the banks’ plan.

According to the Federal Reserve, the 158 million U.S. consumers who use plastic will soon be carrying almost $1 trillion in credit card debt.

The percentage of delinquent credit card accounts — those that are 30 days or more overdue — hit 4.5% in the second quarter, according to the American Bankers Assn. That’s close to the 6.4% of homeowners who missed mortgage payments during the period.

Charge-offs, or those credit card accounts that banks have simply given up on collecting, reached an all-time high of 5.5% in the quarter.

The banks are clearly figuring that the economy is going to get worse before it gets better, and that reducing the number of charge-offs would improve their bottom line (even if they can collect only 60% of some balances).

The banks also would gain an accounting benefit by not having to write off forgiven debt for five years, thus limiting reported losses for what is hoped would be the duration of the economic downturn.

I told Talbott that it’s hard not to be skeptical when banks present themselves as the best buddy of consumers.

“Are we really viewed that poorly?” he replied.

Well, yes. These are the guys who helped wreck the housing market by extending loans to millions of people who had no hope of paying them back, and who lobbied fiercely to change the bankruptcy law so it’d be harder for people to crawl out from under their debt.

In September, come to think of it, the banking industry condemned the House of Representatives’ approval of a Credit Cardholders’ Bill of Rights while passing the hat among taxpayers for $700 billion in bailout funds. The bill subsequently stalled in the Senate.

Linda Sherry, a spokeswoman for Consumer Action, said the banks’ plan would clearly be a plus for many consumers who might otherwise be forced to seek bankruptcy protection to resolve their debt problems.

But she worries that there could be a backlash from cardholders who pay their bills each month.

“A lot of homeowners weren’t happy with plans to renegotiate the mortgages of people who made bad housing decisions,” Sherry said. “I wonder if other cardholders will accept forgiving the debt of some people who mishandled their plastic.”

This is a valid concern. A lot of us work very hard to pay our bills on time and manage our finances. It certainly doesn’t seem fair for banks to bail out those who behaved less responsibly.

Yet these are indeed extraordinary times. And we’ll all benefit economically if consumers get back on their feet as quickly as possible.

“What’s better for everyone?” Talbott asked. “Is it better for people to go into bankruptcy? No. Is it better for lenders if people go into bankruptcy? No. We’re trying to help both sides.”

Say what you will about the banks’ motives, their proposal would be an undeniable boon to a lot of people at a time when many families can use all the help they can get. Federal regulators should approve the plan as soon as possible.

Now about that Credit Cardholders’ Bill of Rights. . . .

David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.

Do you support forgiving the credit card debt of people who can’t pay their bills?