Unlocking cash from your balance sheet

McKinsey & Company

Here are six strategies for releasing cash from your balance sheet. Strategy & Corporate Finance Insights Corporate FinanceOpportunities to free up cash may be hiding in plain sight.

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

MishTalk

Get Involved The State of the Unions Finances: A Citizens Guide. Balanced Budget Ammendment Sign the Balanced Budget Petition. Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation? Fed Balance Sheet vs. Stock Market. The risk premiums of risky securities have become unsustainably compressed in the process, and the Feds balance sheet has metastasized to $3.5 Fed Balance Sheet vs. Stock Market; Will QE Cause Inflation?

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Banking imperatives for managing climate risk

McKinsey

Financing a green agenda is also a commercial imperative—but specialized skills are needed to protect balance sheets. More than regulatory pressure is driving banks to manage climate risk.

A primer in resilience: Maximizing value beyond earnings

McKinsey

Empowering the finance organization to take decisive action to strengthen the balance sheet is critical to achieving organizational resilience. Transformation Insights

How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business

If you’re not a numbers person, finance is daunting. Even if you don’t need to know a lot about finance to do your day-to-day job, the more conversant you are on the subject, the better off you’ll be, according to Richard Ruback, a professor at Harvard Business School and the coauthor of the HBR Guide to Buying a Small Business. Stop avoiding finance because you’re afraid of numbers. “Finance and accounting are very simple.

Rising COVID cases, falling economy

Tom Spencer

Since the start of February this year, the Fed has expanded its balance sheet by more than $2.4 To put that in context, the Fed was created in 1913, and its total balance sheet assets only reached $2.4 What does Fed balance sheet expansion mean for the US economy?

Draghi Pressures ECB to Buy "Junk-Rated" Loan Bundles of Greece and Cyprus

MishTalk

On September 4, ECB President pulled out a financial bazooka including a pledge to build up the ECB''s balance sheet by another €1 trillion. Bundesbank president Jens Weidmann, who also sits on the ECB’s policy making governing council, has already objected to the plan to buy ABS, which he says leaves the central bank’s balance sheet too exposed to risks. In this case, the stench on Greek bank balance sheets will not go away.

The Importance of Business Acumen for High Performance

LSA Global

It is not just the purview of finance to interpret the numbers that govern profit and loss; it behooves every employee to understand how and why the company makes money, spends money, and measures financial performance. Study the Balance Sheet. With term definitions in hand, analyze your company’s balance sheet. Become familiar with what a typical balance looks like and what it can tell you about the financial state of a business.

Mish's Global Economic Trend Analysis: Reader Question: Does the.

MishTalk

Get Involved The State of the Unions Finances: A Citizens Guide. Balanced Budget Ammendment Sign the Balanced Budget Petition. Reader Question: Does the Fed Balance Sheet Properly Reflect QE Announcements? The feds balance sheet doesnt reflect it. The balance sheet was up $720 billion from Aug 1, 2012 to Aug 1, 2013 ($309B in treasuries and $393B in MBS) but that is only $60B per month. Feds Balance Sheet. MISHS.

M&A deals – benefits and drawbacks

Tom Spencer

If there are debts owed by each organization, then the M&A process may increase the total balance sheet debt of the combined company. If the bidding company used debt to finance the acquisition, this will further increase the total balance sheet debt of the combined entity, which can increase the risk financial distress and bankruptcy.

Austria "Bad Bank" Goes Bad, $8.5 Billion "Bail-In" Underway

MishTalk

The step, allowed by new legislation that gives banking supervisors more power to intervene, followed an outside audit of Heta''s balance sheet that exposed a capital hole of up to 7.6 The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta - or "bailed in" - under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden.

Confident Dudley Expects Rate Hikes Will Continue, Hurricane Effect to Provide Long Run “Economic Benefit”

MishTalk

trillion balance sheet at its Sept. The good news is that, while the current expansion is quite old in chronological terms, it is still relatively young in terms of the health of household finances,” Dudley said in a speech to the National Retail Federation. New York Fed president William Dudley expects the Fed to proceed with its asset reduction plan at the September FOMC meeting.

