by | April 14, 2015 · 11:57 pm

The world`s largest P2P lending marketplace

It is ok to have a credit card, but sometimes it can be very expensive. That is not ok for you, but it is big business for your bank. They will earn a lot of money on you. But what if I say that you can cut your credit card rate by several percentage points?

If you have too much money, what if I say that you can earn 8% on your cash? You are not stupid, so you wouldn`t say no to that. You would be interested in borrowing, but you would be interested in earning an 8% rate on your cash too. You will earn no matter what you do. How is that possible?

SurveySaysNegotiatingCredit1

It`s possible because of the new system called peer-to-peer (P2P) lending.

This is a new platform where borrowers meets lenders with the aim of cutting out banks entirely. It`s more like debt-based crowdfunding, and one of the companies in this business went on the stock exchange at the same time when Alibaba entered the IPO market.

When everybody talked about the Alibaba IPO, nobody talked about the new IPO in the P2P lending market. LendingClub Corporation (LC) entered the market in 2014 and are the world`s largest P2P lending marketplace.

This is a company that started in 2007 and their loan origination have totaled over $7,6 billion from 2007 to 2014. They are small, but they are growing fast, and more P2P lending companies can enter the scene.

Their business model is simple. Lenders receive 13% and after deducting 1% for fees and adjusting for a 4% annual default rate, it`s 8% left to the investor. You will win as an investor, but as a borrower, you will too, because they are competitive to other banks.

Without a doubt, this is a threat to the traditional banking model.

This is a threat to traditional Credit Card Cartel like JPMorgan Chase, Bank of America, American Express, Capital One, U.S Bancorp, Discover and Citigroup. They account for about three-quarters of U.S credit card transactions, so consumer lending is big business.

The financial institutions will try to infiltrate the market.

Santander Consumer USA purchased 25% of LendingClub`s total origination for a term of three years in 2013, and LendingClub have seen a growing influx of capital from institutional investors who have begun to dominate the industry.

That`s hedge funds, asset managers, pension funds and family offices to name a few. An analytics firm called Orchard Platform, that caters directly to institutional investors can help them deploy capital at scale via lending platforms.

The shares of LendingClub Corp rose +4,21% today after announcing partnership with Citigroup Inc and Varadero Capital. What will the bank regulators say to that kind of partnership if this is the trend? Will they require that LendingClub have more of its own capital at risk?

LendingClub will work with Citigroup to provide as much as $150 million in affordable loans to underserved borrowers. The loans will be issued by WebBank, based in Utah, and purchased by Varadero Capital via a credit facility from New York-based Citigroup.

LendingClub and their competitor Prosper Marketplace Inc are leading a technology-driven push to lower borrowing costs, and that`s less than a decade after bad lending decisions led to a global credit crisis. I`m worried right now when I think of where we are in the credit cycle.

We need more competition in the banking sector and Lending clubs can do something with that.

What we see now is bank innovation. Probably a bank revolution.

Online credit marketplaces is the future.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | April 13, 2015 · 5:57 pm

When will China be the world`s largest economy?

The U.S is still the largest economy in the world, followed by China. But China is growing much faster than the U.S, and China`s GDP will grow twice as much as its size today and much faster than the U.S.

China will close its gap with the U.S by 2030.

Largest economies in 2030

Not only the U.S will be far less dominant, but some of the largest European economies will also lose to several emerging markets that will skyrocket into the new economic order. This is what we will see in the next fifteen year, according to the U.S Department of Agriculture.

As you can see from the chart above, the gray bar represents the $16,8 trillion gross domestic product projected for 2015. The green bar show you how much bigger the economy is expected to be the next fifteen years.

China and India will grow fast. India is raked eights this year but India will climb past Brazil, France, Germany, Japan and the U.K. according to IMF (International Monetary Fund), India will have the largest workforce in the world within the next fifteen years.

Take a look at Japan.

Despite their QE programs in Japan, they will not grow much the next fifteen years, and that will push the country down on this ranking list made by USDA which is only estimates. It`s interesting to see because Japan was so big until the bubble burst in the early 1990`s.

