Youtube Education – video resources for E-learning (on finance, business, management courses too)

Youtube has a video channel for Colleges and Universities:
Youtube Education

You can click on Directory to see which are the Universities/Insitutions have their educational video put online.

Some examples of resources for finance/business/management:
Harvard Business School

Columbia Business School

Wharton School of University of Pennsylvania

Yale Courses

Result of Supervisory Capital Assessment Program (SCAP) (a.k.a. Bank Stress Test)

On 7 May 09, Fed released the results of the Supervisory Capital Assessment Program (SCAP).

Press release, Statement by Bernanke and Overview of Results (pdf file)

Some highlights:

1. SCAP Buffer

Page 9 of the Overview of Results (PDF) shows the summary for all 19 Participating Bank Holding Companies (BHC). Of particular interests are SCAP Buffer (total, as well as for individual banks). Total $74.6B extra needed. Refer to Pg 9 of the file for SCAP Buffer needed for individual banks.

2. Deadline (from the Joint Statement)

have until June 8th, 2009 to develop a detailed capital plan, and
until November 9th, 2009 to implement that capital plan.

3. Capital Plan (Excerpt from Joint Statement)

[three main elements:

3.1 A detailed description of the specific actions to be taken to increase the level of capital and/or to enhance the quality of capital consistent with establishing the SCAP buffer. BHCs are encouraged to design capital plans that, wherever possible, actively seek to raise new capital from private sources. These plans should include actions such as:

• Issuance of new private capital instruments;
• Restructuring current capital instruments;
• Sales of business lines, legal entities, assets or minority interests through private transactions and through sales to the PPIP;
• Use of joint ventures, spin-offs, or other capital enhancing transactions; and
• Conservation of internal capital generation, including continued restrictions on dividends and stock repurchases and dividend deferrals, waivers and suspensions on preferred securities including trust preferred securities, with the expectation that plans should not rely on near-term potential increases in revenues to meet the capital buffer it is expected to have.

3.2 A list of steps to address weaknesses, where appropriate, in the BHC's internal processes for assessing capital needs and engaging in effective capital planning.

3.3 An outline of the steps the firm will take over time to repay government provided capital taken under the Capital Purchase Program (CPP), Targeted Investment Program (TIP), or the CAP, and reduce reliance on guaranteed debt issued under the TLGP. ]

4. Mandatory Convertible Preferred under the CAP (from Joint Statement)

A BHC may apply for Mandatory Convertible Preferred (MCP) in an amount up to 2% of risk-weighted assets (or higher upon request).

In addition, (in simpler term) to consider requests to exchange outstanding preferred …for new mandatory convertible preferred issued under the CAP.

5. Redeeming Preferred Securities Issued under the CPP (from Joint Statement)

(In simpler term) Supervisors will decide on redemption; banks will have to show they are financially "strong" but it's still up to the supervisors to decide on redemption of outstanding CPP preferred stock. :-)

Question now will be:
How will the banks with shortfall raise capital ?

(My previous post on SCAP)

Report from Center for Public Integrity - Subprime 25: Who’s Behind the Financial Meltdown ?

On 6 May 2009, Center for Public Integrity has published a investigation report titled :
Who’s Behind the Financial Meltdown – the top 25 subprime lenders and their Wallstreet Backers

This Subprime 25 Interactive List is cool.
You can click on the sheets (#1 to #25) to see name, status of company, its CEO, total high interest loans.
Click on "Read More" for more "interesting" information for e.g history, summary, parent companies, bailout money, political contributions etc..

The Subprime 25
These are the top 25 subprime lenders, responsible for 7.2 million "high interest" loans made from 2005 through 2007 (72% of high-priced loans reported).

The articles and glossary from the report are extremely good reads to understand root causes of the subprime crisis.

The "Data" are informative. (Click on Data)
Maps show regions of high interest loans of different percentage points above treasury securities);
Charts & Graphs are really interesting. There are charts showing increasing % of income goes to housing; increasing financing of Mortgage-Backed Securities (MBS) and the top underwriters.

Then there are the interesting parts:

• charts showing political contributions by securities and investment companies, real estate companies to parties (Democrats or Republicans) and
• top recipients of contributions by securities and investment companies, real estate companies for 2003-2004 and 2007-2008;
• top recipients of contributions by AIG in 2008 Election Cycle.

Guess who was the top recipient: 2003-2004 George W. Bush; 2007-2008 Barack Obama.
Haha, wonder what the analysts are trying to imply here :-)

I put the Widget of Subprime 25 on my blog for a limited period :-)

US Banks Stress Test - SCAP (Supervisory Capital Assessment Program)

On 24 Apr, Fed released the method it used to conduct stress tests of 19 biggest US banks.
press release
PDF file

Have browsed through it, trying to figure out what it means..

Some highlights:
It is called SCAP (Supervisory Capital Assessment Program).

1. SCAP Template
The SCAP template is in Appendix A (of the PDF file).
(Read the PDF file for further breakdown of items)

Few parts:

a. Loan and Security Categories to be included in the Loss Estimates

• Loans (many different types of loans)
• Commitments and Contingent Obligation
• Securities
• Trading Account

b. Resources to absorb losses

• Pre-provision Net Revenue
• Allowance for Loan Losses

c. Post Scenario Tier 1 Capital

2. Scenarios

Year to assess: 2009, 2010
2 scenarios: baseline scenario, more adverse scenario

On page 6, there is a Table 1 to show how they formulate the 2 scenarios.

• Average baseline scenario for Real GDP and Civilian Unemployment Rate is calculated by using the average of Consensus Forecasts, Blue Chip and Survey of Professional Forecaster.
  Average baseline for House Prices is by using Case-Shiller 10-city Composite Index.
  
• "More Adverse" Scenario is mentioned in Page 5 Footnote. (refer to the PDF file)
  It was mentioned in the text, "More Adverse" scenario is not "Worst Case" scenario. It is "conditions that are severe but plausible"

3. Securities in Available-for-Sales (AFS) and Held-to-Maturity (HTM) Portfolios

All those ABS, CMBS, RMBS etc.. are here.
Important ! These are the so called "toxic assets".

How is the new FASB guidance on fair value measurement and impairments (see my previous post) being used ?

• Baseline scenario: use FASB new guidance (read: not mark-to-market)
• More adverse scenario: not using FASB new guidance (read: mark-to-market)
  

Some questions to ponder:

• Is the "More Adverse" scenario adverse enough compared to reality ? Is the modelling reasonable ? How to ensure accuracy of inputs ?
• How will the stress test be used ? What happens next if passed ? What happens next if failed ?