accounting

These debt-related shocks will occur regularly for many more years, and each shock will advance or retard the rebalancing process so that it affects the way future shocks occur. There are only a few broad paths along which the Chinese…

As a technophile, I follow the tech space assiduously both in terms of products and trends as well as companies and strategy. Every quarter that Apple announces, I have made it a habit of commenting on their quarter, because they are the…

What I am going to discuss today is financial gimmickry and wage growth. This piece is an outgrowth of a piece I am writing for the New York Times on corporate buybacks and capital investment plus a segment I recently did on Boom Bust at RT…

Here is a chart showing the number of transactions that involve acquisitions of an asset management business by year. It tells us about a couple of trends developing in recent years.

Themes for today: The US faces political constraints in a cyclical downturn that will limit government response The US private surplus is under assault Europe is improving and upgrades to bank stocks are bullish The Fed tends to…

Loan growth rate in the US, while better than in the Eurozone, remains on a downward path. The latest figures suggest that loans are increasing at less than 2%, while deposits continue to grow at 6-7% per year.

Owning shares in a bank is the functional equivalent of owning a call option on the bank’s future operational earnings, and if the share price contains little intrinsic value (i.e. the value of its assets does not exceed the value of its…

Credit underwriters pride themselves in their ability to cut lending when they sense that economic fundamentals have changed for the worse. For example one often hears bankers talking about passing on deals in 2007 because of "not liking…

European banks continue to be engaged in deleveraging. It is partly driven by new capital requirements and partly by preparing for the next year's ECB's asset quality review and stress test. The deleveraging process includes reducing…

The higher demand for leveraged loans is helping to gradually increase leverage of buyout transactions. But a more alarming trend is the sharp relaxation of lending terms - the so-called "cov-lite" (covenant-light) deals. Over 70% of recent…