Carneades R. posted an article on The Value at Risk - Nov 20, 2009, 2:46 pm
Last week, under the cover of darkness and in an extraordinary show of Government incompetence, the FDIC seized United Commercial Bank. The problem is that Mingsheng, a Chinese bank, had already appro...
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Carneades R. posted an article on The Value at Risk - Nov 18, 2009, 3:01 pm
Although the financial media's reporting centers almost entirely on a corporation's reported basic earnings-per-share (EPS), most analysts have historically paid attention to a different line ...
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Carneades R. posted an article on The Value at Risk - Nov 13, 2009, 2:41 pm
The latest idea to revolve around the task of inoculating the global financial system involves a financial instrument known as the contingent convertible bond. Overall, I'm somewhat pleased that t...
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Carneades R. posted an article on The Value at Risk - Nov 12, 2009, 2:28 pm
In the midst of the criticism that's been leveled towards financial innovation of all shapes and sizes, one form of financial instrument in particular has managed to travel under the radar: leases...
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Carneades R. posted an article on The Value at Risk - Nov 11, 2009, 2:13 pm
For Home Depot (HD) and many other corporations, inventory represents one of the single largest items on the balance sheet. For 2008, inventory represented 25.9% of Home Depot's total assets. Furt...
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Carneades R. posted an article on The Value at Risk - Nov 10, 2009, 2:10 pm
In the first installment of my liquidity analysis discussion, I covered Net Working Capital; which is defined as Current Assets minus Current Liabilities. There are two additional ratios that should b...
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Carneades R. posted an article on The Value at Risk - Nov 6, 2009, 2:34 pm
The term liquidity can be interpreted in various ways, depending of course upon the specific circumstances. In corporate financial accounting, liquidity refers to the firm's ability to pay its deb...
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Carneades R. posted an article on The Value at Risk - Nov 5, 2009, 2:40 pm
The formal definition of depreciation is the systematic allocation of the cost of an asset, as an expense, over a period of time. If I were able to provide a definition for depreciation, it would be "...
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Carneades R. posted an article on The Value at Risk - Nov 4, 2009, 2:51 pm
If you're going to learn how to effectively interpret corporate financial statements, it's a good idea to possess at least a cursory understanding of the pricing of long-term non-operating lia...
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Carneades R. posted an article on The Value at Risk - Nov 3, 2009, 2:09 pm
When determining an individual's qualifications for taking out a mortgage of a certain amount, the ideal situation involves the bank/mortgage broker/real estate agent calculating a simple ratio ba...
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Carneades R. posted an article on The Value at Risk - Nov 2, 2009, 1:45 pm
If recent financial market events have taught us anything, it's that a) leverage can work both ways, and b) when leverage works against an individual/corporation/investment entity, the results can...
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Carneades R. posted an article on The Value at Risk - Oct 26, 2009, 8:53 am
In a previous installment, I covered a measure of after-tax operating profitability known as NOPAT (Net Operating Profit After Taxes). NOPAT serves as a relevant indicator of a firm's ability to ...
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Carneades R. posted an article on The Value at Risk - Oct 23, 2009, 4:56 pm
Based upon the sheer level of confusion and misinformation that's percolating across the internet, I'd like to clear up an issue that many people have been speculating about. Can I Use a Wind...
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Carneades R. posted an article on The Value at Risk - Oct 19, 2009, 11:05 am
Although I'm partial towards the use of Operating Cash Flow (OCF) as a primary basis for performance measurement, investors should nonetheless be familiar with Net Operating Profit After Taxes (NO...
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Carneades R. posted an article on The Value at Risk - Oct 16, 2009, 3:27 pm
The price that an investor is willing to pay to acquire a share of a corporation's common equity is largely a function of the corporation's potential earnings growth. When purchasing a stock, ...
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Carneades R. posted an article on The Value at Risk - Oct 15, 2009, 1:58 pm
One of the most fundamental questions we can ask about a company is whether or not it is generating the cash necessary to service its debts. Furthermore, it's important to differentiate between ca...
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Carneades R. posted an article on The Value at Risk - Oct 14, 2009, 9:46 am
... , valuation metric. Instead, investors should use Free Cash Flow (FCF) as a starting point from which to assess a company. ... be aware that there are varying definitions of free cash flow. An ...
