Posted by & filed under Governments & Regulators.

Description:  Corporate borrowing costs are rising at the fastest pace in more than two months on concern that worsening government finances will slow the global economy and make it harder for companies to meet debt payments.

Source: Bloomberg.com

Date: 02/08/2010

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

Questions for discussion:

  • Summarize the report and the impact this trend will have on corporate debt financing. 
  • How can finance managers and investors be expected to respond?

Posted by & filed under Company Analysis, Management Issues.

Description: Shares in Toyota Motor Corp (7203.T) edged higher after the head of the world’s largest automaker made a public apology for safety problems and said it would bring in outside experts to review quality controls.

Source: Reuters.com

Date: 02/07/2010

Link:  http://www.reuters.com/article/idUSTOE61602420100208

Questions for discussion: 

  • How would you play a short term investment in Toyota? Explain your thinking.
  • How do you think the stock will perform over the next 12 months?

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

Description:  Treasury Secretary Tim Geithner says he will always feel legitimate pressure from the public even though the bailout wasn’t ‘under his watch.

Source: CNNMoney – video report
 
Date: 01/29/2010

Link: http://money.cnn.com/video/news/2010/01/29/n_geithner_stimulus_bailout.cnnmoney/

Questions for discussion:

  • Do you share the views put forward by Treasury Secretary Tim Geithner? Explain your answer.
  • In which ways do you think financial managers or investors might behave differently over the next few years because of the financial crisis we have experienced? Explain your answer.

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

Description: High-end electric-car company Tesla Motors filed for an initial public offering Friday, seeking $100 million in the public-financing arena as conventional auto makers are reeling from anemic sales and product recalls.

Source: Marketwatch.com

Date: 01/29/2010

Link:  http://www.marketwatch.com/story/tesla-motors-files-for-ipo-to-raise-up-to-100-mln-2010-01-29

Questions for discussion:

  • What are the factors favoring the success of this IPO and those against?
  • Summarize all of the financial instruments mentioned in the article that comprise the overall financial structure of the firm.

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

Description:  Economists who expect a revival of U.S. employment growth this month have history on their side, according to Thomas J. Lee, a JPMorgan Chase & Co. strategist.

Source: Bloomberg.com

Date: 01/29/2010

Link: http://www.bloomberg.com/apps/news?pid=20601109&sid=aMnej1hFAk_s

Questions for discussion:

  • What is your judgement of the chart and predictions presented in the report.
  • How might financial managers be expected to react in terms of revised planning, if the predictions are correct? Explain your answer.

Posted by & filed under Economic Analysis.

Description: The dollar rose against major currencies on Friday after stronger-than-expected economic data reinforced the view the United States was recovering from recession faster than other developed countries.

Source: Reuters.com

Date: 01/29/2010

Link:  http://www.reuters.com/article/idUSTRE5BF27F20100129

Questions for discussion: 

  • How will the dollar’s activity affect financial management of firms that import and export?
  • Where do you believe the dollar is headed over the next few months? Explain your thinking.

Posted by & filed under Financial Planning.

Description: In the glory days of the digital photo frame business, when his products were still a novelty and shoppers were flush with cash, getting a bank loan to manufacture them was a cinch, Michael Levy says.

Source: NYTimes.com

Date: 01/30/2010

Link: http://www.nytimes.com/2010/01/31/business/smallbusiness/31order.html?ref=business

Questions for discussion:

  • Summarize the problems facing small businesses since the financial crisis hit?
  • What alternatives are small business owners employing as a result of the credit freeze?
  • What are the possible consequences of these changes?
  • Do you believe they are permanent or will borrowing practices return to what they were before eventually?

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

Description:  FDIC Chairwoman Sheila Bair is concerned with the lack of real change in big banks’ operations and compensation.

Source: CNNMoney – video report
 
Date: 01/22/2010

Link: http://money.cnn.com/video/news/2010/01/22/n_fdic_bair_bank_bonuses.cnnmoney/

Questions for discussion:

  • Summary the ideas put forward by Sheila Bair.
  • Do you support her position? Explain your thinking.
  • How do you think the investment industry will respond?
  • Do you think her ideas about clawbacks and other adjustments to executive compensation will succeed? Explain your answser.

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

Description: In his toughest response yet to the financial crisis, Obama proposed Thursday that strict limits be imposed on the size and trading activities of the nation’s biggest banks. The proposal aims to deter commercial banks from becoming so large that they put the broader economy at risk and distort normal competitive forces. The president endorsed some recommendations by former Federal Reserve Chairman Paul Volcker, but didn’t go as far as Volcker’s urgings to break up the banks. Read more about Obama’s bank proposal

Source: Marketwatch.com

Date: 01/21/2010

Link:  http://www.marketwatch.com/story/obama-to-propose-new-limit-on-big-commercial-banks-2010-01-21?siteid=nwtwk

Questions for discussion:

  • Summarize the key points made in the report.
  • What are the implications of a reinstatement of Glass-Steagall for the banks, the stock markets, and for investors?
  • Do you support President Obama’s approach to bank regulation? Explain your thinking.

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

Description:  The biggest sell-off in the Standard & Poor’s 500 Index since March is rewarding options traders who bet on a surge in volatility with gains of 75 percent.

Source: Bloomberg.com

Date: 01/23/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aZOPq7yDKhng

Questions for discussion:

  • What sort of risk is involved with these instruments?
  • Who would be interested in them?
  • Do you agree with the comment that “People are betting on higher levels of volatility in the short term.” Explain your answer.