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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 given for Harley-Davidson’s rise in stock value?
  • How will financials change as a result of this decision? 
  • Do you think this was a wise decision? Explain your thinking.

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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 industry in particular.
  • How should a financial manager in the hard hit industries he mentions react to this forecast with respect to strategic plans, employment, capital budgets, etc? Explain your answer.

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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 can think of that would help?
  • What are the consequences if the program fails?

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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:

  • What are the advantages and disadvantages to following this strategy?
  •  How will this affect the firm’s stock value in the near and long term? Explain your answer.

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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 you believe that the economic expansion was only temporary or the start of a new business cycle?
  • How will this affect financial planning over the next six months? Explain your thinking.

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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 other alternative energy technologies?
  • Are there opportunities for smaller operators or will the energy business always be reserved for large firms?
  • How would you go about preparing statements of projected cash flows?

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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 that IBM’s target may actually be another company.

Source: BNET.com

Date: 10/03/2009

Keys: Capital budgeting and Cash flows (p355)

Link: http://industry.bnet.com/technology/10003588/ibm-versus-google-youve-got-to-be-joking/

Questions for discussion:

  • What are the advantages and disadvantages to using email services from IBM or another competitor? 
  • How does this decision affect capital budgeting and cash flow?
  •  What are the implication for HR?

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Description: Legislation tightening oversight of the $592 trillion over-the-counter derivatives market would give regulators authority to ban so-called abusive swaps.

Source: Bloomberg.com

Date: 10/03/2009

Keys: Stock market (p281), Derivatives (p664)

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=amik0fY5tT7c

Questions for discussion:

  • Do you agree with the effort to regulate the derivatives market. Explain your answer.
  • Do you think the financial crisis would have been averted if this legislation was in place? Why or why not?
  • Is there a basic problem with derivatives of any sort? Explain your thinking.

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Description: The Berkshire Hathaway chief notes the ‘irony’ in the BofA chief having saved the system — by overpaying for Merrill Lynch just hours before it would have failed.

Source: CNNMoney.com

Date: 9/16/2009

Keys: Analysis (p85), Stock market (p281)

Link:  http://money.cnn.com/2009/09/16/news/newsmakers/lewis.faint.praise.fortune/index.htm

Questions for discussion:

  • Do you think the Buffett’s criticism of Lewis is fair? 
  • What do you think would have happened had Merrill not bought BofA?
  • To what degree was this deal “forced” by government?
  • How would you change current government regulation of banking?

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Description:  The microblogging site reportedly is planning to raise $100 million this year based on that valuation.

Source: CNNMoney – video report
 
Date: 9/25/2009

Keys:  Raising capital, valuations, IPO

Link: http://money.cnn.com/video/technology/2009/09/25/f_tt_twitter_valuation.fortune/

Questions for discussion: 

  • Summarize the arguments for concern over Twitter’s valuation. Do you have similar concerns? Explain your thinking.
  • What are a few potential revenue streams for Twitter besides advertising?
  • Do you think Twitter’s business model is vulnerable to competition? Explain your thinking.