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All Blog Posts (216)

Another Economic Bubble Burst Ahead – China? (Part 2)

In the first part of this article, the author provided the striking details of the need to be mindful of the economic pace of development of China. The suggestion was based on an exclusive analysis of economic growth characteristics of economic super powers from a phase of economic miracle to the phase of economic malaise. The author advocated for the need for policies that would mollify the negative impact on the world economy should there be any failure of the Chinese economy. In this second p… Continue

Added by Charles Horace Ampong on February 8, 2010 at 9:00pm — No Comments

Stating the Obvious - OECD and ECRI

These four self explantatory charts from a recent Morgan Stanley European equity strategy report - Equity implications of rollover in growth leading indicators - could'nt provide a bigger sell signal.

Here's the OECD World leading indicator at a 34 year high...

… Continue

Added by Daniel Chow on February 8, 2010 at 8:42am — No Comments

A Fat Tail Risk Metric

I read an interesting paper by Peter Conti-Brown (read here:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1548892) on a proposed Fat Tail Risk Metric (FTRM). Conti-Brown argues that a central cause of the financial crisis is the failure of risk models to account for high impact, low probability events i.e. fat tail events and proposes mandatory disclosure of a firm’s all exposures - contingent liabilities, such as guar… Continue

Added by Sachidanand (Sacha) Singh on February 8, 2010 at 2:30am — No Comments

We Are So Screwed

"Our immersion in the details of crises that have arisen over the past eight centuries and in data on them has led us to conclude that the most commonly repeated and most expensive investment advice ever given in the boom just before a financial crisis stems from the perception that 'this time is different.' "That advice, that the old rules of valuation no longer apply, is usually followed up with vigor. Financial professionals and, all too often, government leaders explain that we are doing… Continue

Added by Daniel Chow on February 2, 2010 at 3:45am — 2 Comments

Corporate Valuation Modeling Book

Hi everyone, Some of you have taken an Enstruct course, but I thought I would announce that the first course is finally in book format and available from Wiley (for some reason they took forever to get it to print!): http://www.amazon.com/Corporate-Valuation-Modeling-Step-Step/dp/047048179X/ref=sr_1_1?ie=UTF8&qid=1250183661&sr=8-1 If you have any qu… Continue

Added by Keith Allman on February 1, 2010 at 6:17pm — No Comments

You’re in Good Company

We recently concluded the Finance 3.0 member’s survey, and wanted to share the summary results with you, as well as announce the winners of our $50 cash prize. We hope you’ll enjoy finding out more about the types and profile of visitors to our community of over 50,000 registered members, and thousands more who've yet to sign up. In a nutshell, you will be pleased to know that you’re in good company… Let us start off by sharing with you with that visitors to Finance 3.0 are a very, very wel… Continue

Added by Finance 3.0 on February 1, 2010 at 2:30am — 4 Comments

Stockholder Wealth Maximization

How? We first need to ask “ What factors determine the price of a company’s stock?” Three factors: - Any financial asset is valuable only if its generate cash flow - timing of cash flow matters because cash received sooner is better- it can be reinvested to produce additional income - Investors are averse (strongly opposed) to risk, they will pay more for a stock whose cash flows are relatively certain than for one with relatively risky cash flows What to do? Increasing cash flows Speeding them… Continue

Added by bruce on January 31, 2010 at 3:43am — No Comments

Inflation and Its Effects on the Economy

FINANCIAL MARKETS FAILURE & NEED FOR A NEW FIANCIAL CAPITALISM MODEL : Current crisis in private US investment banks and developed economies financial markets signifies a change in the existing models of financial capitalism based upon the perception that financial stability stems from self regulation of financial markets where profit is considered final criteria for assessing and mitigating financial risks. This crisis has exposed the fallacy of this perception as this model has miserably… Continue

Added by Muhammad Yaqub Virk on January 28, 2010 at 11:56am — No Comments

Stray Thoughts,Mutual fund dividend

Sacha, just a point of view which you have not included in NAV mechanics on money market mutual funds available in other international markets. These funds offer higher interest rates than most bank deposits do. Such funds are invested in short term CD, treasury securities and government or corporate bonds. The fact that they earn higher yields is that they are riskier. Initially when such funds were created, had a floating NAV like any other mutual fund. On the day the fund opened, it would be… Continue

Added by Mukund Bhide on January 24, 2010 at 4:04am — No Comments

Another Economic Bubble Burst Ahead?

