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2 Posts tagged with the finance tag


I think it is safe to posit the idea that America is a full fledged service economy. Moreover, I believe it safe to wager that the American consumer and American services are closely tied to the global economy. It has been mentioned time and again how critical the American consumer's spending is to the Global economy in media such as The Economist. At the same time, Americans forgo a healthy level of restraint in spending, save less than 5% of household incomes, and maintain a huge deficit financed by foreign nations.


I feel that this scenario resembles too much in the way of an imbalanced equation and that the overall health of the American economy will suffer if a change in perspective does not make way.



It goes without saying that consumption will never go away (at least not in the near future), what we buy how ever will change. This past Christmas financial experts everywhere sat listlessly waiting on retail sales returns to make sure Americans bought lots of little and big boxes of stuff they may or may not need from big box retailers. The American consumer delivered, but not enough to stave off recession talks. Imagine a Christmas with boxes filled with certificates for services and not just flashy wares from low production cost nations. The us economy would not suffer because we did not buy a lot of pre-manufactured goods, if anything it would be bolstered by the fact that our native product, services, would become a main stay. Also we could build an export surplus by way of services. 

Actually, let me define what I mean by services. When I say services I mean anything that is not a physical product handed over at time of purchase. A service could be a painting job, manicure, financial work, legal services, etc.. As long as you are paying someone else for a skill or craft.  I say let everyone else have the goods as we are now the current leader in services worldwide and should build and maintain that brain trust.

Our service economy allows for many creature comforts in that service sector jobs usually mean higher pay. But we dole out our private incomes on goods and products that we hardly ever need as opposed to reinforcing what brought us that disposable cash in the first place. There used be a time that people made goods in their country and bought and sold them from one another. That model has gone away in the world economy; but Americans could buy and sell services to one another and ship them abroad at the same time. We will still buy our goods here and there but the cash flow would stay predominantly in the US as opposed to flowing out. I believe as countries develop, emerging economies will buy plenty of goods for everyone as will China for that matter.

All this is fine, but it must be added that increased savings must go hand in hand with the transfer of the consumer focus. The American consumer is a spendthrift at best. This poor fiscal policy starts with the government. Whom, if the government was a private citizen it would have been brought to collections a long time ago, or at least there spending limit would have been cut off. 

The benefits of savings on the dollar and US consumer by transitioning to a services based economy and increasing savings, go without saying. We would finance our own spending by fattening our own pockets. Loosening our dependance on oil or foreign power of any sort would not hurt either. I believe wholly in a world economy, I just don't think that the trade of goods and services goes one way. Financial Analyst and Economist should be concerned with what the worldwide consumer will do at Christmas and not just Americans. At this time, I can only be concerned with how we get our own house in order.

656 Views 0 Comments Permalink Tags: finance, consumption, service, economy, spending



It is my strong belief and hope that CitiBank acquire Wachovia. At present no such buy out could take place because CitiBank's total US deposits holdings would have to drop below 10%, which is not set to happen soon. If it did, however, such a merger would have many benefits to the companies and their customers.






• The acquisition would put Citigroup firmly in nearly every corner of the US. Wachovia has a very strong presence in the southeast where Citi does not. Moreover, Wachovia recently expanded out west with recent acquisitions, which would only solidify Citi's already prominent presence in the West.



• Wachovia customers would experience the benefit of a national bank with the true retail banking outlets that they are used to. Wachovia customers would also see the addition of many services that Wachovia had not been able to provide like International banking.



• Both Wachovia and CitiBank would enjoy the merger of their knowledge base and resources particularly in the Mortgage Financing and Investment Banking.



• Finally, Citi would see its bottom line bolstered in a time when it has seen short comings in its quarterly reports.

Much of this is wishful thinking; but I think that I should put it down and get it out there for hopes sake.



1,146 Views 0 Comments Permalink Tags: and, and, a, banking, finance, m, mergers, acquisitions

Richard Bakare

Richard Bakare

Member since: Sep 27, 2007

I hope to bring some bit of updates to this site over the year. I plan to include a link to my formal endorsement of a presidential candidate, regular events and news updates, and plenty of pictures as always.

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