CBT Worldwide Inc.

A trusted education resource for the financial services industry, CBT Worldwide specializes in tying real world developments to economic and financial market concepts.

Choose among a wide range of topics including fixed income and money markets, foreign exchange, financial awareness and bank management.

New York-based CBT Worldwide offers custom-designed workshops and training programs that meet individual and corporate learning needs.

For the banking industry, CBT Worldwide provides a one-week program that combines training in banking fundamentals with a computerized bank simulation program for “hands-on” experience.

CBT Worldwide, Inc.
914-646-4240

COMMENTARY:

Counting the Centipede’s Shoes: The Credit Crisis Continues

September 14, 2008. This past year we’ve all been waiting for the “all clear” signal, but it hasn’t happened. Just when we think the worst is over and nothing else could happen, it happens.

We’ve been waiting for the other shoe to drop, but, unfortunately, there have been many dropped shoes over the past 12 months, with more to come.

Some numbers to consider:

Insured domestic deposits total around $4,475 billion
The FDIC reserve fund totals around $45 billion (after a multi-billion dollar hit from Indy Mac)
This represents about 1.01% of insured deposits which is near the mandated minimum ratio

Next, consider the fate of Washington Mutual. Even with the TPG capital infusion earlier this spring, they are severely undercapitalized with no remaining source of additional outside capital and no prospect of internal capital formation via profits.

Meanwhile, further large losses are looming due to charge offs, not to mention potential asset revaluation. This sounds as if WaMu, like Countrywide, should be seeking a merger partner. The most likely partner would be one of the top five banks wanting to boost their nationwide branch network.

However, since WaMu carries most assets at book value, an acquirer would have to revalue the assets to market, making the transaction prohibitively expensive (thank you, FASB).

If our numbers are correct, Indy Mac cost the FDIC about $9 billion. However, this hit pales in comparison with a WaMu rescue.

Look out for another size 15 sneaker to hit the floor before the end of this year. Hello Mr. Paulson, let me introduce you to the She Bair.

Like our past predictions of doom and gloom, we hope we’re wrong!