Dodd calls for Lehman Bros. investigation

Posted by & filed under Company Analysis, Governments & Regulators, Management Issues.

Description:  A year and a half after Lehman Brothers’ collapse, Senate Banking Committee Chairman Chris Dodd, D-Conn., is calling for a federal investigation into the “Lehman situation” and other companies that may have fudged their balance sheets, contributing to the financial crisis.

Source: CNNMoney.com
 
Date: 03/20/2010

 Link: http://money.cnn.com/2010/03/19/news/economy/lehman_brothers_chris_dodd/index.htm

Questions for discussion:

  • Do you believe an investigation would be a good thing? Explain your thinking.

Avoid Negative-Net-Worth Stocks Like the Plague: John Dorfman

Posted by & filed under Financial analysis.

Description: I rarely buy a stock whose debt is greater than stockholders’ equity, or corporate net worth per share. In effect, that means I won’t give a second look to about one third of U.S. stocks.

Source: Bloomberg.com

Date: 03/15/2010

Link: http://www.bloomberg.com/apps/news?pid=20601039&sid=aReZz0vi1B5U

Questions for discussion:

  • In general, do you agree with this analysis and strategy for investing in stocks?
  • Could there be exceptions to the rule?
  • Why do you suppose the stocks that fail the Dorfman rule are still so valued by the investors?

At Lehman, Watchdogs Saw It All

Posted by & filed under Governments & Regulators.

Description: Almost two years ago to the day, a team of officials from the Securities and Exchange Commission and the Federal Reserve Bank of New York quietly moved into the headquarters of Lehman Brothers. They were provided desks, phones, computers — and access to all of Lehman’s books and records. At any given moment, there were as many as a dozen government officials buzzing around Lehman’s offices.

Source: NYTimes.com

Date: 03/15/2010

Link: http://www.nytimes.com/2010/03/16/business/16sorkin.html

Questions for discussion:

  • Summarize the “Repo 105 strategy” used by management.
  • Do you consider any behaviors unethical or illegal?
  • Do you hold the SEC responsible for any wrong doing?
  • Do you believe regulations should be changed to prevent the use of “Repo 105 strategy”?

Palm shares may hit $0: Analysts

Posted by & filed under Financial analysis.

Description:  Palm’s future already looked bleak. But after reporting worse than expected results for the third quarter Thursday, some analysts think the company’s stock is now essentially worthless.

Source: CNNMoney.com
 
Date: 03/19/2010

Link: http://money.cnn.com/2010/03/19/technology/palm_target_price_zero/index.htm

Questions for discussion:

  • Summarize the reasons for Palm’s demise.
  • Do believe there is any hope for the stock?
  • How would you approach this stock to make a short-term play?

Lehman’s $642 million bankruptcy

Posted by & filed under Company Analysis, Governments & Regulators, Management Issues.

Description:  Councils, advisors, consultants, even an art auctioneer get hefty compensation for cleaning up the firm’s books.

Source: CNNMoney.com – video report
 
Date: 03/12/2010

Link: http://money.cnn.com/video/fortune/2010/03/12/f_sl_lehman_fees.fortune/

Questions for discussion:

  • Summarize the possible claims against Lehman.
  • Explain why criminal proceedings against individuals or organizations might be in order?
  • Explain the lessons learned by the failure of Lehman.

$642 million to clean up Lehman — and counting

Posted by & filed under Company Analysis, Governments & Regulators, Management Issues.

Description:  Unraveling the biggest-ever U.S. bankruptcy case isn’t cheap. A report released Thursday by the examiner in the Lehman Brothers Chapter 11 case exposed the games the defunct investment bank’s executives played to stay in Wall Street’s good graces

Source: CNNMoney.com
 
Date: 03/12/2010

Link:
http://money.cnn.com/2010/03/12/news/companies/lehman.fees.fortune/?section=magazines_fortune

Questions for discussion:

  • How does the Sarbanes-Oxley Act, which holds executives responsible for the integrity of their firms’ accounting, relate to the possible legal actions against CEO Dick Fuld and others?
  • Do you agree that the costs associated with “establishing the facts that can be used in both civil and criminal litigation, the 2,200-page report will likely more than make up for its costs”?
  • Do you believe that the report will contribute to better government or industry regulation in the future?

China may allow yuan to rise by mid-April, strategists say

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

Description:  China could allow its currency to begin appreciating against the U.S. dollar within the next month, as Beijing responds to growing pressure from Washington to allow its currency to trade more freely, according to analysts.

Source: Marketwatch.com
 
Date: 03/12/2010

Link: http://www.marketwatch.com/story/china-may-let-yuan-rise-next-month-2010-03-12?siteid=nwtwk

Questions for discussion:

  • Summarize the reasons one can expect a rise in the yuan.
  • What do you believe will happen?
  • Will this be good or bad news for the global economy?

How Men’s Overconfidence Hurts Them as Investors

Posted by & filed under Industry Analysis.

Description: MEN and women invest differently, a growing body of research has found. And in at least one important respect, women may be better at it.

Source: NYTimes.com

Date: 03/12/2010

Link: http://www.nytimes.com/2010/03/14/business/14mark.html?ref=business

Questions for discussion:

  • How are men and women investors different from each other?
  • What lessons are there that each gender can learn from the other?
  • What lessons are there here for investment dealers?

Apax, Private-Equity Firms Say Retail LBOs Return With Recovery

Posted by & filed under Industry Analysis.

Description: Private-equity firms looking to buy retail and consumer companies said they’re now able to finance deals and pay reasonable prices after the credit crisis and global recession triggered a buyout slump.

Source: Bloomberg.com

Date: 03/12/2010

Link: http://www.bloomberg.com/apps/news?pid=20601109&sid=a1CarvonDlcU&pos=15

Questions for discussion:

  • Does this news bode well for the economy?
  • What has changed in this industry since the financial crisis ended?
  • How do you think the industry will perform over the next year or so?

SEC explains dangerous derivatives

Posted by & filed under Governments & Regulators.

Description:  Director of the SEC’s division of Risk, Strategy, and Financial Innovation Henry Hu maps out how credit default swaps work.

Source: CNNMoney.com – video report
 
Date: 03/05/2010

Link: http://money.cnn.com/video/markets/2010/03/04/mkts_ss_sec_white_board.cnnmoney/

Questions for discussion:

  • Summarize the financial arrangements between banks, companies, and investors that define credit default swaps.
  •  What is the problem, if any?
  • Should there be regulation of this market and if so, what should it involve?