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China Faces "Minsky Moment" on Ponzi Financing

MishTalk

After the massive stimulus and more than doubling of new bank loans in 2009, the government attempted to stabilize credit growth, but the growth of the shadow banking system exploded instead. Total local government debt adds up to RMB17.9 trillion (nearly $3 trillion) according to the latest, likely understated, national audit.

Finance 75
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SBA Acquisition Loans – A Win-Win-Win Especially for the Seller

Martinka Consulting

2009 - Were there any business acquisition loans? What this means is, investors get a government guaranteed rate of return of about 4%, which is higher than T-bills and similar. 1 debt coverage ratio and with cash flow considered a form of collateral (doesn’t require 100% tangible collateral). Who benefits?

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Earnings Cheating Season: Is Your Favorite Company Cooking the Books?

MishTalk

The key plank of the Ice Age theory was that this positive correlation would break down and that equities would de-rate in absolute and relative terms compared to government bonds thereby inverting the close positive correlation between bond and equity yields. Is there a growing divergence between net income and operating cash-flow?

Company 70
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Another Obama Clean Energy Fiasco, Potentially Involving Largest Bankruptcy in Spanish History; Appeal of Clean Energy

MishTalk

Throughout this current year, 99 companies across the world have defaulted, the second highest figure in the decade after the 2009 crisis, according to S&P. It also alerted the market that its free cash flow for the year would be as much as €800 million lower than previously forecast.

Energy 28
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The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures

Harvard Business

While the job losses are a terrible blow to those workers and the families they support and the local economies where the factories are located, the decision could prevent the kind of crisis that resulted in it seeking bankruptcy protection in 2009 and a $50 billion bailout by the U.S. government. Given the shift in immediate U.S.

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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

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

MishTalk

What Has Government Done to Our Money? 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. 2009-12-09 Tech Ticker.