So, Japan will not be the growth story the next decade, but where is the growth in addition to China and India? Africa is looking great, and Uganda are among the best. They will climb 18 spots and will be ranked at 91.

The fastest growing countries in the world right now is China, followed by Philippines, Kenya and India. Emerging markets in Asia and Africa will be at the top of global growth projections over the next two years.

The world is expected to grow 3,2 percent in 2015 and 3,7 percent in 2016. The Euro zone is expected to expand just 1,1 percent, as ECB`s President Mario Draghi deals with a fragile Greece and embarks on a bond-purchase program to stimulate the Euro-zone`s growth.

China, India, Philippines, Indonesia and Kenya will grow more than 5 percent this year and make up about 16 percent of the global GDP together. Africa`s largest economy, Nigeria, is projected to expand 4,9 percent this year, and Kenya about 6 percent despite their high unemployment rate. China will slow to 7 percent this year, but they are still the fastest growing G-20 nation.

Asia and Africa will dominate the global growth in 2015.

U.S growth this year is expecting to be about 3 percent even as the dollar soars to its highest level in more than a decade.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | March 27, 2015 · 12:20 pm

Easter holiday

Shinybull.com will be right back after the Easter holiday.

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shinybull countdown

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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by | March 26, 2015 · 11:00 pm

Apple’s Tim Cook leads different

Spend your Easter holiday to read about the World`s greatest leader here at shinybull.com. It is a long story, so take your time. This story is from the April 1, 2015 issue of Fortune. Enjoy!

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by | March 25, 2015 · 11:59 pm

The 5th largest food company in the world

One of the worlds richest and one of the best investors,Warren Buffet, is on the way to build a food empire. Ketchup maker Heinz, backed by Berkshire Hathaway Inc, which is own by Warren Buffet and the private equity firm 3G Capital, which is own by Brazil`s richest man, Jorge Paulo Lemann, will combine with Kraft Foods Group Inc (KRFT.O).

It is a $46 billion deal and that makes it the third largest North American food company. The transaction will create a global food behemoth with annual sales of $28 billion, and Heinz ketchup, Maxwell House coffee, Polly-O Cheese and Jell-O desserts will be some of the brands under its corporate umbrella.

heinz-tomato-ketchup-lid-sterling-silver-hallmarked-ljm

The complicated deal will result in Heinz shareholders owning 51 percent of the company, and Kraft shareholders getting 49 percent. Owners of Kraft shares will also get a hefty $16,50 a share special dividend, funded by the Brazilian firm 3G and Berkshire.

Kraft Heinz will be the fifth-largest food company in the world.

Warren Buffet has long said he want to do more «elephant»-style deals with all the money he has on hand. I think he like food and beverage, because both 3G and Bershire has been fairly acquisitive over the past few years.

They bought Burger King and Tim Hortons, as well as Heinz.

The Dow was losing 300 points today and momentum stocks getting hit harder, so why was the legendary investor Warren Buffet so hungry today, and why hasn`t he lost faith in stocks?

Fist of all; M&A now is lucrative, given ample liquidity and still low-interest rates globally. This is not only happening in the food and beverage industry, but also in tech, health care and biotech industries. I wouldn`t be surprised if that stock catches a further bid on this M&A news.

Berkshire will own more than 300M shares of the new firm and will have paid less than $30 each for them. Naturally, The Oracle has no intention of taking profits. «You won`t see Berkshire reduce is interest,» says Buffet.

«We will be in this stock forever.»

The new company will be publicly traded under the name Kraft Heinz Co, and it expects to save about $1,5 billion in annual costs by the end of 2017. Jorge Paulo Lemann, and his company 3G, has a reputation for introducing aggressive cost cuts at other companies.

Kraft Foods Group Inc is up 35,62% today. Trading at $83,17. Berkshire Hathaway Inc is trading at $217,000 today. EPS; 12,090,84, with a market cap of 356,07B.

It is a shift in the market at the moment as consumers are demanding more healthier food.

Maybe Warren Buffet and Jorge Paulo Lemann will do something with that?

 

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