It Is Europeans Who Are Mostly In Debt

If you think it is Americans who are to blame as having borrowed too much more than they could afford, then think twice!

Take a look at the top external debt (in US dollars) per capita data by countries, these data apparently show that many European countries are in ridiculously deeper debt.

Among these 18 countries, Monaco and Ireland are more than 10 times of their GDP could produce. Only three non-European countries are on the list, those are Qatar, Australia and the USA.

People in rich country do have more purchasing  power to leverage their debt. For such fair comparison, I took their high GDP per capita to normalize their high debt. So here is the list of Debt per capita as percentage of GDP per capita (the debt-to-GDP ratio).

Again, after the normalization, these Europeans are still on the top of the list. Taking Monaco as example, people in Monaco share the average debt as high as over 18 times as their GDP contribution. As I expected, two poor countries, Zimbabwe and Liberia, are also borrowing money around as twice what they could produce.

With such per-capita GDP normalization, it is equally fair to judge the debt of each country, no matter they are poor or rich. So I plot a scatter chart of all countries in the whole world to examine their normalized per-capita debt in relate to their GDP contribution. If every country borrows money at the same level as the same ratio to their GDP contribution, the fit line should be flat.

However, the figure turns out to be upper bend to many rich countries. It is obvious that many rich countries, especially those in Europe, are responsible for their deeper debt as over borrowing money externally.

In a huge contrast, Asian countries, such as Japan, South Korea, Singapore, China as well as India only show their small fraction of debt (under 30%) in comparison to their GDP.

Nortel is on sales

As we speculated earlier, the application delivery product (former Alteon) piece were sold to Redware on 4/1.

Now today, Nokia Siemens made official to bid the large piece of NT including LTE:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bFC797B96-4E88-4E9B-8CE0-0C285C8E8064%7d&siteid=yhoof2

The rest part in Enterprise business are under Avaya and Siemens Enterprise Communications' eyes.

So the question remains that what is the core left after these series of divesture?

Scotia Waterous – A Brief Assessment

Scotiabank overall
- 69000 employees

Structure

• 4 major groups: Domestic Banking, International Banking, Scotia Capital and e-Banking
• Scotia Capital:
• Scotia Mcleod (Canadian i-Banking),
• Scotia Mocatta (metals trading),
• Scotia Waterous (the well-regarded M&A division that operates exclusively within the oil & gas industry)

Relative hierarchy

Scotiabank ==> Scotia Capita ==>Scotia Waterous

Remark:

Scotia Waterous is a very focused team with most directors come from petroleum industry as engineering experts.

They are well regarded mostly because of their focus and specialty.

They are doing business but with their strong technical domain knowledge. However, you as a pure financial/business background might find little difficult to fit in to this close circle, unless you would like to grasp their knowledge and daily language.

Citi Group – A Brief Assessment

Recent job cut

• April 2007 Citigroup eliminated 17,000 jobs, or about 5% of its workforce
• Jan 2008, it announced another 5% cut.
• Nov 2008, the subprime crisis hit Citigroup with full force, despite its receipt of $25 billion in federal TARP bailout money, and on November 17, 2008 Citigroup announced plans for about 52,000 new job cuts.

Market Performance

• $300B market value in 2006 down 15 times to $21B in 2008

Federal Assistance

• $25B federal TARP bailout money
• $20 direct investment to the company by Federal
• $306B in loans and securities from Federal

Structure - four major divisions:

Global Consumer Group, Global Wealth Management,Citi Institutional Clients Group (newly created in 2007), and Global Cards

• Global Consumer Group: Citi Cards, CitiFinancial and Citibank
• Global Wealth Management: Citi Private Bank, Citi Smith Barney, Citi Investment Research
• Citi Institutional Clients Group: Citi Markets and Banking, Citi Alternative Investments
• Global Cards: all Citi credit cards

Relative hierarchy

Citigroup
         ==> Institutional Clients Group
                   ==> Global Banking
                            ==> Investment Banking

https://icg.citi.com/global_banking/invest_banking.jsp

http://www.oncampus.citi.com/careers/north_america/institutional_clients_group/investment_banking.aspx

or you could be end up with this hierarchy

Citigroup
         ==> Institutional Clients Group
                   ==> Global Markets
                            ==> Global Commodities
                                     ==> Oil & Oil Products

https://icg.citi.com/global_markets/product_solutions/commodities/index.jsp

https://icg.citi.com/global_markets/product_solutions/commodities/oil_products.jsp

Are Private Colleges Worth Your Money?

Are private college worth the money?

The answer is a big NO, according to the future earning power of the graduates (what else matters more than the ROI of your education investment?). Note that UT Austin ranked #3 and A&M ranked #2 in the ranking of "The Best Colleges for Making Money".

This is a very interesting ranking, which reconciles what I have been thinking and learned in these years on college selection.

It’s good to see two Texan schools made at the top of the list. This once more reflects on the similar matter what we have tried to justify ourselves for staying in Dallas with the relatively more effective savings, as a living place section thought process.

Another point that I would like to share with you is that selecting a career-focused major is far more important than taking the glory of a school name. Don’t get me wrong, I should qualify further that no one would reject any prestigious glory if it is financially justified. By saying that, I won’t want to pay just for any glory. Thus the key point here is: “glory on other’s name” vs. “gain belongs to your own”.

Taking my daughter’s case just as an example, I think she is maximizing her ability to gain much more from what her school in average could offer to students. I would like to share with you a status update I just learned recently about her job exploring strategy. She has gained so far among only a dozen of students in her school who had got a full hit-rate set of interviews from all investment banking firms they applied to so far. Given the current economic situation, gaining interviews with I-banks such as UBS, Credit Suisse, JP Morgan, Citi Groups, Scotia Waterous, Deutsche Bank, Goldman Sachs, Greenhill, etc. apparently is not a easy task for students this year. Due to the financial crisis impacting much more in the Northeastern area, many Ivy school students had to turn to the South in order to get higher chance for an interview. Needless to say, we are very proud of her.

Just taking this direction as a talking point (not extremely), I start considering more and more that a school is just a playground, it is crucial and really depends on how individual students perform after having entered. So being admitted by a better school is just a formality. In that case, the teacher-to-student ratio, for instance, is just a formality, which will very unlikely affect most of self-motivated students. On the other hand, a student who can stand out of a vast student sea in a school with very low T-to-S ratio would convincingly prove that she or he could perform very well in their career in the future. What matters is the real life in a real world. And obviously, for the same argument, she or he could definitely perform very well if she or he would have been admitted in an ivy school.