Blog Entries tagged 'Capital'

Breaking up is easy to do

stephentaub@yahoo.com — Thu, 27 Jan 2011 23:00:00 +0100

Sara Lee is the latest company to break itself into two or more separate companies.

The split announcement comes in the same month that Motorola divided into two separate companies.

Also in January, ITT, the once-gilded conglomerate, said it would split into three separate companies while Marathon Oil said it would split the company in two.

Marathon, of course, was created from a spin-off from United States Steel in 2002.

Sara Lee Friday said its North Am [...]

PE investing heating up

stephentaub@yahoo.com — Wed, 29 Dec 2010 23:00:00 +0100

Private equity firms are on the prowl for larger companies.

Armed with near-record dry powder, buyout specialists this year alone have completed 68 deals of at least $500 million, according to PitchBook. This is more than double the 26 deals exceeding $500 million in 2009, bringing the two-year total to 94.

PE firms plunked down nearly $78 billion of capital on the 68 deals.

"The bigger deals this year have been made possible by an increased availability of d [...]

Credit quality continues to improve

stephentaub@yahoo.com — Mon, 18 Oct 2010 23:00:00 +0100

Here is further proof the economy in general is improving.

Despite stubbornly high unemployment, Standard & Poor's reported a decline in monthly default rates for all credit lines.

First and second mortgages declined in September to 3 percent and 2.1 percent, respectively. Auto loans decreased slightly from 2.1 percent in August to 2 percent in September.

Bank cards had the largest decline in defaults in the past 12 months, down to 7 percent, according to [...]

A welcome end to operating leases

ronaldfink6@gmail.com — Sun, 15 Aug 2010 23:00:00 +0100

I see that FASB is sticking to its schedule for ending most off-balance-sheet treatment for leases, and so is the IASB. It's about time, frankly, if only to spare us poor, I mean, intrepid financial journalists from having to sort through the particulars of the current accounting treatment a moment longer than necessary.

I speak from personal experience here, having wrestled with the false distinction between capital and operating leases for a sidebar to a piece I wrote fo [...]

Getting what you wish for

marinecole@hotmail.com — Tue, 10 Aug 2010 23:00:00 +0100

As part of the financial overhaul, federal banking agencies have jumpstarted the process of finding alternatives to using credit ratings for calculating banks' capital levels. But alternatives are few and far between and some could be expensive too.

The various bank agencies - the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision - are seeking to gather information and comments on alterna [...]

European bank stress tests: much ado about nothing

marinecole@hotmail.com — Sun, 18 Jul 2010 23:00:00 +0100

The European banks stress tests will be released this week, and while they may slightly bolster confidence among investors, they likely won't fix troubled banks for the long term.

The release on July 23 will focus on 91 banks, with three main groups that are the focus of attention: the German Landesbanks, the Spanish Cajas and the Greek banks.

The potential stress losses at the German banks are expected to be modest given the strength of Germany's economy, which has th [...]

Why Keynes was only half right

ronaldfink6@gmail.com — Mon, 21 Jun 2010 23:00:00 +0100

At long last, one writer has seriously addressed the potential problems with more stimulus spending. (I sent Paul Krugman a question about this more than a week ago, via a comment on his blog, but from what I can see he has yet to address it. And Dean Baker too easily dismisses the issue, in my opinion.)

The problem is not the federal budget deficit, not at least in the short term, but the potential political fallout from bad decision making. That way, says Steve Randy Waldman, ind [...]

Emerging market companies improve governance to attract investment

denise.bedell@tc-worldwide.com — Mon, 14 Jun 2010 23:00:00 +0100

Brazilian companies are taking a page from their US counterparts when it comes to governance and corporate social responsibility. In a recent Latin American corporate governance survey by Latin Finance and consultancy Management & Excellence, Brazilian firms topped the rankings across different industries--not only aiming for compliance, but striving for excellence in corporate social responsibility, sustainability, board independence and other governance measures.

< [...]

Women-owned businesses need more capital to grow

denise.bedell@tc-worldwide.com — Mon, 17 May 2010 23:00:00 +0100

The number of women-owned businesses has been skyrocketing for the past 30 years, and new enterprises now are twice as likely to be started by women as men. However, revenues for men-owned businesses continue to outstrip that of women-owned businesses by almost 75 percent, according to a report by Sharon Hadary, founding executive director of the Center for Women's Business Research and adjunct professor at the University of Maryland University College.

< [...]

My mea culpa over the May 6 market glitch

ronaldfink6@gmail.com — Thu, 13 May 2010 23:00:00 +0100

I owe former Securities and Exchange Commission chairman Arthur Levitt a sincere apology as a result of last week's stock market glitch.

It seems increasingly clear that electronic trading systems are to blame for the mysterious 1,000 point intra-day dive. And as Floyd Norris thoroughly explains today, their dominance reflects a decision to replace human, market-making specialists with technology.

The reason I'm offering a mea culpa here is that I criticized Levitt fo [...]

