Posted by & filed under Governments & Regulators, Industry Analysis.

Description: Goldman Sachs Group Inc. may have backed itself into a corner by speaking out quickly to counter fraud claims by the U.S. Securities and Exchange Commission.

Source: Bloomberg.com
 
Date: 05/01/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=avI7OhdudjWc

Questions for discussion:

  • In terms of public opinion, McCormick said, Goldman Sachs has “already been condemned, the question is the price.” Do you agree with this statement?
  • What advice would you send to Goldman at this time in order to mitigate the damage done to its current and future net worth?

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  When it comes to laying the blame on Goldman Sachs, Wealth Adviser columnist James Altucher says, “not so fast.” Nevertheless, he tells investors to stay away from buying the stock until the flames cool down.

Source:  Marketwatch.com – video report
 
Date: 04/23/2010

Link: http://www.marketwatch.com/video/asset/did-goldman-do-anything-wrong/E02B7836-3C8D-4719-A7EB-DE47036348DF

Questions for discussion:

  • So, in your opinion, did Goldman do anything wrong?
  • Summarize the arguments presented that mitigate the threat to Goldman management and stock value.
  • How should management be expected to respond to the situation?
  • What would you recommend to investors looking at Goldman and other firms dealing with these financial instruments that are the center of the controversy?

Posted by & filed under Governments & Regulators, Industry Analysis.

Description: A slew of internal e-mails from the leading credit rating agencies show employees at those firms knew of the dangers in subprime mortgages, but gave them the seal of approval anyway.

Source:  CNNMoney.com

Date: 04/24/2010

Link: http://money.cnn.com/2010/04/23/news/economy/credit_rating_agencies_hearing/index.htm
 
Questions for discussion:

  • Do you agree with the analysis presented?
  • What actions should be taken by regulators?
  • Should anyone be legally charged?

Posted by & filed under Company Analysis, Growth & Valuation.

Description:  Apple Inc said Tuesday that profit rose 90% in its fiscal second quarter as it sold almost 9 million iPhones, easily topping analyst estimates in both profit and sales amid a surge in demand in international markets.

Source:  Marketwatch.com
 
Date: 04/20/2010

Link: http://www.marketwatch.com/story/apple-earnings-soar-on-strong-iphone-sales-2010-04-20?siteid=nwtwk

Questions for discussion:

  • As an investor with a one year view to the future, what stock value do you see for Apple?
  • What level of stock price volatility would you expect to see during this period? Why?
  • What investing strategies would you expect to employ in order to take advantage of the stock’s price behavior?
  • How would you expect the financial managers at Apple to respond to the current and predicted improvement to sales and profits?
  • How will these changes affect cash flows, consideration for mergers and acquisitions and so forth?

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  During the buildup to the financial crisis, major rating agencies Moody’s Corp. and Standard & Poor’s Inc. were understaffed, didn’t have enough data about the mortgage securities they were rating and were pressured by each other and investment bankers to issue overly rosy ratings, a lawmaker said Friday.

Source: Marketwatch.com
 
Date: 04/23/2010

Link: http://www.marketwatch.com/story/competition-lack-of-data-drove-flawed-ratings-2010-04-23?siteid=nwtwk

Questions for discussion:

  • Summarize the arguments presented by each side of this issue.
  • What is your view of whom, if anyone is to blame for any neglect or improper behavior?
  • What lessons can be learned here in order to help reduce the risk of repeating mistakesthat were made?

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  Regulators would harm U.S. equities trading if they toughened restrictions on computer-driven strategies that have largely replaced human market makers, CME Group Inc. Chief Executive Officer Craig Donohue said.

Source: Bloomberg.com
 
Date: 04/24/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aVkTbg7q8Lwo

Questions for discussion:

  • Do you agree with the concerns expressed by Donohue?
  • Can this type of activity be regulated by way of technology?

Posted by & filed under Governments & Regulators.

Description:  Director of Enforcement Robert Khuzami discusses the charges against Goldman Sachs during a panel at Tulane University’s Corporate Law Institute.

Source: CNNMoney.com – video report
 
Date: 04/16/2010

Link: http://money.cnn.com/video/news/2010/04/16/n_Goldman_SEC_lawsuit_Khuzami.cnnmoney/

Questions for discussion:

  • Summarize the accusations against Goldman and Paulson.
  • Is this just a matter of full disclosure?
  • What impact do you think this action will have on Goldman, Paulson, and other financial firms in general?
  • Do you think the consequence of this legal procedure by the SEC will be positive for future financial activity?

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  The Securities and Exchange Commission on Friday charged Goldman Sachs Group Inc. and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages.

Source: Marketwatch.com
 
Date: 04/016/2010

Link: http://www.marketwatch.com/story/goldman-charged-with-fraud-over-paulson-cdo-trade-2010-04-16?pagenumber=1

Questions for discussion:

  • Are there any explanations that can mitigate the damage done to the reputations of the firms involved?
  • What effect do you think this publicity will have on other financial dealings between institutions?
  • What can be learned from this article about the concept of risk management?
  • Do you believe the SEC is serious about pursuing legal action against Wall Street firms? Explain why or why not.

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  From July 2004 through April 2007, as credit markets boomed, Goldman Sachs Group Inc. created 23 financial transactions called Abacus, the word for a relatively crude counting tool involving the shuffling of beads. Yesterday, the Securities and Exchange Commission sued the bank for securities fraud in what would be the penultimate offering in the series, according to Bloomberg data.
Source: Bloomberg.com
 
Date: 04/017/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aFsmwaue4PZo

Questions for discussion:

  • What can be learned from this article about the concept of risk management?
  • Do you believe the SEC is serious about pursuing legal action against Wall Street firms? Explain why or why not.

Posted by & filed under Industry Analysis.

Description: Yes, we hit 11,000. Propaganda. Yes, we’ll quietly sneak past 11,722 (Dow’s 2000 peak). Yes, we’ll happily climb to 14,164 (Dow’s 2007 peak). Maybe. But you’re being conned: Even a new record of 14,165 barely equals CPI inflation the past 10 years. Get it? Wall Street’s lost more than 20% of your money the past decade. Now they’re blowing a new bubble, filled with more toxic costly hot air.

Source: Marketwatch.com
 
Date: 04/13/2010

Link: http://www.marketwatch.com/story/new-dow-high-ahead-happy-talk-feeds-sheep-2010-04-13?pagenumber=1

Questions for discussion: 

  • Do you agree with the analysis presented?
  • Are there explanations for investors’ “herd-mentality”?
  • What strategy would make sense for an investor if the scenario presented is valid?
  • How do you think corporate financial planners will behave over the next few years?
  • How should they behave, given this analysis?