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Carneades R. posted an article on The Value at Risk - Oct 13, 2009, 1:26 pm
In my intro to fundamental analysis, I focused on discrediting the P/E ratio as a viable means of gauging the relative value of a stock. The premise behind my campaign of disparagement was that net in...
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Carneades R. posted an article on The Value at Risk - Oct 12, 2009, 2:52 pm
Far too often, the relative attractiveness of a stock is discussed in terms of its price-to-earnings ratio (P/E Ratio). This is an inherently flawed method for determining a stocks value; although th...
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Carneades R. posted an article on The Value at Risk - Oct 9, 2009, 2:43 pm
Imagine that you purchased a home with the knowledge that you were paying $50,000 more than its true market value. Now imagine that as part of your personal financial planning, you decide create a per...
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Carneades R. posted an article on The Value at Risk - Oct 7, 2009, 3:45 pm
Earnings management is an ugly term; it carries with it the implication that a company has strategically timed and/or manipulated its financial statements in order to reach a more desirable earnings o...
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Carneades R. posted an article on The Value at Risk - Oct 5, 2009, 8:30 am
The head of GE International, Nani Beccalli, told the Financial Times during an interview that he is concerned about the risk that the governments of the world will withdraw stimulus support too rapid...
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Carneades R. posted an article on The Value at Risk - Oct 2, 2009, 3:12 pm
As everyone knows by now, Ken Lewis, CEO and President of Bank of America (BAC), has announced that he will retire at the end of 2009. Most people won't shed a tear over the departure of a well pa...
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Carneades R. posted an article on The Value at Risk - Sep 26, 2009, 3:45 pm
One of the primary pillars which underpin arguments in favor of health insurance reform is the idea that health insurance companies earn "fat" profits, and it is these profits which stand in the way o...
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Carneades R. posted an article on The Value at Risk - Sep 24, 2009, 1:30 pm
A blast-out email I received this morning from Rep. Alan Grayson (D-Fl) confirmed that HR 1207 - the "Audit the Fed" bill - has gained significant traction in the House of Representatives, having gain...
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Carneades R. posted an article on The Value at Risk - Sep 24, 2009, 9:25 am
The National Association of Realtors released data on Existing Home Sales this morning which showed existing home sales declining 2.7% from July to a (SAAR) rate of 5,100,000 dwellings per year. The o...
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Carneades R. posted an article on The Value at Risk - Sep 23, 2009, 10:08 am
Many commentators have, in the aftermath of the destruction wrought by reckless financial industry behavior, promulgated the view that restrictions should be placed on bankers' pay. The theory goe...
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Carneades R. posted an article on The Value at Risk - Sep 21, 2009, 9:14 pm
The following represents an entirely hypothetical conversation. It did not happen; rather, I am suggesting it is what would happen under the circumstances. Me: Senator Frank, I often hear you deride ...
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Carneades R. posted an article on The Value at Risk - Sep 19, 2009, 10:59 am
Americans cling tightly to their respect for the concept of "free markets", often citing this ideal as a principal reason behind opposition to numerous policy proposals. The concept of a free market t...
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Carneades R. posted an article on The Value at Risk - Sep 18, 2009, 2:52 pm
When considering the true value of experience as it relates to the attractiveness of an employee, or more specifically a manager, we need to establish a competing attribute against which to weigh the ...
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Carneades R. posted an article on The Value at Risk - Sep 17, 2009, 9:29 am
The US Census Bureau released August housing starts data this morning which showed a 598,000 (seasonally adjusted annualized rate) rate of starts. The August rate was 1.5% higher than July's 589,0...
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Carneades R. posted an article on The Value at Risk - Sep 16, 2009, 1:19 pm
The Chairman of the Senate Finance Committee, Senator Max Baucus (D-Montana), today released his "marked up" version of proposed health care reform legislation. The legislation, entitled "America'...
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Carneades R. posted an article on The Value at Risk - Sep 15, 2009, 1:59 pm
Judge Andrew Napolitano blasted a constitutional expose across the op-ed pages of the Wall Street Journal this morning, citing Supreme Court precedent which he believes has the effect of rendering unc...