Another Unbelievable Stress-Free Test; Whitewash Math and Deferred Tax Assets

MishTalk

Roughly one in five of the euro zone''s top lenders failed landmark health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday. The results of the ECB’s examination of balance sheets worth €22tn, known as the Asset Quality Review, will require the 130 lenders who took part in the exercise to adjust the value of their assets in their accounts or prudential requirements.

The age old tale of financial crises

Tom Spencer

Moreover, balance sheet data from the Federal Reserve shows that the acquired assets have remained fairly consistent in value, indicating that the underlying assets were not altogether a lost cause. Post-failure balance sheets show that Lehmann Brothers actually had twenty billion dollars of assets in excess of its debts. The story of the 2008 financial crisis begins somewhere shortly after the death of Jesus Christ himself.

10 Flaws with Mainstream Economics

Tom Spencer

Corporate finance academics argue that firms should act to maximise shareholder value, since shareholders are the owners of the firm. Economics assumes that markets tend towards equilibrium, a situation in which the economic forces of supply and demand are balanced.

Government About to Destroy American Mortgages Permanently Warns Dick Bove; Mish Says Nonsense

MishTalk

Finance reports Government About to Destroy American Mortgages Permanently. The answer to that question is that we no longer have things like 20-year and 30-year mortgages because banks are not going to put that type of mortgage on their balance sheets. I do agree that most mortgages will be variable/adjustable, as a bank you just can’t take the interest rate risk by offering longer term fixed rates if you hold those loans on your balance sheet.

Greek default in all but name - Tom Spencer consulting blog

Tom Spencer

Over the last few decades, countless risky financial products were sold to investors using harmless sounding terms like “credit default swap”, “mortgage backed security”, “special purpose vehicle” and “off-balance sheet financing”. About. Book Shop. Archive. Definitions. Helpful Links. Quotes. Subscribe. Greek default in all but name. by Tom Spencer on November 27, 2011 · 0 comments  ·  Image Source. in Economics.

Mish Fined 8,000 Euros for Quoting French Blog

MishTalk

trillion balance sheet is leveraged nearly 49-to-1. As a group, these three banks have some €4 trillion in assets on their balance sheets, supported by €129.3 The authors note "the bias of the present system" in France, "which encourages excessive financial leverage, and contributes to a dearth of equity financing for innovative projects and an inefficient allocation of resources."

Persistent Overoptimism Three Ways: Truckers, Fed Economists, Manufacturers

MishTalk

A possible explanation for the SEP’s prediction of a rapid catch-up to potential GDP after 2009 is that participants overestimated the efficacy of monetary policy in the aftermath of a so-called balance-sheet recession. Recessions triggered by financial crises are typically preceded by sustained episodes of bubbly asset prices and debt-financed spending booms. The other day I noted a persistent overoptimism regarding manufacturers.

The Data Says Climate Change Could Cost Investors Trillions

Harvard Business

These so-called “stranded assets,” sitting on petro-company balance sheets, are essentially worthless. Economy Sustainability Finance & Accounting Digital ArticleAn important new study , published in the journal Nature Climate Change, says that climate change will be expensive. Extremely expensive. It turns out that if you mess with the planet’s thermostat, it’s not great for the economy or investments.

European Banks Dump Massive Amounts of Subordinated Debt on Investors

MishTalk

The figures follow a deal agreed by European regulators earlier this month that will bring in so-called bail-in rules for senior bondholders from 2016, two years earlier than envisaged by finance ministers in their common position agreed in June. Details show the alleged rainy-day fund is a pathetic €12.5bn of joint funds not available until 2020, even though 128 banks covered in the agreement have an aggregate balance sheet somewhere between €26 trillion and €27 trillion.

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. Banks would rather store their money at the Fed than lend it to finance potentially risky projects. To conserve capital, banks institute a lending freeze, and bank balance sheets contract as existing bank loans are repaid. My friends and I walked out of the Big Short several years ago feeling like a group of global financial crisis experts.

