article thumbnail

2008 Financial Crisis – Causes and historical context

Tom Spencer

Many an economics and finance course later, I see that the layers of complexities to the 2008 financial crisis are innumerable. The senior slices of a CDO were considered to be safer because they had first priority on cash flows received from the pool of mortgages in the event of default. It all seemed so clear.

article thumbnail

We Can’t Study Short-Termism Without the Right Metrics

Harvard Business

Similarly, considering greater accruals (which represent the difference between reported income and operating cash flows) to measure short-term orientation has its difficulties. It assumes that a smaller proportion of cash flows in earnings indicates a myopic firm.

Metrics 30
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Strong Economy – Strong Buy-Sell Market

Martinka Consulting

The driving force is the baby boomer generation is large and highly entrepreneurial (as per an Intuit study saying this generation owns a disproportionate share of businesses. 70% of medium sized companies will change hands (2008). 70% of medium sized companies will change hands (2008). Easy money. Demographics. And guess what?

article thumbnail

What GE’s Board Could Have Done Differently

Harvard Business

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. Because of these dubious decisions, GE’s ratio of debt to earnings has soared from 1.5 in 2013 to 3.7

article thumbnail

Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation?

MishTalk

So refraining from any forecast of what will happen in the near term, it’s sufficient to observe that the economic data is not nearly as strong as widely perceived, and the impact of QE on stock prices does nothing to improve the underlying cash flows. December 2008 (85). November 2008 (78). October 2008 (108).

article thumbnail

Oil’s Boom-and-Bust Cycle May Be Over. Here’s Why

Harvard Business

In fact, 2018 may mark the first year shale producers will be able to fund future expansions of drilling programs through their own cash flow. By 2050, more than half of the world’s passenger cars are likely to be electric vehicles, according to the Morgan Stanley study.

article thumbnail

The Comprehensive Business Case for Sustainability

Harvard Business

In the largest study on climate change data and corporations, 8,000 supplier companies (that sell to 75 multinationals) reported on their level of climate risk. One study estimated that companies experience an average internal rate of return of 27% to 80% on their low carbon investments. ” Improving risk management.

Study 28