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Carneades R. posted an article on The Value at Risk - Sep 14, 2009, 1:45 pm
After falling victim to conventional wisdom last week, and speculating whether the FDIC had weeks or days remaining before it would need a Deposit Insurance Fund restoration bailout, I determined that...
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Carneades R. posted an article on The Value at Risk - Sep 12, 2009, 3:16 pm
The slew of bank failures that typically accompany a Friday night have inspired many people to approach these bouts of creative destruction as if it were a sport - say college football - worthy of fol...
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Carneades R. posted an article on The Value at Risk - Sep 11, 2009, 2:40 pm
The symbiotic relationship between politics and money is well known; it almost seems that we as Americans are so dependent upon our television sets for information about the world, that simply airing ...
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Carneades R. posted an article on The Value at Risk - Sep 10, 2009, 8:02 am
After Representative Joe Wilson's (R-SC) outburst last night, it's clear that there is a distinct concern amongst conservatives as to whether H.R.3200 - the health care bill that everyone has ...
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Carneades R. posted an article on The Value at Risk - Sep 9, 2009, 3:06 pm
Typically, I've tried to tackle political issues on this site without the use of ideological talking points; besides the fact that I abhor the concise, pre-packaged way of thinking about the world...
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Carneades R. posted an article on The Value at Risk - Sep 7, 2009, 12:41 pm
The corporate graveyard is littered with companies that were either unable to adapt to structural changes within an industry, or were - in the saddest of situations - unaware that these changes were e...
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Carneades R. posted an article on The Value at Risk - Sep 6, 2009, 4:52 pm
Many political prognosticators - myself included - have speculated that conservative opposition to any sort of health care reform will strengthen the Republican party's base, allowing the GOP to g...
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Carneades R. posted an article on The Value at Risk - Sep 4, 2009, 5:56 pm
I realize that today's bank failure - First Bank of Kansas City being the wilted financial institution- is a relatively insignificant event which shouldn't realistically be compared to the Gen...
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Carneades R. posted an article on The Value at Risk - Sep 3, 2009, 1:20 pm
Natural Gas, an abundant yet integral component of US energy supply, has today reached a price of $2.52 per million British Thermal Units - a level not seen since 2002. I'm always intrigued when t...
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Carneades R. posted an article on The Value at Risk - Sep 3, 2009, 11:15 am
For anyone who missed it, Tom Daschle, Democrat and former Senate majority leader, wrote an extremely ill-conceived op-ed which appeared in today's Wall Street Journal. After Senator Daschle's...
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Carneades R. posted an article on The Value at Risk - Sep 2, 2009, 10:41 am
Despite commanding a 60-40 majority in the U.S. Senate, Democrats have thus far struggled to push their health care reform agenda past the committee level. The threat of a Republican filibuster has se...
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Carneades R. posted an article on The Value at Risk - Sep 1, 2009, 2:56 pm
Realpoint - the competition enhancing, transparency embracing, antithesis of the big three NRSRO's - has released it's monthly CMBS delinquency report covering the time period through July 200...
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Carneades R. posted an article on The Value at Risk - Aug 31, 2009, 2:33 pm
As Congress prepares to return home from it's cherished recess, the debate over health care reform stands as the most contentious issue the country is currently dealing with. As such, public opini...
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Carneades R. posted an article on The Value at Risk - Aug 29, 2009, 1:32 pm
The federal government's campaign to tighten the regulatory vice-grip on credit rating agencies (CRO's) intensified yesterday, when the SEC's Inspector General released a report which crit...
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Carneades R. posted an article on The Value at Risk - Aug 26, 2009, 6:35 pm
The string of positive economic news continued today, as orders for durable goods - bigger ticket items expected to last at least two years - rose 4.9% from a month ago. This news was accompanied by a...
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Carneades R. posted an article on The Value at Risk - Aug 25, 2009, 1:41 pm
As anyone who receives Social Security benefits probably knows by now, the trustees who oversee that vast entitlement program have forecast that there will be zero cost of living allowance (COLA) over...
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Carneades R. posted an article on The Value at Risk - Aug 25, 2009, 9:15 am
June of 2009 was a positive month for home prices across most of the nation, according to today's S&P/Case-Shiller Home Price Index report. The release indicated that home prices in the 10 and 20 ...
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