Big banks win on credit spreads

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Description:  Wide credit spreads and lack of competition boost profits at Goldman Sachs and JPMorgan. Source: CNNMoney – video report   Date: 10/16/2009 Keys:  Stock valuation (p281), Financial environment (p27), Cash flows (p355) Link: http://money.cnn.com/video/markets/2009/10/16/mkts_ss_banks_credit_fbr.cnnmoney/ Questions for discussion:  Summarize the reasons for bank success this quarter and the reasons for concern in the future? How… Read more »

U.S. deficit biggest since 1945

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Description: It’s officially official. The Obama administration on Friday said the government ran a $1.42 trillion deficit in fiscal year 2009. Source: CNNMoney.com Date: 10/16/2009 Keys: Bond valuations (p249), stock market (p281) Link:  http://money.cnn.com/2009/10/16/news/economy/treasury_deficit/index.htm?postversion=2009101617 Questions for discussion: How might this information influence financial managers planning for the near future? Explain your answer. If government bonds… Read more »

Scandal hits corporate role models IBM, McKinsey

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Description: It isn’t often that big blue gets a black eye. But on Friday IBM (IBM.N), the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam. Source: Reuters.com Date: 10/16/2009 Keys: Capital budgeting decisons (p311), Stock market (p281)… Read more »

Harley Rises on Wandell Plan to Cut Jobs, End Buell

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Description: Harley-Davidson Inc., the biggest U.S. motorcycle maker, rose on plans to cut about 180 jobs, end its Buell line and sell its MV Agusta unit to save as much as $140 million in annual costs. Source: Bloomberg.com Date: 10/15/2009 Keys: Cash flows (p355), Stock market (p281) Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aADuFuWty08s Questions for discussion:  Summarize the reasons… Read more »

Roubini: ‘Jobs lost forever’

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Description:  The economist who accurately predicted the recession says unemployment will peak between 10% and 11%. Source: CNNMoney – video report   Date: 10/06/2009 Keys:  Financial environment (p27), Working capital management (p.461), Cash flows (p355) Link: http://money.cnn.com/video/news/2009/10/06/n_ss_roubini_earnings.cnnmoney/index.html Questions for discussion:  Summarize Rouini`s forecasts and explanation for business conditions in general and for the financial services… Read more »

Banks still stuck with the junk

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Description: Beset by delays, the government’s program for ridding banks of bad assets is finally poised to take off. But problems still plague the controversial program. Source: CNNMoney.com Date: 10/09/2009 Keys: Capital structure policy (p526), stock market (p281) Link:  http://money.cnn.com/2009/10/09/news/companies/ppip/index.htm?postversion=2009100916 Questions for discussion: Summarize the problems facing the program? What are some possible solutions you… Read more »

ConocoPhillips Plans to Sell $10 Billion of Assets

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Description: ConocoPhillips, the third-largest U.S. oil company, said it will sell about $10 billion of assets in the next two years and cut capital spending in 2010 to reduce debt and increase returns on capital. Source: Bloomberg.com Date: 10/08/2009 Keys: Evaluating project economics and capital rationing (p396), Stock market (p281) Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7WBQb3aYhUU Questions for discussion:… Read more »

U.S. Economy: Services Grow for First Time in a Year

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Description: U.S. service industries expanded in September for the first time in a year as the emerging recovery spread from housing and factories to the broader economy. Source: Bloomberg.com Date: 10/05/2009 Keys: Cash flows (p355), Growth (p586) Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9IZDDP21AtQ Questions for discussion:  Why is the service industry index a useful measure of business growth? Do… Read more »

Making oil from algae

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Description:  Turning the carbon-eating organism into crude could conserve oil and lower carbon emissions. Source: CNNMoney – video report   Date: 10/02/2009 Keys:  Risk (p.209), Cash flows (p355) Link: http://money.cnn.com/video/news/2009/10/02/n_ef_algae_oil.cnnmoney/ Questions for discussion:  What are the risks associated with investing in this industry? What are the existing infrastructures that give this concept certain advantages over… Read more »

IBM Versus Google: You’ve Got To Be Joking

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Description: So IBM decided to drop the bomb on Google — Big Blue will offer a basic email service for $36 per seat, undercutting the latter’s $50 a head Apps pricing. A Gartner analyst called it “trouble for Google,” but I’m not so sure. I think that Google has still got some enormous advantages, and… Read more »