Draghi Announces ECB Exit From Easing Remains Far Off

MishTalk

Get Involved The State of the Unions Finances: A Citizens Guide. Balanced Budget Ammendment Sign the Balanced Budget Petition. Bernanke says the US economy is solid enough that the Fed can begin tapering its balance sheet purchases later this year. Given the stock and bond market bubbles the Fed has created, the Fed of course should taper (not that it should ever have expanded its balance sheet in the first place). MISHS. Global Economic.

How the Great Recession Changed Banking

Harvard Business

That strengthened investment banks’ balance sheets by forcing them to scale back and to change the nature of the risks they take. As a result, their balance sheets are half as large on a risk-adjusted basis, and the capital they hold against trading positions has doubled over the past decade, our research shows. Less apparent to the outside world is how much banks are also investing in controls, especially in their compliance, risk, and finance divisions.

Descent of the Global Monetary System

Tom Spencer

For example, if the US government spends more than it collects in taxes, it can finance the budget deficit by selling bonds.

BIS Slams the Fed; Ridiculous Question of the Day: "Is The Fed Going To Attempt A Controlled Collapse?"

MishTalk

Historical evidence shows that this rarely happens following a balance sheet recession. They encapsulate the self-reinforcing interactions between perceptions of value and risk, risk-taking and financing constraints which translate into financial booms and busts. Such episodes often coincide with banking crises, which in turn tend to go hand in hand with much deeper recessions – balance sheet recessions – than those that characterise the average business cycle.

Start of a Global Currency Crisis?

MishTalk

Babacan said the central bank was taking the necessary steps to deal with the situation, and said Turkey was protected against the swings in the market by its sound finances. The balance sheet of the government, the banks and households are quite well protected against market volatility.” In Emerging Market Contagion Spreads , I presented a viewpoint that emerging market currencies have been under pressure because of falling commodity prices.

Battle Cry of the Day: Save the Bondholders; Failed Bank Resolution on Verge of Unraveling Days Before Ratification

MishTalk

Sharon Bowles, the chair of the parliament’s economics and finance committee, said the revisions were essential to accommodate national central banks that “do not have big balance sheets” and need extra guarantees from the state when lending to struggling lenders. In lengthy negotiations last month the EU reached a deal on how to handle failed banks. The European parliament was set to ratify the deal in a matter of days. Today, the UK decided it doesn''t like the deal.

940 Chinese Firms Halt Trading; China Allows Houses as Margin, Bans Use of Term "Equity Disaster"; Two Rules, Two Questions

MishTalk

Besides financing the bubble with new money, the Chinese government has suspended IPOs, cut trading fees, and relaxed requirements on margin loans (for example, Chinese retail investors can now use their apartments as collateral ). After the bond market rejected Beijing’s plan to float the debt issued by local governments earlier this year, Chinese leaders simply ordered state-owned banks to buy such debt, adding assets of dubious quality to their balance sheet.

Nifty-Fifty Becomes Fab-Five; Return of the "Four Horseman"; Ozone Layer

MishTalk

Fab-Five On November 16, Yahoo Finance reported How A Monster Year For Amazon, Google And Facebook Is Carrying The Stock Market. equity strategist and the firm's portfolio strategy research team note that narrow market breadth, with just a handful of strong performers carrying the load for a slew of weaker performers, tends to favor high-quality stocks with strong balance sheets and lower volatility.

Syriza Trounces New Democracy; Greeks Stop Paying Taxes; Run on Greek Banks Escalates; Get Out!

MishTalk

A finance ministry official confirmed on Friday that state revenues had collapsed this month. “It’s The monthly Bank of Greece balance sheet data for the month of December revealed a significant increase in Greek bank ECB borrowing which rose by €11bn in December to €57bn (including €1bn of Emergency Liquidity Assistance).