Time for the Fed to articulate a real strategy

denise.bedell@tc-worldwide.com — Thu, 11 Mar 2010 23:00:00 +0100

The surprise discount rate increase last month and the FOMC discussions over when to begin reducing its balance sheet have really highlighted the importance of transparency in how and when policymakers plan to return things to normal -- whatever that normal may be.

Whenever there is any perceived shift in fiscal or monetary policy, there is a quick reaction in debt market spreads. The current lack of a clear exit strategy is creating its [...]

Private investment a stopgap for state and local budgets

ronaldfink6@gmail.com — Mon, 01 Feb 2010 23:00:00 +0100

A growing number of state and local governments are leasing highways, airports and other public property to private investor so they can devote dwindling tax revenues to maintenance and improvements of other infrastructure. Much of the investment in these so-called public-private partnerships is coming from pension funds and private equity. But observers doubt the trend is sustainable.

This piece describes a burst of such activity recently seen in the U.K. and Canad [...]

Can Private Equity Come Back?

stephentaub@yahoo.com — Mon, 11 Jan 2010 23:00:00 +0100

It's official: 2009 was a disaster for private equity.

This was confirmed by a new report from Dow Jones, which counted 331 funds raising $95.8 billion last year, down 68 percent from the $299.9 billion raised by 508 funds in 2008. This made 2009 the worst year for fundraising since 2003.

Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst, attributed this huge falloff to limited partners who did not have capital to commit. "As the liqu [...]

Credit quality keeps improving

stephentaub@yahoo.com — Tue, 05 Jan 2010 23:00:00 +0100

So, is the economy turning around? The skeptics-and there are always skeptics-say no, insisting the recent growth and positive economic signals are the result of inventory restocking and the stimulus bill. Once these factors are exhausted, we'll suffer a second dip in the decline, they argue.

Never mind that a majority of the stimulus funds haven't yet been spent on stimulating the economy, but this is a topic for another discussion.

Oh, and an index of [...]

Tax assets on the chopping block as Tier One bank capital

ronaldfink6@gmail.com — Sun, 20 Dec 2009 23:00:00 +0100

Did international bank rules discounting tax losses have anything to do with the timing of the deal between Citi and the Treasury?

This is conspiracy theorizing at its best (or worst, depending on your point of view). But can it be purely a coincidence that Citi and the Treasury worked out their deal on a tax break for the bank's net operating losses right before international regulators came out with new rules that would disallow such deferred tax assets as counting toward Tier One [...]

Check the weather before you release your earnings

ronaldfink6@gmail.com — Wed, 09 Dec 2009 23:00:00 +0100

This isn't exactly the height of behaviorial finance, but research by two Fordham University accounting professors finds that the stock market reacts more favorably to corporate earnings reports on sunny days than on cloudy ones. (Technically, it confirms previous research along these lines but you get the picture.)

The research, by John J. Shon and Ping Zhou, also finds that the results are more pronounced for firms followed by "naïve" investors and is reflecte [...]

Time Warner gets serious about reducing its payables

ronaldfink6@gmail.com — Thu, 03 Dec 2009 23:00:00 +0100

How desperate is Time Warner for cash? Desperate enough to charge its freelancers a fee to get paid on time, based on a sliding scale. In other words, Time is indeed Money at Time.

Gawker likens the practice to that of a payday loan service. And it definitely does have that loan shark quality to it, though we use the word "quality" loosely.

But another way to look at is in terms of working capital management. I mean, if this isn't effective payables m [...]

How to make Wall Street create job growth

ronaldfink6@gmail.com — Wed, 02 Dec 2009 23:00:00 +0100

To get the economy moving again, the job submit President Obama is holding on Thursday should produce ideas other than short-term measures to provide relief for the unemployed.

What can the government do? Here's summary of all the infrastructure projects around the country that need funding:

Personally, I'd like to see more emphasis on high-speed rail and other forms of mass transit than on roads, to help move the country away from its dependence on autos, [...]

Emerging markets still aren't everything they're cracked up to be

ronaldfink6@gmail.com — Tue, 24 Nov 2009 23:00:00 +0100

This pretty much puts the kibosh on the argument that emerging markets are the place to be right now.

It wasn't so long ago that sovereign wealth funds from countries like Dubai were supposed to ride to the rescue of Citigroup and other U.S. banks. The situation now is essentially the reverse, with Dubai World's creditors being asked for forbearance on $59 billion in debt.

The thing is, this also may be more evidence that the debt required to finance the growing fe [...]

Is China's bubble different from that of the U.S.?

ronaldfink6@gmail.com — Tue, 17 Nov 2009 23:00:00 +0100

There's been lots of talk around President Obama's Asian trip about China's economy being much more resilient than that of the U.S.

No question, China has bounced back from the global recession more quickly than the U.S. has. And its government clearly believes more firmly in investing in infrastructure and other means of underpinning its ability to produce rather than consume, as the liberal economist Robert Reich amply illustrates.

But the Chinese economy may be no [...]