Most economists would agree that just as there is much euphoria surrounding an economic boost for a country, there is also an implicit economic phobia with regards to its authenticity and sustainability in the longer term. Historical analyses of economic empires depict a cyclical trend of economic mayhem and plummeting after attainment of the pinnacle of distinctive economic super power status. As a matter of fact, the demise of these economic empires has been observed to occur immediately after… Continue

Added by Charles Horace Ampong on January 18, 2010 at 12:59pm — 1 Comment

2010 Market Probability & 5 Considerations

Barron's Michael Santoli, makes his perdictions based upon history. The past is never certain to be the future. But it's all we got, so why not us it? Michael gives an excellent summation. Is it 1931 or 1983? The bulls see the market mimicking 1983, the bears point to 1931. Those in the middle see many similarities with 2004. Barron's Michael Santoli reports. Not that 2010 is likely to disappoint. "We're back to an environment where the fundamentals have to c… Continue

Added by Bill M Wright on January 17, 2010 at 11:30pm — 6 Comments

The Benefits of Financial Crisis

Interesting lessons here - and how to be careful what you wish for. Bankruptcy could be good for America By Gideon Rachman Published: January 12 2010 02:00 | Last updated: January 12 2010 02:00 (From the FT) In Winnie-the-Pooh , there is a significant moment when the bear is asked whether he wants honey or condensed milk with his bread. He replies "both". You can get away with this sort of thing if you are a much loved character in children's literature. But it is more problematic when great… Continue

Added by Brent Wheeler on January 17, 2010 at 5:40pm — No Comments

Paper on Liquidity: by Sandeep yadav

Introduction This is not the first time the liquidity crisis has impacted the world there has been a series of events after the World War II system of centered economic clout has failed to provide international financial stability (Thorvald, Solheim and Vale 44). Globalization is an another phenomena which has impacted deep and it was a one way street started from US and Europe and later on Japan which has now transform to developing economies which have large population along with low wage rate… Continue

Added by Sandeep Yadav on January 16, 2010 at 3:35am — No Comments

The best of decades, worst of decades

The best of decades, worst of decades Swaminathan Aiyer Dated: December 27, 2009 It has been the best of decades, the worst of decades. In the 2000s, India became an economic growth champion (especially in services), and was recognized as a potential super-power through admission to the world’s nuclear club. But the same decade witnessed gross misgovernance, rising terrorism and Maoist insurrection, and outrageously high rates of malnutrition and anaemia. In 2000, India was just recovering f… Continue

Added by CMA.Devarajan Swaminathan on January 14, 2010 at 11:39am — No Comments

USA Fun Tax Facts

How progressive is your tax structure? This chart illustrates the progressive structure of the federal income tax system as seen in the average tax rates (center column) computed from tax returns filed in 2007. For example, the top left block indicates that the top 1% of tax returns report… Continue

Added by Bill M Wright on January 13, 2010 at 11:00pm — 1 Comment

Generating wealth from "thin air" ??

Is it possible to generate genuine wealth in virtual worlds and games???? Very likely.... here is an extract on the economics of virtual worlds..... Continue

Added by Brent Wheeler on January 11, 2010 at 5:13pm — No Comments

Book Recommendation Request

I have taken the liberty of shifting this from a message to this blog where: - there are various other book recommendations and - Medhi can hopefully get a wider range of responses to his good question "Can you suggest me some books for the following subject. Treasury and Fund Management Portfolio & Investment Management" My suggestions - and portfolio and investment management rather than Treasury is my field - start with the classic "Investment Policy: How to Win the Losers Game" by Ch… Continue

Added by Brent Wheeler on January 9, 2010 at 11:11pm — 2 Comments

How's Your Government Accounting & Marketing Skills ?

When your neighbor loses her job, it's a recession. When you lose your job, it's a depression. When federal workers not only keep their jobs but see their pay rise during a recession, it's a sign of the times. And when my home real-estate taxes rise 18% when my value falls 30% and the city tax gets raised I'm ready to ask all levels of government to make some layoffs and take some paycuts. How about you? Our State employees have taken about a 5% cut but our unionized teachers… Continue

Added by Bill M Wright on January 7, 2010 at 12:30am — No Comments

Financial reports and ratio analysis is not reliable...

Financial reports and Ratio Analysis is not a good measure to analyze performance of any organization. I know, I am quoting a very strong statement to put my point. This is just to make the topic more interesting. In most of the cases, book value of shares is just 10-20 % of the market value of the shares. Reason for the same is that financial reports are reported on book value basis and does not include intangible assets efficiently. There is lacuna in our financial and accounting system that w… Continue

Added by Amit Puggal on January 5, 2010 at 1:37pm — 5 Comments

The Case for Free Trade (Following the Mercantilism discussion)

A summary - by Milton and Rose Friedman, adapted from "Free to Choose" is set out below. It is worth paying attention to their demolition of the counter arguments - some of which are currently enjoying an attempt at revival.... The Case for Free Trade By Milton Friedman and Rose D. Friedman In international trade, Hoover fellow Charles Wolf Jr. argues above, deficits don't much matter. Here Milton Friedman and Rose Friedman discuss what does: freedom. A ringing statement of logic and principle.… Continue

Added by Brent Wheeler on January 5, 2010 at 4:00am — 6 Comments

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