Reflections on Conspiracy Theories and Sensible Accounting by Reader "Alice", 89 Years Young; True Meaning of Banking Safely

MishTalk

The founder of modern international finance, Amschel Rothschild, gave the aims and direction of his enterprise simple instruction when he declared he cared not what governments did, all he wanted was the right to control, print their money. When I began investing, one looked at the real property on balance sheets. I received several emails regarding my post on Risk-Free Banking and Fractional Reserve Lending that I would like to share.

Laughable Eurozone Banking "Non-Union"; Expect Disorderly Breakup

MishTalk

Germany Backtracks on Banking Union MarketWatch reports Germany appears to backtrack on EU banking deal EU finance ministers have promised to agree on a so-called single-resolution mechanism--consisting of more centralized decision-making and financing for the shuttering or downsizing of failing banks--before the end of the year. At the heart of the disagreement is what to do when so-called bank resolution funds, financed by the banking sector, run out of money.

Why Apple Is Getting into the Energy Business

Harvard Business

Energy-efficient lighting, motors, and other hardware continue to make good sense for many firms, whether financed on the balance sheet or by third parties who provide the upfront capital and then share the savings on future power bills. Apple’s huge size, power use, and balance sheet allow it to jump in faster than many other firms, but there is plenty of opportunity to lay the groundwork today, while saving money and helping sustain the environment.

Credit Equals Gold No.1

MishTalk

Industrial and Commercial Bank of China, the world''s largest bank by assets, said on Thursday that it has no plans to use its own money to repay investors in a troubled off-balance-sheet investment product that it helped to market." Financing outside the formal banking system accounted for more than a third of the Rmb17tn total new credit issued in 2013. Interesting details have emerged regarding the Chinese trust fund that was on the verge of default a few days ago.

As European Banks Retreat from the World Stage, China Is Stepping Up

Harvard Business

Of course, the retrenchment of global finance also reflects pressure on banks from regulators and shareholders to rebuild their capital and liquidity. China’s four largest banks have quadrupled the share of foreign assets on their balance sheets since 2007 to $1 trillion—that make gives them larger foreign portfolios than German or Italian banks. As European banks retreat, China is leading something of a changing of the guard in global finance.

China Cash Crunch Eases, For How Long? Three Things China Needs to Avoid; When can Beijing Truly move to Market-Determined Interest Rates?

MishTalk

Total credit in the economy (total social financing) showed a 40 per cent rise in November over the prior month and is on course for growth this year of almost 20 per cent. It is clear that banking institutions, state-owned enterprises and local government financing vehicles have remained relatively insensitive to, or been able to circumvent, higher interest rates and bond yields, central government curbs on the shadow banking sector, and the rampant real estate and infrastructure markets.

Prisoner's Dilemma Game in Greece; Contagion-Spread Eurozone Breakup More Likely Now; How will Greece NOT pay back €320 billion?

MishTalk

It does not need to borrow money from foreign countries to finance its ongoing deficit (because there is no deficit). The key point is that as long as Greece runs a current account surplus, it can finance its way via taxation, without further Troika meddling. As a result of Troika-imposed austerity, Greece has a current account surplus that widened in September to over a billion euros. This happened because demand for foreign goods collapsed in the wake of 27.3%

The Globalization Backlash Is Reverberating Through Boardrooms

Harvard Business

Meanwhile the Institute of International Finance forecasted net capital flows for emerging markets in 2015 would be negative for the first time since 1988. Furthermore, there will be new complexities in managing the balance sheet and navigating wider financing decisions; particularly as the “carry trade” (the strategy of borrowing at low interest rates in developed countries and investing in higher yielding emerging markets), becomes less attractive.

BitGold Now Available in US! Why BitGold?

MishTalk

BitGold just completed a financing for C$18 million, which included some top name institutional investors. After this financing, BitGold’s two main owners are the shareholders of GoldMoney and Roy Sebag, whose understanding of gold is as deep as anyone I have ever met. The balance sheet also includes a lot of outstanding short-duration lending facilities, adding more risk. BitGold USA Effective today, BitGold Announces Platform Launch in the United States.